The 5 Best Accounting Software Choices for E-commerce Businesses: Our Top Picks for 2024

Accounting software is indispensable for any small business, especially if it has a large e-commerce presence. Accounting platforms present enormous benefits for e-commerce sellers, including inventory management tools and online invoicing for service-based e-commerce businesses. Accounting software also helps e-commerce sellers comply with tax regulations, which are often complicated when many online businesses sell to customers all around the country and the world.

To assist you in identifying the right accounting software service for your e-commerce business, we examined dozens of options. Our top selections are determined by factors that are important to e-commerce businesses, including third-party integrations, price, invoicing capabilities and inventory management.

One benefit of commercial accounting software is its affordability. Entry-level plans for our recommended providers on this list range from $10 to $20 per month. At the high end, monthly plans may cost $300 or more per month. Customized pricing is often available for large enterprise customers. Some companies, such as Wave, also provide basic accounting software for free.

Some accounting software providers charge for additional users beyond a set limit, which is an important point to keep in mind if many employees need access. A few vendors also offer bundles or add-ons, including timekeeping and payroll, for an additional monthly fee.

Today, most accounting software companies have shifted entirely from desktop-based software to a software-as-a-service model hosted in the cloud, in which users pay monthly on a subscription basis.

Choosing accounting software with the right features for an e-commerce operation will help your business’s finances. Here are some features you should look for in accounting software for e-commerce.

Bank Reconciliation

Bank reconciliation is the process of comparing your business’s books against your bank records. When done manually, this is a tedious and time-consuming process. However, many accounting software providers now provide tools that can quickly and accurately match your bank statements with invoices, bills, purchase orders, expenses and other transactions recorded in your business’s books.

Online Invoicing

Accounting software often includes invoice-creation features. For service-based e-commerce businesses, the ability to email a quote or invoice makes it easier to get paid. Leading providers, such as FreshBooks, also track when customers receive and view your requests for payment. Customization tools can be used to build professional-looking invoices that match your e-commerce business’s brand, which is important for appearing legitimate in the eyes of online consumers.

Recurring Invoices

A subscription-based e-commerce business will appreciate the ability to send invoices at regular intervals. Many accounting software providers include recurring invoices on higher-tier plans.

Financial Reports

The data captured by accounting software can be used to generate a variety of financial accounting reports that provide insight into how your e-commerce business is performing. These include general ledger reports, profit-and-loss statements, balance sheets, receivables and inventory analysis, and more.

Inventory Management

E-commerce businesses that sell physical products often keep inventory off-site, which makes proper inventory management especially crucial. A few leading accounting software services also provide tools for tracking inventory, creating purchase orders and more.

Time Tracking

Many accounting software providers provide tools for tracking time spent on projects. These tools, which are offered either as part of their accounting services or as stand-alone products, are useful for service-based e-commerce businesses, allowing them to convert billable hours into an invoice for payment.

Payment Reminders

Service-based e-commerce businesses that send frequent invoices may find that not all customers pay on time. Accounting software allows you to set automated payment reminders so you don’t have to chase down customers.

Bank Feed

Accounting software often integrates with your bank account so that all transactions from your financial institution sync with your general ledger.

The best accounting software for your e-commerce business depends on the specific features you’re seeking and whether your business is product- or service-based. Here are three basic steps to take when you’re evaluating accounting software.

1. Conduct market research.

Start by exploring the products currently on the market. Online guides (such as this one) can help you analyze and compare various options. Additionally, check user reviews and customer feedback on third-party review platforms and the Better Business Bureau website to get a well-rounded understanding.

2. Contact vendors for demos.

After completing your initial research and narrowing down your options to a select few companies, contact each one to request a product demo. Additionally, sign up for any available free trials to evaluate the software. Make sure the setup process for the accounting software is user-friendly.

3. Evaluate pricing.

Pricing for commercial accounting software is often straightforward. More expensive tiers include more features, so make sure you know what your business needs before you choose. Inquire about any package deals. Companies like Intuit bundle their accounting services with other business software, so taking advantage of these deals could save you some money.

Tracking your e-commerce sales in a spreadsheet doesn’t cut it once you enter the big leagues. Properly managing your business’s finances according to accounting standards is good not only for profits but also for staying in compliance come tax time. Here are some of the major benefits of using accounting software for e-commerce.

• Reduces errors: Accounting and bookkeeping errors are caused predominantly by human error. Common mistakes, including spreadsheet errors and inaccurate manual entries, are often cited by accounting professionals as a source of financial headache. Accounting software reduces reliance on manual spreadsheet inputs by directly extracting data from third-party business apps and bank records.
• Improves financial security: Embezzlement still plagues businesses that don’t maintain adequate internal controls. Guidelines and processes set by a company are designed to uphold the integrity of accounting and bookkeeping procedures. Utilizing accounting software enhances the effectiveness of these measures, aiding in the prevention and detection of employee fraud.
• Stores data safely: One benefit of cloud-based software is that all of your data is stored safely in the cloud, rather than on a physical device or paper ledger that can be stolen or damaged.
• Helps with tax preparation: E-commerce businesses often sell to customers around the globe. State sales tax, VAT and import duties are just a few of the taxes that e-commerce sellers must pay. Accounting software comes to the rescue in managing this task efficiently. Many software providers offer programs designed to calculate e-commerce sales tax, prepare tax forms and even file taxes automatically.

• Assists with business decisions: The data collected by accounting software can be leveraged to generate financial reports and reveal insights about your business’s performance, including cash flow forecasting, inventory reports and much more.
• Frees up your time: Accounting software can automate tedious business chores such as bank reconciliation, freeing you up to focus on growing your e-commerce business.