5 Ways to Improve Back Office Accounting in an eCommerce Business
Small Businesses that are looking to make sales online are always keen to implement a strategy that integrates both their back-office systems with their E-Commerce online.
Before we go about discussing the roles and responsibilities and ways to improve efficiency, it is imperative to understand the significance of a perfectly functioning back-office staff.
Delivering a core function for all kinds of business, the accounts and finance department has always got to be on their toes. The core aim of the staff is not only to be efficient but to streamline business operations and then ensuring that the company earns external goodwill during the process. In short, making errors or creating delays is not an option for this department.
Even though most of the back office accounting operations take place behind the scenes, how you manage the department is key to ensuring the smooth functioning of the business.
Efficiency is the need of the hour, given the rising costs of business operations. However, when compared to other businesses, the responsibility of the back office staff changes in an E-Commerce Business.
The core purpose of the E-Commerce business is to make the process of securing sales easier for a business. Given the wide variety of platforms available, it is considerably easy for a person to purchase things online.
Addressing the issues of poor efficiency in an E-Commerce business will yield the following results for a business.
- Prevents Workflow Bottlenecks
- Ensures that none of the resources go to waste
- Lays to rest any issues of work duplication
Improving back-office efficiency sets the company up for greater success. The management now has time to focus on delivering results rather than focusing on clearing any internal disorder.
Since its invention, the platform has become widely popular among users. However, given the popularity and the rising numbers, businesses must integrate both the E-Commerce and the back-office functions.
One of the advantages of integrating any two core business operations is that the information for both the functions becomes accessible thru a single source. This makes decision making more straightforward as the process of evaluating and linking the two departments becomes less time-consuming and less messy.
Another critical factor that contributes to the performance of the business is simplification. Integrating both the accounting software and the back-office abilities simplifies the process of recording information. This simplification results in better efficiency in the business.
Now that we are aware of the significance of the department and that of integrating the two functions, here are some other ways to improve back-office accounting.
1. Get Online
One of the key methods to ensure the integration of two business functions is to reduce the extent of business work that goes on in the process. Using cloud-based accounting software offers businesses a host of benefits.
Unlike the traditional methods, using online accounting systems syncs your data in real-time. Now, you have the option of bookkeeping on the go. The software records all transactions, immediately adjusting the books accordingly.
This is a new and positive change from the traditional methods which can be quite lengthy and tedious.
In addition to an automated recording system, the change allows you to access your books from any internet remotely-enabled device. The improved accessibility means that all crucial information of your business is available at your fingertips.
By going online with the help of a cloud accounting software, you automate the mechanism of data entry. By doing so, you get rid of the administrative hassles that at times slow down the decision-making process of a business.
The paperless bookkeeping system gives the owners and the users of the information the time to focus on other vital issues of the business. In addition to reduced administrative decision-making time, the cloud-based accounting system keeps important business information safe from any accident.
In case of a disruption in the software, you have an option of restoring the files. Unlike the traditional methods where you are at risk of losing or misplacing valuable data, going online ensures that you have the backup needed to secure the information.
2. Invoice Directly from your Cloud Accounting Software
The traditional model of accounting and financing requires users to create invoices at the end of each billing period. However, the inefficient time-consuming nature of the process means that E-Commerce businesses today are looking for newer, more creative ways of invoicing.
Online invoicing, more popularly known as e-invoicing, is much more different in this regard. Switching to online invoicing speeds up payments and reduces costs.
The faster you send invoices, the sooner are your chances of getting paid. You can set the settings of your invoicing software to either scheduled invoicing or direct invoicing, depending on how you want to get paid.
The competitive advantage of invoicing online, speed is not the only benefit of doing so.
In traditional business lines, once you’ve sent your invoices, you wait until the due date and regularly check your bank balance. If the money is not there by the due date, the chase and the countless calls for payment begin.
With e-invoicing, however, you have the advantage of automatic tracking. A sale on the website through a credit or debit card needs regular updates. The option of payment status on the online invoicing software gives you the status and an overview of the money owed to you.
You can also run reports and create a better audit trail of the business, in case your client or the government have any questions.
