Do I need to record Shopify Card Transaction fees if they are taken out before a payout?

I need help with this as well!!

Hi GK23,

There are two things that we can consider when recording Shopify fees.

If those transaction fees were posted in your bank account together with your sales, you'll want to create an expense transaction so you can match it with the downloaded transaction fees. 

Here's how: 

1. Click Expense on the left menu.
2. Go to the Expenses tab, click New transaction drop-down arrow.
3. Select Expense.
4. Fill in the necessary information such as the Payee, Payment account, Payment date, and the Category details sections.
5. Click Save and close.

However, if transaction fees were charged outside QuickBooks without affecting any of your accounts, you don't have to record it since it will not affect your books. However, I still recommend reaching out to your accountant for other ways on how to record the fees. 

When bank transactions are downloaded, you can match the bank transactions in Quickbooks Online (QBO): Match and Categorize Bank Transactions in QuickBooks Online.

In case you need further assistance, please let us know so we can help you.

It's a bit tricky for those whose shops are on shopify, lazada or Amazon. But's that oki, kindly just record the total amount that you earned from shopify shop and deduct the fee as bank charge expense. As Revenue need to be recorded correctly. Kindly share below what i did:

Step 1. Open new Journal Entry

1. + New, Journal Entry

2. Credit Revenue  : exact amount that your shop's invoice on shopify states (you might consider to record shipping income + product revenue if you need to)   (enter Name: Shopify's Shop as you customer )

3. Debit   Trade  & Other Receivable  : amount that shopify really paid to your bank (enter Name: Shopify's Shop => treat this one as your customer)

3. Debit Bank Charge  : amount of transaction fee that shopify deducted before paying you

4. Save and close

Step 2. 

1. go to Sales => All Sales

2. on the New Transaction arrow => choose Payment

3. Select Name "Shopify's Shop" and chose Journal Entry # that you want to make payment

4. Enter the real amount that Shopify paid you at Payment Received. (Payment Method : Cash, Ref Number: as bank reference: Shopify.....)

5. Save and New

Hope it help. And might other have better solution. Good luck!

I am not an accountant but I just went through this, preparing for my tax return. It is my understanding that yes, you do need to keep track of the fees in some manner. The reason is that the gross amount that the 1099-K that Shopify issues (and reports to the IRS) includes those fees. So, you have to report them as an expense. Otherwise, you'd be paying taxes on money that you never received.