BEST OF

Best Accounting Software for E-commerce Businesses

Look for e-commerce accounting software that lets you process payments and track inventory and sales tax.

Rosalie MurphyAug 10, 2021

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With customers in many states — and maybe even around the world — online businesses need accounting software that supports their unique needs.

The best e-commerce accounting software does that by offering built-in sales tax support and inventory tracking. If you choose software without those features, integrations with third-party inventory management and sales tax automation software are essential.

These are our picks for the accounting software options best suited to online sellers.

Our pick for

Overall accounting software for e-commerce businesses

QuickBooks Online stands out for e-commerce because it can automatically look up sales tax and tell you how much you owe and when it’s due.

QuickBooks
Shop now

on QuickBooks's website

QuickBooks Online

QuickBooks

Starting at

$25/mo

Additional pricing tiers (per month): $50, $80, $180.

Promotion

50% off

50% off for first three months.

Shop now

on QuickBooks's website


Why we like it

QuickBooks is an industry leader, used by millions of small businesses worldwide. In the accounting field, that can mean something: If you’re working with an outside bookkeeper, QuickBooks is probably their weapon of choice. QuickBooks Online is cloud-based and well-suited to smaller businesses, although it can scale up as your company does, from the Simple Start package (one user, two accounting firms) up to Advanced (up to 25 users and three accounting firms, plus advanced features). The program integrates with hundreds of apps, in addition to connecting easily with other products in the Intuit family handling payroll and payment processing. There's also a separate version for self-employed individuals (starting at $15 per month with 50% off in the first three months).

Pros

  • QuickBooks Online automatically calculates sales tax, then keeps track of what sales tax users owe in each jurisdiction and when payments are due.

  • Inventory tracking is available within QuickBooks Online at the Plus and Advanced levels.

  • QuickBooks has an extensive library of apps to facilitate data syncing with Shopify, Etsy and many other sales platforms and payment processors.

Cons

  • QuickBooks can have a learning curve for users without accounting experience.

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Our pick for

Accounting software for multiple users

Xero allows unlimited users, making it a good option for online businesses with big teams.

Xero

Xero

Starting at

$11/mo

Additional pricing tiers (per month): $32, $62.

Promotion

50% off

50% off for first two months.


Why we like it

Xero stands out by allowing unlimited users at every subscription tier, a potentially valuable feature for businesses where several users may need at least limited access to the system to run reports or analyze performance. You can also set up different permissions for each user so employees only have access to what's relevant to their job. By contrast, QuickBooks Online Advanced allows just 25 users and three accounting firms. The New Zealand-based company, which has accounting software that is a market leader in some parts of the world, is also working to make inroads in the U.S. It offers a full certification program for accountants (like QuickBooks does), with more than 100,000 accountants and bookkeepers using Xero — which makes it easier for Xero customers to find outside help.

Pros

  • Unlimited users at every pricing level.

  • A large library of apps to facilitate integration with sales platforms and inventory management software.

  • Inventory tracking available within Xero at every pricing level, though you can only track 4,000 items.

Cons

  • The Early pricing plan limits users to just five bills and 20 invoices per month.

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Our pick for

Best value accounting software

Zoho Books is free for businesses with less than $50,000 in annual revenue, including access for one user and one accountant.

Zoho Books

Zoho

Starting at

$0/mo

Additional pricing tiers (per month): $20, $50, $70.

Promotion

N/A

Why we like it

Zoho Books packs an impressive collection of features and reporting capabilities for an affordable price. Its interface is easy to learn and use, and the option to automate workflows — for example, to send an email alert if an invoice exceeds a certain amount, or to apply a discount or late fee in certain cases — makes it stand out as an attractive choice. (You can create five automated workflows under the basic plan and up to 10 under the higher tiers.) Zoho is perhaps best-known for its customer relationship management, or CRM, and productivity apps, which integrate well with its accounting software. It's possible to create contacts on Zoho Books based on new leads in Zoho CRM, for instance.

Pros

  • Offers a free version.

  • Zoho offers many other programs, including CRM, expense reporting and human resources software, that can sync with Zoho Books.

  • Mobile apps (including an Apple Watch app) with advanced features.

Cons

  • To manage inventory and integrate with sales platforms, you’ll need Zoho Inventory, a companion software program that may come with an additional cost.

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Our pick for

Accounting software for e-commerce solopreneurs

GoDaddy Bookkeeping makes things easy for self-employed online sellers with features like an auto-generated Schedule C worksheet.

GoDaddy Bookkeeping

GoDaddy

Starting at

$5/mo

$4.99 and up per month

Promotion

N/A

Why we like it

GoDaddy Bookkeeping software is designed for users who are selling online — in particular, those with no accounting experience. GoDaddy Bookkeeping offers a secure and fast way to manage your books, automating sales and expenses, importing business accounts from e-commerce sites and generating up-to-date income and expense reports, profit and loss statements and other documents.

