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E-commerceManagement accounts

Clear numbers for a growing e-commerce business

A £650k online retailer was growing without knowing what drove profit. We made the numbers clear.

The result

+6 pointsmargin

net profit margin, worth £39,000 a year

  1. 1
    The problem

    Sales were growing, but it wasn't clear what drove profit

    Simon's business turned over £650,000 a year and spent heavily on marketing. Without detailed financial insight, he couldn't see which channels delivered the best return, or how to keep best sellers in stock without tying up cash in slower lines.

    Before: net profit margin
    5%net profit margin
  2. 2
    Our approach

    Show what drives profit, every quarter

    We introduced regular reporting so decisions about spend and stock could be based on real numbers.

    1. Step 1: Introduced quarterly management accounts.
    2. Step 2: Showed which marketing channels delivered the best return.
    3. Step 3: Identified best sellers to guide stock buying.
    After: net profit margin
    11%net profit margin+6 points
  3. 3
    The outcome

    Six points more margin, worth £39,000 a year

    With clearer numbers, Simon could direct spending to the marketing channels and products driving growth. Net profit margin rose by six percentage points, adding around £39,000 a year at his current turnover.

    • +6 pointsnet profit margin
    • £39,000additional annual profit
    • Quarterlyfinancial reviews

Is this you?

If this sounds familiar, let's talk about management accounts.

  • Sales are growing, but you can't see what's driving profit.
  • You spend heavily on marketing without knowing what works.
  • Cash is tied up in slow-moving stock.
Talk to an accountant

Names changed. Figures are real examples based on this client's circumstances. Your result will depend on yours.