This article covers how to post Shopify Payments payouts and PayPal payouts to QuickBooks Online using A2X for Shopify.
For this example, we will 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:
When we send it to QuickBooks Online, it will appear as general Journal Entry:
The transactions in the journal in QuickBooks will have the account and tax rate mappings that we have previously setup 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, we will see QuickBooks has automatically picked up the journal as the matching transaction:
All we need to do is click ‘Match’ to reconcile the journal entry to the deposit:
The accounting for this Shopify Payout is now complete and it will appear in our financial statements like this:
PayPal payouts (via PayPal clearing account)
In this example, the payout won't match directly to a specific payment and A2X will use gateway clearing account to capture the payment amounts.
The PayPal payout that we will be using as an example covers one month:
The main difference between a Shopify Payments payout and a payout from another gateway (such as PayPal) is the Gateway transaction 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 the gateway transactions work, please 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, and the expected payment has been allocated to the clearing account:
The corresponding deposits in the QuickBooks PayPal account would look something like this:
We 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.
Hint: With QuickBooks Online, it is possible to set up a bank rule so that the Shopify deposits get automatically 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 it first received the expected payment from A2X, and then had those payments applied:
We can see that the clearing account has fully cleared out as the payments for the orders have arrived. For high volume stores, we may expect a small residual balance in the clearing account as it can take some time for payment deposits (corresponding to the orders A2X has imported) to actually arrive.
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