Discover the Ultimate Shopify Invoice App for Sales

Shopify invoice app for Sales

all right so the purpose of this video is going to be showing you how to enter Shopify sales into QuickBooks online and an overview of the method that we're going to be using is we're going to be using journal entries to accomplish this we're going to create a journal entry template and QuickBooks online and the way this is going to work using this journal entry is this going to allow you to enter these sales at any interval that you want I usually just do once a month at the end of every month put in the sales for the entire month and the reason that works is because well we're going to be utilizing clearing accounts they're called or holding accounts however you want to think of them and essentially what we're going to be doing because you need to have your debits and credits in your bank account being correct in order to do Bank reconciliations every month and specifically in this case to debits to your bank account what this workflow allows us to do is enter in the entire sales for the month because what we're going to be doing to offset these sales is we're just going to be putting the debit side of things into a into we're going to have multiple clearing clearing accounts in this case but let's just say for now with Shopify asset clearing account balance sheet and what that allows us to do is put all those funds in there for the entire month and then whenever those deposits are actually hitting our bank account then all we have to do is transfer those funds from that holding account into our bank account so this allows us to capture the sales for the entire month in just one journal entry but it also allows us to keep our debits into our bank account accurate so that we can do bank reconciliations that during every month let's see sometimes people try to just utilize the deposits let's say Shopify for example just to pause this into the bank account and just categorize those as sales but whenever you do that you don't capture everything in terms of refunds and returns sales tax liability collected things like that but that's why I like using this workflow so much so we'll go through and I want to try to cover everything I can in this video and we'll go through the entire kind of creation process with this how I like to do with my clients who I'm using this exact workflow for for entering their Shopify sales into into their QuickBooks Online we're going to go over first finding all the needed reports that you're going to need to be looking at on a monthly basis and we're going to be using kind of a worksheet here to put in different steps and everything for you to reference in the future so you can kind of have a checklist whenever you're entering these sales on a month-to-month basis but yeah so we're going to look up all the reports first and then we're going to use those reports and look at all the categories and things and then we're going to use that to list out and enter all the needed accounts into our chart of accounts and we're going to make sure those are entered first into our QuickBooks online and those are essentially the category accounts under profit loss and balance sheet once those are entered then we're going to start the process of creating an actual journal entry template in QuickBooks Online in order to capture these monthly sales and for net for that portion of it we're just going to talk about the sales and then the payment collection and then after that I'll introduce quickly just in case this is needed in your case we'll introduce cost of goods sold within Shopify and how to enter that as well into the same template and once you have the template created then we'll go to this worksheet again and we'll start entering in the actual steps in order to do this on a monthly basis and while we're doing that we're actually going to be going into the journal entry and putting in actual real numbers for a month's sales in Shopify so you can see what that looks like an actual example of that and then finally once we do all that I'm going to discuss what I like to call the back end of this workflow and that'll make more sense later on but there'll be some open-ended items like the clearing accounts for example there'll be some open-ended items after this is uh this journal entry is is entered and then we'll go over kind of the back end of this workflow what this is going to look like whenever you're working with your bank feed throughout the month so the first step here like I mentioned we're just going to go through and we're going to try to find at the best of our ability at this stage of the workflow here we're going to try to find all the reports that are going to be needed in order to eventually enter these these journal entries and what I like to do I just have these pinned right now so that doesn't show my client information but what I like to do is open up your Shopify and then duplicate two to three tabs just to have a few tabs open because what I found with Shopify is usually you need to have two to three potentially different reports in order to find all the numbers that are needed to enter these journal entries it's not at least not that I've found all included in one report which is okay what we're going to do later on in this workflow is add where to find there's reports and steps here in the worksheet so we'll know at the beginning every time we do this to at to first open up all these reports that are needed and you can even eventually bookmark these reports these report screens as well so you have to go in and find the reports every time you can just click them in your bookmarks but anyway looking at the reports here so I just went from home to analytics and reports here in Shopify depending on your situation you may need to find different reports here or more reports I'm just going to show you right now the reports that we're