DIY Bookkeeping for Shopify Sellers: What You Actually Need to Know
Bookkeeping might not be your favorite part of running an online store, but it’s one of the most important. Knowing your numbers means knowing your business: what’s working, what’s not, and how to grow sustainably. Messy or outdated bookkeeping can leave you feeling confused, frustrated, and overwhelmed – never knowing the true profitability of your business and always feeling behind when it’s tax time.
Ready to take control of your financials? Let’s dive into our top expert tips on DIY bookkeeping for Shopify Sellers. Here’s what you actually need to know.
#1 - Choose a bookkeeping system that fits your needs
Having a reliable system in place to keep accurate records of all the financial transactions in your business is essential. These transactions are tracked in categories of revenue, cost of goods sold, expenses, assets, liabilities, and equity. Once recorded in your bookkeeping system, all these transactions flow into financial reports to provide a picture of the overall health of your business and empower you to make informed business decisions. But that’s not all! Organized and up-to-date bookkeeping is essential for tax compliance, qualifying for business loans, and even attracting investors.
Not every accounting software works well for e-commerce bookkeeping, but there are several that do. Two of the most popular choices are QuickBooks Online and Xero, but there are other options. You’ll need to consider your current and future bookkeeping needs when selecting the right option for your business. For example:
Will you be the only one working on your books or will you be collaborating with others?
Will the accounting software/system continue to work efficiently as your business grows?
Will streamlining your bookkeeping involve app integrations?
If so, which apps do you want to connect with your accounting software and are reliable integrations available?
#2 – Beware! Choose the right Shopify integration app
As your business grows, you may want to connect your Shopify store to your accounting software to help streamline your financial workflow. The right tools will help keep your financials accurate and up to date, without adding hours to your workload. If you’ve visited the Shopify app store, and search for “bookkeeping”, you’ll see page after page of available connections. Be cautious and do your research before connecting any apps to your accounting software. The wrong apps can make a big mess in your books and lead to missed insights. The right apps will send summarized transactions to your books that easily match to bank deposits. No mess, no fuss.
When it comes to connecting Shopify to QuickBooks Online (or Xero), it’s no secret the Mavens recommend A2X. It’s one of the most reliable tools available to automatically pull in Shopify sales, fees, refunds, taxes, and more, directly to your accounting software – all in clean, easy-to-work-with summarized entries. If you’re selling on multiple channels, A2X has integrations for Amazon, Walmart, eBay, Etsy, and PayPal.
While A2X and similar tools automate a big part of the process, you’ll still need to review, categorize, and reconcile each month. That’s not a downside, though! It’s what keeps your books accurate and ensures nothing slips through the cracks.
#3 - Track more than just net deposits
It’s a common mistake to look at the amount deposited into your bank account and assume that’s all you need to record for your sales income. But the truth is, that number only reflects what’s left after Shopify has already deducted things like transaction fees, refunds, discounts, and, in some cases, sales tax. It’s the net payout, not the full picture of what you actually earned or processed in sales.
To get an accurate view of your business performance, you need to be tracking your gross sales, or the total amount received before any deductions. That means recording not just what was deposited, but also:
The full amount customers paid
Any discounts you offered
Refunds and chargebacks
Shipping income and costs
Platform and payment processor fees
Sales tax collected at checkout
This breakdown helps you understand your true revenue, calculate your gross profit correctly, and catch red flags before they turn into big issues. Without it, you’re essentially flying blind—and that makes it harder to price your products properly, plan for taxes, or make informed business decisions.
#4 - Keep up with state sales tax nexus
Sales tax is one of the most confusing, but crucial parts of e-commerce bookkeeping. You must determine whether you have physical nexus in a state, determined by location, warehouses, or employees in a state. Also, if you’re selling in multiple states, you need to consider economic nexus—which means you have a tax obligation in a state once you hit a certain threshold in sales or activity there.
