How to keep track of your dropshipping profits

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 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

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'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

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

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 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

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.