You are on page 1of 25

1.

Introduction to E-Commerce

Internet Commerce
By Internet commerce, we mean the use of the global Internet for purchase and sale of
goods, services, including service and support after sale. Internet commerce brings some
new technology and new capabilities to business, but the fundamental business problems
are those that merchants have faced for hundred - even thousands - of years: you must
have something to sell, make it known to potential buyers, accept payment deliver the
goods or services, and provide appropriate service after the sale. The Internet is an
efficient mechanism for advertising and distributing product information. Its enabling
complete business transactions. Internet commerce is one type of the more general
electronic commerce.

E-commerce
E-commerce is buying and selling goods and services over the Internet. Ecommerce is
part of e-business. E-business is a structure that includes not only those transactions that
center on buying and selling goods and services to generate revenue, but also those
transactions that support revenue generation. These activities include generating demand
for goods and services, offering sales support and customer service, or facilitating
communications between business partners. By the help of the flexibility offered by
computer networks and the availability of the Internet, E-commerce develops on
traditional commerce.
E-commerce creates new opportunities for performing profitable activities online. It
promotes easier cooperation between different groups: businesses sharing information to
improve customer relations; companies working together to design and build new
products/services; or multinational company sharing information for a major marketing
campaign.

The followings are the business uses of the Internet. These services and capabilities are a
core part of a successful e-commerce program. They are either parts of a value chain or
are included as supporting activities:

Buying and selling products and services


Providing customer service
Communicating within organizations
Collaborating with others
Gathering information (on competitors, and so forth)
Providing seller support
Publishing and distributing information
Providing software update and patches

E-Commerce stands for electronic commerce and caters to trading in goods and services
through the electronic medium such as internet, mobile or any other computer network. It
involves the use of Information and Communication Technology (ICT) and Electronic
Funds Transfer (EFT) in making commerce between consumers and organizations,
organization and organization or consumer and consumer. With the growing use of
internet worldwide, Electronic Data Interchange (EDI) has also increased in humungous
amounts and so has flourished e-commerce with the prolific virtual internet bazaar inside
the digital world which is righty termed as e-malls.

We now have access to almost every knick-knack of our daily lives at competitive prices
on the internet. No matter one is educated or illiterate, an urbane or a countryman, in
India or in U.K; all you need is an internet connection and a green bank account. With ecommerce then, you can buy almost anything you wish for without actually touching the
product physically and inquiring the salesman n number of times before placing the final
order. Here is a beautiful picture depicting how has human life evolved to adapt to the
digital world and hence trading over the internet. As seen, from pizza and potted plant to
pair of shoes, we have everything on sale on the internet available in tempting offers..!!
Snapdeal.com, Amazon, eBay, Naaptol, Myntra, etc. are some of the most popular ecommerce websites.

Airline and travel tickets, banking services, books, clothing, computer hardware,
software, and other electronics, flowers and gifts are some popular products and services
that can be purchased online. Several successful e-businesses have established their
business models around selling these products and services. Ecommerce has the potential
to generate revenue and reduce costs for businesses and entities. Marketing, retailers,
banks, insurance, government, training, online publishing, travel industries are some of
the main recipients of e-commerce. For instance, banks use the Web for diverse business
practices and customer service.

2. Retail/E-commerce Accounting

While the virtual world of e-commerce has expanded the opportunities for traditional and
online retailers, the unique challenges of integrating front and back office systems and
managing the resulting data can be a daunting task.
Intelligent planning and technical proficiency are required as each retail book-keeping/ecommerce book-keeping solution must be custom-designed for the specific needs of each
business configuration.
Our extensive history with the brick-and-mortar and online retail industries allows us to
analyze your current processes and recommend thoughtful technologies that increase
efficiency and accuracy. Once we understand how the various segments of your
business relate to one another and build an integrated retail bookkeeping/ecommerce
bookkeeping system to provide the necessary operational details, we can further consult
on how to make the most of what the data is telling us.

Sales and Data Entry for Retailers


Because virtual and physical inventories can have varying margins and origins, it is
important to properly classify and track the performance of each product to identify
winners. Our sales data entry focuses on analyzing relative performance for
maximum profitability. Through the use of custom segmentation, retailers are able to
quickly identify and feature high volume and high profit items and minimize or
remove items from their inventory that aren't selling. In addition, our sales systems
deliver instant feedback on the various marketing efforts. The faster you learn the
metrics of what's working and what's not, the faster you are able to push on
successful campaigns and cut non-performers.
Lescault and Walderman recognizes the importance of sales and marketing data
entry. We consult with our clients to create the unique classifications and track the
4

categorical details that ensure the most efficient use of the data itself.

