Going global – using Expandly & Xero’s tracking categories to make international tax easier
Post by Expandly on 4th June 2019
Amazon and eBay have made it incredibly easy for anyone to sell their products internationally. What they haven’t made easy is reconciling it in Xero so that the correct local taxes are paid. Whether you’re an eCommerce accountant faced with assigning thousands of orders to the correct country, an online seller presented with a large accountancy bill or someone who’s been stung in the past – Expandly’s Xero eCommerce integration has the solution (and it’s got a little something to do with tracking categories).
Using Xero’s tracking categories to separate international sales
Xero comes with a handy tool that you’re probably already using, called “tracking categories”. Using the Xero advanced settings, you can add up to two different tracking categories and 100 different subcategories. While many use these tracking categories for cost centres, the savvy among you will be using these for countries – allowing you to track, filter and then bulk update tax rates on Amazon, eBay, Etsy and any other orders from different countries.
So what’s the problem?
Doing this manually or via CSV is time-consuming because you need to download the sales orders from each of your sales channels into Xero and then associate each order with the correct country before you can get filtering and calculating your tax bill. The solution?
Using Expandly to map orders to Xero’s tracking categories automatically
Expandly comes with a Xero eCommerce integration that, among many other things, allows you to map certain order information to your Xero tracking categories. Orders from across your sales channels (including Amazon, eBay, Etsy and Shopify) will then automatically be assigned to the correct sub-category within that category.
So, for example:
1. You create a tracking category in Xero called “country” with the sub-categories: UK, Spain and Italy.
2. You map this in Expandly by associating the “country” Expandly field with your “country” tracking category.
3. An order comes in from Amazon Spain, and Expandly sends it to and tells Xero that this belongs to the Spain sub-category.
4. You use your sub-category in Xero to filter all orders from Spain and then bulk update the tax information from 0% to the correct rate
And, even better:
5. An order comes in from Hawaii (because we’re exotic like that) and Expandly creates Hawaii as a sub-category in Xero for you.
The importance of filtering orders by country
We couldn’t sign off without mentioning the importance of this all. Online retailers selling outside of the UK are responsible for complying with local tax laws and regulations. Those failing to do so can get stung by hefty fines, accounting bills and, in severe cases, investigation and business closure. But that really shouldn’t scare you away from global expansion (or eCommerce clients who sell internationally) because selling internationally using Amazon, eBay, Etsy or your own shopping cart:
1. Expands your audience, which increases your sales;
2. Diversifies your business, allowing you to try out new things;
3. Brings you more orders, which grows your business; and
4. Doesn’t have to be a tax nightmare when you involve an excellent international eCommerce accountant who uses the Expandly Xero integration.
Other Expandly-Xero features
For those online sellers and eCommerce accountants intrigued by the above, you might also be interested in our other Xero eCommerce integration features, including:
– Integration will all of the major online marketplaces and shopping carts.
– The option to send sales orders to different bank and sales accounts in Xero, depending on the sales channel and payment method.
– The ability to send orders directly to the draft, approved or paid sections in Xero.
– The option of batching invoices to avoid Xero’s soft transaction limit.
– The chance to schedule sales orders to send to Xero automatically on a daily, weekly or monthly basis.
About Expandly’s Xero integration
Expandly multi-channel management software doesn’t just help you to list and process orders (and it isn’t just for eCommerce business owners either). Online sellers and accountants can use Expandly to easily import sales orders into Xero, including batching invoices, sending them straight to the approved or paid section, specifying different bank accounts for different sales channels and payment methods and scheduling this all to happen automatically.