March 31, 2020
Biggest mistakes Shopify sellers make in QuickBooks Online

Biggest mistakes Shopify sellers make in QuickBooks Online

Hey it’s Veronica Wasek
with Five Minute Bookkeeping and in this video I will talk
about the biggest mistakes that Shopify sellers make
with QuickBooks Online. (bright music) The biggest mistakes
that Shopify sellers make with QuickBooks Online, I
certainly have seen my share of them so let’s go ahead and get started. First one is recording net
sales into your QuickBooks. So basically, you’re not
capturing any sales deductions, any sales taxes or anything
that would give you details of what makes up those sales. One of the things that
you need to consider is that Shopify not
only is made up of sales but there’s also returns
and refunds, sales, taxes, deductions and all of those amounts need to be broken out so
you can get a clear picture of your profitability. On the QuickBooks side,
you’ll see only net payments deposited either from Shopify payments or from other payment processors. So ideally, as your shop
grows, as your business grows, as you need to get a clearer
picture of how your business is doing and what you’re
really paying for fees, or what your deductions are. Ideally, you want to then
start recording your sales at a more detailed level,
showing you what makes up the sales and deductions. Next, assuming that apps will automate, so “automate” and tasks and
eliminate all manual tasks. That is a common misconception. We think that, hey if
I just connect Shopify with this app or Shopify
and QuickBooks using an app that it should all be simple
and I won’t have to worry about doing any bookkeeping. Wrong, no you still have
to work on the bookkeeping, it may save you time in entering
some of those transactions but it’s not eliminating the
need to do your bookkeeping. Next is using the wrong app
and I have a separate video where I talk about apps that integrate Shopify with QuickBooks but
there are many that just bring in a whole bunch of details
over into your QuickBooks that, in my opinion, is not necessary. You don’t need to bring in
every single transaction from Shopify into QuickBooks, you just need to bring
in summarized totals. And the next mistake, and as
I already started telling you is syncing detailed
transactions into QuickBooks. So the wrong apps will,
at least in my opinion, the wrong apps will sync over every single transaction into QuickBooks. If you’re a high-volume
seller that is a whole lot of data to bring over, and
really it’s just cluttering things up in your QuickBooks
and eventually it will just slow down your database. If you’re a small seller
perhaps you can get away with just using a simple
app and bringing over every transaction but as
you grow that’s probably not the best thing to do. Next mistake, when you’re using those apps you may not have the ability to really manage how transactions are coming over from Shopify into QuickBooks. There are some integrations
that are very limited and only allow you to post transactions into very limited accounts. Whereas others allow you
a lot more flexibility in how those transactions come over. And the mistake that I see
many Shopify sellers make is that they don’t ever
look at that integration in that account mapping. So it’s very important to
look at the account mapping between Shopify and QuickBooks Online to make sure that
transactions are being mapped into the right account and
that it’s not going to cause a big mess by putting transactions
into the wrong account. The next mistake, and really it’s two mistakes in one. It’s thinking that you
need to sync your inventory between Shopify and QuickBooks Online, and attempting to manage your inventory in QuickBooks Online. QBO has a very limited functionality when it comes to managing inventory. And ultimately, that’s just
not going to work for you if you have a growing business. The best practice would be for you to use a cloud inventory app
to manage your inventory especially multi-channel inventory. At that point it really gets overwhelming and you really would not want to use QBO to manage your inventory. Next mistake, not
reconciling amounts received in the bank with Shopify amounts. So you may have an
integration between Shopify and QuickBooks, it’s bringing
over amounts received from Shopify but do those
amounts really match what’s being deposited
in the bank account? If they don’t, you need to be
reconciling those two amounts and figuring out what’s
different, it’s usually fees and those fees need to be recorded. Otherwise things are getting messed up and then you’re not really
capturing all of the fees. And next is PayPal, so
PayPal is not the mistake it’s just the problems
that come as a result of using PayPal. Now obviously you have
to give your customers multiple ways of paying you
and PayPal is very popular, I use PayPal. But, when you use PayPal,
PayPal has its own set of issues that you have to deal with from the bookkeeping side and things start to get messed up. Really PayPal acts as its own bank account and then you have to
know how to really work with those transactions so that, again, things don’t get messed up. And finally, assuming that
you can set up and do your own bookkeeping without
the help of a qualified Shopify and QuickBooks online accountant. I know that it’s very
simple to just purchase your QBO subscription and get started and you probably are excited
to be running your business and be doing your own bookkeeping. But, if things aren’t set up properly, if you haven’t really set
up the proper structure, to really handle all of the
different eCommerce transactions that you have, the
different payment processors that you’re using, you will
likely run into problems. So, if you have any questions
make sure that you check out the description box below
for how to contact me. Also check out the description box below for free resources, a link to
join my Facebook community. I’m Veronica Wasek with
Five Minute Bookkeeping, if this content is helping you,
make sure that you comment, like, share and subscribe to this channel so you can get all of my latest videos.

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