Before You Start

This guide focuses on the ‘Payout Method’ for reconciliation. Ensure you have administrator access to your accounting software (QuickBooks, Xero, etc.) and your Shopify Finance Reports readily available.

Overview

25 min
Setup Time
Intermediate
Difficulty
Daily
Maintenance

What You’ll Learn

  • Understand the Payout Method for Shopify reconciliation
  • Accurately record Shopify sales, fees, and taxes
  • Match Shopify payouts to your bank deposits
  • Troubleshoot common reconciliation discrepancies

1. Understanding the Payout Method

The payout method focuses on reconciling the lump sum amount Shopify deposits into your bank account. Instead of recording individual sales transactions, you’ll record a summary of sales, refunds, discounts, and fees that sum up to the net payout.

Key Concept

  • Matches bank deposits perfectly
  • Reduces transaction volume in your books
  • Simplifies sales tax reporting
  • Ideal for high-volume stores

2. Preparing Your Accounting Software

To implement the payout method, ensure your chart of accounts includes the following (adjust names to your preference):

QuickBooks Online:
  • Shopify Payouts (Bank account type)
  • Shopify Sales (Income)
  • Shopify Shipping Income (Income)
  • Shopify Discounts (Income)
  • Shopify Cost of Goods Sold (Cost of Sales)
  • Shopify Payment Processor Fees (Expense)
  • Sales Tax Payable (Other Current Liability)
Xero:
  • Shopify Bank Account (Bank account type)
  • Shopify Sales (Revenue)
  • Shipping Income (Revenue)
  • Discounts Given (Revenue)
  • Cost of Goods Sold (Direct Costs)
  • Payment Processing Fees (Expenses)
  • Sales Tax Payable (Liability)

3. Data Source: Shopify Finance Reports

Shopify’s ‘Finance Reports’ are your single source of truth for all transactions related to a payout. Specifically, you’ll be looking at the ‘Payouts’ report and drilling down into individual payouts.

Key Sections to Extract

  • Gross Sales
  • Discounts
  • Refunds
  • Shipping Charges
  • Sales Tax Collected
  • Payment Processing Fees
  • Net Payout Amount

4. Reconciliation Workflow

Here’s an example of summarized payout data you would work with.

{
  "payout_id": "P-123456789",
  "payout_date": "2025-10-20",
  "net_payout_amount": 1050.75,
  "summary": {
    "gross_sales": 1200.00,
    "discounts": -50.00,
    "refunds": -25.00,
    "shipping_collected": 15.00,
    "taxes_collected": 90.75,
    "processing_fees": -80.00
  }
}
  1. 1

    Retrieve Payout Details

    From your Shopify admin, navigate to ‘Finances’ > ‘Payouts’. Select a payout you wish to reconcile and download its transaction details.

  2. 2

    Summarize Data

    Consolidate the gross sales, refunds, discounts, shipping, taxes, and payment processing fees into a single entry or journal entry.

  3. 3

    Create Journal Entry

    In your accounting software, create a journal entry to record these summarized totals. Debit your Shopify Payouts/Bank account for the Net Payout Amount.

  4. 4

    Reconcile Bank Feed

    Match the deposit in your bank feed to the Shopify Payouts account and clear the corresponding journal entry.

5. Common Issues & Troubleshooting

Payout Doesn’t Match Bank Deposit

Check the payout date and ensure you’re looking at the exact same payout period. Sometimes banks process deposits with a slight delay. Also, confirm no other funds were batched with the Shopify payout in your bank.

Need Help?

Expert Reconciliation Support

Struggling to get your Shopify payouts to balance? Our team specializes in e-commerce bookkeeping and can help streamline your reconciliation process.

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