The ultimate guide to Shopify accounting with A2X
Running a business is often a flurry of admin tasks and never-ending to-do lists, coupled with some testing setbacks and lots of rewarding milestones. Creating and growing a successful e-commerce brand is no different – but don’t let that scare you. When the hard work pays off, the feeling of accomplishment is even sweeter.
Like all good things, building and running a Shopify store takes time and effort. At times, the process can feel overwhelming and you might even ask yourself whether it’s all worth it. If you’re reading this, and you’re a Shopify seller struggling to stay on top of your accounting, you’ve come to the right place.
Think of your business as a human body, with accounting one of its vital organs essential to both your day-to-day operations and long-term business goals. It helps you track income and expenses, financial compliance, and provides information to make informed business decisions. However, it’s often one of the first admin tasks to fall by the wayside – and that can be costly (in both time and money) for any business.
It’s critical that you keep current, accurate financial records if you want your business to grow and your brand to endure. In this guide, we’ll introduce you to the best ways to manage your Shopify accounting with A2X for Shopify and your accounting system.
Shopify accounting: accurate, automated and reconciled
It’s a common misconception that there are only two options when it comes to managing your Shopify accounting: you hire an accountant or do it yourself. While neither option is a bad one, there is a middle ground.
The role of an accounting system Even with the best management, it’s almost impossible to get the same efficiency and accuracy with spreadsheets or paper-based systems as you can using a cloud-based accounting system.
Instead of falling behind, and going weeks without reconciling your accounts, an accounting system will enable you to automate a lot of those processes – everything from tracking invoices and expenses, to bookkeeping and payroll (if required). As an e-commerce seller, a cloud-based option lets you operate your business remotely.
Reliable, accurate accounting software makes it easier to scale your business because you’ll have clear visibility of your business performance. If you work with e-commerce specialist accountants, they can give you better advice if they see what’s happening in your business.
Not only does online accounting software make your life easier and save you time, it also helps you track cash flow and simplify your finances, so you can optimise your business growth over time.
Below are two cloud-based accounting systems we recommend to Shopify merchants. Both work well for new and established sellers – and can follow your growth trajectory.
Xero offers an end-to-end financial accounting solution that works hard for you – even while you sleep. It’s popular with Shopify store owners and across a wide range of e-commerce industries worldwide.
Features include: • A dashboard you can customise • Detailed reporting – 65 different reports • Well-structured, dynamic payroll system • Tracking inventory option • Automated bank reconciliation • Chart of Accounts • Invoicing and estimates • Accounts payable to facilitate all billing operations • Contact management which helps you drive target marketing by identifying specific groups of customers
Also known as Intuit QuickBooks, this is known as the most advanced accounting solution for e-commerce and offline stores. It’s super-simple to use, and an intelligent business tool that lets you instantly see how your business is doing. Features include: • Basic but informative dashboard interface • 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
Bridging the ecommerce accounting gap
While Shopify manages order processing for your e-commerce business, and your accounting system manages cash flow, you’ll need additional software that automatically imports your Shopify sales data into your accounting system.
Connector apps automate the transfer of data between different systems, so you don’t have to rely on manual data entry – an alternative which requires valuable time and those dreaded spreadsheets again.
A2X for Shopify
A2X automates accounting for Shopify stores worldwide using Xero or QuickBooks. The accounting app is trusted by hundreds of leading e-commerce accounting firms and has helped thousands of e-commerce sellers manage their accounting.
It works by organising all of your sales transactions into tidy summaries that, when posted to your accounting system, match your Shopify pay-outs – making it easy for you to reconcile your accounts right down to the last cent. By connecting the data between Shopify and Xero or QuickBooks, you have the information on hand to better manage and understand your business.
