Why Ecommerce Bookkeeping Automation Is a Must for Your Business Growth

Running an ecommerce business opens the door to many opportunities. But let’s be honest, it can also be stressful. You’ve got products to manage, orders to ship, and customers to keep happy. On top of all that? Ecommerce also brings manual tasks like bookkeeping that can slow you down, especially when it comes to handling sales tax.

Ecommerce bookkeeping is one of those processes that often gets pushed aside. It’s slow. It’s boring. And it’s easy to mess up. But bookkeeping can become a big deal when tax time comes, or you must analyze your expenses.

That’s why more and more ecommerce businesses are turning to automated bookkeeping. And the reasons are pretty simple.

It takes care of the numbers faster, with fewer mistakes, and without the daily hassle. Plus, with automated bookkeeping, you can get a clear view of your finances.

In fact, around 60% of retailers have already implemented AI into their bookkeeping systems. Big companies like Walmart, Amazon, and Target have made the switch. So why not you?

In this article, we’ll talk about ecommerce bookkeeping and why it should be automated. Let’s dive in!

Ecommerce Bookkeeping: The Basics You Need to Know

You’re probably selling on multiple platforms using different payment apps. And we guess you might be dealing with many currencies. That makes things more complicated. And let’s be honest! Tools like QuickBooks or Xero don’t always cover everything, even with plugins or integrations.

That’s where bookkeeping for ecommerce can work perfectly. It’s about recording and managing your online store’s finances: your income and expenses. It tracks your sales, returns, platform fees, inventory costs, marketing spend, payroll, and more.

In short, ecommerce bookkeeping helps you stay on top of your numbers. So, you can make smarter decisions and grow with confidence. But how can you use it? Let’s reveal that further down!

Examples of bookkeeping for ecommerce

So, what does ecommerce bookkeeping look like in action? Here are a few real examples to understand how you can use it for your online store:

• Tracking and sorting financial transactions: Every time money moves in or out of your business, it needs to be recorded. These transactions are sorted into categories like income, expenses, or equity. So, instead of relying on spreadsheets, you can use accounting software that speeds up this process.
• Managing what you owe and what you’re owed: Bookkeepers keep an eye on bills you need to pay and money you’re supposed to receive. This helps you stay on top of your budget and avoid cash flow surprises.
• Creating and sending invoices: Invoices are important for confirming transactions with customers. Ecommerce accounting uses automated tools to send and track invoices. So, it’s easy for them to stay organized and avoid missing payments.
• Matching your books to your bank account: To make sure everything adds up, bookkeepers regularly compare your financial records with your actual bank statements. It helps catch errors or missing transactions.
• Keeping track of inventory: Bookkeepers also help track what’s in stock and how much it’s worth. They can use inventory management software to better deal with forecasting and financial planning.
• Handling sales tax nexus requirements: As your business grows and starts selling in different countries, you might create a sales tax nexus. It’s a legal obligation to collect and remit sales tax in those regions. Bookkeeping software can help you stay compliant by tracking where you have a nexus and ensuring taxes are collected and filed correctly.

Now that you know how bookkeeping for ecommerce business works, let’s look at its different types. Hope this will help you figure out which one best fits your needs.

Types of Ecommerce Bookkeeping

When it comes to ecommerce bookkeeping, there are two main types you can choose from: cash basis and accrual basis. Each has its pros and cons depending on how your ecommerce business runs.

Cash basis bookkeeping

This ecommerce bookkeeping type is the simplest. You record money when it moves. It means you log income only when the money hits your bank account and record expenses only when they’re paid.

So, if you sell a product today but the payment lands in your account next week, you record it next week. The same goes for expenses like shipping fees or sales taxes. You log them once they’re paid, not when they’re due.

Why use it?
Cash basis bookkeeping is great for a small ecommerce business or startup because it’s easy to manage and shows a clear picture of your cash on hand. It also works well if your company doesn’t carry large amounts of inventory or rely heavily on inventory management systems.

Downside
It doesn’t show the full picture, like money you’re expecting to receive or bills you still need to pay. So, it’s difficult to plan ahead.

