In any growing business, there comes a time when you realize that managing your finances with spreadsheets just won’t cut it anymore. If you’re selling on a marketplace like Amazon or eBay, or on your own online store with a platform like BigCommerce or Shopify, QuickBooks Online is a great way to track your orders, products, and expenses, and get a bigger picture of your financial health.
However, I’ve seen many QuickBooks Company Files in dire straits because the business didn’t take the time to set it up properly in the first place. Here’s what you need to do to configure your Company File so you can get the best visibility into your finances.
1. Enter your current account balances
First you need to tell QuickBooks Online how much money you currently have, so enter the balances for your company checking account and credit card. Don’t forget to make a balancing entry to your opening equity account!
2. Enter any outstanding bills and invoices
If you have any outstanding balances with vendors, enter those as bills to create your accounts payable balance. Similarly, if any customers owe you money, input those invoices to create your accounts receivable balance. Now you have an accurate record of who you owe, who owes you, and why.
3. Add your products
Keeping accurate inventory prevents overselling and helps you figure out which items are the most profitable. I recommend having a standard naming convention across all your sales channels and QuickBooks Online, which reduces confusion when managing your products.
If you’re using automation software like eCC Cloud, you can add your products to QuickBooks as you sync transactions. If you’re manually entering orders in QuickBooks Online, you can export your products as a CSV file from your store and import into QuickBooks Online. A word of caution if you take this route: make sure you carefully match your CSV fields to your company file!
4. Add your customers
I recommend that small online businesses don’t track individual retail customers in their accounting software. Just enter your wholesale and distributor customers in QuickBooks Online, and create a “standard customer” to use for retail sales.
5. Configure your company preferences
Finally, you’ll need to tweak a few additional settings that are specific to managing the finances of an online business.
In the Company Settings, make sure to turn on:
- Show Product/Service column on sales forms
- Track quantity and price/rate
- Track quantity on hand
In the Sales Tax tab, edit your Sales Tax Settings to:
- Charge sales tax
- Mark all new customers taxable
- Mark all new products and services taxable
That’s it! Now you’re ready to harness the power of QuickBooks Online for your e-commerce accounting. If you’re ready to do away with hand-entering your orders and manually adjusting your inventory, sign up for a free trial of eCC Cloud and enjoy the ease of automated accounting.