To stay compliant, you’ll need to identify where you have nexus (physical or economic) and register to collect and remit sales tax in those states. The good news? Tools like Shopify Tax can be set up to automatically calculate and collect the correct sales tax at checkout, based on where your customer is located. Using an app like TaxJar can really help streamline your sales tax filings in multiple states.
When it comes to DIY bookkeeping, it’s important to remember that any sales tax you collect should be recorded as a liability, not income. You’re holding that money temporarily until it’s time to file and pay it to the state. This is usually done on a monthly, quarterly, or annual schedule depending on your sales volume.
Keep in mind that sales tax rules can vary by state and by product. Some items, like clothing or digital goods, might be taxed differently or even be exempt. It’s worth double-checking your product categories and tax settings to make sure everything is accurate.
Even with great tools, it can still be a headache to keep up with, so as your brand grows, we recommend using a sales tax service provider, such as Sales Tax & More to help keep things on track.
#5 - Reconcile accounts regularly
Bookkeeping isn’t a set-it-and-forget-it process. Having a consistent monthly routine is crucial for the long-term success of your business—and your brand. When you fall behind or ignore your books, it becomes much harder to catch up. Errors go unnoticed, important trends slip through the cracks, and in some cases, your books may even fall out of compliance with tax rules.
It’s essential to set aside time each month to ensure that all of your financial transactions are recorded in your bookkeeping system, and check that there aren’t any duplicate or missing transactions. To verify this, you need to reconcile all your business bank and credit card account balances in your bookkeeping system to their month-end statement balances. If you use PayPal in your business, you’ll need to reconcile your PayPal account balance to your month-end PayPal statements. Also, remember to record your payment processor fees and reconcile the balances in your payment processor clearing accounts on a monthly basis. In nearly all cases, the amounts received from payment processors are net of fees. You’ll need to run reports from each payment processor to get the total amount of fees to record each month.
What’s next, after your financial transactions are recorded in your books and reconciled to account statements? Take some time to review your Profit & Loss and Balance Sheet reports. It’s one of the best ways to stay in tune with your brand’s financial health.
#6 - Know when to ask for help from the experts
DIY bookkeeping is a great option for many Shopify sellers, especially when you’re just starting out, but that doesn’t mean you have to do it all alone.
If you’re looking for a starting point, grab a copy of our free Shopify Bookkeeping Blueprint, where we go over the bookkeeping basics every seller needs to know. You’ll learn about integrating Shopify with QuickBooks Online using A2X, tracking inventory accurately for your financials, avoiding common bookkeeping mistakes, gaining clarity on sales tax, and more—all in one easy-to-follow guide.
When you're ready to take charge of managing your own books like a pro, our DIY Shopify Bookkeeping course can help by providing a clear, actionable roadmap! This course walks you through the step-by-step process of setting up your books and building a streamlined bookkeeping system you can confidently maintain as your business grows. It also includes a handful of useful tools and resources to support your success!
If there comes a time where you’re spending more time fixing errors or worrying about the accuracy of your numbers, it might be time to get some additional support from the experts.
At Mavency, we support sellers at every stage of your journey—whether you need a one-time bookkeeping set-up, help with diagnosing and cleaning up your messy books, or ongoing monthly bookkeeping services.
Closing & Resources
So, when it comes to DIY bookkeeping for Shopify sellers, what do you actually need to know? It’s all about the right bookkeeping system, a consistent routine, and a clear understanding of what to track (and why). Successful bookkeeping will help equip you to make confident decisions and stay in control of your numbers—without the overwhelm.
Need some more expert guidance? If you are ready to work with a trusted and reliable Shopify bookkeeping team, you can use this link to learn more about Mavency to see if we are a good fit for working together. For some additional support for your DIY Shopify bookkeeping, check out the free and paid resources linked below:
A2X - Sign up to use A2X for your Shopify to QuickBooks Online integration and receive 20% off your first 6 months by using our discount code: A2XMAVENCY
We hope to connect with you soon!
