DIY Shopify Bookkeeping: Revenue, Expenses & Profit - Explained
Confused by your Shopify numbers? You’re not alone. Whether you’re managing your own bookkeeping or simply trying to make sense of your Shopify reports, learning how to track and interpret your financials is one of the most powerful skills you can develop as a business owner. The good news? You don’t need to be an accountant. You just need the right breakdown. Here’s the Maven’s guide for DIY Shopify Bookkeeping: Revenue, Expenses & Profit.
Revenue ≠ Profit
It’s tempting to glance at your Shopify dashboard, see your sales revenue, and think, “Great! That’s what I made this month.” But that number is just the beginning of the story.
Sales Revenue represents the total amount your business brought in before anything is deducted - like discounts, returns, fees or costs. It includes many components:
Gross sales
Discounts and promotions
Returns and refunds
Shipping income (if you charge customers)
Sales tax (if collected)
Other sales-related income
But your Shopify payouts don’t reflect this. What hits your bank account is a net payment, already reduced by refunds, fees, sales tax, and other adjustments. If you’re only recording bank deposits as revenue, you’re missing key data - and potentially skewing your financial picture.
To accurately track your performance, you need to record all the components of your Shopify sales.
Expenses and Cost of Goods Sold (COGS)
Your expenses are everything it takes to keep your business running -and they can add up fast. Some costs are predictable, like your Shopify subscription or a monthly app fees. Others pop up unexpectedly, like a last-minute supplier charges or urgent website fixes.
To make sense of it all, you need to track expenses in clear categories. Most importantly, separate your Cost of Goods Sold (COGS) from your general operating expenses helps you understand how profitable your products are before any other business costs come into play.
Your Cost of Goods Sold should include all direct costs associated with producing or acquiring the products your business sales, such as:
Product inventory or raw materials
Manufacturing or packaging costs
Shipping costs (to you)
Direct labor
Inventory-related fees
Tracking your expenses in consistent categories makes it easier to see where your money is going and where you might be able to cut back. Some common expense categories worth tracking include:
Software subscriptions
Advertising and promotional fees
Legal and administrative fees
Contractor payments
Insurance
Payroll
Keeping your chart of accounts clean and organized ensures your reports are more accurate and meaningful.
Profit: Gross vs Net
Here’s the equation that really matters:
Net Profit = Revenue – Expenses
That’s the number that tells you how much your business is actually keeping after covering all costs.
If your sales are high but your profit is low, you may be underpricing, overspending - or both.
To get a clearer view of your business health, understand the difference between:
Gross profit - Revenue minus only your COGS. This gives you insight into your product margins.
Net profit - Revenue minus all expenses. This is what your actually keeping.
Both are key metrics to review regularly. Together, they help you make smarter decisions about pricing, spending, and planning for growth.
Know Your Reports
You don’t have to check every report every day- but reviewing a few key ones regularly can transform how you run your business.
Profit & Loss Report (Income Statement):
Shows your revenue, COGS, expenses, and profit over a specific period. It’s your go-to for measuring performance monthly or annually.
Balance Sheet:
A snapshot of what your business owns (assets), owes (liabilities), and what’s left (equity). It’s helpful for understanding your business financial health and stability.
Cash Flow Statement:
Tracks actual cash moving in and out of your accounts. It’s critical for managing day-to-day operations, planning for taxes, and avoiding surprises.
Reading these reports regularly gives you the insight to price smarter, invest more confidently, and grow with intention.
DIY Bookkeeping Tips from the Mavens
When you’re handling your own Shopify bookkeeping, consistency is everything.
Reconcile accounts monthly - Match all your business bank and credit card statements to your bookkeeping records every month. This catches errors early and keeps everything clean for tax time.
Separate business and personal finances - Use dedicated business accounts to avoid confusion and maintain clarity.
Use the right technology tools - We recommend QuickBooks Online with a Shopify integration app, like A2X. This setup imports clean, summarized data and reduces manual entry.
Customize your Chart of Accounts - Set up your chart of accounts to fit your business, but keep it simple.
The easier your system is to use consistently, the more useful your numbers will be for spotting trends, flagging issues, and staying on top of your finances.
Closing & Resources
Shopify DIY bookkeeping doesn’t have to be overwhelming—but ignoring it can cost you.
When you understand the difference between revenue and profit, track your COGS and other expenses clearly, and reviewing your reports regularly, you’re not just running a store - you’re running a business with clarity and control.
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!