going to use for this particular video an example so first is a sales over time report so we're going to open up the sales over time report and here it shows things like gross sales discounts returns net sales shipping collected things like that this is going to be needed and this shows obviously a lot of information so what we want to capture whenever we're going to be creating this journal entries is I like to think of it as kind of the top portion of the bottom portion the top portion being the collected amount what I mean by that so like this I kind of think of as like the sales and collected amount so that includes things of course like sales and discounts and returns and also things like tax collected and then in the bottom portion we're going to have the payment type portion of it and what is that's always going to balance each other out and this will make sense a little bit later but so next we need to find so there we found kind of the sales and everything collected portion of it now we need to find the actual payment type portion of it so we need to enter in the for those clearing accounts are eventually going to be deposited into our bank account and for that I like again in analytics and reports here I like this payments report right here so we can go ahead and click that now here we see different payment methods like Amazon Shopify stripe and PayPal so we're going to be utilizing this report as well so now that we have these reports just kind of at least what we think for now what we might be needing now is a good stage I think to make sure that everything in our chart of accounts going into QuickBooks online now is entered in our chart of accounts and if it's not to enter them so you can either so here in the gear icon you can go here and then under lists or under settings you have chart of accounts here so looking at this first report here so first we see the gross sales here so let's go ahead and make sure that we have a sales account entered in our chart of accounts so if you scroll down to income or you can just search we see a sales and here you can decide if you just want to put it in the bulk sales category or if you want to separate it out maybe put like a Shopify or online sales category anything like that just to keep it simple in this video we're just going to keep it as sales so we're so okay so that's in the chart of accounts that's good and then next we see discounts and returns so let's go ahead and make sure that those are in here so here we have a discounts given and it's an income account so we do want to make this an income account we're just going to debit it and make it a negative and then we have returns or refunds let's make sure that's in our chart of accounts yeah we also have refunds as an income account so that's good so everything so far we have in our chart of accounts then we have shipping so we have the shipping income in this particular case and here we also have a shipping income account and then we have tax so in this case we're going to make this a tax lie we're going to make it a liability so we're going to enter it whenever we're collecting these sales tax from Shopify we're going to enter it as a liability under balance sheet and then we'll talk about the back end but whenever we pay it that's when we're going to lower the liability so we want to make sure that we have some sort of sales tax liability entered into our chart of accounts here so we have all our chart of accounts in this end now we can start discussing the payments portion of it and this might be a little confusing until we wrap everything up here but there's two things that you need to think about on the payment side of things uh and we might as well start talking about it now because we need we're going to need to have all these entered in short into our chart of accounts so the first thing you need to think about and especially in this stage is if these payment methods like this if there's separate deposits into your bank account and here's what I mean let's say like stripe for example see we have these stripe payments collected and that is included in our Shopify sales if these stripe payment collected if they're separated separately into our bank account so if you look at our bank account bank feeder its deposits if you have separate stripe deposits going in there from these sales then we need to create a separate stripe clearing account in this particular case same with Shopify obviously we need to create a Shopify clearing account as well if things like this so we have like shot pay installments payment type and then we have the Shopify payments let's say for example that the shop pay installments are included in the regular Shopify deposits that are already being put into our bank account if that's the case then we won't need to create a separate shop pay clearing account on our chart of accounts because it's included in these deposits here same with PayPal so there's in this particular case we're having separate PayPal deposits into a PayPal account so you want to have a separate account for that and Amazon as well Amazon is going to be separate in this particular case there's separate Amazon deposits going into our bank account and it's not included in the Shopify payments so again we need to make a separate uh clearing account for that so in this particular case we need to have a clearing account or some sort of asset account on our balance sheet for Amazon PayPal Shopify not shop pay because it's included in Shopify in this case in stripe so these are going to be asset accounts and Shopify is going to be a clearing account stripe is going to be a clearing account PayPal we can make kind of a bank account or just a regular PayPal asset account because it's a separate account that's being deposited into not directly into the bank account and Amazon as well so we had these four that we need to make sure that we have in