Maybe you opened your Etsy shop with the dream of sharing your handmade crafts with the world, maybe you opened it as a side hussle, or maybe you opened it out of pure boredom during COVID-19 lockdowns. Whatever your reason for opening your Etsy business, we'll take a wild guess that it wasn't because you wanted to learn all about ecommerce bookkeeping.
Many of you recently learned that GoDaddy Bookkeeping is about to retire and are floundering to find an accounting alternative that meets your needs.
Take a deep breath and relax because this blog will help you identify the best way to deal with this next step in getting accurate, simple, and cost-effective financials for your Etsy business.
The 'must-haves' of Etsy bookkeeping
You may not want to deal with finding a new bookkeeping software to replace GoDaddy, but this disruption of your status quo is not a bad thing. It's a great opportunity for you to reassess the way you operate your business, discover inefficiencies and strengths and decide what YOU really need for your business. There are no one-size fits all solutions because a lot depends on what you are looking for.
Here are some things you should ask yourself when making your accounting software wish-list:
- What integrations do you need to streamline your financials?
As an Etsy seller, you know how complicated all the components are that make up your income and expenses. You should make sure to look for a software that integrates with your banks and credit cards, your Etsy shop, and any other payment processors like Paypal.
Why is this so important? In order to get real insights into the health of your business, you should have a deeper understanding of your gross sales in Etsy and the breakdown of all your fees between your listing fees, transaction fees, payment fees, and sales tax.
You also want to make sure you will properly record your transactions to eliminate any double-counting of your income.
- Whats your level of accounting or bookkeeping knowledge?
While you don't need to be a wizard-level CPA, for a DIY accounting software like Quickbooks, Xero, or Wave, a good working knowledge of accounting is important to make sure your books are accurate. If you don't have this, we would leave DIY to your crafts and not your accounting system, even if it does integrate with your Etsy store.
- What's your hourly rate?
When comparing prices of different alternatives or deciding your budget for an accounting solution, remember that you often get what you pay for. Lower price alternatives usually mean more manual work for you.
As an entrepreneur, you may not get paid per hour but you know how valuable your time is. Each hour you spend on administrative tasks like bookkeeping, is one hour less you are spending on growing your business.
Ultimately, you may decide that this fits with what you are looking for but don't forget to factor in the cost of your labor when comparing prices.
- What kind of expertise do you need?
Not all bookkeeping is created equal.
Bookkeeping for ecommerce businesses is not the same as bookkeeping for other small businesses. Any bookkeeping provider you choose should understand the financial nuances and complexities of the ecommerce space to ensure everything is accounted for correctly.
- Where do you want to be 2 years from now?
You know that saying, "dress for the job you want, not the job you have"? Well, the same applies for bookkeeping.
Consider where you want your business to be 2 years from now and pick an option that grows with your business.
For example, today your company may be a single-member LLC that files a Schedule C with your tax return. But if you anticipate significant growth in the next year or two, you may decide that changing your tax entity to an S corporation is more tax efificent for you. You'll want to choose a bookkeeping option that can support you based on your growth goals and not just your current size. You don't want to be switching services again in a year from now.
Top GoDaddy alternatives for Etsy sellers
Hopefully, at this point you went through the questions listed above and have a better idea of what you want and need for your bookkeeping process.
There are many options out there for Etsy bookkeeping and, more specifically, GoDaddy Bookkeeping alternatives. Here we will cover 2 of the most popular options:
- DIY bookkeeping with an accounting software
- Automating your bookkeeping by using an app or SaaS company
DIY bookkeeping with an accounting software
Quickbooks is an excellent accounting software with many features and a large pool of integration options for ecommerce sellers including Etsy and others like eBay, Paypal, etc. Prices start from $16 for the Simple Start edition but you would likely upgrade to a higher tier of $25 or $35 per month to get the functionality you would need. In addition, certain integrations cost extra.
One point to note is that Quickbooks is an accounting software only and not an accounting service. If you don’t have accounting or bookkeeping knowledge, Quickbooks can be fairly complex and may easily result in inaccurate financials.
In general, a DIY accounting software may be a good fit for you if you have intermediate to advanced accounting knowledge and are familiar with double-entry accounting (i.e., debit and credit), balance sheets, owner’s equity, bank reconciliations, and creating a relevant chart of accounts for your business. If not, any money you save by managing your financials yourself may be lost when you need to pay a CPA to correct the books come tax time.
Automate your bookkeeping by using a SaaS solution
Automating admin tasks can save you a significant amount of time and money so you can focus on growing your business.
By automating your bookkeeping with a SaaS solution like Finaloop, you have access to an accounting software but would be outsourcing the task of maintaining accurate financials to the experts. This leaves you with little to no accounting tasks to care of yourself.
Finaloop connects with the Etsy API to import your orders, fees, and products. Finaloop also connects to your banks, credit cards, Paypal, and other apps and automatically categorizes all of your transactions based on a chart of accounts customized for ecommerce businesses like yours. Finaloop also ensures your COGS and inventory are properly recorded in your books and helps you migrate your data from GoDaddy to make the process as seamless and simple as possible.
Quickbooks software is cheaper than Finaloop (by about $34 per month, depending on the tier and size of your business). The price difference relates to the fact that Finaloop and QuickBooks offer two different services. QuickBooks is a software that you use to do your own bookkeeping. Finaloop is a service that does your bookkeeping for you.
By automating your bookkeeping with Finaloop, you could reduce your monthly bookkeeping work from about 10 hours a month to about 15 minutes a month.
As a small business owner, your time is valuable. The real question to consider is whether about 9 hours of free time a month is worth $34 to you and your business.
As an Etsy seller, you have a lot on your plate to create your handmade products and manage your store. The last thing you want to worry about is your bookkeeping.
Automating this process by trying out Finaloop can reduce your bookkeeping headaches, increase your accuracy, and give you more time to invest in growing your ecommerce business.
Still not convinced? Finaloop has a special offer for GoDaddy customers. By heading to this link, you can try Finaloop for 30 days free. No commitment and no credit card required.
We are a technology company providing automated end-to-end accounting service to ecommerce businesses. Our system connects to your apps, syncs all your data, and reconciles your books in real-time, replacing your bookkeeper. We offer reconciled books available 24/7, tax-saving insights, and a single place for all your financial data.
*The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only. Readers are advised to consult with their attorney or accountant with any questions or concerns.*