VAT Accounting with multiple Payment Providers

HelloDay
New Member
6 0 0

Can anyone please help me with this as I'm getting nowhere?

We take payments through Shopify Pay, PayPal and Klarna. We have just last month gone VAT registered, meaning we now charge VAT and need to account for this properly in Quickbooks.

We receive payouts 9settlements in Shopify speak) from Shopify, Klarna and PayPal. I presumed each of them would be able to immediately and simply show me what amount from each payout is VAT. But none of them do - which absolutely baffles me.

I don't push every single transaction through Quickbooks as there are thousands and it's a nightmare to manage. We've always accounted for each payout into our bank, broken down into 'total revenue' and 'fees' paid to payment provider. Now though we need to also state how much of that payout it VAT collected for HMRC. But none of the payment providers can actually show me!! 

Shopify have a Tax report, but it's not broken down by payout, and the settlement report doesn't show VAT. PayPal straight up refuse to even pull in VAT (????? Is that right???) and Klarna don't have a report for it either.

I'm baffled - can anyone help or shed any light, as my accountant expected this to be a straightforward question to see how much of each payout was VAT.

Please help if you can!!

Thank you

Kirsten

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KristiAtKlarna
Shopify Partner
70 4 14

Hi @HelloDay ,

Klarna provides settlement report data via the Klarna Merchant Portal, as documented at: https://developers.klarna.com/documentation/settlement-files/

 

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HelloDay
New Member
6 0 0

Hi @KristiAtKlarna 

After long chats with Klarna support, they tell me it is not possible to download a CSV settlement report which gives me the VAT for each transaction in the settlement. This is included in the PDF report but not the CSV report, meaning I'd have to add each amount together manually. In settlements with hundreds of transactions this it not viable. If this is not the case please let me know.

They said I could get this information from Shopify. But Shopify does not know which transactions are included in each Klarna settlement, so that won't work.

Thanks

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KristiAtKlarna
Shopify Partner
70 4 14

Hi again @HelloDay ,

Hopefully the help article titled "Include vat amount and rate in CSV report" (available in the Klarna Merchant Portal from the "Help" button) covers this topic; it states:

To include the VAT amount and rate per transaction, use the Report Configurator  (documentation at: https://developers.klarna.com/documentation/settlement-files/#report-configurator). Simply edit an existing CSV configuration or add a new one in case it's not yet listed. Find the transactions list at the bottom of the page and drag and drop the fields from right to left in order to include them in your report.

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HelloDay
New Member
6 0 0

Hi Kristi

Thank you - I have finally figured it out. So it is possible on Klarna. That is a HUGE help. (FYI I was told twice by chat support on the portal that it wasn't possible).

Now I need to pester Shopify and PayPal to make it possible. 

Can anyone shed any light on these two?

Thank you

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philosophyalice
Tourist
7 0 2

I do not understand why shopify cannot provide the VAT breakdown in each payout.  You can export a list of transactions for each payout but this does not include tax information.  The only way to find this information to to export the orders by date but then refunds for the relevant payout are not included.  I find it quite astonishing that it is not possible to find out without a great deal of hassle how much of a particular payout is tax.

 

We are now facing having to pay £300 per month for a finance integration to pull out this information for us.  We are therefore looking at alternatives to shopify as well!

 

Please can someone from shopify clarify why it isn't possible for you to include the tax information within the payout information and whether you are aware of any solutions to this issue?

 

Paypal is going to be a whole separate issue but end of the day we can simply stop accepting paypal as a payment method if needed.

 

I don't know if you have got anywhere HelloDay?

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DaveHelloDay
New Member
1 0 0

No we didn't get anywhere unfortunately. We have had to work out such a convoluted method of calculating the VAT by payout with our accountant in excel, and we are still trying to make sure it is working properly for us. I have no idea why Shopify won't display the VAT by payout as they have that data available, they just aren't showing it and it's inexcusable really.

I think we are muddling through but with questionable confidence, and it adds such a huge workload to what should be a simple task.

Best of luck

Dave

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philosophyalice
Tourist
7 0 2

Thanks.  I am looking at shopify apps which will do this for us - we are currently paying for an integration between shopify and xero (accounting software) but we need to move to a different system as the transaction volume means importing each order separately is causing problems.  Will let you know if I find a solution!

 

Alice

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