Shopify is another excellent online platform where you can start your ecommerce business. Shopify has different programs and features that help small businesses reach potential customers to make sales and pave their way to business success. But, of course, as you reach more buyers and earn more, you shouldn't forget about your obligations: taxes.
Paying and sorting your taxes is a tedious part of owning an ecommerce business, and since you run the business yourself, there are no people that handle the taxes for you. If you're a newbie in the ecommerce market, familiarizing yourself with the taxes of selling platforms and how to set them up is essential for your success.
Neglecting your taxes can be the start of your business's downfall. So if you want to grow and succeed in Shopify, here are some beginner basics you should note when it comes to Shopify’s taxes.
When you start a selling business, whether you have a physical store or an online selling profile, all the items you sell are levied with taxes according to your government's law or the selling platform's policies.
If you are planning to start selling on the Shopify platform, here are some of the taxes you should note.
Sales tax is levied on every tangible item you sell in your ecommerce business. For example, have you ever gone shopping for groceries and noticed that there's an additional sales tax in the receipt once you get out your goods? That's exactly the situation with the items you are selling. As a Shopify seller, it's your duty to collect sales taxes and remit them to the proper tax collection agency.
But, before you start to collect sales tax for your goods, you should have the correct rate applied to your items. If you are selling your products from the United States, the sales depend on what state you are located in. For example, if your merchandise is in New York, there's a 4.25% sales, while in Los Angeles, it's 9.5%. So make sure to know the proper state tax rate to collect the proper taxes.
Your total income from the platform and other earned money is levied with an income tax at the end of the fiscal year. There are seven different tax percentage brackets in the United States you can fall under depending on how much your income is. If you earn $10,000, you are levied with a 10% tax, and as your income goes higher, the percentage rate also increases.
You will have to file an income tax return to know the final tax payment. Income taxes can also be confusing, and filing wrong can incur penalties. If you're new to all of this, it is best to hire a professional accountant to keep up with your income taxes.
To collect the proper sales taxes and keep on top of your tax obligations, you have to set up your taxes in your Shopify admin account. Here are the important steps to follow when setting up your taxes in Shopify.
When you set up your Shopify admin account, you must determine your shipping zone. There are different rates of shipping taxes across different states. Make sure to select the regions you will potentially ship your items so the platform can add the corresponding shipping rates once your customer checks out their item.
Setting-up automatic tax rate collections will be helpful for the collection of taxes. The platform will automatically add the amount of taxes when your customers check out. But before you can set up, you now have your sales tax nexus. To calculate the sales tax, you must first determine if your business is destination-based or origin-based.
Destination-based depends on tax calculations on the location of your customer. While the origin-based depends on tax calculation on where the items are coming from. You have to check which category you fall in with your state laws.
Some items are eligible for tax exemptions. In some cases, exemptions are mandated by the national government, but some states give tax exemptions to some products. For example, any footwear product less than $50 is exempted from taxes in Connecticut.
These exemptions can change from time to time, so it's important to keep updated with these tax law changes to apply for the following exemptions. There are also local tax professionals who can help you with these exemptions to help you properly collect your sales tax.
Now that you know how to add taxes on Shopify, it’s also important to keep track of your collection to know if you’re doing it right. Here are some practices that can help you manage your taxes on Shopify.
Everything is recorded under your seller's profile whenever you collect a sales tax and your total earnings. Take advantage of your transaction records to organize your taxes. You can download all your financial reports from shipping, sales, and taxes.
There are plug-ins compatible with Shopify to help you keep track of your taxes. For example, applications like TaxJar and Quaderno can automatically collect and summarize all your financial transactions and keep and organize records you can use for your filing process. In addition, there are several softwares you can integrate into your Shopify account, like Quickbooks, that record your sales and help you keep track of your inventory.
Use the software to simplify the taxation aspect of your business to help you get organized and be on top of your taxes.
If managing your taxes is simply too much and too confusing, you can hire tax professionals to handle it for you. When it comes to a reliable professional, Unloop can help you with your ecommerce business. Our tax professionals can help you manage your sales tax to help collect the remit properly. We also have professional bookkeepers that can help you manage all your financial transactions and inventory.
Rest assured, these professionals can handle all your tax needs and help you strategize and make plans to help your business grow further.
Creating your seller account and deciding on the trendiest product to sell on Shopify are the easier parts of starting your ecommerce business. Keeping the financial records, keeping up with your product inventory, and managing your Shopify taxes are much harder, but all essential to the growth and success of your business. We hope the overview of the taxes helps you better understand your tax obligations and help you set up your taxes on Shopify so that you can sell your products smoothly and properly. If you are in need of professional help, don’t forget to book a call with us now!
Shopify is another excellent online platform where you can start your ecommerce business. Shopify has different programs and features that help small businesses reach potential customers to make sales and pave their way to business success. But, of course, as you reach more buyers and earn more, you shouldn't forget about your obligations: taxes.
Paying and sorting your taxes is a tedious part of owning an ecommerce business, and since you run the business yourself, there are no people that handle the taxes for you. If you're a newbie in the ecommerce market, familiarizing yourself with the taxes of selling platforms and how to set them up is essential for your success.
Neglecting your taxes can be the start of your business's downfall. So if you want to grow and succeed in Shopify, here are some beginner basics you should note when it comes to Shopify’s taxes.
When you start a selling business, whether you have a physical store or an online selling profile, all the items you sell are levied with taxes according to your government's law or the selling platform's policies.
If you are planning to start selling on the Shopify platform, here are some of the taxes you should note.
Sales tax is levied on every tangible item you sell in your ecommerce business. For example, have you ever gone shopping for groceries and noticed that there's an additional sales tax in the receipt once you get out your goods? That's exactly the situation with the items you are selling. As a Shopify seller, it's your duty to collect sales taxes and remit them to the proper tax collection agency.
But, before you start to collect sales tax for your goods, you should have the correct rate applied to your items. If you are selling your products from the United States, the sales depend on what state you are located in. For example, if your merchandise is in New York, there's a 4.25% sales, while in Los Angeles, it's 9.5%. So make sure to know the proper state tax rate to collect the proper taxes.
Your total income from the platform and other earned money is levied with an income tax at the end of the fiscal year. There are seven different tax percentage brackets in the United States you can fall under depending on how much your income is. If you earn $10,000, you are levied with a 10% tax, and as your income goes higher, the percentage rate also increases.
You will have to file an income tax return to know the final tax payment. Income taxes can also be confusing, and filing wrong can incur penalties. If you're new to all of this, it is best to hire a professional accountant to keep up with your income taxes.
To collect the proper sales taxes and keep on top of your tax obligations, you have to set up your taxes in your Shopify admin account. Here are the important steps to follow when setting up your taxes in Shopify.
When you set up your Shopify admin account, you must determine your shipping zone. There are different rates of shipping taxes across different states. Make sure to select the regions you will potentially ship your items so the platform can add the corresponding shipping rates once your customer checks out their item.
Setting-up automatic tax rate collections will be helpful for the collection of taxes. The platform will automatically add the amount of taxes when your customers check out. But before you can set up, you now have your sales tax nexus. To calculate the sales tax, you must first determine if your business is destination-based or origin-based.
Destination-based depends on tax calculations on the location of your customer. While the origin-based depends on tax calculation on where the items are coming from. You have to check which category you fall in with your state laws.
Some items are eligible for tax exemptions. In some cases, exemptions are mandated by the national government, but some states give tax exemptions to some products. For example, any footwear product less than $50 is exempted from taxes in Connecticut.
These exemptions can change from time to time, so it's important to keep updated with these tax law changes to apply for the following exemptions. There are also local tax professionals who can help you with these exemptions to help you properly collect your sales tax.
Now that you know how to add taxes on Shopify, it’s also important to keep track of your collection to know if you’re doing it right. Here are some practices that can help you manage your taxes on Shopify.
Everything is recorded under your seller's profile whenever you collect a sales tax and your total earnings. Take advantage of your transaction records to organize your taxes. You can download all your financial reports from shipping, sales, and taxes.
There are plug-ins compatible with Shopify to help you keep track of your taxes. For example, applications like TaxJar and Quaderno can automatically collect and summarize all your financial transactions and keep and organize records you can use for your filing process. In addition, there are several softwares you can integrate into your Shopify account, like Quickbooks, that record your sales and help you keep track of your inventory.
Use the software to simplify the taxation aspect of your business to help you get organized and be on top of your taxes.
If managing your taxes is simply too much and too confusing, you can hire tax professionals to handle it for you. When it comes to a reliable professional, Unloop can help you with your ecommerce business. Our tax professionals can help you manage your sales tax to help collect the remit properly. We also have professional bookkeepers that can help you manage all your financial transactions and inventory.
Rest assured, these professionals can handle all your tax needs and help you strategize and make plans to help your business grow further.
Creating your seller account and deciding on the trendiest product to sell on Shopify are the easier parts of starting your ecommerce business. Keeping the financial records, keeping up with your product inventory, and managing your Shopify taxes are much harder, but all essential to the growth and success of your business. We hope the overview of the taxes helps you better understand your tax obligations and help you set up your taxes on Shopify so that you can sell your products smoothly and properly. If you are in need of professional help, don’t forget to book a call with us now!
Keeping track of your finances can be tricky and overwhelming, especially if you lead a hectic business in the ecommerce industry. But hang on, there are a few bookkeeping tips and tricks that can help you make this process easier and more efficient. With them, you can avoid dealing with financial problems, such as financial losses, tax filing issues, and even bankruptcy.
So why not take the time today to start thinking about how you can stay on top of your bookkeeping? With the right information and strategies, you’ll be well on your way to steady financial footing for your ecommerce business!
Check out this list of top ecommerce bookkeeping tricks to get your finances in shape:
Before optimizing your bookkeeping processes, arm yourself with basic bookkeeping knowledge first. Begin by knowing that bookkeeping and accounting are separate tasks.
| 💡Bookkeeping tasks are about tracking and organizing data in a business’s books. Accounting, on the other hand, is the task of making sense of numbers through accurate reports. |
Bookkeeping and accounting records go hand in hand. If you’re a small business owner, you’ll have to choose between these two recording methods:
It is also essential to familiarize yourself with bookkeeping and accounting jargon like assets, liabilities, equity, revenue, expenses, costs, and profits. Awareness of these terms will make it quicker and more efficient for you to check your books and understand reports.
Investing in good bookkeeping and accounting software can help you streamline and automate your processes. With the right software, you can integrate your data into the ecommerce platform you are selling on so that your data can be categorized and organized automatically.
You can combine this data with the other key performance indicators you track that aren’t provided by the online marketplace where you’re selling. You can also use the software’s report-generation capabilities to make sense of all your business transactions and other financial data.
When there are changes and updates in the books from different departments of the company, they’ll also get recorded automatically and everybody can view the most updated data immediately.
Other benefits you will enjoy from having bookkeeping and accounting software are the following:
Having separate personal and business accounts is essential to managing your business finances effectively. Designate different bank accounts and credit cards for personal and business purposes.
This way, all transactions can be clearly labeled to minimize the confusion from mixed-account spending. Both small and large companies will benefit from this strategy as it helps maintain control over monetary resources.
| 💡There’s a higher risk of fraud or misuse of confidential data when multiple accounts are not properly secured or managed. |
Run financial reports regularly to utilize the data recorded in the bookkeeping process. Bookkeeping and accounting tools allow you to generate reports in just a few clicks because they have templates. You can quickly check the following financial statements:
Make sure that your financial statements are organized and comprehensive. To organize your records, start by documenting all your transactions as they occur. This might mean including additional details in every entry, such as dates, transaction codes, and receipts.
Also, save any emails or other correspondence related to the transaction so that you can reference them later if needed.
As a startup ecommerce business, it’s best to run reports as often as possible. Doing so allows you to see your business’s successes and duplicate the best practices that led to those wins. On the other hand, if there are alarming numbers reflected in the reports, you can create mitigation plans quickly and improve your financial performance.
When it comes to ecommerce bookkeeping, one of the best things you can do is to automate your financial processes. Doing this can save you from a lot of hassle in the long run. Set up online access to your accounts to conveniently view your balances and keep track of any changes or updates with ease.
You can also set up automatic withdrawals from your bank account to go straight into your bookkeeping software. This way, you don’t need to enter all of your financial transactions manually.
You can also set up automatic payments for your bills and invoices. By doing this, you won’t have to keep track of when each bill is due, and you won’t have to worry about forgetting to pay a bill on time.
Finally, link your ecommerce bookkeeping software to your credit card and bank statements so that all your transactions will be automatically imported into your software.
Another area of your ecommerce business you need to be on top of is inventory management. Customers get turned off by stores with products they want but can’t buy because of a lack of supply. When your inventory isn’t organized, you miss out on plenty of sales opportunities.
The good news is that most ecommerce sites have an inventory management feature, so you only need to integrate the data into your primary accounting system. You can add the numbers to other data stored in the tool to determine the cost of goods sold and delivery or fulfillment costs.
The collated data and reports will guide you in deciding whether your fulfillment methods are efficient. You can also use your findings to know what kind of promotions to launch and which products to focus on to boost or maintain sales.
One of the most underrated accounting and bookkeeping tips is investing in a tool with a customer relationship management (CRM) feature. This practice will make your business operations even smoother.
The data you’ll get from a CRM tool might not be in monetary value, but you can get just that by combining them with other data stored in your accounting and bookkeeping software. Because customers are your business’s lifeblood, you must include these details in your bookkeeping.
So, give yourself and your bookkeeper the convenience of having customer insights within your main accounting tool.
| 💡A CRM tool saves contacts of leads and customers that can help you conveniently send invoices and do marketing. |
CRM tools also store information like the sales journey of a potential customer and the issues they experience in the sales process.
We’ve already discussed the basics of bookkeeping and knowing how bookkeeping tools and their features help you optimize your ecommerce business operations. Now, we’ll answer a lingering question many business owners like you have: should you hire a professional bookkeeper? Our answer is yes!
Here are the benefits small business owners reap in partnering with bookkeeping professionals:
It’s tempting to do bookkeeping yourself, but with plenty of tasks on your plate, the best move is to delegate it to experts.
By now you know that optimizing your bookkeeping can make your business operations run smoothly. These eight tips may be a lot for some, but implementing them in your business will be worth it.
If you need more bookkeeping tips, assistance using bookkeeping and accounting software, or if you want to delegate bookkeeping tasks to experts, Unloop is here. We have a team of professional bookkeepers who are well-versed in the ecommerce industry, so your books will always be in good hands.
We also specialize in accounts payable services, forecasting, payroll, and taxes. Book a call with us today to get started!