Accounts Payable Management for Retailers


Considering the significant number and variety of sources for your retail business,
maintaining an efficient and accurate accounts payable system is critical to the health of
your ongoing business relationships. This starts with an organized system of entry,
involves diligent oversight and ends with a system of checks and balances.
A solid AP system with proper oversight is highly effective at preventing common
mistakes and errors. This can quietly represent significant savings for your business. In
addition, checks and balances are instrumental in raising red flags that alert owners to
problem activity. The earlier this activity is identified and rectified, the lower the cost and
impact to your business.
Because of our experience with both physical and virtual retail businesses, Lescault
and Walderman is able to build proven accounts payable systems, while offering unique
shortcuts and time-savers that will help to streamline the accounts payable management
in your retail/e-commerce business.

Account Reconciliation for Retailers


Employing an impartial third party to provide account reconciliation can be one of the
most insightful and beneficial decisions you can make for your business. From increased
visibility to more efficient risk management, account reconciliation offers an abundance
of benefits.
Oftentimes, a fresh set of eyes can identify obvious issues that don't stand out to daily
users who might be too familiar with the workflow and data passing through their system.
The reconciliation process, when properly implemented, can provide a wealth of useful
information on the true health of your business. Using a consultant to perform the
account reconciliation, retailers are able to focus on implementing appropriate
5

management methods.
We've found that experience is truly the greatest teacher when it comes to account
reconciliation, and we lean heavily on ours to share what we've learned with our
clients. We've encountered a wide variety of unique and interesting issues in the
performance of our reconciliation processes and are ready to help serve and protect your
business.

Financial Reporting for Retailers


Financial statements (balance sheets, profit and loss statements) are one of the most
essential components of your retail/e-commerce book-keeping system. They are the
primary method for communicating the financial health of your retail business to
outside parties.
When financial reporting is timely, business owners are able to focus on current
issues and make the most of their financial information systems. In addition, they are able
to more effectively plan for the future. The higher the quality of the financial reports and
the information contained therein, the greater the effectiveness of the plans that result
from them.
We see financial reporting as one of the most important services that we offer our
customers. When built on accurate data and prepared for simple but thorough
analysis, these prepared documents can become the difference between success and
failure.

3. Accounting for E-commerce Businesses

Accounting plays a crucial role in tracking the health and defining the roadmap for your
e-commerce business. When accounting for your online store, there are some very
specific actions needed to ensure accurate and timely reports.
If you are a store owner or an accountant new to e-commerce, there will be a learning
curve. No worries. To get you started heres a comprehensive introductory guide. Lets
look at six of the best accounting practices to track the growth of your online store:

A. Record your invoices with payments


Bookkeeping is often defined in simple terms as the practices of keeping daily records of
your financial transactions. For your online store, the Order coupled with the linked
Payment is your transaction. There are primarily two ways to go about it:
1. Record every transaction: This is one of the most recommended practices if you
have 1-2 selling channels. When you are in the early growth stages of your
business, it is important to track sales by customer name and other individual
order level details.
2. Record summary transactions daily/weekly: Expert CPAs and CFAs in the ecommerce accounting space advice this if you are doing multi-channel sales. At
this level, your accounting application doesnt meet your CRM (Customer
Relationship Management) needs. So a summary transaction of your sales by
channel should meet your needs. There is one important step

you should take

when recording your invoices in apps like QuickBooks Online or Xero. Link it
with the appropriate payment you received from the customer. Without this step,
you have the chance of double counting sales.

B. Record Inventory on hand


Inventory is one of the primary business assets in your e-commerce business. The
7

inventory count tells your stores Goods on hand. Businesses constantly strive to
perfect inventory management to avoid lost sales, disruptions in production, high
holding costs, etc.
Note: Inventory Tracking is available with QuickBooks Online Plus plan only. As of
today, Xero supports Inventory Quantity tracking.

