In our continuing efforts to make eCommerce accounting easier, today we announce a big step forward for inventory tracking.
In short, you can now take a picture of your receipt and upload it to Seller Ledger. We use the latest “artificial intelligence” technology to extract item cost information from the image and pre-populate the inventory purchase form.
To show you exactly what’s possible, here is a picture, taken from an iPhone, of a receipt from a trip to our local Marshall’s store:
Within Seller Ledger, if this purchases came in from a linked bank or credit card, make sure to categorize it as “inventory” and then go to Inventory -> Purchases and click “Add details.” If this was a cash purchase, or from a source not connected to Seller Ledger, just go to this same screen and click the “Add Inventory” button.
You will see a new option at the bottom of the screen to “Upload image or pdf”:
Click the “Upload receipt” button and choose the picture that you took of your receipt (or try the example we’ve posted above.) Seller Ledger will then process the image and extract as much information as possible. In the above example, you will end up with the following:
And scroll down to see the remaining information that we were able to extract from the image…
Notice that we found 4 unique items with descriptions and the correct per-item costs. Not only that, but we were able to recognize the $6.32 in sales tax. And given our recent feature that allocates extra cost of goods amounts, we automatically allocated that $6.32 across the 4 items.
The one piece of work left for you to complete is to either identify or create the unique SKU for each item, which will then allow Seller Ledger to match to sold items, thereby updating inventory and cost of goods amounts automatically when it sells.
To help us improve this feature over time, it helps to get as may customers trying it as possible. Please give it a try and let us know how we can make it better.
When you purchase inventory, there are often other costs besides the cost of the individual items that must be accounted for as part of “cost of goods.” In fact, we wrote a blog post about it a while back.
Until now, deciding how to handle those extra costs was something that customers had to figure out on their own. Well, no more. Now, Seller Ledger allows you to enter those additional costs and we automatically adjust the per-item cost of goods for your inventory.
You will now see a new “Other costs” field at the top of the form for entering inventory purchase details. Enter the total of any extra costs paid, be it sales tax, inbound shipping, processing fees, whatever. Then, as you record the item-level purchase details, you will see the “other costs” amount divvied up among the items, based on the weighted average cost of those items within the overall purchase.
This feature saves you time so you don’t have to attempt any calculations yourself. And it sets us up well to support the next big feature we’re working on: the ability to upload a picture of a receipt and have us create inventory purchase details from it. Stay tuned.
To really understand how to improve your eCommerce business, you should know which items make you the most profit. Seller Ledger recently rolled out summary-level gross margin totals on the dashboard of those sellers who track inventory. Now, we have introduced a new “gross profit” report to show you that same information (and more) on a per-item level.
For each unique item that you sell, we will show you how much total gross profit you make, as well as your average gross margin for those items. You can sort by different columns too. This allows you to see which items make you the most profit for your business. Hopefully, this information can help inform your sourcing strategies going forward.
Better cost tracking = better information
It’s important to realize that this report is only going to be as helpful as the information you’ve entered into Seller Ledger. The more “cost” information you provide about your inventory, the more accurately we can report on your sales and profits.
Pro tip
One of the quickest ways to load inventory cost information into Seller Ledger is to upload it in CSV format. Check out our blog post on how to do just that.
For those of you who may be using the cash-based approach to inventory, or simply tracking at the balance level, this new report won’t be particularly useful. But, in case this might motivate you to track at a more detailed level, feel free to go back and see how Seller Ledger can support you.
Help us further automate inventory costs
We continue to look for ways to reduce the amount of effort required to get what you need out of Seller Ledger. And we understand that tracking inventory is one of the most challenging aspects of running an eCommerce business. As such, we’d love to hear suggestions on ways to improve the ability to get inventory cost information into our platform.
Please email us at [email protected] with your suggestions and we’ll do our best to tackle as many as we can.
Seller Ledger is very pleased to announce the release of new functionality to help you track the gross margin in your eCommerce business.
