Choosing the Right Accounting System for Your Shopify Business

Whether you’re just starting up your e-commerce business or you’ve reached the point where your DIY accounting doesn’t work anymore, here’s what you need to get your back office running smoothly.

Xero for E-Commerce

Here at Xendoo, we have chosen Xero as the accounting software with the most to offer Shopify online sellers. Xero offers eCommerce stores the ability to easily sync with third-party apps for inventory, point of sale, and more. From directly within the Xero software sellers can manage AP, AR, budgets, and category or division tracking.

  • Cloud-based
  • Customizable dashboard
  • Extensive reporting options
  • Inventory tracking
  • Accounts payable function
  • The stable framework allows the business to scale up

A2X for Shopify

This “connector” app saves you hours of work per week by integrating your Shopify store with your accounting system.

  • Automatic importing of store data into the books
  • Automatic bank reconciliation
  • Automatic adjustments for fees, refunds, etc.
  • Prevents mistakes caused by manual data entry
  • Summarized statements

TaxJar for Sales Tax

Another major time suck for e-commerce businesses is calculating, reporting, and remitting sales tax for every state where you have customers. (And it will only get worse in the years ahead as state tax codes tighten up.) TaxJar links with Xero to do all that for you.

  • Calculates sales tax based on each state’s nexus
  • Daily updates enable the timely filing
  • Automated filing option with AutoFile
  • Displays fines and penalties for delinquent filing
  • Shows what you should have collected and what you really collected

Shopify Apps

In addition to this accounting system set-up, Shopify offers more than 1,000 apps to help you with inventory, shipping, reporting, and much more. We suggest, however, that you fully explore the capabilities of Xero, a2X, and TaxJar before choosing additional apps, to avoid duplicating functions.

Another great feature of Shopify is its profit margin calculator. Simply plug in the gross cost of your product and a markup percentage, and it will figure out:

  • The sale price
  • Your profit in dollars
  • Gross margin

Outsourcing your Bookkeeping & Accounting

Although the currently available software makes life much simpler for e-commerce businesses than it was even five or ten years ago, you may still feel like you’re in over your head when it comes to bookkeeping and accounting. In that case, outsourcing to an online bookkeeper and online accountant should be considered — and it’s more affordable than you might think.

Xendoo offers in-depth knowledge of the accounting needs of e-commerce small businesses, from weekly bookkeeping to business taxes. And our flat monthly fee is less than half what you’d likely pay an hourly accountant. It’s our mission to give you the time and peace of mind to focus on making your business grow.


This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.


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