C. Track your Cost of Goods Sold (COGS)


When acquiring inventory to sell on your website, you are exchanging cash for
inventory asset. The challenge lies in the fact that the cost cannot be deducted till you
sell. When it sells, your COGS should be updated appropriately. COGS reporting is a way
to track your costs associated with each item that sells from your store.
Heres a simple formula to calculate your Cost of Goods Sold:

Sample Template:

Why you need it:


Getting the pricing right is crucial to building a profitable and sustainable business. Once
you know the actual COGS, you should be able to tweak and optimize the selling price
towards it.
However, businesses calculate COGS at a very basic level and do not count for indirect
costs in acquiring inventory. Make sure you look beyond just how much you paid for the
goods. Have you included shipping costs? What about the packaging costs for all your
products? A comprehensive and accurate COGS report ensures that you are not
overstocking and your expenses are under check.

D. Capture Sales Tax liabilities


Most ecommerce sellers we come across go through a learning curve as they build their
business. With respect to bookkeeping, accounting for Sales Tax liabilities is one of the
biggest hassles. Different states have different rates and so do multiple counties and
municipals. Are you outside US/Canada? Consider the VAT on your Orders.
E-commerce tools like Shopify and Big commerce will calculate it automatically for you
when a customer orders a product from your site. The next step is to record the same in
your accounting application. The Sales Tax should be recorded at the Invoice level for
accurate reports. Applications like QuickBooks Online or Xero will let you run reports to
show your liabilities to State, County and Municipal Tax agencies.

E. Reconcile all your accounts


Bank reconciliation is the process of matching transactions youve got recorded in
QuickBooks Online/Xero to what youve got in the bank. It is a critical step to avoid
double counting and to ensure that your bottom line is accurate.
If you using an e-commerce platform like Shopify, you need to consider the payment
transaction fee charged by the payment processor (Shopify, PayPal etc.) To do this
manually, you need to create a Credit Note at the Invoice level before linking it to the
respective payment from the customer.

F. Automate
All of the above mentioned accounting practices can be done manually. The
constraint though is time. Also, with manual efforts the perils of errors and double data
entry come along there are tools to automate most of the time consuming practices for
your e-commerce store. Top providers like Shopify and Big commerce have App Stores
to extend to automate business processes. Pipemonk is a 5-star rated and certified app in
Shopify & Intuit. Our mission is to save you 100+ hours a month in manual accounting.

G. Profit and Loss Report/Income Statement


Simply put, this report gives the profit or loss for a given time period.
Every income statement has a top line representing the gross revenue or sales; and
a bottom line representing the actual net profit/loss or net income.

Sample Template:

10

Why you need it:


Your business earns a net income when your revenue from product sales exceeds
expenses. A positive net income effectively means you have increased your assets and
the revenue from those assets outweighs the costs of acquiring the assets. An Income
Statement lets you evaluate the profitability, performance and lets you assess the risk for
any investor or creditor in your online venture.

H. Balance Sheet
11

A Balance Sheet tells you the actual value/worth of your business. It lists down your
Assets, Liabilities, and Equity.
Equity is calculated as:

Sample Template:

Why you need it:


With an accurate Balance Sheet in place, you can calculate two important metrics to
measure the health of your business:

i) Quick Ratio: It is the measure of short term health of your business. The higher the
quick ratio, the better.

12

Heres the formula to calculate it:

If the ratio for you is 1:1, you should be able to pay off all the liabilities / bills on
time. Raise a red flag if the Quick Ratio is around 4:1 is not good for a business as this
implies that the business has 4 times idle assets against the requirement of 1.
ii) Current Ratio: Current Ratio is the ability of your e-commerce business to pay
current liabilities with current assets. It can be calculated as follows:

Make sure
you do everything in your capacity to keep the Current Ratio above 1.
ratio less than 1 does not immediately signal bankruptcy, it is a signal to

Though a
correct the

course.
The above accounting practices ensure that your bookkeeping is up to date and accurate.

4. Accounting Issues Faced by the E-commerce Industries

E-Commerce, e-tail, e-retail, dot com, online shopping, etc., call it what you want, but
they are here to stay. You can now buy everything from luxury products to vegetables
online. As the Indian economy expands, consumption is also expected to rise and this
sector is expected to grow as well. As the e-commerce industry emerges, relatively little

13

industry specific accounting guidance is available that addresses some of the accounting
challenges faced by this sector.
We have sought to discuss a few sector specific accounting issues in more detail, focusing
on the most significant areas which are commonly faced by the e-commerce industry
across the world.

