List of 5 Best Etsy Accounting Software – Save Time and Increase Profits

Running a business in itself is a lot of work. You juggle between a lot of work, from inventory management to customer service to creating unique products to stay on top.

But then there is a technical side of it all, which might not feel so glamorous: accounting. Yes, we’re talking about tracking sales, expenses, and taxes.

The good news? The right accounting software will make this part of your business a breeze.

Let’s dive into everything you need to know to find the Etsy accounting software that perfectly fits your Etsy business.

TL;DR – List of Etsy Accounting Software

In case you’re short on time, here are five popular accounting software options for Etsy sellers:

1. QuickBooks Online
2. Wave
3. Xero
4. Craftybase
5. FreshBooks

This blog will discuss these tools in more detail so you can choose the best fit for your business.

While these tools can help streamline your finances, we at EcomBalance offer a more hands-off approach. Specializing in eCommerce bookkeeping, we integrate seamlessly with QuickBooks and Xero to manage all your financial books automatically.

This way, you can focus more on growing your Etsy shop and less on crunching the numbers!

Schedule a callback!

Why Etsy Sellers Need Accounting Software

First off, let’s talk about why you need accounting software. Can’t you just keep a notebook or use an Excel sheet? Sure, you could, but as your business grows, that can get messy.

Here’s why accounting software is a must-have for you:

• Save Time: Automatically track sales, expenses, and profits instead of manually entering data.

• Avoid Tax Season Stress: Proper bookkeeping ensures you can file taxes without scrambling.

• Understand Your Business: Clear reports help you see the most profitable products.

• Stay Compliant: Many tools track sales tax, which is important for Etsy sellers who operate across states.

For example, according to Etsy’s 2023 seller census, 82% of Etsy sellers run their shops solo. That puts a lot of work on one person.

Leveraging accounting software can take one big pressure off your plate.

How to Get Started with Accounting for Etsy

Starting your accounting journey as an Etsy seller can seem daunting, but with a clear plan and the right tools, you will set yourself up for smooth operations. Follow these steps: 

• Set up a Separate Bank Account: You do not want your personal and business money mixed up; it can get very messy. A dedicated business account simplifies bookkeeping and gives you a professional image when dealing with customers or suppliers.
• Gather Your Etsy Data: Etsy offers detailed reports on your sales, fees, and transaction data. This report helps you track your income and expenses, which is vital for accurate Etsy bookkeeping.
• Pick a Software: Choose one that integrates with Etsy for automatic syncing. Which also generates financial reports and tracks your profit margins, allowing you to focus more on growing your shop rather than managing spreadsheets.
• Track Your Expenses: Keep a log of all your expenses such as shipping supplies, Etsy fees, and money spent on materials. This will help you find out your profitability and optimize a pricing strategy accordingly.
• Monitor Regularly: Check your software every week or month. This will help you understand the most profitable products to make better inventory and pricing decisions.
• Reconcile Your Accounts: Compare your Etsy payout reports with your business bank account to catch any discrepancies. This ensures accuracy and provides peace of mind, especially at tax time.

Many accounting tools integrate directly with Etsy, pulling in your sales and fees automatically.

By setting up the right software to keep your books organized, you can be assured of compliance and gain valuable insights that drive your Etsy business to success.

Key Features to Look For in Etsy Accounting Software 

All accounting software is not created equal. You need to look for certain features to find the perfect match for your business.

Here are some must-have features for Etsy sellers:

• Etsy Integration: Find a tool that automatically imports your sales and fee details from Etsy accounts. Ensuring you’ll save hours of manual entry.
• Expense Tracking: Ensure the software records everything from shipping supplies to advertising costs.
• Inventory Management: If you’re a manufacturer, tracking raw materials and finished goods becomes a crucial function. Find a tool which keeps a track of such things.
• Tax Prep: Features such as sales tax calculation, quarterly tax estimation, and direct integration is essential while looking for software as they can be lifesavers during tax season.
• User-Friendliness: Choose software with an easy-to-use interface. Wave and FreshBooks bookkeeping offers just that, which is ideal for beginners.

5 Best Etsy Accounting Software

Finding the best accounting software for Etsy sellers can be a blessing. The software lets you easily streamline your business and save countless hours. Let’s dive deeper into the top picks for Etsy sellers:

1. QuickBooks Online

QuickBooks Online is the first pick among small business owners. It provides a comprehensive set of tools essential for those who have a growing business. 

Key features:

• Integrates directly with Etsy to import sales data.
• Tracks income, expenses, and profits automatically.
• Offers advanced reporting and tax preparation tools.
• Supports payroll and multi-user access.

Because of its extensive capabilities, QuickBooks Online pricing is relatively higher and may feel overwhelming for beginners. However, its scalability and reliability make it worth the investment for serious sellers.

2. Wave

Wave stands out because it provides a powerful free platform that reduces the barrier to entry for new Etsy sellers. It’s particularly well-suited for those testing the waters with a new product line.

