In this article, we’ll be looking at the Shopify system and how it can help you save time. You may not know what it is or where to start with integrating but fear not! we will show you everything there is for your business in XERO. This will allow both systems to integrate seamlessly without manual reconcilements between them. Let’s get started now…
WHAT IS SHOPIFY?
Shopify is a complete commerce platform that has everything you need to run an online business. You can create and customize your storefront, sell in multiple places, or even at pop-up shops. With the help of Shopify’s easy-to-turn features like payments processing tools for both customers & vendors alike; shipping management software including access from anywhere on earth with an internet connection – managing inventory isn’t nearly as difficult anymore either because it all happens through this one system called “Shopify”.
Shopify understands that it doesn’t know everything, however; they have created their app store to find whatever you need for your business. With categories such as “Staff Picks” and trending apps, you can keep on top of applications that may benefit the way in which things are run at home or work. They also launched an application programming interface so if somebody has any ideas about new software then this would be a perfect opportunity because now people don’t even need permission from Apple.
HOW TO INTEGRATE SHOPIFY WITH XERO?
To connect your Shopify account to Xero You will have to follow these steps:
Select ‘Add App’ after that, click ‘Install app’
Next, choose the payment plan you wish to use.
Accept the terms and conditions.
Click Connect now.
A pop-up window will open, and then you must click on “Allow Access”. Next, the user is taken into Shopify where they need to select Xero accounts that want to be linked.
Next up is the area of payment settings. You’ll have to use a link that Xero provides, but it’s important because this will set most expense accounts as overhead instead of an actual cost for your business so you can keep track more easily. Clicking Create New Expense Account takes us over here on our chart-of account page where we can create one if needed.
After you have created the account, refresh the Shopify page and you’ll have the account you just created as an option. After you have selected it, it will appear like this.
Now Tax settings.
These are based on the one that you are most comfortable with. After you have completed the setup then hit “Complete setup” to continue
You should be able to see a ‘Launch Xero’ button on the top right of your next page. Click this and you will move over to check if all has gone according to with integrating an app like Shopify. In settings/connected apps, make sure that it says “Shopify Integrated App.”
By now you’ve signed up with Shopify as well as Xero. If you need to make any modifications in the way Shopify information affects the accounts of Xero, then you need to navigate to the app’s tab within Shopify to find the Xero application. Then, enter the settings of the application.
SHOPIFY XERO DOUBLE ENTRIES
Double-entry bookkeeping was developed in part to help merchants keep track of their finances more easily. When you make a transaction, the money moves from one account to another, and this process helps us understand how much resources were available at any given time so that we can plan for future endeavours accordingly.
You may have heard the terms credit and debit prior to. In simple terms, they refer to “in” or out.”
A business’s bank account has two sides to it. One side is the money coming in, which might be from payments made by customers or sales revenue received from clients; while another could involve debiting that account for expenses incurred when interacting with other businesses such as train tickets purchased using credit cards held outside our company’s system (which then charges us interest).
To make it simpler to understand how is happening, the Shopify integration process is doing in the framework of Xero the duplicate entries for each step are displayed below.
Shopify offers an inventory of changes it will make when the following modifications are done within Xero:
1. Orders will be made in the form of invoices
- DR Trade Debtors
- CR Sales
2. Sales transactions will be recorded in the form of payments against the Invoice
- DR Bank
- CR Trade Debtors
3. Refunds will be made as Credit Notes
- DR Sales
- CR Trade Debtors
4. The refund transactions are made to pay off the Credit Note
- DR Trade Debtors
- CR Bank
5. The products will be developed or updated
After you import your invoices into Xero, they’ll show up in the Products and Services section under “Invoices.”
6. Customers will be added or upgraded
The customers and bills will be imported alongside each other.
7. Shopify will charge a fee for each payment you receive. These fees are recorded in the expense account of your Shopify company’s account, so it is important to keep accurate records!
- DR Shopify Expense Account
- CR Bank
Hopefully, this article has helped get you started with the integration process. If there’s anything else, we can do for your company please don’t hesitate to get in touch!
As Xero Accountants, we believe in the power of small businesses to grow. So, whether your company needs help with accounting, from scratch or as part of a larger project, our expert eCommerce Accountants are ready and able to satisfy your needs. Book a free consultation now with an expert
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