Q & A : Shopify and Xero

Brandy asks:

Q: I am in the process of setting up our Shopify POS. I’ve had two sales on it. Is there anything I need to do to document these sales or are they all going to be registered on Shopify? Can I run reports for retail/shop sales in Xero or do I need to do that in Shopify?

A: Shopify and Xero work seamlessly together! Here are the details and step by step instructions for the integration.

Shopify is my favorite e-commerce integration.

1. Turn on the Xero Integration from Shopify by going to Shopify Apps and searching for Xero. The integration is free and managed by Shopify.
2. Then map Shopify to Xero. Click the below image to see my recommendations, but you’ll need to customize it to your Chart of Accounts and preferences. Click Save. 
3. This will only bring over new orders, so if you want to bring over prior orders in order to reconcile these sales with deposits in Xero, just enter the date range to push them over.
   1. tip: If ever there are errors for orders that don’t go over, you will find them on the Xero app page in Shopify and click on the Error to see which orders didn’t translate. Then, it’s as simple as manually adding the one or so order that didn’t work directly into Xero as an invoice.
4. Every order in Shopify will have a corresponding invoice in Xero with the Shopify Order Number as the Invoice Reference in Xero. These invoices will have:
   1. Customer Name or Generic Shopify Customer depending on your preference
   2. Product Sku and Description, Quantity and Price Sold
   3. Correct Tax rate applied directly to the Product (the thing that NO OTHER e-commerce integration does properly!)
5. What is also nice is that the POS orders have an Order Number Prefix to differentiate them from online orders coming through the website. This is useful when searching.

These Shopify created invoices are then matched up to the bulk deposits Shopify makes to your bank account, and the Shopify fees are deducted to match up to the deposit. Make sure to select Shopify to create the Merchant Fees as a bill in the Xero App Settings in Shopify, and when matching invoices to deposits in Xero, you will check the “Show Spent Items” box to be able to select the fees on a deposit. (PayPal splits out their fee separately and these invoices are paid to the PayPal Bank Account in Xero – also an awesome Shopify feature!)

For reports, you will be able to search in Shopify or in Xero. If you have more revenue streams than just Shopify, consider creating a Shopify Sales revenue account in Xero to separate it from, let’s say Etsy Sales.

Congratulations on:

1. Using the best eCommerce website:  Shopify!!
2. Streamlining your Sales Procedure to use Shopify’s Point of Sale (POS does not stand for Piece of Shit when we are talking about Shopify)

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The Chart of Accounts for Jewelers:  The heart beat of any accounting software program or online app. These are the accounts that organize all of your data into meaningful information.