E-commerce Growth Strategy for January 2021
January 11, 2021
Plan for e-commerce in 2021.
January has arrived and the entire e-commerce industry of Australia is breathing a collective sigh of relief. After a bumper 2020 and a Christmas season dominated by online shopping, January is offering the chance for rest and most important reflection.
While e-commerce shopping in 2020 became necessary due to lockdowns and restrictions across the country, 2021 will show continued growth in this space. This year will be defined by changing consumer preferences as we negotiate an economic recovery locally and abroad. This month we focus on the lessons of the last year and to create a strategy for e-commerce businesses moving forward.
Follow these steps in January to make the rest of 2021 profitable:
Manage Cash Flow
January delivers a slowdown in sales and paying accounts with Australia Post or couriers. This means it is extremely important to focus on cash flow once the busy December season is over. Due to the decrease in sales in January do not rely on new revenue to pay outstanding accounts. Settle it from the sales from the previous quarter. An outstanding balance at the beginning of the year can easily snowball as the year goes on.
One area of focus should be settling all final accounts. For e-commerce it is no surprise that postage will be one of the biggest invoices due in January. One important thing to keep in mind is that Australia Post invoices can be very large due to increased sales and returns and exchanges. It is critical to ensure the correct amount is set aside to cover these expenses.
Stock Management
The less busy time in January is a perfect time to do a stock take. This can help e-commerce brands achieve two goals. One is to keep on top of inventory and the other is train staff in any new stock or changes.
While January can and should be a time to relax after the mad rush of Christmas, it can also be used effectively to touch base with staff and planning for stock management.
Managing Refunds and Returns
E-commerce return rates can go up by almost 50% above normal after the holidays. Returned holiday gifts is the biggest problem for e-commerce retailers. In addition, clothing and shoes are returned at the highest rate year-round, especially because customers often buy multiple sizes with the intention of returning items that don’t fit. It is important to manage returns properly and hang onto profits.
Review the data from past returns and calculate the average e-commerce return rate for your business. If it’s below 30%, that is really healthy. If it’s higher, it might be time to implement strategies to reduce your return rate. Of course, clothing always has a higher e-commerce return rate, so start thinking about pricing that includes this as part of the cost of doing business.
If tracking e-commerce return rates hasn’t been done before in your business, it’s time to add that metric to the key performance indicators (KPIs) for your business. A clear understanding of how e-commerce returns affect profit margin helps to establish both pricing and paid return label costs that keep your business profitable in the long term.
Review Sales
The slower summer months is also a good time to review the sales of the last quarter. This can easily be achieved when completing your stock take, no need to schedule extra tasks.
When restocking review what has been selling and what is not. If you need less or should discontinue products now is a perfect time to make that call. It is also important to review margins on sales. Do you need to put your prices up? Or are your margins good enough to lower prices and become more competitive. These are great pieces of information to have early in the year. And finally, review which channels are making most sales. For example, are most sales coming through your own site or third-party sites such as eBay, Kogan or Amazon. Understanding where to focus and what to let go is a great way to build more value into your sales strategy.
Review Marketing and Advertising Budgets
Now that the busiest quarter of the year is over it is a perfect time to reflect on marketing and advertising budgets. While there is no perfect mix, budgets for marketing in 2021 should grow to maintain and increase business in an environment where online spending is only set to increase.
Consider which platforms worked best for you. If email marketing in newsletters or social media platforms provided results plan on increasing spends in those areas. Often a good guide is to increase spending budgets by at least 10%. However, this is only a guide, each business should review their spends to decide on their increases.
On the other hand, if certain platforms or types of content where underperforming now is the perfect time to revise spending in this area. Marketing is a complex mix of content, platforms and ad spends, however, looking at the busiest time of the year provides the most clarity on what is working and why.
Read Catch of the Decade
Gabby Leibovich and Hezi Leibovich, two of Australia’s most successful online entrepreneurs wrote a book, Catch of the Decade. This book explains how they built, launched, merged, and sold some of the most disruptive businesses in Australia: Catch, Scoopon, Menulog and Luxury Escapes. We at 360 Accounting believe this is foundational reading for any business owner in the e-commerce space. This book contains secrets and strategies to shorten a new or seasoned business owner’s learning curve, lists mistakes to avoid, and helps your business thrive in these uncertain times.
