Do you have an eBay business? Do you want to know the best accounting software for your needs? If so, read on! This post will be discussing which accounting software is the best for your business. We'll go in depth about what each option is and how much they cost, as well as how eBay sellers can benefit from using them.
First up, we'll talk about how you can start off using basic spreadsheets.
We are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice. We highly recommend that users seek advice from qualified accountants for their tax compliance.
This is a great place to start for eBay sellers who are just getting started or who want a completely free option for their bookkeeping. We have put together a Free eBay Seller Accounting Spreadsheet which will help you as a new eBay seller to keep track of your sales, refunds and fees.
Of course the spreadsheet doesn't pull the data from eBay automatically like some of the software options we'll discuss later do, but if you are happy to manually download the required reports from eBay and input the data yourself then it could be a good option.
The reports you'll need to download and how to filter them to find the data you need is discussed in this article.
A good rule of thumb is when you become VAT registered then it's probably time to ditch the spreadsheet and start using accounting software. The main reason for this is that to submit a VAT return to HMRC (the UK's VAT authority) you need to follow the Making Tax Digital or MTD rules.
MTD came about in 2020 and in a nut shell it means that you have to submit your UK VAT returns via an approved software partner. The idea being that HMRC want to be able to see the data behind the figures included on your VAT return to see that things add up essentially.
Do once you're VAT registered you should start to think about using a software provider to account for your eBay sales.
You might also consider the switch if you find the manual process of downloading and processing the eBay reports tedious. Most of the softwares we will discuss later are pretty good value for money when you consider just how much time you will save plus they are often more accurate than doing it manually due to the lower risk of human error.
For eBay sellers who want to streamline and manage their accounts in an effective way there are a couple of well renowned options available.
Xero is one such example which has been getting great feedback from its users since it was first launched in 2006 by Australian Tim Lucas.
Xero has a great host of built in reports meaning you can manually enter your eBay sales and fees and then produce profit and loss reports, balance sheets and the all important VAT Returns.
You still need to manually download and enter the eBay sales information each month with Xero but if you use an integration app such as A2X or Link My Books then that process could be completely automated too. See the integration section below for more detail.
It's MTD compliant and you can submit your VAT returns straight to HMRC from inside Xero with the click of a button.
Xero has 3 price plans available. Stater, Standard and Premium. Starter is not really suitable for most eBay sellers as you are limited to the number of invoices and bills you can enter on it. Most eBay sellers choose Standard with some choosing Premium, mainly those who need the added multi-currency features.
Starter - £12/month
Standard - £26/month
Premium - £33/month
All pricing is in GBP and excludes VAT.
Another established choice for eBay sellers is QuickBooks which was launched in 1998 by Intuit Inc but now also offers their accounting services via the cloud with their QuickBooks Online product.
Similarly to Xero, QuickBooks Online is a full solution meaning that you enter all your income and expenses and it does all the hard work for you in producing reports and VAT returns.
QuickBooks Online has 3 price plans available. Simple, Essentials and Plus. Unlike Xero QuickBooks Online pricing is mainly focused around additional users. You can only add additional users on the Essentials and Plus plans. Most eBay sellers choose Essentials with some choosing Plus, mainly those who need the added stock features.
Simple - £12
Essentials - £20
Plus - £30
All pricing is in GBP and excludes VAT.
Xero and QuickBooks Online are both really good tools. In fact they are both so similar in terms of features and pricing that it's genuinely hard to choose a winner.
Both platforms offer a really good solution for eBay sellers looking to streamline their bookkeeping. Both also offer a free trial so if you're considering one or the other then the best thing to do is try them both and judge for yourself.
Assuming you now have Xero or QuickBooks, the next thing to consider is probably going to save you the most time overall. That is an integration app.
The two main players in this market are A2X Accounting and Link My Books.
These apps help you to automate your eBay bookkeeping completely.
They hook up directly to your eBay account and Xero or QuickBooks and form a connection between the two. But more than that, they help you to accurately account for your eBay sales, refunds, fees and VAT completely on autopilot.
Mini - $19/month - Max 200 orders/month
Basic - $39/month - Max 500 orders/month
Pro - $69/month - Max 2,000 orders/month
Advanced - $99/month - Max 5,000 orders/month
Standard 10K - $149/month - Max 10,000 orders/month
All pricing is in USD and excludes VAT. Larger plans are also available.
Starter - £11/month - Max 200 orders/month
1K - £23/month - Max 1,000 orders/month
5K - £35/month - Max 5,000 orders/month
10K - £59/month - Max 10,000 orders/month
All pricing is in GBP and excludes VAT. Larger plans are also available.
A2X and Link My Books are both very good at what they do. They both make your life as an eBay seller much easier when it comes to automating your bookkeeping.
A2X supports eBay, Amazon, Shopify, Etsy and Walmart whereas Link My Books focuses on eBay and Amazon. That being said it can work out less expensive to use Link My Books for your eBay and Amazon bookkeeping and then just using A2X for Shopify, Etsy or Walmart standalone.
Link My Books is well renowned for having a super easy setup process with guided wizards holding your hand along the way. Being a UK based company with a great understanding of VAT they provide default account and VAT rate selections that you can simply approve which makes set up a doddle. With A2X you tax mappings must be manually selected which can be tricky if you are not sure of what you are doing.
A2X is based in New Zealand whilst Link My Books is a British company so if you are keen on backing British businesses then this may sway your choice.
Ultimately whichever you choose you will end up saving a huge chunk of time on your eBay bookkeeping each month. Plus by getting your VAT right you might even end up saving money too as your VAT liabilities could be reduced due to correctly separating out sales which don't incur VAT such as exports, zero rated goods and marketplace VAT responsible goods. This is a common mistake that we see many sellers making before the move to using Link My Books.