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 five of the best accounting software options for your ecommerce business:
- QuickBooks Online: Best overall ecommerce accounting software (8.6 of 10 points)
- Xero: Best ecommerce accounting software for companies requiring unlimited users at a low cost (8.5 of 10 points)
- Zoho Books: Best for ecommerce companies looking for integrated management software (7.6 of 10 points)
- FreshBooks: Best for ecommerce companies seeking outstanding customer service (6.4 of 10 points)
- Wave: Best free accounting software for companies willing to use Zapier for their ecommerce integrations (3.9 of 10)
Comparison of Top Providers
$25 to $180 per month
$12 to $65 per month
$15 to $50 per month (custom pricing model available)
$0 to $70 per month
1 to 25
1 to 10
Costs of Additional Users
$10 per month
$3 per month
QuickBooks Online: Best Overall Ecommerce Accounting Software
QuickBooks Online is our pick for overall best small business accounting software because of its robust features in accounts receivable (A/R), accounts payable (A/P), and banking. QuickBooks Online is 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.
- Cash management and banking: With QuickBooks Online, you can manage your cash transactions, reconcile your bank accounts, and process checks from customers. During bank reconciliation, you can either upload a bank statement or enter the ending balance of your bank account. QuickBooks Online doesn’t require an uploaded bank statement before reconciling. You can also do reconciliation manually. However, it’s best to utilize bank connections for your ecommerce business.
- A/P management: You can create vendors, manage unpaid bills, and track payments in QuickBooks Online’s A/P system. If you sell inventory, you can also see the purchase order (PO) functions in the A/P module to help you manage inventory purchases and quickly convert them to bills after receipt of purchased inventory. You can integrate QuickBooks Online with your ecommerce system to keep track of inventory levels and set up ordering of goods at reorder point.
- A/R management: In QuickBooks Online’s A/R system, we like how QuickBooks Online calculates sales tax for every sale automatically, depending on the jurisdiction. You can also modify your invoices by changing the template and colors. In addition, you can issue credit memos to customers and review the summary of customer transactions.
Our Expert Opinion
QuickBooks Online is our choice for the best overall ecommerce accounting software because of its integration opportunities and inventory features. 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 ecommerce business more efficiently since QuickBooks Online can handle inventory costs, POs, and the application of sales taxes for sales made in different jurisdictions.
Xero: Best Accounting Software for Ecommerce Businesses Requiring Unlimited Users
Xero rivals many of QuickBooks Online’s features. As an alternative to QuickBooks, Xero shares great inventory accounting but provides a different experience to users at a lower price point. Xero wins over QuickBooks in the number of users because Xero 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 United States to help you manage your books.
- Project accounting: Xero’s project accounting is the best among all of the software programs on this list. We’re highlighting this feature because Xero’s project accounting best fits ecommerce businesses selling made-to-order goods on a job order basis. You can use Xero to accurately compute the cost of job orders and provide quotes to customers.
- Inventory management: Xero’s inventory features rivals QuickBooks’ because the former offers almost the same features but at a lower price point. With Xero, you can manage inventory items, see inventory costs, compute cost of goods sold (COGS), and determine ending inventory.
- Fixed assets management: Ecommerce businesses that use special equipment or machines for production will benefit from Xero’s fixed asset manager. In the fixed asset manager module, you can keep track of your fixed assets, calculate depreciation, and account for disposals in the future.
- Sales and income tax: As our pick for the best QuickBooks Online alternative, Xero also does well in taxes, especially if you integrate it with Avalara. In terms of tracking sales tax, both QuickBooks Online and Xero share similar features, such as creating sales tax items, charging sales tax on sales, and adjusting sales tax due to credit memos. Xero’s edge here is that you can pay your sales tax liability through Avalara.
Our Expert Opinion
Xero rivals QuickBooks Online in inventory, A/P, and A/R management. However, Xero stands out in project accounting and fixed asset management. We think that both Xero and QuickBooks deliver an outstanding experience due to their similarities; the choice depends on your budget and needs. Xero is more affordable than QuickBooks Online so we recommend choosing the former if you’re on a tight budget. Furthermore, we recommend that you choose Xero if you’re a project-based or job-order-based business because Xero’s project accounting features best fit your costing and product pricing needs.
Zoho Books: Best for Ecommerce Companies Looking for Integrated Management Software
Zoho Books is one of the apps included within the Zoho suite. It focuses more on bookkeeping and accounting. As part of Zoho’s collection of services, Zoho Books is a great accounting software choice if you’re already using Zoho apps like Zoho CRM, Zoho Inventory, and Zoho Commerce.
