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Updated May 15, 2024

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

E-commerce businesses managing the digital flow of money and products can simplify their processes by using these accounting tools.

Mike Berner
Mike Berner, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Growing E-commerce Businesses
Xero
Xero company logo
  • Great solution for accounting novices
  • No upcharge for additional users
  • Over 1,000 integrations
USALinks to Xero
Visit Site
  • Great solution for accounting novices
  • No upcharge for additional users
  • Over 1,000 integrations
Best for Accountants and Bookkeepers
QuickBooks Online
Quickbooks logo
  • User-friendly interface
  • Live accounting help
  • Over 750 integrations
USALinks to QuickBooks Online
Visit Site
  • User-friendly interface
  • Live accounting help
  • Over 750 integrations
Best for Online Invoicing
FreshBooks Accounting
Freshbooks company logo
  • Easy invoice creation
  • Ability to sync with time tracking
  • Invoice alerts and reminders
USALinks to FreshBooks Accounting
Visit Site
  • Easy invoice creation
  • Ability to sync with time tracking
  • Invoice alerts and reminders
Best for Inventory Management
ZarMoney
ZarMoney company logo
  • Inventory management tools
  • Simple pricing plans
  • Superior reporting tools
  • Inventory management tools
  • Simple pricing plans
  • Superior reporting tools
Best for Custom Solutions
Sage
sage company logo
  • Open API
  • Affordable monthly plans
  • 24/7 customer support
  • Open API
  • Affordable monthly plans
  • 24/7 customer support

Table of Contents

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To develop our list of the best accounting software for e-commerce businesses, our small business finance experts conducted dozens of hours of research. Our process includes attending live demonstrations and interviewing company representatives about their products, as well as conducting hands-on testing of each platform to determine which is best for the unique needs of e-commerce businesses. We compared pricing plans to find the most flexible and best value for e-commerce businesses. Then, we examined features that are important to online retailers, such as digital invoicing, inventory management tools and tax management capabilities that support sales across multiple jurisdictions. We also analyzed user reviews of each accounting software to see how they stacked up in real-world customers’ estimation, and how this feedback lined up with our own testing experience. Learn more about our methodology.

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.

Compare Our Best Picks

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Our Top Picks for 2024
QuickBooks Online
FreshBooks Accounting
ZarMoney
Sage
Rating9.0/109.5/109.0/109.0/109.0/10
Best use case

Growing e-commerce businesses

Accountants and bookkeepers

Online invoicing

Inventory management

Custom solutions

Mobile app

Yes

Yes

Yes

No

Yes

Starting price

$15 per month

$30 per month

$17 per month ($204 annually)

$15 per month

$10 per month

Third-party integrations

1,000+

650+

80+

6

200+ and open API

Unlimited users

Yes

No

No

No

Yes (Standard plan only)

Monthly invoice limit

Yes (20 on entry-level plan)

No

Yes (unlimited up to 5 clients on entry-level plan)

No

No

Customer service

Email, live chat and limited phone

Phone and live chat

Phone, email and live chat

Phone, email and live chat

Phone, email and live chat

Review Link
Scroll Table
Xero company logo
  • Xero doesn’t charge for additional users, making it an ideal choice for businesses that are growing rapidly and adding staff.
  • The software is designed for easy interpretation of financial results and for users who are unfamiliar with accounting concepts.
  • Xero’s entry-level plans impose monthly limits on the number of invoices you can send.
Editor's Rating: 9/10
Visit Site

An e-commerce business with a decentralized base of operations should consider how many people will need access to accounting and bookkeeping software. We like that Xero doesn’t charge per user, making it an excellent choice for rapidly growing e-commerce startups.

One of Xero’s best features is that it is easy to understand. For example, Xero’s dashboard displays cash flow using a color-coded bar chart, with a gray line representing cash going out of the company and a blue line denoting cash coming in. We like that Xero eschews confusing accounting terminology, instead opting for simpler language, like “invoices owed” and “bills you need to pay.” This allows e-commerce business owners to focus on growing their company rather than on learning accounting terms.

E-commerce business owners will also appreciate that Xero integrates with more than 1,000 business apps. The ability to sync with other e-commerce tools is crucial for online businesses. Xero’s plans are based on business size and range from $15 per month for the Early tier to $78 per month for the Established plan.

Quickbooks logo
  • Most accountants and bookkeepers are already familiar with QuickBooks.
  • QuickBooks can connect you with a live bookkeeper or accountant.
  • The basic Self-Employed plan doesn’t allow upgrades.
Editor's Rating: 9.5/10
Visit Site

An e-commerce business with complex accounting needs will likely need a professional accountant or bookkeeper. QuickBooks stands out from the pack as the leading brand name in small business accounting software for over two decades, meaning most accounting professionals are already familiar with the user interface. The widespread adoption rate makes it easier for remote e-commerce teams to communicate easily with outside bookkeepers or accountants.

When you peek under the hood, it’s easy to see why QuickBooks commands a massive market share. The entry-level Self-Employed plan includes some features that even higher-priced competitors don’t offer, such as payment acceptance, expense tracking and cash flow management tools. We think online store owners will also appreciate the integrations with over 650 third-party business apps, including Amazon Business, Square, Shopify, PayPal, QuickBooks Time, Fathom and SOS Inventory. We also like that QuickBooks’ industry-leading mobile app can snap pictures of receipts and sync these expenses with your data.

Another advantage of QuickBooks is the variety of subscription plans. The company offers five levels, ranging from $30 per month for the Self-Employed plan to $200 per month for the Advanced plan.

