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Hi all,
I am working on a few clients who utilize the e-commerce Shopify platform with QuickBooks Online, but I've had a tough time reconciling the activity in Shopify exactly to the books. I'm currently under the opinion that the app that connects Shopify to Quickbooks is fundamentally broken (I'm not against being proven wrong, I may just misunderstand its transaction flow at this point) because I've seen duplicate Shopify sales invoices appear when refunds or modifications to orders are made, as well as sales tax inconsistencies. For example, modified orders will not just go into the books to account for the line items that changed. It will create a brand new invoice and double up certain portions of the original invoice that were not modified.
After calling Shopify they said the gross sales on their reports is correct, so I'm trusting in those numbers as a tie. My process has been clearing out the misstated activity in the year with reversing AJEs, then implementing periodic journal entries to capture the actual gross sales along with the reductions and associated activity with Shopify. However, I haven't found a fool proof method to clear out the AR side of it (Known as 'Shopify Holding' when you connect the app.) I think the reason is the payments and payouts that Shopify is reporting are not always matching up with the deposits that I see in the bank, and it's always the payments that are checks or anything outside of Shopify's payment processing system (To clear that up, I mean the company runs ALL their sales out of Shopify but lets customers pay with checks or cash outside of the Shopify payment system.) I can get the holding account very close to zeroing out but not quite exactly, at this point. I don't want a false liability or asset on the books at year end unless it was an immaterial amount for them.
Does anyone have advice on handling this, or maybe know of a better way to approach it? I've traced every payment from their books to Shopify's reports and had a lot of matches, but just enough mismatches to where it's concerning. Any advice is very much appreciated.
I am working on a few clients who utilize the e-commerce Shopify platform with QuickBooks Online, but I've had a tough time reconciling the activity in Shopify exactly to the books. I'm currently under the opinion that the app that connects Shopify to Quickbooks is fundamentally broken (I'm not against being proven wrong, I may just misunderstand its transaction flow at this point) because I've seen duplicate Shopify sales invoices appear when refunds or modifications to orders are made, as well as sales tax inconsistencies. For example, modified orders will not just go into the books to account for the line items that changed. It will create a brand new invoice and double up certain portions of the original invoice that were not modified.
After calling Shopify they said the gross sales on their reports is correct, so I'm trusting in those numbers as a tie. My process has been clearing out the misstated activity in the year with reversing AJEs, then implementing periodic journal entries to capture the actual gross sales along with the reductions and associated activity with Shopify. However, I haven't found a fool proof method to clear out the AR side of it (Known as 'Shopify Holding' when you connect the app.) I think the reason is the payments and payouts that Shopify is reporting are not always matching up with the deposits that I see in the bank, and it's always the payments that are checks or anything outside of Shopify's payment processing system (To clear that up, I mean the company runs ALL their sales out of Shopify but lets customers pay with checks or cash outside of the Shopify payment system.) I can get the holding account very close to zeroing out but not quite exactly, at this point. I don't want a false liability or asset on the books at year end unless it was an immaterial amount for them.
Does anyone have advice on handling this, or maybe know of a better way to approach it? I've traced every payment from their books to Shopify's reports and had a lot of matches, but just enough mismatches to where it's concerning. Any advice is very much appreciated.
