As an ecommerce business owner, you know the grind—managing sales across multiple platforms, recording sales and expenses, reconciliation, navigating complex tax rules, and hours spent on spreadsheets and still wondering if something has been missed.
Even despite double-checking, errors can derail monthly closings, trigger tax penalties, or damage your reputation; no wonder 60% of retailers have integrated AI into their systems.
However, AI does come with a price tag. So, it’s understandable if you are on the fence, wondering: Will automating bookkeeping really fix your existing bookkeeping woes? Is it worth the spend?
These are valid concerns.
We’ve written this blog post to break down how bookkeeping automation works, tackle your biggest pain points, and help you pick the right tool for your business.
Bookkeeping automation simplifies recording transactions, tracking sales tax liabilities, reporting financial performance, and managing all the data from your sales channels to ensure it's properly synced with your accounting system.
With the right automation software, ecommerce businesses can get real-time insights into financial health and cash flow, save hours on reporting, and reconcile all without direct human intervention.
Without automation, accountants and bookkeepers spend hours manually recording transactions, combing through ledgers, and reconciling data. In fact, there is so much data that they often opt to create a simple summary of transactions at the end of each month. But with an automated ecommerce bookkeeping system, you can:
Think about your current manual bookkeeping routine. You are probably pulling sales reports from Amazon or Shopify, entering data into QuickBooks, and hoping you don’t miss anything.
An ecommerce bookkeeping automation tool, like Webgility, syncs every transaction in your online store or marketplace into your accounting software.
Consider Product Bahn, an emergency food and gear company manufacturer. The company operates seven different shopping carts using Shopify and BigCommerce. Additionally, its products are also sold on Amazon and other third-party websites.
During peak sales, Product Bahn sells as much as six times more than normal volumes, leading to 16 hours of processing time when done manually. With Webgility, the brand is able to sync sales data across multiple stores into QuickBooks in seconds.
Here is a quick summary of the results:
|
Before Webgility |
After Webgility |
|
20-30 orders/day |
200-300 orders/day |
|
1-2 hours of order processing time/day |
1 hour of order processing time/day |
|
Inaccurate accounting and inventory |
Accurate accounting and inventory |
Read the full case study here.
A bookkeeping automation tool helps with automating the following tasks:
Whether you are a single-channel or multi-channel seller, manually recording revenue is grueling busywork.
A bookkeeping automation tool connects with platforms like Shopify, Amazon, eBay, Etsy, and WooCommerce. It ensures every sale is captured and synced with accounting tools like QuickBooks or Xero.
When you use tools like Webgility, your books are synced in real-time, helping you stay on top of your revenue, expenses, margins, COGS, etc. Moreover, the tool also features an AI agent.
More recently, these tools have been introducing AI agents to probe into the revenue, sales and inventory data. You or your accountants can ask high-level business performance questions and get near-human responses, not having to dig into spreadsheets.
Sales taxes vary by state, are ever-changing and require ongoing tracking. It's a compliance nightmare. Even tax experts cite increasingly complex tax reporting as their biggest challenge, and ecommerce business owners aren’t far behind.
A bookkeeping automation tool records every transaction with taxes calculated in real time into the system. It saves you from incorrectly applying tax rates or underreporting sales which can result in penalties, a tax audit, and reputational damage.
To manage expenses better, you need to know where the money comes from and where it goes. From platform fees and shipping costs to ad spend, keeping tabs on all these expenses for multiple platforms can feel overwhelming.
Bookkeeping automation categorizes all these expenses as they occur.
Since these tools integrate with specific expense accounts, they eliminate guesswork and ensure no expense gets overlooked.
You’d be no stranger to the complexities of inventory management and managing the accounting that goes into stocking and restocking your inventory. Ineffective tracking and measuring your COGS will affect your balance sheet and profit margins.
Particularly, as your order volumes, SKUs, and data grow, manual methods to track inventory and account for COGS will certainly become difficult. Errors in COGS calculations can result in inaccurate financial reporting, undermining your ability to make informed decisions.