Keeping track of your finances can be tricky and overwhelming, especially if you lead a hectic business in the ecommerce industry. But hang on, there are a few bookkeeping tips and tricks that can help you make this process easier and more efficient. With them, you can avoid dealing with financial problems, such as financial losses, tax filing issues, and even bankruptcy.
So why not take the time today to start thinking about how you can stay on top of your bookkeeping? With the right information and strategies, you’ll be well on your way to steady financial footing for your ecommerce business!
Check out this list of top ecommerce bookkeeping tricks to get your finances in shape:
Before optimizing your bookkeeping processes, arm yourself with basic bookkeeping knowledge first. Begin by knowing that bookkeeping and accounting are separate tasks.
| 💡Bookkeeping tasks are about tracking and organizing data in a business’s books. Accounting, on the other hand, is the task of making sense of numbers through accurate reports. |
Bookkeeping and accounting records go hand in hand. If you’re a small business owner, you’ll have to choose between these two recording methods:
It is also essential to familiarize yourself with bookkeeping and accounting jargon like assets, liabilities, equity, revenue, expenses, costs, and profits. Awareness of these terms will make it quicker and more efficient for you to check your books and understand reports.
Investing in good bookkeeping and accounting software can help you streamline and automate your processes. With the right software, you can integrate your data into the ecommerce platform you are selling on so that your data can be categorized and organized automatically.
You can combine this data with the other key performance indicators you track that aren’t provided by the online marketplace where you’re selling. You can also use the software’s report-generation capabilities to make sense of all your business transactions and other financial data.
When there are changes and updates in the books from different departments of the company, they’ll also get recorded automatically and everybody can view the most updated data immediately.
Other benefits you will enjoy from having bookkeeping and accounting software are the following:
Having separate personal and business accounts is essential to managing your business finances effectively. Designate different bank accounts and credit cards for personal and business purposes.
This way, all transactions can be clearly labeled to minimize the confusion from mixed-account spending. Both small and large companies will benefit from this strategy as it helps maintain control over monetary resources.
| 💡There’s a higher risk of fraud or misuse of confidential data when multiple accounts are not properly secured or managed. |
Run financial reports regularly to utilize the data recorded in the bookkeeping process. Bookkeeping and accounting tools allow you to generate reports in just a few clicks because they have templates. You can quickly check the following financial statements:
Make sure that your financial statements are organized and comprehensive. To organize your records, start by documenting all your transactions as they occur. This might mean including additional details in every entry, such as dates, transaction codes, and receipts.
Also, save any emails or other correspondence related to the transaction so that you can reference them later if needed.
As a startup ecommerce business, it’s best to run reports as often as possible. Doing so allows you to see your business’s successes and duplicate the best practices that led to those wins. On the other hand, if there are alarming numbers reflected in the reports, you can create mitigation plans quickly and improve your financial performance.
When it comes to ecommerce bookkeeping, one of the best things you can do is to automate your financial processes. Doing this can save you from a lot of hassle in the long run. Set up online access to your accounts to conveniently view your balances and keep track of any changes or updates with ease.
You can also set up automatic withdrawals from your bank account to go straight into your bookkeeping software. This way, you don’t need to enter all of your financial transactions manually.
You can also set up automatic payments for your bills and invoices. By doing this, you won’t have to keep track of when each bill is due, and you won’t have to worry about forgetting to pay a bill on time.
Finally, link your ecommerce bookkeeping software to your credit card and bank statements so that all your transactions will be automatically imported into your software.
Another area of your ecommerce business you need to be on top of is inventory management. Customers get turned off by stores with products they want but can’t buy because of a lack of supply. When your inventory isn’t organized, you miss out on plenty of sales opportunities.
The good news is that most ecommerce sites have an inventory management feature, so you only need to integrate the data into your primary accounting system. You can add the numbers to other data stored in the tool to determine the cost of goods sold and delivery or fulfillment costs.
The collated data and reports will guide you in deciding whether your fulfillment methods are efficient. You can also use your findings to know what kind of promotions to launch and which products to focus on to boost or maintain sales.
One of the most underrated accounting and bookkeeping tips is investing in a tool with a customer relationship management (CRM) feature. This practice will make your business operations even smoother.
The data you’ll get from a CRM tool might not be in monetary value, but you can get just that by combining them with other data stored in your accounting and bookkeeping software. Because customers are your business’s lifeblood, you must include these details in your bookkeeping.
So, give yourself and your bookkeeper the convenience of having customer insights within your main accounting tool.
| 💡A CRM tool saves contacts of leads and customers that can help you conveniently send invoices and do marketing. |
CRM tools also store information like the sales journey of a potential customer and the issues they experience in the sales process.
We’ve already discussed the basics of bookkeeping and knowing how bookkeeping tools and their features help you optimize your ecommerce business operations. Now, we’ll answer a lingering question many business owners like you have: should you hire a professional bookkeeper? Our answer is yes!
Here are the benefits small business owners reap in partnering with bookkeeping professionals:
It’s tempting to do bookkeeping yourself, but with plenty of tasks on your plate, the best move is to delegate it to experts.
By now you know that optimizing your bookkeeping can make your business operations run smoothly. These eight tips may be a lot for some, but implementing them in your business will be worth it.
If you need more bookkeeping tips, assistance using bookkeeping and accounting software, or if you want to delegate bookkeeping tasks to experts, Unloop is here. We have a team of professional bookkeepers who are well-versed in the ecommerce industry, so your books will always be in good hands.
We also specialize in accounts payable services, forecasting, payroll, and taxes. Book a call with us today to get started!
QuickBooks Online (QBO) and Xero are two of the best accounting applications dominating the business industry. Both have excellent things to offer and investing in them can make a difference in streamlining your venture's financial management. But what if you must choose only one? This Xero vs. Quickbooks guide can help you decide!
Choosing between two excellent accounting software can be a real dilemma, so let this article give you a better understanding of Xero accounting vs. QuickBooks Online. Keep reading!
Xero is a New Zealand-based company and one of the fastest-growing and most popular accounting software in the market, with over 3.7 million subscribers worldwide. A two-time holder of the title "World's Most Innovative Growth Company" by Forbes, Xero has a cloud-based system for startups and small businesses. Users can enjoy a more streamlined financial workflow with Xero through the following helpful features.
Xero offers a 30-day trial to see if this accounting tool is the one for your business. Growing businesses can invest and upgrade to enjoy more advanced features, from Xero's Starter, Xero Standard, to Xero Premium.
Intuit Inc. is an American company known for its financial software, such as TurboTax, Mint, and QuickBooks. QuickBooks, launched in 2002, swiftly gained popularity as accounting software in the United States, holding a 74% market share within three years. By 2019, Quickbooks Online reached a whopping 4.5 million subscribers worldwide.
You may wonder why it quickly became a go-to software for most businesses. Below are reasons they choose Quickbooks Online for their bookkeeping and accounting needs.
You probably wonder why it quickly became a go-to software for most businesses. Below are the reasons they choose Quickbooks Online for their bookkeeping and accounting needs.
You can have a monthly subscription to QBO or choose among the various plans like the QBO Simple Start, QBO Essential, and QBO Plus. Whether income and expense management, financial management reports, and even sales tax tracking, you can find a plan that suits your needs best.
After knowing the key features above, we can conclude that both Quickbooks and Xero can give your business solid accounting operations. But more important is identifying which of these two top accounting tools can meet your business accounting needs.
So let's compare the two according to the most important functions any ecommerce business may look for in an accounting tool. One checkmark indicates the feature's presence, while two checkmarks denote a software's dominance over the other:
| Function | Xero | Quickbooks |
| Managing Expenses and Bills | ✅ | ✅✅ |
| Integrations | ✅✅ | ✅ |
| Tracking | ✅ | ✅✅ |
| Technical Support | ✅ | ✅✅ |
| Invoicing | ✅ | ✅✅ |
| Project Management | ✅✅ | ✅ |
| User-Friendly Interface | ✅ | ✅ |
| Multi-Currency | ✅ | ✅ |
| Customizable Dashboard | ✅ | ✅✅ |
| Inventory Management | ✅✅ | ✅ |
| Scalability | ✅ | ✅✅ |
| Bank Reconciliation | ✅ | ✅ |
| Reporting | ✅ | ✅✅ |
| Payment Gateways | ✅ | ✅ |
| Multiple User Access | ✅✅ | ✅ |
Let’s further discuss these software features to ensure the software’s suitability to your business needs.
Both Xero and Quickbooks Online let you scan your receipts and bills for more efficient handling of your income and expenses. They also enable bank reconciliation for seamless expense and bill management. Both accounting tools have an easy process when connecting to banks without compromising the security of their clients.
QBO remains superior in claiming expenses, transaction tracking tags, customer service, mileage, and time tracking compared to Xero. Quickbooks Online permits users to claim expenses across all of its subscriptions.
Meanwhile, Xero offers that feature on its highest-tier package. Xero also allows users to generate two active tracking categories (in contrast, QBO allows 40).
If you want a tool to track inventory, Xero is better at inventory management than QBO. The inventory management feature of Quickbooks Online is available only on its high-tier plan. In contrast, Xero makes it available to all of its plans.
Xero is also a step ahead regarding fixed asset management, as the feature is available in all plans. Meanwhile, QBO encourages users to download a third-party add-on or manually set up an asset account.
QBO and Xero are tied when it comes to the user interface. Both applications are easy to use, and users can easily see results from the dashboard.
If you must keep your books independently, you can do so with Xero or QuickBooks live bookkeeping. Even without an accounting degree, given the right learning curve, you can figure out how to use the different functions of accounting software through online resources and expert assistance.
Most accounting software dashboards offer a quick overview of how your business is performing and are customizable depending on your needs. However, the respective dashboards of Quickbooks and Xero have a few differences.
QuickBooks Online offers multiple customizability options for clients with unpaid invoices, pending bill payments, cash flow, and more. On the other hand, Xero initially provides you with a minimalist dashboard, which you can customize later on.
Issuing invoices shouldn't feel like a chore. It should be fast and accurate. QBO is the dominant one in terms of invoicing because it can support a generation of unlimited invoices. It lets you edit customer information on the invoice page instead of forcing you to navigate to your customer records. This feature can be handy when you need to change the billing address.
In contrast, Xero allows only 20 invoices. Its invoice page is more straightforward, featuring only the most relevant fields, such as invoice number, issue date, due date, and the client.
Small ventures will eventually grow into mid-sized businesses. As a result, you'll have to process payroll for more employees, cater to more customers, and manage larger inventories. Thus, you must ensure your accounting solution grows with you and your business.
In this regard, Xero and QuickBooks Online differ slightly. Xero is the go-to choice for rapidly growing businesses and startups because it scales well with them. Meanwhile, solopreneurs and small business owners will find QuickBooks Online more suitable. If you have a bigger business, QuickBooks offers enterprise-level solutions.
Comparing the pricing of Xero and QuickBooks Online, Xero is way cheaper than QBO, considering Xero supports unlimited users. Both Xero and QuickBooks Online offer three-tier pricing plans. However, they widely differ in how many features their cheapest online plans provide.
| 💡 When choosing which plan is suitable for your business, it would be best to check the specific offers of each plan and not just the costs. You’ll realize that investing not in the cheapest plan but the one that satisfies your business bookkeeping and accounting needs is the wisest choice. |
It's tricky to declare that one software program is inherently superior to another when comparing Xero and Quickbooks. The decision on the Xero VS. Quickbooks Online topic ultimately comes down to your company, your required functionality, your budget, and the features that matter most to you.
Ultimately, whichever accounting software platform you select—Xero or QuickBooks Online—will enable you to manage and optimize your accounting procedures effectively. Make sure to check out their free trials before subscribing to any plan.
If you are ready to leverage the potential of top accounting software, get started with Unloop! Our team of experts combines their experience in ecommerce bookkeeping and accounting with industry-leading accounting software.
Put your business finances on autopilot. Get in touch with us today, and let our experts do the bookkeeping for you!
QuickBooks Online (QBO) and Xero are two of the best accounting applications dominating the business industry. Both have excellent things to offer and investing in them can make a difference in streamlining your venture's financial management. But what if you must choose only one? This Xero vs. Quickbooks guide can help you decide!
Choosing between two excellent accounting software can be a real dilemma, so let this article give you a better understanding of Xero accounting vs. QuickBooks Online. Keep reading!
Xero is a New Zealand-based company and one of the fastest-growing and most popular accounting software in the market, with over 3.7 million subscribers worldwide. A two-time holder of the title "World's Most Innovative Growth Company" by Forbes, Xero has a cloud-based system for startups and small businesses. Users can enjoy a more streamlined financial workflow with Xero through the following helpful features.
Xero offers a 30-day trial to see if this accounting tool is the one for your business. Growing businesses can invest and upgrade to enjoy more advanced features, from Xero's Starter, Xero Standard, to Xero Premium.
Intuit Inc. is an American company known for its financial software, such as TurboTax, Mint, and QuickBooks. QuickBooks, launched in 2002, swiftly gained popularity as accounting software in the United States, holding a 74% market share within three years. By 2019, Quickbooks Online reached a whopping 4.5 million subscribers worldwide.
You may wonder why it quickly became a go-to software for most businesses. Below are reasons they choose Quickbooks Online for their bookkeeping and accounting needs.
You probably wonder why it quickly became a go-to software for most businesses. Below are the reasons they choose Quickbooks Online for their bookkeeping and accounting needs.
You can have a monthly subscription to QBO or choose among the various plans like the QBO Simple Start, QBO Essential, and QBO Plus. Whether income and expense management, financial management reports, and even sales tax tracking, you can find a plan that suits your needs best.
After knowing the key features above, we can conclude that both Quickbooks and Xero can give your business solid accounting operations. But more important is identifying which of these two top accounting tools can meet your business accounting needs.
So let's compare the two according to the most important functions any ecommerce business may look for in an accounting tool. One checkmark indicates the feature's presence, while two checkmarks denote a software's dominance over the other:
| Function | Xero | Quickbooks |
| Managing Expenses and Bills | ✅ | ✅✅ |
| Integrations | ✅✅ | ✅ |
| Tracking | ✅ | ✅✅ |
| Technical Support | ✅ | ✅✅ |
| Invoicing | ✅ | ✅✅ |
| Project Management | ✅✅ | ✅ |
| User-Friendly Interface | ✅ | ✅ |
| Multi-Currency | ✅ | ✅ |
| Customizable Dashboard | ✅ | ✅✅ |
| Inventory Management | ✅✅ | ✅ |
| Scalability | ✅ | ✅✅ |
| Bank Reconciliation | ✅ | ✅ |
| Reporting | ✅ | ✅✅ |
| Payment Gateways | ✅ | ✅ |
| Multiple User Access | ✅✅ | ✅ |
Let’s further discuss these software features to ensure the software’s suitability to your business needs.
