Hello.
I’m looking for some help on Shopify accounting.
If I take £1000 in total sales but only get paid out £800.
In my Xero accounting…
Should I be Accounting
A/ Total Sales £1000 - Shopify Fees £200 = £800
Or
B/ only payout amount of £800 as Sales.
I’m assuming A but just wanted to check as I’m by no means an accountant and just wanted to double check on what the usual practice is and what others recommend.
Thanks!
Just my opinion but…
Either way will have little effect to the bottom line. From a managerial perspective though, I’d choose a version of A. This allows you to see you true sales and costs. We use an app that mines the data from Shopify and posts to our accounting. It shows sales, discounts, returns, sales tax, fees, expected payouts, COGS and more. Then when the money deposits from Shopify we are able to match the deposit to the expected amounts. This helps to catch any missing payouts which, while there haven’t been a lot, there have been some. We also get payments from other platforms like Paypal and this records fees and expected payouts from them.
If you have multiple sales locations this helps to know if improper discounts are being given and if returns are higher in some locations. In short, it helps make sense of Shopify instead of pulling multiple reports and combining data.
Thank you very much. I just wanted to be correct in which way was correct to account for it to avoid under declaring income etc. I have went for option A but just wasn’t sure if that was correct or not.