Accrual basis bookkeeping

This ecommerce accounting method tracks transactions when they happen, not when money moves. If you make a sale today, it gets recorded today, even if you don’t get paid until later. Same with expenses: you log them when they’re billed, not when they’re paid.

Why use it?
Accrual ecommerce accounting gives a more accurate view of how your business is performing. It helps you understand ecommerce trends, especially during busy seasons or when you offer delayed payments. This method also improves the accuracy of your financial statements, since it reflects income and expenses in the periods they occur.

For example, if you get a spike in orders before Christmas but let customers pay later, the accrual method still shows the real sales activity in December, not months later when the money comes in.

Downside

It’s more complex and may require extra tools or help from an accountant.

If you’re just starting out or want a simpler system, cash basis might be enough. But if you want deeper insights and long-term planning, accrual might be worth the extra effort.

Need help with ecommerce accounting software? Contact Forbytes, and our team knows ecommerce inside and out and is ready to support your business.

Why Bookkeeping Automation Is Important for Ecommerce Business

Today, many ecommerce owners feel their bookkeeping service just doesn’t get how online businesses work. The main reason is that companies are still doing their bookkeeping by hand instead of using accounting software. It’s slow, stressful, and eats up time. If you want a clear picture of your financial records and less stress at sales tax time, automating your ecommerce bookkeeping is a must.

According to Gartner, finance automation technology is the integration of machine learning and artificial intelligence that reduces the need for human intervention. Let’s uncover what other benefits you can gain by automating your bookkeeping operations!

Better business financial health

To understand how your ecommerce business is doing, you need to track your income and expenses, including key metrics like cost of goods sold. Ecommerce bookkeeping automation makes this easy and gives you a clear view of your finances. With this information, you can make data-driven decisions.

Accounting software also helps you catch problems early. For example, if your sales suddenly drop, you can use your financial data to quickly find out why. It’s like having a financial roadmap that keeps you on track and helps your business grow faster.

More efficient ecommerce management

Every day, you deal with many daily transactions, changing inventory, and sales on different ecommerce platforms. It’s easy for things to get out of control. Without proper ecommerce bookkeeping, you might lose track of cash flow, miscalculate profits, or miss sales tax deadlines.

Automated bookkeeping for ecommerce keeps your finances on track. First, it helps you monitor inventory across all sales channels. Second, it helps you match payments from different platforms. Finally, accounting software uses intelligent automation to help you do better during busy sales like Black Friday or Christmas. So, you’ll have more accurate and organized data to make smarter business decisions.

More accurate inventory tracking

Inventory is the basis of any ecommerce business. Without accurate inventory tracking, you risk running out of your best-sellers or holding onto slow-moving products for too long.

Automated ecommerce bookkeeping makes inventory management easier to see which products are performing well and which aren’t. It also gives you better insight into related costs like payment processing fees that can eat into your margins. If certain items have been staying on your shelves for too long, you can run a promotion to free up space and avoid unnecessary storage costs.

Avoiding tax mistakes

Let’s admit that tax season is stressful enough. Imagine trying to calculate your sales taxes without any sales records. You’re not only making things harder for yourself, but also increasing the chances of making costly mistakes and falling out of tax compliance.

With automated bookkeeping in ecommerce, your accountants can easily calculate what you owe, ensure everything is submitted on time, and help you avoid penalties or late fees.

So, now you can see how many benefits automated ecommerce bookkeeping can bring if you decide to integrate it into your business. But the next step is understanding what accounting software can help you get the job done. We’ll cover that in the next section.

Required Tools and Integrations for Effective Ecommerce Bookkeeping

According to TechCrunch, the AI bookkeeping startup Finally, which helps businesses manage their finances, has raised $50 million in new funding and secured a $150 million credit line.

What does it mean? More and more companies are moving toward automating their financial transactions and generating real-time financial reports that support better decision-making. And you can do the same to work faster and smarter. That’s why we’ve created this list to help you find the right tool for your business.

Xero

Xero is a cloud-based accounting platform that helps businesses track income, expenses, inventory, and more. It suits perfectly for growing ecommerce teams that sell across multiple sales channels.

