A Comprehensive Guide to Bookkeeping and Accounting for eBay Sellers in 2025

But, when you add Link My Books to the mix, it will actually help you automate your accounting without any errors. The summary entry created by Link My Books in Xero is designed to match the actual deposit you receive in your bank account down to the last penny. With just one click, you can reconcile the entry in Xero, confirming that everything lines up perfectly.

Make Sure You Understand How Income Is Reported

Set yourself apart from the competition by embracing eco-friendly practices, understanding your business’s carbon footprint and taking action to reduce your impact. Improve your listings and optimize your inventory with exclusive eBay insights tools. Get access to performance data that can better inform your business decisions. Earning on eBay is simple with streamlined payment options, straightforward seller fees, and payment flexibility. The software provider should offer multiple ways to get help and respond quickly when you have questions or run into issues. New Wave account sign-ups are limited to US and Canadian business owners only.

Track Your Inventory, COGS, and Shipping Costs

Keep track of the timing and amounts of these payments to manage cash flow effectively. Paying quarterly taxes is another way to ease some of the pressure of reporting your earnings and paying your taxes. Deducting business expenses is another way to lower bookkeeping for ebay sellers your taxable income, and you’ll want to deduct all the expenses that apply to your business.

Top 4 eBay Accounting Software for Sellers

• The entry-level plan of QuickBooks doesn’t include inventory management, which could be a drawback if you’re managing a lot of products.
• EBay provides transaction reports and summaries, but these need to be organized and entered into your accounting system.
• Manually matching eBay payouts with bank deposits, ensuring transactions align with order details.
• Zoho Inventory isn’t a thorough accounting solution, but it syncs with Zoho Books, which tracks expenses, reconciles bank accounts, and lets you send multilingual invoices.
• Not only does our bookkeeping software ease accounting tasks, but we also offer dedicated services from our expert team to help you manage your finances more efficiently.

After integrating Webgility, they automated transaction reconciliation, ensuring accurate sales and expense tracking across multiple sales channels. With hundreds, if not thousands, of transactions happening each month, keeping track of them all can be a daunting task. However, it is essential to stay on top of your sales records to ensure accurate bookkeeping and tax reporting. Integrating eBay with tax software can automate the process of calculating and remitting sales taxes.

The disadvantage is the time to get things set up and the ongoing cost of the software. Failing to match revenue with the correct period can lead to inaccurate financial reports. For example, if revenue and Cost of Goods Sold (COGS) aren’t aligned, it could misrepresent your profit margins. Ensuring that both revenue and expenses are recorded in their correct periods helps provide an accurate view of your financial performance. Implementing a consistent system for tracking will help ensure that you capture all financial activities, aiding in precise financial reporting and tax preparation. Regularly review and update your records to reflect any changes in your business model or expenses, ensuring that your financial data remains current and reliable.

Bookkeeping and accounting tips for hairdressers

Look for bookkeeping software that offers expense-tracking features so that you can easily categorize and monitor your expenses. However, not all software is created equal, and it’s important to know what features to look for when choosing the right ecommerce bookkeeping software for your eBay business. As an eBay seller, tax preparation can be a tedious task as there are many different types of transactions involved – such as buyer fees and shipping costs – which need to be accounted for.

For example, since dropshippers typically don’t hold any inventory, they don’t have any inventory-related expenses, such as the cost of fixing up items sold. Dext (formerly Greenback) automatically syncs your accounting data between eBay Managed Payments and your QuickBooks account. The tool collects your eBay sales, reimbursements, refunds, and fees and exports them to QuickBooks. I will start with which accounting software we think is best for eBay sellers. With options like Wave, FreshBooks, and Sage, you can find a solution tailored to your unique needs, whether you need inventory management, invoicing, or a user-friendly interface. But for a cost-effective and top-quality accounting solution, pairing Xero or QuickBooks with Link My Books is hard to beat.

Intuit QuickBooks

Next, it charts how much you’ve made on each individual item and calculates your business’s profitability as a whole. You’ll get 50 shipping labels and can send 50 invoices too, and you can manage inventory stored at one warehouse. Zoho Inventory isn’t a thorough accounting solution, but it syncs with Zoho Books, which tracks expenses, reconciles bank accounts, and lets you send multilingual invoices.

Tracking Cost of Goods Sold for your eBay Business

• The average basic accounting plan costs between $10 and $15, though you can find higher and lower prices depending on the brand.
• But, the right tools can streamline your bookkeeping process to save you time.
• This means that you no longer have to manually input every transaction, saving you time and reducing the risk of human error.
• Finally, it can actually save you money by helping to ensure you are taking all of your eligible deductions and not overpaying your taxes.
• With ConnectBooks, you can simplify your accounting process and focus on growing your business.

Learn how to get 1099-Ks and payroll documents, avoid common errors, and automate Square accounting with Link My Books. The high volume of transactions, varied fees, and complex tax obligations across different jurisdictions can quickly become overwhelming without proper financial oversight. As an eBay seller, you receive payments for your goods and services through eBay. As an online marketplace, eBay is required to send a 1099-K tax form detailing these payments to the IRS and to you if you reach $2,500 in payments in 2025. If you have a busy eBay business, you may want to move to paying estimated taxes each quarter. Paying taxes four times a year may be easier to handle than one big tax bill.

QuickBooks separates your revenue from taxes and fees, and tracks it to the correct accounts—so you don’t have to. Check out three more of our favorite accounting software options for eBay sellers like you. Whether you’re getting accounting software for the first time or your old software no longer meets your needs, we can help. Enter some basic business information below to get a free, personalized recommendation for the right software. 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. If you’re searching for accounting software that’s user-friendly, full of smart features, and scales with your business, Quickbooks is a great option.

We’ll go through features and give you a comparison table so you can easily choose what’s best for you. It is an eBay account that you can use to access the eBay Seller Hub, a dashboard that provides various features and resources to manage and grow your business. It can help you create and edit your listings, monitor and fulfill your orders, track and optimize your performance, access your eBay messages, and more. You can create a free eBay business account by registering as a business seller on eBay.