Etsy bookkeeping, from an accountant for Etsy sellers who outgrew the spreadsheet
Etsy's payment account is a running tangle of sales, fees, ads, refunds and deposits. We turn it into clean books, whether you make what you sell or source it.
Etsy's fee structure nickels a shop a dozen ways: listing fees, transaction fees, payment processing, Offsite Ads (which you can't opt out of past $10k), Etsy Ads, shipping labels. The payment account nets everything continuously, so deposits have almost no relationship to any period's sales.
Makers add a second layer: materials-based COGS. Pricing handmade work without knowing your true cost per piece is how shops stay busy and broke. An Etsy accountant earns the fee by fixing both layers: the payment-account rebuild and the per-piece costing. That's what our Etsy bookkeeping service does, monthly, in a file you own.
Makers usually get here searching for a bookkeeper for Etsy sellers or an accountant for a handmade business, and most arrive with a backlog. Outsourced, online bookkeeping with a catch-up first is the standard path, and the materials costing survives the transition.
Etsy-specific accounting problems
The payment account black box
Sales go in, fees come out, ads come out, refunds come out, deposits leave on your schedule. Reconstructing what happened in a month requires Etsy's CSVs and patience. We have both.
Offsite Ads fees on some orders and not others
A 12-15% fee that only hits ad-attributed orders makes per-order profitability wildly uneven. We track it as the marketing cost it is, so you can see what Offsite Ads actually costs you.
Materials COGS for makers
The beads, fabric, glaze and packaging you bought in bulk need to become a per-item cost. We build a materials costing approach that's accurate enough to price by and simple enough to maintain.
What we do every month
- Etsy payment account fully reconciled monthly
- All fee types broken out: listing, transaction, processing, ads
- Offsite Ads cost tracking by attribution
- Materials-based COGS for handmade sellers
- Purchased-inventory COGS for resellers and POD
- Sales tax and VAT collected kept out of revenue
- Multi-channel consolidation if you also sell elsewhere
- Books closed by the 10th business day
For makers, vintage sellers and print-on-demand
A jewelry maker, a vintage reseller and a POD shop have three different COGS problems. Materials allocation, per-piece sourcing costs, and printer invoices matched to orders. We've set up all three, and the setup determines whether your margins are knowledge or folklore.
Shops that grow usually add Shopify or a wholesale channel next. Your books come with us, one file, per-channel P&L, no re-platforming.
What an accountant for Etsy sellers does differently
Three things a generalist skips. First, the payment account rebuild: Etsy nets listing fees, transaction fees, processing, Offsite Ads and shipping labels against sales continuously, so the monthly CSV has to be rebuilt into gross sales and each fee type before a deposit means anything. Second, the 1099-K tie-out: Etsy reports gross sales to the IRS, your deposits run well below that, and books that can't bridge the two invite a matching letter. Third, per-piece costing for makers, so the price on a listing is built from a real materials cost and not a feeling.
Sales tax is the one thing Etsy handles for you. As a marketplace facilitator it collects and remits on every US order, so the accounting job is keeping that collected tax out of your revenue, not filing it. Shops that also sell on Shopify carry their own obligation there, which is where multi-channel books earn their keep.
Etsy accounting software: the choices, and why they matter less than the rebuild
The Etsy accounting software question comes up on every onboarding call. QuickBooks Online is the answer for most US shops. Xero if you sell in more than one currency or already run a Xero file. Either way, add a connector such as Link My Books or A2X that posts the payment account as one monthly summary instead of a thousand orders. Etsy's own Shop Manager stats and the per-order sync apps in Etsy's app directory are fine for a glance; neither gives you gross sales, fees by type and per-piece cost in one place.
Etsy bookkeeping done well is a monthly habit, not a software feature: pull the payment account CSV, rebuild gross sales and each fee, post COGS on what sold, tie the deposits. The software holds the result. The habit is the service.