I.

Revenue recognition

E-Commerce companies often are valued based on revenue multiples and hence, it is one
of their most important metrics. Revenue is an area which is susceptible to misuse and
fraud. Therefore, it is subject to constant scrutiny by the regulators. This accounting issue
is primarily to determine timing of revenue recognition and presentation (gross vs. net).
Most of the e-commerce companies either accept payments online through credit cards,
internet banking, debit cards or cash on delivery. Additionally, in most of these
companies, delivery is the responsibility of the company and hence, it becomes important
to determine on when does the risk and rewards get transferred to the customer. It is to
be noted that this issue is relevant for both B 2 C (Business to Consumer) and B 2 B
(Business to Business) models. One of the indicators to determine the timing of revenue
recognition is to know who bears the insurance cost/ risk. In practice, many of the large
e-retail companies enter into agreements with logistic providers who are willing to bear
insurance cost and risk of delivery and under such contracts, companies would recognize
revenue on dispatch of goods from the warehouse. Sometimes, cost of delivery is built in
to the pricing of the product and the cost of transport is borne by the e-commerce entity;
then the risk of delivery and loss is still with the e-commerce company. In such cases, it
may be appropriate to recognize revenues only once the products are delivered to the
customer. Additionally, in practice, an option is given to the customers to return the goods
sold; then it is important to evaluate each such offer more specifically to understand the
facts and circumstances and their repercussions on accounting. Generally, when the buyer
has a right of return and there is uncertainty about the possibility of return, revenue is not
recognized until the shipment has been accepted by the customer or the goods have been
delivered and the time period for rejection has elapsed.

14

An entity considers historical experience in assessing the possibility of return. If, based
on past experience, the entity can make a reliable estimate of the amount of goods that
will be returned, then it would be appropriate to recognize revenue for the amount that is
expected to be received for items that are not returned (assuming that the other conditions
for revenue recognition are met). Due to the current legal framework in India, a B 2 B
entity may not be allowed to make a sale to retail customers and is required to sell its
goods to B 2 C companies. This relationship could have an impact on the presentation of
revenues in the books of accounts of B 2 C and B 2 B on a gross or net basis. Under
Indian GAAP, the Technical Guide on Accounting Issues in the Retail Sector is issued by
the Institute of Chartered Accountant of India (ICAI), provides guidance on presentation
of revenues.
As per the Technical Guide, some of the factors that indicate that an entity is acting as a
principal in transactions could include (indicative list only):

The customer understands that the entity is acting as the primary obligor in the

arrangement
The entity is able to set the selling price with the customer
The entity has inventory risk
The entity performs part of the services provided or modifies the goods supplied
The entity has or assumes the credit risk associated with the transaction.

Revenue represents the amount receivable by an entity for its own account. Therefore, for
a principal, revenue should be presented at its gross amount and is measured before
deducting related costs such as costs for materials and salaries. In an agency relationship,
the amounts collected on behalf of and passed on to the principal is not revenue of the
agent. The revenue of the agent is the amount of commission, plus any other amount
charged by the agent to the principal or other parties. The principal in an agency
relationship recognizes the gross amount charged to the ultimate customer as revenue.
Commission paid to the agent is accounted for as an expense by the principal.
Determining whether an entity is acting as an agent or principal is based on an evaluation
of the risks and responsibilities taken by the entity, including factors as mentioned above
such as inventory risk and responsibility for the delivery of goods or services. A common
example in this field is that an e-commerce company purchases traded goods from a
15

wholesaler. E-Commerce Company generally would sell these goods to the end customer
and may or may not carry the associated inventory risk as it purchases goods from the
wholesaler only when it receives orders from the end customer. However, it may bear the
risk of those inventory items that have been returned by the customers.
In such a scenario, the e-commerce company does not seem to bear significant inventory
risk, however, it may bear the following:

Credit risk
is primarily responsible for providing the goods to the customer, i.e., fulfilling the

order
Direct pricing discretion
Discretion in selecting the supplier/ wholesaler.

Therefore, in this case, the e-commerce company should reflect gross billing to its
customers as its revenue.

II.

