The Best eBay Accounting Software for Online Sellers [Guide]
Estimated reading time: 13 minutes.
Accounting and taxes are often two of the biggest hurdles for ecommerce sellers. This is especially true for small businesses or those just starting out.
Accounting for eBay sellers may be particularly complex, due to the fact that eBay operates 26 international sites which sellers can leverage, spreading their reach to customers across the globe. Understanding your cash flow, inventory and tax obligations at all times is critical, not only to your success and growth as an ecommerce business, but to your survival.
Fortunately these days, an accounting degree is not necessary to handle the books yourself. Having an accountant is always advisable, but with the tools now available to ecommerce sellers, you can automate most of your daily operations and go to the experts when you need tailored advice.
In this guide, we will explore the benefits of automating your accounts, and the best options out there for cloud accounting software, tax apps, integration and inventory management. Plus, we will explain how A2X can be used to take your eBay accounting to the next level!
Table of Contents
Free eBay Accounting Spreadsheet
More than three decades after its creation, accounting professionals worldwide still rely heavily on Microsoft Excel. It seems unlikely that automated systems will render Excel completely obsolete - spreadsheets are undeniably useful, versatile tools.
Many eBay sellers, and other ecommerce sellers for that matter, start with spreadsheets for managing their accounts. This seems like a logical solution, particularly when you’re small and have limited funds to invest in technology upfront.
Plus, there are a number of options floating around which can be downloaded online (free and paid), as well as a few seller templates from eBay itself.
Accounting Software is Best for Online Sellers
Even though Excel is useful, we do recommend starting with accounting software from the beginning. It is undoubtedly the best and most secure way to go - but if this isn’t an option for you straight out of the gate, we suggest deciding on a parameter for when your business will move onto an automated, cloud based system.
The reason for this is that in order to thrive, you will need the functionalities and accuracy that these systems provide. A well-known example of where spreadsheets went badly for one business was JP Morgan, who in 2012 lost £5 billion in revenue - all due to an error in Excel.
This probably wouldn’t happen to you anytime soon, but it does show that even small mistakes in Excel spreadsheets can have huge consequences over time.
The automation that comes with accounting software takes care of the grunt work, and ensures consistency and accuracy.
Why Automate Your Accounting
Automating your accounting takes the most manual, repetitive accounting tasks and processes them automatically - often instantly. It’s number crunching without the headache.
Save time and invest it elsewhere
The first accounting software that non-accountants could use was launched by Intuit in 1983. It was called Quicken, alluding to its purpose of making the process of accounting faster.
Saving time is one of the benefits of using accounting software for your ecommerce business. This kind of technology unlocks your full potential as a business owner, enabling you to swap out the inefficient, repetitive accounting tasks in exchange for time to analyse and strategize based on accurate financial data.
Your valuable time can then be spent on more fruitful tasks, conducive to learning, expanding and improving your business.
Remote access anytime, anywhere
You value the ability to work remotely as an online seller, so cloud-based accounting is a no-brainer for those in the business of ecommerce. Keeping everything on the cloud means that your systems are accessible from anywhere with an internet connection, and are always up-to-date.
Integrating your accounting system with your ecommerce platform will mean ongoing communication between the two, and reports that are updated automatically.
Working with an accountant overseas? Perfect! Cloud-based accounting can be accessed without the hassle of sharing files or sending data over email.
Want to check your financials on the go? Easy! Your tablet or cell phone can dial in.
Accurate, accessible numbers for your financial planning
The phrase ‘human error’ exists for a reason. When you need certain accounting tasks done accurately over and over again, it makes sense to let a machine ensure this happens, it’s what they do best. Nothing gets missed, miscalculated, lost or fuzzy after hours of staring at a screen.
eBay can store your transactional data for 3 months only - if you rely on the platform, you lose this information. The larger your spreadsheets get, the more time they will take to save, update and process formulae.
By using accounting software, you’ll automatically record this historical data for as long as you need it, so that you can track your business performance from the start. You can also use ‘search’ functions to sift through the data and find what you need in seconds.
