Running an ecommerce business comes with a lot of financial and operational complexity. It can be tricky to efficiently manage all the sales, inventory, and accounting needs that come with selling online.
Luckily, Xero provides features and integrations that can dramatically streamline ecommerce workflows. By leveraging Xero's accounting tools and inventory management partnerships, online businesses can optimize profits while saving a ton of time and headache.
In this post, we'll explore how Xero interfaces with platforms like Shopify to automate accounting, as well as solutions like Cin7 that synchronize inventory control. You'll learn the specific ways Xero can act as an ecommerce growth engine for your business by improving efficiency, providing valuable analytics, and facilitating scaling.
Introduction to Streamlining Online Sales with Xero for E-Commerce
Xero is a powerful cloud-based accounting software that can help e-commerce businesses streamline their online sales and operations. By integrating with platforms like Shopify, Xero brings financial data into one place to give merchants more visibility and control.
Exploring Xero Online for E-Commerce Efficiency
As an online accounting solution, Xero offers anytime, anywhere access to critical financial information. Key features like automated bank feeds, invoicing, expense tracking, and reporting provide the foundation for understanding e-commerce finances.
Xero also integrates with hundreds of business apps through the Xero App Store. For e-commerce sellers, apps like A2X for Amazon, Cin7 Core for inventory management, and others enhance Xero's functionality. These apps sync channels, centralize data, and eliminate manual processes - ultimately saving merchants time and money.
With real-time data flows between apps and actionable insights, Xero gives e-commerce businesses the power to make data-driven decisions to optimize online sales.
Which Xero Plan Is Best for E-Commerce?
Xero offers four pricing plans based on business needs. Key factors for e-commerce businesses to consider include:
- Number of sales transactions/invoices per month
- Inventory size and necessary tracking
- Number of users that need access
- Level of accountant collaboration required
The Xero Business plan adds features like 1099 contractor reporting, batch payments, and expense receipt scanning that benefit e-commerce. Multi-user access keeps staff aligned. While the top-tier Enterprise plan offers API access for deeper app integrations.
New Xero users can try discounted "startup" pricing for 1 year. Overall Xero keeps plans affordable relative to the time savings it can provide e-commerce businesses.
Maximizing Online Sales with Xero Integration Apps
The Xero App Store hosts over 1,000 apps across various categories to extend Xero's power. For managing online sales, key app categories include:
- Inventory: Apps like DEAR Inventory and Cin7 help track stock across sales channels and provide insights to optimize inventory levels.
- E-commerce: Shopify, Amazon, eBay, and other marketplace integrations bring all sales data into Xero automatically.
- Order fulfillment: Integration with shipping platforms like ShipStation or FedEx allows efficient processing of online orders.
- Reporting: Apps provide custom reports to analyze online sales metrics not available in Xero, helping to pinpoint areas for improvement.
With bi-directional data flows between Xero and these best-in-class apps, e-commerce merchants gain automation to save time on daily tasks. More importantly, Xero becomes the central source of truth providing comprehensive insights to make smarter decisions and maximize online sales.
Is Xero good for ecommerce?
Xero can be a great accounting software for ecommerce businesses. Here are some of the key benefits of using Xero for your online store:
Seamless integration with ecommerce platforms like Shopify and WooCommerce: Xero offers integrations with many popular ecommerce platforms through apps in the Xero App Store. These integrations allow you to automatically sync your sales, expenses, and other financial data between your store and Xero. This saves you time on manual data entry and reduces errors.
Inventory and order management: With integrations like A2X and Cin7 Core, you can connect your inventory and order data directly from your Shopify or WooCommerce store into Xero. This gives you a central place to manage all your inventory, orders, and accounting.
Powerful reporting and analytics: Xero provides reports and dashboards that give you real-time insight into the financial performance of your online store. You can track metrics like sales growth, profit margins, average order value and more.
Scales with your business: Xero has plans tailored for early-stage ecommerce businesses but also has features like multi-currency support that allow you to expand globally. It's a platform built to grow with an online retail business.
So in summary, Xero is an affordable, user-friendly, cloud-based accounting platform that integrates beautifully with many popular ecommerce solutions. For any internet retailer looking to get on top of their finances, Xero is definitely worth considering.
Can you use Xero for sales?
Yes, Xero offers several features and integrations that make it well-suited for e-commerce sales and online retail. Here are some of the key ways Xero can help streamline sales operations:
Inventory Management
Xero connects with various inventory management apps like Dear Inventory and Cin7. These apps allow you to:
- Track product stock levels in real-time
- Manage purchase orders and automate reorders
- Organize products with details like SKUs, photos, pricing
- Integrate inventory seamlessly with Xero accounting
This helps ensure you don't run out of stock and can fulfill orders efficiently.
