The Best Accounting Software Choices for Etsy Sellers
Etsy is one of the best digital marketplaces to sell handmade and artisan crafts online. This site is home to many home-based sellers and niche markets, making it feel more like a community market. Many sellers on Etsy have already turned their once-small operations into full-time jobs.
The concept of turning your hobbies into something profitable is one that anyone would love to have on their own. However, one key part that new sellers tend not to pay proper attention to is the financial side of their business. A business owner can handle this independently, but it will cost valuable time.
That’s’ why many Etsy Sellers have used Accounting Software to streamline their financial processes. The software provides sellers with accurate financial data to base their decisions. They can also be sure that their bookkeeping records are always up to date, making it easier to keep track of their growing number of transactions.
With these benefits in mind, we’ve developed a few options for Accounting Software that Etsy Sellers will find useful. Whether you are just about to set up your storefront or are already well-established on the site, you can use these to improve your business’s efficiency.
We’re starting with a free option for businesses that want to try the idea first. Wave Accounting is a bookkeeping and accounting solution that’s simple to use and meant for small business operations. Commonly known as an alternative to other accounting software like QuickBooks, this choice tries to cram in as many features as possible within the free package.
Simplicity is the game’s name regarding Wave’s’ roster of features. It offers business owners invoice creation tools, income and expenses tracking, automation options, and even a phone app for use on the go.
Wave uses a double-entry bookkeeping system, allowing it to generate basic financial reports for you. It also allows unlimited bank and credit card integrations, making it easier to manage your accounts. Collaborative work is also possible within this software, as you can add as many collaborators and accountants as you want.
In terms of data security, Wave uses 256-bit encryption protocols to secure your data from any chance of interception. This type of encryption is great as it offers higher security levels than 128-bit encryption. All transactions you log onto Wave are automatically backed into the cloud, reducing the risk of data loss.
However, this software has some cons due to its simpler nature. Users of Wave have commented on how linking bank accounts can be cumbersome. Another potential issue is the fact that Wave only offers basic options when it comes to financial reporting. These include a Sales Tax report, Aged Payables and Receivables, a Balance Sheet, and an Income Statement. Although, it should be noted that these can be downloaded as CSV and PDF files, making them easier to customize.
The next option that Etsy Sellers can use for their businesses is QuickBooks, starting with QuickBooks Self-Employed. This one is meant more for freelancers and sole business owners who want better tracking of their finances and tax obligations. With a starting rate of $15/month, sellers can categorize their expenses as business or personal with a few clicks or swipes. This goes up to $35/month, where users can contact TurboTax CPAs and other support options only available to the highest subscription tier.
QuickBooks Self-Employed can easily connect to your accounts, whether bank accounts or digital payment options. At first setup, you’ll have to configure how transactions will flow throughout the app. This involves manually assigning your income and expenses as either business or personal. Automating this process is also possible, making expense tracking much easier in subsequent uses.
This accounting software has a built-in mileage tracker to help sellers mark down potential tax deductions on business travels. It can also produce financial reports such as Profit and Loss Statements, Receipts Captured, and Tax Details and Summaries.
However, one drawback to the Self-Employed version of QuickBooks is that it isn’t meant for larger businesses. Say that you’re planning to go all-in on your Etsy retail store and starting to plan for expansion. You’re’ likely to outgrow the service as it does not offer much in the way of more robust features.
This is where QuickBooks Online comes in A more robust accounting software that fits your growing business needs. This version offers more features that offer users scalability and functionality. Their subscription starts with the Simple Start package at a monthly rate of $25. This goes up to $100/month with their Advanced package, meant for mid-sized businesses.
Compared to the Self-Employed version we discussed earlier, QuickBooks Online provides much deeper insight into how your business is performing. This comes at the cost of being a bit harder to use for business owners unfamiliar with accounting. The number of users registered to an account depends on the subscription plan, with the Simple Start package only allowing for 1 user and 2 accountants.
The software’s main dashboard gives an excellent overview of your account, displaying various financial information via easily readable graphs. QuickBooks Online can also automatically track and categorize your transactions, allowing you to review them later. Invoices and automatic sales tax tracking are also available for sellers.
The higher-tier subscription packages offer Inventory Management tools that are an immense help. The software will alert you when there’s a low number of stocks and create purchase orders for various vendors. If you plan to extend your storefront to other marketplaces, QuickBooks can sync with multiple platforms across the web. There is also the option of third-party tools and integrations to customize your QuickBooks experience. Some tools are paid, while others are free on the software’s app store.
One negative to using QuickBooks Online is the learning above the curve. Those with some basic accounting knowledge will find it easier, but others may take time to get used to it. There are various resources and guides that new users can check out, which help to ease some of the initial stress of learning a new system.
Another drawback is how expensive their monthly subscription is to some users. Sellers will likely have to upgrade to the Plus package, as the Simple Start package does not offer inventory management options. This means your monthly fee will rise to $80/month, which might be too steep for an Etsy Seller still on the business’s more casual side. Luckily, other options give similar features for a lower cost.
A paid alternative to QuickBooks Online with its own merits, FreshBooks is also a great choice for Etsy Sellers. This software offers small business owners accounting features and integrations that keep it competitive against other available options. Their pricing plan is slightly cheaper than QuickBooks, with FreshBooks Lite costing around $15/month. Their most expensive option, FreshBooks Premium, is priced at $50/month and has improved features that help to streamline your business operations.
The main dashboard of FreshBooks has been enhanced as of late, giving users a cleaner interface to work with. After initial setup, you add your clients to the software for easier invoice creation. However, you also have the option to completely skip this step and add them later down the road.
Your business’s’’ financial health can be easily analyzed through FreshBooks. This software gives Etsy Sellers information on outstanding invoices, profit and loss statistics, and spending displays. New charts have also been added that display your revenue streams and any pending unbilled time. The software easily connects with any financial accounts, such as banks, and any payment options your business uses.
FreshBooks allows the creation of estimates and proposals, which can be turned into invoices as soon as both parties confirm. It also comes with various invoice templates to help you get started quickly. Sales Tax is configurable immediately from the invoice creation screen, Project Management tools and Expense tracking.
Some negative to using FreshBooks include the lack of quarterly tax estimates. It also offers no accountant access features for FreshBooks Lite users, necessitating upgrading the more expensive plans. Lastly, it also limits the number of users and clients that can be registered unless you get the highest-tier subscription plan.