Accounting software means reliable, solid numbers for you to track and plan from. After all, financial plans are to businesses, what Google Maps are to travellers. You need direction, and it needs to be based on realistic data.
The Best Accounting Software for eBay Seller
If you’re reading this article, it’s probably safe to assume that you already know how many accounting software options are out there for business owners. Finding one that works best for both eBay sellers and for your business is a balancing act.
Here, we break down some of the top options and why they are considered best in show.
It’s always useful to chat to an accountant - even if only to ensure that you choose the best suited option for you, and integrate your stack correctly from the beginning. It could save you a lot of hassle (and potentially money), down the line.
The OG. QuickBooks hosts around 4.5 million users across the globe, 3.2 million of those in the US. It ain’t perfect, nor is it cheap, but it’s popular for a reason. Versatile for a range of business types and needs, QuickBooks offers a huge range of features within its suite of packages.
Because of its widespread popularity, it’s easy to find guides and tutorials on just about everything you could need.
“Widely regarded as the top accounting software solution for small businesses, QuickBooks does it all. Whether it’s the affordable pricing, the various pricing plans or the elite features, QuickBooks is the dream accounting software application for small businesses.”
eBay, QuickBooks and A2X can be integrated for automatic data imports and updates.
With A2X, QuickBooks can display your transactional data in ways that are easy to digest, retrieve, compare and archive. Depending on the package you choose, QuickBooks offers multi-currency handling for eBay sellers operating in overseas marketplaces, and top level inventory management to boot.
Xero boasts almost 2 million users worldwide, with around 10% of those located in the US. This is a little low compared to QuickBooks, but it remains one of the top accounting software choices out there.
Xero is big on integrations, so you can automate as many aspects of your operations as you want to.
Xero is also unique for its project time tracker feature. You can turn this on to record how long you spend on certain tasks, so that you can see where you’re investing your resources.
“Xero is our pick as the best accounting solution for growing businesses. Xero is a program that meets you where you’re at. Its flexible features and plan options eliminate the need to invest in another accounting program when your business grows.”
Just like QuickBooks, eBay, Xero and A2X can be integrated for automatic data imports and updates. Xero can also handle multiple currencies, and the conversion rates for these are updated regularly, so you always have the latest data.
Features are similar but packages and prices differ, so this is where you’ll need to decide what is most important to your business, and where to invest your spend.
Comparing QuickBooks and Xero
Ultimately, when it comes to choosing between QuickBooks and Xero, a certain portion of the decision should be made intuitively - how much do you like using them?
While they look quite different, they do similar things, so trial them both and see which sticks.
For a more detailed comparison of the features, pros and cons of QuickBooks and Xero, check out this helpful article.
Sales tax rules differ by country but they also differ by US state, too. With more than 10,000 sales tax jurisdictions in the US, trying to stay on top of them all as a seller - especially a newer one - is a good recipe for a few sleepless nights.
Fortunately, there are apps out there that can do this for you.
Around 20,000 businesses use TaxJar to keep tax compliant. With the ability to process hundreds of millions of tax calculations with a response rate of around 18ms, TaxJar is suitable for businesses of all types and sizes, and is generally considered best for more straightforward requirements.
Critically, it determines your economic nexus, and what that means for your tax obligations - a massive help to online sellers, especially on eBay.
During Cyber Week 2019, Avalara handled tax calculations for around $19 billion in goods. They’re solid, reliable and built for high capacity.
Operating in 79 countries globally, Avalara is your guru for tax obligations and filing wherever you are in the world, making it ideal for ecommerce sellers. Avalara is the only option of these three to support international filings.
Effortless sales tax is Taxify’s motto. As part of Sovos, Taxify offers automated rates, rules and filing in over 14,000 tax jurisdictions. They are usually at the forefront of new upgrades or integrations, and are somewhat more flexible for less standard, more unique business needs.
