2020-01-15 12:59:20 Accounting & Bookkeeping English Depend on QuickBooks Online easy accounting software to keep your Etsy books organized & up to date. Learn why many Canadian Etsy shops... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2019/01/etsy-accounting.jpeg https://quickbooks.intuit.com/ca/resources/finance-accounting/accounting-for-etsy-sellers/ Accounting 101: An Introduction for Etsy Sellers

Accounting 101: An Introduction for Etsy Sellers

6 min read

Are you looking to start or expand your retail business? If so, you may want to consider Etsy Canada. What is Etsy Canada? It’s a popular platform for selling everything from vintage clothing to handmade crafts.

Whether you’re just getting started on Etsy or you’re an established store owner seeking a better bookkeeping solution, it’s important to find accounting software that works for you. Countless Canadian Etsy shops use QuickBooks Online because it’s easy-to-use accounting software that comes loaded with powerful features.

Record Sales and Returns

While Etsy does keep a record of your sales and returns, using accounting software makes it easy to quickly reference this data when you need it. Whether you’re issuing a refund, preparing your taxes, providing a customer with a receipt, or analyzing your current cash flow, QuickBooks keeps every transaction organized and easily accessible.

You can also import transactions from PayPal, credit cards, your bank, Square, and more, so you can keep all of your records consolidated and tidy. QuickBooks even sorts your imported transactions into tax categories so you can maximize your deductions when tax season rolls around.

Monitor Your Store’s Overall Performance

Beyond keeping your books neat, your accounting software helps you gain a clear perspective on the immediate performance of your Etsy shop. You can see what kind of cash flow you have to work with so you can make informed business decisions.

For example, say you buy vintage clothing and resell it on Etsy for a profit. If you see that your cash flow is low, you may want to wait until some items sell before you go out shopping for inventory. QuickBooks provides handy reports including profit and loss statements, balance sheets, and expenses, all available at the touch of a button.

You can also use the data available from your accounting software to gain valuable insight into your store’s performance. Are you shipping products on Etsy more during certain months or seasons? Are there specific items that fetch a higher price than others? Do customers buy one item at a time or do they tend to buy multiple products? Being able to quickly reference this type of information empowers you to run your business more effectively.

Track Inventory

The key to running a successful online store is organization. QuickBooks makes managing even large inventories a breeze. Every time you sell a product or add a new one to your store, your inventory data is updated automatically. This way you know exactly when it’s time to replenish your stock, and you can see which products are flying off the shelves and which items you may want to discontinue. The software also lets you organize your inventory with images and categorize items by price or type.

In addition to keeping your inventory organized and streamlining the reordering process, QuickBooks tracks exactly what you order from each of your vendors, making the reordering process fast and simple. This easy accounting software also lets you check the exact valuation of your inventory so you know exactly where you stand at all times.

You can even set QuickBooks to automatically use the first in, first out (FIFO) inventory valuation method. Say you buy 20 hats for $5 each to resell for $10 each. The hats are selling well, and you decide to reorder 20 more.

However, the seller has since raised the price per hat to $6 each. You can set QuickBooks to track the profit of the first 20 hats as $5 each and the profit of the second 20 hats as $4 each, rather than valuing all hats based on the profit average of $4.50. The FIFO method pushes you to sell your older inventory first, which reduces the impact of inflation on your bottom line.

Because QuickBooks tracks your profits using FIFO, the ending inventory on your balance sheet always reflects current pricing in the marketplace.

Manage Your Sales Tax

When it comes to taxes, QuickBooks is the ultimate tool for Etsy store owners. It’s no secret that taxes can be complicated for self-employed individuals. QuickBooks automatically calculates sales taxes for you, including GST, PST, HST, and QST, or you can add custom rates as needed. If you ever want information on how much tax you owe or how much you’ve accrued, you can simply generate an instant report. QuickBooks also reminds you of important due dates so you’re never struck with a penalty because you missed a deadline.

As a self-employed individual, you may want to deduct business expenses at the end of the year. Your business involves buying used clothing at thrift shops and reselling on Etsy. If you save your gas receipts from your inventory-buying missions, you can deduct these travel expenses from your taxes. QuickBooks makes it easy to save and organize your receipts so you’re prepared in case you get audited.

You can use your phone to take a quick snapshot of your expense receipts, link them to their corresponding transactions when applicable, and then store them safely so they’re available to reference as needed.

Easy Cloud-Based Accounting Software

One of the most exciting aspects of being an Etsy store owner is that you can work from remote locations. QuickBooks is cloud-based software that syncs seamlessly across all of your devices, so Canadian Etsy shops can access their accounts from anywhere in the world (as long as they have the proper credentials, of course). Say you sell craft supplies on Etsy Studio and you’re out shopping for inventory. You can use your smartphone to check your current inventory and see exactly what you need from the aisle of your local craft store.

Because your data is stored securely on remote servers, you never have to worry about losing it. Even if your computer is damaged, you can easily retrieve your data from any device. Cloud-based accounting software is run online, meaning you never have to update your software or buy upgrades. All maintenance is handled by QuickBooks, so you can simply set it and forget it.

Connect with an Accountant

QuickBooks acts as a central hub that allows you to correspond and collaborate with your accountant. The software makes it easy to communicate by sending messages, sharing documents, managing deadlines, and more.

For example, your accountant needs a document from you. Rather than emailing, calling, or texting you, they simply send a request through the QuickBooks platform with a due date. This way, you can simply sort your requests by urgency and respond in a timely manner. You can also set up optional email notifications so you’re always aware of new messages from your accountant.

Separate Business and Personal Data

Many Canadian Etsy shops started as personal buyer accounts. After all, plenty of Etsy shop owners got involved in selling because they fell in love with the Etsy community, and it’s quite common for Etsy sellers to also be Etsy customers. QuickBooks makes it easy to keep your personal and business transactions completely separate. After all, if you’re buying something for yourself, you don’t want your company’s cash flow data to be affected. With QuickBooks, you can keep your personal and business bank accounts and credit cards isolated from each other, and you can easily sort your transactions accordingly.

Find Accounting Software Today

QuickBooks is fully loaded with helpful tools that make running Canadian Etsy shops a simple and enjoyable affair. The software is highly intuitive, so you can get up and running fast, even if you’re not the most tech-savvy Etsy shop owner. 5.6 million customers depend on QuickBooks every day. Join them today to help your Etsy business thrive.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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