4 Mostly Used eCommerce Accounting Software This 2022 

4 Mostly Used eCommerce Accounting Software This 2022

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The financial aspect of a business isn’t just about computing sales. Like it or not, it also encompasses taxes and many other areas, which is hassling for one who just loves to count sales. It’s also not a wise move to rush on complying with tax requirements only when the tax period comes. More so to do all financial matters manually and single-handedly.

Fortunately, accounting software programs abound, making all the financial and taxation matters in businesses more efficient and accurate. This article points out the different types of mostly used eCommerce accounting software this 2022 and why every eCommerce business needs one.

What Is eCommerce Accounting Software?

One huge difference eCommerce accounting software has from the regular ones is that it is customized for eCommerce purposes, especially integrated with all the features needed by online businesses. Hence, no reason to put up with several irrelevant features.

For instance, in the aspect of taxes, an eCommerce accounting software can compute taxes in each sale depending on the state or country in which the transactions occur. This function is available for online businesses, whether they operate nationwide or worldwide.

Businesses can choose between these two—cloud or desktop—or combined. Cloud software lets users access their data on every device they use (e.g., mobile phone, desktop, laptop, etc.), whilst desktop software’s data is only accessible on the desktop on which the software had been set up unless the information is intentionally shared.

Businesses may opt for cloud or desktop-based software or a combination of the two.”

Desktop-based is preferred in terms of security as cloud access may be more vulnerable to hacking, which is why when preferring cloud-based, it’s crucial to choose the best and safest software there is. However, users may also choose a combined approach, such that they can access certain information in the cloud whilst keeping others merely on the desktop.

Why Your eCommerce Business Needs Accounting Software

Having an accountant and bookkeeper makes the aspects of finances and taxes more manageable, but having the best-fitting accounting software makes the process way more efficient. It’s not advisable for business owners or managers to do the numbers by themselves, but if they’re confident about it, they at least have to make sure they use the right eCommerce accounting software to aid in their tasks.

The right eCommerce accounting software can significantly help businesses to grow.”

What accounting software can do to their business is priceless. In a nutshell, here are how the best choice can impact the business positively:

  • It delivers clear financial reports
  • It does bookkeeping tasks accurately
  • It helps analyze financial data
  • It simplifies the management of cash flow
  • It determines the best pricing
  • Its data-sharing efficiency allows cross-department collaboration

In terms of running an eCommerce business, it’s essential to see the big picture, preferably clearly and quickly, in one click. An eCommerce accounting software presents a broader perspective through graphs and charts, allowing accountants to make clear financial reports and stakeholders to better understand their business’s financial statements.

Bookkeeping tasks are handled very well too. Humans as they are, bookkeepers may commit mistakes at any time. The software prevents many kinds of errors, such as the process of integrating payments; hence, ensuring that bookkeeping is always done accurately.

Through an accounting software program, businesses can better analyze their financial data. For instance, they can point out which products or services appeal to customers more and which don’t. This ability to determine customer profitability, among other things, allows businesses to save a great deal as they no longer have to stock the kinds of products that don’t make a good profit.

Good financial analyses pave the way to improved cash flow management. Businesses can view their expenses, earnings, and profit from a bigger perspective, which means they buy the right stock, save up for coming expenses, and even stash up some savings for future emergencies.

Accounting software can also aid in determining the correct prices for any product. It takes into account both the expenses and profit. Businesses wouldn’t want their products to be priced too low and too high. The key is to designate competitive prices that can maximize their profits and add value to their customers at the same time.

Moreover, with easier access to data for each department, collaboration is made possible. Good cross-department collaboration proves to be very time-efficient. Everyone involved can fulfil their tasks right away without having to consult other departments and wait for their response.

The 4 Best eCommerce Accounting Software

There are plenty of choosing the right eCommerce accounting software As of the latest, four accounting software for eCommerce businesses outstand many others.

It’s important to note that when choosing the right software, one has to consider many factors, especially the size and needs of the business. For instance, smaller online businesses don’t need to invest in complicated, expensive software when free or lower versions can just meet their financial needs.

But they can always choose to scale up to a paid plan when they need the extra features. On the other hand, medium to large-sized businesses have to make sure they choose the right software, purchase a plan, and get help from the software team for the setup and application.

