How Automated Accounting Engines Can Salvage Online Profitability

 A much-awaited shopping splurge by pandemic-weary consumers is greeting online retailers with an unanticipated worsening of a recurring back-end problem. Fractured supply chains are causing worsening product delivery delays. That, in turn, is wreaking havoc with e-tailers' bookkeeping software.

As post-pandemic restrictions ease, consumers have been spending the hot summer months splurging on clothes and household amenities. This summer's surge in spending is making digital retailers more vulnerable to accounting errors that result in significant revenue losses.

To address this issue, UpstartWorks developed an automated system to audit and recoup unpaid invoices lost in the supply chain quagmire. Its new accounting automation engine simplifies complex receivable vendor data, identifies, tracks, and resolves costly marketplace oversights that can save businesses millions.

That process first addresses sellers on the Amazon marketplace. Rohan Thambrahalli, founder and president of UpstartWorks, describes that need as critical because Amazon is a glaring example of how delayed payments and other routine accounting mistakes from vendor sales can overwhelm online merchants.

"It is a problem that exists across multiple platforms. We have chosen to tackle Amazon first because it is the biggest player in this space, and the most impactful one for our clients," Thambrahalli told the E-Commerce Times.

Some of the biggest brands in the world use the UpstartvWorks e-commerce platform, he added. His goal is to add accounting automation engines into the platforms used by his clients for other marketplaces.

What his company aspires to do is build a platform that can simplify product commercialization for any brand that wants to launch products across multiple e-commerce systems.

This will serve content-driven, intelligence-driven, and supply chain-driven sellers to help solve the gaps in product distribution. That is where the operational accounting platform addition was so urgent.

"One of the things that a lot of people struggle with is the way e-commerce platforms do their accounting. Accounts payable specifically is a big black hole for several brands," Thambrahalli said.

Targeting the Amazon Marketplace

A continuing roadblock to reinvigorating sales growth remains the supply chain issue. That broken delivery roadway still exists. At the very least, supply chain roadblocks are hampering the backroom computer operations of large and small retailers.

Thambrahalli is focused on removing that hurdle. He is concentrating on building the best product commercialization platform so brands can leverage automation to commercialize their products across multiple platforms.

The accounting automation engine, which automates a retailer's entire financial profit and loss picture, could be a major solution to vendors marketing on Amazon. The Amazon marketplace, it seems, is Thambrahalli's primary target.

"If you are a vendor selling to Amazon, because of all the different chargebacks that happen on a daily basis, you really do not have a good idea of what your P&L looks like. We built our accounting automation engine to give brands a very defined P&L metric as it relates to their Amazon business," he explained.

The secret problem that nobody talks about is missing payments. Some of these unpaid invoices are never even recognized. When he and some of his platform subscribers started noticing this issue, it became a huge eye-opener.

Whether invoices accumulate on a weekly, monthly, or quarterly basis, Thambrahalli and his clients started to notice, in some cases because of how accounting is done, that vendors are not necessarily getting paid from 50-to-75 percent of the time.