How Can I reconcile Expected Revenue from Shopify to the Actual Bank Deposit from TikTok?
Shopify will capture the Gross sale, shipping, and sales tax associated with each order. TikTok may add and deduct further revenue and expenditure items to the net payout balance, and Shopify does not capture these items.
It is therefore necessary to log on to the TikTok Seller Center portal and itemize the additional revenue and expenditure that has been added or subtracted to this payment for purposes of entering this into the general ledger system.
We shall consider the following statement that is issued from TikTok:
| TikTok Description | Definition | Amount | Formula |
1 | Subtotal after seller Discounts | The gross sales amount | $5,677 | + |
2 | Customer Shipping Fee | The Shipping fee revenue | $10 | + |
3 | Sales Tax Payment | The Sales tax collected from the buyer | $540 | + |
4 | Customer Payment | The amount reported by Shopify | $6,227 | = |
5 | Platform Discount | The amount paid to TikTok | ($1,650) | + |
6 | Shipping Fee | Shipping fee paid to platform | ($10) | + |
7 | Affiliate Commission | Commission paid to the affiliate | ($1,200) | + |
8 | Sales Tax | Sales Tax paid to the reporting authority | ($540) | + |
9 | TikTok Settlement Amount | The amount paid to you by TikTok | $2,827 | = |
What is synced by A2X (via Shopify) to your Accounting system
|
| Dr | Cr |
1 | Gross Revenue |
| $5,677 |
2 | Shipping Revenue |
| $10 |
3 | Sales Tax Clearing |
| $540 |
4 | TikTok Clearing Account | $6,227 |
|
What must be raised by general journal in your Accounting System to recognize the additional debits and credits charged by TikTok:
5 | Platform Discount | $1,650 |
|
6 | Shipping Fee | $10 |
|
7 | Affiliate Commission | $1,200 |
|
8 | Sales Tax Clearing | $540 |
|
9 | TikTok Clearing Account |
| $3,400 |
When the amount is received from TikTok for $2,827, this will clear out with the TikTok Clearing Account balance of $2,827 to result in a net balance of Zero.
Please note this is for example purposes only. The actual charges raised by TikTok may or may not include the items listed above. We recommend that you discuss with your accountant to determine which general ledger accounts to map the adjustments to.