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All you need to know about Accounting for Shopify Ecommerce Business
Shopify is a Canadian multinational e-commerce company based in Ottawa. It is also an online e-commerce platform for online store and retail POS systems. Online retailers are offered a variety of services, “including payments, marketing shipping, Shopify expense tracking, and customer engagement tools to simplify the process of running an online store for small merchants.”
In comparison to other e-commerce platforms, Shopify offers some distinct advantages, e.g., low startup cost, full control and management of the store, CRM, and product fulfillment. Shopify is meant for serious entrepreneurs who are willing to make a brand and want a sustainable business. Running an online store on Shopify needs you to drive your own customers, unlike eBay and Amazon.
Survival and Growth of Online Store will depend on Accounting for Shopify Sellers
If you are already an online seller or going to start your e-commerce business, the success and failure of your business will largely depend on Accounting as it will only provide information about the financial health of your business.
Timely information on your profits and losses, available cash at your disposal, costs and earnings, assets and liabilities, inventory status, and tax liability can only help you make the right decisions from time to time.
Integration opportunities on Shopify Online Platform
Shopify can be conveniently integrated with QuickBooks and Xero. Suppose you just started an online Shopify store and already have an ERP for an existing business, there may be a need for integrating these two systems for your business growth for
- Better Inventory Management through automatic entries of Shopify data with ERP and without errors
- Fast order processing
- Better resource utilization by avoiding manual entries
- Better management of customer data
Challenges in Accounting for Shopify
Though Shopify is an excellent platform for your e-commerce business, there are some common accounting mistakes frequently encountered by all users. Once you can fix these mistakes, your business has a better possibility of success.
- Mistakes in recording Shopify deposits as Earnings
- Incorrect reporting of the value of Cost of Goods sold
- Difficulty in combining business and personal financial data
- Mistakes in Sales Tax Calculations
- Miscalculation in Inventory
Reasons that you engage external accounting services as a Shopify Seller
Shopify businesses are normally run by an individual or maybe with another handful of people. More importantly, all Shopify online sellers require to drive their own traffic. It is imperative that most of the owners are busy managing their sales and marketing activities while bookkeeping and accounting activities go for a toss and sail through their business journey blindfolded.
Reasons for outsourcing and engaging external accounting services are
- Low Cost of hiring compared to employing internal accountants
- Accurate inventory, sales and purchases data and judicious selection of reorder levels
- Posting of Ledgers
- Expert and experienced accounting support help you avoid the common Shopify accounting mistakes
- Improving focus on your core business
- Periodic financial reporting and providing business performance and action plans
- Timely compliance of Sales Tax
IMC as your preferred Accounting services for Shopify selling
IMC is your preferred solution as a startup or small business owner. Our experienced Accounting team will be at your support every time you need apart from regular accounting hours scheduled for your services.
All common mistakes and associated challenges with Shopify will be taken care of by us and help you grow your business. IMC Accounting team offers timely information on cash flow status and sales tax compliance needs, and promising access to top-notch accounting software for drop shippers without making a purchase.