post by:
Carmen Marks
Some of us think of accounting and start to gag. For some of us, numbers are how we make everything make sense. The last thing we want to think about is money going out. But accounting is critical to the health and well being of your business. Investopia describes accounting as ‘recording financial transactions pertaining to a business.’
A solid accounting record puts you in the driver’s seat of your business. Using the right programs allow you to track the comings and goings of your money, build a budget, and easily find room for growth and cutbacks.
So the real question is, how do you manage your books? If you’re stuck in the age of pen and paper documenting – or maybe you still like Excel Spreadsheets – then we’re about to blow your mind by showing you the best accounting software for your eCommerce business. Keep your finances organized and free yourself from the monotony of out of date and inefficient bookkeeping.
The Best Accounting Software For Your eCommerce Business:
- Intuit Quickbooks
- Wave
- Free Agent
- FreshBooks
- Xero
- Oracle NetSuite
- Zoho Books
- GoDaddy Bookkeeping
Take a look at what each accounting software has to offer below. Additionally, we’ll provide a pros and cons list from real users found on TrustRadius who have given us insight into their experience – both positive and negative.
1. Intuit Quickbooks
Possibly the most common and popular option for small businesses, Intuit Quickbooks is an all-in-one cloud-based accounting software designed to put all your money in one place. They have several plans to fit any budget and frequently offer discounts for new members. You can organize your invoices and receipts, business taxes, and you can add-on payroll tracking for an additional fee.
Quickbooks is a great overall bookkeeping system, but reviews online say it’s difficult to get in contact with customer support and all of the features can be overwhelming for new members. If you start off with a plan that you realize does not meet your needs, you can switch to another plan. Unfortunately, it’s not very customizable, but with all the tools in one place, you may find that you don’t need customization.
| The Pros: | The Cons: |
| +Plans for any budget | –Customer Support is difficult to reach |
| +Add-on payroll option | –Not customizable |
| +Very user friendly | –Does not integrate well with other accounting software |
2. Wave
We’re always wondering if the price is worth the product. Wave is a company that says “here, have it for free.” For a small business that only wants to manage basic accounting and invoicing, you can’t do much better than free.
Wave offers other options at a monthly and pay-per-use subscription price which helps make receiving payment easier for the customer and available to you quickly. The free version is very limited, but has the basics of any accounting or record keeping you would need for your business.
| The Pros: | The Cons: |
| +Plans starting at $0/month | –Updates cause formatting changes that are difficult to reformat |
| +Great for tracking invoices and bills | –Invoices don’t print in numerical order |
| +You can add your personal logo to invoices | –Delays releasing money, but marks file as “paid” even though the money hasn’t been received yet. |
3. FreeAgent
While not free, FreeAgent has one plan with one monthly price to cut out the hassle of choosing what is best for you. Their low-cost monthly subscription includes invoice management, receipt tracking, banking services, and progress reports of your business. The software has unlimited use, so you don’t have to struggle with limited access while you’re in the middle of a big project.
Unfortunately, you can’t create purchase orders with this program and it’s not very customizable to fit specific needs and priorities. It’s a little more than the bare basics of Wave but not quite as intuitive as Quickbooks. FreeAgent is still a great option for new and small businesses.
| The Pros: | The Cons: |
| +Designed specifically for small business, freelance, and contractors | –Bulk payments are difficult to separate |
| +Invoice reminders automatically sent to the customer | –No customizable templates for individual clients |
| +Fast, user friendly, and easy invoicing | –Some intuitive features distribute money incorrectly |
4. FreshBooks
FreshBooks is a breath of “fresh” air, if you know what we mean. While other programs boast about what they believe is best for you with varying degrees of subscriptions, FreshBooks takes it to another level. They do have four separate plans that check the boxes for payment, bills, and add-ons for payroll.
What’s really interesting about FreshBooks is that they have a fifth option that is entirely customizable. You can pick out the options that are best suited for your needs and leave the rest. Reviews say the program is pretty intuitive, comes with a mobile app, and user friendly.
