5 Benefits of Automated Accounting Integration
October 14, 2018 | accounting, automation, integration, tips | No Comments
As you have likely read, e-commerce sales continue to report explosive growth. According to a recent Statista study (view report), total e-commerce sales within the United States through Q2 2018 reached $249 billion. This represents a 17.4% increase over the $212 billion in sales for the same period of 2017, and approximately 10% of total retail sales in the United States.
In pursuit of your piece of the proverbial pie, it is common for a small and growing business to first license a shopping cart, then an accounting system, followed by email marketing, a shipping system, CRM and more. Establishing all of this disparity and not connecting the dots of data and process has proven to have a negative impact on profits and the ability to scale a small business. Time will be wasted with duplicate data entry as well as searching for and fixing manually inflicted errors in multiple systems. You also become prone to incorrect decisions caused by not having access to real-time data analytics housed in one place.
Take your accounting system for example. Intelligently integrating your e-commerce system with your accounting application provides the following 5 essential benefits…
1. Improved accuracy. According to a recent study by Royal Mail, 6% of businesses’ annual revenue is being lost through poor data quality. All it takes is one simple mistake to send your customers to an eagerly awaiting competitor.
With intelligent integration, your orders, payment details, refunds, and more are loaded with 100% accuracy into your accounting application. The two systems talk directly to each other without human intervention establishing a degree of accuracy that has a positive impact on your business.
“50% of a worker’s time is wasted finding and correcting errors”
2. Reduction in wasted time. According to the American Productivity & Quality Center (APQC), the average company spends $24.21 to process a sales order manually. Further, the Harvard Business Review reports that 50% of a workers time is wasted finding and correcting errors, or attempting to confirm data sources they don’t trust.
The APQC suggests that by incorporating automated integration, the cost of processing a sales order can be reduced to $6. That’s a savings of $15 per order (multiplied by the number of orders your business processes monthly and annually).
3. Real-time data exchange. Ensuring accurate available inventory, being able to ship accurately and on time, and obtaining timely sales and e-commerce metrics for important game changing decisions, is a cornerstone of any successful e-commerce business. Having to wait a day or longer for your systems to be updated can have a severely negative impact on your sustainability.
Properly integrating your e-commerce platform with your accounting system ensures near instant data exchange, understands how to match up your e-commerce customers and items with the appropriate representations in your accounting application, and enables you to manage problems by exception through alerts and notifications.
4. More profitable. As your e-commerce business grows, so do the number of orders you receive. They go hand in hand. When your systems are not integrated, the more orders you receive, the more time it takes an employee to manually enter orders into your accounting system. This translates directly into increased cost of sales, inefficient operations and lower profit margins.
As the business owner entering these orders, you may justify your time spent and call it more of a ‘soft cost’, but make no mistake…it’s a real cost, and one of the most expensive. It’s ownership opportunity cost. It’s time you are wasting with data entry when you could be (and should be) focusing on the next innovative strategy for growing your business.
Intelligent automation also means lower accounting fees. Gone are the days of paying your accounting firm to enter your data manually and fix your mistakes.
5. Win-win for you and your CPA. Imagine how happy your CPA and accounting firm will be when they no longer have to clean up time consuming mistakes you make each month in data entry and attempted journal entries. While your CPA bill may be less, your accounting firm will be thrilled. Instead of wasting time cleaning up your mistakes, they are able to bring on more clients with less staff, and increase their own profitability. They will be so pleased with you, they may even start bringing you donuts again.
Use intelligent integration to improve your operational efficiency, boost your profits, and increase customer satisfaction. When implemented correctly, It’s a small investment with significant ROI.