Why is Shopify bookkeeping with QuickBooks Online so different?
You probably wouldn’t set out to climb a mountain without making sure you have the right tools, knowledge, and experience to navigate the journey successfully. Imagine how an attempted mountain climb might turn out if you were not prepared and didn’t know the roadmap to get where you were heading! Did you know that Shopify bookkeeping can be tricky to navigate too? The right tools and a trusted roadmap are required for a successful journey. One of the tools we recommend for Shopify bookkeeping is QuickBooks Online. Today we’ll uncover some complexities and shed light on what you need to know to stay on top of your financial game. Keep reading to discover why is Shopify bookkeeping with QuickBooks Online so different.
#1 - Various Components of Income
The first complexity we’ll highlight is properly recording the various components of income. When it comes to Shopify bookkeeping, the amounts deposited into your bank account from Shopify and other payment processors are not reflective of your true income. That's because amounts deposited are comprised of gross sales, discounts, refunds, gift cards, shipping income, sales taxes collected, fees, and other factors. So recording income by payment processor in QuickBooks does not accurately reflect all of the components of your income.
#2 - App integrations
Beware - app integrations can be both a blessing and a curse! It's crucial to choose your Shopify to QuickBooks Online integration apps carefully, as some may cause significant issues by dumping a bunch of data into your QuickBooks. Avoid the headache of a messy integration by choosing apps that send summarized transactions to your QuickBooks file. The Mavens’ favorite app is A2X. You’ll find a link in the Closing & Resources section at the end of this article.
#3 - Tracking Shopify inventory in QuickBooks Online
When it comes to tracking your Shopify inventory in QuickBooks, a detailed approach is usually not the best strategy. QuickBooks Online isn't specifically designed to handle the complexities of e-commerce inventory management. Fortunately, though, there are some strategies available for tracking inventory in QuickBooks for accounting purposes.
#4 - Timing differences
Timing differences can have a significant impact on your bookkeeping. From the moment that a sale is made to when it's processed by payment processors and eventually deposited into your bank account, there are timing differences that must be accounted for and reconciled in QuickBooks on a monthly basis using what we refer to as clearing accounts. We use clearing accounts for each payment processor. Your QuickBooks file has to be set up in such a way to account for those timing differences and to be able to reconcile all of your clearing accounts.
Closing & Resources
And those are the reasons why Shopify Bookkeeping with QuickBooks Online is so different. By understanding these nuances, you'll navigate your financial journey with confidence.
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!