Why QuickBooks Self Employed Isn't Enough for Your Etsy Business
Handmade sellers need more than basic bookkeeping. Here's why QuickBooks Self Employed falls short — and how combining Craftybase with QuickBooks gives you everything you need.
QuickBooks Self Employed is often the first accounting tool Etsy sellers come across — especially since Intuit partnered with Etsy to offer a discounted version of the app. On the surface, it sounds like a perfect fit. You get automatic Etsy import, basic expense tracking, and it even files your taxes. Great, right?
Not quite.
If you make your own products, you’re not just “self-employed” — you’re a manufacturer.
This distinction is crucial, especially when it comes to taxes and inventory.
QuickBooks Self Employed (QBSE) is built for freelancers and service-based businesses — not for makers who track raw materials, manage inventory, and calculate Cost of Goods Sold (COGS). And unfortunately, that’s exactly where QBSE falls flat.
Is QuickBooks for Etsy worth it?
It depends. If you’re only selling digital products or dropshipping, QuickBooks Self Employed might cover your basic needs. But if you handmake your products, the answer is likely no — not without serious workarounds or additional tools.
The better approach? Pairing QuickBooks Online with an inventory tool like Craftybase (we’ll explain why below).
What’s missing in QuickBooks Self Employed?
QuickBooks SE tracks indirect expenses and income, but that’s only part of what you need.
If you’re a handmade seller, the IRS expects you to:
- Track inventory and raw material usage
- Calculate COGS correctly
- File with Schedule C using inventory-based accounting methods
QuickBooks Self Employed doesn’t support any of that. It has no inventory tracking, no direct material tracking, and no COGS support beyond manual workarounds. That means you’ll need to do your inventory and manufacturing tracking outside of QuickBooks — and be very careful not to double-count expenses.
Learn more: How to calculate COGS as a handmade business →
What happens if you don’t track COGS properly?
Let’s say you buy $5,000 worth of raw materials in January and enter them as “supplies” in QBSE.
At tax time, those costs reduce your income — great! But what about next year, when you still have $3,000 of that stock left? You’ve already claimed the deduction, so you can’t claim it again. Your tax bill goes up — and the IRS may flag the mismatch in inventory and expenses.
Without proper COGS tracking, you can:
- Overstate your expenses in one year and understate in the next
- Lose the ability to match expenses with the products they helped create
- Risk audits or amended returns
Related reading: Do I need to track inventory as a small craft business?
So what should Etsy sellers use instead?
If you’re just starting out, QuickBooks SE might seem fine. But to run your handmade business properly — and stay compliant — you need tools that go beyond basic bookkeeping.
You have two real options:
Option 1: Pair Craftybase with QuickBooks Online
This is the best of both worlds. Let QuickBooks Online handle your income, bank feeds, and accounting. Then let Craftybase manage:
- Inventory tracking for raw materials and products
- Accurate, rolling COGS calculations
- Pricing guidance and profit tracking
- IRS-compliant end-of-year reporting
It’s the easiest way to ensure you have both your financials and your manufacturing under control.
👉 Learn more: QuickBooks + Craftybase integration
Option 2: Use Craftybase as your all-in-one solution
For smaller sellers or anyone who doesn’t want to juggle two tools, Craftybase also works as a standalone bookkeeping and inventory platform.
You’ll get:
- Built-in Schedule C reporting
- Direct and indirect expense tracking
- Inventory valuation and stock reports
- Etsy integration with automatic order and fee imports
💡 Start a free trial: Try Craftybase free for 14 days
Final thoughts: Is QuickBooks for Etsy worth it?
Not on its own. QuickBooks Self Employed might cover your basic transactions, but it leaves a huge gap for handmade businesses — especially around inventory, materials, and tax reporting.
If you’re serious about running your Etsy shop like a real business, you’ll want a tool that does more than track income. You’ll want to understand your costs, see your margins, and prepare for tax time confidently.
That’s why we recommend combining QuickBooks Online + Craftybase — or switching to Craftybase entirely.
Because your handmade business deserves better than “bare minimum.”
