We get it. We’ve been there. Starting a new business can be as daunting as it is exciting. If you’re a typical entrepreneur, cash flow is at the top of your worry pyramid. In fact, it goes without saying that when you run out of cash, you run out of business. As a means of preserving cash, you may do what many of us do, and trade your valuable time (“soft cost”) for the costs of actually investing into tools and much needed technology (“hard cost”). After all, entrepreneurs are experts in multi-tasking and working 29 hour days. If it means saving cash we can flawlessly execute on whatever needs to get done, right?
As an example, many Shopify entrepreneurs are found caught sacrificing their time when it comes to getting e-commerce sales entered into their QuickBooks Online company. Instead of establishing integration between these 2 key business systems, the viewpoint is typically that their business is either too small or there are just not enough sales to justify automation. However, when you consider that you could integrate Shopify with QuickBooks Online for as little as $19 a month, the manual route could in fact prove to be the far more costly option, in more ways than one.
The remainder of this article outlines 5 key pitfalls to pay attention to when your Shopify store is not integrated with QuickBooks Online. If you’re experiencing any of these issues, you may want to consider establishing automated integration sooner than later.
1. Time Spent on Manual Entry is Time Not Spent on Growth
When your systems are not integrated, someone, someway, somehow, has to retype your Shopify sales into QuickBooks Online. This is a tedious, recurring task that can be as time consuming as it is a distraction from focusing on more important things, such as improving your e-commerce store’s conversions and sales. If you are thinking that you will just have someone manually enter sales into QuickBooks Online, think about the actual cost (hard or soft) of this decision, and how that compares to just $19 a month for a fully automated solution.
Regardless of who manually enters your sales into QuickBooks Online, statistics show that mistakes are inevitable. Errors caused by manual data entry include transpositions and omissions, which can be costly, particularly when such errors go unnoticed for a period of time. In fact, research firm Gartner reports the average cost of poor data quality on businesses is between $9.7 million and $14.2 million.
One of the biggest concerns you might face when entering sales manually is the potential for mistakes in tax filings, and missing important tax filing deadlines. Automating the flow of accurate and timely information about sales helps to reduce tax risks and the potential for compliance penalties.
The bottom line here is that regardless of what stage your Shopify venture is, manual entry becomes a costly distraction. Having to clean up data entry mistakes, address tax filing issues, and unnecessarily draining working capital will likely slow your business’ growth.
2. Disappointing Customers with Out of Stock Items
Nothing will let the air out of your e-commerce balloon faster than having to call back customers and break the bad news that you cannot ship the item(s) they fell in love with because said items are actually out of stock.
How does this happen you ask? Simple. It’s another side effect of not integrating Shopify with QuickBooks Online. When your e-commerce sales are not integrated with your backend system, there is a time lag that causes your systems to be out of sync until such time as the sales are manually entered into QuickBooks Online. If you are already integrated but your sales are only synchronizing with QuickBooks Online once per hour or once per day, you still run the risk of overselling inventory, as integration needs to occur as instant as possible. This problem is even more exasperated when you have multiple stores connected to a single inventory source (e.g. omni-channel). The easiest way to think about this problem is the wider the gap between the time of a sale and the time it takes for inventory data to update, multiplied by the velocity of sales, the bigger the risk of overselling becomes.
3. Orders Ship to Customers Late or Incorrect
Once those customer orders start rolling in, you have to move promptly to deliver on time. Customers expect (and I mean expect) top shelf service. Any delay or mistake that flips the last mile fulfillment process sideways, can drive your customers right into the hands of your competitors. Two of the most common logistical problems that can occur are a) shipping late to customers, and b) shipping the wrong items.
A decent integration tool with operational oversight can empower you with the basics of ensuring your shipments go out on time, inclusive of being able to establish internal Service Levels (SLAs) that bring your attention to any risks of late shipments. Real-time integration between Shopify and QuickBooks Online brings additional value to your business process by sending your orders through the fulfillment cycle as rapidly as possible, empowering you to fulfill customer orders accurately and quickly, and strengthening your store’s brand in a competitive marketplace when you consistently deliver what customers expect, as they expect it.
4. Lack of Visibility to Your Key Business Metrics
In a marketplace where competition is fierce, having accurate data at your finger tips is essential for making intelligent, timely business decisions. When using both Shopify and QuickBooks Online, the best way of gaining visibility into these key sales and financial metrics is by leveraging the most real-time integration possible. Synchronization with QuickBooks Online that is delayed even by just an hour, can lead to gaps that cause incorrect analysis, and impacts your ability to make proper decisions for your business.
You and your accountant must have an accurate view of sales, inventory, cashflow and other key performance indicators that bring clarity to the most efficient and intelligent investments into your Shopify store’s success. Efficiently managing working capital and inventory replenishment can only occur when your finger is instantly and always on the pulse of your business’ heartbeat.
5. Loss of Your Competitive Edge
Think about it this way. If you drive a Toyota Corolla, would you think you can win a race against a Ferrari (with all due respect to the Toyota)? It’s virtually impossible to keep up with your competitors when you’re not leveraging an automated integration solution for your e-commerce store, particularly when they are. Your competitors will have the advantage, and a stronger handle on managing cost effective inventory that increases their profits, ensuring that items are in stock and delivered to customers on time, and maintaining a high degree of customer satisfaction. It will be very difficult to outflank them, and they will win the race each and every time.
It’s exciting to have an opportunity to start and grow a Shopify store! As you maintain good stewardship of your working capital, make sure to avoid these critical issues that can impede your plans for growth and success. Whether you’re just getting started, or you’re well on your way, automating integration between Shopify and QuickBooks Online can prove to be one of the best investments you make. For a relatively low operating cost, it will free up your resources (including your time), help you gain competitive advantage and drive your business to success.