With a bookkeeping automation platform, you can also track inventory with every sale. The tool will record every sale and return and maintain an up-to-date inventory—a pipe dream for businesses that stick to manual methods. Backed by ML capabilities, the tool will also calculate COGS for each SKU.
Automated bookkeeping helps you generate financial reports in real time including cash flow statements and balance sheets.
This lets you spot trends and uncover opportunities early on, like identifying your most profitable product category or pinpointing items that frequently run out of stock.
By turning raw data into actionable insights, automated tools keep you constantly informed. You’ll know if your finances are on track or if you need to make adjustments to improve profitability or manage cash flow.
There are various benefits of automating bookkeeping for your ecommerce business. Here are some of the main ones.
When you’re rushing to balance the books while focusing on growing your business, mistakes are inevitable. Automated ecommerce bookkeeping significantly reduces computational errors compared to manual methods. While you’ll still need to verify the data, the process is faster and significantly reduces the risk of accounting mistakes.
Bookkeeping automation minimizes these risks by using advanced technology to process and record data with precision.
By automatically importing, categorizing, and reconciling transactions, the tool ensures your books remain accurate and error-free.
With up-to-date information, you can monitor and optimize the cash flow to identify potential issues before they become bigger.
For instance, if inventory expenses start rising unexpectedly, an automation tool can flag that these costs are eating into your profits. Catching this early lets you take proactive steps, like negotiating better supplier rates or adjusting pricing strategies before your cash flow becomes a crisis.
It also ensures your financial reports are accurate and your business stays on top of reporting deadlines. Your tool helps you get your financial data right, saving you the trouble of scrambling through spreadsheets, and potential late fees.
The benefits of automated bookkeeping go beyond accurate financial reports and no data syncing errors.
Manual bookkeeping requires employees to focus on repetitive, low-value tasks like data entry.
Take Greg Gordon, Founder and President of PartyMachines.com, a manufacturer and seller of foam party equipment, for example. Before adopting bookkeeping automation, Greg spent up to 16 hours each month manually entering sales revenue and expenses into QuickBooks.
With Webgility, he could reclaim 8–16 hours every month, which he could then devote to more strategic activities that drive business growth.
Repetitive tasks don’t just drain time, they also eat into your budget. Think of it this way: Every hour spent on manual data entry is an hour not spent on growing your business.
Automated bookkeeping addresses this by handling the grunt work, reducing the hours required for routine tasks, and cutting down on labor costs.
Consider these factors to understand if you need to switch to a bookkeeping automation tool.
If you’re evaluating whether it’s time to automate your bookkeeping, the signs below should help you arrive at the right analysis.
For Chan Stimart, founder of Channies, manual bookkeeping processes were too slow to keep up with fast-growing business demand. As sales grew and her business team expanded, the latter depended on sales records to make effective business decisions.
Chan, a global supply chain expert herself, didn’t need more clues to see this gap. As products were flying off shelves left and right, Chan sought an effective bookkeeping solution. Now armed with real-time data insights, her business team had updated insights and better strategies for the future.
You, too, can take a leaf out of Chan’s book. Your current bookkeeping process may easily manage a few hundred orders a day. But what happens when your sales double or triple? Or when your business team depends on the latest sales and inventory data to optimize the buying experience?
If it doesn't feel as easy or is doubling your workload, it might be time for a change.
If you spend over 5–10 hours a week manually entering data, reconciling accounts, and updating spreadsheets, it may be time to re-evaluate.
For example, Nappy Shoppe was 8 months behind on updating their books until they automated their bookkeeping. This is despite one employee dedicated to recording data into QuickBooks. As we mentioned earlier, outdated books will hamper business decision making - Nappy Shoppe had no real picture of their financial health.
If you’re in a similar case, it is wise to adopt bookkeeping automation.
The founder of PartyMachines.com, a party equipment business, used to spend an entire day every 2-3 weeks recording sales data into QuickBooks. Despite spending so much looking into sales transactions, his team had little visibility into channel specific performance.
According to founder Greg Gordon, bookkeeping automation using Webgility helped him analyze sales data and uncover profound insights across different channels. For example, customers who buy through his website spend more in terms of average sale price. However, they required more handholding to make purchases, whereas he observed that customers on Amazon bought more volumes with little support.
