Love counting cash from sales, but hate crunching numbers for tax time?
Without dedicated ecommerce accounting software, keeping up with your profit and loss can be exhausting and time-consuming. If you’re selling nationwide, tracking taxes by state might feel like a full-time job. Who has time to manage their balance sheet manually?
10 Best Accounting Software For Online Sellers
Starting out with your ecommerce bookkeeping, you’re likely seeking an affordable small business accounting tool. Free plans, such as those offered by QuickBooks, can surely feel enticing. Although popular, my personal experiences with QuickBooks have been less than satisfactory, leading me to stray away from recommending it. While you won’t find all the features of more expensive options in a free plan, you may be surprised by what’s available. However, do consider that to maximize these plans, you might need to upgrade to paid plans or pay by transaction.
Striven
If you’re on the lookout for a comprehensive business solution that goes beyond just accounting, Striven might just be your best bet. Optimized specifically for ecommerce businesses, Striven excels in offering robust all-in-one features, including superior inventory management.
This function proves invaluable in managing your stock levels, thereby enhancing your business efficiency. So, for an integrated solution that combines accounting needs with advanced inventory handling, look no further than Striven. Pricing starts at $35/month per user.
Zoho Books
Zoho Books is part of the Zoho Cloud-Based Business Suite. It offers easy-to-use online accounting software. It integrates with other Zoho tools, as well as other financial services to help you automate your bookkeeping and financial workflows. Use the platform to invoice, handle expenses, estimates, purchase orders, and more. There’s a client portal and a vendor portal available for easy customer and supplier management.
A free plan is available for businesses that earn up to $50,000 per year, with one user and one accountant. Paid plans start at $15/month billed annually.
Freshbooks
If you’re looking for an intuitive and easy-to-use accounting solution and don’t mind paying a bit more at the beginning for it, Freshbooks might be right for your company. It does an excellent job of meeting the needs of small businesses and freelancers and offers a user experience that is hard to beat.
If collaboration is important to you, you’ll appreciate the number of tools designed to make it easier for everyone in your company to understand your finances and contribute valuable information from their own experiences. Great mobile apps and simple record-keeping makes it easy to use this software on the go.
This may not be the best software for helping you handle taxes. If you want to create highly customized invoicing, it might not be ideal for your needs. However, if you want an easy-to-use but powerful accounting tool to help you scale up, this might be the best software for you.
Sage 50 Cloud
If you want a complete accounting solution for your small business that can keep up with you as you grow and you’re willing to pay some of the higher prices in the business, this might be the right solution for you. Despite its name, Sage 50 Cloud does not have to be exclusively on the cloud. Hard-drive based software integrates with the cloud so that you can get the reports you want where you need them without opening up all your finances to the cloud.
If you have a lot of inventory to manage, Sage may have even more value for you, since they offer some of the best tools available for inventory tracking. This makes it a great option for ecommerce businesses with plans to grow big. Sage is an excellent option for anyone with employees who work remotely.
The interface on Sage is not as easy to use as some of its competitors, with awkward traits like links opening its new windows and a busy interface. The lack of a good mobile app is a big problem for many small businesses. However, this software offers customizability, good invoicing, and in-depth records that more than make up for a bit of clumsiness for many business owners.
StartGlobal
For an all-encompassing solution, consider the integrated bookkeeping service provided by StartGlobal. At $149 per month, you get seamless accounting that emulsifies your financial processes into one, easy-to-manage platform. This includes detailed financial reports, income and expenditure tracking, and proactive updates. StartGlobal’s solution is specifically designed to support ecommerce businesses, ensuring you stay on top of your financial game. Worth considering if you’re looking for a comprehensive, manageable, and tailored financial management solution.
Wave
Wave accounting software lets you connect as many credit card and bank accounts as you want, making it much easier to keep track of all of your finances. Income and expense tracking is easy and free. You can take care of invoicing and scan receipts without any charges.
For your customers to pay through your invoices directly, you’ll have to pay a percentage. If you want payroll to go through Wave, you’ll pay for this as well. Wave integrates directly with Shopify.
Xero
Xero has been giving QuickBooks a run for their money over the past couple of years, with a few features that may be a tremendous benefit for your company, depending on your needs. Xero offers three plans to help you scale from small business up to mid-size and even into a larger company.
Even in the more affordable plans you can still have unlimited users, so if you want great collaboration between departments, this might be the best software for your needs. Live bank feeds enable constant bank reconciliation so you can see exactly how much money you have at any given second.
As you go into the higher-paying plans, there are fewer restrictions on how much invoicing and how many quotes you can produce. Higher paying plans also feature support for various currencies. If you have no intention to scale up, this might not be the best company for you, as it is not ideal for small businesses unless you want to grow.
ZipBooks
ZipBooks offers a feature-packed account for free. It makes invoicing, financial reports, etc. very easy. If you’re already using Square or PayPal to handle a lot of your transactions, you’ll appreciate that ZipBooks integrates smoothly with these platforms so you can still take online payment through them, but in a much easier way than before. You will, of course, still pay the standard rates required from these services.
