A2X for Shopify B2B - Explanation of the Accounting Entries

When a Shopify order has been tagged in Shopify to be synced to the connected general ledger, A2X creates accounting entries for this order as part of a grouped settlement, and as an individual B2B invoice.

The First process - the order is fetched and processed as part of a generated settlement.

1(a) The tagged order is still included in the A2X Settlement generation process:
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Once a day, the tagged order is fetched by A2X along with all other orders that have been created or edited during this 24 hour period.
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A2X creates a settlement that includes this order, by payment gateway type which debits a payment gateway clearing account (or pending payment if the orders are unpaid) and credits the applicable profit & loss accounts, as specified in the Accounts & Taxes page.
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1(b) If the order is unpaid in the first settlement, a further settlement will be created when that order is paid.

When the unpaid order is marked as paid in Shopify, A2X will debit the payment gateway clearing account nominated in the Shopify order, and credit Pending Payment.
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The Second Process - the order is processed by A2X as an individual B2B invoice.

​2(a) The tagged order is created as an individual invoice in the ledger.
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A2X creates a B2B Order settlement which syncs as an invoice to the connected ledger which will debit accounts receivable and credit the account selected by the user in the A2X B2B settings page.

2(b) If the tagged order is unpaid at time of syncing, A2X will create a B2B Payment entry when that order is subsequently paid.

A2X creates a B2B Payment settlement which will sync as an invoice (in Xero) or a journal entry (in QBO). This entry debits the account selected in the A2X B2B settings page, and credits the payment gateway clearing account which was used in the Shopify Order.

Please note that there are parts of the B2B process that the Bookkeeper will need to take ownership of, which are:
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3(a) If the B2B invoice is paid by a bank deposit, matching the bank deposit to the open accounts receivable invoice.

3(b) If the B2B invoice is subsequently paid within Shopify, "paying" the open invoice by using same contra account that is nominated in the B2B settings page.

Example #1 - Syncing an Order when it is already Paid.

An order is created and fully paid by AfterPay is tagged in Shopify with the tag 'A2XB2B'.

The account selected in the B2B settings page is a contra asset account called A2X B2B.
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Example #2 - Syncing an Unpaid Order, that is subsequently paid by Bank Deposit.

An unpaid order that is paid by a bank deposit (which is called Manual payment in Shopify) is tagged in Shopify with the tag 'A2XB2B'.
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The account selected in the B2B settings page is a contra asset account called A2X B2B:

Example #3 - Syncing an Unpaid Order, that is subsequently paid by Shopify Payments

An unpaid order that is subsequently paid in Shopify using Shopify Payments is tagged in Shopify with the tag 'A2XB2B'.
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The account selected in the B2B settings page is a contra asset account called A2X B2B:

Example #4 - Syncing an Unpaid Order, that is subsequently paid by a Payment Gateway that is not Shopify Payments

An unpaid order that is subsequently paid in Shopify using PayPal is tagged in Shopify with the tag 'A2XB2B'.
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The account selected in the B2B settings page is a contra asset account called A2X B2B:
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