Taxation

India has a myriad of taxes. Hence, the companies operating in the e-commerce industry
need to have a strong taxation team to ensure that they are in compliance with the various
tax regulations. The Internet and new communication technologies have introduced a new
channel through which sales may occur. Some of the taxation challenges may arise as a
result of the blurring of the distinctions between traditional commerce and commerce
involving digitized products. It is a matter of debate, however, as to whether these new
channels create new products. Some believe that delivery through these channels alters
the character of a product to such a degree that it must be considered a wholly new
product, distinguishable from that delivered through traditional channels, and therefore,
should be treated as unique for tax purposes.

16

Direct taxation: One of the keenest legal issues related to e-commerce remains to be
taxation of revenues generated on the web. Traditionally, taxing rights on business profit
lies with the source country and a business is said to have a source in a country if it has a
Permanent Establishment (PE) in that country. PE by definition relies on a fixed place
of business. In e-commerce, a non-resident business does not need a fixed place of
business in another country. Therefore, the concept of PE is not easily applied to ecommerce. Accordingly, as e-commerce companies explore businesses across
international borders, this is expected to be one of the most important issues to be dealt
with regard to the taxation. It has to be noted that national governments and international
organizations (like Organization for Economic Co-operation and Development (OECD))
have responded to the challenges posed by e-commerce transactions. In India, the Central
Board of Direct Taxes had constituted a High Powered Committee to discuss the taxation
of e-commerce transactions. It appears that current direct tax laws (including treaties)
may not be capable of addressing fully the novel issues brought on by e-commerce.
Consensus is yet to emerge amongst major countries on this area.
Inter-state taxes in India: There are challenges with respect to incidence of inter-state
taxes (i.e., where the tax incidence is on the end consumer like sales tax, value-added tax,
etc.). For example, an e-commerce company based in Karnataka takes an order from a
customer in Maharashtra, while goods are supplied from a vendor in West Bengal, the
question: the inter-state taxes need to be paid by the vendor in West Bengal; or the ecommerce company in Karnataka, is not free of doubt. The tax authorities in India do not
seem to have a settled position on these issues. Companies may need to consult with their
tax specialists as the tax liabilities often have to be evaluated on a case to case basis.

III.

Inventory accounting

In the initial years of a setup, e-commerce companies that cater to retail customers and
often carry significant inventory whilst focusing on increasing their revenues through
aggressive customer acquisition. However, one of the key challenges for operational
success is their inventory management process and ability to effectively manage a lean
17

working capital. Such companies may have built-up inventory in the hope to achieve
higher volumes, which is expected to compensate for the low margin on sales.
Additionally, a constant change in product portfolio and freebies could lead to challenges
in the management of the inventory records. If an entity does not have a strong control
environment to monitor its inventory, then such an entity may face a write down of
inventory balances as at the reporting date. Further, ascertaining cost versus net realizable
value, whichever is lower, becomes a challenge as the margins on such product portfolios
are slim, which may add to the inventory write down provision. Hence, it becomes
extremely important to maintain, monitor and control inventory for an effective inventory
management.

IV.

Logistics

Many companies believe that the biggest impediment is unreliable third-party logistics
and delays in delivery due to poor surface transport. It is important to have a well drafted
agreement with logistics and reverse logistics providers as the following accounting
aspects could have an impact:
Accounting for revenues: Certain logistics provider take over the risk and rewards
when such goods are collected from the companies warehouse, which could remove the
delay and hassle of evidencing delivery for revenue recognition.
Mode of payment: Certain logistics providers collect cash from the respective
customers and aggregate the same and deposit it into the companys bank account, by
which the company could mitigate its risk associated with cash handling.
Cost recognition: There are various ways a logistics provider is paid, per piece basis,
monthly based on volumes, etc. It is critical that companies understand such
arrangements as the related volume discount earned or monthly charges paid would need
to be accounted appropriately.

18

In addition to the above, certain logistics providers, also provide warehousing and
inventory management. It is important for companies to have an effective control and
monitoring mechanism when goods are with a third party.

V.

Advertising expenses

To get customers to visit an e-commerce site and make a purchase involves heavy cost
due to advertisement and marketing. This cost could continue to be significant till we see
a consolidation of the e-commerce sector in India. Considering that such advertising and
marketing costs are significant, the accounting challenge around such expenses is that
most companies would like to defer such costs in their financial statements. Under Indian
GAAP, all such advertising expenses are recognized as an expense when it is incurred.