Key Features:

• Completely free accounting and invoicing.
• Tracks income and expenses with simple dashboards.
• Integrates with bank accounts for automatic updates.
• Optional paid add-ons like payroll.

However, Wave lacks direct Etsy integration, so you must manually upload data. It also lacks some of the advanced features needed to scale businesses, but it’s ideal for small or just beginning operations.

3. Xero

Xero can effectively handle complex finances, making it an ideal choice for Etsy sellers who need to manage high transaction volumes or have inventory-intensive businesses.

Key Features:

• Advanced inventory management.
• Seamless integration with TaxJar for sales tax compliance.
• Customizable reporting tools.
• Supports multiple currencies for international sellers.

While Xero is an excellent tool for larger shops, its plans start cheap and can become costly with additional features. Its extensive features may feel like overkill for small Etsy shops, but it’s worthwhile for rapidly growing businesses.

4. Craftybase

Craftybase is a niche tool specifically designed for handmade businesses, and what makes it different is its ability to automatically calculate the Cost of Goods Sold (COGS) in real time.

Key Features:

• Tracks raw materials, inventory, and Cost of Goods Sold (COGS).
• Generates tax-friendly reports for Etsy sellers.
• Tracks multiple sales channels beyond Etsy.

However, Craftybase’s focus on inventory tracking might feel excessive for businesses that just need simple bookkeeping. Additionally, there’s a learning curve for those unfamiliar with managing materials and inventory.

5. FreshBooks

FreshBooks excels in its simplicity, making it great for sellers who value ease of use over functionality.

Key Features:

• Easy expense tracking and invoicing.
• User-friendly interface is excellent for new users.
• Generates tax-ready financial reports.
• Offers time-tracking for services-based sellers.

FreshBooks is a budget-friendly option for small sellers. However, it lacks robust inventory tracking features in tools like Craftybase or Xero. Its simplicity and strong customer support make it an excellent choice for sellers with straightforward financial needs.

How to Choose the Best Accounting Software for Etsy Sellers 

Feeling overwhelmed by options? Picking the right accounting software for your Etsy shop doesn’t have to be complicated.

Here’s how to narrow it down:

• Assess Your Needs: Consider what your shop requires. Do you need inventory tracking or just basic bookkeeping? Match the software’s features to how you run your business.
• Consider Your Budget: Free tools like Wave are great for beginners, while paid tools offer advanced features. Spending a little bit more money every month can prevent costly mistakes and polish your finances. 
• Try Free Trials: Most tools offer a free trial, so try them out to see what you like. Input some Etsy data, generate reports, and see which feels most intuitive.
• Check Etsy Integration: This is a non-negotiable for seamless tracking. Some software excels at seamless integration, while others might require manual uploads. Prioritize seamless integration to save yourself time.

For example, if you’re a high-volume seller with complex inventory needs, Xero or Craftybase might be worth the investment. Smaller shops might do just fine with Wave or FreshBooks.

The right software will make your accounting smoother, freeing up your time to focus on what really needs your attention.

Still unsure which option is best for you? We can guide you in finding the perfect setup and even handle your bookkeeping for you. With expertise in eCommerce accounting, we’ll manage all your bookkeeping and spare you from the stress of finances!

Get help from experts today!

Costs of Accounting Software for Etsy

Ecommerce accounting software costs can vary depending on features, complexity, and size of your Etsy shop.

Here’s a breakdown:

• Free: Wave offers an entirely free accounting platform with essential features like invoicing and expense tracking. However, premium add-ons, such as payroll, might cost extra.
• Low-Cost: FreshBooks starts at $19/month, as well as QuickBooks which also begins at $19/month, making them a budget-friendly option for Etsy sellers who have straightforward needs.
• Mid-Range: Xero’s plans start at $29/month. It is perfect for rapidly growing business as this tool offers robust features like inventory management, advanced reporting, and payroll.
• High-End: Craftybase is explicitly designed for handmade businesses and starts at $49/month. Its niche features, such as COGS tracking, make it a worthwhile investment for sellers managing raw materials and inventory-intensive shops.

Consider it an investment. Spending $25-$50 a month could save you hours of work and hundreds of dollars in mistakes. The right tool pays for itself in time and peace of mind, especially as your shop grows.

Limitations of Etsy Accounting Software to Keep in Mind

If you’re a new seller on Etsy, its native accounting tools may get you through the first few months. But as your business and inventory grow, you’ll find that they’re not designed to be a full accounting solution.

Here are key limitations of Etsy’s built-in tools:

• Very basic reporting: You’ll see your sales and fees, but not much else. You won’t see your profit or cash flow, making it hard to build forecasts and plan for seasonality.
• No automations necessary for bookkeeping: You’ll still need to categorize expenses, reconcile accounts, and track fees outside the platform.
• Not designed for growing businesses: Etsy’s software can’t handle complex accounting structures. The moment you add more inventory, ads, contractors, or sales channels, your system will fall apart.
  For example, Etsy can’t accurately track COGS because it only monitors sales activity, not production costs. This alone will throw your numbers off.
• No support for tax prep: Etsy doesn’t handle income tax preparation or sales tax.

