5 Best Shopify Accounting Software
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As per research, at present, there are anywhere between 12 and 24 million online stores, and with more people starting online businesses, this number is going to steadily increase over the next few years.
Accordingly, the need for seamless accounting software is inevitable. Like other industries and businesses, your eCommerce business also requires you to manage your finances efficiently to grow your business.
Since the buying and selling of goods and services happen over the internet in the case of eCommerce businesses, the accounting of transactions can be a challenging task. That’s because there are major areas that you as an eCommerce business must address to enable accurate financial records and decision making.
For instance, inventory is an essential element of an eCommerce business. According to research by IHL, ineffective inventory management costs eCommerce businesses more than $1.8 trillion annually. Likewise, when it comes to the sales tax, the economic nexus rules are still incomprehensible. Also, there are a host of products that are eligible for tax exemptions in some states in the US.
Therefore, it’s extremely important that you as an online business invest in good accounting software so that you can automate tax and accounting functions of your Shopify store.
Though Shopify provides you with the functionality of tracking your sales, discounts, and refunds. However, it’s limited and lacks the in-depth information that you need to run your online business efficiently.
In this article, we are going to list down not only the best Shopify accounting software but also the factors that you need to consider before choosing an accounting software for your Shopify store.
Factors To Consider Before Choosing An Accounting Software For Shopify
Choosing the right accounting software for your Shopify store is a crucial decision that can impact your business’s financial management and overall efficiency. Here are some factors that you must consider before choosing accounting software for your Shopify store.
1. Integration With Shopify
When choosing accounting software for your Shopify store, you must ensure that the accounting software can seamlessly integrate with your store. Accordingly, you must look for accounting software that offers native integration or support through third-party apps and plugins.
Native integration means integrations that are developed and maintained by the accounting software provider, ensuring a high level of compatibility and functionality. If your chosen accounting software doesn’t offer a native integration, you can explore third-party apps and plugins designed to bridge the gap between Shopify and your accounting system. Many developers create apps specifically for this purpose.
Besides looking for accounting software that offers native integration or support through third-party apps and plugins, you can also go for alternatives that offer API (Application Programming Interface) access. You can go for this alternative if you want to create custom integrations.
A seamless integration between your Shopify store and the accounting software enables automatic data synchronization, including sales, refunds, and taxes. Thus, it’s important to thoroughly research and test the integration to ensure it meets your business’s needs and that the data transfer is accurate and reliable.
The second factor that you must consider when choosing accounting software for your Shopify store is its scalability. As your e-commerce business grows, you need accounting software that can adapt to your increasing data volume and complexity.
For instance, scalable accounting software should be able to handle a growing number of daily sales, refunds, and other financial transactions without performance degradation. It should offer ample storage capacity or the ability to expand your data storage as your business expands.
Furthermore, scalable accounting software should allow you to add multiple users as your business grows. Such software must ensure that it can accommodate additional team members with different roles and access levels, while still maintaining data security.
If your business expands to multiple locations or sales channels, your accounting software should be such that it can handle the complexity of managing different revenue streams, inventory locations, and taxation requirements.
Furthermore, it must effectively manage a larger inventory including tracking stock levels, cost of goods sold (COGS), and variations in product lines as your product catalog expands.
Also, a scalable solution should offer robust reporting and analytics capabilities to help you gain insights into your growing business. Such software must ensure that it can handle complex financial reporting and adapt to your evolving business needs.
Therefore, before choosing accounting software for your Shopify store, consider your current business size and growth plans. Then, choose accounting software that can scale with your business as it grows. This will prevent the need for frequent software migrations.
3. Accounting Needs
A great accounting software should be able to meet the accounting needs of your Shopify store. It must offer a range of features and capabilities that address the specific financial and operational requirements of your e-commerce business.
For instance, the accounting software should seamlessly integrate with your Shopify store, allowing for the automatic import of sales data, including order details, customer information, and payment transactions. Furthermore, it should enable you to monitor stock levels, product variations, and reorder points, helping you maintain accurate records and reduce the risk of overselling.
Besides this, your accounting software should support the tracking of various expenses, including shipping costs, advertising, marketing, and overhead expenses, so that you can accurately calculate your business’s profitability.
Not only this, the accounting software that you choose for your Shopify store should be able to calculate and record sales tax, value-added tax (VAT), and other applicable taxes based on your business’s location and the locations of your customers.
