This article is part of a larger series on Accounting Software.
The best ecommerce software must integrate with your ecommerce platform to eliminate time-consuming duplicate entries and inevitable mistakes. Changes to inventory and sales recorded in your ecommerce software should flow automatically to your accounting software and vice versa. Here are four of the best accounting software options for your ecommerce business:
- QuickBooks Online: Best overall ecommerce accounting software
- Xero: Best for companies requiring unlimited users at a low cost
- Zoho Books: Best for ecommerce companies looking for integrated management software
- Wave: Best free accounting software for companies willing to use Zapier for ecommerce integrations
At Fit Small Business our mission is to provide small business owners with the best answers to their small business questions. Whenever possible, we evaluate all of the software we recommend by conducting an in-depth case study where our experts determine the strengths and weaknesses of each software by recreating real-life bookkeeping scenarios. There are only two scenarios where we may recommend software that has not been subjected to our case study – the software is not a complete bookkeeping system or if we don’t have access to evaluate the software. We evaluate all software on the same set of criteria regardless of whether they are a partner company.
Comparison of Best Ecommerce Accounting Software
QuickBooks Online: Best Overall Ecommerce Accounting Software
QuickBooks Online is our choice for the best overall ecommerce accounting software because of its integration opportunities and inventory features. It has far more direct integrations with ecommerce sites than Xero, which depends largely upon a connection to Parex Bridge for its ecommerce connections.
For ecommerce retailers, inventory tracking is essential to maintain an adequate inventory for sale. By integrating QuickBooks Online with your choice of ecommerce system, you can manage your business more efficiently since QuickBooks Online can handle inventory costs, purchase orders (POs), and the application of sales taxes for sales made in different jurisdictions.
QuickBooks Online now offers new customers a free meeting with a QuickBooks ProAdvisor to set up your company file.
QuickBooks Online is also our pick for the overall best small business accounting software because of its robust features in accounts receivable (A/R), accounts payable (A/P), and banking. It’s easy to use and adaptable to different industries like construction, production, and merchandising. You can also find independent QuickBooks certified CPAs (certified public accountants) and tax professionals easily to help you manage your books.
QuickBooks Online Overview
Xero: Best Accounting Software for Ecommerce Businesses That Require Unlimited Users
Xero rivals QuickBooks Online in inventory, A/P, and A/R management. However, Xero stands out in project accounting and fixed asset management and wins over QuickBooks in the number of users because it can accommodate an unlimited number, while QuickBooks can accommodate only up to 25 at its highest plan. The biggest drawback to Xero compared to QuickBooks is the relatively small number of independent bookkeepers available in the US to help you manage your books.
Zoho Books: Best for Ecommerce Companies Looking for Integrated Management Software
Zoho Books is one of the apps included within the Zoho suite of small business management products. When choosing Zoho Books, you get a seamless integration with more than 40 other Zoho applications that can manage your entire business, including sales, marketing, team communications, and employee recruitment. It’s also a great accounting software choice if you’re already using Zoho CRM, Zoho Inventory, and Zoho Commerce.
Zoho Books doesn’t directly integrate with any ecommerce platforms. You’ll need to subscribe to either Zoho Inventory, which ranges from $0 to $329 per month depending on the amount of monthly orders, or Zoho Flows, which ranges from $12 and $30 per month.
Zoho Books Overview
Wave: Best Free Accounting Software for Companies Willing To Use Zapier for Ecommerce Integrations
Wave is our choice for the overall best free accounting software because its accounting and invoicing features are totally free. You can send unlimited invoices to customers, set up unlimited companies, and keep track of your accounts at no cost.
The major drawbacks to Wave are that it lacks inventory accounting, and any ecommerce integrations must be accomplished by creating Zaps with Zapier, which is very time-consuming compared to the direct ecommerce integrations offered by the paid software in this guide. We don’t recommend Wave for companies larger than a microbusiness since you’ll need advanced features like robust online payment channels, multi-channel retailing, and inventory management.
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 the functionality of its mobile app. When evaluating software within these categories, we applied a higher weight to features essential to ecommerce companies and lower or no weight to less important features.
The general features evaluation came from our extensive case study that evaluated software in 13 categories. Our evaluation of the general features of ecommerce software includes six of these 13 categories, as our accounting expert believes they’re the most important features for ecommerce companies. The six case study categories included in our General Features score are Banking, A/R, A/P, Inventory, Sales Tax, and Reporting features.
5% of Overall Score
Each software was rated on price compared to other software well suited to ecommerce companies. In addition to the cost of a monthly subscription, we factored in the number of available users and any additional charges that are likely incurred by ecommerce companies.
10% of Overall Score
The ease of use score is a combination of available customer support options, our subjective evaluation of the software’s ease of use, and the availability of third-party bookkeepers that support users of the software.
30% of Overall Score
We evaluated each software on banking, accounts receivable, accounts payable, inventory, sales tax, and reporting.
5% of Overall Score
Mobile apps were evaluated on their ability to perform basic accounting functions from within the application.
50% of Overall Score
Accounting software was rated on its ability to integrate with ecommerce software, with direct integrations receiving more weight than integrations via a third-party connector. Through integrations, the software should synchronize inventory, accounts receivable, and revenue.
Frequently Asked Questions (FAQs)
What features should you look for in ecommerce accounting software?
Features to consider when choosing ecommerce accounting software include invoicing, payment processing, expense tracking, financial reporting, inventory tracking, and integrations with your ecommerce platform.
Is there a free ecommerce accounting software option?
Yes, Wave offers a free accounting software option for small businesses, but all ecommerce integrations must be done through Zapier.
Can ecommerce accounting software integrate with my ecommerce platform?
Some ecommerce accounting software can integrate with popular ecommerce platforms, such as Shopify, WooCommerce, and Square. Be sure to check if the software you’re interested in offers integrations with your specific platform.
It’s critical that ecommerce businesses invest in accounting software that integrates with their ecommerce platform to avoid unnecessary data entry and errors. For a well-rounded accounting software service, QuickBooks Online is our top pick—you’ll never go wrong with its features. Xero is also a great choice, although you may have trouble finding an independent Xero bookkeeper to work with you.