Accounting software for Shopify store owners helps businesses manage the financial side of their business. Linking an accounting solution with Shopify allows you to manage cash flow, track sales taxes, invoice customers and manage your inventory.
In order to grow as a business, you need an accounting system in place to manage finances. Keeping financial data in Excel won’t cut it if you’re processing many orders every month. You need a system that breaks down sales tax by state and tracks cost of goods sold (COGS), so you can continue growing.
The most common ways for managing the accounting for your Shopify business are standalone accounting systems with integration to Shopify or dedicated financial apps from the Shopify app store.
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|Core Accounting||Includes revenue and expense tracking. View sales and profitability by item, customer, and date.|
|Payment Processing||Accept payments directly from the Shopify eCommerce storefront. Payments can be made through Shopify or from a third-party payment provider like PayPal. Depending on the platform, credit cards, gift cards, and bank account transfers can be used.|
|Inventory Management||Inventory levels are updated in real-time when a sale is made in your online store. Automatically send purchase orders to vendors when inventory levels are running low.|
|Sales Tax||Manage sales tax rates by state for each sale.|
|Invoicing||Create and send invoices for customizable products on your Shopify store.|
Accounting software for Shopify allows you to keep better track of your company’s finances and reduce time doing manual data entry by syncing eCommerce sales into one system and automating the reporting process. Some benefits of using accounting software for Shopify stores include:
Accounting software for Shopify allows business owners to track COGS. The accounting system automates the calculation of the gross profit of each item sold. Expenses from the cost of raw materials, labor, Shopify fees, and other business overhead costs are taken into consideration when calculating COGS. All of your sales data from Shopify will be exported to your accounting solution, so you can easily compare sales and costs without manual data entry. Being able to clearly see your gross profit will allow you to get better insights into profitability and business productivity.
Tracking COGS also helps with inventory management. Unsold products in the inventory are counted as an asset. When an item is sold, the cost of the item is taken from the asset value and applied against the revenue from that particular sale. This helps you determine the profit from the sale.
Integrated accounting software for Shopify lets you run more detailed reports on financials, customers, inventory, vendors, employees, taxes, and more. These reports will give you a more detailed view of overall business performance than only using Shopify.
Shopify alone has limited reporting capabilities depending on the plan you purchased. For example, Shopify Lite only has an overview dashboard and finance reports for payments and taxes. Shopify Plus can create reports for finances, customer behavior, and marketing.
Basic accounting software helps businesses manage financials to ensure profitability and growth. While Shopify helps with order processing on the eCommerce side of your business, you need a dependable accounting system to manage cash flow. Accounting software also helps manage sales tax by location to ensure you’re paying the right amount of taxes.
Keep in mind these accounting solutions will require the use of additional software in order to import your Shopify sales data. Connector apps are available through Shopify directly or a third-party that allows you to sync data from Shopify to your accounting solution.
Some popular accounting solutions for Shopify include:
QuickBooks Online integration with Shopify allows order and refund data to be automatically imported into QuickBooks. Order data will also include sales tax data, allowing you to see how much sales tax was paid and still owed. QuickBooks will also record expenses including Shopify fees. When a sale is made in Shopify, item quantities are automatically updated in QuickBooks. This allows you to keep real-time records of on-hand inventory.
Price: QuickBooks Online starts at $15/month for the Simple Start Plan. This plan includes income and expense management, receipt organization, invoicing, basic reporting, and sales and sales tax tracking. Other plans are available for adding multiple users, time tracking, and inventory management.
Xero is online accounting software that is popular among small and growing businesses. Using a connector app, the sales orders from Shopify are automatically exported to Xero daily. You can also automate invoicing, record payments, and update customer contact information when a sale is made.
Price: Xero’s Early Plan starts at $9/month and is marketed towards very small businesses. This plan allows you to send 5 invoices, enter 5 bills, and reconcile 20 bank transactions. Other plans are available for growing and established businesses.
Integrating Zoho Books and Shopify allows you to pull order and customer information from Shopify into Zoho Books. eCommerce businesses can see order dates, order numbers, amount due, payment status, and shipping status.
Price: The Basic plan for Zoho Books starts at $9/month/organization and includes 50 contacts (customers and vendors), one user and one bookkeeper, and five automated workflows. If you need to store more contacts or have more users, other plans are available.
Connector apps are available that automate data transfer between two or more different systems. These applications are useful for accounting systems that don’t already integrate with Shopify. The system allows you to automatically pull data including products, payments, and taxes, so you don’t have to rely on manual data entry.
Some popular connector apps include:
Zapier assists with connecting web apps and software with each other to improve workflows. Through Zapier, Shopify can be integrated with a variety of other solutions for accounting, time tracking, and more.
Price: A free version of Zapier is available for individuals and professionals just starting out. This version only allows integration between accounting systems like Wave, FreshBooks, and Zoho Books. Paid plans give you access to Premium apps including Shopify, QuickBooks Online, Amazon Seller Central, Xero, and more. The paid plans start at $20/month (billed annually).
Using Zapier to sync data with Shopify
OpenSaas allows you to connect different solutions to manage basic accounting, billing and invoicing, eCommerce, CRM, inventory management, and more. With OneSaas, you can connect Shopify to accounting software like QuickBooks Online, Xero, Sage Accounting, FreshBooks, and Zoho.
Price: The basic, Business Starter Plan, starts at $19/month (billed annually). This plan allows you to connect 2 apps and is marketed towards low volume and new businesses. More plans are available if you need to integrate more apps.
OneSaas testimonial from a business using OneSass to integrate Shopify and MYOB AccountRight
Shopify has a number of accounting apps available on the Shopify App Store.
Depending on the solution, these apps can track revenue and expenses, generate financial reports, and automate sales tax rate calculating. These apps are developed by third-parties specifically for use with Shopify.
Popular Shopify apps for financial management include:
Profiteer is a Shopify App developed by Resistor Software for managing COGS. Cost prices for each variant of your products can be stored within the system. You will then be able to see profit margins for every product in each order. Reports will show total eCommerce sales, total POS sales, and profit margins. The reports can also break down sales by the best selling products.
Price: Profiteer starts at $15/month for the Basic Plan. Other plans are available for Shopify stores with a large inventory exceeding 25,000 SKUs. The large inventory plans start at $30/month.
According to user reviews on the Shopify App store, Profiteer is great for measuring profitability. A common pain point among users of Profiteer is that set up can be time-consuming if you have many products and variants.
SimplyCost is a Shopify accounting app from Zapfor Apps that allows business owners to add cost prices and track profits. SimplyCost automatically calculates sales profits and takes taxes, refunds, shipping, and other discounts into consideration. Performance reports can be run with SimplyCost. These reports show you the performance of each store as well as each product. The reports can be broken down by day, product type, vendor, sales channel, and more.
Price: SimplyCost is $4.99/month. A 14-day free trial is available.
Users on the Shopify App store like SimplyCost for the profit and costs tracking functionality, as well as user-friendly reports. Some users noted that you can’t easily switch between different Shopify store sites, making it a hassle to manage multiple stores.