Point of Sale Software
Xero integrates with POS systems like Vend and Shopify POS, enabling you to:
- Accept payments in-store or online via various methods
- Sync sales data with Xero in real-time
- Track daily takings and reconcile cash flow
- Gain insights on sales performance and customer trends
Using a POS system optimized for Xero makes in-store and online sales easy.
E-commerce Platforms
In addition to Shopify, Xero also connects with platforms like WooCommerce and BigCommerce. This allows easy management of:
- Online orders and fulfillment workflows
- Digital receipts and refunds
- Customer details and order histories
- Taxes, shipping, and payment processing
So you can focus on your products and customers while Xero handles the backend work.
Reporting
With a few clicks in Xero, you can generate reports on:
- Top selling products
- Sales by channel (in-store vs online)
- Customer lifetime value
- Cashflow during peak trading periods
- And more...
These insights help guide better sales decisions.
So in summary - yes, Xero is very well-equipped for modern sales operations through its wide range of integrated apps, platforms, and reporting tools. It takes care of critical finance, inventory and order management tasks so you can concentrate on serving customers.
What accounting software is best for ecommerce?
When it comes to choosing the best accounting software for e-commerce businesses, there are a few top options to consider:
Xero
Xero is one of the most popular accounting platforms for small businesses and startups. It offers a range of features tailored to e-commerce including:
- Integration with major e-commerce platforms like Shopify and WooCommerce
- Inventory and order management
- Automated bank feeds and reconciliations
- Invoicing and billing tools
- Reporting for sales, expenses, and profitability
Xero also has an App Store with over 1,000 integrations to extend functionality. Some useful apps for e-commerce include A2X for Amazon integration and Cin7 Core for advanced inventory management.
Overall, Xero strikes a great balance between ease of use and powerful accounting features. The starter plan is affordable for early stage e-commerce businesses too.
QuickBooks
QuickBooks Online is another excellent option, especially for small to medium sized e-commerce businesses. Key features that make it suitable for managing online sales include:
- Deep integration with eBay, Etsy, Shopify, and Amazon
- Barcode scanning and inventory tracking
- Order fulfillment and shipping management tools
- Customizable invoices and billing
- Reporting on sales, cashflow, and product profitability
One limitation is that some advanced inventory features require QuickBooks Premier or Enterprise plans which can get pricey. But for most small e-tailers, the starter Plus plan should suffice.
Zoho Books
If you're looking for an affordable but full-featured solution, Zoho Books is worth considering. Useful e-commerce related capabilities include:
- Integration apps for platforms like WooCommerce, Shopify, and Magento
- Purchase order and inventory control
- Packing slips and shipping label creation
- Recurring billing and invoicing
- Multichannel sales reporting
Zoho Books free plan also allows unlimited contacts and invoices which is rare for an accounting system aimed at smaller online businesses.
So in summary, Xero, QuickBooks or Zoho Books are great choices for most e-commerce accounting needs. Focus on finding the right blend of ease of use, integration capabilities, and affordability for your business.
How do you handle accounting when selling online?
Managing accounting for an online business can seem daunting, but with the right tools it can be simple and streamlined. Here are some tips:
Set up a separate bank account
Dedicate a business bank account specifically for your e-commerce transactions. This keeps online sales revenue and expenses separate from your personal finances.
Use accounting software
Choose software like Xero that seamlessly integrates with e-commerce platforms such as Shopify. This automatically imports sales data, minimizing manual work. Xero also handles invoicing, reporting, and more.
Track inventory
Use Xero's inventory tracking to monitor product stock levels. This syncs across sales channels to prevent overselling. Integrations with shipping apps also automatically update inventory when orders ship.
Understand cash flow
Accounting software gives real-time visibility into cash flow based on bank account transactions. This helps forecast costs and plan finances to support operations.
Save for taxes
Set aside a percentage of each sale to cover sales tax and income tax obligations. Xero can automate this with rules and reminders so you don't miss tax deadlines.
With the right setup, you can manage e-commerce accounting efficiently without needing extensive accounting expertise. The key is choosing software like Xero tailored to online sellers and leveraging app integrations to eliminate repetitive manual work. This frees up time to focus on growing your business.
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Setting Up Xero for Your Online Store
This section will cover the initial steps and best practices for setting up Xero to work effectively with your e-commerce platform, including Xero's startup discount and business plan options.
Taking Advantage of Xero Startup Discount
As a new business, you can take advantage of Xero's startup discount to save on subscription costs in your first year. When signing up, select the startup discount option to get 50% off on Xero's core plans for the first 12 months. This allows you to choose an affordable plan while establishing your operations.
The best Xero plan for e-commerce businesses depends on your transaction volume. Consider the Business Edition plan starting at $27 per month if you have 0-5 bank transactions per month. The Standard plan at $40 suits businesses with 6-19 bank feeds. For 20+ bank feeds per month, upgrade to the Premium plan at $60.