Of all the benefits of an online invoicing system, the increase in the rate of transaction and payment stands out. Reducing the time between sending an invoice and receiving the online payment invoices give you the option of better security and same-day delivery.
The invoicing method also saves time and money, hence increasing efficiency, while also significantly reducing the tedious paperwork.
3. Upgrade to a Modern Payroll System
This is one method that benefits and improves the accounting functions of all back-office services. Regardless of the type of business, managing employee payroll is a headache. However, just like other functions of a company, you can automate the payroll function too.
The new online methods of upgrading to a modern payroll system encourage users to streamline the processes of bringing in new employees.
The modern method of payroll accounting ensures that the record of each employee is visible. The real-time accessibility of employee record will help in assessing the performance of an employee in comparison to the monthly wages they get.
The system also results in the formation of a clear audit trail. The chances of audit companies blaming you for hiring a fake employee drop considerably, given you are using online payroll systems.
For data and employee security, the online payroll system provides you with a centralized location to store all critical data. Not only does the unified data improve data security but it also provides you with ease of access.
The functions of an online payroll system are similar to the ones performed in a traditional business. However, keeping in mind the manual input, there is a higher chance of the online system sabotaging your back-office efficiency. Human error and mistakes and omissions are some things that are bound to happen.
Errors and omissions, in addition to compromising the efficiency of the back-office, reflect poorly on the business too. Therefore, it is imperative to upgrade to a modern payroll system, as it guarantees fewer errors.
4. Manage Expenses
Automation is the need of the hour. Given the benefits of the procedure, it only makes sense to automate the process of recording expenses.
Regardless of the business type you own, there is no disagreement on the fact that the costs are directly tied to sales volume. A better understanding of the costs and expenses of the business will provide you a better insight on how to increase the sales volume.
However, in addition to the management of expenses, the online platform ensures the effective management of all employee payments.
For a small business, it is quite common for employees to make payments for day-to-day expenditures. An online payment system tracks the payments of the employees more conveniently. Simply taking photos of their expense receipts and then uploading on the online platform will be enough for the business to pay back the favor.
Managing expenses is the key to ensuring that the business does well and keeps track of the cost of sales and manufacturing.
Doing so also ensures that you can input the expense data of your business directly into your accounting software.
5. Streamline the Document Storage System
Now with the advent of many exciting applications and web portals, gaining efficiency is not as challenging as it was using traditional lines.
Automation, although costly, yields favorable results for a business. A business operating the old-fashioned way can face an information overload causing the business to drown in physical documents affecting the performance of the company.
Many businesses today have still not streamlined their business operations; this has led to an inefficient mechanism that affects the overall performance.
To perform efficiently, it is imperative to create a more efficient document storage procedure. A procedure that organizes your financial data is more comfortable to audit at the year-end. An organized and efficient data management system will help you in saving money.
Critical to the growth of E-Commerce business, office efficiency combines the process of automation and effective management to yield better results. Integrating business functions and automating critical sectors, as the other options suggest will help a business in improving the efficiency of a department. Streamlining and creating a document storage system, however, will yield positive results for the whole company. Key to optimizing the database is exploring the options available.
By exploring and observing the many automated options available, you will be in a better position to manage your time and resources more effectively. Doing so will allow you to make an informed decision and decide whether an outsourced solution is ideal for you.
Tracking the performance of each function and then coming up with ways to cater to the issues are some of the means through which you can create a database of the necessary information.
The ways mentioned above are some of the methods that you can use to improve the back-office accounting an E-Commerce business. Hiring a professional team of accountants and outsourcing a few critical functions to professionals will only help you in the cause.
In choosing an option to improve the efficiency of the back-office staff, you have to consider the flexibility of the option and how it will cause your online business to grow. Another thing that you need to factor is the processes that you want to link with your E-Commerce business when opting for cloud-based accounting.
Having a clear idea will reduce the cost of accounting in addition to reducing administration costs. Finally, it is imperative to be aware of the range of products that you want to sell online. Doing so will help you to devise a clear strategy of payments and receipts for the goods you sell.