Related services
Closed by day 10, or 50% off
Your prior month is reconciled and delivered by the 10th business day, guaranteed in writing. Miss it and that month's fee is half price. No competitor guarantees anything.
You own your books
We work inside your QuickBooks, Xero or NetSuite file, not ours. Leave any time and everything stays with you, diligence history included.
Exit-grade, always
Accrual books with landed-cost COGS and a maintained addback schedule. If a buyer or lender called tomorrow, your books would be ready.
Published pricing, no lock-in
Our full rate card is on the website and engagements run month-to-month. Every ecommerce-exclusive competitor hides pricing behind a sales call. We don't.
Etsy bookkeeping FAQs
Do I need bookkeeping for my Etsy shop?
For the sellers we serve, Etsy is usually one channel of a $100K+/mo multi-channel operation, and yes, it needs real books: the IRS already sees your gross sales via the 1099-K, and buyers in diligence will ask about every channel, including the small ones.
How do I figure out COGS for handmade items?
Break each product into materials cost per unit, based on what you actually pay in bulk, plus direct packaging. We build and maintain that costing with you so it updates when supply prices move.
Etsy is my side business. Is this overkill?
If Etsy is a side business, we're probably not your firm yet: we work with $100K+/mo operations. Join the waitlist and take our free close checklist, and we'll be here when the business crosses seven figures.
How much does Etsy bookkeeping cost?
Our specialist tiers start at $1,250/mo, priced on total revenue across your channels, with the full rate card on our pricing page. For most clients Etsy is one channel of a larger operation, so there's no separate Etsy fee: the shop gets the same settlement-level treatment as everything else, inside one monthly close.
What does an Etsy accountant do?
Rebuilds the payment account into gross sales, fees by type, ad costs and refunds, then ties deposits to the bank. For makers, they also maintain materials costing so each piece carries a real cost. The output is a P&L that says what the shop earns, which Etsy's own stats can't, because they don't know your costs.
How do I record Etsy sales in QuickBooks?
Monthly summary entries built from Etsy's CSVs: gross sales, then listing, transaction, processing and ad fees each to their own account, refunds separate, deposits clearing the balance. Never book deposits as revenue; the payment account nets so much activity that deposits barely correlate with any month's sales. We run this rebuild every month.
Does Etsy report my sales to the IRS?
Yes, on a 1099-K showing gross sales for the year. Your bank deposits will run thousands lower after fees, ads and refunds, and a return filed off deposits won't match the form. Books that rebuild gross activity reconcile the two, which is what keeps the IRS matching program from generating a letter.
What's the best accounting software for an Etsy shop?
QuickBooks Online for most US shops, Xero if you're multi-currency or outside the US. Either works once Etsy activity is posted as monthly summaries instead of per-order noise. The software choice matters less than the discipline of rebuilding the payment account monthly, which is the step shops skip.
Can you clean up my Etsy books?
Yes. Etsy's CSV history lets us rebuild past months completely: gross sales, every fee type, Offsite Ads costs, refunds and deposit tie-outs. Cleanup is quoted flat and billed at a discount to monthly rates. Multi-year rebuilds ahead of a tax deadline or a loan application are common.
Cash or accrual for an Etsy shop?
Accrual once inventory or materials spending is significant. Expensing a bulk materials order the month you buy it makes that month look bad and the next several look better than they were. Accrual with per-piece costing shows the real margin on each sale, which is the number you should price from.
We'll do last month's books free, and show you what your bookkeeper missed
The free Ecommerce Books Audit: connect read-only access and within 3 business days you get a clean month of books plus a 10-minute recorded teardown of every margin leak, COGS error and sales-tax risk we found. Keep it all, even if you never hire us.
- ✓ Books closed by day 10, guaranteed in writing
- ✓ Everything stays in your QuickBooks, Xero or NetSuite file
- ✓ Published pricing, month-to-month, no lock-in