If you found this post, there is a good chance you are one of the hundreds of eCommerce businesses using Maropost.
While Maropost can help you market and sell online, it is not designed to be a robust accounting solution. That can be problematic since managing cash flow is essential to running a healthy and sustainable business.
One common challenge we see Maropost customers – as well as Shopify and WooCommerce businesses – run into is growing too quickly where you can’t fund enough inventory to keep up with demand. And, if your financial reports are a mess (or nonexistent), you also struggle to get a loan or a line of credit to float inventory and operating expenses.
In this post, we share our Maropost accounting strategies and tactics to help you grow your eCommerce business and avoid many of these common pitfalls.
What is Maropost?
On the off chance, you found this article and aren’t a Maropost customer. Here is a quick primer. Maropost is an eCommerce and marketing automation platform designed to give businesses the tools they need to efficiently operate and scale. This Australian-based company has two main products: Marketing Cloud and Commerce Cloud.
By having two main products, this means Maropost customers have an end-to-end multi-channel platform that works for DTC, retail, and wholesale.
According to the Maropost website, here are a handful of brands that are using the platform:
- Stanley Steemer
- 70/Faces Media
- USA Hockey
- Leaf Group
Why are accounting and bookkeeping important for eCommerce businesses using Maropost?
Here are the four main metrics that every eCommerce business owner should know inside and out: revenue, profit, free cash flow, and inventory levels.
If you aren’t “a numbers person,” the easiest way to keep track of these numbers each month (or ideally weekly!) is through the following four financial reports:
- Profit and Loss Statement: this is your high-level financial outlook that allows you to see all of your revenue and expenses
- Balance Sheet: This is kind of like your business’s highlight reel. It gives you a bird’s eye view of your assets and liabilities.
- Cash Flow Statement: This allows you to gain insights into free cash flow, which can help with ensuring you always have enough money to pay your team and fund inventory, among other things.
- Inventory Forecast: This is fairly self-explanatory but allows you to see your most popular and most least popular SKUs as well as understand how fast inventory is moving.
These reports can typically be set up automatically via your cloud accounting software, like Xero.
As your business scales, there are some additional financial KPIs that you should also be paying attention to, like gross profit, net profit, customer acquisition cost, average order value, cost of goods sold, and inventory lead time. These are just a handful of additional metrics that can help you make more strategic, data-driven decisions about your business.
What cloud accounting software works best for Maropost businesses?
If you are still currently using spreadsheets and Maropost’s direct reports to manage your books, it is probably time to switch to a cloud accounting software. This will save you a ton of time and eliminate a lot of human errors that happen when you are staring at spreadsheets.
While Quickbooks is a popular accounting software option geared toward small and medium-sized businesses, here at Bean Ninjas, we’re a Xero platinum partner.
Fun Fact: Like Maropost and Bean Ninjas, Xero is also an Australian-based company.
Not only will you save time when you switch from spreadsheets to Xero, but you will also gain a lot of automation features to streamline your accounting and bookkeeping processes. Some features include automated bank feeds, setting up a custom chart of account rules, and payment reminders, just to name a few. There are also a ton of lesser-known Xero features and eCommerce integrations that can save you and your team a lot of time.
You also have access to detailed financial reports, like your P&L, balance sheet, and cash flow statement.
Pro Tip: One critical thing to get right is your Xero account setup. Here are 8 of the most common mistakes that we see eCommerce businesses make.
How to integrate Xero and Maropost
Speaking of getting your Xero account set up correctly, the most important piece is the integration between Maropost and Xero.
The data that is integrated from Xero to Maropost includes tax rates, customers, products, and accounts.
This will not only save time and reduce tedious administrative tasks but also means you’ll be confident that you always have accurate data in Xero.
While Maropost has a direct Xero integration, there are some real limitations, especially for an eCommerce business making a lot of sales. With our in-depth eCommerce accounting expertise and getting tired of encountering many of these issues on clients’ accounts, we ended up creating our own SaaS app, Crossbeam.
Crossbeam accounts and solves a lot of these shortcomings, including providing near real-time reporting, accurate GST and sales tax reporting, and more.
How to do accounting for Maropost businesses
From building your tech stack to accrual accounting best practices, here are some actionable tactics for Maropost businesses.
Build your Maropost accounting tech stack
The first step to getting your finances in order is to build a solid accounting tech stack. Here are the 4 tools we regularly use with our clients, in addition to Xero
- A2X: If you also sell on Amazon, Etsy, eBay, or Walmart, then A2X helps tidy up your transactions by sending them to Xero and matching your payouts to your bank deposits.
- TaxJar: TaxJar helps keep track of sales tax no matter where your products are sold. Sales tax laws can be complicated. TaxJar simplifies it for you and helps keep your business in compliance with tax calculations, nexus tracking, reporting, and filing.
- Gusto: Gusto helps you manage payroll, benefits, and other HR necessities for your team.
- Airwallex: Airwallex is another financial tool that can be easily integrated with Xero. Airwallex is great for companies that make international sales in addition to domestic ones. The tool helps manage global cash flow and automates the reconciliation process. With Airwallex, you can create bank feeds in each currency you accept without manually importing entries. The tool was made to help save companies hours of admin time and frustration.
Switch to accrual accounting
Most companies start with cash-basis accounting simply because it’s easier. The bookkeeping might be more straightforward at first, but eCommerce finances can get complicated, and this method could be hindering your company as you scale.
That’s why we recommend switching over to accrual-basis accounting. The accrual-basis method is a better option for larger or more complex businesses like eCommerce operations. With accrual, you record the revenue when it’s earned. This usually means that revenue is reported before money is exchanged. Essentially, the company operates on credit and settles debts after transactions have taken place. Keep in mind that accrual accounting is required for larger businesses by the generally accepted accounting principles (GAAP).
Revenue is accounted for when it is earned. Typically, revenue is recorded before any money changes hands. Unlike the cash method, the accrual method records revenue when a product or service is delivered to a customer with the assumption that money will be paid in the future. Expenses of goods and services are recorded despite no cash being paid out yet for those expenses.
Get systems set up for tax time
No matter the size of your eCommerce business, there’s never a better time than now to put your financial systems in place. Having software and tools set up to help you track your finances and run financial reports means tax time will be less of a scramble.
Build in fraud prevention controls
Accounting automation and tools don’t just save you time, they can also help prevent fraud. Many of the tools listed in this post can help you by allowing you to work in fraud prevention controls. For instance, with Xero, you can restrict access to payment authorizations and account changes to your bank accounts. You can require purchaser approval for invoices before they’re paid. Of course, you should also reconcile your accounts monthly, review your P&L and balance sheets, and run regular financial audits.
Unfortunately, sometimes fraud happens internally from team members you trust. For example, one company realized something wasn’t adding up with their books, and someone was selling their product through Amazon. This was despite their contracts that stated their wholesale customers could not sell their product on the platform. As it turns out, one of their employees was creating fraudulent invoices to get customers to pay him through a personal account. The employee embezzled approximately $230,000, and the company now has guardrails that could have prevented the fraud in the first place, including inventory management systems, product audits, and oversight of credit card charges.
Maropost accounting key takeaways
Here are the key takeaways to consider:
- Select an accounting software option that integrates well with Maropost, like Xero.
- Build an accounting tech stack with tools that complement each other.
- Utilize accrual accounting.
- Review your financial reports regularly
- Set up fraud prevention controls.
Whether you’ve run your business through Maropost for years or you’re just getting started, your accounting systems and processes have a big impact on operations.
Looking for help with Maropost accounting? Schedule a free call with a Bean Ninjas team member today