Although many e-commerce businesses will hire an accountant to help them with tasks such as tax filings, having efficient accounting for Shopify software can make a big difference to your finances!
Functions such as expense tracking in Shopify automate most of the daily bookkeeping duties, like:
- Producing real-time P&L reports
- Compiling every sales channel in one place
- Managing your inventory from a single dashboard
In this article, we’ll explain which admin functions you need, as well as how to handle your accounting and analytics. We will also look at when you should consider hiring an accountancy professional.
When Should an E-commerce Business Hire an Accountant?
Here are a few scenarios in which you probably need advice from an accountant:
- Choosing an advantageous trading structure as a start-up
- Switching between accrual and cash-basis accounting systems
- Filing complex tax returns or multi-state sales tax declarations
- Managing cross-border taxes for international sales
- Troubleshooting a cost inefficiency
However, if you’re already a trading e-commerce company, you don’t necessarily need to pay for accountancy services outside of your year-end expenses. Integrating an advanced e-commerce accounting app with your Shopify account can help you to take care of your day-to-day finances and deliver up-to-date reports, so you know exactly where you stand.
How Does an E-commerce Accounting App Work?
With thousands of retail platforms and payment processing providers in the market, we often hear grievances from clients trying to juggle dozens of systems. If you sell on different platforms and have varying payment streams, you could have an app for each one, including:
An e-commerce accountancy app draws those revenue centers and payment processing functions together, collating all of your data in one place, to give you accurate insights into business performance.
The idea is that you can review overall sales from your own website or app, and every other retail channel, consolidating everything from your customer reports to inventory management.
The Benefits Of An Integrated E-commerce Ecosystem
Combining all of your sales and stock data in one place has countless advantages! Normally, if you want to sell your products on multiple platforms, you’ll need to invest a considerable amount of time to deal with your payment transactions.
A cohesive accounting app puts every channel in the same place. It can automatically stream data to your accountancy program (or accountant) so that you have everything you need to file reports declarations accurately and on time.
Managing Diverse E-commerce Sales Platforms
Multiple points of sale mean multiple sales income ledgers, platform fees, tax deductions, admin and shipping costs, and compliance regulations.
If you capture all of your data in one place, you can evaluate performance, schedule stock fulfilments, report overall figures, and calculate profitability–with user-friendly reports and one-click data analysis. The benefits include substantial administrative burden reductions, better insights into revenues, less reliance on your accountant, and enhanced management accounting.
Automatic E-commerce Transaction Compilations
Traditionally, e-commerce businesses would need to compile each transaction, which is a laborious task that could take hours (particularly if you have a large number of sales and expenses). Manual bookkeeping is time-consuming and vulnerable to human error.
An accounting app for e-commerce with in-built integration functionality can match each transaction in seconds with 100% accuracy, so you can free up time, spend less on your financial management, and ultimately boost your profits.
Overall, it’s a safer, faster, and more efficient way to manage your finances. You’ll need to invest significantly less in hiring an accountant, as your bookkeeping will be continually updated and under control.