April 6, 2020
How to Pick an Ecommerce Accounting Platform

How to Pick an Ecommerce Accounting Platform

Hey, it’s patti scharf CPA and co-founder of catching clouds the leader in e-commerce accounting Welcome back to another Saturday Slowdown where I like to remind everybody to work on their business and not just in their business To talk about how to pick the right accounting platform for your e-commerce business. I’ve been getting this question Everywhere all the time and I’m seeing it more and more online I think because more and more accountants are starting to realize that this is a question that they should be asking but it really needs to start with you the ecommerce business owner because You know, you’re the one you’re out there You’re getting you’re picking out your shopping carts and your payment processors and your reprice errs And your pay-per-click stuff your email market like you’re probably an app Overload at this point and you’re you know that you need to get control over your finances and you’re not really sure where to start So this is kind of to give you some advice to put you on the right path What options you should be looking at and where you should be going with that when you’re talking about keeping track of your accounting? I think everybody pretty much starts out on spreadsheets because it’s easy and it’s basically free but there are other options that are actually better for your business because You it has a double entry bookkeeping Element to it. If you don’t know what the heck I’m talking about I’m sure I’ve got a video if I have a video you’ll see something pop-up right here But in any case if you’re using a a double entry system then you can make sure that the money that’s going in and coming out is All accounted for when you’re doing your stuff, right? So there are lots of different tools on the market There is NetSuite at the very high end you might need NetSuite we’ve had clients who have outgrown us and gone to notes we Because they’re in the I don’t know 75 million dollar-a-year range or something like that. They’ve got really sophisticated inventory needs and they want to track everything item by item and NetSuite was basically built for that. It’s a really solid system people Love it or hate it. The funky thing about NetSuite is it makes the hard things easy and the easy things hard so Like if you’re going with something like zero or QuickBooks Online, which I’ll talk about in a second They have like automatic bank feeds where they can pull transactions directly from the bank into the system That suite doesn’t have that like you would think that if these More basic systems had that that NetSuite would be able to figure that out, but they don’t do that But they they work really well with the inventory and supply bag. So The downside to NetSuite is it’s really really crazy expensive like insanely expensive. So If you can get just as good of results, like, you know Keep your eye on the prize if you you know what you’re trying to get to is good financial information, and you can get there in a More cost effective way. I don’t know why you wouldn’t do that, but But there are so there are valid reasons You just need to know what those reasons are before you start doing your research There is a new tool called odoo, which is an open-source tool that a lot of companies are starting to check out They don’t have a long enough track record really for me to kind of get a sense in the market of where they’re at development wise but but the thing about odoo is that It costs less for the license But it’s going to cost way more for development because you’re basically creating a custom solution for yourself as you’re growing So so that’s something to be aware of but I think it’s a company to watch. I’ve been hearing lots of rumblings about them So well, we’ll see what happens with them the two big players in this space Right now are QuickBooks Online and zero If you’re an e-commerce seller Chances are you’re probably going to be on one of these. I know a lot of Accountants in particular who are like no. No, they should use QuickBooks desktop for enterprise because they have More robust inventory system and all that. Well the front QuickBooks desktop Is that QuickBooks desktop Doesn’t have what these cloud applications have zero and QuickBooks Online. They have this whole ecosystem of Different apps and things that plug in and can move information around and is accessible by people no matter where you are Whereas QuickBooks desktop, it’s kind of a pain in the butt to use. It’s why people are moving away from it because you if you want it in a central location now, you have to get a hosted server and blah blah blah like it’s a mess like If your business is in the cloud you should be using tools that are in the cloud So QuickBooks Online and zero, they are pretty much neck-and-neck I’m not going to go too much into them But go check out this video that I did a while back that’s comparing the two systems for e-commerce. I would say The end result is they’re kind of six of one half dozen of the other at this point But there’s been a lot lot lot of rumblings about QuickBooks online as of late in the accounting community I think that Technologically, QuickBooks Online and zero are pretty comparable. They’re pretty competitive They’re they’re kind of keeping each other in check as far as pushing each other in the industry. So it’s great that they’ve got this competition going to push things forward because it’s better for everybody in the industry when you’ve got a competitor who’s doing that but The problem with QuickBooks Online is they’re having a heck of a time Like Intuit itself is having a heck of a time there. There’s like a bunch of rumblings about TurboTax where they were hiding their free file System in the web searches and stuff. So dokin find this free filing system that they could use for taxes and they’ve Been raising their prices over and over and over like I just did a video. I want to say like ten months ago after a lot of people were unhappy with intuit because they had raised their prices again and they were like, what are my alternatives they keep raising their prices and That was less than a year ago and just this past week they announced Another price increase of like 16 percent or something like that. It’s it’s kind of crazy so a lot of people oh, and then the other thing is They just started this quickbooks live thing where they’re offering bookkeeping services Just to the general world Which I have some other comments about how that’s going to go but in any case there are a lot of accountants who are like freaked out about that and they’re like They’re cannibalizing our clients and they’re they’re gonna do a horrible job. And what are