Both Xero and Quickbooks Online let you scan your receipts and bills for more efficient handling of your income and expenses. They also enable bank reconciliation for seamless expense and bill management. Both accounting tools have an easy process when connecting to banks without compromising the security of their clients.
QBO remains superior in claiming expenses, transaction tracking tags, customer service, mileage, and time tracking compared to Xero. Quickbooks Online permits users to claim expenses across all of its subscriptions.
Meanwhile, Xero offers that feature on its highest-tier package. Xero also allows users to generate two active tracking categories (in contrast, QBO allows 40).
If you want a tool to track inventory, Xero is better at inventory management than QBO. The inventory management feature of Quickbooks Online is available only on its high-tier plan. In contrast, Xero makes it available to all of its plans.
Xero is also a step ahead regarding fixed asset management, as the feature is available in all plans. Meanwhile, QBO encourages users to download a third-party add-on or manually set up an asset account.
QBO and Xero are tied when it comes to the user interface. Both applications are easy to use, and users can easily see results from the dashboard.
If you must keep your books independently, you can do so with Xero or QuickBooks live bookkeeping. Even without an accounting degree, given the right learning curve, you can figure out how to use the different functions of accounting software through online resources and expert assistance.
Most accounting software dashboards offer a quick overview of how your business is performing and are customizable depending on your needs. However, the respective dashboards of Quickbooks and Xero have a few differences.
QuickBooks Online offers multiple customizability options for clients with unpaid invoices, pending bill payments, cash flow, and more. On the other hand, Xero initially provides you with a minimalist dashboard, which you can customize later on.
Issuing invoices shouldn't feel like a chore. It should be fast and accurate. QBO is the dominant one in terms of invoicing because it can support a generation of unlimited invoices. It lets you edit customer information on the invoice page instead of forcing you to navigate to your customer records. This feature can be handy when you need to change the billing address.
In contrast, Xero allows only 20 invoices. Its invoice page is more straightforward, featuring only the most relevant fields, such as invoice number, issue date, due date, and the client.
Small ventures will eventually grow into mid-sized businesses. As a result, you'll have to process payroll for more employees, cater to more customers, and manage larger inventories. Thus, you must ensure your accounting solution grows with you and your business.
In this regard, Xero and QuickBooks Online differ slightly. Xero is the go-to choice for rapidly growing businesses and startups because it scales well with them. Meanwhile, solopreneurs and small business owners will find QuickBooks Online more suitable. If you have a bigger business, QuickBooks offers enterprise-level solutions.
Comparing the pricing of Xero and QuickBooks Online, Xero is way cheaper than QBO, considering Xero supports unlimited users. Both Xero and QuickBooks Online offer three-tier pricing plans. However, they widely differ in how many features their cheapest online plans provide.
| 💡 When choosing which plan is suitable for your business, it would be best to check the specific offers of each plan and not just the costs. You’ll realize that investing not in the cheapest plan but the one that satisfies your business bookkeeping and accounting needs is the wisest choice. |
It's tricky to declare that one software program is inherently superior to another when comparing Xero and Quickbooks. The decision on the Xero VS. Quickbooks Online topic ultimately comes down to your company, your required functionality, your budget, and the features that matter most to you.
Ultimately, whichever accounting software platform you select—Xero or QuickBooks Online—will enable you to manage and optimize your accounting procedures effectively. Make sure to check out their free trials before subscribing to any plan.
If you are ready to leverage the potential of top accounting software, get started with Unloop! Our team of experts combines their experience in ecommerce bookkeeping and accounting with industry-leading accounting software.
Put your business finances on autopilot. Get in touch with us today, and let our experts do the bookkeeping for you!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Hearing the word accounting leaves our brains in tangles. The thought of crunching numbers and organizing financial records is already enough to give us a headache. And now, we have a new beast to conquer: accounting for an ecommerce business.
From the arduous task of sorting through business transaction receipts to enduring late-night sessions in front of computer screens, the very idea of it makes us want to pack up and leave the ecommerce world even before we get started.
This leaves us wondering whether accounting for ecommerce businesses is truly simple. But don’t worry! This article aims to provide all the answers right away.
Accounting for ecommerce still functions like regular accounting, but it's specifically designed for online businesses.
In simple terms, it means keeping track of money-related activities when you sell things online. Such activities include recording, analyzing, and managing financial transactions for the digital store. From there, you can understand your finances, make smart decisions, and stay compliant with standard rules in the fast-paced online market.
Since everything happens online, you need a way to quickly collect and handle all this financial data. That's where accounting software comes in handy. It's an innovative tool that many ecommerce companies use to keep their financial reports organized and make their accounting tasks easier.
Here are some of the popular accounting software used by most ecommerce business owners:
Starting an ecommerce accounting system means choosing one of these accounting solutions. By doing so, you can effectively manage the financial aspects of your ecommerce store and set yourself up for success.
Although ecommerce business accounting requires tools and software, its core functions remain unchanged. Your business’ internal system must include these three facets to build a reliable accounting arm for your online venture.
Bookkeeping is the accounting task of recording transactions. This process follows a step-by-step cycle to keep everything accurate, starting by overseeing business transaction data.
In an ecommerce setting, data will be collected from you via electronic means. It can be gathered in different ways, including:
Once all the data is collected, the bookkeeper running the accounting tool will start creating or managing a chart of accounts. They will sort the financial information into different categories (e.g., sales and expenses) and record each transaction along with its corresponding amounts.
The bookkeeper’s job is to make sure all the numbers are right. They’ll double-check everything with a special report called a trial balance. If everything looks good and the numbers add up correctly, the process moves on to the next step.
Aside from bookkeeping tasks, generating financial statements is also important. Any ecommerce business owner can benefit from this since it gives you a clear picture of your overall performance in the market, which you can interpret later on.
Key financial statements are composed of three:
From income to cash flow statements, you can determine if your business is making a profit, generating enough cash to cover expenses, or experiencing losses.
Ignoring sales tax responsibilities is not an option in ecommerce marketplaces.
Failing to collect and remit sales tax can result in severe repercussions, including penalties, fines, and potential legal troubles. As an ecommerce business owner, adhering to proper tax filing procedures is imperative to keep things hassle-free.
Effective inventory management ensures the right amount of products is available to meet customer demand while minimizing excess stock.
From an accounting perspective, inventory directly affects the cost of goods sold (COGS), representing the cost of producing or purchasing the goods sold during a specific period. By tracking inventory levels and associated costs, you can identify the true cost of goods sold and, subsequently, the gross profit.
Speaking of organization and management, ecommerce businesses have two primary accounting methods to choose from:
This approach records transactions when actual cash is received or paid out. Revenue is recognized at the time of payment receipt, and expenses are recorded when payments are made.
This method provides an easy way to track cash flow. It is also suitable for smaller ecommerce businesses with lower sales volumes and simpler inventory tracking needs.
This method records transactions when they occur, irrespective of the cash exchange timing. Revenue is recognized at the time of the sale, even if payment is yet to be received. Meanwhile, expenses are recognized when goods or services are received, regardless of payment timing.
The accrual accounting method offers a broader view of the business's financial status over time. It is also commonly used by larger enterprises with higher sales volumes and more complex inventory management needs.
Like traditional accounting, you can hire an ecommerce accounting service for your store. But in case you have little to no idea what to look for when shopping around for a service, take a look at these:
You're busy, and everyone understands that. But your competition won't wait for you. Even if you aim to use certain accounting systems, catching up can take some time. This is where a good accounting team can enhance your efficiency. They should know how to integrate accounting software with your online store for a smooth and synced recording.
Subscribing for the accounting software alone doesn't entitle you to a bookkeeper. While it provides you with the means to perform bookkeeping tasks, the real magic happens when you combine the power of technology with skilled human expertise.
Inclusive bookkeeping services offer you the best of both worlds—efficient accounting software combined with the insights and proficiency of a dedicated bookkeeper. Their combination ensures that your business grows and financial needs are met.
Sometimes, asking a bookkeeper to create a financial statement may cost you extra. But you always have a better option—seek a service that can give you a consistent and precise financial statement, whether you need them or not.
Reconciling can be a tedious task. It is tremendously important that the numbers on the books match the money in the business bank account. That's how you know everything is recorded accurately.
With an experienced accounting service overseeing this process, you can rest assured that your financial information is protected from suspicious activities.
Ecommerce accounting has never been easier, just like the familiar practices we used before. However, we understand that not all businesses can keep up with the increasing demands of accounting tasks.
Unloop caters to all the services mentioned above and more. We are a team of experts who know accounting software and are adept at bookkeeping. The best part is we know how ecommerce businesses work.
Let us handle the numbers while you focus on success. Book a call now!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Hearing the word accounting leaves our brains in tangles. The thought of crunching numbers and organizing financial records is already enough to give us a headache. And now, we have a new beast to conquer: accounting for an ecommerce business.
From the arduous task of sorting through business transaction receipts to enduring late-night sessions in front of computer screens, the very idea of it makes us want to pack up and leave the ecommerce world even before we get started.
This leaves us wondering whether accounting for ecommerce businesses is truly simple. But don’t worry! This article aims to provide all the answers right away.
Accounting for ecommerce still functions like regular accounting, but it's specifically designed for online businesses.
In simple terms, it means keeping track of money-related activities when you sell things online. Such activities include recording, analyzing, and managing financial transactions for the digital store. From there, you can understand your finances, make smart decisions, and stay compliant with standard rules in the fast-paced online market.
Since everything happens online, you need a way to quickly collect and handle all this financial data. That's where accounting software comes in handy. It's an innovative tool that many ecommerce companies use to keep their financial reports organized and make their accounting tasks easier.
Here are some of the popular accounting software used by most ecommerce business owners:
Starting an ecommerce accounting system means choosing one of these accounting solutions. By doing so, you can effectively manage the financial aspects of your ecommerce store and set yourself up for success.
Although ecommerce business accounting requires tools and software, its core functions remain unchanged. Your business’ internal system must include these three facets to build a reliable accounting arm for your online venture.
Bookkeeping is the accounting task of recording transactions. This process follows a step-by-step cycle to keep everything accurate, starting by overseeing business transaction data.
In an ecommerce setting, data will be collected from you via electronic means. It can be gathered in different ways, including:
Once all the data is collected, the bookkeeper running the accounting tool will start creating or managing a chart of accounts. They will sort the financial information into different categories (e.g., sales and expenses) and record each transaction along with its corresponding amounts.
The bookkeeper’s job is to make sure all the numbers are right. They’ll double-check everything with a special report called a trial balance. If everything looks good and the numbers add up correctly, the process moves on to the next step.
Aside from bookkeeping tasks, generating financial statements is also important. Any ecommerce business owner can benefit from this since it gives you a clear picture of your overall performance in the market, which you can interpret later on.
Key financial statements are composed of three:
From income to cash flow statements, you can determine if your business is making a profit, generating enough cash to cover expenses, or experiencing losses.
Ignoring sales tax responsibilities is not an option in ecommerce marketplaces.
Failing to collect and remit sales tax can result in severe repercussions, including penalties, fines, and potential legal troubles. As an ecommerce business owner, adhering to proper tax filing procedures is imperative to keep things hassle-free.
Effective inventory management ensures the right amount of products is available to meet customer demand while minimizing excess stock.
From an accounting perspective, inventory directly affects the cost of goods sold (COGS), representing the cost of producing or purchasing the goods sold during a specific period. By tracking inventory levels and associated costs, you can identify the true cost of goods sold and, subsequently, the gross profit.
Speaking of organization and management, ecommerce businesses have two primary accounting methods to choose from:
This approach records transactions when actual cash is received or paid out. Revenue is recognized at the time of payment receipt, and expenses are recorded when payments are made.
This method provides an easy way to track cash flow. It is also suitable for smaller ecommerce businesses with lower sales volumes and simpler inventory tracking needs.
This method records transactions when they occur, irrespective of the cash exchange timing. Revenue is recognized at the time of the sale, even if payment is yet to be received. Meanwhile, expenses are recognized when goods or services are received, regardless of payment timing.
The accrual accounting method offers a broader view of the business's financial status over time. It is also commonly used by larger enterprises with higher sales volumes and more complex inventory management needs.
Like traditional accounting, you can hire an ecommerce accounting service for your store. But in case you have little to no idea what to look for when shopping around for a service, take a look at these:
You're busy, and everyone understands that. But your competition won't wait for you. Even if you aim to use certain accounting systems, catching up can take some time. This is where a good accounting team can enhance your efficiency. They should know how to integrate accounting software with your online store for a smooth and synced recording.
Subscribing for the accounting software alone doesn't entitle you to a bookkeeper. While it provides you with the means to perform bookkeeping tasks, the real magic happens when you combine the power of technology with skilled human expertise.
Inclusive bookkeeping services offer you the best of both worlds—efficient accounting software combined with the insights and proficiency of a dedicated bookkeeper. Their combination ensures that your business grows and financial needs are met.
Sometimes, asking a bookkeeper to create a financial statement may cost you extra. But you always have a better option—seek a service that can give you a consistent and precise financial statement, whether you need them or not.
Reconciling can be a tedious task. It is tremendously important that the numbers on the books match the money in the business bank account. That's how you know everything is recorded accurately.
With an experienced accounting service overseeing this process, you can rest assured that your financial information is protected from suspicious activities.
Ecommerce accounting has never been easier, just like the familiar practices we used before. However, we understand that not all businesses can keep up with the increasing demands of accounting tasks.
Unloop caters to all the services mentioned above and more. We are a team of experts who know accounting software and are adept at bookkeeping. The best part is we know how ecommerce businesses work.
Let us handle the numbers while you focus on success. Book a call now!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Unsurprisingly, most businesses switch to cloud-based accounting software. While very helpful, traditional manual data entry using ledgers and columnar is prone to mistakes. If there's an error, you have to find it and edit several entries as a consequence. It's a grueling process for non-accountants because it takes up a huge chunk of time.
Fortunately, the rise of computer technology has transformed the business world. Cloud accounting software has been invented and proven to help minimize errors and process financial data. The competitive online accounting software market also makes it easy to acquire them, so ecommerce business owners like you can get in the wagon easily.
Before replacing old-school ledgers and journals with a cloud-based tool, let Unloop give you tips and recommendations on how to best use cloud accounting software.