- Inventory management: Zoho Books and Zoho Inventory are terrific partners for inventory management. Zoho Books has the necessary inventory accounting features like creating inventories, determining COGS, and reporting ending inventories. By adding the advanced inventory features found on Zoho Inventory, you can accurately account for inventory costs in the books and manage inventory requirements and reorder points.
- Mobile app functionality: One thing that can prove useful for ecommerce businesses is Zoho Books’ mobile app functionality. Whether you’re on a tablet or smartphone, Zoho Books’ mobile app can help you receive payments, send invoices, and categorize expenses through the app.
- Customer support: Integrating with third-party apps can be problematic sometimes. With Zoho Books, you can resolve problems easily with integrations because Zoho’s customer support is superb. There are many ways to contact them and you can get the assistance you need in case you’re having trouble with ecommerce apps integrated with Zoho Books. However, you may have problems finding an independent Zoho bookkeeper in the U.S. to assist you.
Our Expert Opinion
Zoho Books doesn’t directly integrate with any ecommerce platforms. You’ll need to subscribe to either Zoho Inventory, starting at $49 per month for more than 25 orders, or Kloud Connectors for $30 per month for each ecommerce integration. The benefit of choosing Zoho Books is the seamless integration with over 40 other Zoho applications that can manage your entire business including customer relationships (CRM), sales, marketing, inventory, team communications, and employee recruitment.
FreshBooks: Best for Ecommerce Companies Seeking Outstanding Customer Service
FreshBooks is an accounting software service rivaling Xero in project accounting. However, FreshBooks caters more to self-employed individuals and freelancers, making it one of our choices for best accounting software for freelancers. FreshBooks best fits service-based businesses because it combines project management and accounting into one program, but it doesn’t provide inventory accounting.
- A/R management: Invoicing is another strength of FreshBooks because it gives you the ability to personalize invoices. You can also manage customer balances within the module and send payment reminders. Self-managed ecommerce businesses can use FreshBooks to handle customer accounts and accept payments.
- A/P management: Since FreshBooks lacks inventory management features, it doesn’t have A/P features for POs. However, its A/P system is flexible enough to handle small purchases of inventories and supplies needed for your operations. FreshBooks focuses on service items, making it suitable for service-based companies selling services online.
- Great customer support: FreshBooks is famous for its outstanding customer support. You can contact them by phone or you can have them contact you. They also provide assistance by chatbot or live chat in case you need help. Their email address is also available for inquiries or complaints. If you need immediate help, FreshBooks offers robust self-help articles on their support page.
Our Expert Opinion
FreshBooks integrates with ecommerce platforms, and it can be used as an accounting software solution for self-managed ecommerce businesses. If you’re a service provider, FreshBooks fits your needs perfectly. On the contrary, product-based businesses will find FreshBooks lacking in terms of inventory management. However, if your ecommerce management system includes inventory management, you can use it instead to track inventories and import the balances to FreshBooks for financial reporting.
Wave: Best Free Accounting Software for Companies Willing To Use Zapier for Their 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 on Wave for free. The major drawbacks to Wave are that it lacks inventory accounting, and any ecommerce integrations must be accomplished by creating zaps with Zapier. Zaps is their automated workflow that integrates apps and services.
- A/R management: Wave’s A/R management may not be as robust as QuickBooks or Xero, but it’s outstanding, given that it’s a free service. With Wave, you can create invoices, accept short payments from customers, and manage customer balances. For small ecommerce businesses, Wave’s A/R features are more than enough.
- A/P management: The A/P system of Wave is basic if compared to other accounting software. You can create vendors, manage billings, and record payments, but Wave doesn’t deal with advanced features like vendor credits, project billings, and POs.
- Sales and income tax: As a free service, we’re satisfied that Wave accounts for sales taxes in the sale tax liability account automatically. If your ecommerce business sells products to different jurisdictions, automatic accounting for sales taxes is an efficient feature. Unfortunately, you can’t file and pay your taxes through Wave.
Our Expert Opinion
For a free option, Wave is worth considering. You can subscribe to Zapier to create zaps to ecommerce platforms, but that’s very time-consuming compared to the direct ecommerce integrations offered by the paid software in this guide. Wave’s features are simple and basic, and it best fits microbusinesses with minimal accounting needs. 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 important to ecommerce companies and lower or no weight to features less important to ecommerce businesses.
The general features evaluation came from our extensive case study that evaluated software in 11 categories. Our evaluation of the general features of ecommerce software includes six of these 11 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.
20% 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.
10% of Overall Score
Mobile apps were evaluated on their ability to perform basic accounting functions from within the application.
30% 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.
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 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.