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How to help your e-commerce clients reconcile large sales volumes during the holidays

If you have clients with e-commerce businesses, you know that most sales occur during the holidays begin as early as the beginning of November. While businesses usually plan their new product lines and marketing initiatives, many neglect bookkeeping. This leads to oversells, incorrect cost of goods sold, failure to record expenses, and incorrectly fulfilled orders.

When your e-commerce clients receive large sales volumes during the holidays that are not reconciled, it causes these problems:

  • Manually catch up with thousands of orders in the new year.
  • Delays in filing taxes.
  • Funds not deposited in the correct accounts.
  • Oversells and refunds.
  • Errors in the books and clients being upset with you.
  • More work for you and your firm.

Fortunately, some planning prior to Black Friday can prevent many time-consuming errors. Here at Connex, we find that accountants who work proactively with their clients save themselves many hours of work and headaches!

This guide summarizes the most important actions that you and your clients can take to reconcile your books for the tax season.

Tip #1: Set up accurate mapping in QuickBooks

To run their business successfully, several fields need to be mapped correctly in QuickBooks®:

  1. Deposit accounts must be mapped correctly so your clients can get their online payouts from e-commerce sales.
  2. Product SKUs must match the QuickBooks item name or SKU field, if they are using QuickBooks Online.
  3. Map all selling channels to QuickBooks. Your clients might expand to additional selling channels during the holidays. The same product may have different SKUs on different selling channels, but they must be mapped to the same product in QuickBooks.
  4. Set up accurate sales tax mapping from selling channels to QuickBooks.
  5. Correctly map customers. Whether your clients want to sync individual orders or sync a summary sale, the correct mapping will help your clients generate accurate reports.

Correctly mapping from e-commerce selling channels to QuickBooks is the key to accurate data and reporting for your clients. 

Tip #2: Upload initial inventory to QuickBooks

If your clients don’t have their inventory up-to-date in QuickBooks, they can upload a spreadsheet with the current inventory for each of their items. Oversells and refunds are a common concern during the holidays, especially if your clients sell on multiple channels. Correct inventory helps your clients avoid overstocking that ties up capital, leads to spoilage, and is only tax deductible when the item is sold.

Having accurate inventory in QuickBooks is one of the most important factors to ensure that your clients can fulfill orders efficiently, make informed financial decisions, and have sufficient cash flow. 

Tip #3: Implement automation where you can

As your clients expand their businesses, it will become more difficult to manually keep up with entering orders into QuickBooks. In fact, during the holiday season, many e-commerce businesses oversell because their inventory cannot be manually updated on time. Oversells lead to refunds, low customer ratings, and unhappy clients.

Other disadvantages of manual data include the following:

  • It is expensive to hire and train staff to enter data manually.
  • There are high turnover rates among data entry staff
  • Human errors lead to incorrectly filled orders.
  • There is an inability to keep up with inventory updates during busy times.

With the right automations, your clients can sync orders, inventory, customers, merchant fees, and sales tax. Some tools will automatically match bank deposits with online payouts. Automation not only saves your clients from manually entering data; it ensures their books are reconciled in time for tax season. In the past, it could take weeks to have an automation implemented to sync e-commerce data with QuickBooks.

With advances in integration tools, some automations can be set up in a few days, just in time for your clients to be ready for Black Friday and holiday sales. 

Tip #4: Sync a daily summary instead of individual sales

When sales volume spike, many of our customers decide to sync a daily summary instead of individual sales to QuickBooks. A daily summary sale sync saves space in QuickBooks and it is easier to reconcile. If your clients sell on Amazon, they can generate the Amazon settlement report, which is a summary of two weeks of sales. Some automations can sync over daily summary of sales including order and inventory, which can also help your clients track income.

Many businesses want to add all e-commerce orders under a single customer or under the name of the selling channel. In QuickBooks, your clients can run sales reports grouped by selling channel. Your clients can separate Amazon FBA sales versus MFN, and help them decide whether the expenses are worth selling on FBA.

Tip #5: If you use QuickBooks Desktop editions, use a reliable host and keep the QuickBooks Web Connector running

We see many errors among QuickBooks Desktop customers who want to bring their sales over from e-commerce channels.

First, it is essential that your clients have a reliable QuickBooks host, such as Right Networks or Ace Cloud Hosting. If your QuickBooks is not hosted yet, here are some considerations before choosing your provider:

  • Are they Intuit® authorized?
  • What security practices do they follow?
  • Do they offer backup services?
  • What is their uptime?
  • What applications do they support besides QuickBooks?

Second, keep the QuickBooks Web Connector running, so that the sales can be synced over from the selling channels to QuickBooks. If the QuickBooks Web Connector fails to run, it will auto try the sync. If you move your sync to another machine, ensure your syncing tool knows the company file’s location. If QuickBooks is closed and the file location is incorrect, then your sync will fail.

Be proactive with your clients

You and your clients can look forward to a more profitable and relaxing holiday season with proactive planning. By ensuring correct field mapping in QuickBooks, setting up the correct inventory, implementing automation where you can, syncing summaries instead of individual sales, and taking necessary precautions with QuickBooks Desktop, you will be able to reconcile your clients’ books more easily an on time for tax season.

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