Although signing up for cloud bookkeeping and accounting software will add to company costs, the investment is worth it in the long run. Here are some top benefits you’ll reap when using bookkeeping and accounting programs.
Accounting software can make data collection and monitoring stress-free. This is because you can integrate information across all your platforms and tools.
You can also add the following in the accounting system from different ecommerce platforms like Amazon or Shopify:
When generating different financial statements, lots of computations can occur. After collecting and monitoring data that will be included in the statements, the software can also do the calculations for you. Whether it’s the computation of your company’s profit, owner’s/shareholder’s equity, taxes, assets, or liabilities, you’ll know the details immediately through help from the software.
Skip the hassle of inputting formulas on Excel sheets, which are prone to human error, and rely on accurate outputs from software instead.
When data collection, monitoring, and computation are automated, generating reports will be easier. It is more convenient when using a bookkeeping and accounting program because these tools already have templates for the different financial statements you need. Pick a report you need to generate; the software will do all the work for you.
Whether you have a physical or online business, recording transactions as accurately as possible is important. You can achieve this by enhancing your accounting processes with a cloud accounting software solution and other accounting applications run by accounting professionals. With that, let us give you a shortlist of tools you can explore and decide what fits your business needs.
QuickBooks was developed by Intuit Inc.— an American software company that also created other widely used financial tools such as TurboTax and Mint. QuickBooks was launched in 1983 for small and medium-sized businesses. As of writing, QuickBooks is now a popular accounting and financial management software in the United States, with an 80.88% market share and more than 26 million users.
QBO is an accessible cloud accounting software with guaranteed scalability, functionality, and flexibility. You can customize this application to better suit your accounting needs. Double-entry accounting is easy with QBO and allows you to enjoy simple record-keeping that generates comprehensive financial reporting capabilities.
Hundreds of third-party applications can integrate with QBO, which makes information sharing faster and easier. Many professionals in finance and accounting are familiar with QuickBooks, which means you can tap a large pool of accounting pros to handle a QBO-powered cloud-based accounting system. You can make purchases, create invoices, and send bills easier with QuickBooks.
At $15 per month, you can enjoy QBO and upgrade your subscription anytime, depending on your needs. You have nothing to worry about getting started with QBO because it is user-friendly, but it is recommended that you spend an ample amount of time familiarizing yourself with the software.
Sage has over 3 million users and is also popular, just like QBO and Xero. The software lets you manage finance, accounting, payroll, and other business aspects. Because it is cloud-based, you can access all its features from any device and manipulate records within the cloud solution.
An award-winning software because of its commitment to its customers, FreshBooks is a fantastic all-in-one accounting software. It allows you to automate many tasks that include payment collection and invoice reminders.
With Freshbooks, you can scan detailed financial reports, conduct various online transactions, connect with your team for a collaborative workflow, and access it using your mobile phone.
Zoho Books allows business owners, accountants, and bookkeepers to manage a business's finances. You can automate workflows with Zoho Books, and this software assists its end-users in working collectively in different departments to stay in control of payables and receivables.
This software has many features, including inventory management, automatic importing, matching bank feeds, and compiling real-time tracking of projects for invoicing.
Xero is one of the fastest-growing cloud accounting software companies in the market. It is a New Zealand-based and popular tool among small businesses, holding over 2.7 million users worldwide. Forbes recognized it as the "World's Most Innovative Growth Company" twice.
Xero aims to simplify traditional accounting software for small business owners and allow them to spend more time on revenue-generating activities. Its cloud software feature allows you to create invoices and pay bills by simply clicking a few command buttons.
The good thing about Xero is that it allows unlimited users in all its packages. The software is intuitive, and there are instructions on its website if you want to learn its full potential. These features provide great cost savings for the business owner.
A2X is a third-party application that allows integration to cloud-based systems such as QBO and Xero with online marketplaces such as Amazon, Shopify, Etsy, eBay, or Walmart. It was structured according to the rules and processes of leading ecommerce financial experts.
This third-party software offers accuracy, and its creators believe every business should enjoy stress-free accounting. A2X caters to small retailers, major market players, and anyone who deals with accounting data.
There are tons of cloud-based accounting applications to choose from. However, not all of them are good for your business, and you must consider a few things.
Observing the market landscape and how your business's internal processes serve it is very important. From there, identify the parts in your accounting system that need improvement and upgrade. Reviewing the processes helps you determine what your business lacks regarding sustained growth.
Talking to your fellow entrepreneurs or business owners is also a good move. Ask for tips, innovative tools, and strategies that have helped their businesses grow.
The web is always accessible. Use the internet and conduct intensive research about business applications that are in demand.
Once you find tools for your business, allocate a budget for their initial payment and subscription. You must research whether they have adequate resources to train you and your staff. Everyone must understand how to use these tools before committing to them.
Always remember that every software has a unique setup, and you have to evaluate if it's the best cloud-based accounting software for MAC OS or Windows.
Amazingly, most of the cloud-based accounting applications in our list are user-friendly and customizable. To get the most out of the software you choose, contact the provider's customer support team and allow them to help you.
After all the internet research, software evaluation, and accounting professional interviews you've done, make a shortlist of software and validate each. Determine the compatibility, price, and testimonials. This list will make assessing and choosing the software to invest in easier.
After rounding up your potential software, it is time to finalize and decide. We recommend getting a trial version of the software before you select a package that best works for your business.
Always remember: if you are unsatisfied with your decision, you can refer to your shortlist and explore the next software option. Hold onto that list for future reference.
Does the capacity to generate different financial statements sound promising to you? You’re not alone. However, the numbers and reports will only make sense when you understand their purpose. Let's explore the three fundamental financial statements you should examine and the valuable insights they can provide.
Your company income statement comprises various financial information like the revenue, cost of goods sold/cost of sales, gross profit, operating expenses, operating income, non-operating items, earnings before taxes, and net income. This type of financial report states whether or not your business is profitable.
As its name suggests, a cash flow statement gives you an idea of how the money flows in your business. You'll gain insight into incoming funds, their sources, company expenses, and their destinations. It details various operating, investing, and financing activities to give you a more in-depth look at your cash flow.
Check your balance sheet if you want to check your business assets, liabilities, and owner’s/shareholder’s equity. The premise is that your business should have more assets than liabilities to ensure you can meet all your financial obligations and make your business thrive.
On the other hand, the owner’s/shareholder’s equity shows the amount you can give to yourself or the shareholders. The higher your company equity is, the more investors you can entice to invest in your business.
By following the previous tips, you will know precisely the capabilities of bookkeeping and accounting software and how to read financial reports better. You should now be confident you'll get accurate statements and understand any financial deck.
Make your daily operations and business management even easier by complementing your tools with help from experts! These days, many bookkeeping and accounting firms offer complete services to assist you in managing your business finances. Here are some of the benefits you’ll enjoy in partnering with them.
Experts from a firm can help you make sense of the numbers and the statements through statement notes. These notes provide extra information about your company's financial statements, including methods, assumptions, guidelines, and other details for accurate calculations and decision-making. Accounting professionals add them without clouding the primary message.
When partnered with a firm, you can get financial statements and reports regularly or as often as you need. This allows for consistent monitoring of your business’s financial health. You can use these reports to know if you are hitting your goals or need adjustments to your strategies for success.
When it comes to your business finances, accuracy is a priority. Only when the numbers are correct do you make the right decisions. It is a must for business owners like yourself to make accuracy checks a part of your daily routine. You can get a helping hand in fulfilling this task with an experienced account manager.
Investing in bookkeeping and accounting software is essential for generating financial statements and running an effective accounting system for your business. These tools offer convenience and help streamline collecting, monitoring, and computing financial data.
You can improve this further by partnering with experts from bookkeeping and accounting firms. They provide additional benefits such as accurate financial statements, regular reports, and statement notes to help you make informed decisions about your business’s finances.
Partner with us here at Unloop so we can assist you with your cloud-based accounting software and financial statement needs. We offer more assistance on top of that. Contact us If you’re interested in our bookkeeping services.
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Unsurprisingly, most businesses switch to cloud-based accounting software. While very helpful, traditional manual data entry using ledgers and columnar is prone to mistakes. If there's an error, you have to find it and edit several entries as a consequence. It's a grueling process for non-accountants because it takes up a huge chunk of time.
Fortunately, the rise of computer technology has transformed the business world. Cloud accounting software has been invented and proven to help minimize errors and process financial data. The competitive online accounting software market also makes it easy to acquire them, so ecommerce business owners like you can get in the wagon easily.
Before replacing old-school ledgers and journals with a cloud-based tool, let Unloop give you tips and recommendations on how to best use cloud accounting software.
Although signing up for cloud bookkeeping and accounting software will add to company costs, the investment is worth it in the long run. Here are some top benefits you’ll reap when using bookkeeping and accounting programs.
Accounting software can make data collection and monitoring stress-free. This is because you can integrate information across all your platforms and tools.
You can also add the following in the accounting system from different ecommerce platforms like Amazon or Shopify:
When generating different financial statements, lots of computations can occur. After collecting and monitoring data that will be included in the statements, the software can also do the calculations for you. Whether it’s the computation of your company’s profit, owner’s/shareholder’s equity, taxes, assets, or liabilities, you’ll know the details immediately through help from the software.
Skip the hassle of inputting formulas on Excel sheets, which are prone to human error, and rely on accurate outputs from software instead.
When data collection, monitoring, and computation are automated, generating reports will be easier. It is more convenient when using a bookkeeping and accounting program because these tools already have templates for the different financial statements you need. Pick a report you need to generate; the software will do all the work for you.
Whether you have a physical or online business, recording transactions as accurately as possible is important. You can achieve this by enhancing your accounting processes with a cloud accounting software solution and other accounting applications run by accounting professionals. With that, let us give you a shortlist of tools you can explore and decide what fits your business needs.
QuickBooks was developed by Intuit Inc.— an American software company that also created other widely used financial tools such as TurboTax and Mint. QuickBooks was launched in 1983 for small and medium-sized businesses. As of writing, QuickBooks is now a popular accounting and financial management software in the United States, with an 80.88% market share and more than 26 million users.
QBO is an accessible cloud accounting software with guaranteed scalability, functionality, and flexibility. You can customize this application to better suit your accounting needs. Double-entry accounting is easy with QBO and allows you to enjoy simple record-keeping that generates comprehensive financial reporting capabilities.
Hundreds of third-party applications can integrate with QBO, which makes information sharing faster and easier. Many professionals in finance and accounting are familiar with QuickBooks, which means you can tap a large pool of accounting pros to handle a QBO-powered cloud-based accounting system. You can make purchases, create invoices, and send bills easier with QuickBooks.
At $15 per month, you can enjoy QBO and upgrade your subscription anytime, depending on your needs. You have nothing to worry about getting started with QBO because it is user-friendly, but it is recommended that you spend an ample amount of time familiarizing yourself with the software.
Sage has over 3 million users and is also popular, just like QBO and Xero. The software lets you manage finance, accounting, payroll, and other business aspects. Because it is cloud-based, you can access all its features from any device and manipulate records within the cloud solution.
An award-winning software because of its commitment to its customers, FreshBooks is a fantastic all-in-one accounting software. It allows you to automate many tasks that include payment collection and invoice reminders.
With Freshbooks, you can scan detailed financial reports, conduct various online transactions, connect with your team for a collaborative workflow, and access it using your mobile phone.
Zoho Books allows business owners, accountants, and bookkeepers to manage a business's finances. You can automate workflows with Zoho Books, and this software assists its end-users in working collectively in different departments to stay in control of payables and receivables.
This software has many features, including inventory management, automatic importing, matching bank feeds, and compiling real-time tracking of projects for invoicing.
Xero is one of the fastest-growing cloud accounting software companies in the market. It is a New Zealand-based and popular tool among small businesses, holding over 2.7 million users worldwide. Forbes recognized it as the "World's Most Innovative Growth Company" twice.
Xero aims to simplify traditional accounting software for small business owners and allow them to spend more time on revenue-generating activities. Its cloud software feature allows you to create invoices and pay bills by simply clicking a few command buttons.
The good thing about Xero is that it allows unlimited users in all its packages. The software is intuitive, and there are instructions on its website if you want to learn its full potential. These features provide great cost savings for the business owner.
A2X is a third-party application that allows integration to cloud-based systems such as QBO and Xero with online marketplaces such as Amazon, Shopify, Etsy, eBay, or Walmart. It was structured according to the rules and processes of leading ecommerce financial experts.
This third-party software offers accuracy, and its creators believe every business should enjoy stress-free accounting. A2X caters to small retailers, major market players, and anyone who deals with accounting data.
There are tons of cloud-based accounting applications to choose from. However, not all of them are good for your business, and you must consider a few things.
Observing the market landscape and how your business's internal processes serve it is very important. From there, identify the parts in your accounting system that need improvement and upgrade. Reviewing the processes helps you determine what your business lacks regarding sustained growth.
Talking to your fellow entrepreneurs or business owners is also a good move. Ask for tips, innovative tools, and strategies that have helped their businesses grow.
The web is always accessible. Use the internet and conduct intensive research about business applications that are in demand.
Once you find tools for your business, allocate a budget for their initial payment and subscription. You must research whether they have adequate resources to train you and your staff. Everyone must understand how to use these tools before committing to them.
Always remember that every software has a unique setup, and you have to evaluate if it's the best cloud-based accounting software for MAC OS or Windows.
Amazingly, most of the cloud-based accounting applications in our list are user-friendly and customizable. To get the most out of the software you choose, contact the provider's customer support team and allow them to help you.
After all the internet research, software evaluation, and accounting professional interviews you've done, make a shortlist of software and validate each. Determine the compatibility, price, and testimonials. This list will make assessing and choosing the software to invest in easier.
After rounding up your potential software, it is time to finalize and decide. We recommend getting a trial version of the software before you select a package that best works for your business.
Always remember: if you are unsatisfied with your decision, you can refer to your shortlist and explore the next software option. Hold onto that list for future reference.
Does the capacity to generate different financial statements sound promising to you? You’re not alone. However, the numbers and reports will only make sense when you understand their purpose. Let's explore the three fundamental financial statements you should examine and the valuable insights they can provide.
Your company income statement comprises various financial information like the revenue, cost of goods sold/cost of sales, gross profit, operating expenses, operating income, non-operating items, earnings before taxes, and net income. This type of financial report states whether or not your business is profitable.
As its name suggests, a cash flow statement gives you an idea of how the money flows in your business. You'll gain insight into incoming funds, their sources, company expenses, and their destinations. It details various operating, investing, and financing activities to give you a more in-depth look at your cash flow.