Etsy is designed as a marketplace, not as an accounting platform.

You need a separate accounting software that can support the complex financial system of ecommerce businesses to accurately manage your books.

When to Add Expert Help to Your Etsy Finances

A great rule of thumb to keep in mind is this: Bring in a bookkeeper from Day 1.

Even simple financial structures can get messy fast, and you need a bookkeeper to establish a strong financial foundation, discipline, and clean books right from the start.

These are key to a scalable business.

But just in case you’re DIY-ing now, here are signs it’s time to bring in expert help:

• You’re profitable on paper but always short on cash: It’s a sign your cash is leaking somewhere–but you don’t notice. Expert bookkeepers can show you exactly where your money is going.
• You spend more time on spreadsheets than growing your business: A couple of hours a week reconciling accounts, that’s fine. But when you’re spending countless hours a week on your books–and yet you’re still behind–that’s a sign it’s time to delegate.
• Tax prep is a mad scramble every year: If you’re always worried about compliance, unsure whether your books are accurate, or can barely file your taxes on time, a bookkeeper can help ensure your books are tax-ready all year round.
• Your business is growing: If you’re running multiple products, shops, sales channels, or payment methods, your system is too complex to do your books yourself.

If any of these signs apply to you, you need a bookkeeper ASAP.

Our team of dedicated bookkeepers at EcomBalance has got your back. We provide reliable monthly bookkeeping, financial analysis, and proactive support for growing ecommerce businesses like yours.

Simplify your finances with expert bookkeeping today.

Common Mistakes in Accounting for Etsy and How to Avoid Them

Even with software, mistakes can happen. Here are a few common ones—and how to sidestep them:

1. Not Tracking All Expenses: Missing small costs like tape or printer ink adds up. Use software to log every business expense.
2. Ignoring Sales Tax: Many Etsy sellers forget to collect or remit sales tax. Use software that handles sales tax calculations.
3. Mixing Personal and Business Finances: This can create a bookkeeping nightmare. Always use a separate account.
4. Procrastinating: Letting months of transactions pile up leads to stress. Schedule regular bookkeeping sessions.

Frequently Asked Questions (FAQs) 

Before we wrap up, let’s address some of the most common questions Etsy sellers have about bookkeeping software.

Can Etsy Bookkeeping Software Help with Tax Preparation?

Yes, most Etsy bookkeeping software includes tax preparation features.

Tools like QuickBooks and Xero generate tax-friendly reports, calculate sales tax, and help track deductible expenses. Some even integrate with tax-specific tools like TaxJar, making filing accurate and timely.

Does Etsy Bookkeeping Software Automatically Track Expenses?

Many accounting tools, such as FreshBooks and QuickBooks, automatically track expenses by syncing with your Etsy store and bank accounts.

This means that everything from shipping costs to Etsy fees is recorded without manual input, saving you time and reducing errors.

How Do I Sync My Etsy Store with Accounting Software?

Syncing is typically straightforward. Tools like QuickBooks Online and Craftybase offer direct Etsy integrations. You just need to authorize the connection by logging into your Etsy account using the software. Once synced, the tool automatically imports your sales data, fees, and taxes.

Can I Use the Software Without Accounting Experience?

Absolutely! Most tools, like Wave and FreshBooks, are designed to cater to beginners’ needs.

They have accessible dashboards, tutorials, and even have customer support when you have questions about getting through your finances.

Advanced options like Xero or Craftybase may have a learning curve but come with detailed guides and customer support for users who are new to accounting.

Can I Use Etsy Accounting Software for Multiple Shops?

It’s not ideal to use Etsy’s built-in accounting tools for multiple shops.

That’s because:

• Etsy lacks a consolidated financial view necessary for accurate accounting.
• You can’t easily track profit, expenses, or cash flow.
• There’s no automated reporting across multiple shops, resulting in more manual accounting work.

What’s the Easiest Accounting Software for Beginners on Etsy?

If you’re a beginner seller on Etsy, focus more on simplicity and ease of use.

QuickBooks is an easy, scalable option that integrates well with Etsy and handles expenses, payouts, and reporting.

Conclusion

Accounting might not be the most exciting part of running an Etsy shop, but it’s one of the most critical aspects of business.

The right software can save you time, money, and stress. Whether you’re a beginner looking for free options or a long-term seller needing advanced features, there’s a tool for everyone.

Also remember, tracking your finances is more than just counting numbers; it’s about grooming your business for long-term success.

If managing your books all by yourself sounds too overwhelming, let EcomBalance do the hard work for you. With accurate financial tracking to detailed reporting, our Etsy bookkeeping services help you optimize operations and make smarter business decisions. Optimize your Etsy finances today!