Seamless Shopify Xero Integration
Integrating Shopify and Xero automates the transfer of sales and expense data into Xero for streamlined accounting and reporting. Follow these steps for a seamless setup:
- Install the Shopify Xero integration app from the Shopify App Store
- Connect the app to your Shopify store and Xero organization
- Configure account mappings for sales, expenses, inventory etc.
- Set up any optional automation rules like bank feed imports
- Review integrated Shopify data now available in Xero
Top integration apps like A2X and Cin7 can be installed in minutes with no coding required. They also sync inventory, costs of goods sold, and other e-commerce data.
Configuring Xero for Multi-Channel E-Commerce
If you sell through other online channels besides Shopify, Xero can consolidate data from all platforms for unified financial reporting.
Key steps include:
- Set up a unique tracking code for each sales channel
- Map channel sales accounts to the right general ledger codes
- Use fixed asset tracking for inventory across channels
- Configure bank feed rules to import latest transactions
- Unify reports with online sales as sub-categories
Following these best practices ensures you can track sales properly in Xero no matter how many platforms you use to sell online.
Optimizing Online Sales with Xero Features
Xero provides several key features that can help e-commerce businesses optimize their online sales operations and financial management.
Automating Sales Data with A2X
A2X is a popular app available in the Xero App Store that seamlessly integrates Shopify sales data into Xero. This automation eliminates the need for manual data entry, ensuring accurate and up-to-date financial reporting.
Some key benefits of using A2X include:
- Automatic syncing of Shopify sales, fees, taxes and refunds into Xero
- Reconciliation of accounts for accurate record-keeping
- Support for multiple Shopify stores and currencies
- Easy configuration with no coding required
By reducing time spent on manual data tasks, e-commerce owners can instead analyze financial reports and identify areas for sales growth.
Understanding Financials with the Accounting Glossary
Xero contains an accounting glossary covering over 700 definitions to help small business owners understand key financial terminology.
With clear explanations of concepts like:
- Cost of goods sold
- Cash flow
- Inventory
- Chart of accounts
E-commerce managers can better interpret performance reports and make informed business decisions.
Gaining Small Business Insights from Xero Reports
Xero provides insightful reports suitable for small e-commerce businesses, including:
- Sales by product report to identify bestsellers
- Sales by customer report to spot loyalty trends
- Inventory and cost of goods sold reports to optimize stock levels
- Cash flow reports to predict future needs
By regularly analyzing these reports, online businesses can gain actionable insights to drive revenue growth.
Xero's automation, accounting tools and reporting capabilities help streamline e-commerce sales and provide the visibility needed to scale online operations.
Mastering Inventory Management with Xero and Cin7 Core
Synchronizing E-Commerce Inventory with Xero
Keeping your e-commerce inventory synchronized with your Xero accounting software is critical for getting accurate real-time visibility into stock levels. Here are some tips:
- Use an integration app like A2X to automatically sync inventory between platforms like Shopify or WooCommerce and Xero on a scheduled basis. This eliminates manual work.
- Enable the inventory tracking feature in Xero to closely monitor stock quantities. Set up separate inventory asset accounts for each product line or location.
- When new orders come in through your e-commerce store, fulfillment should automatically decrement inventory quantities in Xero for real-time accuracy.
- If you notice discrepancies between actual and recorded inventory levels, conduct regular cycle counts and make adjusting entries in Xero to align the data.
Leveraging Cin7 Core for Advanced Inventory Needs
For more complex e-commerce inventory scenarios, consider integrating Xero with Cin7's Core inventory management system. Benefits include:
- Cin7 offers robust inventory and order management tools beyond Xero's capabilities for high-volume merchants.
- It seamlessly integrates with Xero to transfer journal entries for inventory transactions, providing a centralized data source.
- Cin7 supports multiple warehouses, B2B/B2C sales channels, and advanced supply chain features like batch tracking.
- The integration reduces manual work by syncing stock data between the platforms automatically.
Streamlining Managing Inventory Processes
To further optimize your inventory management workflows using Xero, follow these best practices:
- Document detailed processes for order fulfillment, returns/exchanges, inventory counts, receiving inventory, and other scenarios.
- Eliminate unnecessary manual steps through software integrations. Prioritize automation.
- Assign inventory management roles and responsibilities across your team for accountability.
- Perform regular inventory audits and cycle counts for accuracy. Make adjustments in Xero.
- Use Xero's reporting tools to identify fast/slow-moving items and optimize stock levels accordingly.
By leveraging Xero's inventory features and integrating with purpose-built solutions like Cin7, e-commerce businesses can gain transparency into stock data and streamline workflows. This enables better-informed decisions and support for scaling.
