Sometimes the transaction that pays for an order or refund will appear in a different payout than the order itself.
This can happen for a number of reasons but here are a few of the most common ones:
The order is marked as paid after it is fulfilled. (eg. credit terms such as wholesale, cash on delivery)
The order is originally processed through one gateway, but then paid through another (eg. because a payment through the original gateway failed)
The order is left showing as unpaid in Shopify because the store has processed the payment using an offline gateway. Even though the order is now paid, Shopify thinks the order is unpaid as the final payment transaction has not been recorded
In these cases, A2X will add Pending Payment lines to a payout to account for money that is still owed for an order to recognize that this amount is owed to the business.
A2X will create different Pending Payment lines to account for when the order is placed and when it is paid for.
1. An order is placed but there is no payment transaction or the payment transactions do not cover the full amount.
The Payout for 19 Dec 2019 below shows an example of this. An order for $400 has been made, but the payment for the order has not been received.
Because the payment will happen in the future, it is not possible to tell through which gateway it will be processed, therefore A2X will simply list the outstanding amount as Pending Payment.
2. There is a payment transaction but the order is accounted for in a prior payout.
See the 21 Dec 2019 Payout below. The $400 pending payment from the previous payout has now been paid using the gateways 'cash' and 'external-debit'.
In this situation, the initial payout on the 19th of December would accrue $400 into the pending payment account and the subsequent payout on 21st of December would move the $400 balance from the pending payment account into the actual gateways the $400 was received from, once it was received.
This leaves no balance in the Pending Payment account and the expected balances are allocated to each of the two clearing accounts for the cash and external debit gateways.
Reconciling Pending Payments
If there is a pending payment created by A2X in your accounting system, that has not reversed itself at the end of an accounting period, it needs to be reconciled. The pending payment value on balance sheet should represent the fulfilled orders made by the store that are still owing as an accounts receivable balance.
The detail of each unpaid order should be documented by the business to support the pending payment balance as at the date of the balance sheet.
If all unpaid amounts are tracked by Shopify, the business may wish to generate a Shopify report of unpaid orders. This can be done by clicking on orders in Shopify | and then filtering on Unpaid. These orders can be exported and added in an application such as Excel.
If all unpaid orders are not tracked by Shopify, the business will have to use whatever system they have in place to track accounts receivable amounts in Shopify to ensure the ending balance in the accounting system is correct. This system may be the store's accounting system, such as Xero or QuickBooks Online, it may be an inventory management system, or perhaps these orders are tracked on a spreadsheet.
Here is a detailed, step by step process you can follow to reconcile Pending Payments:
1. The opening balance of Shopify unpaid orders must be recorded in your accounting ledger as at the date you start using A2X for Shopify. You can obtain this balance from Shopify by going to orders, and filtering on unpaid and partially paid orders. You can export this list, and obtain a total unpaid balance. This total needs to be booked as a Pending Payment asset on your balance sheet.
Please note: it is not possible to run a historical point of time report in Shopify. You can only view unpaid orders as at today. If this balance was not captured correctly at the time, you will have to try to reconstruct it. As a starting point, export today's orders, and filter on the dates to identify orders that contain dates up to the go live date with A2X. You may have to keep adjusting this balance for a period of time, when A2X shows a payment for an order that should have been booked in the opening balance.
2. Run a virtual Finance report in A2X for the date range being reconciled. You can find this report under Reports | Finance Report. Go to the Pending payment movement section (bottom right), and click on the net hyperlink as shown below. This report shows you the pending added (i.e. orders that were booked and unpaid during the date range) and the pending removed (i.e. unpaid orders that were paid during the date range).
3. Be patient! Depending on the date range, and volume of data, this report may take a minute or more to generate. Once the report is ready, click on the export to CSV button.
4. Create a Pivot table to summarize the exported data. The main fields to summarize are the order number, and the amount.
This list will show you all unresolved Shopify orders.
If the net amount is positive for the date range, this will represent an order that was paid during the period (and therefore should have been part of the opening balance for the month prior).
If the net amount is zero for the date range, the order has been increased and decreased for the same value - i.e. it has been completely resolved.
If the net amount is negative for the date range, this represents an order that has been created during the date range, that remains unpaid as at the end of the date range.
Compare the opening balance in your ledger, plus the movement identified during the date range, to the total value of unpaid orders in Shopify. These two totals should match. If they do not, prepare a reconciliation of the differences, and make adjustments where needed.
5. If you wish to investigate a specific order, you can do so by going to Shopify and searching on that order number. You can also see the detail in A2X by going to Reports | Reconciliation Report and entering the order number:
Once you click search, you will be redirected to the detail of that order. The page will show you the data from Shopify, and how A2X has created settlements to summarize that data. If the pending payment has been reversed, you will see this in a subsequent settlement.
Hint: If you are in chat and wish to view this article outside of the chat window, please click HERE