Shopify bookkeeping with QuickBooks Online: start to finish in 5 steps

If you're like many Shopify sellers using QuickBooks Online, you might want to understand what's involved in doing your own bookkeeping before you consider turning it over to a professional. At Mavency we’ve helped numerous Shopify sellers set up, organize, and streamline their bookkeeping, so we know just what it takes. If you’re ready for some useful tips, let’s take a behind the scenes look into the 5 essential steps that Shopify sellers should be doing every month to work on your own bookkeeping using QuickBooks Online. Click the video linked below or keep reading and we'll go over Shopify bookkeeping with QuickBooks Online: start to finish in 5 steps.

Before you start working on your bookkeeping, there are a few essential set up tasks that you’ll need to take care of first. You should have already set up your QuickBooks Online, including the chart of accounts and the bank feeds. You should also have connected your QuickBooks Online file to Shopify using A2X. If you’d like to find out how to set up your bookkeeping, here’s a link to our related article: 5 Crucial steps for setting up your Shopify bookkeeping using QuickBooks Online.

Step #1 - Record

The first step in working on your Shopify bookkeeping is to record. This step is where we ensure that all transactions are added to QuickBooks. You’ll start by going to A2X and review your account mapping for any new gateway transactions. Gateway transactions are your third party payment processor transactions. Make sure that all gateway transactions are mapped to the correct accounts in QuickBooks. Ensure that all transactions from A2X have been sent over to QuickBooks. Then you’ll go to QuickBooks and categorize or match all the transactions in the bank feeds. Match Shopify deposits to A2X entries in the QBO bank feeds. Next you’ll record deposits from other payment processors to their corresponding clearing accounts. Then record and categorize PayPal transactions, if you're using PayPal. You’ll also need to record payment processor fees for each payment processor. Last, you’ll update month end inventory balances such as inventory, vendor advances, and cost of goods sold.

Step #2 -Reconcile

The next step is to reconcile. This is where we ensure that there are no missing or duplicated transactions. You want to prepare bank and credit card reconciliations in QuickBooks Online. In this step you’ll also prepare the bank account reconciliation for PayPal, if you're using PayPal. Reconcile all Shopify income and payment processor deposits between QuickBooks and Shopify.

Step #3 - Review

The third step for working on your Shopify bookkeeping is to review. Here's where we review all the transactions for accuracy. Review your clearing account balances, review your inventory balances, review all of the profit and loss accounts, and review your balance sheet accounts.

Step #4 - Revise

The next step is to revise. Here's where we adjust and make corrections as needed. You'll want to correct any miscategorized transactions. Those are transactions that were assigned the wrong account category. You’ll want to fix any errors.

Step #5 - Restrict

The last essential step for working on your Shopify bookkeeping is to restrict. This is where we close the books so that we don't accidentally make changes to the books after we did all that work to do the bookkeeping. To close the books, go to the gear icon in QuickBooks, select Account and Settings > Advanced, change the closing date, and then save.

Closing and Resources

Now that we’ve shared how to do your Shopify bookkeeping with QuickBooks Online: start to finish in 5 steps, we have a few bonus tips to help you stay on top of your bookkeeping tasks. First, set aside time every week to work on your bookkeeping. Also, you should always use a checklist to make sure you don’t miss any steps. You can find more helpful information about Shopify bookkeeping in our free Shopify Bookkeeping Blueprint. We also invite you to explore our Mavency YouTube channel where we continue to add new content for e-commerce sellers. For some interactive support, come join my Facebook community where you can connect with other Shopify sellers and professional bookkeepers online. If you are ready for an even deeper dive into Shopify bookkeeping, you can also take a look at my Shopify Bookkeeping method course on the 5MB Academy. Finally, if you’d like some help and 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.