Before we get to the main point, here are a few basic things about QuickBooks that you should know.
QuickBooks – How does it work?
Primarily, QuickBooks functions as accounting software. In addition to that, QuickBooks also offers cloud-based solutions that can take care of the payroll functions, pay as well as manage bills, and accept business payments.
However, although accounting and bookkeeping are similar, they are not the same. The principles of retail bookkeeping and accounting are simple. While accountancy is a broader subject, bookkeeping is very crucial for it.
Have a look at the basic functions of QuickBooks.
- Determining the inventory cost
- Tracking methods of inventory
- Helping in creating the balance sheet, cash flow, and income statement for the first month; and the initial months as well
- Creating templates for receipts, invoices, and sales orders
- Downloading the software for retail accounting
QuickBooks are important for businesses to sort out the costs and revenue. Therefore, it is always a smart idea to get the basics of accounting right and this is when QuickBooks can help a lot.
Tracking e-commerce accounting with QuickBooks
You can track the accounting of your eCommerce with QuickBooks when you start with your financial statements. Being the owner of your e-store, you will have to maintain and have an updated view of the finances ready at all times. That way, when you have a clear idea about your money and its inflow as well as its outflow, you will be able to handle the business spending efficiently. In addition to that, it will also help you in improving and developing your profit margin consistently.
There are 3 types of financial statements in almost all business models, regardless of industry or size.
- Balance sheet
- Income statement
- Cash flow statement
Balance sheet: As the name suggests, the balance sheet will have two columns and both need to be balanced. At the same time, it should also reflect the correct profit and loss when it is created. In simpler terms, a balance sheet is created to reflect the business’ overall financial health.
Income statement: The income statement of any business will include every inflow of money in a specific time, which is generally a year, quarter or a month. The financial statement will consist of both non-operating as well as operating income. Operating income is the money that your business made through all the regular business activities. The non-operating income represents the indirect cash inflow through activities not directly linked to your business.
Cash flow: Cash flow is arguably the most important financial statement that you will have as an e-store owner or entrepreneur. It will consist of every cost; including every sale made during a specific time, inventory, maintenance, and rent. It will show the gross revenue of your company and the net profit. In addition to that, it will also help you understand every penny spent on the growth of your business as well as the unnecessary expenses.
It’s always a wise idea to understand these basics of bookkeeping and these will help you understand the areas of concern as well as where your money is going! Further, it will also help you with tracking and maintain a proper accounting system to help you run your online business. With QuickBooks, these factors will be handled with zero error and much less time.
Tracking eCommerce accounting with QuickBooks – Benefits
QuickBooks can be a great way to track your e-commerce accounting. You will not just have a clear picture of your accounts, but also your overall business functionality improves and functions better. Let us elaborate on this point with the following pointers. Have a look.
When your e-store receives an order, the order information is generated. Your integrated system will then search for the specific order date in your centralized database. In case, where it fails to find the information in your database, a new user or customer will be included in the list of customers. In other cases, the data will be updated.
The integration will unfold the critical insights that can affect your business into your online store’s performance. It will reveal every crucial data around customer orders, resources, and stock levels, which will certainly help your business in making improvisations. Further, it will also update the product information, add the new products, and sync the tax rates as well from QuickBooks and your eCommerce automatically. In addition to that, you can also get the payments and invoices directly in QuickBooks.
Forget double data entry
This is probably the most prominent benefit of QuickBooks that your eCommerce can enjoy! There will be no more data errors and duplicate data entries. Further, you can also save your money and valuable time from integrating QuickBooks and your e-commerce. The integration will also get rid of the time-consuming and painful hassles of data maintaining and organizing in Magento or any other eCommerce platform and QuickBooks. Therefore, when you integrate your e-commerce with QuickBooks, you will find every customer data, inventory, and sales transactions in your QuickBooks directly. It will make sure that you can have a clean and clear record that you can access anytime.
Furthermore, if you want to remove the need for entering data manually, then you should consider QuickBooks Online. Not only it will take a huge load of manual labor off your business, but also reduce the overall expense of hiring staff.
Wrapping it up
QuickBooks is an effective option to track your eCommerce accounting and it does every function of bookkeeping with zero error, on time, and much less effort.