There are many different options out there to deal with your ecommerce bookkeeping. But, let's be honest, some are just better than others.
To find the best option for your DTC brand, the first question to ask yourself is what are you looking for - an accounting software where you manage your own books, an automated service that gets the bookkeeping done for you, or neither of the above?
If you aren't really sure what you want, you can take this quiz to help you figure it out.
This post will cover two great options for your business:
Quickbooks, a popular DIY accounting software used by many bookkeepers and CPAs versus Finaloop, an automated bookkeeping service working exclusively with ecommerce companies.
What's the real difference between Finaloop and Quickbooks?
For ecommerce companies, your bookkeeping should essentially encompass three key components:
Ecommerce bookkeeping = accounting software + bookkeeper + app integrations
- Accounting software : Where is your bookkeeping managed? Excel, Quickbooks, Xero, etc.
- Bookkeeper: Who is the one managing your bookkeeping? You or a professional?
- Integrations: How are your transactions being recorded from your banks, credit cards, sales channels, payment gateways, etc.?
The real difference between Quickbooks and Finaloop is this:
Quickbooks is an accounting software. You still need to consider who will manage the bookkeeping for you and how to integrate with your relevant apps. If you prefer to do it yourself or to pay for a bookkeeper, this can be a good option.
Some of the apps can be integrated using Intuit integrations, but for others, you would need to use third-party apps that would require you to set it up and monitor it.
Finaloop includes all three. Finaloop integrates with your apps and banks, categorizes and records your transactions, and manages your books in it's own accounting platform. (If needed, Finaloop can also sync your entries into Quickbooks).
DIY bookkeeping with an accounting software (e.g., Quickbooks)
Quickbooks is an excellent accounting software with many features and a large pool of integration options for ecommerce sellers (e.g., Shopify, Etsy, Paypal, etc.). Prices start from $16 for the Simple Start edition but you would likely upgrade to a higher tier of $25 or $35 per month to get the functionality you would need. In addition, certain integrations cost extra (e.g., A2X to integrate Amazon).
It's important to remember that Quickbooks is an accounting software only and not an accounting service. What this means is that if you don’t have accounting or bookkeeping knowledge, Quickbooks can be fairly complex and may easily result in inaccurate financials.
Quickbooks may be a good fit for you if you have intermediate to advanced accounting knowledge (this is why it's a preferred choice for many CPAs). At a minimum, you should be familiar with double-entry accounting (i.e., debit and credit), balance sheets, owner’s equity, bank reconciliations, and creating a relevant chart of accounts for your business. If not, any money you save by managing your financials yourself may be lost when you need to pay a CPA to correct the books come tax time.
Bottom line: Quickbooks has excellent features and integrations available. However, using Quickbooks to manage your books without a bookkeeper is not recommended if you have no accounting knowledge.
Automate your bookkeeping by using a SaaS solution (e.g., Finaloop)
Automating admin tasks can save you a significant amount of time and money so you can focus on growing your business.
By automating your bookkeeping with a SaaS solution like Finaloop, you have access to an accounting software but would be outsourcing the task of maintaining accurate financials to the experts.
Quickbooks software is cheaper than Finaloop (by about $34 per month, depending on the tier and size of your business). The price difference relates to the fact that Finaloop and QuickBooks offer two different services. QuickBooks is a software that you use to do your own bookkeeping. Finaloop is a service that does your bookkeeping for you.
By automating your bookkeeping with a SaaS company like Finaloop, you could reduce your monthly bookkeeping work from about 10 hours a month to about 15 minutes a month.
As a small business owner, your time is valuable. The real question to consider is whether about 9 hours of free time a month is worth $34 to you and your business.
Many business owners have chosen to stay with a bookkeeping option that is mediocre rather than having to face the question "is there a better way to do this?" and deal with a transition.
The fact that you are reading this means you are already asking yourself that question. Kudos! You are already heading in the right direction.
Quickbooks is a great option to save some money for small business owners with accounting knowledge and sufficient resources to handle about 10 hours of monthly bookkeeping work. If not, automating this process by trying out Finaloop can reduce your bookkeeping headaches, increase your accuracy, and give you more time to invest in growing your ecommerce business.
Still not convinced? You can register for Finaloop and try it free for 30 days. No commitment and no credit card required. It will give you a chance to explore what automated bookkeeping looks like and see if it's right for you.
We are a technology company providing automated end-to-end accounting service to ecommerce businesses. Our system connects to your apps, syncs all your data, and reconciles your books in real-time, replacing your bookkeeper. We offer reconciled books available 24/7, tax-saving insights, and a single place for all your financial data.
*The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only. Readers are advised to consult with their attorney or accountant with any questions or concerns.*