Do you have an eBay business? Do you want to know which accounting software is best for your needs? If so, read on! Having the best eBay accounting software is crucial for your business. We'll discuss each accounting software in depth, showing you how much they cost and how eBay sellers can benefit from using them.
First up, we'll talk about how you can start off using basic spreadsheets.
DISCLAIMER
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. You can use it to determine your profit too.
Of course, the spreadsheet doesn't pull the data from eBay automatically like some of the software options we'll discuss later. 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 are 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 is that you must follow the Making Tax Digital (MTD) rules to submit a VAT return to HMRC (the UK's VAT authority).
MTD came about in 2020, and in a nutshell, it means that you have to submit your UK VAT returns via an approved software partner. The idea is that HMRC wants to be able to see the data behind the figures included on your VAT return to see that things add up essentially.
Once you're VAT registered, you need to consider 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 eBay reports tedious.
Most eBay accounting software options we will discuss are pretty good value for money when you consider 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 effectively, there are a couple of options available.
Xero has been getting great feedback from its users since it was first launched in 2006 by Australian Tim Lucas.
It has 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, that process could be completely automated too. See the integration section below for more detail.
Xero is an MTD compliant accounting software that allows you to submit your VAT returns straight to HMRC from inside with the click of a button.
Xero has 3 price plans available: Starter, Standard and Premium. Starter is not really suitable for most eBay sellers, as it is limited to the number of invoices and bills it allows you to 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 accounting choice for eBay sellers is QuickBooks, which was launched in 1998 by Intuit Inc. QuickBooks now also offers its accounting services via the cloud with its QuickBooks Online product.
Similarly to Xero, QuickBooks Online is a complete accounting 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.
Like with Xero, you can use an integration app such as A2X or Link My Books to automatically enter your income and expenses.
QuickBooks is also MTD compliant.
QuickBooks Online has 3 price plans available: Simple, Essentials and Plus. Unlike Xero, QuickBooks Online pricing is mainly focused on additional users. You can only add additional users on the Essentials and Plus plans.
Most eBay sellers choose Essentials, with some opting for 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 eBay accounting 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 are a 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 an integration app. Using an integration app will probably save you the most time overall.
The two main players in this market are A2X Accounting and Link My Books. Both help you to automate your eBay bookkeeping completely.
A2X Accounting and Link My Books hook up directly to your eBay account and Xero or QuickBooks, forming 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 - £13/month - Max 200 orders/month
1K - £26/month - Max 1,000 orders/month
5K - £39/month - Max 5,000 orders/month
10K - £65/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, Shopify, Amazon and Etsy. That being said, it can work out less expensive to use Link My Books for your eBay, Shopify, Amazon and Etsy bookkeeping and then just use A2X for 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, Link My Books provide default account and VAT rate selections that you can simply approve, making setting up a doddle.
With A2X, your 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 as your VAT liabilities could be reduced when 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 they move to using Link My Books.
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