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Top 5 Accounting Software Choices For E-commerce Merchants

The best practice as an e-commerce entrepreneur would be to never ignore the back-office, which means proper bookkeeping, timely accounting, and access to full data to make decisions based on your actual business results.

Why do you need accounting software?

As your e-commerce business grows, your finances will get more troublesome. All of the in-and-out money movements such as sales, returns, supplier payments, banking fees will need to report to the tax authorities after being appropriately categorized and analyzed. Without proper accounting systems in place, you can quickly get overwhelmed with all the financial data you are up against.

When talking about keeping track of your accounting, everybody pretty much starts out on spreadsheets because it's easy and basically free. But there are other options that are actually better for your business because it has a double-entry bookkeeping element to it. In any case, if you are using a double-entry system, then you can make sure that the money that's going in and coming out is all accounted for when you are doing your business.

Top 5 Accounting Software

Here, we will look at some of the best accounting software for e-commerce currently available on the market and also include further options to consider, as you can opt for a specific expense, tracker apps, or even customer accounts.

Compare the Features & Pricing

1. QuickBooks

QuickBooks Online covers options for businesses of all sizes, which makes it a good choice if you prefer easy software. QuickBooks is usually a first choice for the self-employed business because QuickBooks makes it easy to manage expense tracking, balance sheets, invoicing, inventory tracking, and a range of business essentials all-in-one place.

💰  Price:

QuickBooks offers a free trial for 30 days and has four Plans starting at $10 per month.

✅  Pros:

  • Simple and straightforward to use
  • Affordable pricing
  • Flexible with third party applications
  • Connects to all major accounts
  • Numerous features and templates

❌  Cons:

  • Advanced features have a steep learning curve
  • Lack of reports outside of accounting
  • Lack of invoice design tools
  • Limitations on number of users

2. Xero

Xero is an innovative accounting software that is friendly to small businesses since it emphasizes ease of use and mobile utility. Xero can be synced across multiple devices and provides users updates in real-time, giving business owners the latest information wherever they might be.

💰  Price:

Xero offers a free trial for 30 days and has three Plans start at $11 per month.

✅  Pros:

  • Simple and straightforward to use
  • Affordable pricing
  • Connects to all major banks
  • Amazing profit and loss reports
  • Automatic invoice payment reminders

❌  Cons:

  • No phone support and can take more than 24 hours to reply
  • Difficult to manage large volumes of quotes
  • Automatic reconciliation is occasionally incorrect, requiring you to manually review transactions
  • Lack of integrations with inventory management platforms
  • Needs more expanded user permissions for team members

3. FreshBooks

FreshBooks is configured to automatically reconcile credit and debit amounts automatically and import financial data from various sources. Users can adjust access permissions on an individual basis. For example, employees could have limited access to financial reports while giving your accountant's administrator privileges.

💰  Price:

FreshBooks offers a free trial for 30 days and has three Plans start at $15 per month. They also allow you customize your plan that scale with the size of your business.

✅  Pros:

  • Simple and straightforward to use
  • Affordable pricing
  • Constantly updates with new features
  • Detailed help articles for self-service support
  • Easy to do invoice creation and status tracking

❌  Cons:

  • Limited inventory tracking
  • No automatic numeration for the invoices
  • Only supports single-entry accounting

4. Wave

Wave accounting software allows you to connect as many credit card and bank accounts as you want, making it much easier for financial management. Since income and expense tracking is free and easy to start with, you can take care of invoicing and scan receipts without any additional charges.

💰  Price:

Wave requires no set up fees, no hidden charges and no monthly fees. In order for your customers to pay invoices directly however, you’ll have to pay a percentage. If you want payroll to go through Wave, you’ll pay for this as well. The payroll option starts with a $20 dollar monthly fee plus $6 for each active employee.

✅  Pros:

  • Simple and straightforward to use
  • Affordable pricing
  • Competitive rates for credit card transaction processing and bank transfers
  • Connects to external accounts for transaction import
  • Mobile apps available

❌  Cons:

  • Connection issues with bank accounts and credit card accounts
  • Only has 12 base reports available, with no customization
  • Reports could not do month to month comparisons.

5. Sage

Sage 50cloud Accounting is a cloud-based accounting software product with comprehensive customization options and advanced functionality. Sage optimizes through a range of accounting tasks, including expense management, invoicing, and inventory tracking.

💰  Price:

Sage 50 cloud Accounting operates with three plans that scale with the size of your business, starting at $340/ year.

✅  Pros:

  • Simple and straightforward to use
  • Connects to all major banks for automatic transaction updates
  • Automates basic tasks including reconciliations
  • Can email everything to customers to reduce physical paperwork
  • Supports inventory and stock management tracking

❌  Cons:

  • Web app has less features than desktop app
  • Occasionally slow even with a good internet connection
  • If using the desktop app, you must create backups or you risk losing data

Integrate E-commerce Accounting Software

As we have seen previously, it's often not enough to simply buy a new accounting system, but rather merchants need to integrate the accounting system with their ecommerce platform to operate efficiently and achieve optimal results.

When it comes to operationalizing these software packages, Shypyard offers inexpensive or free services to help merchants of all sizes integrate their ecommerce platform with their accounting software. Shypyard has previous experience integrating several ecommerce softwares such as Quickbooks, Xero, MYOB, Freshbooks, and many more.