Check your balance sheet if you want to check your business assets, liabilities, and owner’s/shareholder’s equity. The premise is that your business should have more assets than liabilities to ensure you can meet all your financial obligations and make your business thrive.
On the other hand, the owner’s/shareholder’s equity shows the amount you can give to yourself or the shareholders. The higher your company equity is, the more investors you can entice to invest in your business.
By following the previous tips, you will know precisely the capabilities of bookkeeping and accounting software and how to read financial reports better. You should now be confident you'll get accurate statements and understand any financial deck.
Make your daily operations and business management even easier by complementing your tools with help from experts! These days, many bookkeeping and accounting firms offer complete services to assist you in managing your business finances. Here are some of the benefits you’ll enjoy in partnering with them.
Experts from a firm can help you make sense of the numbers and the statements through statement notes. These notes provide extra information about your company's financial statements, including methods, assumptions, guidelines, and other details for accurate calculations and decision-making. Accounting professionals add them without clouding the primary message.
When partnered with a firm, you can get financial statements and reports regularly or as often as you need. This allows for consistent monitoring of your business’s financial health. You can use these reports to know if you are hitting your goals or need adjustments to your strategies for success.
When it comes to your business finances, accuracy is a priority. Only when the numbers are correct do you make the right decisions. It is a must for business owners like yourself to make accuracy checks a part of your daily routine. You can get a helping hand in fulfilling this task with an experienced account manager.
Investing in bookkeeping and accounting software is essential for generating financial statements and running an effective accounting system for your business. These tools offer convenience and help streamline collecting, monitoring, and computing financial data.
You can improve this further by partnering with experts from bookkeeping and accounting firms. They provide additional benefits such as accurate financial statements, regular reports, and statement notes to help you make informed decisions about your business’s finances.
Partner with us here at Unloop so we can assist you with your cloud-based accounting software and financial statement needs. We offer more assistance on top of that. Contact us If you’re interested in our bookkeeping services.
It takes someone with a keen eye and an open mind willing to consume a good amount of knowledge to expand a new business. So, if you’re reading an article like this, you’ve already got that part checked out, which means you’re up for something more challenging: learning how to do accounting for a small business.
A basic understanding of accounting can help small business owners:
Reading up on online business accounting is a great way to catch up on how new businesses do things in the modern world. Luckily, we’ve prepared a quick guide you can breeze through.
Are you a small business owner who struggles with accounting? Do you feel like you’re constantly playing catch-up with your finances? You’re not alone. Many small business owners have a great vision for their ventures, only to meet challenges in bookkeeping and accounting.
Check out these must-know small business accounting basics:
Every business needs its own business bank account. It helps establish your small business and separate your personal and business finances, making tracking business expenses and income much easier.
Before you get a separate bank account for your small business, research and compare different banks and their offerings, such as:
| 💡You will be transacting with the bank in the long run, so make sure you choose wisely. |
Besides having separate personal and business bank accounts, you should also get a business credit card.
Having a good credit score helps small businesses gain access to business assets and capital they wouldn’t have had otherwise. It allows them to make large purchases and take advantage of supplier discounts without paying upfront in cash.
When you run a business, there must be accurate expense tracking. This is what “bookkeeping” is for. You’ve probably heard of that word and perhaps seen it being used interchangeably with “accounting,” but understand that these two services are entirely different.
Bookkeeping involves recording and tracking business transactions. This includes systematically recording financial transactions such as:
Basic bookkeeping aims to provide accurate and up-to-date financial reports of a business’s financial activities.
Accounting is analyzing and interpreting financial information generated from those financial reports to produce business financial statements. These would include income statements and balance sheets, which provide a snapshot of a business’s financial health at a given time.
This question might have popped up as you read that previous paragraph. Yes, there is a process, and it’s referred to as “the accounting cycle.”
| 💡The accounting cycle is the series of steps a business follows to ensure its transactions are recorded, processed, and reported accurately. |
It follows eight significant accounting tasks:
There are also two methods to record financial transactions that business owners have to decide on:
Now that you’ve got a good grasp of what basic accounting for small businesses is, it’s essential to build on that knowledge. Tax and accounting are good examples, as they both deal with a business’s financial information.
An accounting system involves processing, verifying, and reporting a business’s financial transactions. In contrast, tax involves the payment of things like income taxes to the government based on the information reported by the business.
The data generated by the accounting process is used to calculate a business’s taxable income and tax liability. After which, the data is used to prepare tax returns.
| 💡Note that the legal structure of a business will determine its tax obligations. |
For example, small business owners registered as limited liability companies (LLCs) or partnerships may claim business income on their personal tax return.
Accounting and tax professionals may also provide business services in preparing tax returns. This may include advising on tax-efficient strategies to minimize a business’s tax liability, such as tax deductions and credits.
Nowadays, entrepreneurs have embraced using small business accounting software because of its convenience, efficiency, and affordability. Accounting software automates manual accounting tasks, such as:
Accounting software can cut long hours of complicated work for small businesses. Most accounting software programs also integrate with other business tools, such as payroll and invoicing software, which helps streamline financial management.
Want to know how to make your business finances easier to manage? Check out these tips:
Link your business bank account to your accounting software. Doing this makes bank payments convenient for your customers who opt for them. When your customers pay or you make any payments and withdrawals, the transaction is automatically recorded in bank statements and the books.
Fraud is also less likely to occur because your bookkeepers can easily raise the alarm when data don’t match.
When you have set up bank linking, invoicing, and receipt management for your business, making and collecting payments on time will be easier. You can give your customers discounts and incentives to encourage them to pay in advance or on the due date.
| 💡Through timely payment, the data you can generate from reports will be accurate, and cash flow management will be easier. |
Forecasting and planning your transactions is necessary instead of just recording them as they happen. As a small business owner, you need to keep your records even from previous years, as they will be useful in planning finances for the coming year.
Through historical financial data, you can project possible revenue and expenses. As a result, you can budget your money for the year and break it into quarterly, monthly, and even weekly allocations.
Here’s our last but not least tip. You can hire small business accounting services to simplify bookkeeping and accounting. Partner with trained bookkeepers and accountants to handle your business finances.
Hiring an in-house team works, too, but partnering with reliable agencies is the way to go if you want to save costs while receiving the same quality of work.
So there you have it—the small business accounting basics and how to make your finances easier to manage. We hope these tips have made you feel more confident handling your business finances.
If you ever need a hand with accounting, don’t hesitate to reach out! We at Unloop are passionate about helping growing businesses and making them succeed through our bookkeeping, income tax, and sales tax services.
Book a call with us now to get started on accounting for your business.
It takes someone with a keen eye and an open mind willing to consume a good amount of knowledge to expand a new business. So, if you’re reading an article like this, you’ve already got that part checked out, which means you’re up for something more challenging: learning how to do accounting for a small business.
A basic understanding of accounting can help small business owners:
Reading up on online business accounting is a great way to catch up on how new businesses do things in the modern world. Luckily, we’ve prepared a quick guide you can breeze through.
Are you a small business owner who struggles with accounting? Do you feel like you’re constantly playing catch-up with your finances? You’re not alone. Many small business owners have a great vision for their ventures, only to meet challenges in bookkeeping and accounting.
Check out these must-know small business accounting basics:
Every business needs its own business bank account. It helps establish your small business and separate your personal and business finances, making tracking business expenses and income much easier.
Before you get a separate bank account for your small business, research and compare different banks and their offerings, such as:
| 💡You will be transacting with the bank in the long run, so make sure you choose wisely. |
Besides having separate personal and business bank accounts, you should also get a business credit card.
Having a good credit score helps small businesses gain access to business assets and capital they wouldn’t have had otherwise. It allows them to make large purchases and take advantage of supplier discounts without paying upfront in cash.
When you run a business, there must be accurate expense tracking. This is what “bookkeeping” is for. You’ve probably heard of that word and perhaps seen it being used interchangeably with “accounting,” but understand that these two services are entirely different.
Bookkeeping involves recording and tracking business transactions. This includes systematically recording financial transactions such as:
Basic bookkeeping aims to provide accurate and up-to-date financial reports of a business’s financial activities.
Accounting is analyzing and interpreting financial information generated from those financial reports to produce business financial statements. These would include income statements and balance sheets, which provide a snapshot of a business’s financial health at a given time.
This question might have popped up as you read that previous paragraph. Yes, there is a process, and it’s referred to as “the accounting cycle.”
| 💡The accounting cycle is the series of steps a business follows to ensure its transactions are recorded, processed, and reported accurately. |
It follows eight significant accounting tasks:
There are also two methods to record financial transactions that business owners have to decide on:
Now that you’ve got a good grasp of what basic accounting for small businesses is, it’s essential to build on that knowledge. Tax and accounting are good examples, as they both deal with a business’s financial information.
An accounting system involves processing, verifying, and reporting a business’s financial transactions. In contrast, tax involves the payment of things like income taxes to the government based on the information reported by the business.
The data generated by the accounting process is used to calculate a business’s taxable income and tax liability. After which, the data is used to prepare tax returns.
| 💡Note that the legal structure of a business will determine its tax obligations. |
For example, small business owners registered as limited liability companies (LLCs) or partnerships may claim business income on their personal tax return.
Accounting and tax professionals may also provide business services in preparing tax returns. This may include advising on tax-efficient strategies to minimize a business’s tax liability, such as tax deductions and credits.
Nowadays, entrepreneurs have embraced using small business accounting software because of its convenience, efficiency, and affordability. Accounting software automates manual accounting tasks, such as:
Accounting software can cut long hours of complicated work for small businesses. Most accounting software programs also integrate with other business tools, such as payroll and invoicing software, which helps streamline financial management.
Want to know how to make your business finances easier to manage? Check out these tips:
Link your business bank account to your accounting software. Doing this makes bank payments convenient for your customers who opt for them. When your customers pay or you make any payments and withdrawals, the transaction is automatically recorded in bank statements and the books.
Fraud is also less likely to occur because your bookkeepers can easily raise the alarm when data don’t match.
When you have set up bank linking, invoicing, and receipt management for your business, making and collecting payments on time will be easier. You can give your customers discounts and incentives to encourage them to pay in advance or on the due date.
| 💡Through timely payment, the data you can generate from reports will be accurate, and cash flow management will be easier. |
Forecasting and planning your transactions is necessary instead of just recording them as they happen. As a small business owner, you need to keep your records even from previous years, as they will be useful in planning finances for the coming year.
Through historical financial data, you can project possible revenue and expenses. As a result, you can budget your money for the year and break it into quarterly, monthly, and even weekly allocations.
Here’s our last but not least tip. You can hire small business accounting services to simplify bookkeeping and accounting. Partner with trained bookkeepers and accountants to handle your business finances.
Hiring an in-house team works, too, but partnering with reliable agencies is the way to go if you want to save costs while receiving the same quality of work.
So there you have it—the small business accounting basics and how to make your finances easier to manage. We hope these tips have made you feel more confident handling your business finances.
If you ever need a hand with accounting, don’t hesitate to reach out! We at Unloop are passionate about helping growing businesses and making them succeed through our bookkeeping, income tax, and sales tax services.
Book a call with us now to get started on accounting for your business.
You're in that stage of your business journey where you need to simplify your accounting. So, you are looking for suitable online accounting software. These are the ones that will ease your business bookkeeping, accounting, and inventory management woes. After hours of looking, you're left with two options: FreshBooks vs. QuickBooks.
While both look promising, the question is, what's the right choice for your business? Let Unloop answer that by examining these two popular accounting solutions further.
FreshBooks and QuickBooks are two excellent accounting solution rivals but have unique differences. Before you decide which one of these accounting software platforms you like better, let's set the criteria from which we'll compare the two.
First on the list determines how cost-effective accounting software is. Of course, this is relative to the value they offer. But let's be square and look at this strictly from a price point perspective. That means the lower the price, the better.
Here's where it gets interesting. We'll look at the structure of each software's offerings and how much their basic accounting features bring convenience and add value to your business.
Here are some essential accounting features your software should have:
Another factor to consider before deciding what accounting software you'll get is its ability to handle volumes of transactions. As a small business owner selling on various ecommerce platforms, you'll need to think long-term and pick a tool to keep up with your growing business. The bigger it gets, the more complex transactions to manage.
You'll need inventory tracking if you own an ecommerce business enrolled in programs like Fulfillment by Amazon. Excellent software can make accurate adjustments when there's inventory movement because it ties closely to your costs and revenue.
On the other hand, inaccurate inventory management on the accounting end is a disaster that requires long hours of number crunching.
As your ecommerce business grows, you'll need more accounting-savvy people to delegate the grunt work of poring over numbers. You'll want software with multiple user capabilities to share access to trusted staff if the work becomes too time-consuming or you'd rather do something else.
Now that we've set the deciding factors for the two accounting software, let's put them to the test. Which one would be a better choice for your business? Let's start.
FreshBooks accounting software has a strong value proposition that targets small business owners and self-employed people. The brand offers quality support at any stage of your business journey and caters to several types of businesses.
So whether you're a freelancer, a professional, a traditional business, or a contractor servicing other businesses, FreshBooks will meet your needs.
Their pricing structure is based on a subscription system, with their cheapest package priced at $8.50 up to $27.50 per month. If you pay the one-off price, you'll pay $132.60 for the lowest-priced package and $429 for the highest. They announce promotions on their plans sparingly.
| Lite | Plus | Premium |
|---|---|---|
| $8.50 | $15 | $27.50 |
Browsing the offerings of FreshBooks will lead you to three different plans: Lite, Plus, and Premium. In a nutshell, here are some of the features they offer:
Once you explore FreshBooks, you can use the 30-day free trial to get a feel of how their software works. Its interface is straightforward enough for non-professionals to adapt to quickly.
QuickBooks is the child of Intuit—a software company behind many other businesses and financial solutions. This company has been around for some time and has built many products that cater to a specific consumer segment.
For example, they have software for accountants, small businesses, and individuals. However, their dominant software brand is QuickBooks.
Subscriptions also define QuickBooks' pricing structure. The cheapest plan they offer costs $15 per month, while the highest price reaches up to $100 per month. Occasionally, discounts and promotions are also offered.
| Simple Start | Essentials | Plus | Advanced |
| $15 | $30 | $45 | $100 |
Potential QuickBooks users who are business owners can choose between four plans: Simple Start, Essentials, Plus, and Advanced. Their offerings vary in scope depending on what plan you select, but to lay out some of their offerings, this is what you'll get:
QuickBooks shines in the number of plans and add-on features you can subscribe to. It offers a powerful accounting system for small businesses and even large enterprises. For example, their QuickBooks Point-of-Sale (POS) is an add-on that lets you track sales when they were made.
