I have successfully integrated my Shopify eCommerce sales with my Quickbooks system.
1) My Shopify sales have been selected to "deposit to Shopify Holding" - is this correct treatment? See attached image QBS1
2) How should I then manage the payments that I then receive from Shopify?
a. It is currently set to deposit to BankAccoun1 (this is where it is received)
b. Is is currently being classed as "Sales of Product Income"
c. VAT is also classed at 20%S
See attached image QBS3
What I think I need to do is offset the Shopify holding account transactions previously made.
3. The effect of the above two is that the VAT report seems to be double counting both the true sales income (shopify sales) and also the deposits from Shopify which I don't want to count as income (see attached image QBS2) Instead I want to reduce accordingly the Shopify holding account balance.
How do I do this?
Thanks for the confirmation.
You are correct in that QuickBooks Online will be counting these transactions twice. Essentially it is working as designed as the transactions have been duplicated.
When you have recorded the initial transaction to the Shopify Holding account, you have assigned this with the correct rate of VAT and full transaction amount. Looking at the screenshots you have included, it appears that the amount deposited when funds are received from Shopify is the full amount minus a fee and the associated VAT code. This is the incorrect way to record the transaction.
If this is the case, what you need to do is use a Sales Receipt to record the initial transaction with VAT to Shopify Holding account and when the funds are received into you bank account minus fees, record a Bank Deposit to move the funds from the holding account into the bank and include a negative transaction line to minus off any fees paid. When created in this way, the Bank Deposit transaction will then match against your online banking feed.
To do this, follow the below steps using the transaction you have included on the screen shot as an example.
You can now go to your Banking tab and you will see that the depsoit shows as a Match to the entry on your banking feed. Click Match to match the two together instead of Add.
By doing these transaction in this manner, you will ensure only one sale is recorded with a single amount of VAT paid and the funds received into your bank account will correctly match your bank statement.
Let me know if you have any queries. Or, if you'd like to go through this over the phone, you can call our dedicated team who will be happy to assist you. Our contact details can be found here along with our opening hours.
Hi, why would you even consider syncing to a Shopify Holdings Account in QBO, this is not a bank account and doesn't have to be reconciled. When working with Shopify your main concern is revenue recognition so set up payments received from PayPal to go to the synced PayPal Account (because we reconcile it as a bank) and send the rest of the sales to undeposited funds. As you reconcile the bank account that Shopify deposits the money to, you select the deposits by day (which should be the frequency of shopify deposits) from undeposited funds and record the difference as Shopify fees... no need to have an extra account, unless you really want to have a clearing account to see every single sale and return.
Eugene_S, I'm not interested in matching bank deposits to invoices, as you mentioned, just allow Shopify transaction transfers record revenue and adjust inventory, etc. I can always chase down a customer transaction via Shopify, how and when they paid and issue refunds.
My question is, in Review, what category do I assign to the bank deposits from sales transactions? Example, all commercial deposits go in to one bank account, Checking 7041 (I have another checking acct for expenses). So, should I simply select category "Checking 7041", then simply reconcile the account as normal, thus avoid recording the deposit into any "income" or "asset" account other than "cash on hand" balance sheet entry.
Also, I will be using OneSaas and not Bold for my transfers from Shopify, so I hope I don't run into a Shopify Holding account. Guess I'll figure it out if there is a holding review account.