they doing? And they’re just like all up in arms So a lot of people are jumping ship from QuickBooks online and looking for alternatives So I have a feeling a lot of people are going to end up going to 0 which I guess is Good I don’t think QuickBooks Online is going anywhere As far as price increases zero hasn’t done any sense Basically, I started using them in 2012 So if they had a price increase, okay but it’s not the same as what’s going on over at QuickBooks Online where they’re raising prices like every Like a couple of times a year So I guess that’s something to be aware. There are other players in the accounting space like waivers Ojo or Whatever. They’re there a whole bunch of them who are kind of trying to get traction and stuff But the problem with these other tools is they don’t have the ecosystem that QuickBooks Online and 0 have they don’t have third-party apps That integrate with them that make them More powerful than they are alone so that’s something that you should be aware of and I think it’s especially important for e-commerce businesses because If you’re going to grow to any kind of real size, you’re going to want to have a cloud inventory system I’ve got a whole video about that right here and Zoho waive all those other guys, they don’t have that so So I think if you’re a small business you’re looking to do things on your own or with the consultant or whatever You should really be starting with either quickbooks online or zero and then growing from there I wouldn’t waste too much time on some of the other tools All right. So now you know, what kind of platform options there are Basically now it’s just time to evaluate everything and make a decision The first thing that you want to do is make sure that your operations are solid. Your operations are More important than the numbers right out of the gate. I mean, don’t get me wrong You need to know your numbers and you need to know them pretty quickly But the first thing you want to do is make sure that you know how How your business works how you’re getting products? Through the system and then where that data is and then you need to know what kind of data you need to be grabbing For your financials and to do that. You need the help of your Accountant who’s going to be in there looking at the data and helping to make sure that things go smoothly, right? So when you under when you can understand your operations, you’ll better understand your flow of data And once you understand your flow of data you can make that whole thing kind of streamlined one thing you want to make sure that you do is Create a system that’s going to scale. Like I know so many people who are like oh Okay, so I’m going to use Xero or I’m going to use QuickBooks Online and I’m using Shopify now I just need to know how to push each of those individual orders over into my accounting system and they do it and they have five orders a day and it works and they’re like Done. This is amazing and then six months later when they’re selling 10,000 orders a day. They’re like This is not amazing Okay, like they’ve just created this horrible nightmare and a huge mess and they have to scrap everything and start over So whatever your system you’re putting into place You need to understand how to create that system how to put it into place how to make sure it’s going to work for the long term make sure that it’s scales as you’re And again for that you need somebody who has some experience Working with bigger sellers who know how that all is going to work my other warning to you about picking the right person to work with you is you’re going to want to ask them like not only what kinds of clients they have like It’s not enough to ask people if they’ve worked in e-commerce before chances are because they’re like for millions Amazon sellers alone that somebody’s got an e-commerce seller or maybe a couple But I would be careful with the ones who have like one cloud inventory system that they recommend and they recommend that for all of their clients because It tells me that they don’t have a lot of sophistication with Or maybe not sophistication of a variety of clients so like if you’re a drop shipper or you’re a manufacturer or you do a lot of wholesale like you may have Like I would give different advice to those three different types of businesses I’m not going to try and put all three of them on the same cloud inventory system because it just doesn’t make sense for their so Even if a company is using like only zero or only quickbooks online, that doesn’t worry me What worries me is when they’re advising you on operational tools That are the exact same for all their clients because there is not one right fit for every single ecommerce business so my last bit of advice is to know your numbers and and Understand your financials like keep your eye on the prize You know that the end goal is to get good financial numbers so that you can make great decisions in your business so When you’re building out your system, you picked your platform You’ve got everything moved over your you’ve got a system and it’s humming along The final final check is do your numbers make sense if you’re looking at your financials Does it help you make good business decisions you know you You need to like if you’re looking at image your inventory number and that doesn’t make sense or your cost of goods sold that doesn’t make sense and you don’t have a don’t really understand how much cash you have or how to Like how quickly your inventory is turning over or all those different things. I mean, this is the whole point of accounting So if you can’t answer those questions or you don’t have somebody who is helping you get numbers That can help you make good decisions. Then you need to re-evaluate your process. You need to reevaluate who you’re working with or something needs to change so Just make sure that you know your numbers and that your system is working well for you, that’s it I guess that’s it. I will see you from my office next week. Hey I’ll be home. Well next week. I’ll be in New Orleans, but I’ll be almost home and the week after that I’ll be home for the foreseeable future. So you’ll start seeing me back in my office again, so I guess that’s it for this week. I hope you like this video If you did, please like comment and share if you haven’t already, please subscribe and I’ll catch you later

3 thoughts on “How to Pick an Ecommerce Accounting Platform

  1. Thanks for watching! What platform are you using, and what do you like/dislike about it?

  2. Great video, as always. QBO is increasing its pricing so often. It is now $70 per month. $840 per year… crazy… I can't justify pushing my client to it now. QBD is $70 per year.

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