Define your reporting needs

Management Reporting for ecommerce

Bookkeeping is not just a compliance exercise. Done correctly, it will give you business level insights into how your business is performing.
The most common reporting a business will look at is:
  • Profit and Loss reports
  • Balance sheet report
  • Cashflow forecasts
Collectively, provision of these reports is often called Management Reporting. If you use a software like Xero or Quickbooks for your bookkeeping, these reports will be readily available to you in the reports section of each of these apps.
Be careful of accountants who charges separately simply for the provision of management reports (which is common and unscrupulous practice: it is just the press of a couple of buttons). If you are paying for a management reporting service it must include context and dialogue around what this means for you business and potential decision making.

Profitability

Depending on your business model, you may care only about profitability at the business level, e.g. if you sell one particular service or product.
If your business sells a range of products and services, then you will likely care about the profitability at the service or SKU level. To get this level of detail, you will need to get a relatively accurate idea of costs per product by carefully allocating costs to each product.
How this is best done will differ from business to business. For example, some advertise specific SKUs and can easily identify and allocate ad spend correctly per product, whereas others advertise at the business level, and getting a meaningful approximation of ad cost per product may be unachievable.
Whatever the case, good processes and software can make this exercise simple. We have a range of templates we can share with clients, and you can also look at analytics software like Seller Board, or profit accelerators / consultancies like Sitruna.
Last modified 1yr ago