If you’re ready to work with an experienced and reliable financial pro on your e-commerce accounting, Feel free to use this link to book a free Discovery call with me. I encourage you to join my FaceBook community, 5 Minute Bookkeeping with QuickBooks Online, where you can ask your most pressing questions and interact with other e-commerce sellers, small business owners, and bookkeepers and accounting professionals as well. I hope my explanation helps you better understand whether you should track Shopify inventory with QuickBooks Online. By doing so, you will bypass having to track individual items, costs, and quantities in QuickBooks Online. Whether you decide to use a spreadsheet or an app to track Shopify inventory, you will take the total amount of your inventory at the end of the month and update the inventory amount in QuickBooks Online using a journal entry. Track inventory dollar amount in QuickBooks Online using a journal entry We have to be able to track the inventory dollar amount for accounting and tax purposes. Remember that although Shopify says you can manage your inventory in Shopify, you can only manage inventory quantities and not cost. ![]() Look at the different options and make sure the features address your inventory management needs. There are several different options including Ecomdash, Zoho Inventory, Cin7, and Skubana. While inventory apps aren’t free, they’re the most streamlined way of tracking and managing your inventory. Now let’s talk about using an inventory app to track your inventory. You can check out my video on getting your e-commerce inventory ready for tax time, which shows you how to fill out the spreadsheet. It’s the least expensive way (I’m giving it to you for free), but it does take time to update that spreadsheet. In fact, you can download my free inventory tracking spreadsheet HERE. A spreadsheet is the least expensive way to track your inventory. Tracking Shopify inventory with a spreadsheetįirst, let’s discuss using a spreadsheet. Take a look at the diagram to understand the big picture, then we’ll dive a little deeper and take a look at each option- using a spreadsheet or an inventory app. The diagram below shows the workflow of tracking Shopify inventory in QuickBooks Online. Take the total amount of your inventory at the end of the month and update the inventory amount in QuickBooks Online using a journal entry. You’ll need to track quantity and costs to get the dollar amount of your inventory. How do I track inventory?” You can track your inventory in a spreadsheet or by using an inventory management app. Now you might be asking yourself “Okay, then. The biggest mistake that my Shopify clients make is trying to set up all of the inventory details the inventory items, quantities, and costs, and end up making an unnecessarily BIG mess. If you need to keep a detailed inventory with costs and different levels of inventory, it likely won’t work for you. The inventory functionality in QuickBooks Online is also not very robust. It requires very different tracking for e-commerce purposes versus what we see in QuickBooks Online. You’re using Shopify to sell your products online. ![]() The functionality we see in QuickBooks Online inventory is for people who sell inventory out of a warehouse and invoice their customers directly.Īs a Shopify or e-commerce seller, you’re not invoicing your customers. One of the most important things you need to understand is that QuickBooks Online inventory is not really made for e-commerce sellers. For accounting and tax purposes, you need to track the inventory quantity and cost so you can reflect a dollar amount in QuickBooks. ![]() One thing you have to understand is when you track your inventory in Shopify, you’re only tracking inventory quantities not cost. Let’s go over some basics that you need to understand to track your Shopify inventory in QuickBooks Online. The basics on tracking Shopify inventory in QuickBooks Online
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