All business owners and eCommerce accountants know that sales are the lifeblood of a prosperous eCommerce business. The process of getting your products available on the web can be a daunting task. The start-up costs, ease of administration, and system functionality are essential factors in making the right choice. Shopify is a good option for business owners looking to start an eCommerce business or for an existing business looking to migrate to a new platform.
What are the benefits of Shopify for creating an online store for your business?
Set-up Complexity and Cost
Starting an eCommerce store on Shopify is a quick process. Shopify allows you to use the system, free of charge, for fourteen days. During the trial period, you can select your shop name, register a web domain, list the products sold, and upload photos of the products. Shopify offers online or phone assistance with any of these tasks. After the free trial ends, the least expensive plan starts at around $30 per month.
An alternative to using Shopify is to create an eCommerce site from scratch. Unfortunately, most business owners or eCommerce accountants do not have the technical knowledge to build such a site. As a result, you will have to pay a third party, which can be a costly and time-consuming endeavor. The launch of your site is out of your control, and the quality of the development may be sub-optimal.
Shopify allows your customers to pay for purchases using several standard methods. Credit card payments are processed by Shopify using a service called Shopify Payments. The sales for a given day are batched together and transferred into your bank account. Shopify charges a fee for their payment service. The funds transferred to the bank account are minus these fees. A good eCommerce accountant will be able to classify the sales and expenses correctly. To create accurate financial reports, gross sales must be classified as revenue, and Shopify Payment Fees are classified as expenses.
Customers can also pay for purchases using PayPal or their Amazon account. Both companies charge fees, and your eCommerce accountant needs to ensure that they are correctly coded.
Finally, Shopify provides the ability to offer deferred payment options. They allow customers to purchase goods immediately and pay for them later; however, you still get paid at the point of sale.
The reporting capabilities of Shopify are extensive. The main dashboard provides a snapshot of sales, the number of orders, returns, and hits on the website. Reports can be run at any time and include sales over time, sales by product, sales by channel, and customer sales. There are also profit margin reports, such as profit by-product or product variant.
Shopify also has reports that your eCommerce accountant can use. One crucial report is the Financial Summary, which includes sales, payments, gross profit, gift card liability, and sales tax collected.
At the more expensive Shopify subscription levels, custom reports can be created.
Shopify Fulfilment Network
Timely and accurate delivery of goods is a challenge for any eCommerce business. Keeping inventory on-site or utilizing third-party logistics firms are viable options. Shopify has a network of warehouses across the United States. Merchandise is sent to these Shopify locations in advance of its sale. When a sale is made, the order's fulfillment comes from the warehouse closest to the destination.
As any eCommerce accountant can tell you, integration between your Shopify store and accounting software is necessary. There are several options to link Shopify to accounting systems, such as QuickBooks and Xero. The cost for some applications is based on sales volume, while others charge a flat monthly fee. Your eCommerce accountant can work with you to select the best integration.
To maintain accurate eCommerce accounting some businesses use an inventory management system. Shopify integrates well with the significant inventory management applications.
Choosing the right method to make your eCommerce goods available for purchase is essential. It can also be a challenging process to decide if a change in platform is warranted. Shopify makes either of these decisions easier. System set-up is easy and can be accomplished in a relatively short amount of time. The system supports all major forms of payment. Between credit cards, PayPal, and Amazon, all your customers can quickly pay for their purchases. The reporting is sufficient for both the business owner and the eCommerce accountant. Finally, Shopify has good integrations with accounting software and inventory management applications. Your eCommerce accountant will be able to connect your Shopify store to other essential systems easily.