Why is it so hard to know whether your online store is making money?
When you are running your online store you are juggling so many things, that it might seem impossible to evaluate the most important metric of a successful business: your cashflow.
Do you know whether your business is profitable? Let’s rewind a bit…in order for you to know whether your business is profitable this year (and this month), your books need to be up-to-date.
Most small business owners don’t like looking at their accounting. Who can blame them?
First, you need to do manual data entry (possibly for hours, maybe days) just to get your books up-to-date. Then, you will come face to face with your numbers. And then, who knows? When you see all the expenses, payroll, and taxes coming out of your hard-earned revenue, you might not have any motivation (not to mention money) left to actually do your job.
What is one to do?
Getting your books up-to-date sounds painful and time-consuming, but without your numbers you cannot make informed business decisions.
Here is some good news: you can automate the process of getting your online sales data into QuickBooks. Then, you will have the data at your finger-tips to answer questions such as:
-How much money did the company make this month?
-What did we do differently that could have led to an increase/decrease in sales?
-How much can I budget for marketing?
-Do I need to hire someone, or do I need to let someone go?
Without making informed business decisions based on your cashflow, it will be very difficult to stay profitable and scale your business.
Steps to Automate Your Data Entry into QuickBooks & Be Profitable
Step #1: Match SKU’s and Item Names
Not having matching Product SKU’s in your online store and the “Item Name” field in QuickBooks is the most common mistake that we see among small business owners.
If your product name in your online store does not match the product name in QuickBooks how can you keep track of your sales and inventory? If you hire someone, how will they know it’s the same product if it has a different name in your Shopify store, your Amazon store, and QuickBooks?
Before you implement any automation, be sure to have matching SKU’s and Item Name, either manually or via a spreadsheet.
Step #2: Use a tool to Manage Your Inventory
When your inventory is mismanaged, you run into several problems:
- -Overstocking: having a bigger than necessary inventory can tie up a lot of your capital. It may also be expensive to rent the space necessary to stock your inventory. In addition, if your products have a shelf-life, they may expire or deteriorate if you cannot sell them on-time. The value of your inventory is listed on your taxes.
- -Over-selling: if customers buy products that are out of stock, you will need to process refunds and you will ruin your reputation. Your seller rating on Amazon and eBay will decrease and fewer customers will purchase.
- -Lack of scalability: whether your challenge is overstocking or over-selling, you cannot scale if you don’t have a system for managing your inventory.
- -Poor business decisions: it is impossible to make good business decisions if you don’t know how much of each product you are selling. For example, one of our customers realized that almost 90% of his sales came from Amazon. After that, he stopped selling his products on almost all other sales channels.
Unless you have reliable data on the sales of each of your product through your individual sales channels, you will not be able to manage your capital, market your products, or partner with other companies.
We recommend a tool such as Ordoro to automate your inventory as well as shipping.
Step #3: Set up Deposit Matching to your Bank Account
If you fail to match deposits to sales, income is recorded twice and no merchant fees are recorded. You will pay taxes on any expenses that you fail to mention! As your business grows, it becomes even more important to have a system to match deposits from all the different sales sources with your bank.
Whether you use Stripe, Paypal, or another processor, be sure that you have automation set up to match deposits from your online sales with what shows up in your bank account.
Step #4: Mark Up Shipping As Needed
If your online store is selling internationally, or offer different shipping options, you need to mark up your shipping accordingly and reconcile your QuickBooks accounts. Unless you have a system for syncing your shipping fees with QuickBooks, you will need to enter all the shipping fees manually, which quickly leads to many hours of labor as well as human errors.
Step #5: Map Sales Tax Correctly
If you sell across the United States, you need to collect sales tax in multiple states. Sales tax is levied at different rates in different states, and there are also different rates at the county and city levels. Merchants risk getting audited if they use the wrong tax codes when entering sales tax data into QuickBooks.
We recommend a tool such as Avalara, to comply with your taxes. It integrates with ecommerce platforms and QuickBooks and it can help you avoid getting audited.
Is Connex the Right Tool For You To Expand Your Business to Multichannel Ecommerce?
Most of our customers sell on multiple e-commerce channels. For example, Woocommerce, Shopify, Magento, and ShipStation, just to name a few.
They want to grow their business, and they also value the peace of mind from knowing their books are always up to date and they can serve their customers.
Why Our Customers Choose Sync with Connex
- Developed specifically e-commerce business owners
- You can scale your business by automatically syncing sales & inventory from multiple e-commerce platforms to QuickBooks Desktop or Online.
- You don’t have to spend your resources manually entering sales, inventory, and customers into your website and QuickBooks accounts.
Recommended by Intuit itself, Connex for QuickBooks will give you peace of mind that your inventory will be updated. You will be free of the frustration of oversells and missed items.
- When your inventory is up-to-date, you can achieve higher customer satisfaction, leading to more positive reviews, and increased sales.
- For phone orders, we can sync sales from QuickBooks to your shipping solution.
- If you sell on multiple channels, you can simplify by using our solution instead of multiple tools.
- Connex integrates QuickBooks with all major e-commerce platforms, such as Woocommerce, Shopify, Magento, Amazon, and e-commerce shipping solutions such as Shipworks, Ordoro, ShipStation and ShippingEasy.
How can you decide whether Connex is right for your business?
During this introductory call, you will discover how Connex can help you to:
- Eliminate manual data entry into QuickBooks Online or QuickBooks Desktop
- Automatically update your inventory and prevent oversells and refunds
- Manage sales from multiple channels in one app
- Connect your shipping solutions to QuickBooks
- Have accurate financial information in your QuickBooks every day
Are you unsure whether Connex is right for your business?