When it comes to posting your ecommerce transactions to QuickBooks, there are a few options to choose from:
- Post a general journal entry at the end of the month/quarter/year
- Post individual transactions as they occur, in real time
- Post a summary of your transactions each day/week/settlement period
Each has its own merits and drawbacks, which is why it’s important for retailers to understand the ins and outs before selecting a setting.
If you have a need for speed, journal entries are the way to go. You can post an entry for each month, quarter, or year, and this also minimizes the volume of data flowing into QuickBooks.
Journal entries give you limited financial insights because the aggregated data prevents you from making granular decisions such as which products to discontinue. If/when you do make these decisions, they’ll be made too late because you’re reacting to delayed information, rather than being proactive.
QuickBooks wasn’t designed for journal entries, either. Journal entries are for rare circumstances like making corrections rather than for long-term bookkeeping. They also facilitate less accountability and weaker audit defense.
Real-Time Transactional Accounting
The real-time data you can get from QuickBooks is invaluable and something you should be taking advantage of because that’s what the accounting software was designed for. More granular data offers the most accurate look at your inventory levels and the most up-to-date look at your cash flow. This level of detail helps you be proactive and make smarter business decisions.
Financial insights can help you answer these questions and more:
- Which products and customers are the most profitable?
- Which products should be discontinued?
- Should I raise prices in certain stores?
- Which geographies are the cheapest to ship to?
- Do I have enough cash flow to hire more people?
- Should I stop selling in certain channels?
All this information may seem overwhelming, but at the end of the day, it’s often worth the extra effort to gain the peace of mind and know what’s happening with your business.
The main drawbacks of posting each transaction are the time and resources it requires. Manual data entry into QuickBooks is a time-consuming process, and a high order volume can bloat your QuickBooks file. Accounting automation software can alleviate some of these concerns, which does the data entry for you and will alert you if you need to upgrade your QuickBooks account.
Daily Summary Postings
Daily summaries are a middle ground for sellers who need to speed up the accounting process and minimally impact their QuickBooks files. By consolidating your transactions per day and posting daily rather than continuously, you minimize the resource requirements for QuickBooks and improve stability. You also aren’t posting customer data eliminating that storage need.
These daily postings offer the same good accountability and audit defense of the trans-actional data, plus the same financial benefits and reduced month-end pressure. The practice aligns well with how QuickBooks was designed to record transactions.
Daily summary postings sacrifice real-time inventory data, which is more crucial as your business grows, especially during the busy season. You also don’t get financial insight per customer and, therefore, don’t know who your most valuable customers are. Solving both problems is as easy as connecting Webgility, which shows you your accounting and inventory data at as granular a level as you want.
We want your business to thrive, and the best way to make it happen is to harness all the data available to you. So, here’s what we recommend: Automatically post each transaction in real time until you grow to the point where QuickBooks starts to slow down and get bloated. You can then start to schedule automatic summary postings on a daily basis. By that point, you’ll have a good grasp on sales trends and can reap the rewards.