Cybernews Guest Blog: Group Financial Analytics and Reporting Simplified

You might already be aware of the significance of a thorough financial reporting process and analytics.

After all, reporting is a legal requirement in most countries. But, what may not be apparent is the dire consequences of not giving these aspects enough attention.

If the financial data isn't up to scratch, it could cause some issues for the people in charge—the executives, managers, and investors.

Making decisions based on faulty or incomplete information might lead to less effective strategies, misguided investments, and missed opportunities.

Here's a daunting fact: 38% of businesses fail because they run out of cash due to poor decision-making.

As an e-commerce business owner, you must ensure that your reporting and analytics are solid for your business's sound financial health.

But with multi-channel sales, diverse revenue streams, customer returns, refunds, etc., financial reporting can get a bit tricky.

In this article, we'll go through how you can make your financial reporting and analytics processes more streamlined, simplified, and effortless. So read on.

Financial Analytics vs. Reporting

Financial analytics and financial reporting are often used interchangeably to mean the same thing. But these are actually two different forms of business intelligence that serve very different purposes.

Reporting is the process of organizing data into formal summaries. We add charts and graphs to make reports less boring and make it easier to skim important information. But the keyword here is summary.

Analytics, on the other hand, is the process of exploring the data to extract meaningful insights. These insights can be used to better understand and improve a business.

So where reporting can show you where something is wrong, analytics can show you what's wrong.

Challenges E-commerce Businesses Face in Financial Reporting

Given the unique nature of your e-commerce business operations, there are a few hurdles to jump when it comes to financial reporting and analytics. Here are a few challenges you might be facing:

Figuring Out E-commerce Costs and Overheads

Running an e-commerce business means dealing with quite a few costs. There's the cost of the items you sell and the whole picking, packing, and distribution process. And then there are selling fees from third-party marketplaces and import and customs fees with taxes on top.

You must also handle customer service, rent, utilities, and other business expenses. And don't forget about advertising, marketing expenses, and software and admin costs.

It all adds up quickly, and you must cover all these costs from your profit margin on every product you sell. You need to understand your costs well to set a fair profit margin and get your product prices just right.

How do you do that? Keep track of every cost tied to selling your stuff, organise them in your bookkeeping, and use the "Profit and Loss" report in your accounting software. And make it a habit to check the total costs of each item regularly.

Once you've got a good handle on your costs, you can adjust your profit margins and pricing to make sure you cover all your overheads and still have a bit extra to grow your business.

Payments in Different Currencies

As your e-commerce business starts booming, it might be the perfect time to think about expanding internationally. When you do, it's crucial to accept payments in the buyer's currency and then convert it to your own currency for depositing into your bank account.

But here's the kicker—watch out for hidden fees that come with foreign currency exchange rates.

To dodge any nasty surprises, find shopping cart software that offers many options for charging in different currencies and how your customers can pay.

Also, take the time to understand the exchange rates offered by your credit card payment processors and compare them to the baseline, mid-market rate.

The best move is to use bookkeeping and accounting software that can handle multiple currencies and bank accounts. That way, you can keep track of all your international transactions without breaking a sweat.

Managing Inventory

Inventory management can be a real headache, even for small-time sellers. And when you add new products and sales channels into the mix, it becomes even more complicated.

You must keep tabs on what you got, how much it's all worth, and where it's stored, especially if you've got more than one warehouse or fulfillment center.

With every sale, the total inventory quantity changes, and even those returns coming back in great condition can also make things more complex.

Even without accounting tied into the mix, managing inventory remains a challenging task. It's the backbone of any online retailer's cash flow, so keeping it all in check is a big deal.

Also, the pandemic has made the supply chain a big deal, and e-commerce businesses are working extra hard to keep products flowing to meet customer demand.

To sort things out, start with solid forecasting and predictions (which is only possible with proper financial reporting and analytics). That way, you'll handle the ups and downs, especially during busy times.

