I encountered an important concern over the weekend: “Should I use Excel or accounting software?”
Here are the questions:
“To date, I’ve been tracking my e-commerce activities with Excel. However, I’d like to be able to run more sophisticated reports and get better data. For example, do most people order at the beginning of the month or at the end of the month?”
“I sell my own products, but I don’t sell everything on Shopify. I want to be able to integrate all the products I sell on all the platforms, but I’m not sure how to do it. Are you just using the Shopify reports? That won’t work for me as I sell on Amazon too, and I’d like some kind of bookkeeping program for e-commerce that can integrate, if one exists.”
A lot of online store owners are concerned with this vital part of their business. Is Excel good enough? Are there clear-cut benefits when you switch to an accounting program for e-commerce such as QuickBooks Online (QBO) or Xero? Should you continue to use Excel or switch to accounting software if you’re using multiple sales channels, such as your own online store (Shopify, Magento, Woocommerce, etc.), Amazon, and eBay?
Should I Use Excel Or Accounting Software?
I wouldn’t recommend using Excel for your e-commerce store, even if you’re an advanced user. Here is why:
- It is much faster to record financial transactions into the accounting program than in Excel. Most people say that they can do it much faster with Excel, but, trust me on this – if you haven’t tried any accounting software, just try – you’ll see that it is even simpler.
- Your accountant will love you.:) Yep, accountants hate dealing with Excel spreadsheets. Even if you will make mistakes when recording transactions into an accounting software, for an experienced professional they will be much easier to spot and correct compared to doing the same within Excel DIY table.
- Your yearly tax return / tax preparation costs will reduce because your accountant will be able to see everything in a proper format right away and wouldn’t need to do as much as if you were to use Excel.
- If you use web-based accounting software, your accountant will always be able to log in, correct, or help you with your books throughout the year.
If you are at a stage where you are ready to start moving away from Excel spreadsheets to a bookkeeping software, a couple of best accounting packages that I’d recommend for an e-commerce business, are QuickBooks online and Xero.
QuickBooks Online for Shopify users is one of a top choice cloud accounting and bookkeeping software packages. QBO does the billing, invoicing, profit and loss reports, expense management and payroll. QBO organizes all this for you, giving you more time to focus on other aspects of your online store.
However, the best part is, of course, integrations with e-commerce. When you connect your accounting file with your e-commerce platform, you remove the burden of entering each invoice, sales receipt, bank or credit card charges, etc. manually! Also, your payment transactions coming to Shopify will be sent to QBO and you wouldn’t even need to duplicate those transactions and spend any time on recording them as everything will be done automatically. Once the proper connection is set up, the program does it all for you automatically and, when you log to your QuickBooks file, all you need to do is to update the feed from your store (some connection apps do it automatically) and all entries get posted to the right accounts. In my experience, automation of this process saved companies up to 3 hours of work each time they had to book their e-commerce sales.
Xero accounting for e-commerce store is another top choice that is available out there, and is used by many online shop owners worldwide. It lets you see your cashflow in real-time and, similar to QuickBooks Online for e-commerce owners, you can record your invoices, bills, payroll, and other financial transactions.
Should I Use Excel Or Accounting Software If I’m Using Multiple Sales Channels, Such As Amazon and eBay?
Definitely, use accounting software! An accounting program for e-commerce like QBO or Xero is highly recommended, especially when you sell through multiple channels. While this type of setup might come a bit pricey at first, you would hardly believe how you can easily automate everything to save time! It will be worth every penny.
A bookkeeping program for e-commerce like QuickBooks Online has an app that integrates with Shopify, Amazon, eBay, Woocommerce, Magento, and others. When you set up your books and connect Shopify or other sales channels to it, the system not just helps you with tracking of sales, but also with inventory levels’ updates.
This is especially critical to your online store when you have your own inventory and need to track it on every website or a market place you sell. Also, once your customers complete the purchase of any product within any of the sales channels you use, you must update inventory levels on others. Connecting all your stores via one simple app will update inventory levels on all platforms automatically. If you have already done inventory updates manually in Excel, you know how much time it might take. Just imagine that the program does it all for you automatically. Make a choice: do you want to make it easier or not?
Which App To Use When Connecting Your Accounting Program With Multiple Sales Channels?
Intuit (QBO) provides a list of great apps to connect your store to multiple sales channels.
To speed up bookkeeping, it is much easier to connect QuickBooks Online or Xero with your online store via apps. There are A LOT of connection apps on the market and you will need to try a few before you’ll establish the right connection. Once it is all set up, you will readily see the bookkeeping process sped up 10 times or more. I know this because I’ve done it myself in the past. It is incredible what automation could do. In fact, you can even run a huge business by yourself, if you automate those routine processes: bookkeeping, data entry, etc.
Which accounting program to use when you run an e-commerce store mainly depends on your business’s needs. Each program has its own unique features, and it’s up to you to choose which fits best. If you are looking for the right connection app for your QuickBooks Online bookkeeping program, you may find them here. If your accounting program of choice is Xero, the list of apps that will connect your online store with this program could be found over here.