The multichannel approach is becoming more popular as a way to succeed in retail and e-commerce. This involves selling products through multiple sales channels. For example, brick-and-mortar stores, online marketplaces, and company-owned websites. However, there are some unique challenges of multichannel ecommerce when it comes to inventory management and accounting.
This article discusses how a multichannel ecommerce impacts your inventory management and accounting. Then, we’ll go through the steps you need to take to streamline these key processes to ensure your systems are connected properly.
- What is a multichannel approach in retail and e-commerce?
- Inventory management for multichannel e-commerce businesses
- How to avoid common inventory management problems
- How does a multichannel approach impact your accounting?
- How to manage your accounting with multiple channels
- Connecting inventory and accounting across multiple channels
- Key takeaways on inventory and accounting for multichannel
What Is a Multichannel Approach In Retail and Ecommerce?
A multichannel approach involves reaching customers through a variety of different sales channels. The goal is to reach as many customers as possible by having a presence in different places. This makes it easier for customers to purchase products and increases sales.
For example, an athleisure company may have:
- A brick-and-mortar store,
- A website hosted on Shopify,
- A storefront on social media apps like Instagram, and
- A presence on online marketplaces.
Omnichannel and multichannel approaches are different, despite terms often used interchangeably. An omnichannel approach focuses on creating a consistent shopping experience across all channels. A multichannel approach simply involves having multiple sales channels.
Multichannel Ecommerce Businesses and Inventory Management
Managing inventory becomes complex for e-commerce businesses that sell on multiple channels. To ease the burden of inventory management, inventory management solutions (IMS) are available. These solutions use artificial intelligence (AI) and automation to streamline workflows, and simplify the process of tracking, managing, and organizing inventory across multiple channels.
With Megaventory, all orders in your e-commerce platform/s are transferred to Megaventory. Both Megaventory and the e-commerce platform/s will be updated regardless of where the order is fulfilled. Real-time stock information will allow you to avoid duplicates and make it easier to manage different sales channels.
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How To Avoid Common Inventory Management Problems
Multichannel ecommerce businesses face unique challenges in inventory management. In particular, you need to balance stock levels across platforms. On top of that, you need to avoid overstocking or understocking. Otherwise, you risk missed sales opportunities, lost customers, and higher inventory costs.
With a tool like Megaventory in place, businesses can:
- Get stock alerts to reduce the risk of overstocking and understocking
- Ensure they have the right amount of inventory to meet customer demand
- Take advantage of demand forecasting and safety stock management
- Automate the process of tracking inventory levels and reordering
- Manage inventory across different platforms and locations
Before implementing an IMS, you need an understanding of your stock needs. This includes current stocking issues, dead stock, warehouse locations, staff, etc. Then, decide on what your inventory management goals will be. Finally, do a complete stock take so that you can avoid having inaccurate inventory data.
How Does a Multichannel Approach Impact Your Accounting?
Multichannel businesses have to track transactions from different sources to ensure accurate accounting. The accounting needs to be handled differently for each sales channel. If you’re working with an accountant, make sure that they have experience in all the sales channels you use.
For example, an athleisure company’s POS system, such as Revel Systems, at their brick-and-mortar store will likely process transactions and fees differently from those processed on Shopify or an online marketplace. Similarly, there may be inconsistencies with gift cards, returns, shipping fees, etc.
As a result, it’s crucial for the accounting system to collect data from all channels and consider various fees and taxes. Otherwise, you’ll start to notice inaccuracies and inconsistencies. Precise financial data from all touchpoints is essential for compliance and making decisions.
How To Manage Your Accounting With Multiple Channels
Having cloud-based accounting software is crucial for managing multiple channels effectively. With this type of software, all data can be centralized, accessed from anywhere, and shared easily with your team. Additionally, you can add third-party integrations for each of your channels.
The benefits of using a cloud-based accounting software:
- No need to worry about updates or maintenance
- Ability to share access with others
- Ensured the safety and security of your data
- Instant access to financial insights into your business
- Ability to connect with other apps
For example, Amaka offers accounting integrations for a range of e-commerce and POS systems. These sync transactions (including fees, shipping, taxes, returns, etc.) to your accounting software. Multichannel businesses can manage all integrations from one dashboard. Plus, the integrations also match transactions to the bank feed so that you can avoid manual bank reconciliation.
The three setup options offered:
- 2-Minute Express for a speedy and straightforward setup
- Advanced option for those with specific requirements
- Guided option for those who prefer a 30-minute video call with an Integration Specialist
Connecting Inventory and Accounting Across Multiple Channels
Now that you have an IMS and accounting integrations selected, it’s important to ensure they’re set up correctly for multiple channels. At the core of your ecosystem should be central accounting software that acts as the source of truth. For instance, Amaka and Megaventory both integrate with QuickBooks Online.
A multichannel athleisure business would have to ensure its sales channels can be synced to its accounting software through accounting integrations and an IMS. The accounting integrations should accommodate how each sales channel handles transactions. Then, their IMS needs to be integrated with any other relevant parties such as a supply chain management system.
Key Takeaways On Inventory and Accounting For Multichannel
In conclusion, it can be challenging to manage inventory and accounting in a multichannel business. With the right strategies and tools, you can gain a competitive advantage. From keeping track of inventory levels across multiple platforms, to accurately recording transactions, a well-connected system of apps can help you make informed decisions, reduce waste and take your business to the next level.
Laura Tien is the Marketing Lead at Amaka. She is passionate about the evolution of the accounting industry and accounting technology. Amaka provides accounting integrations that automatically sync your POS system or e-commerce platform to your accounting software.