How To Enter Shopify Sales into QuickBooks Online 

Thank you again for this comment and thank you for reaching out directly. It is much appreciated.

Thank you! I agree with the value/demand and find myself quite happy with my current expertise and niche of working with external e-commerce POS systems with QBO. Thanks for watching and thank you for the comment!

Thank you for this feedback! My videos are longer than most, but hopefully work for people with your learning style. Thanks for watching!

I'm glad I could help. Thank you for this comment!

Thank you for watching and for this awesome feedback!

Gift Cards are a liability and credited when purchased and debited when used (redeemed) for a purchase as a payment method!

@@essentiallyintentional thank you

Thank you! Using the connector may potenially work for you just fine. I’ve just seen many instances where using integrations mess things up in QBO. It is tough too when the integration is set up fully correctly because then there are a large amount of transactions in QBO to clean up, making it more difficult after the fact. I’d suggest if attempting an integration to first fully figure out the exact debits and credits needed for every case scenario. Then, set up the integration and test and determine the exact debits and credits happening in the background in QBO (looking at Transaction Journals) per each scenario and see if they match. A huge consideration in this too is the timing and amounts of any activity happening to your bank account in QBO during an integration, if the debits don’t match exactly to the actual bank deposits then things can become messy quickly and make bank reconciliations impossible and this is usually where I see duplicate sales start to be entered. I personally like this method because it takes the guesswork and/or research of what is actually happening during the integration and allows for more control and customization.

Thank you! Yes, gift card purchases show in sales reports and with this the liability will be increased and gift cards redeemed show in the payments reports and with this the gift card liability will be decreased! The same gift card liability line can be added twice in the journal entry, once in top section to credit for new gift card purchases shown in the shopify sales reports and a second time near the bottom section of the journal entry where the same gift card liability account will be debited (decreased) for gift cards redeemed which will show in the Shopify payments reports

Thank you for this comment and feedback! Much appreciated. Glad to help.

I’m glad I was able to help! Honestly, I would need to know more information about your specific case in order to correctly answer this. If desired, feel free to book a one-on-one Zoom consulting session with me and I’d be glad to go over the pros and cons of going back and redoing or starting now and moving forward for your specific business and case. The link to look at available schedule dates for this is in the video description. Thank you!

Same question!

Ok I went to the other video about how to enter square sales into QBO to learn about the cash deposits and he ends up explaining it in that video after the 30 minute mark!

You’re welcome! Yes, make sure it’s a transfer from clearing to checking and then yes if you are entering these beforehand, you can then “match” them in the Bank Feed. Or, what I usually like to do is create the transfers themselves from the Bank Feed rather than creating them first and then matching them later, usually I do this with the help of setting up “Bank Rules”. However, either method works and accomplishes the same thing at the end of the day so do what works best for you!

Thank you for finding the timeline in the other video and referencing it here! Also, make note of the other reply I just made in this same thread regarding creating the transfers themselves from the Bank Feed itself which is possible if there is no cash/check split needed. Thanks again!@@haileyguthrie3435

I would so love to be able to watch you do this. Do you have a video that shows the step by step of deposit coming in and how you handle it?@@essentiallyintentional

Thank you! Honestly, it’s hard to say without diving in further. If interested, feel free to schedule a one-on-one session with me (link in video description). At the surface, I can say you to keep the debits in your bank account for Jan / Feb, so a bulk JE without also fixing those will not work. There is a chance of starting in March the clearing account method, but this needs to be handled with care. Again, a one on one could be beneficial as it’s too involved for me to fully explain everything via a message. Thanks again!

Just found your Square video, which I believe has the answers to my question! Thank you :)

Thank you! Should be the same workflow. Cash payments made will show up in the shopify payments report, in the JE the cash account will be increased. The only difference will be that the CC shopify payments won't be auto deposited ino bank account, you will just need to make sure that when your client is depositing this cash into their bank account the same cash account is being lowered during the deposit entries in QBO, do not duplicate sales here at this stage, I've seen that happen. Another consideration is if checks are involved then be sure to handle that correctly as well during the QBO deposit entry phase

Thanks for the feedback I'm glad it was helpful! You can watch my Square video here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-ybCOrxyitbc.html starting at 30 minutes in where I discuss this topic. The short answer though is if you are separating cash and check clearing accounts on the Shopify Sales journal entry, then you would create a deposit (or journal entry) in QBO and then in the bottom portion of the bank deposit entry separate out the cash and check deposit amount used in the cash and check payment accounts during the sale entry (I explain better in the video). If you are entering the cash and checks collected during the Shopify sales entry JE under a combined Undeposited Funds account then you would just create a transfer in QBO from Undeposited Funds to your bank account to record those deposits.

