The UK tax authority, HM Revenue and Customs (HMRC), is using new technology to target eBay and other e-marketplaces as part of a crackdown on businesses with missing tax returns The biggest online marketplace, eBay, provides retailers with a number of online tools to help sell and ship items to their customers. However, there is no support for tax and VAT reports.
The UK tax authority, HM Revenue and Customs (HMRC), is using new technology to target eBay and other e-marketplaces as part of a crackdown on businesses with missing tax returns
This, according to merchants and their IT suppliers, forces retailers to complete the relevant forms manually, often leading to late, rushed and in some cases inaccurate VAT returns due to the fact that securing the sale will nearly always take precedence over the associated paperwork.
Keeping pace with multichannel growth
For those retailers selling through only one channel, using an accounting only technology, such as Xero, Kashflow or Quickbooks, would be sufficient. However, in today’s climate where there is a growing need to increase customer touch points; a more sophisticated approach is needed. Specialist machinery maker and retailer Marchant Dice struggled for nine years with this problem when selling through eBay, Amazon, its own website, phone and store sales.
“We tried at least two separate sales order systems with an accounting package to bring the information from these channels together,” said James Marchant, Marchant Dice chief executive. “We had two [Microsoft] Excel workbooks on the go for sales order processing and a third for our accounting package, which recorded the invoices generated to track sales values, tax and produce consecutive invoice numbers. It was a complete nightmare.”
This also had serious knock-on effects on other core areas of the business. “Accurate stock control was a near impossibility and even with the best efforts, it quickly became out of sync over the various channels. This led to customer service issues as well as a lot of wasted time and resources,” Marchant continued.
Managing multichannel financial data
These issues prompted the company to migrate to new multichannel retail management software system. Salman Malik, chief executive of software provider Brightpearl, said: “We understand the challenges retailers face when it comes to managing all the data that is generated through multiple channels. The announcement from HMRC highlights just how important it is for retailers to have a system that supports real-time accounting, helping them to meet with HMRC requirements when it comes to tax and VAT.”
Marchant concluded: “We’re now using Brightpearl and it has completely changed the way we run our business, especially when it comes to managing the data generated from sales and ensuring our accounts are accurate in relation to everything from profit to tax – eBay sales automatically appear inside Brightpearl without any need to insert data from eBay or PayPal emails, saving us time and ensuring accuracy.”
Brightpearl’s cloud-based software for small businesses introduced functionality for merchants to integrate their eBay listings and open source e-commerce software, Magento-based stores for customer relationship management (CRM), electronic point of sale, accounting, order and inventory management.