In addition to income and expense tracking, inventory management, and tax calculation, your accounting software must also offer features including multi-currency support, bank reconciliation, financial reporting, customer management, refunds, and return handling, payroll and employee management, customizations, third-party integrations, and data security and compliance.
Therefore, before investing in accounting software, you must evaluate your business’ specific accounting needs. Does your business primarily focus on basic bookkeeping and expense tracking, or does it require more advanced features like inventory management, multi-currency support, or project accounting?
One of the important factors to consider when choosing accounting software for your Shopify store is your budget. The cost of accounting software for your Shopify store can vary widely depending on the software’s features, your business’s specific needs, and the pricing model of the accounting software provider.
Many accounting software solutions use a subscription pricing model. You pay a monthly or annual fee to access the software. The cost of subscription-based accounting software can vary based on the plan you choose, with higher-tier plans typically offering more features and capabilities.
In addition to subscription-based accounting software, some accounting software providers charge based on the number of transactions you process through the software. If you have a high volume of sales, this pricing model may affect your costs.
Also, if you have multiple team members who need access to the accounting software, you may incur additional costs for user licenses.
Therefore, when choosing accounting software for your Shopify store, you must review the pricing plans and models offered by different accounting software providers. You must also check whether the software provider charges extra for additional users, premium features, and data migration.
5. Reporting And Analytics
Robust reporting and analytics tools are essential for gaining insights into your financial data. Therefore, you must look for software that offers a variety of customizable reports and financial statements.
For instance, the best accounting software for Shopify must offer a range of financial reports, including income statements (profit and loss), balance sheets, cash flow statements, sales reports, and inventory reports.
The income statement is one of the three major financial statements that report a company’s financial performance over a specific accounting period. It focuses on the incomes, expenses, gains, and losses incurred by a company during a specific period. Likewise, a balance sheet of your Shopify store is one of the other three major financial statements that provide a snapshot of your online store’s financial position. It reports your store’s assets, liabilities, and shareholder equity at a specific point in time.
Finally, a cash flow statement is the third major financial statement that reports the flow of cash and cash equivalents moving in and out of your online business. It summarizes whether a company can generate cash sufficient to meet its debt obligations and fund operating expenses.
Besides the three major financial statements, the accounting software that you choose for your Shopify store must also generate other important reports like the sales report, inventory report, and tax reports.
In addition to these reports, your accounting software should also provide analysis tools that track your business’s performance and identify trends and business opportunities. For instance, these analysis tools must be able to analyze customer behavior and sales data, monitor expenses, evaluate the profitability of your products, product categories, or sales channels, forecast financial performance, and compare financial data over different periods.
Thus, when choosing accounting software for your Shopify store, consider factors such as your business size, budget, accounting needs, and integration capabilities. Besides this, you must also consider aspects like mobile accessibility, user-friendliness, security and compliance, support and customer service, customization and add-ons, and data import and export capability.
5 Best Shopify Accounting Software
Selecting the best accounting software for your Shopify store is essential for managing your finances efficiently. Several accounting software options integrate seamlessly with Shopify. Here are some of the top choices.
QuickBooks Online is a popular accounting software that integrates seamlessly with your Shopify store, making it a robust choice for managing your e-commerce finances. It offers a native integration with Shopify, thus allowing you to sync your Shopify transactions, sales, refunds, and taxes directly into your QuickBooks account.
To integrate QuickBooks Online into your Shopify store, all you need to do is sign up for a QuickBooks Online subscription based on your business’s needs and size, install the QuickBooks Online integration app, configure it, map your Shopify data to the corresponding accounts in QuickBooks Online, and initiate the synchronization. Integration of your Shopify store with QuickBooks Online ensures that your financial data is up-to-date and accurate.
In addition to data synchronization, QuickBooks Online can help you reconcile your bank and credit card accounts with your Shopify transactions. This feature simplifies the process of matching your income and expenses. How?
Well, the automatic bank reconciliation feature in QuickBooks Online allows you to automatically match transactions in your bank feed with the corresponding transactions in your books by creating bank rules to categorize and match transactions. You can set up rules to recognize your Shopify sales, refunds, fees, and other transactions. Accordingly, when new transactions take place in your Shopify store and such transactions match these rules, QuickBooks will automatically reconcile them.
