By Jack M. Germain
8/26/2021 4:00 AM PT
A highly anticipated shopping spree by pandemic-weary consumers greets online retailers with an unexpected exacerbation of a recurring back-end problem. Broken supply chains lead to ever greater delays in product delivery. This, in turn, is devastating for the e-tailer’s accounting software.
As post-pandemic restrictions ease, consumers spend the hot summer months shopping for clothes and household items. The spike in spending this summer is making digital retailers more prone to accounting errors that result in significant lost sales.
To address this problem, UpstartWorks has developed an automated system to review and recover unpaid invoices that have been lost in the quagmire of the supply chain. The new accounting automation engine simplifies complex supplier data on receivables, identifies, tracks, and solves costly market surveys that can save businesses millions.
This process first addresses sellers on the Amazon marketplace. Rohan Thambrahalli, Founder and President of UpstartWorks, describes this need as critical as Amazon is a blatant example of how late payments and other routine accounting errors from seller sales can overwhelm online merchants.
“It’s a multi-platform problem. We chose to tackle Amazon first because it is the biggest player in the field and the most powerful for our customers,” Thambrahalli told the E-Commerce Times.
Rohan Thambrahalli, UpstartWorks
Founder and President
Some of the biggest brands in the world use the UpstartWorks e-commerce platform, he added. Its goal is to incorporate accounting automation engines into the platforms used by its customers for other marketplaces.
Its goal is to build a platform that can simplify product marketing for any brand that wants to bring products to market in multiple e-commerce systems.
This will help content-driven, intelligence-driven, and supply chain-driven sellers to fill the gaps in product sales. The expansion of the operational accounting platform was so urgent here.
“One of the things that a lot of people struggle with is the way ecommerce platforms do their bookkeeping. Accounts payable, in particular, is a huge black hole for multiple brands,” Thambrahalli said.
Alignment with the Amazon Marketplace
The problem of the supply chain remains a lingering barrier to revitalizing sales growth. That broken delivery line still exists. At the very least, supply chain blocks are hindering computer operations in the back room of large and small retailers.
Thambrahalli is focused on taking this hurdle. He is focused on building the best product marketing platform so brands can use automation to market their products on multiple platforms.
The accounting automation engine, which automates a retailer’s entire financial profit and loss picture, could be a vital solution for marketing vendors on Amazon. The Amazon marketplace, it seems, is Thambrahalli’s main destination.
“If you’re a seller who sells to Amazon, you really don’t have a good idea of what your P&L is like because of all the different chargebacks that happen every day. We designed our accounting automation engine to give brands a very defined profile give.” P&L metric related to their Amazon business, “he explained.
The secret problem that nobody talks about is missing payments. Some of these unpaid bills are not recognized in the first place. When he and some of his platform subscribers noticed this issue, it became a huge eye opener.
Regardless of whether the invoices accumulate weekly, monthly, or quarterly, Thambrahalli and his clients noticed, in some cases through accounting, that suppliers are not necessarily paid 50 to 75 percent of the time.
Audit of accounts receivable
The unpaid bills and payment schedule existed before the summer shopping spree, Thambrahalli admitted. But he believes it is now strengthening for companies that started growing since last year as well as those that are not.
Those providers who, despite the high consumer frenzy of the summer, have seen a decline in business see a decline in sales and a shortage of money.
UpstartWorks added the automated accounting engine to the company’s platform to first serve customers who do business with Amazon. It gives users a 360 degree view for each brand to launch and discover products.
The platform also enables retailers to track accounts receivable, identify gaps in the product range, and see what their competitors and product category are doing.
“Retailers really get a holistic view of how they should market their product or brand on a given platform,” said Thambrahalli.
For example, suppliers can use their accounts receivable department. They started looking at this payment problem and found that despite having shipped $ 2 million worth of products to Amazon, they were not getting paid anywhere near on time. It didn’t matter that the terms were 30 days. You were paid in 90 to 220 days.
“That reduces the possibility of borrowing money from the bank,” said Thambrahalli. “Several of the brands using our platform have really been challenged with their profitability.”
Reduced unfair business costs
Chargebacks, incorrect billing, over-invoicing – billing problems became significantly greater, because the greater the turnover, the greater the accuracy of the accounting. UpstartWorks has been looking at solving these financial problems for retailers this year.
“The multiplier effect really arose from the increase in all raw material costs. The little invoice reconciliation really came to the surface for us, ”remarked the founder of UpstartWorks.
His company spent the last year automating the platform and adding voting. This segment enables account auditors to review invoices accurately and quickly for up to five years. These internal audits have led to errors in deliveries, overbills and inaccurate invoices being uncovered. Audits also revealed errors in chargebacks and long payment cycles.
“With it I can also show the sellers how much money we can recruit from Amazon for them,” said Thambrahalli.
Breathtaking all-in-one solution
To prove his point on accounting backlogs, Thambrahalli shared an edited spreadsheet report with the E-Commerce Times for an unidentified platform user. On the page that was displayed, this vendor was shown an overdraft of $ 8,000 from Amazon.
In such cases, the UpstartWorks team used the analysis and the collected and aggregated data to address disputes with Amazon. The dispute successfully earned the seller a refund of $ 421,000.
UpstartWorks manages the audits and disputes for the suppliers. The entire process is handled internally.
If vendors were to manually conduct their own audits, an army of accountants would be required. In the case of this provider, UpstartWorks scanned 7,692 orders and analyzed each position.
“We can do this on a large scale, five years back. We went back from December to June 2021 to 2018; and [found] so much money. In other cases, our billing audits show between two and ten percent of the total scanned invoices. So the numbers can get big, “noted Thambrahalli.
Increase the bottom line
In some cases, there are brands that the audits found to be overcharged by two or three million dollars. So, with supply chain constraints rising and raw material costs soaring, this auditing process has been of great value as that money can go straight to vendor profits, he added.
Many Amazon providers are small to medium-sized companies. In the test that Thambrahalli shared for the period July 2019 to June 2020, 75 percent of the trader’s liabilities were stuck in this vicious circle, Thambrahalli emphasized.
“I’m not saying that this is the holy grail of all the problems they face. But hopefully this will help ease some of the profitability pressures that multiple brands are facing – given the current macro conditions in the market, ”he said reasonably.