5 Best Ecommerce Accounting Software in 2021

Features of Ecommerce Accounting Software

The appropriate accounting software for your ecommerce business might be expensive, but it should pay for itself easily in time-savings and accuracy. Ecommerce businesses require more sophisticated software than many other small businesses because of the necessity to track inventory accurately across multiple sales channels, receive online orders and payments, and collect and remit sales tax to multiple jurisdictions.

Direct Integrations with Ecommerce Software

It’s crucial that your accounting software exchanges information with your ecommerce software so that entries in one system will be reflected automatically in the other. For instance, a sale in your ecommerce software should create revenue and a reduction of inventory in your accounting software automatically. The alternative is to record sales in your accounting software manually, which is not a great use of your time. The simplest, and usually the cheapest, way to integrate is to choose a software that has an integration or add-on specific for the ecommerce software you are using.

Ecommerce Integrations Through Third-party Connectors

Many accounting programs can integrate with multiple ecommerce platforms through third-party connectors. For example, OneSaas can connect to either QuickBooks Online or Xero for your accounting needs, and a large number of ecommerce platforms like Shopify, WooCommerce, Squarespace, eBay, Wix, and BigCommerce. Third-party connectors allow you to integrate your accounting software with multiple sales channels, but you’ll have to pay a subscription fee to the third-party connector in addition to any fees you pay for your accounting software and ecommerce software. For example, OneSaas costs between $21.85 per month for two connected apps and 100 transactions to $343.85 per month for five connected apps and 10,000 transactions.

Inventory Accounting

It is crucial for retailers to be able to separate their total cost of inventory purchases into the cost of goods sold (COGS) during the year and the cost of inventory remaining at the end of the year. This requires your accounting software to track not only dollars spent on inventory but the number of units purchased and sold for each inventory item. Generally, less expensive and free accounting software doesn’t do the required inventory accounting, so retailers need to be prepared to spend a little more on accounting software than service providers.

Sales Tax Collections, Remittance, and Filing

An increasing number of states require out-of-state retailers to collect sales tax, which creates a serious burden to ecommerce businesses. A good sales tax system will not only add sales tax to your invoices or receipts but also determine the sales tax rate to apply based on the customer address, track total sales tax collected and remitted by jurisdiction, and assist in filing the required sales tax returns. Some ecommerce platforms will handle your sales tax accounting, in which case you won’t need the feature in your accounting software.

Less Important Accounting Features for Ecommerce Businesses

Most ecommerce companies collect payments online at the time of the sale, so sending invoices to customers is not important. In addition, most ecommerce platforms will provide for online payments and customer receipts, so these features are not required of the accounting software. Finally, since most ecommerce companies are retailers rather than service providers, it’s not necessary for the accounting program to track hours and expenses to charge customers.

How We Evaluated Accounting Software for Ecommerce

We rated accounting software on how well it meets the specific needs of ecommerce companies, as well as pricing, general features, ease-of-use, and our own expert analysis. When evaluating software within these categories, we applied a higher weight to features important to ecommerce companies and a lower, or no weight, to features less important to ecommerce businesses.

READ LESS