I'm glad these videos are helping you all! I may need to make a RU-vid video covering Inventory, but I also cover it in my paid course. But, here's a summary of how I personally handle my current clients' Inventory / COGS tracking in the absence of Inventory specific apps: I kind of combine the two methods, perpetual and periodic. I find this to be the best trade-off between simplicity, ease of use and monthly tracking. Straight periodic is the easiest, but I don't like not having COGS numbers until physical counts are completed, even estimated COGS on a monthly basis is better in my opinion to get at least an estimated view of month-to-month Gross Profit. Sticking with Shopify for this example, I would ask my client to the best of their ability enter in the estimated costs for the items being sold in Shopify. This allows me to run a monthly report in Shopify to at least get an estimated COGS per month in real-time. Then, I create a JE debited COGS and credited Inventory for that month to capture at least the estimated COGS. The full purchases of this inventory are just debited as Inventory Asset in QBO and not broken out per Inventory item. So, at this stage all Inventory purchases are just increasing Inventory Asset in QBO for the total and not being tracked per Inv item. Then, when entering these monthly sales, COGS is increased and the Inventory Asset decreased every month based on the estimated amount which is taken via the COGS report in Shopify which tracks the items sold for that month with their associated estimated cost that was entered before. We can at least get an estimated look at COSG and Gross Profit month to month with little effort and no physical counts. Then, finally when the client can, ideally quarterly but at an absolute minimum once at year-end, they will perform a physical Inventory count. Then, once that is completed, I'll take the actual Inventory Asset total on hold, compare it to the Inventory Asset total in QBO and offset it with COGS, this will bring both the Inventory and COGS numbers to actual. Again, I personally love using this customized combo for small business clients because it combines the simplicity and money savings of not having to introduce a perpetual inventory system, but also allows you to at least include estimated COGS in the monthly P&Ls with the ability to bring those numbers to actual whenever you want with a physical inventory count.

​@@essentiallyintentionalThank you very much!

Hi! I'm cleaning up shopify store and I don't have experience with Netevia.hq POS. I'm having trouble finding the amount of Shopify payouts and fees in Netevia POS, and I can't reconcile it with the bank. DO you have experience on this? Thank you very much.

I'm new to A2X for recording sales, etc., which I see other bookkeepers using. Do you recommend it?

Yes, that is correct if attempting a full Accrual-Basis workflow. I wish Shopify had an easier way to determine the month’s fees. I used to do this for clients where I would look at the following month’s payouts to add in those fees to the prior month but stopped for a few reasons: 1. It became more trouble than I thought was worth because at the end of the day the fees were equal anyway. 2. It lead to a potential increase chance in error if you miss some calculations and if you missed how some payouts contain sales amount for two months (one payout containing fees and funds from both the last day of the prior month and the first day of the current month), if any of these are missed at the beginning and ends of any month, then the Shopify Clearing Account will never go back down to $0. 3. (and most importantly), all of these clients were both taxed as and mostly tracking things on a “Cash-Basis”. I started to view the way shown in the video as recording the fees correctly if looked at on a cash-basis. The way I started to view it is if you receive a Payout to your bank account on July 2, but it was from sales on June 30, you could still post those Shopify fees withheld as as expense in July because the fees weren’t technically incurred (again on a cash-basis) until the payout was made and deposited in July. You can certainly click on the individual Payouts and do this math like I used to with no harm, especially if you are needing a full Accrual-Basis workflow. I decided to teach the simpler cash-basis workflow in this video for the 3 reasons stated above. Hope this makes sense and helps clarify things and I appreciate your thoroughness!

A short potential solution would be to do this: Create an “Other Income” Chart of Account account called “Cash Over / Short” and put the pennies off, whether debited or credit into that account. A more involved solution would be to investigate why it is always a few pennies off within Shopify and then adjust the Journal Entries accordingly. This is assuming that the pennies difference isn’t happening based on the Journal Entry entries themselves but there being a legitimate difference in Shopify of Sales and amount collected within certain months.

You could use a Sales Receipt and positive and negatives to accomplish the same thing but you have to ensure they all equal $0 and know what you're doing when setting this up as to where all of the products/services on the sales receipt are linked to in your Chart of Accounts, I go over this method in some of my other videos, I believe in my "How To Enter Daily Sales into QuickBooks Online" video.

I’m not sure if this is exactly answering your question, but I like to separate the clearing accounts based on the future avenues of deposits. With some of my clients, within the Shopify sales, they will receive separate bank deposits from Paypal, Shopify, Amazon, Stripe, etc. When this is the case, I like to separate them out into separate clearing accounts so that it is easier to audit the accuracy of the workflow if it’s broken out like this. This also makes it easier to handle things like separating out the merchant fees and everything vs trying to do that if you combine them all. Having said that, if you want to make it all under one clearing account, or if you only have Shopify payments for your business, then you can definitely do that as well no problem at all. I just try to add in as many potential scenarios as possible in these videos in order to cover as many possible scenarios as I can.

It should be the same, assuming that the sales is entered at the time into Shopify via cash. As long as it shows up on the monthly Shopify reports as cash sale than everything else should be the same workflow as shown!