For most ecommerce businesses, lack of visibility of spends, and finances, over the best-performing sales channels. Lack of up-to-date financial data makes it difficult to make decisions about marketing spend, inventory restocking, and hiring. This delay can result in missed opportunities or overextension.
If your business is growing too fast to keep up with effective reconciliation, it's time to switch to bookkeeping automation.
Selling across multiple states is great for your business growth but filling the exact tax rates for those states manually isn’t. If tax season is your nightmare of missed deductions, misaligned sales tax, or penalty notices, your business needs automation.
Bookkeeping automation streamlines every aspect of accounting. From integrating your accounting software, and accurately filing taxes to financial reporting, it ensures everything is synced error-free.
Ready to switch to bookkeeping automation? Use this checklist to find out.
Assess whether your existing bookkeeping tools or processes meet your business’s current and future needs.
Are they scalable, efficient, and reliable?
Define your goals
What do you want to achieve with automation? Is it saving time, having fewer errors, ensuring better compliance, or providing real-time financial insights?
Get clear on your priorities.
Map out your bookkeeping process. From data entry, account reconciliations, tax calculations, and reporting, to identifying the most time-consuming or error-prone areas.
Compare the cost of automation tools with the time and resources you’ll save. Look for online automated bookkeeping solutions that offer a clear ROI for your business size and growth stage.
Identify how quickly your team can adapt to the new automated bookkeeping system and whether the tool offers support, training, or a smooth onboarding process.
Compare the cost of automation tools with the time and resources you’ll save. Look for online automated bookkeeping solutions that offer a clear ROI for your business size and growth stage.
Also, identify how quickly your team can adapt to the new automated bookkeeping system and whether the tool offers support, training, or a smooth onboarding process.
Choose a solution that can grow with your business—handling more sales channels, increased transactions, or tax complexities as you expand.
After you identify these key areas, it’s time to set up.
Getting started with bookkeeping automation is easy. It’s all about connecting your tools and creating a flow of financial data. Here’s how you can set it up:
Once everything is set up, monitor the results and make adjustments as your business grows.
Follow these practices to transition from your current bookkeeping processes to automated bookkeeping:
Lastly, choose the right bookkeeping automation tool.
Of the many online automated bookkeeping solutions, how do you choose? By focusing on the must-haves such as the following ones listed below.
A great tool should connect easily to your ecommerce platforms and accounting software. Whether you’re using Shopify, Amazon, Etsy, or accounting software like QuickBooks, all the sales, fees, and inventory updates should flow into your system.
Webgility for instance, integrates with over 60 ecommerce platforms and accounting tools like QuickBooks, ensuring your data syncs automatically. You don’t run the risk of errors with manual data entry.
The tool also syncs inventory across your sales channels. If something doesn't add up, the tool flags it for your attention before it becomes a bigger issue.
Mismatched records or outdated financial reports result in delayed data syncs. A reliable tool should keep your sales, expenses, and inventory in real-time sync, so your financial picture is always error-free.
Webgility keeps your data up-to-date in real time. Your sales, expenses, and inventory are always synced, preventing mismatched records and outdated reports.
The right tool should only bring in a summary of your payouts but also track every sale and return so you always have an up-to-date view of your financial health.
Your business is growing and your bookkeeping solution should grow with it. Whether you’re adding new sales channels, expanding inventory, or dealing with increasing transaction volumes, the tool should scale without adding complexity. Even better if it’s easy enough to set up without an IT team’s guidance.
As your business grows, Webgility perfectly scales with order volumes. Businesses love our user-friendly interface and features that simplify even the most complex workflows.
And with built-in reporting and tax compliance tools, you’ll always have a clear picture of your finances.
Plus, Webgility’s pricing suits businesses of all sizes. Here is the breakdown of Webgility’s pricing across all QuickBooks variants:
All plans include free one-on-one onboarding with an expert to ensure you hit the ground running.
Given the benefits, "Will bookkeeping be automated?" is no longer a question. The only dilemma is how you'll use it for your business. Simplify your bookkeeping and focus on growing your business. Get started for free today with Webgility!