On top of recording your transactions, it’s important to be aware of your cash flow. It’s the amount of cash that enters and exits your business over a given time. So if you earn enough of a profit, but the cash comes in from those profits less frequently, you may suffer from poor cash flow. In 2007, entrepreneur Darren Fell had enough of the many shortfalls of traditional accountancy firms.

What to Look for in eBay Accounting Software

Accounting Entry – As this is an indirect expense you are required to book it as indirect expense in the accounting. Sellers often spend hours trying to “untangle” their payouts, manually splitting or adjusting entries to match their financial records. Determining whether your eBay activity is a hobby or a business affects your tax reporting and obligations. Instead of wasting hours sifting through eBay reports, you get clean, tax-ready data in just a few clicks. EBay sellers can expect a 1099-K form if their annual sales exceed $600 in 2025 (updated reporting threshold).

How to Start a Reselling Business: The Ultimate Guide

Double-entry accounting is a system where every transaction affects the balance sheets of at least two accounts—one account is debited and another is credited. Another important aspect to consider is whether the software offers double-entry accounting functionality. One key aspect that drives the need for eBay accounting tools is the complexity of managing multi-channel sales. Where can you find an accountant or bookkeeper who has experience working with eBay sellers?

Do you have to report eBay sales on taxes?

• Doing the books of accounts for an e-commerce seller is different from maintaining traditional books of accounts.
• You might prefer Google Sheets, Microsoft Excel, or another spreadsheet software.
• Similarly, the integration can automatically sync employee expense reports from your expense management software to your accounting software.
• When you apply the right eBay QuickBooks integration, you can take advantage of a significant boost from streamlined operations.
• With clear insights into your business’s performance, you can plan for growth, manage investments, and prepare for upcoming expenses.
• Since the templates have pre-set categories and formulas, users can simply input data without having to calculate totals or margins every other time.

If so, we recommend looking into eBay accounting software as a better long-term solution. Nearly all of these providers offer free trials, and we strongly recommend test-driving software before committing to one accounting solution. Check out three more of our favorite accounting software options for eBay sellers like you. Keep a meticulous record of all eBay transactions, including sales, fees, and shipping costs. This detailed record will serve as a valuable reference for financial analysis and tax purposes.

After validating the transactions, Link My Books generates a clean summary invoice in Xero. This invoice breaks down the entire payout, clearly categorizing each component into sales, refunds, and fees. This process makes sure that your financial records are accurate and compliant with tax regulations. Both Xero and QuickBooks Online are cloud-based, which means you can access your financial data from anywhere. They also excel in supporting sales tax management and VAT returns, which is important for eBay sellers working across different channels and regions.

EBay sales management involves keeping track of and monitoring various aspects of your eBay account, including active listings, unsold listings, sales data, and profits. To manage your eBay sales effectively, you need to understand how eBay sales work. That means creating listings, managing your inventory, and tracking your sales performance. An eBay spreadsheet system helps you organize your sales and make informed decisions based on your data.

To avoid confusion and ensure accurate bookkeeping, it’s crucial to keep these two separate. Consider opening a dedicated bank account and using a separate debit or credit card for business expenses. Having a bookkeeping system in place will make it easier to keep your finances organized. This can be as simple as using an Excel spreadsheet or investing in an affordable accounting software like My Reseller Genie. Whichever method you choose, make sure to regularly update it with your financial transactions. The best accounting software for eBay sellers depends on your specific needs.

FreshBooks easily offers some of the best invoicing features accounting software can buy. Even its basic plan comes with automations that providers like QuickBooks don’t include with their cheapest plans, such as automatic recurring invoice generation. Plus, unlike Xero, QuickBooks Online doesn’t include inventory management with its cheapest plan—you’ll have to step up to QuickBooks Online Plus, which costs $85 a month. Discover the best enterprise ecommerce solutions for 2025, from accounting and sales to marketing and inventory. By staying organised with receipts and invoices, you’ll have a clear record of your eBay business transactions, making it easier to manage your finances efficiently. Stay informed about changing tax regulations, such as sales tax or VAT requirements, and ensure your accounting processes are compliant to avoid penalties.

One of the most frustrating parts of eBay tax reporting is matching payouts with bank deposits. Link My Books eliminates this hassle by summarizing all transactions, sales, refunds, and fees, into single payout-level entries. These summaries align perfectly with your bank feed in Xero or QuickBooks. From keeping accurate records to tracking your taxable sales, small mistakes can lead to penalties or missed deductions that cost you money.

Ebay charges this fee from the registered seller for each dispute raised. Manually identifying and categorizing each of these components takes time and invites errors, especially when reconciling them against your bank deposits. Research and compare different integration tools based on your specific needs so you can choose the best one. You can reach a wider audience by catering to international customers, significantly expanding your sales potential. Dynamic currency conversion gives you an edge with the ability to adjust prices based on exchange rates and local market conditions.

For example, you can easily integrate it with your online store or shopping cart, bookkeeping for ebay sellers as well as shipping and fulfillment software like USPS and UPS. Its features are easy to use and customizable, making it an excellent choice for eBay sellers. It offers excellent integration with various apps and platforms and a collaborative workflow within large teams.