979 Words｜3 Mins Reading｜20/6/2020
In the journey of running an e-Commerce business, many entrepreneurs seek for our expertise to review their accounts. At YYC, we realize the growth of the business can be restricted by 4 common challenges in accounting related matters as below:
1. Is Your Accountant Lacking of Accounting Related Experiences in e-Commerce Industry?
2. Is Your Accountant Able to Multitask? Did He or She Meet Your Expectation?
3. Is Accounting "Non-essential"?
4. Lack of Experience in Automation of Financial Management?
Malaysia’s e-Commerce market has grown fast in recent years. This is powered by growing smartphone penetration and a willingness by shoppers to buy online. Malaysia Digital Economy Corporation (MDEC) expects the change in behavior of consumers and local traders from the conventional method to online business will continue even after Covid-19 ends.
Businesses are taking proactive steps to ride on the wave of e-Commerce to expand market share. Driven by a relatively high internet penetration rate, the e-Commerce market in Malaysia is going from strength to strength and is forecast to grow at a compound annual growth rate of not less than 24% a year.
Are you planning to start an e-Commerce business or you are running an e-Commerce business but facing accounting problems? Well, we have the solutions.
In today's world, there are lots of advertisements that encourage you to start a business or venture into e-Commerce. There also lots of coaching on new skills in digital marketing to reach for more customers. However, there is limited sharing on how to prepare an effective financial statement for your e-Commerce business.
At YYC, we serve numerous e-Commerce entrepreneurs. During the MCO period, the trend in the e-Commerce industry was particularly strong. Our accounting specialists assists our customers by providing professional financial data. Customers only needed to focus on their business expanding.
In the journey of running an e-Commerce business, many entrepreneurs seek our expertise to review their accounts. At YYC, we realize the growth of the business can be limited by challenges in accounting related matters. Here are 4 common challenges:
Many clients have in-house accountants who might not have work experiences in e-Commerce. We are advising our clients to appoint YYC for leveraging on our experiences. By collaborating with YYC, your accountants can gain extra knowledge from us while working together. Besides, you can rest assured that accounting functions are able to continue in the event of resignations of your staff.
Due to the initial small setup, multitasking among staff is expected. Having an accountant to manage your finances and other operational tasks are cost-saving but this will be ineffective when your business is growing.
In a fast-moving business environment, the committed accountant will be overwhelmed and lost focus which translates into a loss of time and money. With the assistance from YYC, you can be assured that there is a team of specialists who can manage the accounts of your business in the best possible way.
Accounting function is perceived as “not so important” or “the last to worry about” as businesses are fully focusing on “driving online traffic”. Many entrepreneurs do not prepare their accounts properly as well as their business records. Many entrepreneurs with this mindset paid a hefty penalty for non-compliance with the Companies Act. Most of these penalties were for late filing of audited accounts or income tax returns.
Accounting software that integrates with online store platforms can save time in doing accounts. Additional time saving can be achieved if bank transactions for accounting purposes are direct bank feed and auto-match by the system.
Many entrepreneurs are unable to harness the benefits of time and cost savings from automation due to a limited understanding of accounting and IT. When the result of financial statements does not tally with entrepreneurs’ expectations, the backtracking of past errors with manual checking is even more time-consuming.
The discussions with entrepreneurs on accounting are mostly centered around the fluctuating of gross profit ratio, accounting entries for stock adjustment, goods return, goods warranty, discount to customers, gifts and sample to customers, classification of direct costs and expenses, the stock list does not tally with physical goods, stock valuation not in compliance with accounting standards.
All the above will impact on your financial statements. Without correct and updated accounts, it is difficult to make effective decisions. When you have precise accounts, quicker decisions can be made in times of uncertainty with profitable opportunities that can be seized, and risk management policy can be implemented without being afraid of misled by accounting errors.