E-commerce has experienced remarkable growth in recent years and has been projected to continue expanding at an incredible rate.
One researcher projected eCommerce to increase by a whopping 50% from $907.9 billion in 2022 to $1.4 trillion in 2025. There’s no better time to join the niche when it guarantees much growth potential. However, it’s easy to be afraid as a novice that doesn’t know where to start or how to navigate the eCommerce world.
Shopify isa fully hosted solution that allows you to enter the eCommerce world with little or no experience. However, it’s one thing to create a Shopify store and another to keep up with the orders on Shopify without jeopardising other elements of your eCommerce business like cash flow, accounts payable, etc.
We often recommend connecting your Shopify eCommerce platforms with Xero. This cloud-based accounting software can help you track sales, cash flow, and profitability while focusing on other aspects of your business.
Fortunately, connecting these two popular software solutions and reducing the potential for data entry errors is not so hard.
This article explains everything you should know about integrating Shopify with Xero.
What is Shopify?
Shopify is so popular that it’s almost impossible not to have heard about it. But what should you know about it? Launched in 2006, Shopify provides an all-in-one commerce platform that allows the easy and efficient sale of products to people without geographical limitations.
If your primary objective is to quickly launch an online store for a small or medium-scale business, then you should consider Shopify. It’s easy to see why Shopify is often the first name experts call when recommending an online store for anybody. Even the most inexperienced entrants into eCommerce can open a Shopify store with just a web domain and a payment provider.
As a cloud-based system, Shopify allows you to perform several tasks at once, including:
- Product management
- Inventory management
- Order processing
- Payment processing
- Shipment tracking, etc.
The Shopify software can also integrate with others to make your business operations run smoothly.
What is Xero?
Xero is a popular accounting software aimed at helping small and medium-sized businesses cut down mundane accounting tasks such as recording incomes from different invoices and expenses for the week or month. Xero ensures that your business data is stored safely in a single place, thus, allowing you to capture snapshots that you can use to keep track of your business.
Xero is a cloud accounting software tool that works efficiently on different platforms, such as PCs, tablets, and mobile devices. It also means you can invite your accountant or bookkeeper into the software to ensure you keep up with your tax obligations. Some of the key features of Xero that make it an indispensable tool for small and medium-sized businesses include:
- Claim expenses: Xero allows for the simplification of expense claims. It offers analytics that can be used to make informed decisions regarding expenditures.
- Bill payments: Xero provides tools you can leverage to track and pay bills on time. The software also provides a clear overview of cash flow so that you can schedule bill payments.
- Payment processing: Xero can integrate efficiently with online invoicing platforms like Stripe and GoCardless to safely process payments. It also allows you to add a ‘pay now’ button to your invoices, prompting customers to pay immediately.
- Contact management: the platform offers you direct access to the details of your customers and suppliers’ payments and invoices. It also allows you to generate lists and groups from saved searches.
- Data capture: Xero integrates seamlessly with Hubdoc to automatically capture key data and copies of original documents during transactions. This eliminates the need for manual data entry during transaction recordings and account reconciliations.
Why Should You Integrate Shopify With Xero?
Despite being so powerful, Shopify offers few accounting functions, so you often need to employ an experienced eCommerce accountant.
When done correctly, Shopify business owners can also leverage the integration between Xero and Shopify to keep track of sales and returns while comparing performance between multiple sales channels.
Since Xero integrates seamlessly with tracked inventory, owners can synchronise all invoices without losing track of stock or mixing up existing customer records.
There’s also the case for getting better visibility across different areas of your Shopify store, making analysis and reporting significantly easier. Add that to the fact that this integration allows for seamless tax rate management across multiple currencies, and you can tell that it’s a must have integration for every Shopify owner.
Step-by-Step Process for Integrating Shopify With Xero
Now that we’ve covered most of the benefits of integrating Shopify with Xero, let’s move on to the best steps for Integrating Xero with Shopify. Complete the following steps to integrate your Shopify account with Xero:
- Download and install the Xero app in Shopify. To install, click the ‘Add App’ button and then the ‘Install App’ to complete the installation.
- Next, select the payment plan you’re most comfortable with
- Read and accept the terms and conditions
- Click the ‘Connect Now button
- After connecting, a new screen will pop up, prompting you to select the business you’re linking to Shopify. After choosing and linking your company, you’ll get a new prompt asking you to ‘Allow Access.’ Allowing access takes you back to Shopify, from where you’ll need to select a Xero account to connect to Shopify.
- This is for the payment setting. However, the issue is that you may need to ‘create a new expense account’ and link to Xero, considering how Xero sets most expense accounts as overheads. Clicking on the ‘create new account’ will take you back to the Xero Chart, where you can create a fresh expense account. After the new account creation, refresh your Shopify page, and the new account will be ready for use.
- Once you’ve completed the preceding steps and clicked on the ‘Complete setup’ button, a new page will launch, from where you should click the ‘Launch Xero’ button. From the Xero software, check that the app has been integrated correctly. If it has, you’ll see Shopify as an integrated app from the Connected Apps section of Xero.
Final Thoughts
There you have it; a detailed look at why and how to integrate Shopify with Xero. We hope that this article does not only enlightens you on the need for Shopify-Xero integration but also teaches the steps involved to help you get started.
Remember, if the integration proves more difficult than anticipated, you can always hire an eCommerce accountant to help you through the process. These professionals have experience with multiple eCommerce integrations and will guide you through the process.