Why Does Sleek Use A2X for My Ecommerce Accounting?
Ever wondered why Sleek uses A2X for automating your ecommerce financial data? Let’s dive into how this accounting tool benefits your operations as an ecommerce seller.
Outline
- What Makes Ecommerce Accounting So Tricky?
- The Importance of Precise Financial Records
- What is A2X and how does it work?
- FAQs
What Makes Ecommerce Accounting So Tricky?
Navigating the intricacies of ecommerce financials can be quite a hassle.
In dealing with the various sales channels and platforms (such as Amazon, Ebay, Shopify, Woocommerce etc.), you and your accountant might encounter:
- Various taxes like sales tax, GST, and even income tax.
- Dealing with multiple currencies.
- A wide array of fees, each with unique characteristics.
- Settlement periods that could extend over several months.
- Cost of Goods Sold (COGS) discrepancies due to timing.
- Overwhelming transaction volumes could bog down traditional accounting systems.
- Numerous ecommerce platforms.
- Different regions for each online marketplace.
- A variety of payment processors.
- The need for specific software integrations by certain platforms (like Shopify needing Xero).
- An abundance of reports requiring meticulous sorting and analysis.
Indeed, that’s quite the list – and it doesn’t cover everything.
The task of reconciling these elements can quickly become a Herculean effort, consuming all of your accountant’s time to perfect. However, by automating these processes, they can provide you with advice rooted in dependable, precise figures.
The Importance of Precise Financial Records
Why is having accurate financial statements so critical? Primarily, precise accounting is essential for adhering to legal standards in Australia. It’s crucial to accurately calculate your income and tax liabilities across the various regions you operate in to ensure compliance.
Yet, the value of accurate financials extends beyond mere legal compliance.
Given the dynamic and competitive nature of ecommerce, having your accounting in order offers a clear view of your business’s health, empowering you to make swift, informed decisions for growth and sustainability.
Moreover, should you consider selling your ecommerce enterprise or applying for financing, detailed records of your financial activities—encompassing income, expenses, assets, liabilities—are indispensable.
Here are six reasons to embrace outsourced accounting!
Check them out.
Why does this matter?
Consider the following example: receiving a deposit from platforms like Amazon, Shopify, Walmart, eBay, or Etsy might seem straightforwardly classified as “income”. However, the reality is more complex.
You’re likely familiar with the fact that before these deposits reach your bank account, the ecommerce platforms adjust them for various factors (illustrated in the table below).
Understanding these adjustments is vital for a true assessment of your business’s performance.
Whether it’s overspending on ads or misjudging a product’s profitability, lacking this detailed insight leaves you in the dark.
This precision is not just beneficial for you and your accountant but is also critical for potential investors or lenders. It’s the foundation for assessing the robustness and potential of your business.
Sleek uses an ecommerce automation tool called A2X to provide a detailed breakdown of sales and fees per line item but also by pinpointing the transaction month. This facilitates month-to-month performance comparison, streamlining your financial management without the hassle of account adjustments.
The second column on the right, automatically generated by A2X, exemplifies the clarity and detail A2X brings to your financial management.
What is A2X and how does it work?
A2X is a cutting-edge software tool designed to streamline and automate the process of ecommerce accounting. By forming a bridge between your ecommerce platforms and accounting software, A2X simplifies the accounting process, making it more accurate and efficient.
A2X seamlessly integrates with your sales and your Xero accounting platforms, which is managed by Sleek. It meticulously extracts all sales and fee transaction data, accurately computes every detail for your bank deposits, and then consolidates this information into concise journal summaries directly into Xero.
Why is this important for ecommerce sellers?
By organising your financial records using the accrual accounting method, A2X ensures your financial data is not only reliable but also invaluable for both forecasting future trends and reporting current finances. This means ecommerce accounting is made effortless and precise.
A2X meticulously categorises each transaction type — be it sales, fees, refunds, or taxes — associated with your bank deposits. The setup process involves mapping these transactions to specific accounts within your accounting software, ensuring a seamless and consistent organisation of data.
After processing the line items for your bank deposits, A2X posts detailed journal entries to your accounting system. These entries are then automatically matched with their corresponding deposits, greatly simplifying the reconciliation process. Additionally, A2X is designed to handle statement periods that cross over months, organizing your financials according to the accrual method for enhanced financial planning.
Why does Sleek use A2X?
The reason Sleek’s accountants favour A2X lies in its ability to offer a more efficient, accurate, and cost-effective solution for managing ecommerce sales accounting compared to manual methods. In an era where cloud-based accounting software is revolutionising the industry by offering speed, reliability, and accessibility, A2X stands out as a crucial tool for ecommerce businesses that face unique accounting challenges, such as managing finances across multiple sales channels or handling various types of payments.
By leveraging A2X, Sleek’s accountants can reallocate their valuable time from the labour-intensive task of manual bookkeeping to focusing on strategic financial planning and analysis. This shift not only enhances the quality of financial oversight but also accelerates the bookkeeping process, ensuring that your financials are up-to-date and readily available for informed decision-making.
In essence, A2X acts as a catalyst, enabling Sleek to deliver timely, accurate bookkeeping services while also providing them with the bandwidth to offer business insights that can drive your ecommerce venture towards greater profitability and growth.
Also did you know that Sleek is a gold partner of A2X? You can benefit from all these benefits through your existing accounting package with us! For further information about A2X you can head to www.a2xaccounting.com.
FAQs about A2X and Sleek
Can A2X handle a large volume of orders?
Absolutely! A2X is designed to efficiently process any number of orders, whether you have just one or over a million orders monthly. It ensures your ecommerce accounting is automated accurately and reliably, safeguarding your accounting system against the potential strain of high order volumes.
Will A2X alter any information in my seller accounts?
No, A2X operates in a read-only mode. It solely accesses necessary reports from your ecommerce platforms that are essential for the reconciliation process. This means your seller account data remains untouched and unchanged by A2X.
How secure is my data with A2X?
Your data’s security is a top priority for A2X. It employs robust data security technologies, ensuring that all your financial information is securely stored on Google’s cloud platform. Moreover, your data is encrypted, making it inaccessible without proper authorisation. This ensures that your financial data is protected and private.
