Our store has not gone live yet, and we are trying to figure out how our payments will be determined. Shopify support has led me to believe that Daily Payouts don’t exist (at least in Canada), even though we have selected daily payouts. I am told that the Daily Sales are gathered into “Collections” and then paid out after three days.
I am also told that each of these daily “collections” will consist of all sales that occur on that date, in the UTC time zone, as opposed to the time zone that we are actually in, which doesn’t make much sense to us, and will cause serious accounting headaches.
Can anyone enlighten me on whether or not this is all true, and/or help understand why a specific day’s “Daily Sales” would not be gathered based on our time zone?
For context, we are an already existing brick-and-mortar store with a different POS system, and having payouts not reflect the actual day’s sales will be challenging.
Shopify Payments supports multiple countries and time zones (for many Shopify stores – potentially over a million of them, I don’t know the exact number), so it makes sense that they would do a standardized time for issuing payouts.
This won’t affect your accounting at all though, as the only date your accounting team would need (for tax purposes) is the date/time that the order was placed (which is localized and can be set in your store’s “General” settings). You’ll be able to easily see when orders are placed and at what time (in your local time zone).
Also, the time at which you actually receive the payout (different from when the payout was sent, and different from when the order was placed), will vary, depending on which bank you use, so knowing the exact time that the payout was sent is somewhat meaningless.
In Canada, the pay period is 3 business days (this is true).
In your reports that you receive for payouts it will show you the exact day your money will hit the bank. In your orders it will show you the correct time (your time zone) for each order. On the backend for the electronic transfer they utilize 1 time zone to decide when the transaction goes out opposed to having 24 different groups of zones and different payouts set for each zone.
Electronic payments often use a single time zone for all payouts for the sake of simplicity, consistency, and ease of management. Here are a few reasons why this approach is commonly adopted:
Simplicity and Standardization: Using a single time zone simplifies the payment processing system. It eliminates the need to manage and reconcile transactions across multiple time zones, reducing complexity in the system. Standardizing on one time zone helps streamline the entire payment process.
Avoiding Ambiguity: Different time zones can introduce ambiguity and make it challenging to determine the exact time a transaction occurred. This can lead to confusion and potential issues in reconciling records. By using a single time zone, there’s a clear and consistent reference point for all transactions.
Global Operations: Many electronic payment systems operate on a global scale, serving users and businesses in various countries and time zones. To avoid confusion and complications arising from coordinating transactions across different time zones, a central reference point is established.
Regulatory Compliance: Standardizing on a single time zone can help simplify regulatory compliance. Financial institutions and payment service providers often need to adhere to specific regulations and reporting requirements, and using a consistent time zone facilitates compliance with these regulations.
Transaction Timestamps: Electronic payment systems typically use timestamps to record the timing of transactions. Using a single time zone ensures that timestamps are consistent across all transactions, making it easier to track, audit, and troubleshoot any issues that may arise.
In your Shopify Payments/Payouts settings, you can establish a ‘pay period.’ Learn more about this feature here. And more importantly, Canada payment processing guidelines here.
Shopify Payments is designed to accommodate a broad range of countries and time zones, potentially spanning over a million stores. The platform follows a standardized time for issuing payouts, a process that doesn’t impact your accounting procedures.
For tax purposes, your accounting team needs only the order placement date and time, which is localized and adjustable in your store’s “General” settings. Keep in mind that the actual time you receive the payout, which varies based on your bank, is distinct from when the payout was sent or when the order was placed, making the exact payout time less relevant. I’m open to discussing my experience with you. Check out our SuperU.
Sorry but you logic does not make sense. For example when you say:“Shopify Payments supports multiple countries and time zones (for many Shopify stores – potentially over a million of them, I don’t know the exact number), so it makes sense that they would do a standardized time for issuing payouts.”
The Visa network is world wide and and every credit card processor I have used settles batches by the came calendar day as our shop’s sales.
Aslo you say that "The platform follows a standardized time for issuing payouts, a process that doesn’t impact your accounting procedures.
“For tax purposes, your accounting team needs only the order placement date and time, which is localized and adjustable in your store’s “General” settings. Keep in mind that the actual time you receive the payout, which varies based on your bank, is distinct from when the payout was sent or when the order was placed, making the exact payout time less relevant.”
Not true. In order to reconcile my monthly bank statement my CPA had to come up with an entirely new way to track my daily sales, at expense.
The way Shopify settles is confusing and not business friendly. It seems like it is meant to work to your advantage, not ours.
MIchael, I am in absolute agreement with you. I am horrified as to what I will have to do now for basic daily accounting because shopify can’t batch all of my credit card transactions at my day’s end (we’re open to 10 pm). It’s not as simple as “moving those deposits” to the next day - it affects each category of each item in each sale, and it doesn’t show a true picture of my sales for each day when I am scheduling or looking at a month to month sales profit and loss in quickbooks. I’ve NEVER had a POS system that didn’t allow your entire day to batch in your same time zone. This is ludicrous and I can’t believe everyone else isn’t having this same issue. I can tell you that if I don’t get this resolved, I will not be bringing shopify into my other stores (I am testing it in my smaller boutique) AND I will be dropping it after one horrible summer of accounting headaches.