How to Record Shopify Sales in QuickBooks: A Comprehensive Guide
Running an online store on Shopify comes with many advantages—from a user‑friendly storefront to built‑in marketing tools—but when it comes to managing your finances, accurate bookkeeping is paramount. For many business owners, QuickBooks is the go‑to accounting solution. In this guide, we walk you through the process of recording Shopify sales in QuickBooks, whether you’re using QuickBooks Online or QuickBooks Desktop. We also provide best practices, tips to avoid common pitfalls, and insight into how integration tools can automate many of the repetitive tasks.
Why Accurate Recording of Shopify Sales Matters
Before diving into the “how,” it’s essential to understand the “why.” Accurate bookkeeping not only helps you track revenue and manage expenses, but it also plays a critical role in:
Tax Preparation:
Keeping detailed and correct records simplifies your tax filings and helps avoid penalties.
Financial Reporting:
Up‑to‑date financial statements give you insights into profitability, cash flow, and business trends.
Reconciliation:
Matching your Shopify sales with bank deposits ensures there are no discrepancies between your books and actual cash flow.
Informed Decision‑Making:
Accurate data allows you to monitor sales trends and make strategic decisions to grow your business.
Compliance:
Proper recording helps you comply with regulatory standards and eases the audit process.
Because Shopify handles various types of transactions (sales, discounts, refunds, fees, shipping, and sales tax), it’s vital that your accounting system accurately reflects all of these elements.
Step 1: Setting Up Your Chart of Accounts
One of the first steps in ensuring accurate recording is setting up a well‑organized chart of accounts in QuickBooks. Your chart of accounts should include the following key accounts:
Shopify Sales (Income):
Record your gross sales revenue.
Shopify Discounts:
Track any discounts offered to customers.
Shopify Returns/Refunds:
Record any customer refunds.
Shipping Income:
Separate out shipping charges collected.
Sales Tax Payable:
Monitor the sales tax collected.
Shopify Fees:
Track transaction fees and any processing charges deducted by Shopify.
Shopify Clearing Account:
A temporary holding account to track funds held by Shopify until they’re deposited.
Bank Account:
The account where Shopify deposits your payouts.
Creating Accounts in QuickBooks Online
Log in
to your QuickBooks Online account.
Navigate to
Accounting > Chart of Accounts
.
Click on
New
and choose the appropriate
Account Type
(for example, “Income” for sales or “Expenses” for fees).
Enter a clear
Account Name
(e.g., “Shopify Sales” or “Shopify Fees”).
Click
Save and Close
.
Creating Accounts in QuickBooks Desktop
Open QuickBooks Desktop and go to the
Lists
menu.
Select
Chart of Accounts
.
Right‑click in the chart and choose
New
.
Select the appropriate account type, provide an account name, and enter additional details.
Click
Save & Close
.
A well‑structured chart of accounts ensures that every transaction—whether a sale, fee, or refund—is properly categorized, making reconciliation and reporting easier.
Step 2: Gathering Data from Shopify
Before you record any transactions in QuickBooks, you need to extract the necessary data from your Shopify account. There are two primary reports that help you gather the relevant details:
1. Shopify Finances Summary Report
This report provides an overview of:
Gross Sales:
Total revenue before any deductions.
Discounts:
Amounts deducted due to promotional offers.
Returns/Refunds:
Value of refunded orders.
Net Sales:
Actual revenue after deductions.
Shipping Income:
Charges collected for shipping.
Sales Tax:
Tax collected on transactions.
Fees:
Transaction and processing fees deducted by Shopify.
To access this report:
Log in to your Shopify admin.
Navigate to
Analytics > Reports
.
Under the
Finances
category, select the
Finances Summary Report
.
Set the desired date range and review the figures.
2. Shopify Payouts Report
Since Shopify holds funds temporarily before transferring them to your bank, the payouts report provides the actual amounts deposited. It details:
Total Payout:
The net amount deposited after deducting fees.
Fees:
Deductions for transactions, refunds, or any other adjustments.
Date of Payout:
When the funds were transferred to your bank account.
To access the payouts report:
From your Shopify admin, go to
Finances > Payouts
.
Click on a specific payout to view the detailed breakdown.
By comparing data from both reports, you can reconcile your QuickBooks entries with the funds deposited into your bank account.
Step 3: Recording Shopify Sales in QuickBooks
There are two main methods for recording Shopify sales in QuickBooks: using an automated integration or entering transactions manually. We’ll discuss both methods.
Recording Sales Using Automated Integrations
Many third‑party applications (such as Reconcilely, MyWorks, A2X, or Webgility) are designed to sync Shopify with QuickBooks automatically. These tools can:
Map Transactions:
Automatically categorize sales, refunds, shipping, fees, and taxes to the appropriate accounts.
Sync Data in Real‑Time:
Ensure that new orders are promptly recorded in QuickBooks.
Simplify Reconciliation:
Match Shopify payouts with bank deposits, reducing the time spent reconciling accounts manually.
Benefits of Using Integration Tools:
Time Savings:
Automate repetitive data entry.
Accuracy:
Reduce human error by eliminating manual processes.
