Home Blog Challenges faced by E-Commerce marketplace in 2022
Dec 26, 2022

Challenges faced by E-Commerce marketplace in 2022

Posted by Moiz Alamdar | Ecommerce

Every industry has its advantages and disadvantages when it comes to financial management and accounting. However, the e-commerce sector has some critical challenges, and the majority of online merchants are not prepared to handle them. The best accounting firms in Dubai can assist e-commerce businesses in streamlining such difficulties by collaborating closely with them. 

Read the blog below to find out about the significant accounting problems that e-commerce firm owners must be aware of:

Inventory Management can be Complex

No matter how small your business is, inventory management can be difficult for business owners for the purpose of e-commerce accounting. The addition of new goods and sales channels will make things more challenging. You must keep track of the products you own and their values. If your company has several warehouses or fulfillment centers, you might additionally need to keep track of the products where they are located. Each sale will alter the total amount of inventory, and the arrival of returned goods in good condition at the warehouse will also affect the inventory.

Inventory management is the backbone of e-tailers cash flow, so it is imperative that you have total control over this process. Your financials will always be up-to-date because you'll have correct data from automated inventory management systems. You can consult in detail how to manage your inventory from Accounting firms in Dubai.

Struggle to track Seller’s fees

The majority of internet vendors work with e-commerce sites like Noon or Amazon. To sell on one of these platforms you can be charged a set monthly fee as charges for listings, transactions, advertising, and order fulfillment.

Also, the flat cost for shipping is based on the product's category, size, and weight. These costs will all be recorded at the end of the month as "Amazon Fees." The sellers will have no granularity with this strategy, which will make budget planning more difficult. Since automation will result in less effort as you scale, it can be more sustainable. The Accounting firms in Dubai can assist you in tracking the merchant costs and expenses.

The transaction volume can mess up the Accounting System

One annoying issue with the retail sector is the large number of small transactions with a lot of data. With the aid of a good point-of-sale system that can automatically categorize sales data at the SKU level, the conventional retail selling business can easily navigate it. It's possible that your accounting system is unable to manage a large number of intricate transactions each month. Accounting systems that are not effective will slack off because they cannot handle that volume of data. Online vendors in this situation must come up with a clever way to batch their transactions.

The Issue with Returned Items

Accounting for e-commerce gets more difficult when dealing with returned goods. The majority of retailers let customers return things that are defective, arrive damaged, or don't fit as expected. Customers occasionally return items in good condition without providing a legitimate reason. However, e-commerce vendors must adhere to their "Return Policy" because a good return policy increases customer loyalty.

Accepting the returned goods is great for your business, but it may complicate your accounting procedure. Customers must be reimbursed, and the returned item must be added once more to the inventory. To get around this, make sure your accounting software is updated to include returns.

Tax payments can  be confusing

Value Added Tax (VAT) is levied at a meager rate of 5% in the UAE. However, unlike the conventional retail sector, online merchants may find VAT complicated. E-commerce site purchases of goods and services are subject to the 5% standard VAT rate. However, the UAE should be the source of supply. There may be misunderstandings about the location of the supply, the implications of the reverse charge mechanism, the non-resident supplier's VAT registration, the official and commercial evidence for export, the ramifications for importing products through agents, etc. The Accounting firms in Dubai accounting firms can guide you through your VAT needs.

To secure business success in the UAE, e-commerce players must recognize the issues early and effectively address them. The top accounting firms in Dubai, like Acuvat Auditing and Accounting, can help you negotiate the difficulties of e-commerce accounting. We provide comprehensive accounting & bookkeeping services in Dubai to help you fulfill the needs of your e-commerce firm. You can take our services by purchasing our Picks from


Hireon is one of the websites that offers you a hassle-free service experience. Whether you are looking for Accounting, Auditing, Bookkeeping, Taxation services, we are here to help you connect with verified Agencies providing these services in the UAE.

Moiz Alamdar
Acuvat Auditing and Accounting, Dubai, UAE