If you decide to beef up your subscription, you can add on a payroll option, Gusto. This plan lets you integrate payroll to make it much, much easier on your personnel management.
FreeAgent
If you don’t have products to sell but need robust software with a great app to help you manage your accounting tasks on the go, FreeAgent might be right for you. You can access it from any browser with the cloud. It has a very easy-to-use mobile app that makes it convenient for you to bill, handle invoicing, track time, etc, on the go.
This isn’t the cheapest option on the market, but it offers a lot for the price. This software offers time-saving features that small business owners will love. It offers great insights to help you understand your income and spending thoroughly. Customizable invoices could be especially helpful for anyone who bills out large projects.
Kashoo
If you want to make it as simple as possible to manage your business account simply and easily, Kashoo might be right for you. It may be a bit basic for businesses that want more robust features, but if simplicity in the basics is what you’re looking for, this is a great solution.
Kashoo comes at a reasonable price and is even more affordable when paid annually. Multiple businesses can be added to your account as well, making it simple to keep track of all of your enterprises at once. It’s easy to set up and has great time-saving features like recurring invoices and auto connection to bank and credit card accounts for simple reconciliation.
Accounting and tax mistakes can be costly, so skipping steps or rushing the process isn’t an option. The best way to speed up bookkeeping while maintaining perfect accuracy is by using a business accounting system.
I used to do my own bookkeeping. The worst part, I’d wait to do it until the last possible minute. On top of that, I didn’t use any software! Yes, it can be done. I would export all my transactions from my website into a google sheet, match them up to the transactions in my bank account, do the same thing for PayPal, credit cards. Yeah, an absolute nightmare. But yes, I did it.
Now, I use software – and I have a bookkeeper to manage it for me. Outside of avoiding the stress dealing with accounting, there are several reasons why you should use software.
Clear Financial Reporting
Having all of your finances clearly in front of you in charts and graphs helps you visualize bookkeeping information. This clarity makes a huge difference in helping you fully understand your company’s financial statements at any given time.
Get insights about individual trends and big picture perspectives at the press of a button. This kind of clarity lets you consider your finances at any second, rather than consulting with multiple departments and waiting until the end of the month.
You can also learn important information about customer spending habits. In-depth customer research is one of the essentials of being a successful ecommerce startup.
Accurate Bookkeeping
No matter how good you or your bookkeeping team are at doing the math manually, humans are prone to error in a way that computers just aren’t. Integrated payment processing is more accurate in individual transactions. It is also able to screen for mistakes across informational categories to maintain the overall accuracy
Collaborate Between Departments
Most companies agree that cross-departmental collaboration is good for business. This is also true for bookkeeping. Making your business finances accessible to sales, marketing, payroll, inventory valuation, etc., makes it easier for everyone to work together to make the right decisions for the management of company finances.
Online accounting software designed for your ecommerce business allows you to customize reporting in a way that makes the most sense for your company. It also enables you to quickly skip any areas that aren’t relevant to your type of business. At the same time, it ensures that all relevant areas for your business are covered.
For instance, ecommerce that operates nationally or worldwide must calculate taxes per sale per state, which can be challenging without specially-designed software. Selling different types of products requires different business licenses with additional associated costs. You want your software to understand the particular needs and potential snags of your business type.
Cloud vs. Desktop
In the early days of accounting tools, everything was based on desktop software that kept the vulnerable information off the internet. However, security on cloud networks has advanced, and more and more people put vast amounts of essential information onto cloud networks. Therefore, accounting tools have also been developed in cloud options.
- Cloud accounting software relies entirely on the cloud to keep all of your financial data, where you can conveniently access it from your smartphone or any computer. This is incredibly convenient, but it does open up your data to potential hacking on a cloud, so you’ll have to trust in the security of the cloud you choose.
- Cloud and desktop software allows you to put some kinds of information on the cloud and keeps other information only on a desktop. This can be convenient when you want to have some reports accessible online, but you don’t necessarily want all of your company’s financial data on the cloud.
- Desktop software keeps all of your data firmly on the desktop. Unless you export it and share it in some other way, you will not be able to access it on any cloud networks. If you don’t want to take any risks while having your information hacked into on a cloud, this will be the most secure choice.
There are many options to choose from, so it can be nerve-wracking to determine which small business bookkeeping tools are necessary for your company. As you compare the options, keep in mind what features your business needs and what you can do without.
Be conservative in what you can afford to spend, especially when you’re getting started, but don’t compromise on the features that you need. Here are a few features to look for in quality software that may be helpful for your business.
Constant Updates to Stay Current
You want your bookkeeping software to stay current on best practices. Your software should always be evolving to utilize new tools, improve functionality, and be easier to use. Automatic software updates and easy-to-use tutorials make it convenient for you and your company to make use of every new tool as it becomes available.
