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Which version of QuickBooks is right for my business?This is one of the questions I’m asked most often by small business owners. There are a lot of options out there. If you’re looking for a cloud-based solution, there’s QuickBooks Online. If you have a Mac, QuickBooks Mac is a must. And even if you decide to go with the desktop software, you still have to choose between the Pro, Premier and Enterprise versions. Check out Intuit’s full product list with pricing to get an idea of your options.To help get the ball rolling on your decision, here are some of the main differences:There are many other factors to consider based on the nature and needs of your business. If you’re still having trouble picking the right software for you, I recommend consulting a QuickBooks Pro Advisor in your area. He or she should be able to take a look at your company and work with you to decide which will best fit your needs.
Do I use Sales Orders, Invoices or Sales Receipts?Sales Orders are used to track orders that you have received but not shipped. They need to be converted to an Invoice or a Purchase Order in QuickBooks.Invoices record the sale of an item to a customer, but they do not record the payment. The payment needs to be recorded in QuickBooks and applied against the invoice.Sales Receipts are used to record the sale and the payment. This is often the easiest way to record your e-commerce sales.
Do I need to capture all of the customer information in QuickBooks?I usually recommend not bringing customer information into QuickBooks. It often leads to a very confusing customer database if names are not entered exactly the same way, because you will end up with multiple records for the same customer.QuickBooks is a great accounting system; it is not a CRM (Customer Relationship Management) system. In most cases, you can set up a generic customer in QuickBooks for web orders to keep your QuickBooks data manageable.
How do I make sure I get accurate financial data?Making sure your Chart of Accounts and Item List are set up correctly is critical when creating the accounting foundation of your business. Every business is different, but the key areas are:
- Income Accounts — Make sure the Sales (Income) accounts are defined before you start downloading orders. If you want to track sales by different product lines of business or product type, consider using sub-accounts for your main sales account or perhaps using classes (in Premier or Enterprise) to separate product sales by type.
- Cost of Goods Sold — Much like Sales, if you wish to separate the product cost by type, use sub-accounts or classes to distinguish them. Also, any cost related to the product (i.e. shipping costs) should have its own sub-account.
- Sales Taxes — This can be a complete discussion in itself, but make sure you are capturing sales tax correctly and that you have the reporting necessary to provide accurate sales tax reporting. Every state is different and the rules are constantly changing, so you may to solicit advice from a local CPA or other reputable source.
We hope this gives you a good start on the basics of e-commerce accounting. In Part 2 of this series, we’ll get a little more in-depth. If you have questions Jim might be able to help with, let us know in the comments!
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