Also, if your Shopify-QuickBooks Online integration includes an auto-sync feature, you can automate the synchronization of Shopify transactions with QuickBooks. This will further streamline the bank reconciliation process.
In addition to automatic reconciliation, another important feature that QuickBooks Online offers is that of expense tracking. Once you integrate QuickBooks Online with your Shopify store, your Shopify expenses get automatically synced to QuickBooks Online. You can track these expenses, assign an appropriate expense category or account to each transaction, and attach receipts and supporting documents to your expense transactions for record-keeping.
If you have recurring expenses, such as subscription fees or rent, you can even set up recurring expense transactions in QuickBooks Online. This simplifies the process of recording expenses that happen on a regular schedule.
Also, integrating QuickBooks Online with Shopify can help you streamline and optimize your Shopify store’s inventory. You can manually record your inventory transactions, including inventory purchases, sales, and inventory adjustments for damaged goods, write-offs, or other inventory changes.
Then, you can assign appropriate income and expense accounts to these items, and set up inventory tracking for each product. You can even use different methods for valuing your inventory, such as FIFO (First-In-First-Out) or average cost. Choose the method that aligns with your business’s inventory valuation practices.
Besides this, you can utilize inventory reports to gain insights into your inventory levels, turnover, and valuation. Note that QuickBooks Online offers various inventory reporting tools to help you manage and analyze your inventory. Common inventory reports include Inventory Valuation Summary, Inventory Valuation Detail, Sales by Product/Item, and Inventory Stock Status. The information generated by these inventory reports can be invaluable for decision-making, ordering, and managing your inventory efficiently.
You can even set reorder points for your products in QuickBooks Online. Thus, whenever your inventory reaches the reorder level you have set, you can create purchase orders to restock your products.
In addition to expense tracking and inventory management, another important feature that QuickBooks Online offers is that it assists with sales tax calculations and generating tax reports to help you stay compliant with tax regulations. You can configure your sales tax settings in QuickBooks Online to align with your Shopify store’s location and tax obligations. This includes specifying your tax agency, setting up tax rates, and choosing whether to apply taxes to sales.
Thus, once you integrate your Shopify store with QuickBooks Online, QuickBooks Online will automatically calculate the sales tax on your Shopify orders based on the tax rates you’ve configured. Furthermore, the calculated tax amount will be recorded in your financial records. You can also generate sales tax reports in QuickBooks Online that allow you to review tax collections, liabilities, and payments. This way you can monitor your tax obligations and ensure accuracy in tax calculations.
QuickBooks Online Pros
1. Seamless Integration
Many users claim that the transactions from Shopify are imported into Quickbooks Online quite seamlessly, without any hitches. Moreover, QuickBooks Online imports data in discrete transactions rather than a single daily amount.
This means there is no need for manual data entry as the online accounting solution ensures that sales transactions, inventory levels, customer information, and other relevant data are automatically and accurately updated across both platforms in real time.
Integrating QuickBooks Online Payroll with your Shopify store can help streamline payroll processing for your e-commerce business. All you need to do is set up your employees by entering their personal details, payment methods, pay rates, and tax information and define your payroll schedule in QuickBooks Online Payroll.
Accordingly, when it’s time to run payroll, you can use QuickBooks Online Payroll to calculate employee salaries, taxes, and deductions automatically. The software handles the necessary calculations and generates paychecks or direct deposit payments for your employees.
In addition to this, QuickBooks Online Payroll helps you calculate and withhold federal, state, and local payroll taxes accurately. It also helps with payroll tax reporting and filing, ensuring compliance with tax authorities.
You can even automate the preparation and filing of payroll tax returns and W-2s at the end of the year. It ensures timely and accurate filing, reducing the risk of penalties and fines.
3. Generate Customized Invoices
Integrating QuickBooks Online with your Shopify store enables you to automate the invoicing process for your e-commerce business. It can automatically generate invoices for your Shopify sales based on the synchronized data. This means whenever a new order is placed on Shopify, an invoice will be created in QuickBooks Online.
The best part is that QuickBooks Online provides customizable invoice templates that you can tailor to match your brand’s look and feel. You can add your logo, customize colors, and include relevant information.
