Running a business is a hard job. There are so many things to think about and keep track of, from marketing and sales to production and logistics. But one of the most important – yet often overlooked aspects of running a business is accounting and bookkeeping.
If you’re not careful, sloppy bookkeeping can lead to missed opportunities, financial disaster, and even lawsuits. That’s why it’s essential to have a system in place for keeping your books in order. And luckily, Shopify makes it easy to do just that.
Here are some simple tips for doing Shopify accounting and Shopify bookkeeping for your online store.
Use Shopify’s Built-In Accounting Features
Shopify comes with a number of powerful tools for managing your finances. The first step is to take advantage of them.
Shopify’s built-in accounting features include:
These accounting features are fully integrated with Shopify, so you can easily keep track of your finances in one place. And if you ever need to hire an accountant or bookkeeper, they’ll be able to access your records easily.
Also, if you don’t like any of Shopify’s built-in features, you can also use Shopify Shipping apps. For example, Wave is an app that helps you manage your finances, including your invoices, expenses, and taxes. It’s perfect for small businesses and entrepreneurs who need to keep their books in order without spending a lot of money.
Keep Track of Your Expenses
Another important part of bookkeeping is tracking your expenses. This will help you track where your money is going and identify areas where you can cut costs.
There are a few different ways to track your expenses:
One way is to use Shopify’s built-in expense tracker. This tool lets you track your expenses by category, so you can see where most of your money is going.
Another way is to use a dedicated expense-tracking app. There are a number of apps available, such as Expensify and Xero, that let you track your expenses and generate reports.
Accounting and bookkeeping apps can be a lifesaver for small business owners. They can help you save time and money by automating many of the tasks involved in accounting and bookkeeping. They can also help you avoid costly accounting and bookkeeping errors.
Some of the benefits of using accounting and bookkeeping apps include:
- Automated tracking of expenses: Apps like Expensify can automatically track your expenses, saving you time and hassle.
- Accurate financial reports: Accounting and bookkeeping apps can generate accurate financial reports, helping you keep tabs on your business’s finances.
- Easy access to financial data: With an accounting or bookkeeping app, you can easily access your business’s financial data from any device, anywhere in the world.
- Improved cash flow: An accounting or bookkeeping app can help improve your company’s cash flow by providing up-to-date information on your finances.
Integrate Tax Tracking Into Your Accounting System
As a Shopify business owner, it’s important to stay on top of your finances and make sure that your taxes are paid on time. One way to do this is to integrate tax tracking into your Shopify accounting and bookkeeping. There are a number of different tools available that can help you with this, and they can be extremely beneficial in saving time and money and avoiding errors.
One of the most popular tax-tracking tools is TaxJar. TaxJar automatically calculates, files, and pays your sales tax for you, and it integrates with Shopify to make the process as simple and seamless as possible. With TaxJar, you can rest assured that your taxes are always up-to-date and accurate, and you’ll never have to worry about missing a deadline or making a mistake.
Another great option for tax tracking is Avalara. Avalara also offers automatic tax calculation, filing, and payment, and it integrates with Shopify to provide a hassle-free experience. In addition to sales tax, Avalara can also help you with VAT, excise tax, communications tax, luxury tax, and more. With Avalara, you can be confident that all of your taxes are being taken care of properly.
No matter which tool you choose, integrating tax tracking into your Shopify accounting and bookkeeping will save you time and money and help you avoid errors.
Utilize Inventory Management Tools
As an online retailer knows, inventory management is a critical part of running a successful business. Not only do you need to keep track of what products you have in stock, but you also need to be able to forecast future demand and plan your ordering accordingly. Fortunately, there are a number of great inventory management tools available to Shopify users.
One of the most popular options is SkuVault, which offers a comprehensive suite of features for managing inventory, including barcode scanning, real-time stock levels, order tracking, and more. Another popular option is Inflow Inventory, which offers similar features and is also compatible with QuickBooks for streamlined accounting.
Whichever tool you choose, utilizing an inventory management system can save you a lot of time and hassle in keeping track of your inventory. It can also help you avoid errors in your accounting and bookkeeping, as all of your inventory information will be stored in one central location.
Review Your Numbers Regularly
Finally, it’s not enough to just keep track of your income and expenses. You also need to review your numbers on a regular basis.
This will help you identify any problems or areas where you can improve. It will also help you keep on top of your bookkeeping and make sure everything is going smoothly.
Jim Pendergast, Senior Vice President at altLINE Sobanco, recommends, “Review your numbers regularly, at least monthly if not weekly. This will help you identify any issues early on and make sure your bookkeeping is on track.”
Reviewing your numbers regularly is an essential part of effective bookkeeping. Make sure you’re taking the time to do it, and you’ll be on your way to keeping your finances in order.
Cloud Accounting software that works best for Shopify businesses
If you are running a brand new business with less than six figures in total sales, you might be able to get by with the default reports in Shopify as well as a spreadsheet or two.
However, once you are doing six figures in sales, it is in your best interest to use cloud accounting software. It will save you a ton of time and can ensure that your finances are up-to-date and accurate.
The two most popular options for US and Australian eCommerce businesses are Xero and Quickbooks.
Bookkeeping and accounting are essential parts of running a successful Shopify business. By following these tips, you can make the process a lot easier and less stressful.
Don’t forget to keep track of your income and expenses, review your numbers regularly, and hire an accountant or bookkeeper if you need help. With a little effort, you can keep your finances in order and focus on running your business.
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