Merchants benefit from Fulfil's accounting when they operate at scale, care for transactional level detail/COGS, and want to have accounting in-house.
What's different about Fulfil accounting?
When merchants come from QuickBooks Online, Xero, or general tools used by outsourced accountants, the biggest difference is they usually have summarized entries for a day, week, or month. With Fulfil, every accounting event gets a transaction as it happens.
For example, a single sales order on Shopify would have a payment JE at checkout, an inventory JE when the item is pulled out of inventory to ship, and a revenue/COGS JE at the same time. If the order was shipped in two shipments, then it becomes 2 JEs for inventory and 2 JEs for revenue. While this leads to accurate, real-time GAAP accounting, it comes at the expense of o(3n) to o(6n) transactions, where n is the number of orders you get.
The first couple of months, this also brings skeletons out of the closet because any summarized entry is an approximation and has its gaps. Some controllers and CFOs love it; some hate it.
So the first question is if our accounting is a cultural fit for your team.
Can a traditional ERP do this? Yes, but sadly, most implementations we have seen are at the aggregation level. I hear this can get expensive too, because it ends up hitting higher transaction licensing tiers.
Cash reconciliation
Everybody knows to reconcile their banks, but banks are not where DTC brands have transaction volume. A traditional business would have seen checks and bills in a bank statement, but now you have credit cards, gift cards, Klarna, Affirm, and whatever else BNPL solution was launched last week.
Reconciliation at this scale requires a very high level of automation and increasing use of AI so humans can focus on the exception list of unusual transactions and not on 99% of transactions that match perfectly. This usually leads to sudden insights about the refunds being issued or stacked discounts, incorrect tax remittance (channel vs merchant), and so on.
Reporting
Reporting is always a hot topic for accountants. Basic financial reports and tooling are all there to support accounting at scale. In addition, the part that gets overlooked is the ability to drill down as a fully integrated system. From balance sheet > receivable > invoice > sales order. Or from income statement > COGS > invoice > sales order.
The other part of reporting for DTC is segmenting your chart of accounts by channels or segments. So having a single revenue account, while being able to segment it by region, channel, product line, etc., without having a monster of a chart of accounts. Built-in WMS, 3PLs integrated, channels natively connected - no 3rd party WMS, no middleware connectors, no 2nd or 3rd hops to connect to a 3PL means better visibility.
COGS
COGS are another major difference. Costs are calculated and revalued as you receive inventory, and subsequent transactions account for the new cost. Landed costs (freight, duties) and costs when bundling items that are independently sold are all handled natively. Combined with reporting and native channels, this is really what powers seeing revenue, COGS, margins, and contribution by channel.
Final thoughts: Ideal scenarios for implementing Fulfil Accounting
Unlike traditional accounting software, which often relies on summarized financial entries, Fulfil ensures every accounting event is recorded as it happens. This method provides unparalleled accuracy and real-time GAAP compliance but demands an in-house team ready to manage the increased volume of transactions.
For businesses focused on direct-to-consumer (DTC) sales, leveraging advanced features like automated cash reconciliation and integrated reporting across multiple channels is crucial for managing the complexities of eCommerce.
Businesses considering Fulfil should carefully assess their operational complexity, transaction volume, and internal resources. For those with simpler needs or limited accounting infrastructure, a less detailed, more aggregated accounting solution might be more appropriate.
If you think we’re a good match for Fulfil accounting, reach out to our team. They’ll guide you through a personalized demo, address your business needs, and make sure we’re a good fit to enhance your financial strategy for growth and efficiency.
