Why Business Owners Need a Bookkeeper for Shopify

Small Business Owner Using Shopify
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Running an online ecommerce business can be incredibly rewarding. If you own an online store and you’re selling products on your website, you’ll likely be using Shopify as a sales platform. This article will outline some of the key points to help you understand why using a bookkeeper for Shopify with Xero can help.

One crucial aspect that many entrepreneurs overlook, especially as their businesses grow, is the bookkeeping side of it.

While bookkeeping might seem like a back-office function, it’s one of the most important areas to get right, especially in the fast-paced world of e-commerce. In the early stages of your Shopify business, you might feel like you can handle everything yourself, including the bookkeeping. But as your store grows, so do your financial complexities.

If you want to know how to do the accounting for your online business correctly, its best to consult with a professional ecommerce bookkeeper or accountant first.

Connecting Shopify to Xero and ensuring the integration is running smoothly is the job for a specialist. Shopify connects with Xero via third-party apps such as A2X or LinkMyBooks, which sit in the middle, and this is where an ecommerce bookkeeper knows what to do. Don’t make the mistake of just letting Shopify pay lumps of money into your bank and think that’s the end of it. There’s more to it. You’ll need to know how to configure and map the two together to make sure your sales, taxes, inventory and fees are all accounted for in the right way. 

Here are the top reasons why you should connect your Xero to Shopify:

1. VAT and sales tax

If you’re selling a range of products on your website, then it’s absolutely vital that the VAT rate is set correctly within Shopify for each product. This is without a doubt one of the most important parts of accounts and you should consult with a bookkeeper or accountant to make sure you’ve got it setup correctly. You need to be confident about what VAT rate applies to each of your products and ensure that these are feeding into your books correctly. Get it wrong and your VAT returns will be wrong too – and this will result in fines and penalties from HMRC. It’s the last thing you need when your busy trying to grow your business.

2. Payouts and connecting your payment merchants

You’re likely going to be juggling various payment processors, including Shopify Payments, PayPal, Stripe, Klarna or even manual payments. Each of these platforms can generate separate transaction records, which can get confusing fast. A bookkeeper helps keep everything in order by organizing your financial data into one clear, accurate system.

3. Categorising your Products and Fulfilment

You’re probably selling a range of products and you’ll be shipping these either directly from your own warehouse, or from a distribution centre. You can see exactly how much you’re making on your various inventory products by integrating Xero and Shopify. An ecommerce bookkeeper or accountant can oversee this for you, ensuring that your inventory is mapped seamlessly.

Small Business Owner Using Shopify - Bookkeeper for Shopify

4. Fees

A common mistake that business owners make when doing the books themselves is to forget to account for the fees. Once Shopify collects the money from your customers it will hang on to those funds before paying it into your bank account. But before paying you this money, it will deduct off its fees first. If you don’t have an integration set up between Xero and Shopify, this can get overlooked and it means that your sales will be understated. A bookkeeper can ensure that this is accounted for seamlessly as part of the integration.

While Shopify offers a robust platform for running your online store, the financial side of things requires more than just basic math and recordkeeping.

We offer monthly bookkeeping for Shopify packages tailor-made for online businesses. Get in touch to find out more.

Forward-thinking bookkeeping services for award-winning companies and SME’s across the UK.

Tel: 01326 727 112

Email: hello@foxcleverbookkeeping.com

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