Keep a close eye on your spending with suppliers so you don't end up with too much stock taking up all your cash.

Cybersecurity

Cybersecurity can be a real challenge for e-commerce businesses, especially in group financial reporting and analytics.

Your e-commerce business handles sensitive data like customer information and payment details, which makes you (and your financial reporting and analytics systems in specific) an attractive target for cyber threats.

Attacks like ransomware and phishing can cause trouble and mess up your financial health.

You need to take data protection seriously. Invest in strong security measures like a VPN (which will encrypt whatever sensitive data is being transmitted to your servers) to keep those cyber criminals out.

Regularly monitor and quickly respond to threats to keep things safe and sound.

If you don't take cybersecurity seriously, you could end up facing financial losses and damage to your reputation.

So, you better be proactive and ensure their financial reporting and analytics are as secure as can be.

Streamlined Group Financial Reporting and Analytics with riskrate: Overcoming The E-commerce Accounting Challenges

Keeping track of sales, expenses, and profitability is important for making smart choices and keeping your venture going for the long haul.

But doing all the financial reporting manually can be a real pain—prone to errors and using up valuable resources.

With riskrate (the all-in-one Financial Reporting Automation platform for small global teams, including e-commerce businesses), you can reduce 90% of time wasted on manual work and focus on what truly matters—empowering your team to grow faster on dead-set accurate data.

Here are a few ways riskrate can lend a hand and help you sort out the challenges you face with financial reporting and analytics:

Automate Group Financial Reporting Effortlessly

With riskrate, you don't need to spend countless hours generating financial reports manually. riskrate reduces 90% of time wasted on manual work consolidating all financial data a SMB needs for group financials with a few clicks. SMB get a centralised view of performance with a multi-entity, multi-currency P&L in minutes to share with a team with human like analysis.

The platform's seamless integration with various financial tools, like QuickBooks, Xero, and Microsoft Dynamics NAV, allows you to connect with your existing systems seamlessly.

Alternatively, you can also upload CSV/Excel files directly, making it super easy to consolidate and analyze financial data from multiple sources.

Generate Group Reports in a Snap

Churning out financial reports has never been more manageable, faster, or accurate. With riskrate, you can generate comprehensive reports with just a click of a button.

No more slogging through complicated spreadsheets or battlin' formula errors. In less than three minutes, you can have a detailed and analyzed financial report at your fingertips.

Payments in Different Currencies

Going international with your e-commerce business is a smart move, but as mentioned earlier, dealing with reports in different currencies can be a bit of a headache.

You can run multicurrency reports on the fly with riskrate's built-in currency conversion support and track all your international transactions without any fuss.

Cash Flow Positive

As an e-commerce business owner, keeping track of your cash flow is essential for your day-to-day operations and future growth.

With riskrate's live cash forecasts, you get real-time insights into your cash position, giving you the confidence to make smart financial decisions and ensuring you have enough funds to keep your business running like a well-oiled machine.

Best-in-Class Security

Keeping your financial data safe and sound should be your number one priority. riskrate has some excellent security measures in place, including encryption in transit and at rest, to safeguard all your sensitive financial info.

And with single sign-on (SSO) functionality, you can take charge of who gets access to view and edit those crucial financial reports, ensuring only authorized people get in.

Wrapping Up

Choosing the right accounting approach for your e-commerce business is the key to tackling challenges head-on. It might involve finding the perfect software or going through those agreement fine prints.

Sure, it can seem like a fair bit of work, but it's worth it. When you've got a specialized e-commerce solution that streamlines financial reporting processes, provides analyzed reports, and offers currency support, your decision-making becomes more informed and efficient.

Ready to automate your financial reporting? Try riskrate today with a 14-day fully featured free trial—no credit card required.

This is a Guest Blog from Cybernews. a breaking cybersecurity and information news, independent research, the latest tech analysis, and product reviews, all produced by Cybernews in-house experts.

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