VI.

Other business environment related issues


Cash handling: Cash handling is one critical issue that affects most of the ecommerce companies. A lot of companies allow customers to pay cash on
delivery. Accordingly, handling of large volumes of cash, which is inherently
susceptible to pilferage, can be a constant challenge. It can, however, be curtailed
by effective monitoring and segregation of duties. Many companies may institute
controls to ensure cash deposits are made daily with effective receipts and
checklists. The aid of an effective internal audit would be critical. The company
could also institute simple but effective steps like surprise cash counts, expanding

cash insurance, etc. for controlling this risk.


Compliance: There are stringent compliance requirements if an e-commerce is in
the business of e-retail. The Indian laws have not always kept pace with the
technological advancement of the sector. Hence, it is of utmost importance that a
company operating in the e-commerce space is registered with the appropriate
regulatory authorities like Reserve Bank of India, etc. Additionally, it is noted that
a large number of the e-retail companies are funded by Private Equity/Venture
Capitalists, who are foreign investors and hence compliance with Foreign
Exchange Management Act (FEMA) is of supreme importance. Under FEMA, ecommerce activities refer to the activity of buying and selling by a company
19

through the e-commerce platform. Such companies would engage only in B 2 B ecommerce and not in retail trading, inter-alia implying that existing restrictions on
FDI in domestic trading would be applicable to e-commerce as well.
Companies in the e-commerce sector would have to constantly monitor these
challenges and watch out for relevant guidance and practice as they emerge. The
companies may also have to continuously assess their accounting system capabilities,
resource requirements, etc. to keep speed with changing industry, regulations.

5. CASE STUDY

CASE:
AL & CD Ashley (Pty) Ltd is a privately owned fourth generation family business based
in Cape Town, South Africa.
AL & CD Ashley has specialized in the import and distribution of premium quality
kitchenware and houseware brands to the Southern African market, with a range of
customers across South and Southern Africa.
AL & CD Ashley supplies to a broad customer base including, the leading traditional
homeware groups, supermarket groups, department stores, hotels, restaurant & catering
supply businesses, hardware stores, independent home and appliance stores and the
burgeoning online retail sector.
AL & CD Ashley found it time consuming and difficult to update their retailers with
availability and pricing, at any given time. This meant manually responding to customer
requests to provide price lists and stock updates. Staff also had to manually update their
websites and catalogues with product availability and prices when these changed, which
20

they did frequently. AL & CD Ashley use a Sage Pastel product to manage their
inventory. Their staff are trained in using this software, to move their entire system over
to something else was not an option.
Another problem was making sure their warehouse and inventory systems could speak to
each other. Order fulfillment needed to be automated to eliminate potential human error
such as data capture issues and to speed up order processing and shipping.

THE SOLUTION:
Stock2Shop created a solution for AL & CD Ashley using our innovative integration
platform, coupled with some bespoke development.

Public facing website


SAVES STAFF SEVERAL HOURS A WEEK
Stock2Shop saves staff several hours a week by automating repetitive manual tasks like
updating inventory levels, product images and descriptions.
We designed a website based on the Shopify ecommerce platform for AL & CD Ashley.
Stock2Shop automatically synchronies with and tells Shopify what products to display
based on availability in the AL & CD Ashley Sage Pastel system. It also sends the
product images and descriptions to Shopify. The website itself does not sell to the public,
but has an up-to-date list of the brands categories and products offered with a simple
registration process for retailers and business customers to sign up with AL & CD Ashley.

B2B shopping cart


SAVES STAFF HOURS OF WORK

ELIMINATES DATA CAPTURE ERRORS ON

ORDERS
Stock2Shop saves staff hours of work and increases accuracy by automating product,
inventory and sales order creation. Using the Stock2Shop business-to-business shopping
cart allows AL & CD Ashley to share their product data with their customers. It means
21

their customers can order directly off this system and sales orders are then created
automatically in their Sage Pastel accounting system. They have the flexibility to create
different customer accounts based off the accounting system customer accounts. This
means their customers only see the products they need to have access to, with the
appropriate price. Stock2Shop makes sure the product prices, stock levels, product
descriptions and images are updated near real time.

