Selling on eBay can be a profitable business, but keeping track of your finances isn’t always straightforward. Between eBay fees, managed payments, VAT thresholds, and Making Tax Digital, having the right accounting software can save you hours of hassle—and help you grow. In this article, I’ll share the best accounting software options for eBay sellers, based on years of working with ecommerce clients
Why eBay Sellers Need Specialised Accounting Software
Choosing the right accounting software (and even ebay accountant) for your eBay business may sound like something which you don’t need to think too much about. But changing your accounting software later can be a real burden – it’s like trying to rebuild Ikea furniture without the instructions. That is why we always recommend choosing the right accounting software for ebay sellers from day one regardless of your business size.
Why eBay integrations are key
There is good reason why eBay Integration software exists. You may think that it should be easy to keep on top of your sales and eBay fees when you are only selling a handful of units. But when you start making more than 100 sales per month, you will soon find it becomes a tedious manual process prone to error. That is why we use eBay integrations to extract the sales, VAT, fees and payouts from eBay and automatically sync them with accounting software.
We will run down the best eBay business accounting software, so you make the right choice for your ebay business from day one.
Our Top Picks: Best Accounting Software for eBay Sellers
I will start with which accounting software we think is best for eBay sellers. In our opinion, you have two choices. Quickbooks or Xero.
Xero for eBay Sellers: Why We Recommend It
Pros
- PayPal Integration – while eBay may not be using PayPal for settling payments anymore. Sellers are using it to buy products and services. Xero natively connects into PayPal and supports multicurrency buckets which means you do not have to manually reconcile your PayPal payments.
- VAT Tracking – Xero has great VAT tracking, VAT reporting and the ability to easily change VAT codes for your eBay business. You will easily be able to calculate and understand your VAT return in Xero.
- eBay Bookkeeping integrations – Xero is like the iPhone of the accounting software world, that means nearly all software providers develop for Xero first and then roll out to other platforms. That means you have full access to eBay accounting integrations like:
- Ecomledger (our recommendation)
- Link my Books
- A2x
This will seriously cut down the time it takes you to process your eBay sales, fees and VAT.
- Multicurrency Support – Xero has the best multicurrency functionality of all the software we discuss in this article. So, if you buy or sell overseas, Xero should be your first choice.
- Ease of Reconciliation – Xero has the widest range of bank connections available, so you can connect your business bank and start reconciling your transactions easily without having to manually upload statements
- Your accountant will love you – While this shouldn’t be a driver, nearly all accountants work with Xero because it is generally the preferred choice of accounting professionals.
- Payroll – Xero has one of the best native payroll applications so you can run your payrolls with ease.
Cons
- Learning curve – Xero is built for accountants, and while that doesn’t mean you cannot learn to use it. It can be a bit daunting at first and not as easy as QuickBooks to start running reports with ease.
- Expensive – It is now one of the most expensive software out there, but QuickBooks and Xero are both now charging the same as Xero. So, it is no longer the most expensive.
If you choose Xero you need to link this to software, take a look at our guide : Xero eBay Integration Guide
Reminder: The VAT registration threshold in the UK is currently £90,000 (as of 2024). If your sales exceed this, you’ll need to register for VAT and start submitting digital VAT returns.
QuickBooks for eBay Sellers: The Pros and Cons
Pros
- eBay Bookkeeping Integrations – If Xero is like iPhone, then QuickBooks Online, is Android. Therefore, there are nearly as many third-party software developed for QuickBooks as Xero. That means you can connect EComledger, Linkmybooks and A2X to QuickBooks to make accounting for VAT, Sales and eBay fees easy.
- VAT Tracking – QuickBooks accounting software has clear and excellent VAT reporting which means you can review and easily change transactions within the system so you
- Ease of Reconciliation – Nearly all banks connect into QuickBooks which means accounting for your eBay transactions will be easily and there are no manual uploads.
- Multicurrency Support – there is multicurrency support which works well but it does have its limitations.
- Ease of use – QuickBooks is seriously easy to use if you are an ebay seller. It just makes sense what you need to do when it comes to reconciling transactions or running the profitability reports for your eBay business
- Cost effective – QuickBooks is now priced at £33 per month like Xero but there are discounts available and if you go through your accountant, you can save almost 50%. So, it certainly is cheaper than Xero.
- Payroll – Quickbooks has a decent in built payroll system which works well.