What is Gross Margin and why is it important?
Gross margin, to put it simply, is how much profit you make on top the cost to create or acquire your products. This is before deducting other expenses needed to run your business. And it’s defined as a percentage of your overall revenue.
To use a super simple example:
It costs you $6 to make or buy something you intend to sell
You are able to sell that item for $10.
Your gross profit on that order would be $4, which would equate to a gross margin of 40%.
As for why gross margin is an important number to watch, let’s just say that it’s the starting point for any successful eCommerce business. If you aren’t making enough profit on each and every item you sell, you won’t be able to cover the additional expenses to run your business.
For a more in-depth explanation, and some benchmarks on what a “good” gross margin looks like, check out this overview of eCommerce gross margin.
How do I find my gross margin?
Seller Ledger’s gross margin functionality only works for customers who are tracking costs on a per-item basis. You don’t need to track every single item cost, but the more you do, the more accurate your gross margin calculation will be.
If you click into the Inventory -> Sold view, you will now see a summary at the top of the screen that shows you the gross margin value and the percentage of transactions on which it’s based. To increase that percentage, you can enter more cost information for more orders.
In addition, there is a new dashboard tile that shows your gross margin for the current month. We have replaced the old “Cost of Goods” tile for inventory trackers, as this new information contains more detail – not only how much cost information you’ve entered, but also how much profit you’re generating.
Stay tuned for more updates in this direction, as we continue to look for ways to provide more insight into your business.
Do you ever sell an item before you’ve acquired the inventory? How do you account for that? Seller Ledger has a new setting to allow that.
By default, when Seller Ledger attempts to match inventory cost information with a sale, we assume that the sold item was purchased before the date of sale. However, based on feedback from a few customers, we have heard of the need to be able to support purchases that are made after an item has already sold.
Click the edit (pencil) icon under “Orders to Purchase Date Matching” and you’ll be presented with this dialog box:
Choose the second option to also allow matching to “future” purchases and voila – Seller Ledger will now let you match to purchases made after the sale.
In an effort to make it even easier to prepare for 2023 taxes, Seller Ledger has rolled out a few small enhancements.
View sales that have no cost information
For those of you tracking inventory at the item level, we’ve made it a bit easier to identify any remaining sales for which you haven’t yet entered cost information. In the Inventory -> Sold view, there is a new filter to allow you to select sales where cost information is missing:
View “in-stock” inventory totals
At the top of the Inventory -> In Stock view, we now show you the total count and cost of all of your unsold inventory:
Mileage totals
At the top of the Expenses -> Mileage view, you can now see both the total number of miles driven, and the total mileage expenses to deduct. In addition, we’ve added date range selectors so you can choose different periods to review:
While these aren’t the largest changes, they do reflect customer feedback about small ways to make the product a bit easier to use, which in turn, makes accounting and taxes less of a pain. Please keep sending us feedback at [email protected].
For eCommerce merchants who want to track their inventory stock levels and per-item gross profit, we’ve now made it easier for higher volume sellers to load their inventory information into Seller Ledger.
If you make large purchases from certain vendors, and don’t want to type all of those items into Seller Ledger, there’s now an easy way to upload your items (and cost information) via a CSV file. Simply generate a comma-separated file that contains columns with headings of “sku“, “product name“, “quantity” and “total cost” and upload it inside of any of your inventory purchase transactions.
Not only can this help you save time when entering purchase information, but it comes in particularly handy if you want to start the year off fresh, or import inventory from another platform.
eBay cost of goods sold tracking has been a challenge for years (as we have heard from both customers and members of the eBay management team.)
Not too long ago, Seller Ledger rolled out inventory tracking, complete with some nifty automated cost of goods sold calculations. But for eBay sellers, that functionality depends on the use of an optional listing field called “Custom label (SKU).” And it turns out, that field is not shown by default when creating listing templates. So, we thought we’d help folks learn how to find and use that field, and what magic it can potentially unlock.
