This playlist will walk you through your Etsy shop bookkeeping, step-by-step. If your Etsy shop is based in the US and you only have one Etsy shop, Sync with bookkeeping Etsy for QuickBooks Online is the fastest and easiest way to do your bookkeeping. However, your business finances are important, and getting your financial house in order does not have to be as difficult as you think.

Do you need an accountant for Etsy?

Bench simplifies your small business accounting by combining intuitive software that automates the busywork with real, professional human support. The Etsy Deposits report outlines the Etsy deposits made into your shop’s allocated bank account. You can compare it to the Etsy Payments Account CSV to ensure deposit accuracy and reconcile your bank statements. Keeping up with expense tracking throughout the year helps avoid surprises when tax season arrives. A key part of this process is understanding how Etsy handles payments and fees, ensuring you log your income correctly.

An Ultimate Accounting Guide for Etsy Sellers

Crunching numbers for hours on end probably wasn’t the future you dreamt for yourself the day you decided to open your Etsy shop. But luckily, you don’t need to be a numbers ninja to stay on top of your bookkeeping. In this guide, we’ll take you through the bookkeeping basics every Etsy seller needs to know, plus tools that can make it all easier. It’s important to keep track of each sale and the corresponding information, such as product details, customer information, dates, and payment methods. This will help you accurately calculate your revenue and identify any discrepancies or patterns in bookkeeping for etsy sellers your sales data. Proper bookkeeping also helps you avoid cash flow issues by providing visibility into your day-to-day operations, ensuring you’re not overspending or undercharging.

Don’t forget about that pesky inventory.

After switching to Webgility in 2010, data entry dropped to zero hours, and same-day order fulfilment became possible. Sales increased by 94% between 2010 and 2014, compared to 53% in the previous five years, allowing the business to focus on growth instead of managing repetitive tasks. This helps establish your business’s credit history, provides access to cashback or rewards programs, and simplifies expense tracking. About five years ago, I began creating video tutorials to help Etsy shop owners and bloggers learn how to use QuickBooks Online.

QuickBooks and Netsuite are among the best accounting software options for Etsy sellers, offering automated bookkeeping, inventory tracking, and tax reporting. Webgility enhances these platforms by integrating Etsy sales data with QuickBooks for simplified financial management. Instead of spending hours on manual data entry, Webgility syncs your sales, expenses, and inventory in real-time, ensuring that every transaction is recorded correctly. Beyond automation, Webgility helps Etsy sellers stay financially organized. It categorizes expenses, calculates taxes, and generates detailed financial reports with minimal effort.

Inventory management

• Etsy accounting requires tracking sales, inventory, and taxes, including recording revenue, fees, shipping costs, and managing returns.
• By regularly reviewing these reports, you can make informed decisions, manage your cash flow effectively, and ensure long-term financial stability.
• Etsy bookkeeping demands a lot of time and energy, and resources often need more from new business owners.
• Plus, it integrates with Etsy, so you can keep track of your sales and expenses in one place.
• If you write out your schedule in advance, you’re more likely to stick to it.

I now create bookkeeping templates for on-line Sellers, utilising my expertise with data files to bookkeeping for cleaning business provide simple spreadsheet solutions that do the hard work for you. Whenever you feel overwhelmed, remember that all you are trying to do is to record your Sales Income and your fees paid. You can also check out the Etsy Deposits Manager which has this reconciliation built in as one of the automated reports. If tax has been charged to customers and Etsy pays that tax to you for you to pay to the authorities then that tax is included in the Net column on your Payment account. Bizarrely, this is not always the net of the above 2 columns but is the amount of the sale less the processing fee.

• Before you start recording Etsy sales in QuickBooks, you’ll need to export your transaction data.
• This method is intuitive, cost-effective, and great for new businesses before transitioning to more advanced software as their business grows.
• However, you should record the net income you receive, which is the amount deposited into your bank account after Etsy’s fees.
• Bench works with hundreds of ecommerce sellers, and we know ecommerce bookkeeping and accounting inside and out.
• If you need more advanced features, you can upgrade to a monthly plan for $16/month, which is around £12/month.

While free accounting software for Etsy sellers might fit a tight budget, it often comes with limitations that could cost more in the long run due to errors, lack of features, or manual work. Consider the long-term value of paying for software like Xero with Link My Books, which offers comprehensive features and peace of mind that your accounting is accurate and efficient. Then, automate your Etsy bookkeeping and accounting using a solution like Link My Books that integrates Etsy to Xero or QuickBooks. Link My Books reconciles transactions, summarizes invoices, accounts for taxes, and provides detailed financial reports. Bookkeeping records transactions while accounting interprets data to make informed decisions and understand business finances.

You can choose how Etsy orders should be categorized—as sales receipts, sales orders, invoices, or estimates—based on your bookkeeping preferences. If you sell across multiple platforms, Webgility ensures inventory levels are updated across all channels, preventing stockouts or overselling. Plus, its AI-powered analytics provide valuable financial insights, helping you make informed business decisions. Check your state’s tax regulations to determine whether you must charge sales tax and how often you must file your returns. Some states require monthly filings, while others may require quarterly or annual filings.