You definitely can add in a temporary holding account if you'd like, this would be if you are tracking monthly sales on a more accrual-basis. What I'll sometimes do instead of adding a separate holding account is use the total Payment amount and increase/decrease the Income line to match it. The logic I find behind this is for if you are accounting on a cash-basis, then the income matches what you were paid that month, then this will balance out the following month. An example would be a $100 payment timing issue, then in Shopify the month sales report is $100 than the Payment report, then I would put the payment as-is, then lower the sales (based on the sales report) by $100, that way you are not including the $100 in sales that you haven't yet received payment for, hence the cash-basis accounting, Then, the following month that $100 payment should be included in the Payments report and the sales can be reflected in that month's sales. Hope this makes sense and again, either method could work for you.

In the workflow shown in the video, the fees are not being subtracted out from the sales directly as the sales are entered “Gross” and the fees are also added in separately as an expense. So, on your Profit & Loss Report, your top line sales are all Gross Sales, and then the Shopify fees are listed as an Expense (or COGS) on your Profit & Loss, leaving your Net Income (everything else excluded) as the total gross sales minus the Shopify fees. One of the reasons I prefer this method is because small business tax forms (Schedule C/1120S) ask for Gross Sales instead of Net. If you want though, you could just put in the sales using this workflow/template as net fees, you would just put the net fees amount in the Shopify income line and remove the separate Shopify Fees expense line.

It’s different for different workflows and it’s up to you to determine when the fees are taken out at what stage, pre or post deposit. In my experience, when having the Paypal Bank connected to a QBO Bank Feed, you can create deposits that take out the Paypal fees then, that is what I show for that particular workflow taking the Gross Paypal amount. If in your workflow you are not accounting for Paypal Fees at the deposit stage, then you can take net Paypal and add in the expense fees during the sales entry stage with no problem. Hope this helps!

@@essentiallyintentional So what I have ended up doing is going through the monthly statements on PayPal and just adding a line for them on the journal. Unfortunately with paypal, they show all fees in their native currency, so i have to do conversion rates. But it works out in the end. Thank you for the response!

Are you referring to the "Net Payments" total amount in the Shopify "Payments” Report vs Shopify Net Sales, or the net Shopify payouts in the Shopify “Payouts” Report?

@@essentiallyintentional I have the same problem as well, Im using the Shopify Payouts Report. Since there is a delay on when shopify sends payments the sales and what is collected dont match up.

@@essentiallyintentional The payout report you use to get the fees may include fees from sales made before the desired month (e.g. order on 30th April may reflect in 2nd May payout if no payout was made over the weekend) thus the fees total is incorrect for the month of May? Or does this not matter because overtime it may balance out?

@@ethanb931 That is correct, it does though balance out over time. I used to break it down by month by clicking on certain payouts and seeing what month's sales it was associated with, by ended up finding this to simply not be worth the effort (although it can certainly be done no problem). But again, over time I've found that if not doing that then the Shopify Clearing Balance always over time ends up being brought back down to $0.

If I ever make a video for this I will let you know. The short answer would be figuring out the debits and credits needed for your workflow and either working it into your Monthly Journal Entry Shopify Template, adding in a second Journal Entry Template, or a combination of the two. If at any point you would like to schedule a one-on-one with me so I can help make a specific workflow for you (and ask me anything else QBO-related, you can book a session here: calendly.com/essentially-intentional/training-with-gunnar-1-hour thank you for watching!

Sometimes it’s a timing issue vs entry, I would first verify the amounts match (or don’t match) for the “Total sales” in the sales over time report and the “Net Payments” from the payments report for the same date range. If the do match then it’s most likely an entry error. If they don’t match, then first verify is the mismatch is the same dollar amount you listed and then research from there, mainly looking at what is included in the payments amount and whether it should be counted as cash sales for that month and if you deal with any open invoicing or anything within Shopify as well then that could complicate things potentially also

@@essentiallyintentional I am also having the same issue. I can't figure out why I am off by 79.03 in my journal entry (debit has the larger total number). My Net payments and Total Sales are off by that amount in Shopify. Any idea why would that be? I am a small business and do my own bookkeeping, so I am hoping your method will help me stay more on top of my accounts.

@@SimpleMama47 There are many different possibilities that could cause that, that it would be hard for me to say without further investigation. Essentially, however Sho[ufy is calculating the sales number on the one sales report, vs the payment collected total is sometimes a little different (again for many different potential reasons). When I’ve ran into this with clients, I’ve always (because we are tracking sales on a cash-basis), kept the payments as-is and adjusted the sales number if needed to match the payment collected. Doing this has always kept the Shopify clearing account accurate and eventually getting back to $0, and I feel the sales accuracy is correct, again being on a cash-basis, because you are counting sales based on the actual total funds collected (after sale tax and things of course). So, you could either doing some investigating within Shopify to see with your particular workflow and business how they are calculating each number and going from there, or adjust your sales in the JE to $79.03 higher (or do both). When investigating within Shopify, some things to look at are your individual payment methods and collected, and if they all represent dollar for dollar what’s reflected on your sales report (I’ve seen “Manual” payment type in Shopify being used for order errors to reship products, so the numbers was increasing the net payments number but not the sales. Or, if there are ever any open invoices, POs, draft orders, etc. Sometimes these can cause the numbers on the two reports to be different. Hope this helps.