Key features:

• Manage income and expenses
• Send invoices and pay employees
• Track inventory and generate reports
• Automate bill payments and bank reconciliations
• Multi-currency support
• Connects with over 1,000 apps, including Shopify and WooCommerce

Why ecommerce brands love it:

You can automatically sync sales and inventory from your online store into Xero, so you spend less time on manual work.

Why Xero may not be the best option for you:

Xero can be too expensive for very small businesses, especially if you need extra features or apps. It’s easy to use at first, but some tools are harder to learn and don’t let you customize much.

QuickBooks

QuickBooks (by Intuit) is a well-known accounting platform that offers a powerful cloud version called QuickBooks Online. It is best for sales tax support and advanced reports, making it a solid choice for managing cash flow.

Key features:

• Invoicing, receipts, and purchase orders
• Bill and vendor management
• Built-in payroll
• Automatic sales tax calculations
• Multi-currency support
• Alerts for low inventory
• Customizable reports (P&L, balance sheet, etc.)
• Syncs with Amazon, Shopify, Etsy, PayPal, and more

Why ecommerce brands love it:

QuickBooks makes tax season easier with built-in tax help and smart reporting tools. It’s especially great for brands selling across multiple platforms.

Why QuickBooks may not be the best option for you:

QuickBooks has some limits, especially for bigger or more complex businesses. The system can crash, and it doesn’t always back up your data. There are restrictions on file size, users, and the number of transactions. You might also need to use other tools, which can lead to double entry and mistakes.

Sheetify

Sheetify is a Google Sheets-based bookkeeping template designed for small ecommerce platforms. It’s simple, clean, and super customizable. So, Sheetify is a great option for tracking financial health.

Key features:

• Track income and expenses
• Create invoices and quotes
• Built-in tax calculator
• Pre-set formulas and categories
• Easy-to-navigate design
• One-click tools to add and scroll through records

Why ecommerce brands love it:

It’s a great fit for business owners who already use Google Sheets and want a no-fuss way to manage finances without subscriptions or complicated dashboards.

Why Sheetify may not be the best option for you:

Sheetify Bookkeeping doesn’t connect to ecommerce platforms like Shopify. So, you have to enter data manually. It also lacks advanced features like inventory management, payroll, and multi-user access.

As you might guess, there’s no perfect, off-the-shelf bookkeeping software that fits every business need. That’s why it’s smart to look at the downsides of existing tools and consider building a custom solution that automates your operations and supports all the ecommerce integrations you need.

If you’re looking for a team to help, contact Forbytes! We can build a custom bookkeeping system that handles routine tasks and frees your team from manual work.

Ecommerce Success Story: How Forbytes Helped the Client Automate Bookkeeping Operations

Home Furnishing Nordic (HFN), one of the top furniture retailers in the Nordics, faced a big challenge: their systems weren’t connected. Payments were tracked in one place, stock in another, and managers had to switch between tools just to see the full picture. It slowed everything down and created a lot of manual work.

That’s when HFN turned to Forbytes. Instead of replacing everything, our team focused on smart integrations. We connected the tools HFN already used and made them work better together.

We connected their payment provider, Svea, to automatically sync daily payment data. Then we integrated Microsoft Dynamics NAV, their ERP system, so finance, supply chain, and admin tools could all share the same real-time information. Finally, we built custom warehouse systems for their three main locations, enabling livestock updates and smoother logistics.

The result? HFN now runs on real-time stock updates, daily synced financial data, and seamless automation across three key systems, saving time, cutting errors, and making everyday operations more efficient. And with integrated bookkeeping services, HFN can easily keep track of finances and focus on growth.

Let’s Drive Bookkeeping Automation for Your Ecommerce Business Together with Forbytes

Ecommerce bookkeeping automation is no longer a nice-to-have, it’s a must for growing ecommerce platforms. From managing multi-channel sales and tracking inventory to preparing for tax season and spotting sales trends, automated bookkeeping brings clarity and control to your finances.

At Forbytes, we help ecommerce companies integrate the best bookkeeping services and tools into their existing systems. Whether you’re using QuickBooks, Xero, or a custom solution, our team knows how to make everything work smoothly together. Let’s simplify your financial management and set your business up for smarter, faster growth.

Ready to take the next step? Reach out to Forbytes and discover how easy and effective bookkeeping automation can be in the ecommerce industry.