Here’s a basis to narrow down their search:

QuickBooks Online
Pros Cons Pricing
Designed for small to medium-sized businesses
A steep learning curve to the advanced interface
Simple Start: £12 each month for 1 user
Integrates with over 650 apps
Varying quality of customer support
Essentials: £20 each month for 3 users
Over 80 customizable reporting frameworks
Limited functions of the mobile app
Plus: £30 each month for 5 users
Easy to set up and use
New users may find the dashboard cluttered
High-end payroll support
Hybrid calculation of sales tax
Simple dashboard overview
Updates in real-time
Affordable and simple-structured plan pricing

It does have its set of cons, but QuickBooks has remained the first choice amongst a myriad of users over the years. From the very start, it is designed for small to medium-sized businesses, which is why it appeals to most entrepreneurs who have minimal to zero experience in accounting.

Quickbooks can also integrate with over 650 apps and all the other kinds of third-party tools. Alongside integration, users can also access additional features and support for the add-ons. Being able to connect to all major accounts is its great advantage.

QuickBooks Online

It also doesn’t lag behind its competitors when it comes to reporting templates and features. It offers more than 80 reports that the users can customize, all of which show up to be very comprehensive.

The software provides real-time updates, exemplary payroll support, hybrid computation of sales tax, and simply structured and affordable plans. Plus, to promote collaboration, up to 5 users can access the software simultaneously.

Moreover, whilst new users may find the Quickbooks dashboard overwhelming, they usually get it over time and even find that they can obtain simplified overviews of most of their business’ essential data.

Xero
Pros Cons Pricing
Unlimited users
Only best for scaling or growing businesses
Starter: £10 per month for 20 invoices and five bills
Relatively cheaper than QuickBooks
Time tracking and multiple currencies functions are paid add-ons
Standard: £24 per month for unlimited invoices and bills
Integrates popular eCommerce platforms
Inability to set reorder levels
Premium: £30 per month for multiple currencies
Options for project time tracking
Massive difference between online and mobile app
Optional add-ons vary*
Extensive features for customization
Limited customer support; only email and replies take a longer time
Payroll: from £5 each month
Mobile access and mobile apps
Occasional errors in automatic reconciliation
Claim expenses: from £2.50 for each user
Bank reconciliation options
Track projects: from £5 each for user
Offers payroll interface
Pay with Wise: from £3 each month
Contact database and segmentation
Good inventory accounting
Pros Cons
Unlimited users
Only best for scaling or growing businesses
Relatively cheaper than QuickBooks
Time tracking and multiple currencies functions are paid add-ons
Integrates popular eCommerce platforms
Inability to set reorder levels
Options for project time tracking
Massive difference between online and mobile app
Extensive features for customization
Limited customer support; only email and replies take a longer time
Mobile access and mobile apps
Occasional errors in automatic reconciliation
Bank reconciliation options
Offers payroll interface
Contact database and segmentation
Good inventory accounting
Pricing
Starter: £10 per month for 20 invoices and five bills
Standard: £24 per month for unlimited invoices and bills
Premium: £30 per month for multiple currencies
Optional add-ons vary*
Payroll: from £5 each month
Claim expenses: from £2.50 for each user
Track projects: from £5 each for user
Pay with Wise: from £3 each month

Another software that has garnered a name for itself is Xero. Over the years, it added features to get on par or above other accounting software programs. True enough, it can cater to an unlimited number of users and is relatively more affordable than QuickBooks.

Xero 

The software targets growing businesses, offering various interfaces that help them reach their ambitions, which means Xero may not be the best choice for non-scaling small businesses. For a start, it offers three plans in which users can pay for add-ons along the way given its extensive customization features.

It also has a mobile app, although many can attest there’s a huge gap between its quality and that of online. But it does offer simplified, comprehensive functions over their business essentials.

Plus, it offers time-tracking on projects which freelancers can take advantage of, although this is also a paid add-on option.

As of the latest, a devastating fact about Xero is that it has limited customer support. The company is best reached through email. Live chat or phone support is very limited.

Xero has bank reconciliation options too, but its automatic reconciliation is usually incorrect, which means users will have to review their transactions manually in the end.

Overall, Xero’s unlimited user capability is its most appealing feature amongst users. Businesses that value cross-department collaborations usually turn to this software to streamline their work and data sharing.