The drawback to FreshBooks is that you don’t have options for purchase orders, inventory management or vendor tracking. It does have an easy to use customer service feature that is available during designated hours via phone, email, and live chat – but if you’re working on something at 3am, you might be out of luck depending on your timezone.
| The Pros: | The Cons: |
| +Competitive prices that hold larger volume of information than some of its competitors | –No time-tracking capabilities for individual projects |
| +Create and auto send invoices for subscription services | –Not able to carry over past-due balances to a new invoice |
| +Customer service is easy to reach with minimal hold times. | –Terms of invoices are automatically updated across the platform so you can’t customize them for individual clients |
| +Stores client info with ease including a credit card on file for recurring invoices | –Platform runs slower with high volume and occasionally crashes |
5. Xero
If you’re looking for something with simplicity and a program to get started, Xero offers a startup plan option with the ability to manage all of your needs. They have 24/7 customer service which is accessible online. Additionally, their website provides services for finding answers to your small business questions and a trusted accountant database. One thing customers love the most is the ability to customize emails and templates with their own logo.
Users love what Xero has to offer as a solid accounting software, but with every positive is a negative. Xero doesn’t support some of the plug-ins that their competitors have embraced. On top of that, there are some customization issues that users found make things more difficult such as personalized fiscal calendars and small bank integration.
| The Pros: | The Cons: |
| +Ability to customize logos and templates | –Occasionally creates duplicate reports for which the difference is unclear |
| +Monitors invoices and you can send automatic reminders for late payments | –Users unable to send batch payments |
| +Easy to use with eCommerce businesses like Shopify | –Has limited plug-in options to link to other accounting software |
6. Oracle NetSuite
Probably one of the more advanced softwares on this list, Oracle NetSuite is an all in one accountant. If you have an established business, this option might be a great addition or replacement for your less customizable and limited software you’ve been using. NetSuite has been shown to be the preferred software for companies that have 100+ employees and have a few million dollars in revenue.
In addition to customizing your platform and integrating all of your 3rd party systems into the NetSuite cloud, this software features multilingual capabilities, tracking, performance reporting, and real-time monitoring of your business.
Oracle NetSuite is definitely on the more expensive end of accounting software – some reports show it could cost a business up to $100k just to get started. In light of that information, we don’t necessarily recommend this platform for startups or smaller businesses until they’re more solidly established. $100k can go far with marketing, promotion, inventory, and shipping. Once you are ready to make the switch from a smaller-scale accounting service, Oracle NetSuite can’t be beat.
| The Pros: | The Cons: |
| +Customize reports that other platforms do not offer | –Higher costs than other platforms, not advised for new and small businesses |
| +Interactive customer service that allows users to vote on issues in which they want to see change | –Influx of features can be difficult to navigate |
| +Multiple platform integrations that allow for accounting, ERP, and CRM accessibility | –Some users noted price increases on a yearly basis |
7. Zoho Books
Some softwares has you pay additional fees for credit and debit services. But Zoho Books includes that feature in their free program. Zoho Books has four price tiers, starting at $0, that are budget friendly for small businesses. You can monitor your expenses, integrate your banking and payments, and build invoices.
Users who have switched to Zoho Books have expressed some concerns over the platform’s “clunkiness” when converting from a previous software and while using the app. Zoho also has a noticeably absent payroll module, but it does offer 1099 tracking. Probably one of the biggest complaints we’ve seen for this software is that it’s very difficult to undo any mistakes after the documents have been submitted into the program.
The second biggest issue was that there were no customization options for forms, invoices, or even logos and fonts. While some of these complaints may not apply to you, it does show that this is a very basic software and may not be the most suitable answer to companies that work on a larger scale.
| The Pros: | The Cons: |
| +Easy online payment receiving from customers online | –Does not connect with all banks automatically so it does require manual entry |
| +Automatic invoices and notifications of past-due bills | –Reports can be complex and difficult to navigate |
| +Easy to use app that allows you to create +Create invoices and manage bids | –No multilingual capabilities |
8. GoDaddy Bookkeeping
From the domain name registrar to support and resources for starting your business comes an accounting software with attitude. GoDaddy Bookkeeping is their answer to provide you with the same backing.
