Before You Start
This guide assumes familiarity with Shopify’s reporting, your client’s general ledger, and common e-commerce accounting principles. We will focus on reviewing sales, bank clearing, and tax liability accounts.
Overview
What You’ll Learn
- How to identify discrepancies in Shopify sales income
- Troubleshooting mismatched Shopify bank deposits
- Detecting missing or incorrect Shopify fee postings
- Correcting sales tax liability account imbalances
1. Common Error Categories
Most Shopify accounting errors fall into these categories:
Sales Income Discrepancies
- Undersales or overstatements in the GL
- Missing cost of goods sold (COGS) postings
- Incorrect income recognition timing
Bank Deposit Mismatches
- Shopify payouts not matching bank deposits
- Negative balances in the Shopify clearing account
- Old, unreconciled transactions
Tax and Fee Errors
- Sales tax liability not aligning with Shopify reports
- Missing or miscategorized Shopify transaction fees
- Improper handling of refunds and discounts’ tax impact
2. Essential GL Accounts for Review
Systematically examine these accounts for red flags.
Account: Sales Income
This account should reflect gross sales.
- Clear, categorized entries.
- Consistent daily/weekly totals.
- Alignment with Shopify Sales reports.
- Lump sum entries not broken down.
- Unexpected credit balances.
- Significant variances from Shopify.
Account: Shopify Payouts (Clearing)
This is your temporary holding account for Shopify funds.
Expert Tip: Regularly reconciling the Shopify clearing account against bank deposits is the single most important step to prevent major errors. Don’t skip it.
3. Step-by-Step Troubleshooting Workflow
Here’s a sample code block showing a common error pattern for tracking.
{
"error_id": "DEP_MISMATCH_20250901",
"error_type": "deposit_mismatch",
"shopify_payout_amount": 1234.56,
"bank_deposit_amount": 1200.00,
"difference": 34.56,
"date_of_error": "2025-09-01",
"status": "investigating"
}4. Detailed Checklist for Investigation
- 1
Verify Sales Income Account
Compare Shopify sales reports (gross sales, refunds, discounts) to your general ledger entries. Look for lump sums not broken down by date or type, or missing sales days entirely. Ensure all adjustments like returns and discounts are correctly categorized.
- 2
Reconcile Shopify Payouts
Match individual Shopify payout reports (from Shopify Admin > Payouts) to the corresponding bank deposits. Investigate any unmatched, partially matched, or duplicate transactions. A common issue is combining multiple payouts into one bank deposit, requiring manual matching or a clearing account.
- 3
Review Fee Postings
Confirm all Shopify transaction fees, payment processing fees, and app fees are recorded correctly as expenses. Compare these against the detailed fee breakdowns in Shopify payout reports. Missing or miscategorized fees can significantly distort profitability.
- 4
Check Sales Tax Payable
Ensure the balance in your Sales Tax Payable liability account aligns with Shopify’s collected sales tax reports. Any significant variance indicates issues with tax mapping, reporting, or manual adjustments. Promptly address these to avoid compliance issues.
Crucial Step: Bank Reconciliation
Always ensure your Shopify clearing account is fully reconciled. Any remaining balance indicates unreconciled payouts or incorrect postings, which will lead to a buildup of errors over time.
5. Advanced Troubleshooting Tips
Advanced Review Checklist
- Review Shopify settings for manual tax overrides or app-driven tax calculations
- Check for manual journal entries affecting sales, fees, or clearing accounts that bypass the integration
- Audit integration logs (e.g., A2X, QuickBooks Shopify App) for sync failures or warnings
- Verify proper handling of all types of refunds, partial refunds, and gift card redemptions
Need Help?
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Stuck on a tricky reconciliation or a persistent error? Our e-commerce accounting specialists are here to help troubleshoot your Shopify workflow.
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