Your Shopify accounting sorted
As a Shopify seller, having a good set-up is crucial for business growth and maintenance.
If you’re an e-commerce seller on the hunt for the perfect accounting system, this article will explore why Xero and Quickbooks with A2X for Shopify are the best solutions on the market.
$15-$40 per month
Intuitive QuickBooks Online is rated by many as the gold standard software for small business accounting – and they wouldn’t be wrong. Since its release in 2004, it has quickly become one – if not, the – most advanced accounting solution for e-commerce sellers.
The reason for this is its wide range of features. In short, Quickbooks has pretty much everything most businesses need from an accounting solution. This includes invoicing, payroll, bill management, expense and inventory tracking plus multiple currencies. It’s also super easy to select and pay for only the features you need.
Let’s take a closer look at some of its features:
- Basic but informative dashboard – has an easy to navigate interface, making it an ideal choice for those Shopify sellers who are starting out on their e-commerce journey. From your user dashboard, you can see your recent activity and get an overview of key metrics including sales, expenses, profit and loss.
- Comprehensive customer management system – saves customer details, streamlining the accounts process. It also has robust email capabilities so you can send multiple emails to different customers at the same time.
- Simple bank reconciliation – once connected to your bank account, QuickBooks will download and categorise your account activity using live bank feeds, saving you heaps of time when it comes to reconciliation.
- Clients have access too – through their client portal, they can log in and view what they owe you, pay, save, print and raise queries.
- Estimates and invoicing – QuickBooks has everything you need to draft estimates and customise your invoices, including attaching additional documents, adding discounts and shipping costs, and setting up pre-set text. QuickBooks also tracks all your invoices and keeps you posted when or if action is required.
There are a few reasons why QuickBooks is the first-choice solution for so many Shopify sellers.
Depending on the subscription package you choose, you’ll have access to several different reports which you can manipulate and customise, providing you with insights into what’s really happening in your business.
Income and expense all in one place
If you have more than one payment method, which most e-commerce sellers do, you can link them all to QuickBooks, so at a glance, you can see your income and expenses in one dashboard.
Further to what was mentioned in the features list, you can send customers payment links, simplifying the payment process from start to finish.
By integrating QuickBooks with your inventory software, you can keep track of your orders, stock and manufacturing together to give you seamless data synchronisation.
$9-$70 per month
Hot on the heels of QuickBooks is Xero – an online accounting software popular among Shopify sellers. Founded in 2006, Xero now leads the New Zealand, Australian and United Kingdom cloud-accounting markets.
Xero also has a wide range of features, coupled with value for money, ease of use, reporting, customer service, and multiple direct integrations to keep your accounting in sync with everything else. It’s no surprise Xero has a whopping 1.8 million users globally.
It has everything you’d expect from a good accounting software – quotes and invoices, automatic reconciliation of accounts, expense management – plus a few cool extras. With Xero you can get paid in over 160 different currencies, thanks to automatic conversions and regularly updated exchange rates – a must-have for online sellers.
Let’s explore some of Xero’s features:
- Online accounting – see your cashflow in real-time with online billing, banking and accounting.
- Customisable and dynamic dashboard – has a slightly more complex interface than QuickBooks, but support is easily available should you need it. From your dashboard, you can track pending bills, outstanding invoices, expense claims and critical performance graphs.
- Well-structured payroll function – while this feature is only available to select users in the UK, New Zealand, Australia and some US states, if you can use it, do! Earnings, leave requests, sick leave, bonuses, overtime, benefits – all manageable from one central system.
- Pre-set default or import chart of accounts – Xero will assess your industry and type of business before setting up a default chart of accounts or importing a pre-prepared one. You can also set up fixed asset accounts before running depreciation.
- Automatic invoicing, billing and expense claims – create and send invoices plus get paid online, manage your spending, make bulk bill payments, and review and approve expenses.
- Inventory items – track stock and automatically create invoices with Xero’s specially designed inventory tool.
- Easy bank reconciliation – automatically import and code bank transactions.
Xero is the emerging leader of online accounting software, so why do so many e-commerce sellers love it?
Xero means business when it comes to its reports. It can generate 65 reports from balance sheets, payroll, and profit/loss – 20 are payroll-related. You can expect detailed reporting on just about everything from overdue invoices to comprehensive budgets. Reports can be generated for varying periods.
Capability to calculate depreciation
This will save you – or your accountant – a great deal of time and gives you an accurate view of any production costs you’re incurring in the background.
Smarter contact management
Xero merges your finances with your contacts and customers, which you can use to your marketing advantage. Why go looking for new customers when the best ones have already purchased from you? See which groups are spending their money where and consider targeting them with personalised discounts or offers.
Finances on the go
While these days it’s almost unusual not to have a mobile app option, as a cloud-based product, Xero makes it super easy for you to manage your finances on the go – anywhere, anytime.
If you don’t have a connector app – you’re missing out
The role of a connector app is to enable one piece of software to speak to another – saving you a lot of time and automating the transfer of data. While Xero and QuickBooks have their own connector apps for Shopify, what Shopify sellers really need is A2X.
A2X for Shopify is the second product release from the company, specifically created to help Shopify sellers get a handle on their accounting. Think of the app as a middleman that sits snugly between Shopify and either Xero or QuickBooks Online. Rather than importing each order as a new transaction, A2X for Shopify will summarise your sales and post these summaries instead.
While you might be able to manage individual transactions in the early days of your business, as you grow, importing individual order data will quickly cause you a headache – and slow down your accounting system.
The larger the volume of transactions, the easier it is to record each summary as a transaction made up of multiple sales. When you’re ready to reconcile your sales and fees with Shopify Payments pay-outs, A2X for Shopify will automatically do this for you – so you can be sure everything has been accounted for correctly. Automating this workflow across your business will not only save you hours of time and manual labour, you’ll also have accurate and reliable financial data you can rely on to grow your business.
Some of the many benefits of using A2X for Shopify:
- Quick and easy to set-up – is an easy to follow, step-by-step process that will take you only two minutes. A2X then generates pay-out summaries that reconcile each time a pay-out hits your bank account.
- Complete accuracy – get accurate accrual accounting for your Shopify sales, fees and refunds. Posting is automatic for Xero and QuickBooks Online.
- Customise the mapping of each transaction type into your chart of accounts – so you can customise A2X to your preferred accounting setup.
- Safe financial data – if you need to adjust your chart of accounts or accounting configuration, A2X’s statements are easy to reverse, reconfigure and re-post without risk to your financial data.
- Multi-channel and multi-currency support – A2X for Shopify supports all your Shopify stores, in any currency, as well as some stores with multiple payment options.
- Expert support – A2X works with several partners who are highly experienced Shopify accountants. Many are cloud-based accountants themselves, so they understand the complexities of online business. Find an A2X expert Shopify accountant who can help you get set up.
Pick the right accounting system – then make it better
Everything, from the size of your business and budget right through to your projected growth, will influence and ultimately determine which accounting system is right for you. You might not need all the bells and whistles – or you might be in the market to invest in the most advanced solution you can find.
Either way, Xero and QuickBooks are two fantastic options. QuickBooks has ranked number one for many years as the top accounting software for small business. Xero is not far behind as the emerging leader of online accounting solutions. While both work extremely well on their own, Shopify sellers need to consider using an accounting connector app like A2X. It will make monthly reconciliation a breeze, giving you time to focus on developing your business. If you need help getting set up, talk to a professional A2X expert Shopify accountant.