Therefore, once you review your invoices for accuracy and completeness and approve them, you can email those invoices directly to your customers from QuickBooks Online. Alternatively, you can download the invoice as a PDF and send it through other communication channels. You can even keep track of the status of each invoice, indicating whether it’s been viewed by the customer, paid, or remains outstanding.
Also, for subscription-based products or services, you can set up recurring invoices in QuickBooks Online to automate the invoicing process for repeat customers.
4. Comprehensive Reports
QuickBooks Online offers a variety of reports that can be beneficial for e-commerce businesses, including those using Shopify. These reports are comprehensive and provide valuable insights into your financial data when integrated with Shopify.
Besides offering the standard reports, QuickBooks Online also allows you to create custom reports to help you meet specific business needs. You can create custom reports by choosing the data fields, filters, and display options that are most relevant to your business.
In case that does not solve your purpose, you can also go for third-party apps and integrations that are available to extend the reporting capabilities of QuickBooks Online, allowing you to access more specialized reports, analytics, and insights to support your e-commerce operations when integrated with Shopify.
Also Read: How To Create A Shopify Sales Tax Report?
QuickBooks Online Cons
1. Learning Curve
QuickBooks Online can have a steep learning curve for users who are new to accounting software. Some find it challenging to navigate and fully utilize its features. This means that the learning curve can vary depending on your prior experience with accounting software, your familiarity with accounting concepts, and the complexity of your business’s financial processes.
If you have a background in accounting or have used accounting software before, you may find QuickBooks Online more intuitive and easier to learn.
Having said this, bank reconciliation can be a critical task, and understanding how to reconcile your accounts in QuickBooks Online is essential for accurate financial records.
QuickBooks Online operates on a subscription-based model, where you pay a monthly fee for access to the software. The price you pay depends on the tier you select and whether you take advantage of any promotional pricing.
Note that QuickBooks Online offers multiple pricing tiers, each with different features and capabilities. Thus, the cost would vary based on the specific plan you choose.
Also, QuickBooks Online can be relatively expensive, especially for businesses with multiple users or those requiring advanced features. This means as your online business grows and you require more advanced features, you may need to upgrade to a higher-priced plan, resulting in increased monthly expenses.
Xero is another popular cloud-based accounting software solution that can be integrated with Shopify to streamline financial management for your e-commerce business. Note that Xero offers integration with Shopify through various third-party apps and connectors. There are several apps available in the Shopify App Store that are designed specifically for this purpose. Examples include OneSaas (now known as Omnna), A2X for Shopify, and Zapier. You need to select and install any one of these and start integrating Xero with Shopify.
Then, to connect your Shopify account with your Xero account, you must follow the setup instructions provided by the app. Also, you must configure the integration app to define what data should be synchronized between Shopify and Xero. You can typically choose to sync orders, products, customers, payments, and other relevant data. You can also set up rules for how data should be categorized and mapped in both systems.
By setting up this integration, you can synchronize financial data between Shopify and Xero, thus reducing the need for manual data entry.
In addition to automated data sync, Xero provides an inventory tracking feature that helps you manage stock levels, monitor costs, and optimize inventory. Once Xero gets integrated with Shopify and the inventory starts getting synchronized at regular intervals, you need to enable inventory tracking in Xero and start setting up your inventory items.
You can create records for each product or item you want to track. Furthermore, you can include details such as product name, description, SKU, cost, selling price, and preferred suppliers. Besides this, you can also enter the initial stock levels for each item. Once you do this, Xero will automatically track the quantity of each item in your inventory as you make sales or receive new stock.
For instance, when you purchase items, record the transactions in Xero by creating purchase invoices. Once you create purchase invoices, Xero will automatically update your inventory levels and costs. Likewise, when you sell items, create sales invoices. After you create sales invoices, Xero will automatically reduce the stock levels and calculate the cost of goods sold (COGS) based on the cost you entered when setting up the items.
Additionally, for tracking products with specific attributes, such as expiration dates, serial numbers, or manufacturing batch numbers, you can use Xero’s batch and serial tracking feature. For instance, you can use batch tracking for products with a limited shelf life or where traceability is important.
So, whenever you receive or create a batch of such products, you can assign a unique batch number or identifier to these items. You can also specify details like the batch’s manufacturing date and expiration date of such items. Thus, by assigning a unique batch number to the group of products that you produced or purchased in batches, you can monitor such items.
