First Look: A2X for Shopify

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If I were 'Murph' then you might let me get away with just telling you "enough said"... but, since "I'm not Murph", then I seriously doubt that you will let me get away with just telling you that A2X for Shopify now does exactly what A2X has previously done for Amazon (QBO App First Look: A2X for Amazon), provide 'Automated, Accurate Accounting'... even if it is true. 

Still the same, even though you are probably familiar with A2X for automating Amazon sales (Using A2X to Record Amazon Sales) into QuickBooks Online, you need to be aware that A2X has just launched a version designed to make it easy to account for your Shopify sales. The best part is - it’s accurate and it reconciles. I’ve been using a preview version of A2X for Shopify for the last few months and I want to share my excitement now that it has officially launched to the public.

What problem does it solve?

In the same way that Amazon collects payments from customers and then passes this money on to sellers (less any fees), Shopify does the same thing for store owners through Shopify Payments.

Accounting for the sales, fees, refunds, shipping, taxes and discounts on all those Shopify orders, and manually matching it up to the Shopify Payment payouts is time consuming and error-prone when done at scale.

A2X for Shopify automates the process, they detect when Shopify sends payouts and will import and summarize all the order data for that financial period and post it to your accounting system so that it will reconcile and match with the payment each time.

How does it work?

The team at A2X have taken their accountant and bookkeeper friendly approach to accounting for Amazon sales and applied it to Shopify. This way they can reconcile payouts from Shopify Payments directly and accurately. Other gateways such as Paypal and Amazon Pay are supported through clearing accounts.

For example, here is a QuickBooks journal entry that represents a Shopify Payments payout:

And here’s how it easily matches to the deposit from Shopify in the bank account:

Not all Shopify payment gateways will match like this, as the payouts can come at different times and days. If your client is selling with PayPal it might look more like this:

The expected total from PayPal is applied to the PayPal clearing account. Now when those receipts arrive from PayPal, you can add them to the clearing account, to clear the balance.

Other options in the market and how A2X for Shopify compares

QuickBooks Online and Xero for Shopify both have a white-labeled connector called Bold.

Bold works at the transactional level rather than accounting for payouts. By importing transactions in real-time, Bold helps sellers to gain an accurate picture of their sales income at any point in time. However, due to the fact that every transaction is imported as a new invoice or journal entry, this can clog the accounting system with individual orders as the Shopify store grows.

The problem with recording each transaction separately is that when Shopify pays out settlements, it becomes quite difficult to match each transaction up with the respective payout. Especially if you’re selling large volumes!

I personally like the A2X approach of summarizing and grouping transactions by gateway, it makes it easy to reconcile the Shopify Payment payouts directly to the bank deposits. For other gateways I can use clearing accounts for each gateway, like PayPal to ensure the transactions are applied against the corresponding sales, refunds and other charges.

What some other Accountants have said about the new A2X for Shopify

While A2X for Shopify has only just been launched and already there’s a lot of positive feedback from E-commerce accountants. For example, Scott Scharf from Catching Clouds said:

Paul Deuzeman, another CPA said...

Getting accurate Shopify sales data into QuickBooks or Xero has been tricky for many E-commerce accountants, but A2X for Shopify has turned that task into an easy and reliable experience - it’s going to save a lot of time for accountants who have clients selling on Shopify.

If you support clients who use Shopify and use QuickBooks (or Xero) then you can find out more via the Intuit QuickBooks App Center, the Xero App Store, or from the A2X for Shopify website. And, if you want to study the details of how A2X for Shopify works then download the the A2X for Shopify Getting Started Guide.

By the way, because this article is publishing on Tuesday June 18 (2019), you will also have the opportunity to visit the A2X Kiosk located in App Developer Central in the middle of the Intuit QuickBooks Exhibit at Scaling New Heights while you are attending the conference in Salt Lake City, UT.