How to keep track of your dropshipping profits

How to keep track of your dropshipping profits

How-to Guides

Keeping a record of your dropshipping profits is important for measuring the success of your business and controlling your budget. It can be done in two ways: manually or using specialised software. By doing it manually, dropshippers use a spreadsheet such as Excel or Google Sheets to create a tally of the profit, loss, and expenses.

While it is easy on the wallet to manage your bookkeeping this way, it is hugely time-consuming. It is typical for small businesses to use accounting software as an accurate and quick way to track profits.

Here is a list of six top-rated accounting software providers specifically for small businesses.

FreshBooks

FreshBooks is ideal for small and medium-sized businesses. It is cloud-based and works across all your devices such as tablets and mobile. FreshBooks has frequently won awards including six Stevie Awards for customer service. The company has also been featured in Forbes and The Huffington Post.

Benefits
  • Great functionality
  • Easy to use
  • Value for money
  • Comprehensive invoicing features
  • Key features
  • Track expenses
  • Profit and loss statements
  • Tax summaries
  • It can be integrated with over 100 apps including Paypal, Basecamp, HubSpot, and Zenpayroll
  • QuickBooks

    Benefits

    The accounting software from QuickBooks is often referred to as the industry standard. QuickBooks has won awards including “Top-Rated Accounting Software 2021” from TrustRadius. It offers both on-premises accounting software in addition to a cloud-based app.

  • Customisable
  • Easy to use
  • Value for money
  • Excellent customer service
  • Key features
  • Track expenses
  • Manage tax
  • Accept payments
  • Easy time tracking
  • Xero

    Xero's cloud-based accounting software is recognised and trusted worldwide. The company won ten awards in 2021 alone for excellence in technology, sustainability, and communications.

    Benefits
  • Intuitive user interface
  • Reports are simple to create and understand
  • Value for money
  • Key features
  • Track expenses
  • Tax returns
  • Accept payments
  • Easy time tracking
  • Pay employees with payroll
  • It can be integrated with apps including Shopify
  • Sage 50cloud Accounting

    A Windows-only application, Sage 50cloud Accounting has sophisticated bookkeeping features for small businesses. While it only works on Windows and not Apple or Linux, it is well-suited for businesses that need more advanced accounting capabilities. It is worth noting that it is predominately desktop-based but has some accessibility via the cloud.

    Benefits
  • Advanced and comprehensive features
  • Good customer support
  • Highly customisable platform
  • Relatively easy to use
  • Key features
  • Track expenses
  • Tax returns
  • Payments and bank feeds
  • Track job costs
  • Cash flow and invoicing
  • Microsoft 365 integration
  • FreeAgent

    Based in Edinburgh, FreeAgent is an accounting software owned by NatWest Bank. It is geared towards small UK businesses. The company has a great reputation, winning three awards at the Accounting Excellence Software Awards 2020. The mobile app won "Top Data and Expense Management Software Product" at the AccountingWEB 2021 Software Awards.

    Benefits
  • Easy to use platform
  • Drag and drop interface
  • Especially useful for UK businesses
  • Great customer support
  • Value for money
  • Key features
  • Track expenses
  • Tax returns
  • Accept payments
  • Send invoices
  • Payroll for employees
  • Easy time tracking
  • Integrates with a variety of apps
  • Clear Books

    Clear Books is another UK accounting software for small businesses. It is cloud-based and is known for continually improving the app. Reputable in the industry, Clear Books has been a finalist for the Accounting Excellence "Small Business Accounting Software of the Year 2020" and "Data & Expense Management Software of the Year 2020" awards.

    Benefits
  • Simple and user-friendly interface
  • Especially useful for UK businesses
  • Great customer support
  • Value for money
  • Key features
  • Track expenses
  • Tax returns
  • Send invoices and receive payment reminders
  • Payroll for employees
  • Easy time tracking
  • Integrates with a variety of apps including PayPal and Stripe
  • Complete accounting in 170 currencies
  • Summary

    Regardless of how small your dropshipping business is when you first start, using accounting software will keep your books in order. Manually updating a spreadsheet will probably incur headaches and a bad mood. Having accurate and reliable bookkeeping records will make running your dropshipping business one step easier.

    How-to Guides

    Sophie Lockyer

    Sophie Lockyer is a British marketing writer with expertise in ecommerce, digital marketing, and B2C business strategy. She has over eight years of marketing experience in Europe.