Any Questions?
While the silly season is over, we cannot stress enough the importance of learning, taking stock and building for the future in January. Of course, if you have any questions or would like to schedule a review of your books please get in touch. We are always happy to help.
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In today's fast-paced digital world, managing your finances effectively is more crucial than ever. For businesses leveraging digital technology, streamlined bookkeeping is not just a good practice—it's essential for sustained growth and success. Here are some top bookkeeping tips tailored for the digital age. Embrace Cloud-Based Accounting Software One of the most significant advancements in bookkeeping is the rise of cloud-based accounting software. Platforms like Xero, QuickBooks Online, and MYOB offer numerous benefits: ● Accessibility: Access your financial data anytime, anywhere, from any device with an internet connection. This is perfect for remote teams or business owners on the go. ● Real-time Updates: Get a live view of your financial health, allowing for quick and informed decision-making. ● Automation: Automate routine tasks such as invoicing, expense tracking, and bank reconciliations, saving you time and reducing errors. ● Integration: Seamlessly integrate with other digital tools you use, such as CRM systems, e-commerce platforms, and payment gateways. Digitise and Automate Expense Tracking Say goodbye to shoeboxes full of receipts. Digital tools make expense tracking effortless: ● Receipt Scanning Apps: Use apps like Receipt Bank or Expensify to capture receipt images on the go. These apps can extract key information and categorise expenses automatically. ● Direct Bank Feeds: Link your business bank accounts and credit cards to your accounting software to automatically import transactions. This reduces manual data entry and ensures accuracy. ● Categorise Consistently: Establish clear expense categories and apply them consistently to gain accurate insights into your spending patterns. Regular Bank Reconciliations Even with automation, regular bank reconciliations are vital. This process involves comparing your accounting records with your bank statements to ensure everything matches up. ● Catch Errors Early: Identify discrepancies or errors promptly, preventing them from escalating into larger issues. ● Prevent Fraud: Regular checks can help detect unauthorised transactions. ● Maintain Accuracy: Ensure your financial statements are accurate and reliable for tax purposes and financial reporting. Utilise Digital Invoicing and Payment Systems Streamline your accounts receivable with digital solutions: ● Electronic Invoicing: Send professional invoices directly from your accounting software via email. This is faster and more eco-friendly than traditional paper invoices. ● Online Payment Gateways: Offer clients various online payment options (e.g., credit card, PayPal, Stripe) to facilitate quicker payments and improve cash flow. ● Automated Reminders: Set up automated reminders for overdue invoices to reduce the time spent chasing payments. Implement Strong Cybersecurity Measures With all your financial data stored digitally, cybersecurity is paramount: ● Strong Passwords and Two-Factor Authentication (2FA): Protect your accounting software and other financial platforms with robust security measures. ● Regular Backups: Ensure your data is regularly backed up to prevent loss in case of a system failure or cyberattack. ● Educate Your Team: Train your employees on best practices for data security and how to recognise phishing attempts. Seek Professional Advice While digital tools empower you to handle much of your bookkeeping, there are times when professional guidance is invaluable. ● Tax Planning: A qualified accountant can help you navigate complex tax laws and optimise your tax strategy. ● Financial Analysis: Gain deeper insights into your financial performance and identify areas for improvement. ● Compliance: Ensure your business remains compliant with all relevant financial regulations. By integrating these bookkeeping tips into your digital technology framework, you'll not only save time and reduce stress but also gain a clearer, more accurate picture of your business's financial health, paving the way for sustained success. For more information or assistance, feel free to contact us at 360 Accountinsg Services via email at enquiries@360accountingservices.com.au
