Hi, I'm having issue with the Shopify integration in terms of revenue recognition and have noticed a couple of things during my investigation which I hope there is an internal fix rather than acquiring third party apps. My initial issue is that sales/revenue recognition in the Shopify integration is wrong or incomplete as it doesn't match the records in Shopify. As it turns out, it only recognize Shopify Payments as payment method that is being recorded as sales. However if I check 'Commerce' > 'Orders', all sales record is in there and it's just a matter of how/when QuickBooks recognize the revenue which is based on payout and not sales. Below is how I expected QuickBooks recognize sales/revenue from Shopify:1. Importing sales from Shopify. It should recognize the revenue at point of sale (based on orders or orders per day and not on payout)AccountDebitCreditShopify Sales XXXSales DiscountsXXX Shipping Fee Income XXXSales Tax XXXShopify Clearing Account (can setup different clearing account based on payment method)YYY 2. Clearing account will technically be a receivable when it's pending for payout from different payment merchants.3. Recording of payout for Shopify Payments (as this works within the integration):AccountDebitCreditCash in Bank (thru bank transactions)XXX Shopify Clearing Account (matched thru bank transactions) YYY4. Recording of payout for other payment merchants such as PayPal, Klarna, AfterPay, etc.AccountDebitCreditCash In Bank (thru bank transactions)XXX Shopify Clearing Account (individual clearing account matched thru bank transactions) YYY Is there a way for this to work? I don't get why the Shopify integration recognize sale from payout instead of actual sales. It takes more work to records sales from payout instead of using the sales data ('Commerce' > 'Orders') Is there also a way to export 'Commerce' > 'Orders' as there is no export function in that section. Thanks in advance.

Question

Shopify integration revenue recognition

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Hi,

I'm having issue with the Shopify integration in terms of revenue recognition and have noticed a couple of things during my investigation which I hope there is an internal fix rather than acquiring third party apps.

My initial issue is that sales/revenue recognition in the Shopify integration is wrong or incomplete as it doesn't match the records in Shopify. As it turns out, it only recognize Shopify Payments as payment method that is being recorded as sales. However if I check 'Commerce' > 'Orders', all sales record is in there and it's just a matter of how/when QuickBooks recognize the revenue which is based on payout and not sales.

Below is how I expected QuickBooks recognize sales/revenue from Shopify:

1. Importing sales from Shopify. It should recognize the revenue at point of sale (based on orders or orders per day and not on payout)

Account	Debit	Credit
Shopify Sales		XXX
Sales Discounts	XXX
Shipping Fee Income		XXX
Sales Tax		XXX
Shopify Clearing Account (can setup different clearing account based on payment method)	YYY

2. Clearing account will technically be a receivable when it's pending for payout from different payment merchants.

3. Recording of payout for Shopify Payments (as this works within the integration):

Account	Debit	Credit
Cash in Bank (thru bank transactions)	XXX
Shopify Clearing Account (matched thru bank transactions)		YYY

4. Recording of payout for other payment merchants such as PayPal, Klarna, AfterPay, etc.

Account	Debit	Credit
Cash In Bank (thru bank transactions)	XXX
Shopify Clearing Account (individual clearing account matched thru bank transactions)		YYY

Is there a way for this to work? I don't get why the Shopify integration recognize sale from payout instead of actual sales. It takes more work to records sales from payout instead of using the sales data ('Commerce' > 'Orders')

Is there also a way to export 'Commerce' > 'Orders' as there is no export function in that section.

Thanks in advance.

QuickBooks Online

J

James_AL

Welcome to the Community, @dielotopacio. I can assist you with your inquiry about revenue recognition in Shopify integration. With my knowledge and expertise, I can guide you through the process and help you gain a better understanding of how it works.

Revenue recognition allows you to register a payment for the goods or services that you will be providing in the future. It helps businesses of all sizes to recognize their revenues in a consistent way over time.

However, that keep in mind QuickBooks Online solely depends on the data that is given by a third party, such as Shopify.

Additionally, here is an article I can share with you so that you can learn how to run basic reports in QuickBooks. You'll be able to stay organized and keep track of them: Run reports in QuickBooks Online.

Do you have any concerns about integrating Shopify? No worries, just drop a comment below and we'll get you sorted out around the clock. Have a great day!

D

dielotopacioAuthor

Hi James,

Revenue should be recognized (or recorded as sale/revenue) from the time of sale and not at the time of payout. Payout in this case is not even a payment from the actual sale but rather a receivable from payment merchants.

In terms of availability of data from Shopify, it is available and is being retrieved/transferred to QB in the 'Commerce' section under 'Orders'. Sales data (including gross sale, discount, shipping and sales tax) is there which just needs to get recorded against a clearing account.

The issue is that QB record sales at the time of payout and specific to one payment gateway/merchant only which is 'Shopify Payments' which is what goes in the 'App Transactions'. For other payment gateway/merchant, it creates a more work to get recorded as simply categorizing them from 'Bank Transactions' as sale/revenue is wrong.

Is there a way to automatically record the revenue based from actual sales instead of payout? Or do have to leverage on third party apps to do this?

Thanks James!

K

Kevin_C

Moderator

Thanks for the prompt response and the in-depth details you shared about your concern. I recognize the relevance of the streamlined process in handling your Shopify transactions in QuickBooks Online (QBO).

Please know that the latest transactions or payments from your sales for completed orders will be synced as payouts into QBO, and it works as designed in the current offerings of Shopify. QBO only depends on how Shopify sends your sales data. Thus, it will exported to the program when you receive the payout and not from the actual sale.

You'll want to check out these articles for more information about this process:

Regarding the payments from other payment merchants, you're correct that it will not sync in your App Transactions page but in the Bank Transactions instead. It is because if you use a third party for payments, like PayPal or Stripe, you'll have to manually record your sales and fees since the payouts for those sales won't import to QuickBooks. You can refer to this article for more details: Record third-party sales and fees in QuickBooks Online.

Nonetheless, I recommend communicating with the Shopify Support Team to check if they can allow such an option as you desire. Otherwise, you may look for a third-party app that is best suited for your business type and needs.

Please let me know if you have further questions or concerns about Shopify and QBO integration. I'll be more than happy to help. Keep safe!

E

ElijahStownton

Recognizing revenue at the time of sale is essential, especially when operating on an accrual basis. Currently, QuickBooks Online's native Shopify integration records revenue upon payout, which can complicate accurate financial reporting.

To address this, consider using a third-party integration platform that allows for more granular control over data synchronization. For instance, platforms like Skyvia enable you to set up automated workflows that record sales data from Shopify orders directly into QuickBooks at the point of sale, rather than waiting for the payout.

S

Samantha Blake

I would recommend using Synder, specifically RevRec. It will help you manage your revenue and can make the process easier overall. I use it for my accounting and I think it was one of the best decisions because doing everything manually was such a pain. And I think I saw on their site that they offer many integrations, not just with Shopify, so you can connect your sales and payment platforms to your accounting software via Synder without any hassle.

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