may2021 - 12

THE LEADERSHIP ADVISOR
Accounting in a Multi-Channel,
Third-Party World
FOR YEARS NOW, e-commerce has grown its share of the market by leaps and bounds. The
pandemic only accelerated that trend, with U.S. ecommerce sales growing 44 percent
over the course of 2020. With most brick-and-mortar locations having to close at least
temporarily, even traditionally online-averse businesses found ways to get creative and
pivot to a new reality. While these methods served as a lifeline during troubling times, they
also present accounting challenges for businesses.
Two of the most popular contemporary
methods of selling online
are the use of multiple channels
for sales and partnering with third
parties to complete transactions.
While neither of these options is
a brand new innovation, they are
more common than ever before.
Accountants who understand these
concepts and their implications for
businesses have a huge opportunity
to serve as advisors as their clients
solidify their strategies surrounding
these practices. Adding channels
or working with third parties adds
complexity to a business's operations.
As a result, many business
owners need guidance on the best
way to navigate these waters.
MULTI-CHANNEL SALES
A sales channel is a platform
through which a business can sell
its goods and services. If a retailer
owns a store where it sells products,
that's a channel. In the digital marketplace,
however, many businesses
rely on a slew of channels to offer
maximum exposure to potential
customers. It's not uncommon for
a business to have an ecommerce
website of their own as well as
selling on Amazon, eBay, Etsy, and
more.
In addition to the possibility of
increased sales, addings channels
gives businesses a lot more to track.
They need to be able to share inventory
units across channels, consider
the fees and landed costs associated
with each channel, and devise their
strategy in a way that leverages the
benefits of each channel while not
bogging them down in the minutiae
of managing everything.
It's important for accountants
to familiarize themselves with
popular channels and inventory
management issues that can arise
from multi-channel commerce. The
main reason that most businesses
don't add channels is fear of being
able to provide the same excellent
customer experience across channels.
If you have the skills to help
them achieve that goal, you can
help them grow in a big way.
THIRD-PARTY
PARTNERSHIPS
Have you ordered from a delivery
app in the past year? If so, you know
first-hand how prevalent thirdparty
transactions have become.
In addition to delivery apps, many
businesses have partnerships with
other vendors who put their products
in, say, delivery grocery boxes.
Like adding sales channels, these
programs increase a business's
reach. However, they can also come
with serious drawbacks.
Many articles have been written
about whether delivery apps are
good for restaurants in the long
term. While a vital lifeline during
the pandemic, many restaurants
hope to divorce themselves from the
practice as pandemic restrictions
ease. These questions are exactly
the sorts of issues accountants can
help resolve. Every case is different,
but if you understand the data and
the specifics of your clients, you
12 MAY 2021 ■ www.CPAPracticeAdvisor.com
AMY VETTER, CPA.CITP, CGMA
Mindful Technologist &
Keynote Speaker
@AmyVetterCPA
can provide them with powerful
insights as to what makes sense
for them.
With the world increasingly
heading " back to normal, " whatever
that means, businesses will be looking
to develop long-term proactive
plans rather than reacting to oncein-a-lifetime
circumstances. What
served as a lifeline in 2020 may
end up being an anchor in 2021.
Channels that were adopted at a
moment's notice may have potential
to increase growth for years to
come. These sorts of considerations
are precisely the areas where firms
need to be willing to step in and
help their clients.
As accountants, we have the
power to consult our clients on
best practices, powered by data and
familiarity with their operations,
markets, and concerns. In today's
ecommerce-powered marketplace,
understanding multiple channels
and third parties is essential in
providing the sharpest advisory
services. If you can grasp these
concepts today, you'll stand to
create a better tomorrow for both
your firms and your clients. The
pandemic may have expedited the
transition to ecommerce, but the
wave was always coming. Now
it's on us to make sure our clients
catch it and we are ready to service
them. ■

http://www.CPAPracticeAdvisor.com

may2021

Table of Contents for the Digital Edition of may2021