Supports Multiple Users
You may only need a single license software if you just want a small accounting department to have access to your finances. However, if you have more departments that need to access the software, you need to have the capacity for many people to sign in at once. Multiple users are a necessity if you want to allow cross-department collaboration. External accountants may also need access.
Automated Billing, Payments, and Cash Flow
The more that your software can do for you, the less you’ll have to do yourself. Look for software that allows you to automate multiple functions if you have a company that has many repeat customers and transactions.
Automated billing and cash flow let customers purchase from your business or ecommerce store, be billed, and pay. They do all of this without anyone in your company facilitating the transaction. Recurring invoices make it easy to bill and collect regularly. Make sure that you have a great ecommerce platform to integrate with, and you’ll find that a lot of the legwork in billing and tracking inventory and sales are done for you.
Inventory Management
If your ecommerce bookkeeper is doing manual accounting and inventory tracking, you’ve probably realized how challenging it can be. It’s hard to keep track of everything. It is frustrating when you think you have something in stock, but you don’t, or you order more of something you already have plenty of.
Software that keeps track of inventory management enables you to reduce what you need to store. It also ensures that customers are never promised something that you don’t have in stock. You can check out some free apps.
Sales Tax Calculation
If you are in the ecommerce business, one of the most important aspects of your accounting is sales tax compliance. Lots of accounting programs can calculate sales tax, but often you have to enter and file manually.
Automated sales tax programs make it much easier to handle the thousands of sales tax jurisdictions throughout the United States. When you are doing ecommerce bookkeeping sales tax and income tax are important parts of your accounting needs.
For small businesses that operate locally or do not sell retail, automated sales tax compliance may not be as important.
Payroll, Timesheet, and Billable Hours
If you have employees, managing their time and cash flow can get exhausting. Most companies can’t fully automate payroll. That said, bookkeeping software can automate a lot of the calculations for you and make it a lot easier for your personnel department to sign off on payroll and billable hours. Clear, easy to understand timesheets make it easier for your personnel department and for your employees to understand their hours.
Analytics and Reporting
Analytics and reporting capabilities are critical in any accounting software you choose. They provide crucial insights into your financial data, enabling informed decision-making. Clear, digestible reports simplify the interpretation of complex data, aiding critical business strategies. Enhanced analytics will streamline your financial processes, optimizing growth and profitability within your ecommerce business.
Integration with Ecommerce Platforms and Payment Processors
If you are selling things online using ecommerce platforms, an accounting package that integrates smoothly with your ecommerce selling platforms is essential. You don’t want to have to enter business expenses or bank transactions manually. You want every aspect of your financial data to smoothly integrate with your ecommerce platform and banks so that you always have access to accurate financial data.
For businesses that don’t utilize online platforms, ecommerce integration won’t be as important. Integration with your banking system is something that all businesses find convenient. Whatever kind of business you have, if you ever think that you may sell retail online, good integration with an ecommerce platform is something you should look for.
Use on the Go
Accounting options that have highly effective accounting apps make it much easier for you to handle a lot of the important aspects of running your business on your phone. Software that also operates on a cloud enables you to access the information that you need from any computer or device that is handy.
Scalable/ Tiered Pricing
There aren’t very many business owners who hope to remain at precisely the same size in the future as they are now. You want your company to be able to grow and you don’t want to have to worry about switching to new software when it does. You want a business accounting solution that offers you the functions you need at a price you can afford now and gives you room to grow down the road.
Plans offered at tiered pricing let you start at an affordable level and make a smooth transition to a more advanced or powerful program down the road. Programs that let you pay for only what you need make it easy to customize your plan without spending more than you have to.
Whether or not your business will still need an accountant depends on how much accounting you need to do and how much of it you’re comfortable handling yourself. You may decide to take care of most of your business accounting internally, but outsource your taxes to an accounting firm.
Maybe you’ll hire an internal accountant to manage your accounts year-round, including taxes. ecommerce accounting will have different needs than other small businesses.
Think about what you need now and how you intend to grow when choosing the right accountant. Whatever accountant you choose, make sure they have specific experience in your area of business. Taxes and best practices for bookkeeping often vary by business type, so using an accountant who understands your field is essential.
Choose the Right Bookkeeping Software for Your Company
Whether you’re navigating the complexities of an ecommerce enterprise or managing a different type of small business, top-notch bookkeeping is indispensable to ensure growth. High-caliber accounting software provides a clear and instant view of your business’s financial health, making your decision-making process significantly more straightforward.
Striven is one such software that we strongly recommend. With seamless reconciliation between ecommerce platforms, banks, and other financial channels, this tool brings clarity by showing the real-time financial status of your company. This prevents the risk of overstocking or understocking, allowing for better inventory management.
Striven also comes with automated invoicing and payroll features, which cater to retailers and servicemen alike, making financial management a breeze. The right software, like Striven, can do wonders for your business by effectively managing the lifeblood of your company—its finances.
If you’re seeking more accounting tips to further enhance your financial practices, be sure to check out our dedicated section for this on our website.