Utilizing Xero's E-Commerce Tools for Business Growth
Xero offers powerful tools to help e-commerce businesses manage sales, gain insights, and support growth. Here's how to make the most of Xero's e-commerce capabilities:
Harnessing Xero's Sales Reports for E-Commerce Analysis
Xero's detailed sales reports allow you to break down revenue by product, sales channel, location and more. This helps answer key questions like:
- Which products are selling best?
- How much revenue comes from online vs offline sales?
- What locations generate the most revenue?
With this data, you can optimize your inventory, focus marketing efforts, and expand to new locations.
To access Xero's sales reports:
- Navigate to the Reports section
- Select the Sales tab
- Choose a report like Sales by Product Summary
- Filter by date range, sales accounts, etc
You can also customize reports to show exactly the e-commerce metrics you need.
Customizing Xero Dashboards for Online Sales Monitoring
Dashboards give an at-a-glance view of important e-commerce KPIs like:
- Online sales revenue
- Average order value
- Sales by marketing channel
To build a customized e-commerce dashboard:
- Create a new dashboard
- Add tiles for desired metrics from the Sales section
- Arrange tiles and set date ranges
- Save the dashboard
Now you have a centralized place to monitor online sales activity.
Integrating Shopify and Other E-Commerce Platforms
Connecting platforms like Shopify to Xero automatically syncs key data like orders, customers, and payments. This gives a single source of truth without manual data entry.
Benefits include:
- Streamlined order management
- Automated accounting workflows
- Complete visibility into e-commerce finances
To integrate Shopify or other platforms, visit the Xero App Store and connect the desired app. Popular options include A2X and Cin7.
With the right setup, Xero can be an invaluable asset for gaining insights, streamlining operations, and enabling the growth of e-commerce businesses.
Navigating the Xero Advisor Directory for E-Commerce Expertise
Selecting the Right Xero-Certified Advisor
When looking for a Xero advisor to help with your e-commerce accounting, it's important to find someone with expertise specific to online sellers. Here are some tips:
- Check the advisor's listed specialties - look for e-commerce, Shopify, online retail, inventory management etc. This indicates they have experience working with businesses like yours.
- Review client testimonials and case studies to verify the advisor's experience with e-commerce clients.
- During your consultation, ask about their experience helping e-commerce businesses get set up with Xero and optimizing their workflows. An advisor with hands-on Shopify-Xero integration experience will understand your needs best.
Leveraging Professional Advice for Streamlining Operations
A knowledgeable Xero advisor can help streamline your e-commerce operations in many ways, including:
- Integrating systems: Connecting platforms like Shopify and Xero to sync data between your store, inventory, and accounting. This automates manual processes.
- Optimizing workflows: Fine-tuning your processes in Xero to match your business needs. This increases efficiency through customized reporting, invoice automation, expense tracking etc.
- Leveraging apps: Identifying useful add-ons and extensions for Xero to eliminate bottlenecks in your e-commerce workflow. Popular examples are inventory management, shipping label printing and POS apps.
- Ongoing support: Providing continued guidance as your business grows to ensure your accounting setup scales sustainably.
Accessing Training and Support Through Xero's Network
Xero offers many avenues to access training and support from certified advisors and partners:
- Xero App Store: Browse e-commerce focused apps that integrate with Xero and read reviews from users with online retail businesses.
- Xero Advisor Directory: Search for advisors with expertise in your industry and location. Filter by specialties like "E-commerce" and "Shopify".
- Xero Events: Attend free webinars and seminars hosted by Xero showcasing e-commerce tips from advisors, app partners and customers.
Leveraging Xero's extensive network resources helps e-commerce businesses stay on top of accounting best practices tailored to their unique needs as they scale operations.
Conclusion: Synthesizing Xero for E-Commerce Success
This final section will summarize the key points covered in the article, reinforcing how Xero and its integrations can streamline online sales and drive e-commerce success.
Recap of Key Steps to Streamline Online Sales with Xero
- Integrate Xero with e-commerce platforms like Shopify using apps like A2X or Cin7 Core to automatically sync sales data
- Leverage Xero's inventory management features to keep track of stock levels in real-time
- Use Xero's bank feeds and automated workflows to simplify reconciliation
- Access custom e-commerce reports in Xero to monitor sales performance
- Configure user permissions so staff only see relevant data
Final Thoughts on Xero as an E-Commerce Growth Engine
In summary, Xero offers powerful accounting and inventory features to manage online stores. Combined with Shopify and other platforms through integrations, Xero gives e-commerce owners real-time visibility of finances and operations. This streamlines order processing, inventory tracking, reporting, and more. With the right setup, Xero can serve as a central hub to oversee all commerce data and fuel business growth.
