Accounting is a necessary evil for any business, and it can be especially daunting for online store owners using WooCommerce. However, with these 5 essential WooCommerce accounting tips, you can streamline your accounting process and be prepared for tax season without adding extra work to your already busy schedule.
1. Determine Sales Tax Rules and Nexus
The first step in setting up your online store is to determine your sales tax obligations. This can be a complex process that varies by location, product, and tax nexus. WooCommerce provides resources to support your tax setup, but we recommend meeting with an accountant to ensure you fully understand your obligations. Once you have your sales tax rules figured out, you can configure WooCommerce to charge sales tax automatically.
2. Setup Tax Rules in WooCommerce or Use a Tax Management Plugin
If your business requires charging sales tax based on the customer’s shipping address or in multiple states or countries, you may need to set up hundreds of tax rules. In this case, an automatic tax calculation plugin like TaxJar or Avalara AvaTax can be immensely helpful. Evaluate the pricing and features of each to find what works best for your business.
3. Sync WooCommerce Data to an Accounting Platform
To keep track of your sales tax and other financial figures, sync your data to an accounting platform like QuickBooks. This will allow you to closely track your finances and have all of your data in one place. QuickBooks offers useful features like easy expense tracking and invoicing options, and can quickly pay for itself in the time and work it saves you.
4. Track and Report Key Figures
Once you sync your WooCommerce store to an accounting platform, you can monitor important figures like revenue, expenses, cost of goods sold, and profits. QuickBooks makes it easy to run reports and reconcile accounts, allowing you to monitor your business’ health at any time. Be sure to track cashflow, inventory, expenses, and total sales and profits to understand your business’ financial performance.
5. Know Your Deadlines
Missing a tax deadline can have serious consequences, so it’s important to know your reporting schedule and set reminders to file on time. You may even need to file quarterly taxes, so check with your accountant to be sure. By preparing ahead of time and putting automated systems into place, you can eliminate accounting headaches and ensure worry-free accounting.
Implementing these 5 essential WooCommerce accounting tips will not only prepare you for tax season but also streamline your accounting process and provide valuable insights into your business’ financial performance. Say goodbye to accounting headaches and hello to seamless and worry-free accounting!