When syncing your Shopify store with QuickBooks, one important decision you'll need to make is how you want your orders to be synced: as individual transactions or as a single summary. Each approach has its advantages and considerations, and in this guide, we'll explore the key differences to help you make an informed decision.
Detailed Reporting: Syncing orders as individual transactions provides an accurate and granular level of detail. Each order is synced as an invoice or sales receipt, and recorded separately, offering comprehensive insights into your business's financial activity.
Accurate Inventory Tracking: Individual transactions contribute to accurate inventory tracking, as each order contains the exact product or variation ordered, resulting in accurate inventory asset and cost of goods sold in your QuickBooks accounts. Most importantly, these correctly affect inventory levels in QuickBooks, allowing you to use QuickBooks as a core platform to accurately track and update inventory levels.
Better Analysis: With individual transactions, you can analyze sales patterns, customer behaviors, and product performance more effectively. This level of detail can be valuable for strategic decision-making.
Reconciling Flexibility: With individual transactions syncing to QuickBooks as separate payments, it can be very easy to record them in clearing or bank accounts of your choice - and split by payment method on your site as well. From there, it's simple to clear daily deposits as they hit your bank account, especially with the support MyWorks has for transaction fees and bank deposits.
Increased Data Volume: Syncing orders individually may result in a higher volume of data. However, until you're in the range of 5k orders/month or above, this is what QuickBooks is built for, and does not have a negative impact on performance. In addition, MyWorks includes the ability to consolidate these transactions in other ways - like syncing some or all orders to a single customer.
Simple Reporting: Syncing orders as a single summary can reduce the amount of your financial records, as it results in a single transaction in QuickBooks for each day's sales.
Simple Reconciliation: With a single transaction in QuickBooks for each day's sales , reconciliation can be more straightforward, and make it simpler to match deposits as they clear your bank account.
Limited Detail: The main drawback is the lack of detailed information - as there will be almost no level of detail in QuickBooks around key areas of an order:
- individual products sold,
- sales tax collected,
- shipping or discount amounts,
- separate customer records/information
If the specific details of each transaction matter in QuickBooks, as they usually do, syncing orders as a single summary may not provide the level of granularity you need.
Analytical Limitations: Analyzing sales patterns or customer behaviors may be more challenging when dealing with summarized data. This approach may not be suitable for businesses that rely on detailed analytics.
Under-utilizing QuickBooks: Part of the benefit and value of the QuickBooks platform is the ability to handle large amounts of transactions and provide powerful and detailed reporting on the transactions present in QuickBooks. When detailed transactions aren't present in QuickBooks, you're wasting the benefit of what you're paying for in QuickBooks by not leveraging features like this that are available to you.
Choosing between syncing orders as individual transactions or a single summary depends on your business needs, the volume of transactions, and your preference for detailed reporting. Consider the trade-offs and prioritize what aligns best with your financial management and analysis requirements.
Remember, both options are valid, and the choice ultimately depends on finding the right balance for your specific business scenario.