Furthermore, just like any other great accounting software, Xero provides features like bank reconciliation, expense tracking, and financial reporting.
However, there are a host of things that Xero’s integration with Shopify cannot do. These include:
- Sales tax accounting
- Automatic tax filing in multiple tax jurisdictions
- Invoice creation for each Shopify sales transaction
- Inventory and Cost of Goods Sold management
- Connection of multiple Shopify stores to a Xero account
- Shopify stores and Xero accounts with different currencies
- Invoices showing customer (payment) details
1. Ease Of Use
Xero provides a user-friendly interface that’s intuitive and easy to navigate, making it accessible for users with varying levels of accounting expertise.
The layout of Xero is organized logically, with menus and options placed where users might expect to find them. This contributes to an intuitive navigation experience.
Furthermore, the dashboard provides a quick overview of key financial information, allowing users to access important data and frequently used features in one centralized location.
2. Unlimited Users
Unlike other accounting software, Xero’s pricing plans aren’t based on user count. This means you can add employees without worrying about software costs increasing. That’s because you can restrict access by setting permission levels for each user.
For example, you can allow your employees to perform tasks like sending invoices, entering expenses, and limiting who can view the company’s financial data. Xero can register every action of the user and comply with the history of all transactions, keeping things organized.
1. Limited Inventory Management
While Xero offers inventory tracking, some businesses may find that it lacks more advanced inventory management features compared to specialized inventory software.
Xero’s inventory features are primarily designed for basic stock tracking, and they may not offer advanced warehouse management functionality, such as tracking inventory across multiple warehouses, managing bin locations, or optimizing order picking.
Besides this, its capabilities in the barcode scanning area may not be as advanced or comprehensive as those of dedicated inventory management systems that are purpose-built for efficient barcode scanning and label printing.
Also, Xero may not provide advanced kitting or bundling features, where you can group multiple items into a single kit or bundle product. However, it allows you to create products with variations.
Furthermore, the level of integration and automation with 3PL providers may be limited in Xero’s inventory management for those businesses that rely on 3PL services.
2. Lacks Great Customer Service
While Xero provides customer support, some users have reported that response times can be slow, and support may not always meet expectations.
For instance, response times from Xero’s customer support team can vary based on the level of subscription and the method of contact.
Some users may experience quicker responses, while others may encounter delays during peak times. Also, the availability of support may vary by region.
3. Fair Multi-Currency Support
Firstly, setting up and configuring multi-currency support in Xero can be complex, especially for users who are new to accounting software. It may require some time and effort to ensure it’s correctly configured.
Secondly, the automatic calculation of foreign exchange gains or losses can sometimes lead to unexpected results, which users need to understand and account for in their financial reporting.
Thus, we can say that the experience with Xero’s multiple currency support largely depends on a user’s familiarity with accounting practices, the complexity of their international financial operations, and their ability to effectively configure and manage the software.
Accordingly, users who invest the time to understand and correctly set up multi-currency support typically have a more positive experience, while those who face challenges may seek assistance from professionals or leverage Xero’s support resources.
Therefore, it’s essential to assess your specific business needs and the level of multi-currency support required when considering Xero for your Shopify integration.
FreshBooks is primarily known for its invoicing and accounting features, and it offers integrations with various e-commerce platforms, including Shopify. It can sync seamlessly with your Shopify store, thus allowing you to create and manage invoices automatically.
Accordingly, when a sale is made on your Shopify store, data flows directly into FreshBooks for accurate and streamlined invoicing. This eliminates the need for manual invoice creation, thus saving you time and reducing errors.
Also, the integration of FreshBooks with your Shopify store ensures that the details of each sale on your store, including order information, customer details, and transaction values, are accurately reflected in the invoices created in FreshBooks.
In addition to streamlining invoicing, FreshBooks allows you to create professional and customizable invoices. For example, you can add your logo and personalized messages, and set up specific payment terms. However, the level of customization for individual invoices tied to specific sales on your Shopify store may be limited within the automated process.
Besides managing invoices, Freshbooks’ integration with your Shopify store helps in tracking sales made through your store, thereby providing you with a comprehensive view of your income and sales data within FreshBooks.
Thus, when a sale is made on your Shopify store, the integration automatically records the transaction details in FreshBooks. This includes order information, customer details, and transaction values.