Pros

  • Direct integrations with Amazon, Etsy, eBay and PayPal.

  • On the Essentials and Premium plans, GoDaddy Bookkeeping can estimate your quarterly tax payments and generate a Schedule C worksheet.

  • Designed for non-accountants.

Cons

  • No inventory tracking available.

  • No free trial.

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Our picks for best e-commerce accounting software

Click the software name to read our review.

Our pick for: Best overall accounting software for e-commerce businesses

Price (before any discounts): 

  • Simple Start: $25 per month.

  • Essentials: $50 per month.

  • Plus: $80 per month.

  • Advanced: $180 per month.

QuickBooks is generally regarded as the industry standard in accounting software because it offers a wide variety of features and many accountants use it. A key differentiator for e-commerce businesses is that QuickBooks Online can automatically look up sales tax in each jurisdiction, then tell users how much they owe each sales tax authority and when payments are due. QuickBooks’ large app library also allows users to import Shopify and Etsy data and sync with a large number of sales platforms, making it an efficient option that should save business owners time.

Our pick for: Best accounting software for multiple users

Price (before any discounts): 

  • Early: $11 per month.

  • Growing: $32 per month.

  • Established: $62 per month.

Every Xero plan allows unlimited users, so it could be a good option if you’re running your business with a team. Beyond that, Xero offers many features similar to QuickBooks Online: integrations with a large number of e-commerce platforms and inventory management programs, and sales tax calculation. Xero can also generate a sales tax report, though it relies on a third-party app, Avalara, for sales tax rates.

Our pick for: Best value accounting software

Price (when paid annually): 

  • Free for businesses with less than $50,000 in annual revenue.

  • Three users: $15 per month.

  • Five users: $40 per month.

  • 10 users: $60 per month.

Zoho Books (and its companion Zoho Inventory) is a good value as many of its features — including invoicing, accounting reports and the ability to manage 1099 contractors — are available for free to the smallest businesses. Like Xero, Zoho Books can generate a sales tax report and relies on Avalara for up-to-date sales tax rates. But users will need Zoho Inventory to manage their inventory levels and integrate with online marketplaces.

Our pick for: Best accounting software for solopreneurs

Price (when paid annually): 

  • Get Paid: $4.99 per month.

  • Essentials: $9.99 per month.

  • Premium: $14.99 per month.

GoDaddy Bookkeeping is designed for self-employed online sellers. By providing quarterly tax payment reminders and an auto-generated Schedule C worksheet at tax time, it can help you to manage personal as well as business finances. But if your business grows and you need more advanced features, including inventory tracking, you may need to switch to different software.

How to choose accounting software for your e-commerce business

When considering e-commerce accounting software, you’ll first want to make sure it works well with your selling platform and inventory management software. When these items can all talk to one another, it’s easier to stay on top of your finances.

Direct integrations between these systems are best because data can flow seamlessly from one to another. Third-party integrations can work well too, though — just make sure to test them, ideally during your software’s free trial period.

Also, if you work with a bookkeeper — which most business owners should at least consider — that person will need to access your books, ideally in real time.

Does it integrate with your selling platform?

Whether your shop runs on Amazon, Shopify, WooCommerce, Etsy or elsewhere, your accounting software should be able to easily import data from that platform so you know how much revenue you’re generating.

Does it integrate with inventory management software?

Depending on how big your e-commerce business is, you may not package and ship every item yourself. Inventory management software can help you keep track of stock levels.

Your inventory software should communicate with all your selling channels to avoid mistakes, like selling products you don’t have in stock. It should also share data with your accounting software to help you understand how much capital is tied up in inventory and when you need to order more products.

How will you manage sales tax?

When customers pay sales taxes, they pay the seller, not the government directly. The seller then has to pass those funds on to the city or state collecting them.

Because customers pay sales tax, rates are determined based on where they’re located, not where the seller is located. That’s easy for a brick-and-mortar store, since all of their in-person transactions happen in the same building. For an e-commerce business selling to customers all over the country or the world, it can get complicated.

E-commerce businesses need to keep track of how much sales tax they owe in each jurisdiction, then make tax payments.

QuickBooks Online automatically calculates sales tax based on the location of the customer, and QuickBooks users can generate sales tax reports so they know how much they owe to each jurisdiction.

Xero and Zoho Books both rely on Avalara, a third-party app, for tax calculations. Both of these programs can also generate sales tax reports.

If you choose a different software solution, make sure you know how to gather all the data your accountant needs.

Last updated on August 10, 2021

To recap our selections...

NerdWallet's Best Accounting Software for E-commerce Businesses

  • QuickBooks Online: Best for Overall accounting software for e-commerce businesses
  • Xero: Best for Accounting software for multiple users
  • Zoho Books: Best for Best value accounting software
  • GoDaddy Bookkeeping: Best for Accounting software for e-commerce solopreneurs