Should ecommerce businesses use AI for bookkeeping?

May 10, 2023

6 reasons why you are wasting your money on traditional bookkeepers

6 reasons why you are wasting your money on traditional bookkeepers

With 84% of ecommerce businesses either actively working AI solutions into their business or having it as a top priority, ecommerce is one of the leading adopters of AI.

If you aren’t already thinking about using AI or Machine Learning for your ecommerce accounting and bookkeeping for your Shopify or Amazon store, here are 6 reasons why it's time to make the switch!


6 reasons why it's time to stop throwing away money on traditional bookkeepers each month

1) Most don’t understand ecommerce and DTC

With confusing sales tax laws, high transaction volumes, and complex inventory management and returns issues, ecommerce accounting and bookkeeping are a lot more complicated than bookkeeping for brick & mortar stores. 

While the basic structure of all bookkeeping is generally the same—assets, liabilities, equity, income, and expenses—the breakdown of each category, the specific issues important for you to understand for your business, and the technology needed to properly record all transaction details are dramatically different from your physical store counterparts. 

Having an ecommerce tailored AI booking software that is built to understand these differences, will help you get the most value and insights from your financials and prevent major issues down the line. 

Read more on why ecommerce bookkeeping so different than other industries in our blog Ecommerce bookkeeping: 6 tips every ecomm business needs to know.

2) Inaccurate books

As talented as your bookkeeper may be, they just can’t keep pace with the constantly fast-moving world of ecommerce - it's not humanly possible for them to pull all the data at the pace ecommerce businesses move and get it right. Traditional bookkeepers often rely on manual data entry, which increases the risk of human errors. Mistakes in recording transactions, inventory counts, or financial calculations will lead to inaccurate financial statements and reporting. 

AI accounting systems are designed to minimize the risk of errors in financial reporting. AI-powered bookkeeping systems can automate many routine and repetitive tasks, such as data entry, invoice processing, and bank reconciliations. It pulls the data directly from the sources of truth - Shopify, Amazon, Walmart, Stripe, Paypal, Gusto, banks, etc. - at a speed that a human can't compete with.

This not only saves time but also reduces the risk of errors, as AI systems can accurately process large volumes of data much faster than humans. They can flag discrepancies and identify inconsistencies in data, reducing the risk of fraud or other financial irregularities.

3) Consistently delayed books

If you were to ask your bookkeeper for an up-to-date P&L, cashflow statement, and balance sheet, or even what your current overhead expenses were per day, they wouldn’t be able to tell you. You would have to wait until the month’s books were closed!

Sounds, ridiculous, right? Would you accept this kind of delayed response from any other service provider?

How can you make fast decisions about the future of your business if your bookkeepers can’t give you an accurate overview of your financial situation until the next month?

With AI bookkeeping, you won’t have to worry anymore about receiving delayed books. You can get a live overview of all of your financials—including your P&L, Cashflow, and Balance Sheet.


4) They use generic Chart of Accounts (CoA)

A CoA is the breakdown and structure of your financials. ‍A well-defined CoA improves your ability to monitor and analyze the financial performance of your business through meaningful reports and can directly impact your decision-making process. 

The one-size-fits-all list of accounts does not, in fact, fit all. The standard CoAs, such as the Quickbooks chart of accounts, are not created with today's ecommerce business in mind. Ecommerce businesses don’t work like brick & mortar stores and the accounting treatment and CoA breakdown should not be the same. Don’t underestimate the importance of setting up your books based on ecommerce best practices. 

Read our blog on Setting up your ecommerce chart of accounts for success 

5) Limited data analysis and insights

Traditional bookkeepers don’t possess the same level of data analysis skills as AI bookkeepers. Analyzing and extracting valuable insights from financial data is crucial for optimizing your business operations and identifying growth opportunities in the ecommerce industry.

AI systems can help your ecommerce businesses gain deeper insights into your financial data. They can analyze patterns and trends in sales, expenses, and other financial metrics, providing valuable insights. 

6) Limited scalability

As your ecommerce business grows, your accounting needs will become more complex. Traditional bookkeeping methods struggle to handle the increased volume of transactions and the need for real-time financial information. Scaling up traditional bookkeeping processes can be challenging and may lead to inefficiencies.

AI bookkeeping systems can easily scale up or down to handle changes in the volume of transactions, making them ideal for your ecommerce business when you experience fluctuations in sales volume.

Is it enough to use a bookkeeping software like QuickBooks Online (QBO) or Xero?

The short answer is no.

The long answer is noooooooooo.

Many ecommerce owners and bookkeepers take the standard Quickbooks bookkeeping process, add an Intuit ecommerce service or third-party integration, such as OneSaaS or A2X to integrate with their store platforms, point-of-sale systems, fulfillment, and other ecommerce platforms to Quickbooks Commerce and consider this ecommerce bookkeeping.

While bookkeeping software, like QuickBooks Online (QBO), Xero and others, are tools to manage bookkeeping and accounting, they require a bookkeeper's expertise and time to actually do the bookkeeping  - classify transactions, enter bills, collect invoices, match payments, and reconcile discrepancies. A Tax CPA would also be needed to prepare ongoing and year-end tax filings.

Adding ecommerce integrations is only one piece of the puzzle in making your books ecommerce-friendly. 

So should I use AI and Machine Learning for my ecommerce bookkeeping?

For the overwhelming majority of ecommerce and DTC brands, the answer is yes, you definitely should!

Unless you have a bookkeeping or accounting background, a lot of the important nuances of ecommerce bookkeeping may be lost in your books. So, just like ChatGPT needs a human to review the content it produces, it's important to make sure any bookkeeping solution you choose, has the ecommerce knowledge you need to get the most from your financials.

Finaloop combines Machine Learning technology with human accounting and ecommerce experts, to replace ecommerce and DTC accounting software, app integrations and bookkeeper. 100% accuracy guaranteed, we provide you with historical catch-up in less than 48 hours, your books in less than 15 minutes /month and can do your taxes in less than 3 hours/year.

Sign up HERE to get your financials set up today.

About Finaloop


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, your accounting software, and your ecomm integrations. 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.*

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