The Definitive Guide to Shopify Accounting
May 19, 2019

The Definitive Guide to Shopify Accounting

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Estimated reading time: 10 minutes.

Shopify seller

You’ve finally decided it’s time to open an ecommerce store, and you’ve chosen Shopify as your sales platform.

Great job – you’ve made the first step! 

It’s more than likely you now find yourself smack bang in the middle of a whirlwind of activity: Developing product/s, building a business plan, devising a marketing strategy – all incredibly important parts of starting and running your own business.

You’ve no doubt been told that the first couple of years in business will be hard, and we won’t lie, it is. Running your own business, especially ecommerce, can be labour-intensive and overwhelming. 

What if we told you there’s one thing you could do to set yourself up for success right from the start? You’d do it, right?

Accounting is one of those things small business owners tend to neglect until it starts causing them a problem (like Nick Losciuto). Either they try and do it themselves to save money, or they wait six months until they’ve made enough money to cover the cost of an accountant.

From experience, we know that 9 times out 10, small business owners regret their decision to wait. The one thing they wish they’d done is to invest in the right back-office tools from the beginning - before it all gets out of hand. 

In this guide, we’ll look at why you should set yourself up with the right back-office from the get-go: What apps and integrations to use, and how it all contributes to the success of your Shopify business.


  1. Accounting systems for Shopify sellers
  2. Why you should use an accounting connector
  3. Tax software for Shopify sellers
  4. Shopify’s profit margin calculator
  5. Why work with an ecommerce specialist accountant
  6. Benefits of a well established back office

Accounting Systems For Shopify Sellers

First thing’s first – you don’t need to have a degree in accounting to manage your business finances (although we’d highly recommend working with an ecommerce specialist accountant). 

The job of accounting software is to automate certain processes, so both you and your accountant can better understand where your business is headed.

It’s near impossible to scale a business without a stable accounting framework, so the sooner you can invest in reliable and accurate accounting software, the better. This is because accounting is fundamental to expense and revenue management. Working without it is like throwing a dart at a target while blindfolded.  

Online accounting software makes your life easier and saves you time - the most precious commodity to any business owner. It also will help you to track cash flow and simplify your finances, so you can optimize your businesses growth over time.

From tracking invoices and expenses to bookkeeping and payroll (if required), good accounting software is like running a magic wand over your finances. But it’s important you choose not just a great product, but the right product for your business needs.

Shopify stores range in size, industry, number of employees, what they sell, and budget. So be sure to choose a solution that fits your business where it is now, as well as where it will grow to be in the future.

Online Accounting Software We Recommend Using With Shopify

You may be trying to choose between Xero vs Quickbooks, among others, for Shopify. While there is rarely a one-size-fits-all approach for accounting, you may find one option is a better fit than another for your business. 

Xero And Shopify

Xero for Shopify is not only popular with store owners, but also across a wide range of ecommerce industries and other small business types worldwide. 

Connecting Xero to Shopify is straightforward and fast. Xero Shopify integration is seamless and offers an end-to-end financial accounting solution that works hard for you – even while you sleep.

Features include:

  • Customisable dashboard. 
  • Detailed reporting – 65 different reports, to be exact.
  • Well-structured, dynamic payroll system.
  • Option to track inventory.
  • Automated bank reconciliation.
  • Chart of Accounts.
  • Invoicing and Estimates.
  • Accounts Payable to facilitate all billing operations.
  • Contact Management, which can help drive targeted marketing by identifying specific groups of customers.

Be sure to check out our in-depth Xero and A2X support guides for accountants.  

Quickbooks For Shopify

Also known as Intuit QuickBooks, Quickbooks Online is well known for being the most advanced accounting solution for ecommerce and offline stores. Despite its apparent simplicity, it’s actually an incredibly intelligent business tool that lets you instantly see how your business is doing. Quickbooks Shopify integration is uncomplicated and easy to set up. If you’re considering using Quickbooks with Shopify there are some great features to take advantage of. 

Features include:

  • Basic but informative dashboard interface.
  • A customer management system for saving and coordinating customer details.
  • Simple bank reconciliation.
  • A client portal so your customers can log-in and view their account information.
  • Invoicing and Estimates.
  • Wide range of customisable business reports.

If you need help connecting Quickbooks and A2X, our comprehensive guides are found here

Ecommerce app integrations

Why You Should Use An Accounting Connector

Most online business tools are designed to solve a specific problem but aren’t designed to integrate with other tools. 

One solution is to manually transfer data using spreadsheets and a lot of manpower. The alternative is to invest in ‘connectors’ or integration apps that do the job seamlessly for you.

A2X for Shopify is one of those apps.

It automatically connects data between Shopify and Xero or Quickbooks, so you have the information on hand to better manage and understand your business. It’ll save you a lot of time too. This short video gives an easy to understand overview of how it works: 

Need more details? We’ve got them! 

Why A2X For Shopify Should Be Your Go-to For All Shopify Accounting 

  1. Makes scaling easier: As your Shopify store grows, the number of orders you import into your accounting software can quickly become overwhelming, making reconciling to your bank account a nightmare.

    While you can still see individual orders, with A2X you’ll also get summarized statements tied to each pay-out summary, for fast and penny-perfect reconciliation each month.

