Bookkeeping and Accounting Software Solutions

Q: "What is the best accounting software product for eBay businesses?"

A: There is no right answer; many small or start-up eBay sellers don't use software at all; they just keep records manually.

Sooner or later, though, you will want to automate your accounting system. The sooner you become familiar with one of the popular software packages, the easier it will be to make the transition, before you develop bad habits.

When it comes to small business accounting packages, there is QuickBooks and...there is QuickBooks. The vast majority of eBay sellers begin by using either QuickBooks Basic or QuickBooks Pro. I generally recommend starting with QuickBooks Pro, as you will outgrow QuickBooks Basic's features fairly quickly, especially if you are maintaining a large and diverse inventory of products for sale on eBay.

To customize QuickBooks for an eBay selling business, you may want to download eBay Accounting Assistant, a free QuickBooks template" owned by eBay that helps you import eBay and PayPal data directly into your QuickBooks files (pages.ebay.com/accountingassistant). Note that you need to have QuickBooks already loaded onto your desktop or laptop computer in order to use eBay Accounting Assistant.

Two things to keep in mind, though, when using eBay Accounting Assistant:

1 . If you are using QuickBooks to run more than one business, you may have to run a separate installation of QuickBooks for your eBay selling business before you can use eBay Accounting Assistant.

2. I have heard reports from numerous eBay sellers that eBay has been extremely slow to update and fix software bugs in eBay Accounting Assistant, and that eBay's technical support for this product is uneven at best. You should read the member postings in the Technical Issues section of the eBay community Answer Center to get more information about this product and eBay's commitment to it.

Another great accounting software product for eBay sellers is KeepMore.net, a Web-based accounting solution offered by Sagefire, Inc., of Boulder, Colorado (keepmore.net). KeepMore.net helps you keep track of your income and expenses without getting bogged down in accounting and bookkeeping minutiae that have nothing to do with selling on eBay. By adding the Yes! feature to your KeepMore account, you preserve an entire year's worth of eBay transaction data—plus loads of reporting on your bought and sold items—in one concise place, so you can:

• Identify your top buyers and sellers

• See your sell-through rate

• Know your average selling price

KeepMore.net with Yes! allows you to import data directly from eBay and PayPal and automatically imports all of your eBay transactions every hour, allocating them as income or expense for you. For a demonstration of the product in action, go to KeepMore.net's home page and click on Live Demo.

Q: Where can I get a chart of accounts and other QuickBooks templates that are specific to eBay businesses?

A: A chart of accounts is basically a list of income and expense items organized by categories. Whenever you sell something on eBay, your bookkeeper (or your bookkeeping software) enters amounts in the appropriate categories—for example, by debiting "inventory of SKU 1234" by one item, crediting "cash" for the purchase price, and crediting "sales tax" if the buyer paid sales tax on the item.

No two charts of accounts for an eBay seller will ever look exactly the same, but taking a generic chart of accounts for a retail business and then customizing it for an eBay selling business will take lots of time and patience. Cathy Aiello, an eBay PowerSeller and CPA from Portland, Oregon (allegroaccounting .com), specializes in developing and selling customized charts of accounts and QuickBooks data files for different types of eBay sellers, beginning at $19.98. For about $150, Allegro Accounting will also help you set up QuickBooks and eBay Accounting Assistant for your eBay selling business and provide a one- to two-hour tutorial on how to use it (for details, see web-bookkeeper.com).

Q: "Is there a software product that will help me determine which of the items I'm selling on eBay are profitable and which aren't?"

A: There are actually several, but the ones most commonly used are:

• QuickBooks Pro with eBay Accounting Assistant

• KeepMore.net with Yes!, offered by SageFire, Inc., of Boulder, Colorado (keepmore.net)

• Easy eBay Accounting System, offered by Allegro Accounting of Portland, Oregon (allegroaccounting.com)

• ProfitBuilderSoftware, offered by eBay PowerSeller and author Corey Kossack of Phoenix, Arizona (profitbuildersoftware.com)