A2X for Shopify has several benefits: • Saves hours of reconciliation each month. Never waste another minute manually reconciling your Shopify pay-outs and figuring out fees, refunds or adjustments. A2X automates that process, transforming hours into seconds with just a few clicks – reconciling Shopify pay-outs perfectly including all fees. • Enables accurate bookkeeping. A2X automatically imports your Shopify store data and allocates it in your accounting system. When the Shopify pay-outs appear in your bank feed, the amounts posted by A2X reconcile precisely to your bank statement, meaning you always have reliable, accurate financial data at your fingertips – no more guesswork. • Makes growing your e-commerce business easy. As your Shopify store grows, the number of orders you import into your accounting system can quickly become a problem. A2X supports thousands of daily orders without sending each transaction to your accounting system. You’ll get summarised statements tied to each pay-out summary for fast and penny-perfect reconciliation each month. • Tidy up your books. A2X for Shopify can load past Shopify pay-outs, generating up to a year’s financial history. This enables A2X clients to go back to the start of their financial year and roll forward all their Shopify transactions from that point, for ‘clean’ books that reconcile. • Supports multichannel and multi-product sellers. If you sell your products across multiple channels (like Shopify and Amazon) or you run several Shopify stores, A2X allows you to connect multiple stores and channels to a single accounting system. This means you can run your business in one accounting system and across multiple channels. • Supports multi-currency sellers and multiple tax rates. • Supports multiple payment gateways. Shopify Payment pay-outs will reconcile directly to bank deposits. PayPal, Amazon Pay, Authorise, Afterpay and other payment gateway transactions will be posted to your accounting system with a clearing account.
How to set-up A2X for Shopify
- Create a new A2X for Shopify account from the Shopify sign-up page • If you have an A2X for Amazon account, you’ll be asked to confirm that you wish to create a new account. Choose ‘Continue with New Account’. • In the next window, choose ‘Continue to Your New Account’. Now you’re ready to set up your new A2X for Shopify account.
- Connecting an A2X for Shopify account to your Shopify store • Click the green ‘Continue with Shopify’ button, input your Shopify store name, and click ‘Connect’. • You’ll be redirected to your Shopify store and asked to log in and grant A2X permission to connect. • Once permission is granted, you’ll be directed back to A2X and your first pay-outs will begin importing into A2X. The process usually takes 10-20 minutes. For larger Shopify stores, it can take several hours.
- Connecting to your accounting system • Click the Connect button for your accounting system (either Xero or QuickBooks) and proceed with the connection process. You’ll be redirected to your accounting system to grant A2X permission. • If you’re connecting A2X for Shopify to an accounting system that is connected to a different A2X account (either with Amazon or a different Shopify store), you should choose to share the existing connection, rather than create a new one.
- Configuring the accounts and taxes for your Shopify sales • You need to configure A2X for Shopify to map your Shopify transactions into your accounting system. • A2X will offer to create several generic default accounts, or you can select your own mappings. We recommend working with your accountant on this initial setup as it will affect how the Shopify transactions appear in your financial reporting. • You can customise how transactions are created, such as grouping sales by country or province, in the Settings > Invoice section of A2X. This can help if you have specific tax handling requirements for some countries. • Shopify Payments – sales, refunds and other transactions paid via Shopify Payments will be imported into A2X in their own pay-outs. These will be posted as a single batch of transactions and will always match perfectly to the corresponding deposits from Shopify. • If you’re using other gateways or payment methods, these will be imported separately into A2X for Shopify. You’ll need to define a clearing account for each of them and post the corresponding payment proceeds to the same clearing account. The exact configuration for each account will depend on the payment methods. • You can disable, configure, and preview these settlements in Settings > Connections.
- Posting Shopify pay-outs and reconciling them in your accounting system • Once you’ve connected and configured your account, you can send your pay-outs to your accounting system. To do that, click the Send link. • You’ll then see the pay-outs in your accounting system and be able to match or reconcile them to the corresponding deposits.
Accurate accounting = profitability and growth
If managing your Shopify accounting takes you hours, you’re probably stopping your business from reaching its full potential.
A2X is the missing link between Xero or QuickBooks and your Shopify account, and the key to streamlining your accounting and unlocking opportunities in the e-commerce sector. It takes the guesswork out for you and your accountant, giving you full visibility of your Shopify sales and fees so you can focus on profitability and growth.
Getting set up is easy, and once you are, you’ll be away smiling.
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