  2. Saves hours of reconciling each month: If you’re still manually reconciling your Shopify pay-outs, and then pulling out your fee, refund or adjustment data, here’s the good news: A2X can do this for you automatically. With a few clicks, you’ll do away with hours of work each month.

  3. Delivers more accurate bookkeeping: A2X brings through your Shopify store data and allocates it in your accounting system. That means you always have reliable, accurate financial data at your fingertips – no more guesswork.

  4. Is consistently updated and upgraded to ensure it maintains seamless integration with your Shopify account: No outdated, expensive software that doesn’t keep up with the rapid changes in ecommerce accounting.

    Plus a dedicated support centre to ensure you get the most out of A2X.

Tax Software For Shopify Sellers

So, you’ve sorted your accounting by investing in a dedicated piece of cloud-based accounting software, like Xero or Quickbooks. And you’ve integrated A2X, so you have usable sales data and reporting and can make better, more informed business decisions.

Next step to think about: sales tax.

With TaxJar’s simple sales tax app, you’ll always know how much you owe in sales tax. It takes care of all the tricky calculations involved with sales tax – goodbye manual spreadsheets!

When linked with accounting software, TaxJar works by importing your order history, pulling out the sales tax collected and calculating how much sales tax you owe to each state, when, and how often.

TaxJar can help you figure out whether you’ve been paying the right amount of sales tax.

TaxJar and A2X for Shopify are a winning combination. 

TaxJar will:

  • Calculate what you owe in sales tax in each state based on nexus.
  • Give you a comparison of what sales tax you’ve collected versus what you should have collected. If you’re not collecting at all, TaxJar will give you an approximate liability figure.
  • Break down sales tax for states requiring it.
  • Update your sales tax reports every day, so you can stay on top of collecting your sales tax and filing your returns on time.

Shopify Margin Calculator

Deciding on what price to sell your product/s for isn’t simply a matter of plucking a number out of thin air. But it can be simple using Shopify’s profit margin calculator to find the right price for your product (the right price being, of course, one that enables you to make a profit).

Before you can develop an effective pricing strategy for your business, you need to figure out what your mark-ups and profit margins are. Shopify’s profit margin calculator is easy to use – simply enter the gross cost of each item and what percentage in profit you’d like to make on each sale – and hit calculate.

The tool will do all the work for you, running your numbers through its profit margin formula to find you the price you should be charging your customers.

Why Work With an Ecommerce Specialist Accountant?

Deciding to work with an accountant is a business decision, and one you’ll benefit from instantly – don’t leave it until you’re losing money. 

Most small business owners attempt to do their own accounting and bookkeeping, but let’s be honest – managing finances probably is not the reason you went into business.

Just like business tools, it’s important to consider which accountant is best to work with. 

While there are lots of accountants who are familiar with Xero and Quickbooks, not as many are equipped with the skills and knowledge to work with Shopify store owners or ecommerce businesses in general.

There are huge benefits in using a specialist accountant who is highly experienced in ecommerce accounting and understands the complexities involved with selling through Shopify.

  • Catching Clouds: accounting services for online businesses: “We speak ecommerce.”
  • Muse Minded: expert bookkeeping and income tax.
  • Bookskeep: confident ecommerce bookkeeping.

Find an accounting expert who is confident using your accounting software as well as any connector apps. They also need to be well-versed in any relevant sales tax legislation, particularly for those with customers in the United States. 

Ecommerce specialist accountants don’t only help you tidy up your books and make sure you’re paying the right amount of tax. They also may be able to help you improve your business processes so you can work more effectively.

Their advice will be invaluable when making major business decisions.

Understanding Your Taxes

One challenge that most Shopify merchants come across is understanding their tax obligations in the regions they sell into.

Our regionally specific tax guides below should help you understand what you might owe, and how you should handle your taxes across the world:

Setup Shop The Right Way

Shopify has over 1000 different apps to help assist ecommerce stores, with everything from accounting and inventory, to shipping and reporting.

We love a good app just as much as the next person (who wouldn’t want to make life easier if they could, right?), but too much choice can be a bad thing.

Business owner

Finding the right mix of apps and integrations to automate back-office admin tasks is just as beneficial for your customers as it is for your business operations. 

Ensuring you have an accurate and reliable back-office setup means you can spend more time on customer service. Your customers can pay you easily, and you have peace of mind knowing you’re adhering to your financial obligations as an ecommerce owner.

By pulling together and automating all aspects of your accounting, and working with a specialist accountant, you’re setting your business up with the right foundations and giving yourself the best chance to grow right from the beginning. 

For you to remain in business, profitability and growth are crucial. And without the right systems in place to support that profitability and growth, the reality is you won’t be in business for long. Start your business as you mean to go on, by ensuring you are set-up for success right from the outset.

A2X for Shopify is designed to do exactly that. 

A2X Shopify integrations

The best business tools for Shopify Accounting:

If you’re looking for help to set up your ideal Shopify back office, or for more information on A2X for Shopify, get in touch with A2X or an A2X partner. With A2X, you can enjoy stress free Shopify accounting, giving you back time and taking the stress out of selling. 

Try it for free today. 

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