Comparing TaxJar, Avalara, and Taxify
Figuring out which tax app to go for might be made easier by the pricing plans available. Check out the comparison table below, and for more detailed information about the features included in each package, check out their dedicated pricing pages.
|30 day free trial||Avalara’s pricing is volume-based, designed to scale with you. See their pricing page for details.||30 day free trial|
|Plan 1||Starter at $19||Starter at $47/mo|
|Plan 2||Professional at $99||Standard at $97/mo|
|Plan 3||Premium at (POA)||Premium at $247/mo|
A2X is a connector app specifically designed to solve the problems faced by ecommerce sellers when integrating their seller platforms with their accounting software.
Ecommerce sellers need a little more information than deposit amounts when it comes to their bookkeeping. Sellers need to know how much of that deposit is profit margin, how much is sales tax, how much is reimbursement for returns, how much is fees from eBay - and so on.
Without having money categorized into these buckets automatically after each transaction, sellers would have to do this themselves at a later date - a time-consuming, frustrating and unnecessary hassle.
A2X organizes your transactions via the accrual method, so that any statements spanning multiple months are broken out and deposits carried over. This allows sellers to track their month-to-month cash flow and make more informed decisions about when to increase or decrease spend.
A2X also tracks your Cost of Goods Sold, so that you have visibility over your inventory sales and profit margins.
For your free trial of A2X, head to A2X for eBay.
Ecommerce Inventory Management
As for any retailer, your inventory is at the heart of your eBay business. If you only sell a small range and quantity of products, and just on eBay, you might be able to manage with a spreadsheet.
But as soon as you start to grow, expand onto other channels, and need to deal with volumes of returns or keep your stock offsite, your system will soon get overwhelmed. And as the heart of your business, you don’t want to skimp on managing it properly.
Automating your inventory management will help you streamline running your business, increase customer satisfaction, and ultimately, make you more money.
Currently, QuickBooks Commerce is only available as an add-on to QuickBooks Online customers, but they are looking to roll out to a wider audience.
QuickBooks Commerce brings all your selling platforms together in one place so that you can manage your sales and shipping seamlessly. Data is imported automatically so that you can get a real-time view of your inventory movements wherever, whenever.
Currently, the platform supports a maximum of 30,000 SKUs/month order volume, 20,000 SKU list, and does not support weight-based inventory units of measure. For the full list, check out their FAQs here.
Simplified inventory management software Cin7 offers multi-site retail, wholesale and online services. With more than 550 integrations, sellers have a wealth of options when it comes to building their own unique stack to meet their business technology needs.
It also has built-in ecommerce solutions to handle complex promotions, volume pricing, contract pricing, freight calculation and more - all great options for eBay sellers wanting to expand and offer their customers more.
As one of the best known tools out there for inventory management, Zoho can integrate with other apps in your ecommerce strategy, and even offers accounting options too. Zoho is excellent for tracking customer experience and inventory, and is user-friendly, making it a good all-rounder for modern business owners.
There’s also a free plan available, but it’s very limited in features.
Describing itself as a ‘one-stop app for shipping orders from each of your sales channels’, Ordoro focuses on shipping and supply chain management. It is simple, easy, and particularly good for drop-shipping and businesses running just-in-time (JIT) systems.
Watch out for its price plans, though - to get any inventory management features, you have to go for Pro or higher.
Ordoro doesn’t offer demand forecasting, manufacturing inventory features or enterprise-specific resources.
While it’s ideal for smaller ecommerce sellers; larger businesses with more complex needs should probably look elsewhere.
Comparing Inventory Management Apps
The type of inventory management app suitable for your business will heavily depend on the types of products you sell, the volume sold, number of SKUs and how you ship. The best one to use may also be influenced by your accounting software choice, whether it can be integrated and how they work together.
Before deciding on your app, you may want to get these steps clear first and use them to help you choose.
For more information about starting strong with inventory management, check out this helpful guide.
For more options of inventory management apps by business type, see this article.
eBay Accounting Made Easy with A2X
A2X ensures that eBay sellers get all the information they need in an organized, clean and efficient way, at the touch of a button.
With journal summaries sent to your accounting software ready to be reconciled, you can handle your bookkeeping tasks in minutes rather than hours.
Save yourself time, money and resources with A2X for eBay, and try it free for 30 days!
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