Order Fulfillment
ENSURES ORDERS ARE QUICKLY AND CORRECTLY DISPATCHED.
Stock2Shop developed a bespoke solution that integrates AL & CD Ashleys Sage Pastel
product with their 3rd party warehousing and logistics partner, Aramex. When orders are
raised in Pastel, they can easily, at the click of a button, be sent to Aramex via the
Aramex EDI gateway for fulfillment. This is particularly important on large orders where
data capture issues are bound to happen. Its a huge time saver, eliminating the need to
manually capture each order twice, once in Pastel and then again with Aramex.

Online retailers
SAVES STAFF SEVERAL HOURS A WEEK.
AL & CD Ashleys products are sold on South Africas largest online retailers, amongst
them Yuppiechef and Kalahari. Stock2Shop provides a way to automatically provide
these retailers with product availability and pricing at defined intervals. This that means
retailers have up-to-date stock information and ensures they do not let their customers
down should they order a product that is out of stock. Additionally it saves time for AL &
CD Ashley and their retail partners, as the product availability is automatically updated
on their websites.

E-commerce
INTEGRATES WITH MULTIPLE ECOMMERCE PLATFORMS.
Certain products are sold through manufacturer branded websites, which required
integration with the Magento ecommerce software. Stock2Shop connects Magento with
22

their Sage Pastel system. This means orders are raised directly into Pastel and then
fulfilled. It also means that stock levels and pricing are correct on the website at all times.

6. Conclusion
Few people will deny that early growth in EC was fuelled by media hype. How
else would you explain multi-million dollar financing packages based on business
plans that had been drawn up on cocktail napkins and domain names that were
worth millions? For better or worse, those days are behind us and the growth in
EC today is being fuelled by sound business principles. Organizations are using
EC to improve their bottom line by reducing costs and by increasing sales. Of
course, its not as simple as creating a flashy web site either. Just like in the real
world, theres a lot of planning that needs to be done before the doors ever open.
In general, todays businesses must always strive to create the next best thing that
consumers will want because consumers continue to desire their products,
services etc. to continuously be better, faster, and cheaper. In this world of new
technology, businesses need to accommodate to the new types of consumer needs
and trends because it will prove to be vital to their business success and survival.
E-commerce is continuously progressing and is becoming more and more
important to businesses as technology continues to advance and is something that
should be taken advantage of and implemented. From the inception of the Internet
and e-commerce, the possibilities have become endless for both businesses and
consumers.

Creating more opportunities for profit and advancements for

businesses, while creating more options for consumers. However, just like
anything

else,

e-commerce

has

its

disadvantages

including

consumer

uncertainties, but nothing that cannot be resolved or avoided by good decision23

making and business practices. Every day more people connect to the Internet and
grow increasingly comfortable with digital transactions. Business will alter more
in the next ten years than it has in the last 50. It is estimated that total transactions
over the Internet will rise to nearly $2,000 billion within three years and over
$3,500 billion within five. The successful companies of the future will be those
that take e-commerce seriously, dedicating sufficient resources to its development.
Companies that use it as a reason for completely re-designing their business
processes are likely to reap the greatest benefits.

7. Bibliography

24

http://ocw.metu.edu.tr/pluginfile.php/352/mod_resource/content/0/LectuLe_3
.pdf
https://www.uop.edu.jo/download/research/members/introduction.pdf
https://www.pipemonk.com/blog/ecommerce-accounting-best-practices/
https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Accou
nAcco-Update/Documents/AAU-February-2014.pdf
http://www.clemson.edu/uced/working_papers/uced_100701.pdf
http://www.thecasecentre.org/educators/casemethod/resources/freecases/stanf
stanfordfree#ecommerce
http://www.k-ecommerce.com/medias/Living_Essentials_Case_Study.pdf
http://www.practicalecommerce.com/articles/3616-Simplified-Accountingfor-Ecommerce-Merchants
http://blog.bigcommerce.com/e-commerce-accounting-faqs-part-1/
https://www.cga-pdnet.org/Non_VerifiableProducts/ArticlePublication/ECommerce/E-Commerce_p1.pdf
http://digitalmarketingphilippines.com/top-8-common-e-commerce-seoproblems-and-solutions/
http://firstmonday.org/ojs/index.php/fm/article/view/601/522
https://steph31719.wordpress.com/2009/11/17/conclusion-in-progress/

25