FreshBooks and QuickBooks both make excellent options in terms of functionality. They can connect to your business checking or savings account. Both can generate financial reports, issue invoices, track expenses, and enable bookkeepers to make journal entries.
However, depending on certain features, one tool may excel over the other. For an ecommerce business, evaluating these is crucial. What unique benefits does QuickBooks have over FreshBooks and vice versa?
| Criteria | QuickBooks | FreshBooks |
| Basic Accounting | ❌ | ✅ |
| Price | ❌ | ✅ |
| Offerings | ✅ | ❌ |
| Inventory Tracking | ✅ | ❌ |
| Scalability | ✅ | ❌ |
| Number of Users | ✅ | ❌ |
If you need only basic accounting features, FreshBooks might suit you more. This accounting software typically caters its services to freelancers and individual contractors. We recommend exploring other options like QuickBooks if you're seeking more advanced tools.
At face value, there's no doubt FreshBooks wins this criterion. Your $132.60 can get you a year's worth of FreshBooks’ Lite plan compared to QuickBooks pricing of the Advanced plan at $100 per month.
To put the subscription price in a better perspective, let's compare two of the cheapest plans from both software: FreshBooks’ Lite plan and QuickBooks’ Simple Start plan.
| QuickBooks Simple Start | Freshbooks Lite |
| $15/month | $8.50/month |
If you're pinching dollars and starting a business on a budget, Freshbooks is the better choice.
When it comes to FreshBooks and QuickBooks integration, QuickBooks is undoubtedly unbeatable. As long as you have mastered using it, you'll get a detailed cash flow, and tax preparation will become easier.
Both FreshBooks and QuickBooks offer cloud accounting with FreshBooks Cloud Accounting and QuickBooks Online.
Granted, FreshBooks can compete with similar standard offerings such as income and expense tracking, bookkeeping, and integrations, to name a few. It's also noteworthy that FreshBooks does a great job with unlimited billable clients.
However, small business owners can only enjoy this functionality when they upgrade to the Premium plan. QuickBooks also wins on the add-on features, which brings us to the next point.
QuickBooks for small businesses comprises an inventory tracking feature that exceeds expectations. While FreshBooks handles the basics, QuickBooks raises the bar with additional, more advanced features, such as low-inventory alerts and reorder functionalities. With these, you are empowered to manage your inventory on the spot.
However, in terms of inventory management, QuickBooks has the upper hand.
Small business software add-ons are available once you're subscribed to QuickBooks. As your business grows, the number of employees and the volume of your inventory follows. QuickBooks lets you upgrade your plan with additional features to adapt to this growth.
Features such as QuickBooks POS lets you track and manage large sales volumes. QuickBooks Payroll helps you accurately pay your employees' salaries. FreshBooks is yet to keep up with these sophisticated add-ons.
Another concern about scalability is the number of users allowed to access the software. Both FreshBooks and QuickBooks provide the option to add users to their self-employed and small business plans. However, FreshBooks has a base user limit of just one, and you'll have to add $10 for each additional user.
QuickBooks' plans vary in the number of permitted users, ranging from one (for their Simple Start plan) to 25 users (for their Advanced plan). You can even add accounting firms to the number of users; they all have separate slots.
QuickBooks excels over FreshBooks thanks to its superior inventory tracking, a broader range of offerings, scalability, and support for many users. This makes it a perfect choice for ecommerce business owners with complex inventory and various financial management needs.
Accounting software will significantly benefit you and your business, but only if you know how to operate it effectively. Subscribing to QuickBooks is just an initial step; you still have to invest time in learning how to use it. As a small business owner, this takes time and effort.
Let Unloop bridge that gap with our bookkeeping services. We are adept at utilizing QuickBooks, so we are confident about working efficiently with entrepreneurs like yourself to free up your time. Ready to level up your ecommerce accounting venture?
Book a call with us today to get started!
You're in that stage of your business journey where you need to simplify your accounting. So, you are looking for suitable online accounting software. These are the ones that will ease your business bookkeeping, accounting, and inventory management woes. After hours of looking, you're left with two options: FreshBooks vs. QuickBooks.
While both look promising, the question is, what's the right choice for your business? Let Unloop answer that by examining these two popular accounting solutions further.
FreshBooks and QuickBooks are two excellent accounting solution rivals but have unique differences. Before you decide which one of these accounting software platforms you like better, let's set the criteria from which we'll compare the two.
First on the list determines how cost-effective accounting software is. Of course, this is relative to the value they offer. But let's be square and look at this strictly from a price point perspective. That means the lower the price, the better.
Here's where it gets interesting. We'll look at the structure of each software's offerings and how much their basic accounting features bring convenience and add value to your business.
Here are some essential accounting features your software should have:
Another factor to consider before deciding what accounting software you'll get is its ability to handle volumes of transactions. As a small business owner selling on various ecommerce platforms, you'll need to think long-term and pick a tool to keep up with your growing business. The bigger it gets, the more complex transactions to manage.
You'll need inventory tracking if you own an ecommerce business enrolled in programs like Fulfillment by Amazon. Excellent software can make accurate adjustments when there's inventory movement because it ties closely to your costs and revenue.
On the other hand, inaccurate inventory management on the accounting end is a disaster that requires long hours of number crunching.
As your ecommerce business grows, you'll need more accounting-savvy people to delegate the grunt work of poring over numbers. You'll want software with multiple user capabilities to share access to trusted staff if the work becomes too time-consuming or you'd rather do something else.
Now that we've set the deciding factors for the two accounting software, let's put them to the test. Which one would be a better choice for your business? Let's start.
FreshBooks accounting software has a strong value proposition that targets small business owners and self-employed people. The brand offers quality support at any stage of your business journey and caters to several types of businesses.
So whether you're a freelancer, a professional, a traditional business, or a contractor servicing other businesses, FreshBooks will meet your needs.
Their pricing structure is based on a subscription system, with their cheapest package priced at $8.50 up to $27.50 per month. If you pay the one-off price, you'll pay $132.60 for the lowest-priced package and $429 for the highest. They announce promotions on their plans sparingly.
| Lite | Plus | Premium |
|---|---|---|
| $8.50 | $15 | $27.50 |
Browsing the offerings of FreshBooks will lead you to three different plans: Lite, Plus, and Premium. In a nutshell, here are some of the features they offer:
Once you explore FreshBooks, you can use the 30-day free trial to get a feel of how their software works. Its interface is straightforward enough for non-professionals to adapt to quickly.
QuickBooks is the child of Intuit—a software company behind many other businesses and financial solutions. This company has been around for some time and has built many products that cater to a specific consumer segment.
For example, they have software for accountants, small businesses, and individuals. However, their dominant software brand is QuickBooks.
Subscriptions also define QuickBooks' pricing structure. The cheapest plan they offer costs $15 per month, while the highest price reaches up to $100 per month. Occasionally, discounts and promotions are also offered.
| Simple Start | Essentials | Plus | Advanced |
| $15 | $30 | $45 | $100 |
Potential QuickBooks users who are business owners can choose between four plans: Simple Start, Essentials, Plus, and Advanced. Their offerings vary in scope depending on what plan you select, but to lay out some of their offerings, this is what you'll get:
QuickBooks shines in the number of plans and add-on features you can subscribe to. It offers a powerful accounting system for small businesses and even large enterprises. For example, their QuickBooks Point-of-Sale (POS) is an add-on that lets you track sales when they were made.
FreshBooks and QuickBooks both make excellent options in terms of functionality. They can connect to your business checking or savings account. Both can generate financial reports, issue invoices, track expenses, and enable bookkeepers to make journal entries.
However, depending on certain features, one tool may excel over the other. For an ecommerce business, evaluating these is crucial. What unique benefits does QuickBooks have over FreshBooks and vice versa?
| Criteria | QuickBooks | FreshBooks |
| Basic Accounting | ❌ | ✅ |
| Price | ❌ | ✅ |
| Offerings | ✅ | ❌ |
| Inventory Tracking | ✅ | ❌ |
| Scalability | ✅ | ❌ |
| Number of Users | ✅ | ❌ |
If you need only basic accounting features, FreshBooks might suit you more. This accounting software typically caters its services to freelancers and individual contractors. We recommend exploring other options like QuickBooks if you're seeking more advanced tools.
At face value, there's no doubt FreshBooks wins this criterion. Your $132.60 can get you a year's worth of FreshBooks’ Lite plan compared to QuickBooks pricing of the Advanced plan at $100 per month.
To put the subscription price in a better perspective, let's compare two of the cheapest plans from both software: FreshBooks’ Lite plan and QuickBooks’ Simple Start plan.
| QuickBooks Simple Start | Freshbooks Lite |
| $15/month | $8.50/month |
If you're pinching dollars and starting a business on a budget, Freshbooks is the better choice.
When it comes to FreshBooks and QuickBooks integration, QuickBooks is undoubtedly unbeatable. As long as you have mastered using it, you'll get a detailed cash flow, and tax preparation will become easier.
Both FreshBooks and QuickBooks offer cloud accounting with FreshBooks Cloud Accounting and QuickBooks Online.
Granted, FreshBooks can compete with similar standard offerings such as income and expense tracking, bookkeeping, and integrations, to name a few. It's also noteworthy that FreshBooks does a great job with unlimited billable clients.
However, small business owners can only enjoy this functionality when they upgrade to the Premium plan. QuickBooks also wins on the add-on features, which brings us to the next point.
QuickBooks for small businesses comprises an inventory tracking feature that exceeds expectations. While FreshBooks handles the basics, QuickBooks raises the bar with additional, more advanced features, such as low-inventory alerts and reorder functionalities. With these, you are empowered to manage your inventory on the spot.
However, in terms of inventory management, QuickBooks has the upper hand.
Small business software add-ons are available once you're subscribed to QuickBooks. As your business grows, the number of employees and the volume of your inventory follows. QuickBooks lets you upgrade your plan with additional features to adapt to this growth.
Features such as QuickBooks POS lets you track and manage large sales volumes. QuickBooks Payroll helps you accurately pay your employees' salaries. FreshBooks is yet to keep up with these sophisticated add-ons.
Another concern about scalability is the number of users allowed to access the software. Both FreshBooks and QuickBooks provide the option to add users to their self-employed and small business plans. However, FreshBooks has a base user limit of just one, and you'll have to add $10 for each additional user.
QuickBooks' plans vary in the number of permitted users, ranging from one (for their Simple Start plan) to 25 users (for their Advanced plan). You can even add accounting firms to the number of users; they all have separate slots.
QuickBooks excels over FreshBooks thanks to its superior inventory tracking, a broader range of offerings, scalability, and support for many users. This makes it a perfect choice for ecommerce business owners with complex inventory and various financial management needs.
Accounting software will significantly benefit you and your business, but only if you know how to operate it effectively. Subscribing to QuickBooks is just an initial step; you still have to invest time in learning how to use it. As a small business owner, this takes time and effort.
Let Unloop bridge that gap with our bookkeeping services. We are adept at utilizing QuickBooks, so we are confident about working efficiently with entrepreneurs like yourself to free up your time. Ready to level up your ecommerce accounting venture?
Book a call with us today to get started!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
You don’t aim to earn a profit in a nonprofit organization. You work with a motive to serve the general public—whether it be for educational, religious, or charitable purposes. But this doesn’t exempt you from the financial challenges that require effective management. Adopting the best accounting software for nonprofits becomes crucial to overcome these burdens.
While your organization may not be driven by profit, you still deal with monetary transactions such as donations, memberships, and grants. You must organize and comply with financial management regulations, albeit differently.
This article will guide you in understanding the importance of leveraging the right nonprofit accounting software and maximizing its benefits. But before that, let’s talk about the distinctive nature of nonprofit organizations in accounting.
Accounting for nonprofit organizations is an interesting study. It doesn’t work the same as regular accounting because its motive is to serve the community rather than earn a profit. Government authorities understand this and have made concessions in tax regulations, accounting methods, and financial reporting requirements.
Here is a basic guide on how nonprofit accounting works.
Nonprofits usually choose between cash and accrual accounting.
| Example: A financial contract was set up in January, but the payment was made or received in March. For cash-based accounting: You’ll record the expense in March. For accrual accounting: You’ll record the expense in January. |
Unlike companies and online businesses, nonprofit organizations exist to serve the public interest and fulfill a specific mission. This fundamental difference in purpose translates into various accounting practices.
In generating reports, nonprofits prioritize accountability and transparency, emphasizing proper stewardship of resources received through donations, grants, and other funding sources. They also practice specialized techniques such as fund accounting and donor management to track funds and donor-imposed restrictions.
The key financial statements commonly issued by nonprofit organizations are as follows:
| Financial Statements | |
| Statement of Financial Position | Also known as the balance sheet, it outlines the organization's liabilities, assets, and debts. |
| Statement of Activities | Shows the different income sources and expenses incurred by the organization over a specified period. |
| Cash Flow Statement | Illustrates cash movement in and out of the organization, providing insights into its liquidity. |
| Statement of Functional Expense | Lists of funds you spend on different functions within the organization, such as administrative or fundraising. |
Nonprofits apply for a tax-exempt status using Form 1023. The authority (IRS or CRA) then decides whether your organization qualifies as charitable. Once you are officially tax-exempt, you don't have to pay federal income taxes and even property and sales taxes.
However, you’re still required to pay for an annual tax return. You will still report your revenue and expenses to the tax authority.
🔔 REMINDER 🔔
| You must file and submit Form 990 on the designated payment schedule to pay for the annual tax return. |
As briefly mentioned, nonprofit accounting works differently from businesses. The accounting method, tax compliance, procedures, and types of financial documents are not similar to what authorities would require for a for-profit.
But if we talk about why you need to use software, it all goes down to the same reasons.
Choosing the best accounting software programs for nonprofit institutions lies in aligning their functions with your unique needs. Of course, everyone has different preferences, but we are here to help you find the perfect match that ticks all the boxes for your accounting tasks.
