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How do I manage Shopify deposit payments to avoid double-counting sales income?

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?

14 Comments
Anonymous
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Hey kristana2712, could you advise if the Shopify Holding...

Hey kristana2712, could you advise if the Shopify Holding account has been created as an Undeposited Funds account type? Many thanks
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Yes it has

Yes it has
Anonymous
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Hey kritsana2712, Thanks for the confirmation. You ar...

Hey kritsana2712,


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.


  1. Record the initial Sales Receipt as the transaction occurs with the full amount paid by the customer £60 with the appropriate VAT code to the Shopify Holding account.
  2. Next, select the option for Bank Deposit from the Create + menu.
  3. On the next screen, you will see all of the Sales Receipts that have been recorded to Shopify Holding account listed
  4. Enter the correct date of when the funds have been received into your bank account
  5. Tick the box beside the Sales Receipt/s that are being settled to the bank
  6. If you need to enter a fee to reduce the amount received into the bank, scroll to the bottom of the screen and you will see the option to Add New Deposits
  7. Enter the details of Received from and select your fee account from the Account box.
  8. Lastly enter the amount of fee paid as a minus figure, eg -1.34.
  9. Save and close the transaction.


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.






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That is a right load of Tosh. So in this case I would hav...

That is a right load of Tosh. So in this case I would have to add manual transactions for every single sale that I make. Hahahha... what a joke.
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As far as I know, Shopify doesn't publish a report that s...

As far as I know, Shopify doesn't publish a report that says to which sales the deposits are linked to.  And for people like us, with thousands of sales per day, how do you know which sales? We can't manually go sale by sale and check of the box...What do you recommend for companies too big to do it that way?? Their sales -fees = deposits equation doesn't work, it's never accurate
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is it possible to delete the shopify holding account and...

is it possible to delete the shopify holding account and then disconnect shopify?
Super Explorer ***

Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

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. 

Not applicable

Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

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.

Thanks, Tim_68

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Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

Tim - Did you ever figure out a good solution to this?  WE have something similar where we ended up doing end of month adjustments and moving cash out of a clearing account.

 

Ideally we'd want to the transactions to flow directly through QBO with fees, inventory consumption, etc. all netted out.  We'd even like the ability to record partial payments and deposits against unpaid shopify transactions if we received a check for instance.

 

Haven't found a good solution yet -- Hoping you have?

 

-Kevin

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Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

was anyone able to find a solution to this? 

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Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

It doesn't seem so. I am looking for a solution to this as well.

Not applicable

Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

I don't think so. I haven't figured it out myself.

QuickBooks Team

Re: How do I manage Shopify deposit payments to avoid double-counting sales income?

Hi @Zack3,

 

You can can find a match of your Shopify payment transactions. I'm here to h elp you accomplish this.

 

To start, find match allows you to let QuickBooks finds any existing transactions with your Shopify payments. Here's how:

  1. Go to the Banking page.
  2. Select your Shopify account.
  3. Under For Review, select your Shopify payment transaction.
  4. Click Find Match.

This way, you'll be able to manage your shopify payment transactions. I've also included our detiled guide in finding a match of your transactions.

 

However, I'd still recommend contacting your accountant. He/she can be able to guide you in categorizing and managing your Shopify deposit payments.

 

Feel free to leave a comment below if you have any other questions about QuickBooks Online. I'll be always around to help.

Not applicable

Re: As far as I know, Shopify doesn't publish a report that s...

Worth taking a look at A2X they're an accounting integration that was originally built to solve this same problem of bulk deposits not attributing to individual orders for accurate accounting - Now been adapted to suit Shopify's bulk deposits as well. Definitely worth a look.

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