If you are using Shopify + Xero and your bookkeeping is taking hours – you need to read this article.
We get calls on a daily basis and the conversation goes like this:
“We are a 7 figure eCommerce business. We use Shopify and Xero. In the early days, we used an integration like Bold or One Saas to send all invoices over to Xero. But now that we are doing 20/50/100+ orders a day, our bookkeeping is a nightmare! We spend hours every week matching Shopify orders to payment gateway deposits”
Surely there is a better way?
Well, there is a better way – and the answer is a Shopify / Xero connection called A2x. A2x is a tool that originally designed to connect Amazon to Xero (hence the name) and about a year ago replicated this amazing tool for Shopify.
This Saas solution connects Shopify to Xero the way accountants and bookkeepers need to see the data – that is daily, by payment method, net of fees (for Shopify payments), and it breaks out sales with GST versus sales without GST.
Daily Shopify deposits in Xero? Instant green match. For the other payment gateways (Afterpay, Paypal, Zip Pay, etc..) the bank deposits get coded to a clearing account, A2x sends daily sales to the other side of the same clearing account (which must be mapped during the set up process), and at month end we raise the merchant fee, reconcile the account, and done.
You will most likely need some help during the set up stage, which involves mapping Shopify transactions to the related Xero Chart of Accounts. But once set up, the connection works really, really well and you will have hours back in your week.
But what about cost of sales, you ask? A2x has a solution for this too, but in our opinion, this only works well when the business has a few SKUs, and the cost per item is set and forget. For any situations more complex than this, we would highly recommend investigating adding an inventory solution to your eCommerce tech stack.
Inventory and revenue recognition issues in eCommerce are very complex, and if your financials don’t make sense, there is every chance you have missed a crucial step in your bookkeeping month end process. If you are a high value, 7 figure eCommerce business, you can’t do this without expert support.
We don’t recommend integrating the inventory solution with Xero, but we have many solutions to get the cost of sales into your Xero file on a daily or a weekly basis.
Interested? Give us a call. We are deeply niched tax agents who are eCommerce specialists – we work with 7 figure eCommerce businesses that use Xero + Shopify. You need to use a tax agent that understands your vertical. Anything else is unacceptable. Call us on 04 26 625683 (04266 CLOUD)