In selecting nonprofit financial software, opt for solutions that seamlessly integrate with your workflows and cater to your nonprofit's size, budget, and needs. Some of the best nonprofit fund accounting software include:
| Top Providers | Description |
| Xero | Xero, a popular cloud-based software, shines in expense tracking and management, helping you stay on top of your organization's financial health. The cash summary report provides a comprehensive cash position overview, enabling analysis of income, expenses, and available funds. |
| Aplos | As a full-featured CRM, Aplos enables you to manage your members and donors effectively. The True Fund accounting feature helps you comply with donation restrictions, promoting transparency and accountability. |
Sage Intacct | Sage Intacct has comprehensive trackingand billing capabilities for accurate management and grand funds reports. This software includes nonprofit specific features like multi-user and currency.Collaborate with your team across different locations.Effortlessly handle transactions in multiple currencies. |
QuickBooks Online | QuickBooks Online comes with easy expense sorting, allowing nonprofits to categorize revenue expenditures by fund or program. Create custom reports based on the data that matters most to the organization.Get valuable insights into your financial performance. Streamline donation processes by syncing bank accounts for instant expense tracking and cash flow updates. |
Zoho Books | Zoho Books supports collaboration by allowing users to add remote employees and volunteers as individual users, providing role-based access and facilitating seamless teamwork. Accounting features like customizable payment pages and multi-currency support enable acceptance of global donations, breaking geographical barriers. |
Netsuite ERP | NetSuite's fund accounting framework revolutionizes the stewardship of funds for nonprofits through diverse revenue streams and accurate expense tracking. Offers real-time access to over 250 standard and customized reports.Gain insights into fund balances, grant activity, inventory management, and financial performance. |
FreshBooks | FreshBooks offers a complete software package that allows users to run reports, track expenses, and log time for employees, all within one platform. Creating sleek invoices and estimates takes seconds.Convenient online payment options allow supporters to contribute and ensure faster donation processing.Automated late payment reminds you that payments are received promptly, minimizing funding delays. |
Nonprofit accounting can be tricky. You have to keep track of different sources of income while staying compliant with the regulations. Fortunately, accounting software for nonprofits is a good way to manage these tasks with minimal error (and stress).
While the market offers many promising options, you only need to find one that caters the most to your needs. But what if you seek more than just an accounting and bookkeeping solution? What if you want something that does even more for your nonprofit or ecommerce business? Accounting tools are good, but they might not cover everything you need.
At Unloop, we believe in combining cutting-edge technology with the expertise of skilled bookkeepers and accountants. By leveraging automated data entry and bookkeeping, we free up time for our professionals to focus on in-depth analysis and provide valuable insights for your ecommerce business. Give us a call and work with us today.
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
You don’t aim to earn a profit in a nonprofit organization. You work with a motive to serve the general public—whether it be for educational, religious, or charitable purposes. But this doesn’t exempt you from the financial challenges that require effective management. Adopting the best accounting software for nonprofits becomes crucial to overcome these burdens.
While your organization may not be driven by profit, you still deal with monetary transactions such as donations, memberships, and grants. You must organize and comply with financial management regulations, albeit differently.
This article will guide you in understanding the importance of leveraging the right nonprofit accounting software and maximizing its benefits. But before that, let’s talk about the distinctive nature of nonprofit organizations in accounting.
Accounting for nonprofit organizations is an interesting study. It doesn’t work the same as regular accounting because its motive is to serve the community rather than earn a profit. Government authorities understand this and have made concessions in tax regulations, accounting methods, and financial reporting requirements.
Here is a basic guide on how nonprofit accounting works.
Nonprofits usually choose between cash and accrual accounting.
| Example: A financial contract was set up in January, but the payment was made or received in March. For cash-based accounting: You’ll record the expense in March. For accrual accounting: You’ll record the expense in January. |
Unlike companies and online businesses, nonprofit organizations exist to serve the public interest and fulfill a specific mission. This fundamental difference in purpose translates into various accounting practices.
In generating reports, nonprofits prioritize accountability and transparency, emphasizing proper stewardship of resources received through donations, grants, and other funding sources. They also practice specialized techniques such as fund accounting and donor management to track funds and donor-imposed restrictions.
The key financial statements commonly issued by nonprofit organizations are as follows:
| Financial Statements | |
| Statement of Financial Position | Also known as the balance sheet, it outlines the organization's liabilities, assets, and debts. |
| Statement of Activities | Shows the different income sources and expenses incurred by the organization over a specified period. |
| Cash Flow Statement | Illustrates cash movement in and out of the organization, providing insights into its liquidity. |
| Statement of Functional Expense | Lists of funds you spend on different functions within the organization, such as administrative or fundraising. |
Nonprofits apply for a tax-exempt status using Form 1023. The authority (IRS or CRA) then decides whether your organization qualifies as charitable. Once you are officially tax-exempt, you don't have to pay federal income taxes and even property and sales taxes.
However, you’re still required to pay for an annual tax return. You will still report your revenue and expenses to the tax authority.
🔔 REMINDER 🔔
| You must file and submit Form 990 on the designated payment schedule to pay for the annual tax return. |
As briefly mentioned, nonprofit accounting works differently from businesses. The accounting method, tax compliance, procedures, and types of financial documents are not similar to what authorities would require for a for-profit.
But if we talk about why you need to use software, it all goes down to the same reasons.
Choosing the best accounting software programs for nonprofit institutions lies in aligning their functions with your unique needs. Of course, everyone has different preferences, but we are here to help you find the perfect match that ticks all the boxes for your accounting tasks.
In selecting nonprofit financial software, opt for solutions that seamlessly integrate with your workflows and cater to your nonprofit's size, budget, and needs. Some of the best nonprofit fund accounting software include:
| Top Providers | Description |
| Xero | Xero, a popular cloud-based software, shines in expense tracking and management, helping you stay on top of your organization's financial health. The cash summary report provides a comprehensive cash position overview, enabling analysis of income, expenses, and available funds. |
| Aplos | As a full-featured CRM, Aplos enables you to manage your members and donors effectively. The True Fund accounting feature helps you comply with donation restrictions, promoting transparency and accountability. |
Sage Intacct | Sage Intacct has comprehensive trackingand billing capabilities for accurate management and grand funds reports. This software includes nonprofit specific features like multi-user and currency.Collaborate with your team across different locations.Effortlessly handle transactions in multiple currencies. |
QuickBooks Online | QuickBooks Online comes with easy expense sorting, allowing nonprofits to categorize revenue expenditures by fund or program. Create custom reports based on the data that matters most to the organization.Get valuable insights into your financial performance. Streamline donation processes by syncing bank accounts for instant expense tracking and cash flow updates. |
Zoho Books | Zoho Books supports collaboration by allowing users to add remote employees and volunteers as individual users, providing role-based access and facilitating seamless teamwork. Accounting features like customizable payment pages and multi-currency support enable acceptance of global donations, breaking geographical barriers. |
Netsuite ERP | NetSuite's fund accounting framework revolutionizes the stewardship of funds for nonprofits through diverse revenue streams and accurate expense tracking. Offers real-time access to over 250 standard and customized reports.Gain insights into fund balances, grant activity, inventory management, and financial performance. |
FreshBooks | FreshBooks offers a complete software package that allows users to run reports, track expenses, and log time for employees, all within one platform. Creating sleek invoices and estimates takes seconds.Convenient online payment options allow supporters to contribute and ensure faster donation processing.Automated late payment reminds you that payments are received promptly, minimizing funding delays. |
Nonprofit accounting can be tricky. You have to keep track of different sources of income while staying compliant with the regulations. Fortunately, accounting software for nonprofits is a good way to manage these tasks with minimal error (and stress).
While the market offers many promising options, you only need to find one that caters the most to your needs. But what if you seek more than just an accounting and bookkeeping solution? What if you want something that does even more for your nonprofit or ecommerce business? Accounting tools are good, but they might not cover everything you need.
At Unloop, we believe in combining cutting-edge technology with the expertise of skilled bookkeepers and accountants. By leveraging automated data entry and bookkeeping, we free up time for our professionals to focus on in-depth analysis and provide valuable insights for your ecommerce business. Give us a call and work with us today.
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Embracing the digital age has revolutionized accounting and bookkeeping for businesses, and cloud accounting software stands at the forefront of this transformation. Efficiency, accuracy, and real-time data are king these days, and you don’t want to get left behind with outdated processes. Learn the benefits of cloud accounting software and make the switch.
When you start using online accounting software, you’ll soon realize its advantages. In this article, we are listing seven points to start and an introduction to Quickbooks Online and Xero—two of today’s most coveted accounting software.
It’s not easy to let go of the processes you’re used to. It’s even harder when these systems involve company finances. But is it worth it to keep using outdated accounting processes like spreadsheets?
Here are some flaws you have probably experienced in using Excel sheets:
Excel sheets are difficult to access as they require individuals to log in to a computer where the file is. When one needs a personal copy, they need a USB, an email address, or a shared drive. Getting updates to the main copy is time-consuming as it requires repeating the file acquisition process for the latest version.
Excel files are also prone to corruption, so you must always have a backup file. You won’t be able to access the file once it becomes corrupted, and you need to start from scratch again.
Data input for Excel sheets is manual, which makes it more prone to human errors. Although you can automate computation and summarization of data, the results will still depend on the accuracy of the data source.
With Excel sheets being prone to human errors, you and your team must do frequent and detailed checking, which can be time-consuming.
The bookkeeper and the accountant should work together to ensure books are updated and accurate for reports and the tax season. However, this collaboration can be difficult with a single Excel sheet you can access on one computer. Data collection and constant updates become a burden.
Excel acknowledges how important integration is. You can now integrate a few tools like Outlook, Mailchimp, Google Sheets, Trello, Hubspot, and Slack with it. Although these are helpful, they are limited. Businesses also need to integrate applications for banks, payment channels, inventory, timesheets, project management, and more!
Now that you know the limitations of using Excel sheets, let’s look at why a cloud accounting system is a worthy investment. Check out the benefits of cloud-based accounting below:
First is its friendliness to the environment. When you switch from traditional accounting to cloud-based accounting systems, the first thing you’ll notice is the pile or cabinets of paperwork on your financial reports. You save all this paper and resources by allotting the money to reliable cloud software.
Many cloud accounting services offer bank reconciliations, easy transfers, and receipt automation. You can instantly convert documents and receipts from images into text. Integrating eCommerce stores into the cloud-based accounting software for sales and inventory management is also possible.
Invoicing, expense tracking, and bank reconciliation are also covered—everything is automated! All these data are automatically registered in the cloud and seen on your books.
Information and business financial data are kept confidential by locking hardcopy books in cabinets and protecting offline computer programs with passwords. Cloud accounting offers intense data security. With a cloud-based accounting system, your finances are kept with layers of security that are tried and tested against hackers.
Only authorized people you can trust can access these documents. As a result, it’s almost impossible for files to get corrupted in cloud accounting systems compared to files saved on a computer or printed on paper.
When you give passwords to your team of bookkeepers and accountants, they can work together and update the file simultaneously. They can skip the hassle of sending the most updated file to their colleagues as the changes are immediately updated in the cloud for authorized people to see.
As a small business owner, you can see your business growth and your business financial data in real-time, too, with your team being able to collaborate on updating your books. You can generate the report yourself or delegate the task to your accountant, who can access and get the data they need from the cloud accounting platform in just a few clicks.
The accessibility of cloud accounting solutions contributes to the convenience of data updates and team collaboration. Because it is a cloud-based system and not dependent on specific office computers, anyone can access them anywhere as long as there’s a stable internet connection.
Many cloud accounting services these days even go the extra mile to optimize their application for mobile use. This is because of the convenience and the number of individuals relying on smartphones.
Cloud-based services are worth your investment because of the time, money, and resources you will have saved.
Which accounting software offers the benefits of cloud technology? Experience the benefits of cloud computing accounting software firsthand with Quickbooks Online and Xero.
Check out how your business may benefit from using these cloud accounting platforms:
Quickbooks Online offers a live bookkeeping accounting solution, so you are sure that your books are always updated, and you can always get reports with real-time data. The data are sorted out and categorized through automatic configuration and customization.
You can create invoices with a “Pay now” button, send them to your customers, and receive their payments. Payments made in different channels will be tracked, categorized, and safely stored in the cloud and in time for reports.
If you manage a team, tracking their time and projects and managing their payroll are also possible with Quickbooks.
Xero has almost the same offers as Quickbooks Online, allowing you to give out and receive payments in just a few clicks. This process is possible because the cloud accounting software links banks and other payment channels.
Not only can you pay and receive payments, but you can also receive them on time because the accounting tool schedules them. All you have to do is approve the transaction to proceed.
You can also integrate payroll software to ensure that the hours rendered by your employees are paid accordingly.
With the help of the software, salary and tax computation are also taken off your plate, minimizing the headache when tax season comes. In addition, you can see your income, expenses, and other company key performance indicators through easy-to-generate reports in this cloud accounting platform.
There are numerous benefits to having your accounting processes automated through cloud computing. If you haven’t started using cloud-based accounting yet, now is the time to make the switch. Quickbooks and Xero offer many features that will make the accounting and bookkeeping process easier and help you boost your business performance.
Unloop can be your partner if you decide to update your processes. We have a team of bookkeepers and accountants using Quickbooks and Xero. Let us manage your books for you. If you are interested or have any questions, book a call with us, and we are more than happy to talk with you!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Embracing the digital age has revolutionized accounting and bookkeeping for businesses, and cloud accounting software stands at the forefront of this transformation. Efficiency, accuracy, and real-time data are king these days, and you don’t want to get left behind with outdated processes. Learn the benefits of cloud accounting software and make the switch.
When you start using online accounting software, you’ll soon realize its advantages. In this article, we are listing seven points to start and an introduction to Quickbooks Online and Xero—two of today’s most coveted accounting software.
It’s not easy to let go of the processes you’re used to. It’s even harder when these systems involve company finances. But is it worth it to keep using outdated accounting processes like spreadsheets?
Here are some flaws you have probably experienced in using Excel sheets:
Excel sheets are difficult to access as they require individuals to log in to a computer where the file is. When one needs a personal copy, they need a USB, an email address, or a shared drive. Getting updates to the main copy is time-consuming as it requires repeating the file acquisition process for the latest version.
Excel files are also prone to corruption, so you must always have a backup file. You won’t be able to access the file once it becomes corrupted, and you need to start from scratch again.
Data input for Excel sheets is manual, which makes it more prone to human errors. Although you can automate computation and summarization of data, the results will still depend on the accuracy of the data source.
With Excel sheets being prone to human errors, you and your team must do frequent and detailed checking, which can be time-consuming.
The bookkeeper and the accountant should work together to ensure books are updated and accurate for reports and the tax season. However, this collaboration can be difficult with a single Excel sheet you can access on one computer. Data collection and constant updates become a burden.
Excel acknowledges how important integration is. You can now integrate a few tools like Outlook, Mailchimp, Google Sheets, Trello, Hubspot, and Slack with it. Although these are helpful, they are limited. Businesses also need to integrate applications for banks, payment channels, inventory, timesheets, project management, and more!
