The Best Accounting Software for eBay Sellers

As one of the first platforms available for individual and small business ecommerce, eBay remains a popular—and profitable—venue for ecommerce businesses. No longer is eBay simply the online equivalent of a yard sale. Serious businesses sell on eBay and make serious money doing so.

Alongside the rise of eBay as a serious business has been the rise of accounting software for eBay sellers. Gone are the days when eBay sellers had to track their inventory, income, and expenses using spreadsheets, personal finance software, or desktop applications. There is a host of cloud-based accounting software for eBay businesses.

A host of options means a host of questions, though. You might be wondering how to pick the best accounting software for your eBay business. Read on to see our top picks for accounting software for eBay sellers.

Factors to Consider When Picking Accounting Software for eBay Sellers

Inventory

As is the case with any retail business, inventory is the lifeblood of your eBay business. If you only sell on eBay, your inventory is probably relatively small, and if all your inventory is stored in a location you can easily access, then you can handle inventory management using a spreadsheet.

But what if you sell on other sales channels, like Amazon? Or what if your inventory is stored off-site in a warehouse or distribution center?

As your eBay business grows, you will likely need to invest in an inventory management app. Yes, this will cost you some money, but it will save you hours of time and costly inventory management errors.

Keep your future inventory management needs in mind when you are choosing the accounting software for your eBay business. Ideally, your inventory management solution should integrate with your accounting software, so make sure you pick accounting software that allows integrations easily. (Spoiler alert: All of the picks on our list allow for easy integration with third-party apps.)

Sales Tax

One of the biggest benefits of having an eBay business is the ability to access customers all across the U.S., and even around the world. This benefit also comes with a challenge, though—sales tax compliance.

Recent court decisions have created a ton of confusion around sales tax compliance. There are more than 10,000 sales tax jurisdictions in the United States, and trying to stay in compliance with all of them on your own is a nightmare scenario for any eBay seller.

Fortunately, there are apps to help. Avalara and TaxJar are both great options to consider for sales tax automation for your eBay business. For a small fee each month, both Avalara and TaxJar will file and remit all necessary sales tax returns and payments due for you.

Not sure if you are liable for sales tax in a particular location? Both Avalara and TaxJar have a huge library of information on each state’s sales tax requirements. Of course, your accountant can also help you with this, as well as other tax ramifications of doing business in multiple states.

Setup

Before we look at the best accounting software for your eBay business, there is one more thing to consider. All of the accounting software options we are about to discuss—and the third-party apps available for the functions that are not part of the core accounting package—tout ease of integration.

In reality, integration is anything but easy, especially in the beginning.

Improper integration will completely wreck your accounting. Consider engaging a bookkeeper who specializes in ecommerce in general—and eBay in particular—to help you set up your accounting software and the integration of your third-party app solutions.  Even if you aren’t ready to engage with a bookkeeper on an ongoing basis just yet, invest in the services of one when you first set up your accounting software. This will save you time, not to mention headaches, in the future.

The Best Accounting Software for eBay Sellers

Now that we’ve looked at some of the things you need to consider when choosing the best accounting software for your eBay business, it’s time to move on to our top picks. These accounting solutions have been chosen based on ease of use, availability of third-party app integrations, and availability of resources for ongoing support.

All of the picks are cloud-based. The power and flexibility of cloud-based accounting systems far outweigh the cost of the subscriptions. With a cloud-based software, you get:

• Real-time access from anywhere: Many eBay sellers are digital nomads. Using a cloud-based accounting software lets you access and update your financial records from anywhere you have an internet connection. As an added bonus, you can work with a bookkeeper or accountant anywhere in the world without having to worry about how to transfer your accounting information to them.

• Easy integration with third-party apps: Most of the third-party apps for eBay sellers are cloud-based, and many only work with cloud-based accounting software. Using a cloud-based accounting software helps insure ease of integration.

• Automatic software updates: Cloud-based accounting software updates are pushed out on a regular basis. This means you always have the most up-to-date and secure software for your valuable business information.

Our Top Pick: QuickBooks Online

QuickBooks Online is our top accounting software pick for eBay businesses. There are three main reasons why:

• Ease of use: QuickBooks Online (QBO) is easy to set up and use. Yes, we still recommend hiring a bookkeeper to help you set it up, but after setup, using the software is pretty intuitive. You can even set up rules to do most of the heavy accounting lifting for you.

• Support: If you do have a question about QBO, you can easily find an accountant, bookkeeper, certified QuickBooks ProAdvisor, or even videos created by other QBO users to help you.

• Integration: QBO integrates directly with dozens of apps, including your eBay seller account. Even if you can’t find a direct integration, an app like Zapier can often help you integrate the various software you use to run your eBay business.

Runner Up: Xero

Xero is gaining popularity in the U.S., and it is already the cloud-based accounting software of choice in Australia and New Zealand. Finding support is getting easier, but it’s still not as easy to find a Xero partner as it is to find a QuickBooks ProAdvisor.

Still, a number of accountants and bookkeepers support Xero, and business owners—including eBay sellers—love Xero for its ease of use and lack of accounting jargon.

Xero boasts all the same features as QBO, so choosing one over the other is a matter of personal preference.

Third Place: GoDaddy Online Bookkeeping

GoDaddy Online Bookkeeping was designed specifically to work with eBay and PayPal, as well as Amazon and Etsy. The direct sync feature makes it very attractive to many eBay sellers.

GoDaddy Online Bookkeeping is a good solution if you are running a small eBay store, but it’s not well-suited to larger enterprises. Because there is no balance sheet feature in GoDaddy Online Bookkeeping, your inventory management solution will not sync to it in any meaningful way.

If you’re just getting started with your eBay business, GoDaddy Online Bookkeeping might be the best option for you. With plans starting at $3.99/month, it is definitely the least expensive option on the list. There is no complicated setup or data entry required, either, meaning you won’t need to work with a bookkeeper to set things up correctly.

A Note About Taxes

We always recommend that ecommerce sellers use the services of an accountant or enrolled agent to prepare your annual tax return. Since you are doing business in multiple states, there is the possibility of incurring income tax liability in multiple states, as well. If you are also a digital nomad, this possibility increases. Only someone well-versed in tax law can help you navigate this tricky territory.

All three of our picks for accounting software for your eBay business provide the information you will need to give to your accountant at tax time, either in the form of a profit and loss statement and a balance sheet, or—in the case of GoDaddy Online Bookkeeping—a pre-populated Schedule C worksheet. Regardless of which option you choose, you will be well-prepared to meet with your accountant or enrolled agent at tax time.

How to Choose the Best Accounting Software for Your eBay Business

Whether you intend to keep your eBay business small, or if you have visions of growing an entire ecommerce enterprise with eBay as a component, you will need reliable, cloud-based accounting software.

If you intend to build an ecommerce empire, the best accounting software for your eBay business will not only allow you to track your income and expenses, but it will also produce the reports you need to make good decisions to grow a profitable business. QuickBooks Online and Xero both provide easily customizable reports to give you all the information you need.

In addition to our top three picks, there are a number of other accounting software solutions that will work for your eBay business. Take advantage of the free trial period and test a couple of different solutions before making your final decision on the best accounting software for your eBay business.

The post The Best Accounting Software for eBay Sellers appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/accounting-software-for-ebay-sellers/