Managing your business finances when using Shopify

If you want to start an online business, you may be thinking about using Shopify (you’d be right to, it’s one of the most popular platforms for e-commerce).

What it won’t do though, is manage your shop’s finances. That’s something you’ll have to think about separately.

If you manage your Shopify finances well, it can provide you with more opportunities when it comes to how you market your business. You’ll be able to afford to get more customers to the site.

This guide discusses answers to questions around Shopify finance, including:

• What is Shopify?
• How does Shopify work?
• What are Shopify’s costs?
• What other costs might you have?
• How can you manage it all?

Shopify is an online platform to sell things over the internet. According to Statista, internet retail sales in the UK were valued at £1.99 billion at the end of 2021.

So there’s nearly two billion reasons why businesses want to sell online. Small companies can take advantage of the market, by having a dedicated platform to simplify the process.

For more information on how to start selling online, see: How to run a successful ecommerce business.

Shopify describes itself as a ‘command centre.’ It lets you use one platform to manage selling in person, on mobile, through social media, online or at pop-up shops.

You’ll start by choosing a template for your website. From there, you’ll be able to start selling your products.

Shopify doesn’t ship the products for you, but its platform lets you connect to businesses that will. In the UK, its shipping partner is courier service, Hermes.

Alternatively, there are dropshipping businesses that Shopify can help you connect to. These will produce and ship products for you, if you sell them through your site.

To help set up your site and purchase supplies, Shopify offers funding support through Shopify Capital. It’s like a loan from the company, they offer you the money you need and take it out of your earnings.

The amount you can borrow and the rates you have to pay back are dependent on what your Shopify store is expected to earn. So, to explore this option you’ll have to apply through their website.

In the UK, there are three different subscription Shopify finance plans:

• £20 a month — Shopify basic
• £56 a month — Shopify standard
• £211 a month — Shopify advanced

There are other costs to the platform aside from Shopify’s subscription finance, there’s a credit card rate and transaction fee. It changes depending on your plan:

• Basic — 2.2% plus 20p
• Standard — 1.9% plus 20p
• Advanced — 1.5% plus 20p

• Basic — 2%
• Standard — 1%
• Advanced — 0.5%

When you’re using Shopify, there may be other costs that you have to consider to keep the business running.

The first is the supply and manufacturing of your products. Its platform doesn’t provide you with things to sell. If you make your own goods, you’ll still have to record the costs of the materials and equipment you need.

Many Shopify businesses work with dedicated suppliers, and the platform does connect to them. Shopify has apps within the software to pair you with companies that can get you what you need.

For example, suppose you have designs for t-shirts. In that case, you can arrange for a supplier to print and ship the items after customers buy them through your Shopify shop. 

Once you have a store and a supplier to fulfil orders, the next thing to consider is getting people to buy them, which usually means marketing it over social media.

You can set up accounts on social platforms for free, but if you want to make sure people see your marketing, you’ll have to pay for advertising. That cost is more if you’d like to hire a marketing agency.

Without marketing your products, you’ll likely struggle to get people to your website to make a purchase. So when it comes to managing your finances, there are these extra areas to think about towards success on Shopify.

As your store starts generating earnings, it will become more important to consider your bookkeeping. Shopify finance can become a daunting task, but there are ways to make it easier to manage.

Even though the Shopify platform is a helpful tool for setting up an e-commerce website or keeping track of stock, it can’t manage your overall business finance.

You’ll benefit from setting up a business account to record sales and keep up with costs. Countingup is one with built-in accounting software.

You’ll be able to manage your Shopify shop’s finances through the Countingup app with tools to support you through every step. So from when you open your Shopify account, you’ll be able to keep track of the subscription fees.

Once you start, you’ll be looking for a supplier, but you’ll have to make sure you can pay them. If you don’t have money available to bring in supplies, you’ll face problems satisfying customer orders.

To make sure you can keep track of all the Shopify finance that’s coming in and out of your business, Countingup keeps you updated with cash flow insights.

Building a thriving store takes time and investment. Any marketing campaigns you decide to do will mean you’ll keep a budget.

With the Countingup app, your costs can sort automatically with its expense categorisation feature. The tool lets you look at each business area and everything you do to see if you can afford more ads.

Using Shopify and Countingup together provides you with the ability to maintain your entire business through your phone. Both apps are accessible anywhere and convenient to use, so you’ll be unlikely to have a problem with either.

But if you do, Shopify and Countingup offer their own customer support teams to keep your business going.

Get started with Countingup for free.