As a small business owner, managing your finances can be a complex task. While effective bookkeeping is essential for day-to-day operations, there are specific situations where seeking professional financial advice can provide significant benefits and help ensure your long-term success. Key Indicators It's Time to Consult an Advisor It's important to recognise when your financial situation warrants more than just accurate record-keeping. Here are some common scenarios that suggest it's time to reach out to a professional financial advisor: ● Significant Business Growth: When your business experiences rapid growth, your financial structure often needs to evolve to keep up. An advisor can help you navigate increased revenue, new investments, and scaling operations. ● Complex Tax Situations: If your business has diversified income streams, international operations, or other complex tax implications, a financial advisor specializing in tax planning can help you optimize your tax strategy and ensure compliance. ● Major Business Decisions: Contemplating a significant investment, expansion, acquisition, or sale of your business? These decisions have profound financial implications, and professional advice can help you assess risks and opportunities. ● Cash Flow Challenges: While bookkeeping tracks cash flow, an advisor can help identify underlying issues causing consistent cash flow problems and develop strategies to improve liquidity. ● Personal and Business Financial Blending: Small business owners often find their personal and business finances intertwined. An advisor can help separate these and create clear strategies for both. ● Retirement or Succession Planning: Planning for your eventual exit from the business, whether through retirement or selling, requires strategic financial foresight. An advisor can help create a robust succession plan. ● Unexpected Financial Changes: Market downturns, sudden operational changes, or unforeseen expenses can create financial uncertainty. A professional can help you navigate these challenges and adapt your financial strategy. ● Lack of Financial Knowledge: If you find yourself consistently unsure about financial terminology, investment strategies, or long-term financial planning, it's a clear sign that professional guidance would be beneficial. What a Financial Advisor Can Offer A financial advisor offers a range of services that go beyond the scope of traditional bookkeeping: ● Strategic Planning: Developing long-term financial goals and creating a roadmap to achieve them. ● Investment Guidance: Advising on suitable investment opportunities for your business's growth and stability. ● Risk Management: Identifying and mitigating financial risks that could impact your business. ● Tax Optimisation: Crafting strategies to minimize tax liabilities legally and effectively. ● Succession Planning: Preparing for the smooth transition of business ownership. ● Budgeting and Forecasting: Assisting with more advanced financial projections and budget development. Next Steps If you identify with any of the scenarios above, don't hesitate to seek professional financial advice. A consultation with a qualified advisor can provide clarity, peace of mind, and a stronger financial foundation for your business. For a personalised consultation, contact us at enquiries@360accountingservices.com.au
In today's fast-paced digital world, managing your finances effectively is more crucial than ever. For businesses leveraging digital technology, streamlined bookkeeping is not just a good practice—it's essential for sustained growth and success. Here are some top bookkeeping tips tailored for the digital age. Embrace Cloud-Based Accounting Software One of the most significant advancements in bookkeeping is the rise of cloud-based accounting software. Platforms like Xero, QuickBooks Online, and MYOB offer numerous benefits: ● Accessibility: Access your financial data anytime, anywhere, from any device with an internet connection. This is perfect for remote teams or business owners on the go. ● Real-time Updates: Get a live view of your financial health, allowing for quick and informed decision-making. ● Automation: Automate routine tasks such as invoicing, expense tracking, and bank reconciliations, saving you time and reducing errors. ● Integration: Seamlessly integrate with other digital tools you use, such as CRM systems, e-commerce platforms, and payment gateways. Digitise and Automate Expense Tracking Say goodbye to shoeboxes full of receipts. Digital tools make expense tracking effortless: ● Receipt Scanning Apps: Use apps like Receipt Bank or Expensify to capture receipt images on the go. These apps can extract key information and categorise expenses automatically. ● Direct Bank Feeds: Link your business bank accounts and credit cards to your accounting software to automatically import transactions. This reduces manual data entry and ensures accuracy. ● Categorise Consistently: Establish clear expense categories and apply them consistently to gain accurate insights into your spending patterns. Regular Bank Reconciliations Even with automation, regular bank reconciliations are vital. This process involves comparing your accounting records with your bank statements to ensure everything matches up. ● Catch Errors Early: Identify discrepancies or errors promptly, preventing them from escalating into larger issues. ● Prevent Fraud: Regular checks can help detect unauthorised transactions. ● Maintain Accuracy: Ensure your financial statements are accurate and reliable for tax purposes and financial reporting. Utilise Digital Invoicing and Payment Systems Streamline your accounts receivable with digital solutions: ● Electronic Invoicing: Send professional