Strategies for Automating Your Shopify Seller Accounting Process
Online platforms like Shopify are a convenient way to promote your business and make money, but essential functions like accounting can be daunting for a business owner. There is tons of information to keep track of, from sales to refunds, expense accounts, and sales tax, VAT or GST. Fortunately, there is advanced software that makes organising your accounts much easier increasing your efficiency and helping you grow your business.
Various software programs enhance Shopify seller accounting processes with automated features that decrease your workload and ensure the accuracy of all data and transactions. Instead of working long hours manually managing financial information, implement this automation software so you spend less time stressing and more time growing your business.
Importance & Benefits of Automated Accounting
Automated accounting software not only helps save you time but also ensures your business is maintaining proper standards and meeting regulatory requirements and keeps you on top of all aspects of your Shopify store. Additionally, many accounting software programs are based on cloud computing which stores your information digitally, allowing you to access these programs and manage your business from anywhere with an internet connection. Automated accounting provides you with the following benefits that optimise your store:
- Keeps You Up-to-Date
- Decreases Errors
- It gives You More Control
- Increases Efficiency
- Improves Security
- Integrations With Other Platforms
- Enables Instant Financial Analysis
Automated Accounting Strategies
Automating your Shopify seller accounting is essential for a successful business, but choosing the right one can take time and effort with the prevalence of available software. The main thing to remember when determining the software you want to use is your business goals. Establishing what you want your business to look like in the future allows you to select the software with the features you need to achieve that future. No matter what software you decide to use, there are a few strategies to maximise the benefits of automated accounting.
Digitise All Accounting Processes
Managing Shopify seller accounting processes manually with stacks of documents in files is tedious and inefficient for an online store. Accounting software provides a simple way to organise everything from bank transactions to revenue and expense accounts to inventory management. Storing all of this information and documentation digitally ensures data accuracy and gives you an easy way to access whatever you need.
There are no limitations to what accounting processes you can digitise and automate. Setting up your business’ bank account to feed into your accounting software eliminates the need to import bank statements manually and allows you to understand your finances better. Digitising documents keeps them organised and easily accessible. The simplification of these processes enhances your business with instant visuals of performance that show you where your business is excelling and where improvements are required.
Accounting Software Integrations
An advantage of accounting software is the integration features that optimise your processes. These features allow multiple apps and other software to transmit and share data automatically, performing tasks like recording sales or expenses, organising them into categories, and bank reconciliations.
There are various software integrations, such as Link My Books, that sync your data from Shopify to Quickbooks or Shopify to Xero, and many more. They significantly increase efficiency allowing you to complete tasks that used to take hours with just one click. Those that are automated require no effort on your part, such as integrations that manage refunds, balance your books, and provide you with insights on important things like cash flow, so your business is more successful.
Cash Flow & Expense Management
Managing cash flow is essential for business owners. It ensures that your business brings in more money than is going out. Part of this requires accurately tracking and forecasting your expenses and revenue regularly so that you can improve your cash flow. Accounting software organises these transactions in reports that quickly give you insight into your store’s finances. Attempting to do so manually takes up precious time you could spend adding new products to your store or promoting your business.
Simplify Tax Obligations
Thinking about doing taxes and continually complying with tax obligations is daunting, but with accounting software, they do not have to be a headache. Regulations vary based on where you live and run your business, but the complexity of preparing for taxes remains the same. Accounting software organises the digital records of transactions and expenses so that whether you do your taxes on your own or with the help of an accountant, the information is readily available and easily shared.
Manage Employee Payouts
As a Shopify business grows, employees or independent contractors may be required. Tax regulations will create various managing methods for these employees or contractors. A payroll schedule with tax withholdings will need to be set up, as well as a way to track how much is being divvied out in payments. Thankfully, cloud-based accounting software can handle these tasks.
You'll also want to ensure that your employees have a way to track their own expenses. You can help by keeping track using digital documentation of travel, home office, and other costs. All tracking is straightforward when using automated administrative software.
Establish Regular Checks
An important habit to establish as a business owner that is made much easier by accounting software is regular checks of your accounting processes. It is easy to fall into the trap of procrastinating in updating your bookkeeping. Instead of letting everything pile up to deal with at the end of the month or year, instituting weekly reviews of your accounts breaks information up into smaller amounts that are less daunting to handle.
Cloud-based accounting software can generate financial reports like balance sheets, income statements, and cash flow statements. These automatic reports are valuable for Shopify store owners to optimise their businesses regularly.
What To Do Next
Shopify seller accounting software saves you from numerous headaches and enhances your business. Incorporating this software using the above strategies will surely increase your business’ success.
To learn more about Shopify accounting read our in depth guide Shopify Bookkeeping 101. We teamed up with Ecommerce Accountants to bring you the most in depth guide of Shopify accounting to ensure you get it right, pay the correct amount of taxes and spend as little time as possible in doing so.