eBay bookkeeping software helps eBay sellers to keep their finances in order so they can focus on the business. In this post, we’ll go through what using this type of tool involves and how to choose the right one.
Why eBay Sellers Need Specialized Bookkeeping Software
Challenges of Bookkeeping for eBay Sellers
Selling Challenges
Sellers have a variety of eBay seller fees to account for, too, plus payment gateway fees. They are not always fixed, so tracking means correct calculations. Tracking shipping costs is similar, plus connecting each one to individual sales.
Sellers also need to handle inventory tracking to avoid stockouts or overstocking and calculate the cost of goods sold (COGS). This is not just about the number of products, but all their variations, too.
Sales tax and VAT computations are probably the most complex of all. These apply to sales made to customers in different states and internationally. Determining a nexus obligation and staying updated on changing rates can be tricky.
Then, there’s tracking returns and refunds and making inventory adjustments for items placed back in stock, or disposed of. This means adjustments to income, too.
Categorizing Income and Expenses
eBay sellers who experience a high volume of transactions can find it challenging to record them all. A store with multiple payment methods also means more complicated tracking and reconciliation.
Keeping business and personal accounting separate can be a challenge in itself for an individual seller. They also have to gather and store individual receipts for each expense.
Benefits of Using eBay Bookkeeping Software
Time and Skills
To remain competitive and grow, eBay sellers usually need to prioritize sales rather than bookkeeping. This leaves them with little time for recording and categorizing, which can mean rushing and making costly mistakes.
Most eBay sellers will also not have a background in finance and won’t understand accounting principles. This can lead to a lot of costly errors in tax computations and missed deductions.
eBay bookkeeping software automates a lot of the bookkeeping work, which makes it less time-consuming and more accurate. The expense is more than worth it.
Hiring a certified accountant can be costly, however. Hiring a bookkeeper vs accountant is an alternative, too. They know how to use accounting software and can take care of the rest of the manual tasks. This frees up more time to focus on selling.
Software, furthermore, can generate comprehensive financial reports like an income statement vs balance sheet, and even pro forma financial statements. This makes analyzing data easy, so sellers can better identify trends, areas to improve, and growth opportunities.
Ease of Use
eBay bookkeeping software is scalable so you don’t have to make huge changes when your business grows. Most tools offer additional features that you can use as needed.
Most accounting software also integrates with other tools like independent inventory management software or ecommerce management tools. This makes record-keeping easy and fast with automated data transfer in real time.
Key Features to Look for in eBay Bookkeeping Software
Integration with eBay and Other Sales Channels
How well your eBay bookkeeping software integrates with the eBay platform as well as other sales channels is key. When you sell across marketplaces and other channels, you need to keep all your tracking in sync:
- Payment gateways
- Shipping carriers
- Inventory management software
- Customer relationship management software
- Tax compliance software
- Financial reporting
Inventory Management Capabilities
You may want at least the core inventory management features available in your eBay bookkeeping software. This is not for everyone, since many sales channels have their own inventory features. But you can look into:
- Barcode scanning
- Multi-channel inventory management
- Demand forecasting
- Inventory valuation methods
- Real-time inventory tracking
- Product variation management with lot and serial number tracking
- Low stock alerts and automated purchase order creation and tracking
- COGS calculation
Expense Tracking and Categorization
Expense tracking features are a game-changer for any business. Look for:
- Receipt capture by upload or photographing
- Predefined expense categorization by setting rules based on merchant or description, or integrated chart of accounts
- Mileage tracking
- Expense reporting
- Integration with credit cards
- Expense approvals above a certain amount
Tax Reporting and Compliance Tools
The core tax features we recommend for eBay bookkeeping software include:
- Automatic sales tax calculation
- Tax report and form generation with automated filing
- Tax compliance alerts
- Sales tax management, including nexus determination
User-Friendly Interface
Any software you use should really have a user-friendly interface. After all, you got a tool to help you, not so you can spend months learning its intricacies. Look for tools that:
- Increase efficiency
- Reduce errors
- Offer a pleasant experience
Scalability for Growing Businesses
If you plan to grow your business, target software that can handle:
- Multiple users with different access levels
- Larger and larger transaction volumes without performance degradation
- Changing inventory tracking needs for growing product lines
- Enough data storage for expanding sets
- Multi-currency support
- Multiple business entity support
- Flexible integration capabilities
- Customizable reporting
Top eBay Bookkeeping Software Options
QuickBooks
QuickBooks is a popular bookkeeping software because of its robust features and strong integration with eBay. It can automatically import sales, fees, and expenses. It’s not a dedicated inventory tool, but it can handle basic tracking of stock levels, value, COGS.
QuickBooks also easily tracks business expenses, categorizes them, and generates reports. The mobile app can capture receipts. This software also helps with basic sales tax calculation and reporting.
