 Let's move on to the perpetual inventory system using third-party application and integration Now this is the one that most people that deal with Shopify accounting don't generally recommend So I want to point that out first But before I dive into it, so now let's think about what this Contains find third-party application that pulls in each transaction allowing us to use QuickBooks online To track inventory on a perpetual inventory basis in other words There's many different types of of integrations out there They can allow us to help us pull information in from the third-party platforms like the Shopify's and the Amazon into the QuickBooks system now QuickBooks itself has an integration in the QuickBooks system which possibly could be used for Shopify Amazon Or eBay, but like with many other applications that one's trying to simplify the method by not pulling in All of the data sale by sales not making a sales receipt for every transaction That's happening or tracking inventory on a perpetual inventory system That's what most people kind of recommend not to track all the time every single Transaction we'll get into that in a little bit more detail But some other softwares you might find some that do allow you to pull in the full transaction And so you have to be careful in terms of if you're using third-party integrations What the integration is doing? Is it doing the format that you want? So perpetual inventory system using third-party application integration pros and cons So provides a lot of detailed information including customer data. That's going to be one of the pros We're pulling it over not just a summary of the transactions, but the entire the entire thing So we're gonna have all the customers In our system, which could be nice because then we can kind of look around and have everything within one QuickBooks online Tracks inventory and cost of goods sold on a perpetual basis So if we were in an on-ground system, then what would happen is when we purchased the inventory We would have an increase not only in the dollar amount and unit of inventory But also a subsidiary schedule which would be tracking it by units using kind of a flow assumption method like a First in first out or a weighted average method And then when we sell the inventory with a sales receipt or invoice it will actually reduce The inventory for us so and that's similar to what happens when you do a self check out at say a grocery store The grocery store is actually recording the decrease in the inventory and the related cost of goods sold at the point In time you do the scan even though you only see the sales side of things So if that's all set up properly that would be great. However the cons are It's complicated to set up requiring the implement implementation of inventory items into QBO in other words if you were going to set up a system where you pull over every sales transaction from a Shopify or an Amazon into your QuickBooks system You would have to set up inventory items that match the data that's being pulled in so that when you create the sales receipts QuickBooks online knows which inventory items to be tracking with that that gets quite complex and detailed Depending on how much stuff you're selling on these on these online platforms and how many different types of inventory You have on it. You may not Need data in both QuickBooks online and third-party platform in other words You already have the customer data the sales data You can put the customers on your on your mailing list possibly from the data Before it gets into QuickBooks So you probably don't need to track every customer Transaction because you already have that data in another system Over time large volumes of sales can slow down QBO. This is one of the big problems because if you're on Shopify or Amazon usually you're trying to sell large volumes of Inventory if you pull in large volumes of inventory into QuickBooks a bunch of transaction heavy loads of transactions It could start to bog down QuickBooks and slow down QuickBooks at some point in time. Also, just note that QuickBooks online Isn't really designed for more complicated inventory tracking systems It's a fairly basic inventory tracking system when you're using the the perpetual inventory system mainly designed for basically on-ground Inventory tracking once your inventory needs gets more complicated It the QuickBooks online inventory tracking system might not be Sophisticated enough to deal with it and if you want to track it in more detail You might then need an integration of like a third-party application