Bookkeeping; is there an easier way?

[HH1088]

Hello, we use Shopify for our retail/online clothing store. We have too many inventory items for QuickBooks online to handle, so we send the data from Shopify to A2X accounting, then A2X sends COGS to QuickBooks. I have to manually enter into QB the shop pay installments and manual gift card entries every month. I used to have to do returns too but thankfully shopify has recently updated that. 

Does anyone have a better way? It seems that having apps to handle integrations for the back end bookkeeping is tedious. Thanks 

[KP_Enterprises]

We use Bookkeep.com. They mine the data from Shopify and post to our accounting system. We have a large number of transactions every month and doing it manually would be a huge challenge. Bookkeep can record your sales, COGS, Different payment types, gift cards sales and redemption, sales tax recording and filings and a whole lot more on a daily basis and for a reasonable rate. It would be worth at least talking to them to see if they are a fit.

[KTJay_81]

Hey, after learning this week how poor the direct Shopify —> QBO integration after trying to use it for the first time, I’ve had a brief look at A2X. 

From what I understand it should be handling ALL payment gateways, expenses, sales etc so I’m surprised to hear you’re having to enter manual shop pay instalments and gift cards. 

perhaps reach out to a Specialist Shopify QBO bookkeeper for a consultation to check it’s set up correctly. 
OR perhaps you’ve just enlightened me to some failings of A2X should I use them in the future. 😫

[umiajhu]

I use A2X, and I don't have to enter in my Shop Pay Installments or Gift Cards. I think the OP was referring to manual gift cards as opposed to ones purchased directly through my site. A2X does them for me. Payment processors that are outside of Shopify Payments don't provide the transaction fee breakout in the info that comes from Shopify to A2X. It sends over the total amount of the purchase which goes into a clearing account. The only thing I have to do for Shop Pay installments (which is outside of Shopify Payments), is run a report of the Shop Pay Installments fees for each month and do a journal entry to move the Fee amount out of the clearing account, so it's accounted for correctly. I used to have to do this for Paypal too, but PayPal is now processed through Shopify. 

@HH1088 , have you had any luck this month figuring out how to handle the Shop Pay Sales since Shopify is now collecting and remitting sales tax on our behalf? The tax is coming through directly as 'tax', but when they pull it back to remit, it's coming through as 'Debit' from Shopify, which is the same that Shop Cash comes thru as. A2X support told me to just put it under the same clearing account as the Shop Cash, but wanted to see if others were doing the same, or if we would need it broken out separately for anything. 

Having done everything manually in the past, and doing journal entries in QBO, A2X has been a lifesaver, and once you understand how it works it saves me so much time and my books are great. 

Edit: Tagged the wrong person

[sellercpa · Accepted solution]

The fact is that Shopify bookkeeping is quite challenging primarily due to all the payment gateways. A2X is definitely the industry standard when it comes to Shopify integration with QBO, but it's not perfect and requires a review of the balance sheet every month to ensure proper accounting. When setting up A2X, there is a lot of mapping of accounts from A2X to QBO that is required. By default, A2X sends other gateway payments (meaning anything but Shopify payments) to a clearing account call "Shopify Clearing Account". This is initially a catch all for non-Shopify payments. Using this default setup makes it very difficult to reconcile, so the best practice is to set up a clearing account for other gateway payments. Here are some examples:

• PayPal payments - If Shopify Payments has not started processing PayPal payments for you, and you accept PayPal, you will likely see the most activity on this other payment gateway. You need to setup a specific clearing account. All express checkout payments and preauthorized bill pay user payments must go to this account from the connected PayPal bank feed in QBO. Then you must configure the A2X mappings to send all PayPal payments to the PayPal clearing account in QBO. The end result should be zero each month in the clearing account just by correct mapping. Where this gets tricky is when you are receiving payments into PayPal not associated with Shopify or sending payments, not associated with Shopify refunds. Even if Shopify payments is processing payments for PayPal, you may still receive payments there is you are accepting sales on Meta.
• Meta - If you are accepting sales through Meta, you must set up a specific Meta clearing account which should also zero out each month just based on the correct mapping.
• Shop Cash - If you are accepting Shop Cash, you must set up a specific Shop Cash clearing account which should also zero out each month just based on the correct mapping.
• Shop Pay Installments - If you are accepting Shop Pay Installments, you must set up a specific Shop Pay Installments clearing account which should zero out give or take a few days at the end of the month if you have directed all payments received as "SHOPPAYINST AFRM" to this account and recorded the fees manually. The manual recording of these fees must be done each month by running a report in Shopify. If you don't do this, that account will not have fees on your P&L and the balance sheet account will grow.
• Pending payments - What you do in Shopify flows through A2X to QBO. If you mark an order paid without receiving payment, a balance sheet account will show money due to you. Likewise if you owe a customer a refund, it will show a negative balance here. These balance sheet accounts should be reviewed monthly.
• Manual orders - Manual orders can cause some issues too. Balance sheet accounts must be reviewed monthly to diagnose issues.
• Shopify Clearing Account - Anything that doesn't go to the other clearing accounts, which show up here. If you have mapped all your clearing accounts and still see a balance here, that means you've accepted payment through a new gateway and you'll need to determine if you should set up a new clearing account.
• Shopify Loan - Took a Shopify loan? Make sure to record the interest using the loan agreement, if not, you'll end up with a negative amount on the balance sheet liability account after applying all the payments.

Is there an easier way? Process wise, no. But you can outsource your monthly bookkeeping to an ecommerce accounting firm and save hours that can be used focusing on what you do best.

The Seller CPA is an ecommerce specialized CPA firm. You can book a call with us here. Learn more about our Shopify bookkeeping services here: https://www.sellercpa.com/shopify-bookkeeping

[HH1088]

This is very helpful, thank you