When you start to create a listing, one of the first things you’ll do is create a title for your item. By default, you will see two fields: Item title and Subtitle. However, if you click on the link to the upper right, called “See title options“, you will see a few more options pop up. One of those options is “Custom label (SKU)”.
Click on the selector to turn that field on, and you should see an updated form that looks like this:
Now, you have the ability to enter information about this item in the Custom label (SKU) field. But what should you put there, and why is it important?
You can choose to put anything you’d like in there, but, if you follow this guidance in conjunction with Seller Ledger, you will see two major benefits:
Have your inventory reduced and your cost of goods sold automatically calculated when an item sells
See how much money you make on each sale
The key concept here is to have a unique identifier (SKU) for each item you sell on eBay. How you create that identifier is up to you. Some people put a combination of letters and numbers, with some parts relating to the product name, or the bin number in which they are are currently stored. Others simply choose ever-increasing numbers. What matters most is that each SKU value is unique to that eBay item.
In Seller Ledger, when you purchase items for resale, you now have the ability to create a product/item, complete with a Product SKU field.
If you enter the same value in your eBay listing under “Custom label (SKU)” that you enter in Selller Ledger under “Product SKU”, you can sit back and watch the magic happen. When one of those items sells on eBay, Seller Ledger will match the order to your inventory, reduce the number of “in stock” units in inventory, and automatically calculate the cost of goods sold for that item, and show you the gross profit for that sale, as seen below.
eCommerce sellers, large and small, now have the ability to track inventory with Seller Ledger. Until now, customers could only write off inventory as “cost of goods sold” when purchased. But no longer!
Why track inventory in Seller Ledger?
There are a number of reasons to track inventory:
For most eCommerce sellers, the IRS requires that you do so.
It better aligns costs with your sale.
If done properly at the item level, it can help automate accurate stock levels (avoid stockouts,) as well as tell you how much money you make on individual orders and items.
So what does Seller Ledger offer in terms of eCommerce inventory tracking?
There are now 2 main ways to track inventory in Seller Ledger: what we call “balance-level” and “item-level” tracking.
Do you already keep a spreadsheet of all of your inventory, including how much you paid for each item? When an item sells, do you have to go back and update it? Have you tried to figure out how much money you make on each sale? If you can answer “yes” to any of these questions, then this option is for you.
While a bit more effort is required, the steps are quite simple:
When you purchase goods for resale, categorize them as Inventory purchases
Within each purchase, enter each item, including a unique SKU value, and the item’s cost. This process works very similar to splitting transactions.
Alternatively, you can start from your list of sold items (the order history we’ve already imported for you) and just tell us which purchase transaction included the item sold.
If you provide Seller Ledger with this level of detail, we do a few things for you automatically when an item sells (matching first based on SKU first, then by name):
We reduce the stock level for that item in your inventory
We calculate and generate the cost of goods for that item
You do not. If you would prefer to just categorize inventory purchases as “cost of goods sold,” you are free to do so. But, you might want to make sure you understand the risks with that approach. We’ll be writing another post about that option soon.
How do I try this out?
Just discovering Seller Ledger? Start a 30 day free trial right now – no credit card required.
For existing customers, just log into Seller Ledger, and you will see two new changes to the website. First, on the left of your Dashboard, we have added and made visible a new “Inventory” asset account. Second, there is a new top-level navigation link for Inventory. For those who previously categorized inventory purchases as “cost of goods sold,” you can elect to switch to properly tracking inventory. We explain more about how that works here.
Is there an additional charge for tracking inventory in Seller Ledger?
No – this feature is available to all customers at no additional charge. Unlike other accounting/bookkeeping platforms, we think even the smallest sellers should be able to see how much money they make on each item and keep on top of their inventory stock levels.
Please tell us what you think
This is a pretty big release, and represents weeks of work and planning. It’s also something we never got to tackle with Outright/GoDaddy Bookkeeping. As such, we’d love to hear from you as you try this new functionality – the good, the bad and the ugly.
