According to recent data, eCommerce activity represented 14.3 percent of total retail sales in 2018. This figure, representing about 1 in 7 transactions, has been rapidly increasing and will continue increasing into the foreseeable future. Unsurprisingly, many up and coming entrepreneurs are looking towards the eCommerce space in order to get their businesses off the ground and running.
There is no doubt that eCommerce enterprises play an important role in the world of business. However, just because eCommerce is thriving, that doesn’t mean all businesses in this space will necessarily succeed. As the number of businesses selling online continues to increase, the space itself has become much more competitive.
Ecommerce Platforms and Accounting
In order to succeed as an eCommerce business owner, you will need to develop a set of effective accounting practices. Many of these businesses outsource their eCommerce digital accounting needs in order to focus on other tasks in-house. Others may do some outsourcing, but will also want an eCommerce platform that they can actively manage themselves.
In this article, we will compare some of the top eCommerce platforms currently in use. We will also discuss the importance of inventory management and financial forecasting, and how these things can have a major impact on the success of your business. By proactively seeking accounting solutions before your problems even begin to emerge, you will position yourself to succeed in this increasingly competitive world.
The Importance of Developing Good Bookkeeping Practices
At the end of the day, running a successful eCommerce business is all about finding creative ways to improve your bottom line. Because your “bottom line” is a function of both revenues and expenses, there are multiple different approaches to financial management you can potentially take.
One of the best ways to improve your cash flow is to improve your inventory management practices. This can be done by switching systems (FIFO v LIFO), decreasing the amount of inventory you hold at any given time, and various other strategies. However, in order for any of these decisions to be effective, you will need to quantify their impact in advance—this is why using a platform with inventory management options is so fundamentally important.
The platform you choose should also be conducive to long-term financial forecasting. By being able to predict your future revenues and expenses in advance, you will be much less likely to run into sudden financial surprises. Your forecasting model should be based on previous performances, your current balance sheet, and reasonable future expectations. Again, all of these things will be much easier if you have a supportive accounting platform to work with along the way.
Below, we will compare six of the most competitive platforms and allow you to decide which one is best for your eCommerce enterprise:
Shopify is a platform that offers free hosting, making it very easy to create an account and get started. Its user-friendly interface features more than 100 different professional themes, allowing you to add a lot of personal character to your platform. There are several different versions of Shopify available, ranging in price from $9 per month to $179 per month. With advanced site analytics, financial reports, and unlimited bandwidth available, there is no surprise that Shopify is one of the most popular platforms in use. The site’s analytics make it easy to quantify how much you are paying per click and per each dollar of revenue.
Magento is an innovative platform that offers an incredibly in-depth array of accounting, selling, and design options to choose from. There is a free download of Magento available for startups, though there is also a more complex version that will charge you on an annual basis. The platform features several unique features, ranging from customer polls, private sales features, and active sales records. There are also several customer segmentation options available, making it easier to identify which groups of customers are the most profitable. This will help you create better financial forecasts and also help you focus on the parts of your business that make the most money.
WooCommerce is a WordPress plugin, meaning that it is free and open to new users (though you will need to pay for hosting). This particular platform is ideal for businesses that prefer to work with multiple payment gateways, such as PayPal, BACS, and Cash on Delivery. The reports are easy to read and designed for quick monitoring of incoming sales, inventory levels, and overall store efficiency. You will also have the option to engage in various marketing campaigns, offering discounts and various other specials. The platform is also very conducive to customer reviews, allowing your top-selling products to rise to the top and attract the attention of new shoppers.
BigCommerce is among the more expensive platforms in this list, with three different plans available, ranging in price from $29.95 to $199.95. However, it is also one of the easiest to use and offers a very wide range of features. Reporting features and payment gateways are already built-in, allowing your business to immediately get started. The platform advertises literally “hundreds” of accounting, marketing, and inventory management systems—the ones that are most useful for you will depend on your specific business. BigCommerce also makes it exceptionally easy to modify the visual appearance of your online store, as needed.
Wix was originally founded as a platform for creating websites (of all kinds), which made their transition into the eCommerce space rather straightforward. The platform itself is optimized for mobile use, has an incredibly friendly user interface, and also includes hosting. Monthly costs begin at $4.08 and go up as high as $24.90, depending on which plan you choose. Overall, Wix is probably your most affordable option. Wix also advertises its global shipping and tax manager, its advanced order tracking features (allowing you to keep an accurate inventory and accounts records), and its secure shopping cart. There are also plenty of pre-designed store templates available for you to choose from.
Jimdo is another affordable platform, offering hosting and ranging in price from $7.50 to $20.00 per month. Jimdo offers you the possibility of using your own domain name, no transaction fees, and a dynamic set of templates. The platform is very conducive to PayPal and credit card usage, which are both essential components of the accounts management process. Though Jimdo may not be as in-depth as some of the other options featured here, it is one of the best places for enterprises with simple inventory needs that are looking to get started selling today.
Conclusion – Choosing the Right Platform
Without a functioning eCommerce store, your new business will have a difficult time achieving its long-term goals. There are many different platforms available for you to choose from, each with various pros and cons attached to it. By balancing cost, usability, accounting features, and various other factors, you should be able to choose a selling platform that is compatible with your business’ current needs. To learn more about how you can integrate your eCommerce platform with our outsourced accounting services, contact Fully Accountable at 1-877-330-9401.