By Chelsea Krause
If you’re one of the 1,800,000 sellers on Etsy, you probably spend a lot of time thinking about how you can set yourself apart, what new products you can sell, and different ways you can market your items. But one thing that often doesn’t get enough thought or attention is the bookkeeping side of running a business. Luckily, there are several accounting tools tailored specifically toward Etsy sellers that can make managing your finances a quick, dread-free process.
Wave
Wave is a completely free accounting software with ample features, good customer support, and a direct Etsy integration. All of your Etsy sales will automatically be added to the software. Wave also connects directly with PayPal and has duplicate transaction detection.
In addition to managing sales, you can also send invoices, save contact information, and separate personal and business expenses in Wave (the latter is a must for small businesses using one bank account for personal and business use; otherwise you risk an IRS audit). You can also run a sales tax report and/or accounts payable report to see who hasn’t paid their invoices yet.
The software is incredibly easy to use, offers full accounting capabilities (including bank reconciliation), and…did I mention it’s free? Of all the options for Etsy users, this software offers the best accounting and the most features. It also can grow with your business as you add employees and payroll down the road.
QuickBooks Self-Employed
QuickBooks Self-Employed isn’t a full accounting solution, but it offers expense tracking, light bookkeeping, and tons of tax support. The software is ideal for single users running a small business. A recent Etsy integration makes it a great choice for users looking to manage their finances and make tax season a breeze.
Like Wave, QuickBooks Self-Employed will import all of your Etsy sales directly into the software. The program will automatically categorize expenses and you can set bank rules as well for how transactions should be organized. You can also separate personal and business expenses and track numerous deductions, including mileage and home office deductions. The reports are a little more limited but you’ll be able to see your overall profit and loss.
The best part about QuickBooks Self-Employed is its tax support. If you’ve been selling on Etsy for awhile, I’m sure you know how complicated self-employment taxes are. QuickBooks Self-Employed supports Schedule C’s, calculates estimated quarterly taxes, and integrates with TurboTax so you can file your taxes directly from your software come April 15. The software costs $10 a month or $17 a month if you choose to include the TurboTax integration.
GoDaddy Online Bookkeeping
GoDaddy Online Bookkeeping offers basic bookkeeping, strong tax support, and a full Etsy integration as well.
Just like Wave and QuickBooks Self-Employed, GoDaddy Online Bookkeeping will automatically import all of your Etsy sales. Of all the accounting options for Etsy users, this one offers the best reporting. You can run reports to see your profit and loss, sales tax, top customers, top items sold, and invoice statuses. You can categorize personal and business expenses, and there are several tax support options, including Schedule C, 1040, and estimated quarterly taxes. You can track deductions and manage expenses as well.
GoDaddyOnline Bookkeeping offers two plans that are compatible with Etsy: $9.99 a month or $14.99 a month.
As an Etsy owner, you have enough to think about without having to worry about your business’s finances, too. See which of these tools is best for your business and free up your schedule so you can spend less time on accounting and more on doing the work you love.
Sandra L
This is so awesome Chelsea! I’m glad you mentioned QuickBooks Self Employed is pared down but really helpful. It doesn’t have a custom Chart of Accounts but that’s so it matches with TurboTax which is nice at the end of the year. If you do need a custom Chart of Accounts then sellers would want to go with QuickBooks Simple Start, Essentials or Plus. And if you want to automatically import your Etsy sales order receipts and associated expense transactions (payment processing fees, etc) then you will want to check out the Greenback App in the Etsy App store. There’s no manual data entry to get all of your transaction data synced to QuickBooks or Xero. I don’t know if they do Wave. You can compare your fees before July 16, 2018 and after.