Cons
- PayPal – If you just use a GBP PayPal account then it works well but if you work with multicurrency then QuickBooks is not exactly helpful. To the point where you have to manually import statements which defeats the purpose of the integration. If you have multicurrency PayPal, go with Xero
- Multicurrency – While it does support multicurrency it is a lot more clunky than Xero; you will have to manually match off each foreign currency transaction. So, if you have a lot of transactions, it can be a real time sink. Again, if you use a lot of multicurrency go with Xero.
What is Ecomledger and LinkmyBooks?
These are automated accounting third-party tools that connect your eBay (and Amazon, Shopify, etc.) aaccounts to your accounting software. They then do all the ecommerce accounting, they pull in your sales, fees, VAT, refunds and create journal entries automatically—so your accounts stay tidy, accurate, and HMRC-compliant. We use Ecomledger in our firm. This means you have accurate accounting for your ebay business.
Is FreeAgent a Good Fit for eBay Startups?
FreeAgent can work as ebay accounting software, there are some limitations but if you are going to maintain a non-VAT registered ebay business then it may work for you.
Why use Freeagent as your ebay accounting software:
- It can be cheap for some – FreeAgent is cheaper than many other accounting software. You can get this for free if you bank with Natwest, Royal Bank of Scotland, Ulster Bank or Mettle Bank account.
- Bank Reconciliations – you can connect your business bank so you can automatically bring in your transactions to your accounting software. This means you can largely do your bookkeeping easily.
- Simple UI – Freeagent is not built for accountants, its built for small business owners. It has a simple UI, so it’s easy to reconcile items, run reports and see your profit and loss.
Why wouldn’t we recommend Freeagent for your ebay business
- Lack of eBay Integration software – Freeagent does not have any robust third-party eBay integrations. This means that it can be incredibly hard to bring in your eBay sales properly. You must remember you’re paid net from eBay—that means your payouts are sales minus eBay fees. If you just code it from your bank then you may miss a Vat threshold or if you are Vat registered, submit incorrect figures
- Its too simple – while being simple is great, it cuts both ways. It means that it can be really limited when you are trying to analyse data or do something which more than just categorising your ebay business bank.
- It’s quite expensive – if you do not get this free, then the subscription costs £33 plus VAT a month. That makes it quite expensive and there are better options at that price point
So would I recommend Freeagent, it may suffice if you are going to keep under the VAT threshold and you get it free with your bank. However, if you have dreams of growing beyond £90,000 then I would choose different software.
Why Making Tax Digital means you need the right accounting software for your eBay business
HMRC is now focusing fully on making tax digital, this started with VAT, where you need software to file VAT returns, but they are now launching MTD for Income tax which means sole traders will now need to report to their tax figures every 3 months to HMRC using approved Software.
All the software we have mentioned on this list supports MTD for VAT and will support it for MTD for income tax. Now more than ever you need to make sure you choose the right software for your eBay business as soon you will be required to report to HMRC every 3 months.
Other Options: Sage, Zoho, and Pandle Reviewed
There is other accounting software which may work with your ebay business but ultimately wont work as well as Quickbooks or Xero. I will go through why you may want to avoid these softwares.
Sage
Sage was a bit late to the cloud accounting market, but their Sage Business Cloud is a good system liked by business owners and accountants. However, its not great for eBay businesses or ecommerce in general as there are just far too few eBay integration tools.
It is not as easy to use as QuickBooks or Xero and its more expensive. So, we do not recommend sage.
Zohobooks
People may see this as the cheap option, but it’s built for service-based businesses. If you do ecommerce or eBay, then it’s just not going to work for you as itdoesn’t have the best eBay integrations or app infrastructure. Therefore, I would avoid this one.
Pandle
This software was developed by an accountancy firm and while its super cheap there are basically no apps connecting into Pandle. Its not built for eBay or ecommerce and more focused on the really small business or service businesses. Again, we would avoid this one.
With all of these you need to understand that all will be subscription based pricing and you are looking at prices of between £20 to £40 per month.
Final Thoughts: Choose Software That Grows with You
If you’re just starting out under the VAT threshold: FreeAgent (only if you get it free from your bank).
If you’re planning to grow your eBay business over £90k (which I hope is most people) or already VAT-registered: Xero or QuickBooks should be your choice – if you use multicurrency, use Xero if not then use QuickBooks.
Avoid: Sage, Zoho, and Pandle if you’re serious about scaling an eBay business- you will end up realising that cheap is not always better and end up making painful migrations to Xero or QuickBooks later down the line.
