Reconciling your Shopify payments helps you ensure that your financial records are correct. Most Shopify owners aren’t accounting experts, though, so reconciling payments manually in Xero can be confusing and frustrating. Fortunately, there is an easier way to do it with Reconcile.ly.
As a Shopify merchant, it’s important to keep an eye on your business’s financial health. Reconciling your Shopify payments helps you do this by ensuring that your financial records are correct.
Most Shopify owners aren’t accounting experts, though, so reconciling payments manually in Xero can be confusing and frustrating. Fortunately, there is an easier way to do it with Reconcile.ly.
This blog explains how you can reconcile deposits for your Shopify payments in Xero with our Shopify app integration. But first, let’s define what reconciliation is and why it matters.
What Is Reconciliation?
Reconciliation is a step in your business’ accounting where you compare records, like transaction statements, to determine the validity of your finances. It’s like a cross-check of two financial records to ensure your accounts are correct.
Also known as payment or bank reconciliation, this process generally compares an external financial record with an internal one. For example, an external record may be a bank statement, while an internal one could be your ledgers or accounting software.
The reconciliation process allows you to spot any discrepancies or errors that may be the result of things like unprocessed or bounced checks, errors, fraud or mishandling of funds, and more. You can then fix them and produce correct financial statements and records. This will ensure that you maintain an accurate understanding of your business’s financial health.
The Benefits Of An Automated Reconciliation Solution
As a Shopify store owner, you get bank deposits for the products you sell online. Considering how sales shift and change, reconciling these deposits can take a lot of work. There’s a lot of information to take into account, such as fees, returns, currency exchanges, SKU management, and so on.
For instance, a payment or deposit may reflect in your records or statements, but when you trace it, you discover it’s a refund - meaning you don’t actually have that money. Manually monitoring and reconciling these transactions can take up tons of valuable time and get confusing for those who aren’t experienced accountants.
With automated reconciliation, you can save time and improve areas of your operations like monitoring stock volume or SKU management. As the platform tracks payments for your products from the store, you can also use it to monitor stock levels. Having an automated reconciliation platform aids you in sustaining product levels in store.
Reconciling your Shopify payments in Xero with the Reconcile.ly app helps you track the exact amount of money you ought to have so that your accounts balance. With constant updates from your Shopify store, you can stay abreast of your company’s financial health.
With accurately recorded numbers, you can be sure that the software has not made any errors. On the other hand, manual reconciliation leaves plenty of room for human error. So, using an app like Reconcile.ly to reconcile deposits from Shopify payments helps uphold the integrity of your financial records - giving you error-free and uncorrupted data.
How To Reconcile Deposits From Shopify Payments In Xero
Instead of manually creating invoices for each order or payout you receive from Shopify, Reconcile.ly can automate that process for you by sending a consolidated invoice regrouping your activities. This makes it possible to reconcile your Xero accounts with a single click!
Ready to streamline your reconciliation process? Here’s how to reconcile your Shopify payments in Xero using Reconcile.ly.
Create your Xero banking connection/ bank feed
Before we get to the reconciling bit, you need to connect your bank to a Xero account.
To do so, you must register for online banking with your banker. Follow your bank’s instructions for how to add a Xero account. Once you’ve connected your bank to Xero, you can import up to a year’s past transactions, and your new transactions will update and reflect on your Xero account automatically.
You also need to ensure that this information is correct at all times. Always ask for shipping and product details, as well as tax and other information in your Shopify order process. That way, Shopify can feed this information to Xero. If you miss this data, it could cause discrepancies in Xero’s reconciliation process.
Integrate the Reconcile.ly app into your Shopify
The next step is to integrate the Reconcile.ly app with your Shopify store so it can record your store’s transactions. You can install it from the Shopify app store or by going to app.reconcile.ly. We offer a 14-day free trial so that you can test it out before you commit.
On the app, you can decide which Xero account/s the app will use for transactions. This includes returns or refunds, shipping fees, sales, and more.
With this integration, you’ll want to keep all transactions on Shopify. If a customer makes changes or additions or returns via email, the app won’t pick up the transaction. Instead, ask them to follow your Shopify order process so that Reconcile.ly automatically does the work for you.
That’s it! Reconcile.ly will now do everything you need it to automatically. It will track incoming orders, refunds, and fees and export them into invoices that automatically sync to Xero.
If you’d like to reconcile older orders, you can backdate the store’s transactions as far back as you would like to so that you can ensure all your financial records are accurate.
Reconciling Shopify payments in Xero is a big challenge for many Shopify merchants. It’s an important process, but it can be very confusing and time-consuming to do manually.
If you’ve been struggling with this process, then try out Reconcile.ly. The app takes care of all your reconciliation needs with just a click!
Our goal is to make sure you spend as little time as possible on your reconciliation and bookkeeping. That way, you can focus on what you do best: making sales!