As far as inventory management is concerned, FreshBooks may not offer advanced inventory management features. That’s because FreshBooks is primarily an invoicing and accounting platform. However, it can help track products sold and revenue generated from Shopify sales. Also, it can provide some level of inventory-related information.
For instance, the integration of FreshBooks with your Shopify store might synchronize basic inventory information from your store to FreshBooks, thus allowing you to have an overview of products, quantities sold, and related sales. The product details and quantities sold imported from your Shopify store into FreshBooks offer you insight into sales performance and stock levels.
Also, the integration helps you in reconciling the sales data with inventory information, thus giving you a clearer picture of product movements.
Apart from invoicing and inventory management, another important feature that FreshBooks offers is that of generating financial reports. With the Shopify integration, it can provide insights into sales performance and income related to your Shopify store. Further, it can use the sales data from your Shopify store to generate profit and loss statements, providing insights into the overall financial performance related to Shopify sales.
You can also leverage FreshBooks’ reporting features to create balance sheets that incorporate the income and expenses associated with your Shopify sales. You can even generate cash flow statements that reflect the movement of money in and out of your business, including income derived from your Shopify store transactions.
Also, FreshBooks has time-tracking features which can be beneficial for service-based businesses. If you offer services or bill clients based on time, this can be a useful feature to track and bill for your time spent on Shopify-related tasks.
1. Ease Of Use
FreshBooks is highly regarded for its user-friendly design and ease of use. It boasts an intuitive interface that’s clean, well-organized, and straightforward, making navigation easier for users.
Furthermore, the software simplifies complex accounting processes, such as invoicing, expense tracking, and time management, making them easier to understand and utilize.
2. Data Security
FreshBooks offers robust security measures such as data encryption and secure access, thus helping you to protect sensitive information.
For instance, the information traversing between your browser and FreshBooks is protected with 256-bit SSL encryption. Also, the FreshBooks application, including your data, rests securely behind firewalls.
Besides this, FreshBooks uses industry-standard encryption protocols and practices to transfer sensitive information responsibly. Also, FreshBooks handles cardholder data by PCI Data Security Standard requirements.
1. Limited Inventory Management
FreshBooks might not provide advanced inventory management features essential for businesses with complex inventory needs. It may track products sold and quantities, but it might lack advanced features for inventory control like tracking stock across multiple locations or managing complex variations.
While FreshBooks can synchronize basic inventory information from your Shopify store, it might not provide robust tools for managing more intricate inventory-related operations.
Also, FreshBooks might not support real-time inventory adjustments or automatic updates for changes in stock levels as extensively as dedicated inventory management systems.
2. Limited Financial Analysis
FreshBooks generates standard financial reports such as profit and loss statements, balance sheets, and cash flow statements. These reports are essential for understanding the overall financial performance of your Shopify store. However, these tools may not provide in-depth financial analysis as other specialized systems.
Zoho offers a suite of applications for various business needs, and it includes Zoho Books, which is an accounting software that integrates with Shopify. When Zoho Books is integrated with your Shopify store, it enables you to streamline and manage your accounting processes efficiently.
For instance, it allows for the automatic generation of invoices based on your Shopify store’s sales data, thus simplifying the invoicing process for you. Accordingly, when a sale occurs on your Shopify store, Zoho Books creates corresponding invoices, reducing manual effort for you. These invoices are professional-looking invoices that are tailored to your brand.
Furthermore, Zoho Books ensures that sales data in your Shopify store is accurately reflected in the invoices, making billing more accurate and efficient for you. In case your Shopify store has regular customers, Zoho Books also allows you to create recurring invoices for such customers and set up credit cards so they can pay securely.
In addition to invoicing, Zoho Books allows you to track inventory in your Shopify store so that it’s easy for you to identify fast-moving items and keep them well-stocked. It organizes your inventory with vital information like SKUs, product images, vendor details, costs, and stock-on-hand. Thus, there is no chance of running out of stock. That’s because you can track your items from the moment you create them.
You can even set reorder levels and get alerts before the stock level in your Shopify store drops below the minimum level. Furthermore, if you select preferred vendors for specific items beforehand, you can send such vendors purchase orders instantly.
Apart from tracking inventory and invoicing, Zoho Books offers an expense tracking feature that can help you manage various expenses related to your Shopify store’s operations. For instance, it enables you to categorize expenses related to your Shopify store, thus allowing you to organize various costs, such as marketing, shipping, inventory, or any other business-related expenses.
