Best Accounting Software For eCommerce

Keeping your eComm startup’s financial records up to date is made a lot easier with the right software, especially when you consider all the factors that help differentiate an online business from a conventional brick-and-mortar one. Due to a lack of geographical limitations, online businesses need to manage sales tax from customers in different states throughout the country. The right software also makes it easier to track inventory and automate certain mundane, repetitive tasks.

The bottom line is that eComm-specific software can be crucial to running a successful business. In this post, we’ll explore the importance of finding the right solution, key features to look for, and how Graphite Financial (eComm/CPG-focused accounting firm) can help.

The Importance of Accounting Software for eCommerce

The eCommerce startup environment is a fast-paced one where goods are typically sold via multiple platforms (Amazon, Etsy, Shopify, your consumer website, etc). Because of how fast-paced the online business environment is, there’s a need for streamlined financial management – and that’s what a robust eComm accounting platform can help provide.

In addition to keeping your cash flow and financials on track, a good accounting program can help reduce errors and enhance productivity via automation.

Key Features to Look for in eCommerce Accounting Software

What makes for good accounting software for your eComm startup? You’ll want to be sure that it offers various features to ensure that it’s able to automate accounting processes and perform how you need it. Some of the key features to be on the lookout for when considering different software solutions include:

• Integration with various eCommerce platforms
• Payment processors
• Inventory management systems and inventory tracking capabilities
• Real-time sales tax calculations
• Multi-currency support for any international sales

Top Accounting Software for eCommerce in 2024

QuickBooks Online (QBO) and NetSuite are two of the best cloud-based accounting tools for eComm startups and the ones that Graphite Financial recommends. 

Known for its ability to handle advanced financial data, inventory tracking and automate sales tax, QBO is largely considered the best software program for eComm startups. QBO also excels with multi-platform integration and has an extensive library of third-party integrations with most eComm platforms. QBO is also able to scale up as your eComm startup grows.

For mature startups with more complex accounting systems or the need to move to a scalable ERP solution, NetSuite is a great option. Switching from an early-stage accounting software platform to Netsuite is a significant decision and the right timing for this migration is an important factor to consider. Some indicators that your eComm startup may be ready for NetSuite include the following:

1. Revenue Growth & Funding Milestones

• Annual Revenue Exceeds $5-10 Million: As a startup’s revenue grows, the limitations of entry-level accounting software like QuickBooks become more evident. 
• Series B/C Funding or Later Stages: Startups scaling post-Series B typically need better financial controls, multi-entity management, and consolidation capabilities.

2. Increasing Operational Complexity

• Multi-Entity or International Expansion: When managing multiple subsidiaries, business units, or international entities, NetSuite’s multi-book and currency consolidation features become valuable.
• Advanced Inventory & Supply Chain Needs: If managing complex inventory or production processes, or if considering scaling into omnichannel retail, NetSuite’s integrated inventory management can simplify operations.
• Diverse Revenue Streams: Startups with various revenue streams (e.g. SaaS subscriptions, professional services, product sales) benefit from NetSuite’s ability to handle different revenue recognition rules.

3. Accounting, Compliance, & Reporting Requirements

• Regulatory Compliance Needs: Growing companies with evolving regulatory requirements (e.g., SOC 2, SOX, GAAP/IFRS) need stronger audit trails and reporting capabilities.
• Financial Consolidation & Reporting Challenges: When month-end close, consolidation, or management reporting becomes a bottleneck, a comprehensive ERP like NetSuite can streamline the process.

4. Scalability Constraints in Current Systems

• Outgrowing QuickBooks or Xero: When QuickBooks (or similar platforms) starts creating inefficiencies, data silos, or manual processes that impact accuracy, it’s a sign that an ERP transition is necessary.
• Fragmented Syst

How to Choose the Best Accounting Software for Your eCommerce Startup

Choosing the best eComm accounting software for your business should be based on a mix of personal preferences and program features. One of the most important factors that you need to weigh is whether the solution you decide can scale up as you grow, especially if you’re in startup mode.

Some of the other key factors that you’ll want to be on the lookout for include:

• Integration capabilities
• Customer support
• Pricing and value
• Security
• Cloud-based platform

Integration with eCommerce Platforms: A Key Feature

One of the most important features any eComm accounting program you’re considering should exhibit is the ability to integrate with other eCommerce platforms. Due to multi-sales channels, the ability to integrate with platforms like Shopify, Amazon, WooCommerce, Etsy and more can streamline accounting practices.

