Hey, it's patti scharf CPA and co-founder of catching clouds the leader in e-commerce accountingWelcome back to another Saturday Slowdown where I like to remind everybody to work on their business and not just in their businessTo talk about how to pick the right accounting platform for your e-commerce business. I've been getting this questionEverywhere all the time and I'm seeing it more and more onlineI think because more and more accountants are starting to realize that this is a question that they should be askingbut it really needs to start with you the ecommerce business owner becauseYou know, you're the one you're out thereYou're getting you're picking out your shopping carts and your payment processors and your reprice errsAnd your pay-per-click stuff your email market like you're probably an appOverload at this point and you're you know that you need to get control over your finances and you're not really sure where to startSo this is kind of to give you some advice to put you on the right pathWhat options you should be looking at and where you should be going with that when you're talking about keeping track of your accounting?I think everybody pretty much starts out on spreadsheets because it's easy and it's basically freebut there are other options that are actually better for your business becauseYou it has a double entry bookkeepingElement to it. If you don't know what the heck I'm talking aboutI'm sure I've got a video if I have a video you'll see something pop-up right hereBut in any case if you're using a a double entry systemthen you can make sure that the money that's going in and coming out isAll accounted for when you're doing your stuff, right? So there are lots of different tools on the marketThere is NetSuite at the very high endyou might need NetSuite we've had clients who have outgrown us and gone to notes weBecause they're in the I don't know 75 million dollar-a-year range or something like that. They've got really sophisticatedinventory needs and they want to track everything item by item andNetSuite was basically built for that. It's a really solid system peopleLove it or hate it. The funky thing about NetSuite is it makes the hard things easy and the easy things hardsoLike if you're going with something like zero or QuickBooks Online, which I'll talk about in a secondThey have like automatic bank feeds where they can pull transactions directly from the bank into the systemThat suite doesn't have that like you would think that if theseMore basic systems had that that NetSuite would be able to figure that out, but they don't do thatBut they they work really well with the inventory and supply bag. SoThe downside to NetSuite is it's really really crazy expensive like insanely expensive. SoIf you can get just as good of results, like, you knowKeep your eye on the prizeif you you know what you're trying to get to is good financial information, and you can get there in aMore cost effective way. I don't know why you wouldn't do that, butBut there are so there are valid reasonsYou just need to know what those reasons are before you start doing your researchThere is a new tool called odoo, which is an open-source tool that a lot of companies are starting to check outThey don't have a long enough track record really for me to kind of get a sense in the market ofwhere they're at development wise but but the thing about odoo is thatIt costs less for the licenseBut it's going to cost way more for development because you're basically creating a custom solution for yourself as you're growingSo so that's something to be aware of but I think it's a company to watch. I've been hearing lots of rumblings about themSo well, we'll see what happens with them the two big players in this spaceRight now are QuickBooks Online and zeroIf you're an e-commerce sellerChances are you're probably going to be on one of these. I know a lot ofAccountants in particular who are like no. No, they should use QuickBooks desktop for enterprise because they haveMore robust inventory system and all that. Well the front QuickBooks desktopIs that QuickBooks desktopDoesn't have what these cloud applications have zero and QuickBooks Online. They have this whole ecosystem ofDifferent apps and things that plug in and can move information around and is accessible by people no matter where you areWhereas QuickBooks desktop, it's kind of a pain in the butt to use. It's why people are moving away from it because youif you want it in a central location now, you have to get a hosted server and blah blah blah like it's a mess likeIf your business is in the cloud you should be using tools that are in the cloudSo QuickBooks Online and zero, they are pretty much neck-and-neckI'm not going to go too much into themBut go check out this video that I did a while back that's comparing the two systems for e-commerce. I would sayThe end result is they're kind of six of one half dozen of the other at this pointBut there's been a lot lot lot of rumblings about QuickBooks online as of late in the accounting communityI think thatTechnologically, QuickBooks Online and zero are pretty comparable. They're pretty competitiveThey're they're kind of keeping each other in check as far as pushing each other in the industry. So it's great that they've got thiscompetition going to push things forward because it's better for everybody in the industry when you've got a competitor who's doing that butThe problem with QuickBooks Online is they're having a heck of a timeLike Intuit itself is having a heck of a time there. There's like a bunch ofrumblings aboutTurboTax where they were hiding their free fileSystem in the web searches and stuff. So dokin find this free filing system that they could use for taxes andthey'veBeen raising their prices over and over and over like I just did a video. I want to say like ten months ago after alot of people wereunhappy with intuit because they had raised their prices again and they were like, what are my alternatives they keep raising their prices andThat was less than a year ago and just this past week they announcedAnother price increase of like 16 percent or something like that. It's it's kind of crazyso a lot of people oh, and then the other thing isThey just started this quickbooks live thing where they're offering bookkeeping servicesJust to the general worldWhich I have some other comments about how that's going to gobut in any case there are a lot of accountants who are like freaked