QuickBooks reconciliation doesn’t have to be complicated or time-consuming.
Today, we’ll tell you why reconciliation is essential to your success. We’ll also show you how to reconcile Shopify in QuickBooks.
Reconciling your Shopify sales lets you keep track of your transactions and ensure your Shopify payouts are correct.
When you are on top of your Shopify bookkeeping, you can see what is working for your business. You’ll know about any overspending, where you can cut back, and what to focus on to improve profit.
What Is Reconciliation?
To put it simply, reconciliation is the process of making sure two sets of data match up. It’s an important aspect of your business’s accounting as it ensures your accounts are correct. Reconciliation enables you to identify any discrepancies or errors in your financial records so that you can fix them.
With Shopify, reconciliation also helps you to ensure that the inventory left for consumers matches with your payouts received for sales and that the money you have spent matches the money that has left your accounts.
Step-By-Step Guide To QuickBooks Reconciliation
You don’t need a bookkeeper to reconcile your accounts.
Software like QuickBooks and Xero can do it for you. With QuickBooks, you can manually reconcile your payouts from Shopify.
Luckily, doing it manually isn’t the only way.
You can also use Reconcilely, which will automatically send Shopify payments, refunds, and fees from any payment gateways straight to QuickBooks.
It will automatically create an invoice for each transaction, including fees, to create a seamless accounting experience.
This process happens in real-time and lets you see what is happening to your money. It’s super fast and super easy, making reconciliation a breeze.
However, if you want to do manual reconciliation, here’s how you do it:
1. Find Payout Reports On Shopify
From your Shopify home screen, scroll down and look for your payout schedule. To the bottom right will be a View All Payouts button. Click on it.
Next, a list will pop up. This list will have all your payouts sorted according to date.
Find the date you are looking for and click on it. This will open it up and view more detail about that specific payout.
2. Payout Report Details
On the screen, you will see many different categories and numbers. The Total will be the total amount in your bank account, and there will also be the Gross and Fees categories.
There will also be Refunds and Adjustments. These will sometimes be $0.00 and you can ignore them.
The report you are looking for will be at the bottom. It will show all the transactions that have made up the payout you received.
3. Show Shopify Finances Report Summary
From the Shopify drop-down menu, you’ll find the Reports options under Analytics.
Go to Reports, and scroll down until you find the Finances section. Look at the reports section until you find the Finances Summary. Click on it.
To get the right report, you must enter the transaction dates. You can do this at the top right corner.
The next portion will show the financial report for the chosen dates. A section with Sales, Liabilities, Payments and Gross Profits will show.
The amount deposited was most likely different from the amount shown on your Finance report. That’s because the amount you received is the Shopify payment minus any fees and adjustments.
Because they don’t match up, it can get complicated when you have to add this information to QuickBooks.
4. Create A QuickBooks Journal Entry To Log Transaction Details
Next, you need to create a manual journal entry in QuickBooks for every transaction.
This manual journal entry should also account for all the adjustments found in the Shopify finances report.
Once you’ve accounted for all the fees and adjustments, they should match the amount received through your bank deposit.
Congratulations! You’ve just successfully manually reconciled Shopify with QuickBooks!
Reconciling Mistakes To Avoid
Reconciling can be daunting, especially for those without experience in finance. However, it is a necessary task to ensure your future financial health.
Common reconciliation mistakes to avoid include:
- Missed reconciliations: We know it’s hard, and sometimes, you want to give it a skip. But that one skip could have long-lasting effects on future errors, like a snowball growing bigger every month. Make sure to reconcile every transaction.
- Missed transactions: Missed transactions, like missed reconciliations, can cause future problems. You may have missed transactions because of mislaid invoices or invoices you never added. Stay organized.
If the above steps feel like too much, don’t fret. You’re not alone. You can always use an automated reconciliation service.
How To Automatically Reconcile With Reconciley
QuickBooks reconciliation can be time-consuming and complicated. Without experience, it’s easy to make mistakes and miss transactions.
Save yourself hours, maybe even days, of manual reconciliation with Reconcilely.
With Reconciley’s automated process that runs in real-time, you will have instant access and complete control of what is happening with your business.
The best part? It’s super quick and easy to automate your reconciliation process.
Install the Reconcilely app on the Shopify app store or directly log in with your myshopify.com domain. Once there, start your 14-day free trial. There’s no risk involved, and you can quickly streamline your accounting processes.
Use your Xero or QuickBooks account associated with your Shopify account and connect it. Reconciley will send invoices to this account for any orders and payouts made in the future.
You are connected. Adjust the settings to your liking and choose a starting date. Reconciley will start sending you your invoices in real-time every day.
With Reconciley, it’s that easy to stay on track with your finances. Save yourself a world of hassle and use Reconciley for your Shopify business needs.
Why Reconciling Is Important For Your Business
Reconciling your business allows you to keep track of what is happening. It also helps you monitor and manage your cash flow. Companies should reconcile at least quarterly but preferably every month.
Common reasons for reconciliation:
- Valid data entry: Reconciling your transactions will allow you to find any account irregularities. These could be minor miscellaneous errors like double charges, over or undercharging, etc. Checking data can also catch other errors, more nefarious ones like theft or fraudulent behavior.
- Accurate Financial Statements: Banks make mistakes sometimes, which can cost your business money. Reconciling is one way to make sure bank statements and your business statements match up.
- Tax Reports: Everyone has worried about committing accidental tax fraud at least once. This is especially true for companies new to the financials of owning a business. For accurate tax returns, consistently reconciling will keep you in the clear.
- Theft: It’s unfortunate but reconciling will let you watch for any irregularities caused by foul play from employees or business partners. It has happened, and up-to-date bookkeeping is one of the best and most sure-fire ways to catch theft and prevent it.
Reconciling transactions and keeping track of payout protects your business.
Whether you are experienced or just starting, mistakes will pop up. But with consistent reconciling, you will be able to keep a handle on any strange transactions.
Reconciling is not just about fixing problems but also preventing future issues. Accurate reconciliation will provide you control over your business finances and peace of mind.
While you can manually reconcile Shopify in QuickBooks, and risk making mistakes, a better, streamlined solution would be to use an app such as Reconcilely to automate your Shopify store and accounting.
Check out our free trial today.