How to Setup Shopify Payments and Link to Your Accounting

How to Setup Shopify Payments and Link to Your Accounting

Entrepreneurs love Shopify – it’s the full package.

One platform with all the ecommerce and point-of-sale features you need to build, grow and run your business, including its very own payment gateway – Shopify Payments.

Shopify Payments was formed in 2013 through a partnership between Shopify and payment provider Stripe. If it’s the right fit for your business, you can start accepting credit card payments quickly and easily, and it means you don’t need to pay for and integrate a third-party option.

This guide will show you how to set up Shopify Payments, and then connect with the rest of your accounting tools and systems to create, what we like to call, the full accounting loop. Connecting all of them ensures a seamless flow of accurate and reliable financial data, essential for making smart business decisions.

Setup Shopify Payments for Easy Processing

The payment gateway is easy to activate from the Payment Providers page in your Shopify account settings.

Here’s what you’ll need to get set up:

  • Your employer identification number (EIN)
  • Your banking information
  • The average price of your orders
  • The average shipping time of your orders

You also need to complete set-up within 21 days of your first sale, or all payments will be automatically refunded.

Step-by-step setup

Step 1: From your Shopify admin, go to Settings > Payment Providers.

Step 2: Activate Shopify Payments:

  • If Shopify Payments is your only credit card payment provider, then click Complete Account Setup in the Shopify Payments section.
  • If you’re using multiple credit card payment providers, then click Activate Shopify Payments in the Shopify Payments box, and then Activate Shopify Payments in the dialog box.

NB: This will remove any other credit card payment providers from your account.

Step 3: Enter your store details and banking information. Click Save.

Now that you’ve set up Shopify Payments you can configure other settings, like setting up Shopify pay-out notifications or editing customers’ billing statements. You can also run a test transaction by enabling “Test More” and using test credit cards to simulate payment. See Shopify’s guide on how to do this here.

Accounting Software for Accurate, Automatic Bookkeeping

When you set up your Shopify store, one of your first tasks for getting your accounting sorted is to find cloud-based accounting software. This will automate certain processes, and make it easier for you and your accountant to see what’s happening in your business.

Xero and QuickBooks Online are well known in the ecommerce world as some of the best accounting apps for Shopify businesses.

You’ll also find it difficult to scale your business without good accounting software because it’s fundamental to expense and revenue management, including cash flow tracking.

Both Xero and QuickBooks Online are easy to integrate with your Shopify account, and once you’re setup with those, add A2X for Shopify for the extra level of detail that you will need.

The Limitations of Only Syncing Shopify with Accounting Software (and Not A2X)

Xero and QuickBooks Online can both be synced with Shopify. This ensures you have visibility of the financial data stored in your Shopify account, including Shopify Payments transactions.

That integration removes the need for the manual transfer of Shopify transactions into your accounting software, a painstakingly arduous task that costs time and money. However, if you connect your accounting system directly to Shopify, don’t be surprised if you find the connection somewhat clunky – and here’s why.

Each transaction in Shopify is made up of several different components: shipping, fees, sales tax – and this is what your accounting system will automatically import. It’s exactly what you want from your accounting system, yes, but as your store grows and your sales increase, this amount of individual transaction data will quickly overwhelm your system and cause it to slow down.

The other issue will come when you attempt bank reconciliation. Pay-outs from Shopify Payments are made in batches, which makes reconciling the individual transactions with your bank account a long, drawn out manual process.

That’s why Shopify sellers around the world have turned to A2X for Shopify, because it eliminates those pain points.

A2X explained

A2X for Shopify’s unique advantage is that it offers settlement accounting.

The software works by automatically importing your Shopify Payments pay-outs – fees, refunds and adjustments included – and generates a summary. It then posts those summaries to Xero or QuickBooks Online.

Then, when Shopify pay-outs arrive in your bank account, you can easily reconcile them with your A2X for Shopify statements. Through this process, it’s just as easy to manage 2,000 transactions per day as it is 20.

The benefits of A2X

  • The success of your business depends on accurate data. Without A2X, you are relying on your own manual input and calculation to be accurate all the time. There’s a reason the term “human error” exists.
  • A2X automates a process that would take you hours and could still be error-prone, despite your best efforts. You get the time back to invest elsewhere in your business and grow.
  • It’s quick and painless to set up, and your accountant will love you for it.
  • Coming towards the end of the tax year? A2X will have automatically recorded the sales tax you collected on every transaction so you won’t need to manually calculate anything. Easy filing, more accurate returns.
  • Want to see how your business is performing month-to-month? Without A2X, you would need to separate batches and figure this out yourself. A2X organizes orders by month from the outset so you have greater visibility over your cash flow.
  • Considering selling? Attract better buyers and higher price-points with your squeaky clean books and excellent financial records.

Still not convinced? Try A2X for Shopify today on a free trial and see what it can do for your business.

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