Scalability:
Easily manage large volumes of transactions.
Detailed Reporting:
Gain insights into sales trends, fees, and expenses.
If you opt for an integration tool, simply follow the instructions provided by the app to connect your Shopify store to QuickBooks. This usually involves:
Installing the app from the Shopify App Store.
Authorizing the connection with both Shopify and QuickBooks.
Configuring settings such as mapping accounts and sync frequency.
Testing with a few transactions to ensure everything is recorded correctly.
Manually Recording Shopify Sales in QuickBooks Online
If you prefer a hands‑on approach or have a low volume of transactions, you can manually record each transaction in QuickBooks Online using journal entries or sales receipts/invoices.
Step‑by‑Step Process for Manual Entry
Log In:
Access your QuickBooks Online account.
Create a New Sales Receipt or Invoice:
Click the
+ New
button.
Select
Sales Receipt
if payment is received immediately or
Invoice
if payment is due later.
Enter Customer Details:
Add the customer’s name, email, and address. If the customer is new, create a new record.
Input Sales Details:
Under the
Product/Service
field, select the item sold from your inventory list.
Enter the
quantity
,
rate
, and any applicable discounts.
For taxes, ensure you input the correct sales tax if applicable.
Record Payment:
If it’s a sales receipt, enter the payment method (e.g., credit card, PayPal).
For invoices, set the payment terms (e.g., Net 15, Net 30).
Add a Memo:
Include details like the order number or Shopify reference for future tracking.
Save and Send (if needed):
Save the transaction and, if desired, email a receipt or invoice to the customer.
Recording Shopify Fees and Adjustments
Since Shopify deducts transaction fees from your payouts, it’s important to record these as separate expenses. Here’s how to do it:
Identify the Fee:
Use the Shopify Payouts Report to determine the exact fee deducted.
Create an Expense Entry:
In QuickBooks Online, click
+ New
and select
Expense
.
Enter the amount, date, and a description (e.g., “Shopify Transaction Fee”).
Select the corresponding expense account (e.g., “Shopify Fees”).
Save the Expense:
This will ensure that your total revenue is adjusted to reflect the net amount deposited into your bank account.
Recording Shopify Deposits
Since Shopify pays out a net amount after deducting fees and refunds, it’s crucial to record the actual deposits accurately:
Create a Journal Entry for Deposits:
Go to
+ New
and select
Journal Entry
.
Debit your
Bank Account
with the deposit amount.
Credit the
Shopify Clearing Account
for the same amount.
Match the Transactions:
In the Banking section, match the journal entry with the bank deposit recorded from Shopify’s payout.
Reconcile Regularly:
Regularly verify that the balance in the Shopify Clearing Account matches the sum of the sales recorded minus fees and refunds.
Recording Sales in QuickBooks Desktop
The process in QuickBooks Desktop is similar, but the navigation differs slightly.
Creating a General Journal Entry
Open QuickBooks Desktop.
Go to the
Company
menu and select
Make General Journal Entries
.
Enter the Date:
Use the last day of the period you’re recording.
Input Accounts and Amounts:
Debit:
The Shopify Clearing Account for the total payout amount.
Credit:
The Shopify Sales account for gross sales.
Adjust for Discounts and Refunds:
Debit the Shopify Discounts and Returns accounts.
Record Shipping and Taxes:
Credit Shipping Income and Sales Tax Payable as appropriate.
Record Fees:
Debit the Shopify Fees account.
Add a Memo:
Include details like “Shopify Sales for [Month/Year]” for clarity.
Save & Close.
Recording Bank Deposits
Navigate to
Banking > Make Deposits
.
Select the Clearing Account:
Choose the Shopify Clearing Account as the source.
Enter the Deposit Details:
Input the deposit amount and select your actual bank account as the destination.
Save the Deposit:
This entry will help reconcile your Shopify payouts with your bank statements.
Best Practices for Recording Shopify Sales in QuickBooks
Accurate recording is not a one‑time setup but an ongoing process. To ensure consistency and accuracy, consider the following best practices:
Consistent Recording Schedule:
Reconcile your accounts daily or weekly to catch discrepancies early.
Cross‑Reference Reports:
Regularly compare your Shopify Finances Summary Report and Payouts Report with your QuickBooks records.
Utilize Clearing Accounts:
Use a dedicated Shopify Clearing Account to manage timing differences between sales and payouts.
Detailed Documentation:
Maintain detailed notes for any manual adjustments or irregular transactions.
Review and Adjust Settings:
Periodically review your integration settings (if using an automation tool) to ensure they still align with your business needs.
Employee Training:
If multiple staff members handle bookkeeping, ensure they’re trained on your procedures to minimize errors.
Consult a Professional:
Engage with an accountant or QuickBooks ProAdvisor, especially during the initial setup or if you experience discrepancies.
Common Pitfalls and How to Avoid Them
Even with the best practices in place, recording Shopify sales in QuickBooks can present challenges. Here are some common pitfalls and tips on how to avoid them:
1. Recording Gross Sales Instead of Net Sales
The Issue:
Entering gross sales without accounting for Shopify fees, refunds, and discounts leads to an overstatement of revenue.