Now that you know the limitations of using Excel sheets, let’s look at why a cloud accounting system is a worthy investment. Check out the benefits of cloud-based accounting below:
First is its friendliness to the environment. When you switch from traditional accounting to cloud-based accounting systems, the first thing you’ll notice is the pile or cabinets of paperwork on your financial reports. You save all this paper and resources by allotting the money to reliable cloud software.
Many cloud accounting services offer bank reconciliations, easy transfers, and receipt automation. You can instantly convert documents and receipts from images into text. Integrating eCommerce stores into the cloud-based accounting software for sales and inventory management is also possible.
Invoicing, expense tracking, and bank reconciliation are also covered—everything is automated! All these data are automatically registered in the cloud and seen on your books.
Information and business financial data are kept confidential by locking hardcopy books in cabinets and protecting offline computer programs with passwords. Cloud accounting offers intense data security. With a cloud-based accounting system, your finances are kept with layers of security that are tried and tested against hackers.
Only authorized people you can trust can access these documents. As a result, it’s almost impossible for files to get corrupted in cloud accounting systems compared to files saved on a computer or printed on paper.
When you give passwords to your team of bookkeepers and accountants, they can work together and update the file simultaneously. They can skip the hassle of sending the most updated file to their colleagues as the changes are immediately updated in the cloud for authorized people to see.
As a small business owner, you can see your business growth and your business financial data in real-time, too, with your team being able to collaborate on updating your books. You can generate the report yourself or delegate the task to your accountant, who can access and get the data they need from the cloud accounting platform in just a few clicks.
The accessibility of cloud accounting solutions contributes to the convenience of data updates and team collaboration. Because it is a cloud-based system and not dependent on specific office computers, anyone can access them anywhere as long as there’s a stable internet connection.
Many cloud accounting services these days even go the extra mile to optimize their application for mobile use. This is because of the convenience and the number of individuals relying on smartphones.
Cloud-based services are worth your investment because of the time, money, and resources you will have saved.
Which accounting software offers the benefits of cloud technology? Experience the benefits of cloud computing accounting software firsthand with Quickbooks Online and Xero.
Check out how your business may benefit from using these cloud accounting platforms:
Quickbooks Online offers a live bookkeeping accounting solution, so you are sure that your books are always updated, and you can always get reports with real-time data. The data are sorted out and categorized through automatic configuration and customization.
You can create invoices with a “Pay now” button, send them to your customers, and receive their payments. Payments made in different channels will be tracked, categorized, and safely stored in the cloud and in time for reports.
If you manage a team, tracking their time and projects and managing their payroll are also possible with Quickbooks.
Xero has almost the same offers as Quickbooks Online, allowing you to give out and receive payments in just a few clicks. This process is possible because the cloud accounting software links banks and other payment channels.
Not only can you pay and receive payments, but you can also receive them on time because the accounting tool schedules them. All you have to do is approve the transaction to proceed.
You can also integrate payroll software to ensure that the hours rendered by your employees are paid accordingly.
With the help of the software, salary and tax computation are also taken off your plate, minimizing the headache when tax season comes. In addition, you can see your income, expenses, and other company key performance indicators through easy-to-generate reports in this cloud accounting platform.
There are numerous benefits to having your accounting processes automated through cloud computing. If you haven’t started using cloud-based accounting yet, now is the time to make the switch. Quickbooks and Xero offer many features that will make the accounting and bookkeeping process easier and help you boost your business performance.
Unloop can be your partner if you decide to update your processes. We have a team of bookkeepers and accountants using Quickbooks and Xero. Let us manage your books for you. If you are interested or have any questions, book a call with us, and we are more than happy to talk with you!
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
A Shopify ecommerce balance sheet generated through accounting software allows budding business owners like you to effectively manage and scale your business. It details your online store's performance and includes key metrics like assets, liabilities, and shareholder's equity.
If you're a Shopify user with a software integration such as QuickBooks Online (QBO), your balance sheets are automatically generated. You can view it on the software or the reports section of your shop's settings page. But is this the only document you need in a series of financial statements?
In this article, we’ll take a closer look at Shopify accounting and the role of balance sheets in managing your company's financial health. We'll also tackle the other financial statements briefly for you to gain some knowledge on what they mean for your business.
Accounting is vital because it projects your business's financial position. It serves as a reflection of the economic activity within an enterprise.
An accounting report gives you, your investors, creditors, and regulators detailed intelligence into how well you execute financial decisions. It also allows key decision-makers to work with appropriate oversight if something untoward occurs within your business.
In accounting, you’ll usually face challenges related to changes in tracking, inventory reporting, sales, and revenue. You’ll also need to deal with complex tax laws and regulations.
There are essential facts about Shopify accounting you must know as an online business owner, and here are some of them.
When selling online, you have to deal with both physical products and shipping costs, and Shopify has a feature to help you track your inventory. However, Shopify does not track factory expenses because there is no production process involved when running an online store.
When you grow your business, there’s a chance you’ll sell internationally, which means you have to deal with multiple currencies. This can be challenging because it requires conversion of revenue and expenses into your home currency for reporting purposes. If you get started with Shopify accounting, you won’t have to worry about this as the platform has multiple-currency features.
When you sell products across states, you need to stay compliant with various laws and regulations, especially for products subject to sales tax. When using Shopify accounting, you can enjoy automatic sales tax calculation. Nevertheless, it would be best to choose an agency with experience in dealing with tax laws and regulations to ensure compliance and avoid any legal problems.
Shopify accounting offers ecommerce financial data resources on its website, which includes a comprehensive overview of various reports, templates, and tutorials to get you started or improve your existing processes.
You can handle COGS by keeping track of how much inventory your company had at the end of an inventory period. The COGS calculation can also include depreciation or amortization of assets used during that inventory period. A more accurate way to calculate COGS for ecommerce is to keep track of units sold periodically and multiply it by the cost per unit. You can get insights on these data through Shopify accounting.
Reporting with Shopify accounting is not much different than the process that's used with other financial reports. However, there are slight differences to note if you're using Shopify accounting services or software packages:
The Shopify accounting process has powerful tools available to generate accurate results on time.
Shopify accounting fees can affect your business, so staying updated on the latest rates and pricing methods is important—these costs can change how you price products. You must ensure that your income is always higher than your expenses and that you have a healthy profit to ensure your business thrives.
An ecommerce balance sheet is a financial statement that offers a snapshot of your company's financial position and growth potential at a specific time. It is divided into three main sections: Assets, Liabilities, and Shareholder Equity.
Assets represent everything that you own, including items you’re owed. Assets are divided into two categories: current and long-term. Current assets include:
Long-term assets are intangible assets, like trademarks and patents, that provide value over a longer period.
Fixed assets refer to items the company owns that have long-term value, such as buildings, machinery, and equipment.
To calculate assets, you have to use the standard balance sheet equation.
Total Assets = Total Liabilities + Shareholder Equity
Asset Category Examples:
Liabilities refer to your financial obligations, including money owed to suppliers, employees, and lenders. Similar to assets, liabilities are categorized into two: short- and long-term liabilities.
Current liabilities, such as accounts payable and wages, are obligations that must be settled within 3 months up to a year. Long-term liabilities include bonds payable, which will be paid over a longer timeframe.
Liability Category Examples
Shareholder equity or owner's equity represents ownership of the business expressed in monetary amounts. As a whole, this account also reflects the true financial standing of an ecommerce business and indicates its current value to its owners. A higher shareholder equity generally denotes a more financially stable and profitable company.
To calculate shareholder equity, we rearrange the balance sheet equation:
Shareholder Equity = Total Assets - Total Liabilities
By understanding how assets, liabilities, and shareholder equity are interconnected, you can assess the financial health of your company more accurately.
The balance sheet provides stakeholders an overall picture of the business’s health. But for Shopify business owners like you to manage your business well, you also must understand and pay attention to what’s going on with the other financial statements. Let's take a closer look at income statements and cash flow statements, which are both available on Shopify.
This document reports your revenue, expenses, and net income earned in a given duration. It's important to look at both the revenue and net income generated. If your store is making more money but also incurring higher expenses, this could be a sign that you're not making wise financial decisions, and you must adjust.
This statement tracks how much cash your store generates or uses. It helps you monitor positive and negative cash flow. This is important in keeping your business’s day-to-day operation.
The cash flow statement is oftentimes overlooked by some small business owners because balance sheets and income statements seem sufficient in telling how operations are doing. But running out of cash is a real problem—a critical mistake that can put a business owner out of business overnight. Paying attention to cash flow, through cash flow statements, helps prevent this.
Balance sheets are essential for stakeholders and business owners. Online sellers give more emphasis to balance sheets as it is one of the financial reports you need to decide the fate of your business.
Nevertheless, Shopify income and cash flow statements are also just as important. They help keep track of your company's finances in terms of inventory, revenue, and expenses.
Doing these financial statements right is important. By working with accounting experts, like who we have here at Unloop, you can easily get better balance sheets with accurate numbers that will help you identify what your business needs and make sound decisions. Plus, you’ll have the other financial statements taken care of along with it.
Are you ready to supercharge your Shopify finances? Get in touch with our team to know more about our bookkeeping services today.
Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
A Shopify ecommerce balance sheet generated through accounting software allows budding business owners like you to effectively manage and scale your business. It details your online store's performance and includes key metrics like assets, liabilities, and shareholder's equity.
If you're a Shopify user with a software integration such as QuickBooks Online (QBO), your balance sheets are automatically generated. You can view it on the software or the reports section of your shop's settings page. But is this the only document you need in a series of financial statements?
In this article, we’ll take a closer look at Shopify accounting and the role of balance sheets in managing your company's financial health. We'll also tackle the other financial statements briefly for you to gain some knowledge on what they mean for your business.
Accounting is vital because it projects your business's financial position. It serves as a reflection of the economic activity within an enterprise.
An accounting report gives you, your investors, creditors, and regulators detailed intelligence into how well you execute financial decisions. It also allows key decision-makers to work with appropriate oversight if something untoward occurs within your business.
In accounting, you’ll usually face challenges related to changes in tracking, inventory reporting, sales, and revenue. You’ll also need to deal with complex tax laws and regulations.
There are essential facts about Shopify accounting you must know as an online business owner, and here are some of them.
When selling online, you have to deal with both physical products and shipping costs, and Shopify has a feature to help you track your inventory. However, Shopify does not track factory expenses because there is no production process involved when running an online store.
When you grow your business, there’s a chance you’ll sell internationally, which means you have to deal with multiple currencies. This can be challenging because it requires conversion of revenue and expenses into your home currency for reporting purposes. If you get started with Shopify accounting, you won’t have to worry about this as the platform has multiple-currency features.
When you sell products across states, you need to stay compliant with various laws and regulations, especially for products subject to sales tax. When using Shopify accounting, you can enjoy automatic sales tax calculation. Nevertheless, it would be best to choose an agency with experience in dealing with tax laws and regulations to ensure compliance and avoid any legal problems.
Shopify accounting offers ecommerce financial data resources on its website, which includes a comprehensive overview of various reports, templates, and tutorials to get you started or improve your existing processes.
You can handle COGS by keeping track of how much inventory your company had at the end of an inventory period. The COGS calculation can also include depreciation or amortization of assets used during that inventory period. A more accurate way to calculate COGS for ecommerce is to keep track of units sold periodically and multiply it by the cost per unit. You can get insights on these data through Shopify accounting.
Reporting with Shopify accounting is not much different than the process that's used with other financial reports. However, there are slight differences to note if you're using Shopify accounting services or software packages:
The Shopify accounting process has powerful tools available to generate accurate results on time.
Shopify accounting fees can affect your business, so staying updated on the latest rates and pricing methods is important—these costs can change how you price products. You must ensure that your income is always higher than your expenses and that you have a healthy profit to ensure your business thrives.
An ecommerce balance sheet is a financial statement that offers a snapshot of your company's financial position and growth potential at a specific time. It is divided into three main sections: Assets, Liabilities, and Shareholder Equity.
Assets represent everything that you own, including items you’re owed. Assets are divided into two categories: current and long-term. Current assets include:
Long-term assets are intangible assets, like trademarks and patents, that provide value over a longer period.
Fixed assets refer to items the company owns that have long-term value, such as buildings, machinery, and equipment.
To calculate assets, you have to use the standard balance sheet equation.
Total Assets = Total Liabilities + Shareholder Equity
Asset Category Examples:
Liabilities refer to your financial obligations, including money owed to suppliers, employees, and lenders. Similar to assets, liabilities are categorized into two: short- and long-term liabilities.
Current liabilities, such as accounts payable and wages, are obligations that must be settled within 3 months up to a year. Long-term liabilities include bonds payable, which will be paid over a longer timeframe.
Liability Category Examples
Shareholder equity or owner's equity represents ownership of the business expressed in monetary amounts. As a whole, this account also reflects the true financial standing of an ecommerce business and indicates its current value to its owners. A higher shareholder equity generally denotes a more financially stable and profitable company.
To calculate shareholder equity, we rearrange the balance sheet equation:
Shareholder Equity = Total Assets - Total Liabilities
By understanding how assets, liabilities, and shareholder equity are interconnected, you can assess the financial health of your company more accurately.
The balance sheet provides stakeholders an overall picture of the business’s health. But for Shopify business owners like you to manage your business well, you also must understand and pay attention to what’s going on with the other financial statements. Let's take a closer look at income statements and cash flow statements, which are both available on Shopify.
This document reports your revenue, expenses, and net income earned in a given duration. It's important to look at both the revenue and net income generated. If your store is making more money but also incurring higher expenses, this could be a sign that you're not making wise financial decisions, and you must adjust.
This statement tracks how much cash your store generates or uses. It helps you monitor positive and negative cash flow. This is important in keeping your business’s day-to-day operation.
The cash flow statement is oftentimes overlooked by some small business owners because balance sheets and income statements seem sufficient in telling how operations are doing. But running out of cash is a real problem—a critical mistake that can put a business owner out of business overnight. Paying attention to cash flow, through cash flow statements, helps prevent this.
Balance sheets are essential for stakeholders and business owners. Online sellers give more emphasis to balance sheets as it is one of the financial reports you need to decide the fate of your business.
Nevertheless, Shopify income and cash flow statements are also just as important. They help keep track of your company's finances in terms of inventory, revenue, and expenses.
Doing these financial statements right is important. By working with accounting experts, like who we have here at Unloop, you can easily get better balance sheets with accurate numbers that will help you identify what your business needs and make sound decisions. Plus, you’ll have the other financial statements taken care of along with it.
Are you ready to supercharge your Shopify finances? Get in touch with our team to know more about our bookkeeping services today.
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.