Designed for the accountant who has no experience for formal training as an accountant, aka many small business owners trying to play all of the roles of their business, GoDaddy Bookkeeping offers a clear and straightforward software for new users. The program integrates with fulfillment platforms like Amazon, eBay, and PayPal.
Many users say GoDaddy Bookkeeping says their CRM (customer relationship management) has improved and optimized. But it’s far from perfect. Users say the program lacks time management keeping options and only provides units in US dollars instead of options for other currencies. This isn’t too surprising since GoDaddy is a US-based company, but it does limit businesses who deal with consumers across the pond or the border.
| The Pros: | The Cons: |
| +Download from online retail platforms easily (Amazon, eBay, Etsy) | –Currency units in US dollars only. |
| +Compatible with Paypal, download transactions with ease | –Dates in US formats requiring manual editing |
| +Low cost, basic setup, uncomplicated for new users | –Limited time keeping options |
| –Unable to set your own tax or fiscal year |
The Importance Of Finding The Right Accounting Software
Finding the right accounting software is not just a task to check off on your to-do list. It’s a vital part of your overall business health. Being able to consolidate your finances onto one platform saves you time, money, and stress.
Using a software that is below your needs or beyond your means could leave you in a position that is overwhelming. You will be playing catch up on the backend trying to fill in the blanks where your software leaves you empty.
The right accounting programs will help give you insights into your businesses that you may not be able to track quickly on regular pen and paper or excel spreadsheet.
Key Factors to Look For When Choosing an eCommerce Accounting Software
There is a difference between general bookkeeping and accounting. Bookkeeping is the recording and organizing of financial documents. Your bookkeeping should include:
- Invoices
- Bank accounts
- Debt repayment (both yours and your customer’s)
- Payroll
- Any financial transactions
On the other hand, accounting is the practice of analyzing these documents to make predictions for your business. Your accountant should prepare reports for:
- Tax preparation
- Audits
- Forecasting and risk assessment
- Adjustments to previous entries
As an eCommerce business, you want to be sure your program integrates seamlessly with the platform where you conduct your business. Unifying your platform with your software means automatic updates, receipts, and record keeping saves you a lot of time printing, filing, and uploading documents.
You as the business owner can handle the bookkeeping aspects, but it is in your best interest to hire an experienced accountant to help you with the more complicated aspects of balancing the books.
What Makes eCommerce Accounting Different From Traditional Accounting?
The most important thing you can do when managing your books is understanding what makes an eCommerce business different from traditional businesses. eCommerce has a few aspects that make the business unique and that affects how you do your accounting.
- Bank accounts and credit are not the main focus of transactions. eCommerce businesses track transactions through the selling platforms
- The focus is on inventory and cost of goods sold (COGS). In a business where your goal is to sell a product, a lot of your numbers are based around how much inventory you purchase, store, sell, and receive as returns.
- The beauty of the internet allows us to interact with people sitting right next to us or in countries thousands of miles away. This affects sales tax and foreign transactions. Sales tax is based on the state in which the product is sold and purchased, meaning it’s complicated and ever changing.
Factoring in these nuances is incredibly important for managing the transactions and monitoring the money that comes in and goes out. An eCommerce specific accounting software benefits your business because they understand these differences and modify their programs to provide you with the best solutions possible.
Thankfully, you don’t need flashy accounting software to get your business up and going. However, you should be aware of the basics and supplement the areas where your software is lacking. As your business becomes more developed, you can increase your subscription plans to use more of the accounting services. Small businesses should not be too quick to jump on the expensive and complicated programs unless you have already determined that your business requires a more sophisticated docket.
Conclusion
While bookkeeping is generally the process of recording transactions, accounting is a little more complex. Hiring an experienced accountant can help you project the health of your business. Using these tools and the right people can set you up for success. Align yourself with an accounting software that provides reliable customer service and resources for improvement.
Spend the time to research and review the plans carefully. Keep in mind the price of the program and the ability to grow and integrate with your current platforms. Consult with other companies and accounting professionals to find out your specific needs and which features will work for you and your business.