Programs like QBO offer direct integration compared to third-party connectors like A2X, which are better for accounting and bookkeeping reconciliation.

Sales Tax Automation

Unlike conventional brick-and-mortar stores, online businesses aren’t limited by geography. They can sell to any consumer anywhere in the country or throughout the world. Because of this, automating sales tax becomes a feature that you don’t want to be without.

Sales tax varies state-by-state – and failure to appropriately apply sales tax to transactions can throw your books out of balance or even subject your business to legal issues and penalties. QBO and NetSuite are two software platforms that can automate sales tax and further streamline accounting operations.

Additionally, the aforementioned eCommerce accounting software solutions can also help your online business manage different types of currencies from international sales.

Inventory Management Features for eCommerce Businesses

To ensure timely product delivery and customer satisfaction, online businesses must always strive to strike the perfect balance between stockouts and fulfillment. Inventory management helps ensure that the right products are available in the correct amounts at the right time. Optimizing inventory management can help reduce costs and maximize profits. Proper inventory management can also help businesses more quickly adapt to changing consumer preferences.

QBO and NetSuite also have robust inventory management abilities & intergrations to help businesses maintain adequate levels of stock.

Cost vs. Features: Finding the Right Balance

When selecting any eComm platform, weighing the program’s cost is especially important. However, determining which program provides the best value for your operation is largely contingent on your business. For instance, if your business is still in growth mode, you’ll likely be more interested in a low-cost option that can provide your basic needs without overly increasing your business expenses. A larger, more established company will likely require more advanced software to keep it on its growth progression.

There are various low-cost accounting platforms out there that may be a better fit for eComm startups with basic needs compared to QBO and NetSuite.

Choosing the Best Accounting Software for eCommerce

Automation. Integration. Sales tax compliance. These are all key features that you should be looking for in your eComm accounting platform. Which one is best for you is largely contingent on your business and personal preferences, but these three characteristics tend to be universal, regardless of the size and scope of your business.

If you’re deciding between online accounting software programs, be sure to do your homework on each platform. Also, look for free trials where you can use the software and test it out before you’re obligated to make any purchase. This is a great way to ensure the platform you select will meet your needs.

The Best Choice for Your eCommerce Business

So what’s the best software choice for your eComm startup’s financial health? Simply put, it’s the one that best suits your online operations as well as your personal preference. It can also depend on the size of your business, your business goals and how fast you expect to grow. For this reason, it’s important not to just pick a software platform that can meet your current operational needs, but your future goals as well.

QBO and NetSuite are both viable cloud-based options, though several other options may work best for your operations. Make sure that you select the one that best fits your eComm startup. Graphite is here to help pair you with the right accounting software and support your eComm startup with all of its accounting needs. Contact us today to learn more.

FAQs

What’s the best free eCommerce accounting software?

QBO and NetSuite are two of the best cloud-based accounting programs for eComm startups. While QBO tends to be the preferred option among many accountants, NetSuite is another suitable option that offers many of the same benefits.

How do I know if my accounting software integrates with my eCommerce platform?

Look for platform integrations when you’re browsing accounting software. As an eComm startup who sells products across multiple platforms, it’s important to work with a program that can integrate with Amazon, Shopify, Etsy, Squarespace, BigCommerce and more.

Do I need inventory management in my accounting software?

If you’re really looking to make a solution work harder for your business, inventory management features are key to ensuring you always have adequate amounts of product in stock. Optimizing inventory management can help reduce costs and maximize profits. Proper inventory management can also help businesses more quickly adapt to changing consumer preferences.

How can accounting software help with tax compliance?

Accounting software can help factor in deductions, exemptions, credits and other variables to help estimate your eComm startup’s tax obligations. A good eCommerce platform can also ensure you stay compliant with sales tax requirements, which is a challenge for online businesses since selling potential isn’t limited by geography. Working with a program that can automate sales tax is a key feature that you’ll want to consider when selecting a platform.

Can I manage multi-currency transactions with accounting software?

Yes, a good solution can help automate complex transactions, track exchange rates, calculate currency conversions and better streamline accounting. Again, because online companies aren’t limited by geography, managing multi-currency transactions can be a key feature to weigh when selecting a program.