The Solution:
Always record sales net of any deductions. Use the Shopify Finances Summary Report to determine the correct net sales figure and ensure your clearing account reflects the actual funds transferred.
2. Misclassifying Transactions
The Issue:
Incorrect mapping of income, expenses, and fees can result in inaccurate financial reports.
The Solution:
Set up your chart of accounts meticulously and map each transaction type correctly. Revisit your mappings regularly, especially if you add new products or change your fee structure.
3. Timing Differences Between Sales and Payouts
The Issue:
Shopify may record sales on one day while payouts occur on another, leading to mismatches in your reconciliation.
The Solution:
Use a clearing account to bridge the gap. Record the sales as soon as they occur and then record the payout as a separate deposit entry. Reconcile these entries by matching the clearing account balance to your Shopify reports.
4. Overlooking Refunds and Adjustments
The Issue:
Refunds and discounts can be easily missed if you only focus on gross sales.
The Solution:
Ensure you record all discounts, returns, and refunds as separate transactions. This ensures that your net sales figure is accurate and your expense accounts reflect the true cost of doing business.
5. Manual Data Entry Errors
The Issue:
Typographical errors and miskeyed figures can introduce discrepancies into your books.
The Solution:
Whenever possible, use integration tools to automate data entry. If you must enter data manually, double‑check your figures and consider implementing an approval process for journal entries.
Tools and Integrations to Simplify the Process
For businesses with a high volume of transactions or those that want to reduce the manual workload, there are several integration tools available:
Integration Tools Overview
Reconcilely:
Offers automated syncing of sales, fees, refunds, and payouts between Shopify and QuickBooks. It also includes customizable settings to map your data accurately.
MyWorks:
Connects Shopify with both QuickBooks Online and Desktop, mapping your product data, recording fees, and ensuring that sales and deposits are recorded correctly.
A2X:
Specializes in summarizing and transferring Shopify sales data into QuickBooks, especially useful for reconciling payouts.
Webgility:
Integrates Shopify with QuickBooks (both Online and Desktop), automating the transfer of sales data and offering tools to reconcile Shopify payouts with your bank deposits.
How They Help
Time Savings:
Automation reduces the need for manual entries, freeing up your time for more strategic tasks.
Increased Accuracy:
These tools minimize human error by automatically mapping and syncing transactions.
Real‑Time Data:
Enjoy up‑to‑date financial records that reflect your current sales and expenses.
Customizable Settings:
Tailor the integration to match your specific business processes and chart of accounts.
While the decision to use an integration tool depends on your business size and transaction volume, many Shopify store owners find that automation not only improves efficiency but also enhances the accuracy of their financial records.
Final Thoughts and Recommendations
Recording Shopify sales in QuickBooks is essential for maintaining accurate financial records, making informed decisions, and ensuring regulatory compliance. Whether you choose to manually enter transactions or leverage automation through an integration tool, follow these key recommendations:
Start with a Solid Foundation:
Set up your chart of accounts correctly and gather all the necessary data from Shopify.
Regular Reconciliation:
Make reconciliation a routine part of your bookkeeping process to catch discrepancies early.
Automate Where Possible:
Consider using integration tools like Reconcilely, MyWorks, A2X, or Webgility to reduce manual data entry and improve accuracy.
Monitor and Adjust:
As your business evolves, periodically review your processes and integration settings to ensure they continue to meet your needs.
Seek Professional Advice:
Especially during the initial setup, consulting with an accountant or QuickBooks ProAdvisor can help ensure that your books are set up correctly and that you’re capturing all necessary data.
By taking the time to implement these best practices, you can streamline your e-commerce bookkeeping process and focus on growing your business. Accurate financial records not only help you understand your current financial health but also set the stage for future success.
Conclusion
In today’s fast‑paced e-commerce world, maintaining accurate financial records is non‑negotiable. Shopify sales can involve complex transactions with multiple components such as fees, discounts, shipping charges, and taxes. When integrated properly with QuickBooks, these details can be automatically captured, reconciled, and reported with precision.
Whether you’re a small business owner manually recording a handful of transactions or managing a high‑volume store with automated integrations, understanding how to record Shopify sales in QuickBooks is critical for staying on top of your finances. With a clear chart of accounts, reliable data from Shopify reports, and a methodical approach to reconciliation, you can ensure that your financial records are accurate and that you’re well‑prepared for tax season, audits, and strategic decision‑making.
By leveraging the power of integration tools and following the best practices discussed in this guide, you can save time, reduce errors, and gain deeper insights into your business performance. Ultimately, effective bookkeeping sets the foundation for sustainable growth and long‑term success.
Remember: whether you choose to record sales manually or automate the process with a tool, the key is consistency and attention to detail. Accurate records empower you to make smarter decisions, secure financing if needed, and steer your business confidently into the future.
Happy bookkeeping, and here’s to your continued success with your Shopify store and QuickBooks!
Published on [Your Blog Name] – For further insights and practical tips on e-commerce accounting, subscribe to our newsletter and join our community of thriving online entrepreneurs.