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dielotopacio
April 26, 2024
Question

Shopify integration revenue recognition

  • April 26, 2024
  • 3 replies
  • 0 views

Hi,

 

I'm having issue with the Shopify integration in terms of revenue recognition and have noticed a couple of things during my investigation which I hope there is an internal fix rather than acquiring third party apps.

 

My initial issue is that sales/revenue recognition in the Shopify integration is wrong or incomplete as it doesn't match the records in Shopify. As it turns out, it only recognize Shopify Payments as payment method that is being recorded as sales. However if I check 'Commerce' > 'Orders', all sales record is in there and it's just a matter of how/when QuickBooks recognize the revenue which is based on payout and not sales. 

 

Below is how I expected QuickBooks recognize sales/revenue from Shopify:

1. Importing sales from Shopify. It should recognize the revenue at point of sale (based on orders or orders per day and not on payout)

AccountDebitCredit
Shopify Sales XXX
Sales DiscountsXXX 
Shipping Fee Income XXX
Sales Tax XXX
Shopify Clearing Account (can setup different clearing account based on payment method)YYY 

2. Clearing account will technically be a receivable when it's pending for payout from different payment merchants.

3. Recording of payout for Shopify Payments (as this works within the integration):

AccountDebitCredit
Cash in Bank (thru bank transactions)XXX 
Shopify Clearing Account (matched thru bank transactions) YYY

4. Recording of payout for other payment merchants such as PayPal, Klarna, AfterPay, etc.

AccountDebitCredit
Cash In Bank (thru bank transactions)XXX 
Shopify Clearing Account (individual clearing account matched thru bank transactions) YYY

 

Is there a way for this to work? I don't get why the Shopify integration recognize sale from payout instead of actual sales. It takes more work to records sales from payout instead of using the sales data ('Commerce' > 'Orders')

 

Is there also a way to export 'Commerce' > 'Orders' as there is no export function in that section.

 

Thanks in advance.

3 replies

J
James_AL
April 26, 2024

Welcome to the Community, @dielotopacio. I can assist you with your inquiry about revenue recognition in Shopify integration. With my knowledge and expertise, I can guide you through the process and help you gain a better understanding of how it works.

 

Revenue recognition allows you to register a payment for the goods or services that you will be providing in the future. It helps businesses of all sizes to recognize their revenues in a consistent way over time.

 

However, that keep in mind QuickBooks Online solely depends on the data that is given by a third party, such as Shopify.

 

Additionally, here is an article I can share with you so that you can learn how to run basic reports in QuickBooks. You'll be able to stay organized and keep track of them: Run reports in QuickBooks Online.

 

Do you have any concerns about integrating Shopify? No worries, just drop a comment below and we'll get you sorted out around the clock. Have a great day!

D
dielotopacioAuthor
April 26, 2024

Hi James,

 

Revenue should be recognized from time of sale and not payout (payments received from merchants). Inside QuickBooks, revenue is recorded after a payout and payout is not even a payment. 

 

Data is available as I can see them in the "Commerce" section under "Order". That should be the basis for recording sales/revenue and not the payout.

 

 

Getting paid thru different payment merchants in Shopify means transaction has already been paid regardless of payment method/merchant. In accounting, you recognize/record the revenue from that point of sale and receiving the payout from different payment merchants does not signify sale nor revenue is earned. It's more of a receivable from payment merchants has been settled/paid/remitted. 

 

The current Shopify integration seems to record sales/revenue at payout and not from point of sale which is what goes in "App Transaction" which is not right. This method even created more work as it only recognized payments made thru Shopify Payment. Any other payment merchant such as PayPal needs to get categorized from "Bank Transaction" to revenue but it will require additional work as it needs to get reconciled with sales/revenue from Shopify first since the payout will not match the sales data.

 

I understand that business need to recognize their revenue in a consistent way but it's not right in this current setup. Is there a way to get revenue recognized from time of sale and not from time of payout? 

E
ElijahStownton
April 28, 2025

Recognizing revenue at the time of sale is essential, especially when operating on an accrual basis. Currently, QuickBooks Online's native Shopify integration records revenue upon payout, which can complicate accurate financial reporting.​

To address this, consider using a third-party integration platform that allows for more granular control over data synchronization. For instance, platforms like Skyvia enable you to set up automated workflows that record sales data from Shopify orders directly into QuickBooks at the point of sale, rather than waiting for the payout.

S
Samantha Blake
May 9, 2025

I would recommend using Synder, specifically RevRec. It will help you manage your revenue and can make the process easier overall. I use it for my accounting and I think it was one of the best decisions because doing everything manually was such a pain. And I think I saw on their site that they offer many integrations, not just with Shopify, so you can connect your sales and payment platforms to your accounting software via Synder without any hassle.

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