You can even create custom expense categories matching the specific expense types related to your Shopify store operations. Such expense categorization helps you in tax filing and regulatory compliance by ensuring that expenses are appropriately classified for tax reporting purposes.
Also Read: How Shopify Taxpayers Can Prepare For Tax Season 2023?
Another great feature that Zoho Books offers to Shopify store owners is bank reconciliation. Zoho Books integrates with your bank feeds, allowing you to import and synchronize bank transactions automatically. This streamlines the reconciliation process, especially for income and expenses related to your Shopify store.
For instance, you can match the sales data from your Shopify store with the corresponding deposits or income recorded in your bank statements. This includes matching sales amounts, fees, and other related income. You can even reconcile the expenses related to your Shopify store and record them in Zoho Books with the corresponding debits or withdrawals in your bank statements, ensuring all costs are accurately accounted for.
You can even generate reconciliation reports that provide you with a detailed overview of matched and unmatched transactions, thus helping you identify discrepancies or errors between the bank statement and your financial records. In cases there are any discrepancies, Zoho Books allows for adjustments and corrections, ensuring that your financial records accurately reflect your bank statement transactions.
1. User-Friendly Interface
Zoho Books provides an intuitive and user-friendly interface, making it accessible for users with varying levels of accounting knowledge. It provides you with a clean and simple dashboard that provides you with immediate, convenient insight into your Shopify store’s financial health. An effective, user-friendly UI makes Zoho Books easy to navigate.
The layout of the website is user-friendly. Furthermore, the mobile app makes it easy for you to instantly upload receipts and invoices for any purchases made.
2. Accounting Efficiency
Zoho Books is designed to offer efficient accounting solutions for businesses, particularly for small to medium-sized enterprises.
With its automated features, ease of use, and comprehensive functionalities, Zoho Books contributes to streamlining and optimizing various accounting tasks, including those related to Shopify transactions.
For instance, the platform automates various accounting processes, such as invoicing, expense tracking, and bank reconciliation. This reduces manual effort and human error in repetitive tasks.
Then, it streamlines the invoicing process, allowing for quick creation, customization, and automated sending of invoices based on sales data, which can be particularly efficient for Shopify transactions.
Furthermore, the integration with bank feeds facilitates easy and accurate bank reconciliation, aligning bank transactions with recorded transactions in the system.
Also, the system efficiently tracks and categorizes expenses, providing a clear overview of costs related to various business activities, including those from Shopify.
1. Limitations For Complex Needs
Zoho Books is well-suited for small to medium-sized businesses, offering a range of accounting features that can meet many complex needs. However, for businesses with highly intricate or industry-specific requirements, Zoho Books might have limitations in catering to those needs.
For instance, Zoho Books might have limitations in customization to fit highly specialized workflows or industry-specific requirements. While suitable for many small to mid-sized businesses, it might have limitations in handling more complex operations that require extensive scalability.
Furthermore, businesses with industry-specific needs might require more specialized features that cater to their specific requirements, which might not be fully covered in Zoho Books.
Also, highly complex systems with numerous integrations or specific software requirements might face challenges in integration or might not find the required compatibility within Zoho Books.
2. Integration Limitations
Zoho Books offers integrations with various applications and services to streamline accounting operations. However, it might have some limitations in terms of integrations with specific third-party software or highly specialized platforms.
For instance, Zoho Books might not integrate with highly specialized or less common software specific to certain industries, which could limit its compatibility with businesses with those systems.
It might not support all third-party apps or platforms, limiting options for businesses requiring diverse software integration.
Wave Accounting is an accounting software that offers free invoicing and accounting features to users. Other features including online payment processing, payroll software, and access to personalized bookkeeping services and coaching through Wave Advisors are paid features that users can utilize as per their need.
When integrated with Shopify, Wave Accounting facilitates the invoicing process for transactions made on your e-commerce platform. It can automatically generate invoices based on sales made through your Shopify store. Accordingly, when a transaction takes place on your online store, Wave Accounting creates corresponding invoices, thereby reducing the effort of creating invoices manually. However, you can switch between automatic and manual billing whenever you want.
