In this article we will cover how to post Shopify Payments payouts and PayPal payouts to QuickBooks Online using A2X for Shopify.
For this example we will first look at the Shopify Payments payout shown below:
This payout corresponds to the following bank deposit in QuickBooks, awaiting reconciliation:
The payout contains the following transactions:
We send this to QuickBooks Online and it appears as General Journal entry, like this:
The transactions in the journal in QuickBooks will have the account and tax rate mappings you saw in A2X, as shown above. The next step is to move onto the reconciliation of the journal to the deposit.
In the banking section of QuickBooks Online you will see QuickBooks has automatically picked up the journal as the matching transaction, as shown below.
All you need to do now to match the journal entry to the deposit, is click ‘Match’.
The accounting for this Shopify Payout is now complete and it will appear in your financial statements like this:
PayPal payouts (via PayPal clearing account)
In this second example we will look at a PayPal payout. In this situation the payout won't match directly to a specific payment and A2X will use gateway clearing accounts to capture the payment amounts.
This is the example PayPal payout, it covers one month:
The main difference between a Shopify Payments payout and a payout from another gateway is the Gateway transactions shown below:
This transaction reflects the expected payment from the PayPal gateway for the orders in this payout. For a more detailed explanation of how these gateway transactions work you can refer to this article.
In our example we have mapped this transaction to a Shopify Clearing account.
When it posts to QuickBooks, the journal will have a zero balance because no cash payment is expected, the expected payment has been allocated to the clearing account as you can see below:
The corresponding deposits in the QuickBooks PayPal account would look something like this:
You can see the two deposits for 23.99 and 40.00 that will be allocated against the clearing account, and will clear out the expected 63.99 from A2X.
The PayPal Fee amounts in the example above of 1.25 should be directly allocated to payment processing fees.
With QuickBooks Online, you can set up a bank rule so that the Shopify deposits automatically get allocated to the Shopify Clearing account.
Once the payments have been allocated to the clearing account, we can run a general ledger report on the Shopify Clearing Account to see how the clearing account firstly received the expected payment from A2X, and then had those payments applied:
You can see that the clearing account has fully cleared out as the payments for the orders have arrived. For high volume stores you may expect a small residual balance in the clearing account as it can take some time for payment deposits to arrive corresponding to the orders A2X has imported.