Reconciliation with Xero

In some cases, you might have to reconcile your Shopify sales information with your bank feed in Xero.

Shopify creates an "authorised" invoice for each order in Shopify and applies a payment to the invoice. How you reconcile in Xero will depend on how you’ve mapped your Payment account in your Shopify Xero app settings.

Payment account

There are two recommended approaches. You can:

Option 1: Map your payment account to a bank account

Before you begin reconciliation, make sure the Shopify Xero app is configured for this approach. These instructions assume you are using Shopify Payments to process credit card transactions and you’ve already mapped your payment account to the bank account where your credit card batch deposit is done.

Export all orders to a single contact

On the Settings page of your Shopify Xero app, under Customer export settings, select Do not export customers to Xero.

Customer export settings

Export Shopify Payments Fees and Adjustments

On the Settings page of your Shopify Xero app, under Customer export settings, check Export your payout fees and adjustments from Shopify Payments.

Export from Shopify Payments

You can then select an expense account to use for fee and adjustment entries:

Select expense account

When the app exports data, fees and adjustments for any Shopify Payments payouts that are contained in the export date range will be sent to the account you selected. There will be one entry per payout for both fees and adjustments.

For example:

Payout entries

Each entry is a manual journal post:

Manual journal posts

If you select a bank account as the payment account, fees and adjustments will appear as Spend Money transactions on the account:

Spend money transactions
Spend money transactions 2

How to reconcile with your bank feed

Many of your customers will pay using a credit card. One challenge with reconciliation in this case is that funds arrive as "batch" deposits which involve multiple Shopify orders.

To reconcile this information, you need to match your deposits with the appropriate invoices.

Match deposits to invoices

From your Xero dashboard, click Accounts, then click the Reconcile tab to start account reconciliation.

On the right side of the Reconcile screen, click the Match tab, then click Find and Match.

Search by Name using the keyword Shopify to find all of the invoices created by Shopify.

Find and match

Once you find all your Shopify invoices, select all the invoices for that day the totals should match, and click OK to reconcile.

Option 2: Map your payment account to a clearing account

Before you begin reconciliation, make sure the Shopify Xero app is configured for this approach. These instructions assume that you've already mapped your payment account to a clearing account.

How to reconcile with your bank feed

Think of a clearing account as a running total of sales that will increase and decrease over time. An invoice paid from a clearing account increases the total of the clearing account, while reconciling a deposit decreases the total of the clearing account. The clearing account is a rolling amount due to delays in credit card processing, but in the end when all orders are done and all deposits are made, the clearing account will reach zero.

To reconcile this information, you need to match your deposits with the appropriate invoices. Create a receive money transaction and assign it to the clearing account.

Receive money transaction

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