QuickBooks is scalable with different plans and has one of the most intuitive interfaces. It also has dependable and accessible customer support.
Xero
Xero is a popular cloud-based accounting software that can integrate with eBay through third-party apps like A2X or Link My Books. It’s best for small businesses, but can adapt to changing needs through a variety of pricing plans.
Xero is known for its user-friendly interface. It has only basic inventory features, but efficiently tracks and categorizes business expenses with features like receipt capture and bank feeds. Xero also helps with sales tax calculation and reporting.
You can access reliable customer support from Xero through multiple channels.
Wave Accounting
Wave Accounting is a popular eBay bookkeeping software choice for small businesses because it has a free basic plan. It’s not as sophisticated as other accounting tools, but has the essential features. You can also scale up with paid plans.
Wave allows you to create professional invoices and track payments and expenses. It has receipt capture and categorization features along with automated bank and credit card transaction imports.
You can generate financial reports from Wave and leverage its basic tax preparation tools. It also has basic inventory tracking on the free plan.
A2X
A2X is more of a bridging tool than standalone bookkeeping software. It connects your eBay store with your accounting software to facilitate automations. It’s accurate, flexible, and highly scalable without compromising performance.
How to Choose the Right eBay Bookkeeping Software for Your Business
Assessing Your Business Needs
The right eBay bookkeeping software basically depends on how many transactions you manage and how complex your business structure is. Consider how the tools you’re reviewing handle:
- Cash-based or accrual-based accounting methods
- Number of team members needing access to financial data
- Accounting expertise of those handling the books
- Inventory types, volume, and variation
- Tax obligations and complexity
- Pricing models and fees
- Support availability and responsiveness
- Scalability
- Transaction volume
Evaluating Software Features and Usability
Apart from your unique business needs, good software should offer at least the basic convenience:
- Income and expense tracking
- Payment gateways and payment processing
- Sales tax management
- Financial reporting
- Software integration
- Mobile app
- Intuitive interface
- Easy to learn
- Documentation, resources, and tutorials
Trial Periods
You should always test out bookkeeping software before committing to a paid plan. Try software that has free trials or demo versions to assess their fit for your business. Consider, for example:
- Ease and accuracy of data imports
- Ease and accuracy of reports
- Report customization
Making the Final Decision
In addition to carefully evaluating the above, look into what others are saying about it. Peer reviews and recommendations can be very helpful. You can also glean feedback from online forums and communities.
FAQs
What is the best eBay bookkeeping software for beginners?
Many sellers recommend Wave Accounting to start with because it’s easy to use and has a free tier. You can use all the essential invoicing, expense tracking, and reporting features. It also imports financial data automatically.
As you grow, you can consider QuickBooks Online (the cloud-based version), Xero, or another paid tool that suits your needs.
How can I integrate my eBay account with bookkeeping software?
eBay does not offer direct integration, but a tool like QuickBooks Online can handle the integration. You can integrate tools like Xero using third-party apps.
In the absence of direct or third-party integration, you can manually import your data, although it’s very time-consuming and error-prone.
Can I use the same software for multiple eBay accounts?
Most eBay bookkeeping software can handle multiple accounts within the same platform, as long as the platform allows it. Make sure you create separate entities to track income and expenses separately and remain tax compliant.
How does eBay bookkeeping software help with tax preparation?
Software offers the most accurate, timely, and detailed reporting. This is essential for proper tax filing. Some tools even offer tax-specific features like automatic sales tax and VAT calculation based on customer location. Often, it even automatically checks for current tax rates and even encrypts data for privacy and security.
What should I do if my eBay bookkeeping software isn’t tracking all my sales?
Never rely completely on eBay bookkeeping software automations. Always double-check your records, or hire a bookkeeper to help you. If you notice issues, check that:
- The link between your software and eBay account is set up correctly.
- You set the tool to import data on the appropriate schedule.
- You do not have import filters set up that are blocking certain transactions.
- Your eBay account doesn;t show issues like payment holds or selling restrictions.
- Your eBay account is recording sales correctly.
If you still experience errors, you can manually enter data in the meantime to keep your records clean. Then, we suggest contacting software support for guidance and assistance. If you can’t find a solution, look into alternative software options.
What Is EcomBalance?
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
- Monthly Finance Meeting Agenda
- 9 Steps to Master Your Ecommerce Bookkeeping Checklist
- The Ultimate Guide on Finding an Ecommerce Virtual Bookkeeping Service
- What Is a Profit and Loss Statement?
- How to Read & Interpret a Cash Flow Statement
- How to Read a Balance Sheet & Truly Understand It
Conclusion
eBay bookkeeping software can really help you in a big way if you’re bogged down with work. You should never push bookkeeping tasks aside, but you shouldn’t ignore business operations and growth, either.
A suitable tool to track your finances can provide a valuable service. This way, you don’t have to sacrifice in either of these key areas.
