Managing your eCommerce finances is more than just keeping the books tidy, it's about understanding your business, making confident decisions, and staying ahead of tax deadlines. With the right accounting tools, you can stop guessing and start growing.
Whether you're selling on Amazon, Shopify, Etsy, or your own website, your eCommerce business comes with its own financial challenges. That's why choosing the right eCommerce accounting software is one of the most important decisions you'll make.
Our blog breaks down why these tools matter and which ones we recommend to make your life easier.
Need help with your eCommerce accounting? Contact Unicorn Accountants to get started.
Why accounting tools matter for eCommerce businesses
Unlike traditional brick-and-mortar businesses, eCommerce operations have unique financial characteristics that demand specialised tools. And here's why:
High Transaction Volume
Even small businesses selling online can process hundreds (or thousands) of transactions per day. Tracking every sale, refund, and fee manually could become a full-time job in itself, not to mention the challenges of maintaining accurate financial records. The right accounting software takes manual data entry out of your hands and improves the accuracy of tracking business expenses and sales.
Explore further the Amazon seller metrics you should be tracking.
Multiple Sales Channels
Selling across platforms like Shopify, Amazon, eBay, and Etsy is great for reaching even more customers, but it creates fragmented financial data. Without the right tools, tracking sales and payment processing fees across multiple online sales channels can quickly become overwhelming.
Inventory Management
Keeping tabs on your stock, understanding the Cost of Goods Sold (COGS), and making sure you're valuing inventory accurately are essential for healthy cash flow and tax reporting. But inventory management features in accounting tools can shave hours off of spreadsheet stress.
International Sales
If you're selling overseas, you'll need tools that support multiple currencies, sales tax (e.g., EU VAT OSS), and manage exchange rates without any hassle. Not all platforms can handle this well, which makes multi-currency support a non-negotiable for global sellers.
Payment Gateway Reconciliation
Taking payments through PayPal, Amazon Payments, Stripe or GoCardless? Matching payouts to sales and bank transactions can be a real challenge. You need a tool that makes reconciliation straightforward when managing multiple payment gateways.
Returns & Refunds
Returns are a natural part of eCommerce, but they add another layer of confusion when generating financial reports. A good eCommerce accounting solution will handle this automatically, so your reports remain accurate and you maintain a clear view of your financial health.
Real-time Data Needs
The eCommerce business is fast-paced, and it's not always viable to wait until month-end to check your numbers. Having real-time financial data readily available can help you make faster, more informed business decisions, which are crucial for cash flow management and growth forecasts.
Our must-have accounting tools for eCommerce businesses
If you want to move away from spreadsheets or find faster software that handles your eCommerce business performance and financial management, here's what we recommend.
Xero accounting software
We recommend Xero online accounting for most eCommerce sellers. It's a cloud-based accounting solution that's intuitive, flexible, and built for modern business owners. It supports automated expense tracking, real-time bank feeds, and produces clear financial reports.
Key features of Xero accounting software:
- Automatic import of bank accounts and transactions
- Easy expense management
- Simplified inventory management
- Seamless cash flow forecasts
- Making Tax Digital (MTD) compliance
- Secure sharing with your accountant
- A2X eCommerce accounting software integration
While Xero handles the core accounting tasks, A2X takes care of the eCommerce-specific data. It connects directly to your eCommerce platform (such as Amazon, Shopify, Etsy, or eBay) and organises your sales, refunds, fees, and taxes into organised summaries.
Here's why A2X is a great choice for eCommerce accounting software:
- Breaks down your sales into neat journal entries
- Matches payouts to bank deposits
- Handles multiple currencies and tax management
- Eliminates manual data entry errors
- Organises financial records for accurate accounting
How Xero and A2X work together
Combining Xero cloud accounting software with A2X is a surefire way to save time on your monthly bookkeeping processes and get clearer financial visibility. These accounting systems work together to make eCommerce accounting much simpler by allowing you to sync data from your eCommerce platforms and organise it within Xero.
Think of A2X as the bridge between your eCommerce platform and Xero. A2X fetches your sales and payout data from your eCommerce store and sends it to Xero in a structured, reconcilable format. They work together to give you faster bookkeeping, more accurate financial management, and easier tax compliance.
Here's a simple breakdown of how Xero and A2X work together:
| Step | Platform/Tool | Task Performed |
|---|---|---|
|
1. Connect all platforms |
All tools and platforms | Connect your eCommerce store to your A2X account and your A2X account to Xero |
|
2. Make a sale |
Amazon, Shopify, Etsy, eBay, etc. |
Customer purchases an item from your eCommerce store |
|
3. Sync transaction |
A2X |
Pulls data (e.g., sales, fees, COGS, tax) |
|
4. Send to Xero |
A2X |
Generates a journal entry for Xero |
|
5. Reconcile payment |
Xero |
Matches bank feed with payout summary |
|
6. Generate reports |
Xero |
Creates profit and loss, cash flow, and VAT returns |
Need help with eCommerce accounting software integration?
Choosing the right eCommerce accounting software is a great first step in streamlining financial management for online businesses. Unicorn Accountants works with various eCommerce businesses to help them manage their accounting processes and get to grips with their tax liabilities.
If you need help with the financial aspects of running an eCommerce store so you can focus on business growth, contact Unicorn Accountants on 020 8064 0454 for a friendly, no-obligation chat.
Frequently asked questions about eCommerce accounting tools
Are these tools MTD (Making Tax Digital) compliant?
A2X integrates directly with Xero, which is fully compliant with the Making Tax Digital (MTD) regulations. Using these tools together to submit VAT returns and ensure tax compliance online keeps your eCommerce business on the right side of MTD.
How often should I reconcile my sales and bank accounts with these tools?
Smaller businesses can usually reconcile accounts monthly, but if you're a larger business or have a lot of transactions, you might want to think about weekly or even daily reconciliations.
What if I sell on multiple platforms?
A2X supports integration with multiple platforms, including Amazon, Shopify, and eBay. It pulls all your sales channels into a single, structured format, making accounting much easier to manage.