A 20-person cross-border e-commerce team sold into the United States, Germany, and Australia from two legal entities and three warehouses. The founder kept his own spreadsheet of the “real” numbers because he did not believe the reports his own team produced.
When the person running the business keeps a private version of the books, you have a problem worth fixing. The symptom looked like an accounting issue. The cause was an operating one. The ERPNext Consulting work took about ten weeks, end to end.
Before: four versions of the same month
Closing the month took 14 days. During those 14 days, nobody could say whether the business had made money.
- Currency conversion happened in a spreadsheet, using a rate someone looked up on whatever day they got around to it.
- Stock moving from the UK warehouse to the US warehouse was recorded as a sale in one entity and a purchase in the other, inflating revenue by about $90,000 a month.
- Inventory was valued in three local currencies and added together, which is like adding 40 kilometers to 40 miles.
- Marketing spend, freight, and duties sat in one pooled account, so nobody could tell which market was profitable.
After: one number, three markets, five-day close
The changes were about setting rules, not about features. Each rule took an afternoon to agree and a week to make stick.
- One exchange rate source, one rate per month, locked on the last working day. Everyone uses the same rate, including the freight cost on Australian orders.
- Transfers between the two entities are recorded as transfers, not as sales. Revenue now means money from customers, full stop.
- All inventory is valued in one base currency. Local currency figures are shown for reference, never added together.
- Every cost gets attached to the market that caused it — freight, duties, marketplace fees, returns. A product’s margin now includes what it actually costs to get it to the customer.
What the honest numbers revealed
The Australian market, which everyone assumed was the growth engine, had been losing money for four quarters once freight, import duties, and returns were counted. Margins there were negative 6 percent, not the 22 percent the old reports showed.
They raised Australian prices by 8 percent, dropped two heavy low-margin products from that market, and stopped paying for express shipping on returns. Within two quarters, Australia contributed 11 percent of gross profit instead of dragging it down.
The founder deleted his private spreadsheet in week six. That was the real signal that the numbers had become trustworthy, and it is the point of an ERPNext Consulting engagement done properly.
Pick the market you are least sure about, take one product, and add freight, duties, and returns to its margin by hand. If the number surprises you, you have found exactly where to look next.