SECTORS
E-Commerce

How can you optimize cash management for your e-commerce business?

Find out why an e-commerce business needs cash management software and how Fygr can help.
Free trial
Request a demo

E-commerce: key points to remember about cash flow management

Cash management is a key issue for e-commerce companies, whose business model relies on highly volatile cash flows, heavy dependence on sales and payment platforms, and high marketing investments. Cash is constantly needed to finance inventory, absorb commissions, and support customer acquisition, often even before sales are actually collected:
Multiple sales channels (own website, marketplaces, social media, dropshipping) with varying delivery times and commissions
Constant pressure on inventory with short life cycles and risks of shortages or overstocking
Massive marketing investments requiring high advertising budgets with uncertain ROI
Cash flow delays imposed by payment platforms and providers
Fygr enables e-merchants to centralize all their financial flows, secure their working capital requirements, and closely monitor the actual profitability of their business, despite the operational complexity of the sector.

The specific cash flow challenges for e-commerce businesses

Why is cash flow management particularly difficult for e-commerce businesses? We have identified three major issues.
Volatile financial flows and multiple sales channels
Constant pressure on supplies and inventories
Massive marketing investments and uncertain return on investment

Volatile financial flows and multiple sales channels

The e-commerce sector is characterized by extremely complex financial flows generated by a multitude of sales channels. An e-commerce site must now simultaneously manage its direct sales, marketplaces (Amazon, Cdiscount), dropshipping platforms, and social networks.
‍
Each channel has different payment terms, commissions, and transaction systems, creating a particularly unstable and difficult-to-manage financial environment.

This multiplicity of revenue sources generates a complexity of tracking and reconciliation that quickly becomes unmanageable manually.

Constant pressure on supplies and inventories

E-commerce companies operate under constant pressure to maintain a critical balance between available inventory and order flow. The slightest forecasting error can lead to stockouts or overstocking, directly impacting cash flow.

Product life cycles are becoming shorter and shorter, particularly in fashion and electronics, forcing entrepreneurs to make rapid and massive investments in inventory, with no guarantee of complete turnover.

This dynamic creates constant pressure on working capital requirements, requiring unfailing financial agility.

Massive marketing investments and uncertain return on investment

The e-commerce business model relies heavily on huge advertising investments, mainly on digital platforms such as Google, Facebook, and Instagram.
These campaigns often account for a significant portion of revenue, with budgets reaching 20 to 30% of income.

However, the return on investment for these expenses remains difficult to measure accurately, creating ongoing uncertainty about the actual performance of the investments.

Seasonal variations further accentuate this difficulty, with peaks in marketing expenditure that can quickly destabilize cash flow.
BEST PRACTICES

How to effectively manage cash flow for a company in the e-commerce sector

Free trial
Request a demo

Centralize and automate the tracking of multi-platform financial flows

In the complex ecosystem of e-commerce, managing financial flows is a major challenge. Companies in this sector have to deal with multiple sales channels: their own websites, marketplaces, social networks, and international platforms.
This centralization provides comprehensive, real-time visibility of all financial transactions, eliminating the risk of manual errors and significantly reducing the time spent on bank reconciliation tasks.

Develop cash flow forecasts adapted to the specificities of e-commerce

The intrinsic volatility of the e-commerce sector calls for particularly dynamic and accurate financial forecasts. Companies in the e-commerce sector have an interest in modeling various complex scenarios incorporating seasonal variations, the impact of marketing campaigns and potential stock fluctuations. These projections become genuine decision-making tools, enabling them to anticipate financing requirements, optimize sourcing strategies and secure cash flow in the face of sudden variations in activity.

Secure and optimize financial risk management

E-commerce is particularly exposed to specific financial risks: fraud, exchange rate variations, dependence on payment systems. These factors make cash management all the more complex.
CHOOSE FYGR

Why use Fygr for your e-commerce?

Cash management software offers a wide range of solutions to meet these different needs and best practices for e-commerce businesses. Fygr is a treasury software that could very well meet the needs of your e-commerce business, so let's take a closer look at why.
Free trial
Request a demo
GOOD REASON #1

Multi-channel banking synchronization

Centralize and automatically categorize your financial flows from multiple sales platforms
Real-time aggregation of transactions from marketplaces (Amazon, Cdiscount, eBay) via your banks
Automatic categorization by sales channel and product type
Instant reconciliation of commissions and transaction fees
GOOD REASON #2

Dynamic cash flow forecasts

Build your financial strategy with customized scenarios
Seasonal flow modeling (peak periods such as sales)
Projecting cash requirements for marketing campaigns
Inventory and procurement projections
GOOD REASON #3

Continuous optimization of your business model

Accurately measure actual vs. forecast performance
Dynamic comparison between forecast and actual
Quickly identify marketing performance gaps
Real-time adjustment of your strategy

They chose Fygr

Here's what some of our customers have to say after choosing Fygr to visualize their financial data:
Many thanks to Julie at FYGR for her patience during our discussions about how to use the tool! We are receiving excellent support, thank you!
Sochanda Pich
CEO @ MyArtistPlace
This is THE essential solution for cash flow management and forecasting! Julie and Dya are always available and incredibly responsive! Well done to the whole team!
Stephen Calleja
Executive @ Callvin
FYGR is an excellent tool that allows you to accurately track your figures (cash flow/income/expenses/advance payments) every day. Thanks to the categorization of expenses, it is very easy to forecast expenses, including automatically and over several years. The support team is very responsive and attentive, thank you to them. The solution is stable, easy to use, and flawless. It is ideal for building your budget. Each exceptional expense is tested to verify its feasibility and set commercial objectives if necessary. As a result, I sleep soundly (or party instead of doing accounting!)
Bravo, and thank you!
Simon Giron
Founder and CEO @ Naobike
FAQ

Everything you need to know about cash management for e-commerce businesses

Answers to the questions you ask us most often.
What is the average time frame for receiving payments on the main marketplaces?
Payment terms vary considerably depending on the platform: Amazon generally pays every 14 days, Cdiscount within 30 days, while your Shopify store with Stripe offer payments within two days. These delays create a cash flow requirement that can reach 45 days between shipment and actual payment, not counting customer returns, which further extend these terms.
Which cash flow KPIs should be prioritized for e-commerce?
Beyond your bank balance, keep an eye on: Days Sales Outstanding (DSO), which measures the average time it takes to collect payments; inventory turnover rate, to avoid over-commitment of capital; cash conversion cycle, which includes supplier payment terms, inventory, and customer payments; and burn rate during periods of high marketing expenditure. A monthly dashboard of these indicators will help you anticipate any tensions.
What is the minimum cash ratio to maintain in e-commerce?
A healthy e-commerce business should maintain the equivalent of 60 to 90 days of fixed costs in available cash. This cushion allows you to absorb seasonal variations and cash flow delays. During periods of strong growth or before seasonal peaks (Q4), aim for 90-120 days to finance the increase in inventory without weakening your financial structure.
Should cash management be outsourced or kept in-house?
For an e-commerce business with less than €5 million in revenue, a part-time CFO or an accountant specializing in e-commerce, combined with good software, is usually sufficient. Above €10 million or with significant internationalization, a dedicated CFO becomes necessary. The key is to have automated tools: manual data entry becomes unmanageable beyond 3-4 active sales channels.