Freshbooks company logo
  • FreshBooks allows you to easily create professional-looking invoices customized with your branding.
  • Time tracking and credit cards can be linked for easy tracking.
  • FreshBooks charges for additional users.
Editor's Rating: 9/10
Visit Site

We found that FreshBooks outclasses competitors in its invoicing capabilities. Although e-commerce businesses that sell physical products usually don’t need to send invoices, service-based e-commerce firms will certainly need this feature. We like FreshBooks for invoicing because it allows you to convert quotes and tracked time directly into invoices on your smartphone, which you can then send to customers for on-the-spot payment.

We found it easier and more intuitive to create invoices in FreshBooks than in the competing software we reviewed. FreshBooks provides tools for you to customize the look and feel of your invoice so that every message matches your branding. During our testing, we found FreshBooks’ invoice alerts and customer reminders particularly useful. The software tracks when customers receive and view your invoices, thus ensuring you get paid on time.

E-commerce business owners will like that FreshBooks integrates with more than 80 third-party business apps. Paid plans range from $17 per month for the entry-level Lite version to $55 per month for the Premium tier. FreshBooks also offers custom plans for large enterprise customers.

ZarMoney company logo
  • ZarMoney offers inventory management features that are typically reserved for enterprise resource planning or dedicated inventory management software.
  • The pricing structure is easy to understand and doesn’t charge separately for features.
  • ZarMoney lacks a mobile app for on-the-go accounting.
Editor's Rating: 9/10

Effective inventory management is one of the most important tasks for an e-commerce business that sells physical products. We found that ZarMoney punches above its weight in terms of inventory features, with the ability to manage products at multiple locations, easily transfer inventory and assign barcodes.

ZarMoney’s accounts receivable analysis for inventory management is also top-notch. Indeed, we found that ZarMoney outdoes competitors such as QuickBooks in report generation. ZarMoney includes 40 premade reports, including profit-and-loss statements, balance sheets and general ledger reports. Over 1,000 customization options provide access to virtually unlimited reporting capabilities.

ZarMoney’s pricing is straightforward. It includes three flat-rate plans ranging from $15 per month for the Entrepreneur plan to $350+ per month for the Enterprise plan.

sage company logo
  • Sage features an open API, allowing developers to build custom integrations.
  • The entry-level plan stands out for affordability, at $10 per month.
  • The only way to accept invoice payments is through integration with Stripe.
Editor's Rating: 9/10

Many e-commerce businesses find that a cookie-cutter solution just doesn’t cut it. Enter Sage and its open application programming interface (API), which allows software developers to create custom integrations and solutions. During our research, we found Sage’s active developer and user forum to be incredibly helpful for making the most of Sage’s capabilities. We particularly appreciated that Sage allows developers to build apps at zero cost; users are merely required to register on Sage’s developer website.

Other useful features for e-commerce businesses include Sage’s invoicing capabilities, cash-flow-forecasting tools and Stripe integration for easy invoice payment. Sage also offers 24/7 customer support, and the software integrates with apps such as AutoEntry, Avalara and Credit Hound.

Sage’s two paid plans stand out for affordability. The Sage Accounting Start tier is just $10 per month, while the more advanced Accounting tier costs $25 per month.

Costs of E-commerce Accounting Software

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.

TipTip
Keep an eye out for introductory discounts, which often reach 50% for the first few months of your subscription.

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.

Features of E-commerce Accounting Software

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.

Did You Know?Did you know
You are more likely to get paid on time when you send a professional-looking invoice.

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.

TipTip
For more complex inventory management needs, check out our guide to inventory management software.

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.

FYIDid you know
Time tracking is also useful for creating accurate price quotes for future projects.

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.

Choosing E-commerce Accounting Software

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.

Advantages of Accounting Software for E-commerce

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.
Did You Know?Did you know
Many businesses must file taxes quarterly, so make sure you’re following best practices for tax preparation.
  • 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.

E-commerce Accounting Software FAQs

Accounting software helps a business’s bookkeepers and accountants record and manage financial data. Oftentimes, accounting software also includes invoicing capabilities.

Remitting sales tax is one of the most complicated aspects of running an e-commerce business. Many e-commerce sellers ship products to different states and countries, all of which require you to pay different taxes. Accounting software can help ensure that you collect and pay the correct amount of sales tax.

The cost of goods sold (COGS) is an important accounting term that refers to the total cost of producing and distributing a product to customers. In e-commerce, this can include manufacturing, shipping, warehousing and fees, such as those assessed by credit card companies.

Cash accounting involves recognizing revenue and expenses when cash is exchanged, while accrual accounting recognizes revenue and expenses as they are incurred. E-commerce sales often fluctuate seasonally, so both cash accounting and accrual accounting can work well. Typically, e-commerce sellers start with the easier cash accounting method and then switch to the accrual method as their business grows in complexity.

Accounting software aids in inventory management by monitoring the available stock, and some systems can even generate purchase orders. Software that’s equipped with advanced inventory management tools can track sales seamlessly, whether they occur in your e-commerce platform or in a brick-and-mortar retail store, thereby providing real-time insights across various business locations.

Mike Berner
Mike Berner, Business Operations Insider and Senior Analyst
Mike Berner is a finance expert who spent more than half a decade serving as an economic analyst for the U.S. Army Corps of Engineers. He is experienced in conducting quantitative analysis and research to guide clients and companies through changes in the financial markets. With a bachelor's degree in economics and a bachelor of business administration in finance, Mike is adept at breaking down the complex financial topics that affect business owners, from business loans and accounting to payroll and credit card processing. He also tests and analyzes the latest financial software solutions and enjoys giving tips on matters ranging from tax forms to sales strategies to investing through platforms like YouTube, TikTok and Substack.
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