1. Retail vs Trade & Omnichannel
Whether your customers are retail or trade clients, they’re still going to expect an excellent level of customer service from you. But they do need to be handled differently within an omnichannel business.
For example, you’re going to need to ensure that your B2B or trade customers have the freedom and autonomy to purchase up to their full credit limit, and pay invoices at any time.
This means ensuring your sales staff are up-to-date and kept informed of new trade agreements and credit balances at all times. It’s also likely that you’ll need to invest in new technology to empower your clients to pay whenever (and however) they choose to do so. This could be a payment over the phone, an online payment or in person.
2. Cross-Channel Inventory Reporting
One of the biggest challenges in omnichannel retail is ensuring your inventory levels are up-to-date across your sales channels, and that the underlying inventory reporting and cost of goods sold figures are also accurate.
Firstly, a reliable inventory management system should be your first port of call. This will handle the inventory updates for you automatically, regardless of where (and how) you’ve bought and sold your products.
On the accounting side itself, your system should be able to use accurate inventory accounting methods to ensure costs and profit are being calculated correctly. But not only that, you should also ensure you have real time access to margin reports, profitability and inventory availability so you can make fast and trustworthy decisions to make the replenishment and reordering process easier.
I must admit that when you also add cross-border trade into the mix as well, well things can get just a little bit trickier…
3. Cross-Border Trade & Omnichannel
Whether your website alone caters for international customers or whether you’re on a mission to expand overseas via online marketplaces, your cost and profit margins become ever more increasingly important to get right.
When buying and selling in foreign currencies, you’ll need to accurately portray exchange rate gains and losses within your accounting, otherwise you could be inflating your profits.
Similarly, you’ll also need to ensure you’re reporting on the true costs of your products. But what exactly do I mean by that? Well, there are other costs associated with buying and selling goods, aside from just what you’ve paid versus what your customer has paid.
Freight and carrier charges, insurance fees, marketplace fees, import duty and other taxes are all examples of what we refer to as landed costs, or the true costs of your products. Sadly, these can sometimes be overlooked within both accounting transactions and financial forecasts.
You may need to handle these costs manually, appropriating costs to your products in the best way to suit you. A couple of basic examples of this include:
> Attribute more of your insurance costs to high value items.
> Attribute more of the container or freight charges to bulky or heavy items.
It’s up to you how you decide to divide up your landed costs, and they of course depend on what you’re buying and selling. But at the very least, you should be able to divide up the costs based on: value, weight, volume and quantity.
4. Cross-Channel Tax Reporting
Omnichannel retail also brings other challenges to financial management, such as the need to report tax in a consistent way for sales that originate from different systems and platforms.
Every sales channel (and region) handles tax differently, making your job more challenging as you expand.
Within your retail management system, you should be able to enter tax-exclusive (net) prices and setup rules to add tax as needed for each channel. This ensures that as your orders download, the appropriate tax is being added to each sale based on anything from delivery location, to specific item tax amount.
If accounting for your sales manually, you will need to ensure the correct tax amounts are being applied as per rules and legislation for where your store is located, as well as where your customer is based, and on what they’ve actually ordered from you.
5. Cross-Channel Audit Trail
With each of your omnichannel processes tied up so closely with your accounting reports, you will need to ensure you’re making use of a decent cross-channel audit trail.
This could be anything from being able to see which sale or purchase caused which accounting journal, as well as how each inventory correction affects your asset values and which refund relates to which sale as well.