FreshBooks
Pros Cons Pricing
Outstanding customer support
Not best for handling taxes
Lite: £9.90 per month for 5 billable clients
With credit feature
Adding users comes at £7 per user
Plus: £17.10 for 50 billable clients
Plenty of integrations
Severely limited mobile app function
Premium: £27.00 for 500 billable clients
Affordable and simple pricing structure
Lacking reports features
Very streamlined user interface
Invoices may not be fully customized
Customizable invoices
Lite doesn’t offer double-entry accounting
Constant new features’ updates
Add discounts to invoices

The most outstanding feature of FreshBooks is its very reliable customer support. Businesses that look for extensive support from setup to application will find this software very helpful. The company’s user support wins over many other accounting software companies.

FreshBooks 

Their articles are a huge help and phone support extraordinary. But this doesn’t guarantee they have a well-working mobile app, as it is reported by most users to be severely limited.

It comes with an unlimited user feature too but at a price. Adding a new user means an additional £7. However, compared to other software programs, it appears to be more affordable at the starting price.

Its automated bank reconciliation is a great help for businesses. This feature imports financial transactions automatically and then categorizes. Its simplifying capability saves them a considerable amount of time.

For businesses that need help with accounting matters, FreshBooks may not be their best choice as it doesn’t provide quarterly tax calculations. Fortunately, they can opt for third party tax professionals to take charge of their tax concerns. Legend Financial would be glad to help.

Wave Accounting
Pros Cons Pricing
Completely free for invoicing and accounting use
Only best for microbusinesses
Totally free for accounting and invoicing purposes
Uses Zapier for eCommerce integrations
Fairly basic and simple templates
Quality features for basic accounting
Limited features for mobile app
Helps in filing tax returns and calculating tax payables
Doesn’t integrate discounts
Uses 256-bit encryption to ensure security from hacking
Only uses accrual basis accounting
Uses double-entry accounting
Has only 12 non-customizable reports
Supports multiple currencies

Wave Accounting, by far, is the most affordable of all accounting software programs as it is eternally free for accounting and invoicing use whilst adding much value to the business. It comes without hidden charges or recurring fees, except that payment and payroll features are charged.

It’s best for microbusinesses with minimal accounting needs. They can transact with as many bank accounts and credit cards as they want without worrying about fees. Most importantly, their transactions prove to be very safe from hacks and leaks as Wave Accounting uses 256-bit encryption.

As it is free software, its features may be just too basic and simple; hence, it’s least recommended for growing businesses. Larger businesses will need far more advanced options, which this software may not meet.

Choosing the Best eCommerce Accounting Software

Businesses can list down their accounting needs and see what checks their boxes.Hiring an accountant  can help them decide which among these mostly used eCommerce accounting software this 2022 fits their business.

They may not get everything they want in one software, such that it has great accounting performance but subpar taxation solutions. Fortunately, our accounting and tax experts at Legend Financial are more than glad to help. See how we maintain the trust of our clients. Reach us today!

References

5 Best Ecommerce Accounting Software Programs for 2022. (14 December 2021). Retrieved from Fit Small Business: https://fitsmallbusiness.com/best-ecommerce-accounting-software/

Best Accounting Tools for E-Commerce Businesses. (7 February 2021). Retrieved from Osome: https://osome.com/uk/blog/best-accounting-tools-uk/

5 Reasons To Use eCommerce Accounting Software. (n.d.). Retrieved from The Accountancy Cloud: https://theaccountancycloud.com/resources/blogs/ecommerce-accounting-software

15 Best Small Business Accounting Software Tools for Growing Businesses. (10 June 2020). Retrieved from Shopify: https://www.shopify.co.uk/blog/small-business-accounting-tools

The Best Accounting Software for Ecommerce Shops and How to Choose. (9 October 2019). Retrieved from ShipBob: https://www.shipbob.com/blog/ecommerce-accounting-software/

Best Accounting Software for Ecommerce in 2022. (2 January 2022). Retrieved from Ecommerce Platforms: https://ecommerce-platforms.com/articles/best-accounting-software-for-ecommerce

Best Ecommerce Accounting Software (and How to Choose). (19 March 2022). Retrieved from Go Forma: https://www.goforma.com/business-resources/best-ecommerce-accounting-software-how-to-choose

10 Best Accounting Software Picks For Ecommerce Businesses. (16 February 2022). Retrieved from ecommerceCEO: https://www.ecommerceceo.com/ecommerce-accounting-software/

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