Furthermore, with Wave Accounting, you also can customize invoices allowing for branding, personalized messages, and specific payment terms, thus tailoring invoices to suit your business needs. Also, you can set up recurring invoices and automatic credit card payments for your repeat customers. That is with Wave’s recurring invoice feature, you can schedule everything from invoice creation and sending to payment collection and sending overdue payment reminders to customers.
Another great feature that Wave Accounting offers is that of Online Payments. This feature allows you to get paid faster as it enables your customers to make online payments through either bank deposit, credit card, or Apple Pay. To receive online payments from your customers, all you need to do is email invoices to them. Further, your customers can use the ‘Pay now’ button in the email to send over your payments.
The best part is that Wave Accounting allows you to accept all the major cards including Visa, Visa Debit, Mastercard, Mastercard Debit, and American Express. Also, you do not have to worry about data security as Wave Accounting offers bank-grade security for all online payments.
In addition to invoicing and online payments, Wave Accounting also enables the tracking and categorization of expenses related to your Shopify store operations, thus aiding you in cost management and analysis.
Within Wave Accounting, you can easily categorize and organize expenses related to your Shopify store. Such expense categorization helps you create a clear breakdown of different types of costs associated with your e-commerce store’s activities. You can even attach receipts and documentation to expense entries, ensuring that there is proper documentation for each transaction. This is important for record-keeping and potential audits.
You can also generate expense reports that provide a summary of all expenses incurred, including those related to your Shopify store. These reports offer insights into where money is being spent within the e-commerce operation.
In addition to this, Wave Accounting supports bank reconciliation, which is the process of matching transactions recorded in your accounting system (Wave Accounting) with those in your bank statements. Just like any other great accounting software, Wave Accounting allows you to import bank transactions directly into the platform. This import feature can be used to bring in bank statements or transactions from your Shopify store’s financial activities.
Once the bank statements or your Shopify store transactions are imported, you can manually match transactions recorded in Wave Accounting with the corresponding entries in their bank statements. This includes transactions related to Shopify sales, expenses, and other financial activities. If there are discrepancies between the recorded transactions and the bank statement, you can make adjustments within Wave Accounting to correct any errors or omissions.
Note that Wave Accounting also provides reconciliation reports that summarize the matched and unmatched transactions. These reports help you to identify any discrepancies and ensure that the financial records in Wave Accounting align with your bank statement.
Besides the above features, Wave Accounting provides a host of other features like payroll management and financial reporting to manage payroll and undertake financial analysis respectively.
1. Free Account
One of the primary benefits of using Wave Accounting over other great accounting software is that it offers free invoicing and accounting. This means you can create customized invoices matching your brand free of cost. You can even have access to unlimited income and expense tracking.
The best part is that you can add unlimited partners, collaborators, or accountants and make unlimited bank and credit card connections without shelling a single penny out of your pocket.
2. Easy To Use
The platform has an intuitive and user-friendly interface, making it accessible to users with varying levels of accounting knowledge. Plus, it’s super easy to create and send professional-looking invoices to your customers. Furthermore, it is easy to track sales, income, and expenses and reconcile your bank statements with your Shopify store transactions to uncover any discrepancies.
1. Limited Customer Service
Wave Accounting, as a free accounting software, does offer customer support, but the level and type of support are limited compared to some paid accounting solutions.
It provides a range of online resources, including guides, tutorials, and a knowledge base. You can access these resources to find answers to common questions and learn more about using the platform.
There is even an active user community where you can ask questions, share experiences, and seek advice from other Wave Accounting users. The community forum can be a helpful resource for troubleshooting and getting tips.
However, unlike some paid accounting software options, Wave Accounting does not offer live chat or phone support. You primarily have to rely on online resources or chatbot support. If you purchase the paid solution, in that case, you have access to live chat and email support.
2. Not Scalable
Wave Accounting is generally more suitable for small businesses, freelancers, and sole proprietors, and its scalability might be limited compared to more advanced and robust accounting solutions.
While Wave Accounting offers a range of essential accounting features, its functionality may not scale to meet the complex needs of larger businesses or those with intricate financial requirements.
Businesses in specific industries with specialized accounting needs might find that Wave lacks certain industry-specific features that more advanced accounting solutions provide.
When choosing accounting software for your Shopify store, you must consider factors such as your business size, budget, accounting needs, and integration capabilities. It’s important to select software that aligns with your specific requirements to ensure smooth financial management for your e-commerce business.