out about that and they're likeThey're cannibalizing our clients and they're they're gonna do a horrible job. And what are they doing?And they're just like all up in armsSo a lot of people are jumping ship from QuickBooks online and looking for alternativesSo I have a feeling a lot of people are going to end up going to 0 which I guess isGoodI don't think QuickBooks Online is going anywhereAs far as price increases zero hasn't done any senseBasically, I started using them in 2012So if they had a price increase, okaybut it's not the same as what's going on over at QuickBooks Online where they're raising prices like everyLike a couple of times a yearSo I guess that's something to be aware. There are other players in the accounting space likewaivers Ojo orWhatever. They're there a whole bunch of them who are kind of trying togettraction and stuffBut the problem with these other tools is they don't have the ecosystem that QuickBooks Online and 0 have they don't have third-party appsThat integrate with them that make themMore powerful than they are aloneso that's something that you should be aware of and I think it's especially important for e-commerce businesses becauseIf you're going to grow to any kind of real size, you're going to want to have a cloud inventory systemI've got a whole video about that right here and Zoho waive all those other guys, they don't have that soSo I think if you're a small business you're looking to do things on your own or with the consultant or whateverYou should really be starting with either quickbooks online or zero and then growing from thereI wouldn't waste too much time on some of the other toolsAll right. So now you know, what kind of platform options there areBasically now it's just time to evaluate everything and make a decisionThe first thing that you want to do is make sure that your operations are solid. Your operations areMore important than the numbers right out of the gate. I mean, don't get me wrongYou need to know your numbers and you need to know them pretty quicklyBut the first thing you want to do is make sure that you knowhowHow your business works how you're getting products?Through the system and then where that data is and then you need to know what kind of data you need to be grabbingFor your financials and to do that. You need the help of yourAccountant who's going to be in there looking at the data and helping to make sure that things go smoothly, right?So when you under when you can understand your operations, you'll better understand your flow of dataAnd once you understand your flow of datayou can make that whole thing kind of streamlined one thing you want to make sure that you do isCreate a system that's going to scale. Like I know so many people who are like ohOkay, so I'm going to use Xero or I'm going to use QuickBooks Online and I'm using Shopify nowI just need to know how to push each of those individual orders over into myaccounting system and they do it and they have five orders a day and it works and they're likeDone. This is amazing and then six months later when they're selling10,000 orders a day. They're likeThis is not amazingOkay, like they've just created this horrible nightmare and a huge mess and they have to scrap everything and start overSo whatever your system you're putting into placeYou need to understandhow to create that systemhow to put it into place how to make sure it's going to work for the long term make sure that it's scales as you'reAnd again for that you need somebody who has some experienceWorking with bigger sellers who know how that all is going to workmy other warning to you about picking the right person to work with you isyou're going to want to ask them like not only what kinds ofclients they have likeIt's not enough to ask people if they've worked in e-commerce beforechances are because they're like for millions Amazon sellers alone that somebody's got an e-commerce seller or maybe a coupleBut I would be careful with the ones who have likeone cloud inventory system that they recommend and they recommend that for all of their clients becauseIt tells me that they don't have a lot of sophistication withOr maybe not sophistication of a variety of clientsso like if you're a drop shipper or you're a manufacturer or you do a lot of wholesale like you may haveLike I would give different advice to those three different types of businessesI'm not going to try and put all three of them on the same cloud inventory system because it just doesn't make sense for theirsoEven if a company is using like only zero or only quickbooks online, that doesn't worry meWhat worries me is when they're advising you on operational toolsThat are the exact same for all their clients because there is not oneright fit for every single ecommerce businessso my last bit of advice is to know your numbers and andUnderstand your financials like keep your eye on the prizeYou know that the end goal is to get good financial numbers so that you can make great decisions in your businesssoWhen you're building out your system, you picked your platformYou've got everything moved over your you've got a system and it's humming alongThe final final check is do your numbers make sense if you're looking at your financialsDoes it help you make good business decisionsyou know youYou need to like if you're looking at image your inventory number and that doesn't make sense or your cost of goods soldthat doesn't make sense and you don't have a don't really understand how much cash you have or how toLike how quickly your inventory is turning over or all those different things. I mean, this is the whole point of accountingSo if you can't answer those questions or you don't have somebody who is helping you get numbersThat can help you make good decisions. Then you need to re-evaluate your process. You need to reevaluate who you're working withor something needs to change soJust make sure that you know your numbers and that your system is working well for you, that's itI guess that's it. I will see you from my office next week. HeyI'll be home. Well next week. I'll be in New Orleans, but I'll be almost home and the week after thatI'll be home for the foreseeable future. So you'll start seeing me back in my office again, soI guess that's it for this week. I hope you like this videoIf you did, please like comment and share if you haven't already, please subscribe and I'll catch you later
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