invoices directly from your accounting software via email. This is faster and more eco-friendly than traditional paper invoices. ● Online Payment Gateways: Offer clients various online payment options (e.g., credit card, PayPal, Stripe) to facilitate quicker payments and improve cash flow. ● Automated Reminders: Set up automated reminders for overdue invoices to reduce the time spent chasing payments. Implement Strong Cybersecurity Measures With all your financial data stored digitally, cybersecurity is paramount: ● Strong Passwords and Two-Factor Authentication (2FA): Protect your accounting software and other financial platforms with robust security measures. ● Regular Backups: Ensure your data is regularly backed up to prevent loss in case of a system failure or cyberattack. ● Educate Your Team: Train your employees on best practices for data security and how to recognise phishing attempts. Seek Professional Advice While digital tools empower you to handle much of your bookkeeping, there are times when professional guidance is invaluable. ● Tax Planning: A qualified accountant can help you navigate complex tax laws and optimise your tax strategy. ● Financial Analysis: Gain deeper insights into your financial performance and identify areas for improvement. ● Compliance: Ensure your business remains compliant with all relevant financial regulations. By integrating these bookkeeping tips into your digital technology framework, you'll not only save time and reduce stress but also gain a clearer, more accurate picture of your business's financial health, paving the way for sustained success. For more information or assistance, feel free to contact us at 360 Accountinsg Services via email at enquiries@360accountingservices.com.au
As a small business owner, managing your finances can be a complex task. While effective bookkeeping is essential for day-to-day operations, there are specific situations where seeking professional financial advice can provide significant benefits and help ensure your long-term success. Key Indicators It's Time to Consult an Advisor It's important to recognise when your financial situation warrants more than just accurate record-keeping. Here are some common scenarios that suggest it's time to reach out to a professional financial advisor: ● Significant Business Growth: When your business experiences rapid growth, your financial structure often needs to evolve to keep up. An advisor can help you navigate increased revenue, new investments, and scaling operations. ● Complex Tax Situations: If your business has diversified income streams, international operations, or other complex tax implications, a financial advisor specializing in tax planning can help you optimize your tax strategy and ensure compliance. ● Major Business Decisions: Contemplating a significant investment, expansion, acquisition, or sale of your business? These decisions have profound financial implications, and professional advice can help you assess risks and opportunities. ● Cash Flow Challenges: While bookkeeping tracks cash flow, an advisor can help identify underlying issues causing consistent cash flow problems and develop strategies to improve liquidity. ● Personal and Business Financial Blending: Small business owners often find their personal and business finances intertwined. An advisor can help separate these and create clear strategies for both. ● Retirement or Succession Planning: Planning for your eventual exit from the business, whether through retirement or selling, requires strategic financial foresight. An advisor can help create a robust succession plan. ● Unexpected Financial Changes: Market downturns, sudden operational changes, or unforeseen expenses can create financial uncertainty. A professional can help you navigate these challenges and adapt your financial strategy. ● Lack of Financial Knowledge: If you find yourself consistently unsure about financial terminology, investment strategies, or long-term financial planning, it's a clear sign that professional guidance would be beneficial. What a Financial Advisor Can Offer A financial advisor offers a range of services that go beyond the scope of traditional bookkeeping: ● Strategic Planning: Developing long-term financial goals and creating a roadmap to achieve them. ● Investment Guidance: Advising on suitable investment opportunities for your business's growth and stability. ● Risk Management: Identifying and mitigating financial risks that could impact your business. ● Tax Optimisation: Crafting strategies to minimize tax liabilities legally and effectively. ● Succession Planning: Preparing for the smooth transition of business ownership. ● Budgeting and Forecasting: Assisting with more advanced financial projections and budget development. Next Steps If you identify with any of the scenarios above, don't hesitate to seek professional financial advice. A consultation with a qualified advisor can provide clarity, peace of mind, and a stronger financial foundation for your business. For a personalised consultation, contact us at enquiries@360accountingservices.com.au