our chart of accounts also included in all four of these so you want to have the asset account for all four of these payment types also we want to have for each of these payment types that are taking separate Merchant fees we also want to have a merchant fees account for them if you want to just make it one Merchant fees expense account for all four of these you definitely can in this case we're going to separate them all out so we're going to create an Amazon payments Merchant fee expense account we're going to create a Shopify Merchant fee expense account and we're going to create a strike one as well and PayPal if I didn't mention that so we're also we're gonna so what we're going to do now is go into a chart of accounts create four different accounts asset accounts for these payment types and four different Merchant fee expenses as well so if you go back to a chart of accounts here see if we have any of these entered already okay so we don't have anything for Shopify so we're going to go new here and this is going to be again a current asset on our balance sheet don't worry too much about the tax form section so we're going to name this Shopify clearing account and again this is going to be a temporary kind of holding bucket on the balance sheet that we're eventually going to take these funds in bulk and slowly bring them over into our bank account whenever the deposits happen now let's enter the associated Merchant fee for this so we're going to go to expenses here and then you can either create them all separately or we can do is create a bulk kind of parent Merchant fee account and I'll show you what that looks like so let's just create so first we're just going to create one expansion it's going to be called Merchant fees and then what we can do is create a new expense and save it under that account and then these are kind of create sub accounts underneath that and then here we'll put Shopify Shopify fees and then here if you look in the bottom here this is what it's going to look like in your profit loss report yeah the emerging fees expense category and then it's kind of indented and then you'll have the Shopify fees underneath so that's what we're going to do for all the other fees as well so next looking at our payments report we have PayPal so in this particular case let's say that we have a separate PayPal account that's going to be these funds are going to be deposited into they're not going to be deposited directly into our bank account we'll just eventually every now and then transfer the funds from the PayPal to the bank account so here we just have to make sure that we have if we don't already a PayPal asset account or balance sheet so it doesn't have to be a PayPal clearing account like we have set up here we're actually just going to make it a PayPal so you can set it up as a bank account if you want so let's go ahead and do that we'll set up as a bank account I mean if they're both assets on the balance sheet so it doesn't really matter but let's just say we have a PayPal bank account now set up on our chart of accounts and then now again we're going to enter in the merchant fee expense so under expenses we'll put it under Merchant fees again here and then we'll call this PayPal fees next we have see we have Amazon payments here so again asset account payments clearing account so go ahead and add that again Merchant fee on your Merchant fees Amazon fees and the last one we have here is a stripe so this is the same thing you figure out if you want to set up as a bank account or a clearing account the both assets and the balance sheets that's not a huge deal in this particular case we're just going to make it a clearing account so in this particular case you want to figure out if stripe is going to be deposit if the stripe payments collected and Shopify are going to be deposited directly into your bank account separately or if it's going to be deposited into your stripe a separate stripe account and then you'll eventually whenever you want transfer those over so that's an important kind of Distinction to know as well in this particular case and then now one more Merchant fee we're going to add here so you see here Merchant fees and how they're kind of listed out here then we have straight fees all right so now we have everything listed in a chartered accounts we have everything in this side of things in terms of recording all the sales discounts returns sales tax selected shipping income everything everything in kind of the top portion of the journal entry again Works kind of the sales and total collected amount and then we have everything also in our chart of accounts to separate out all the payment type section of the journal entry and what that involves again is for every separate kind of depositing channel in terms of like Shopify and stripe and Amazon and PayPal that are being made there's a separate asset account or balance sheet reflecting those and then with all of them that are reflecting those there's also a merchant fees expense account and restrative accounts reflecting those fees as well so now that we have all of the accounts we believe at this stage at least in our chart of accounts let's go ahead and actually start the process of creating this journal entry template and then as we're kind of creating it and as we go we're also going to be working on creating the the workflow lists out as well so you can reference it every month and go through a checklist to do this you actually go to recurring transactions in QuickBooks even though we're setting up a template if you make it unscheduled it makes it a template so the gear icon here in the top right then under list you'll see recurring transactions here and then we're going to hit new and again we're going to make it this journal entry we're going to do a journal entry in this video if you want to make it a sales receipt or an invoice we're not going to go over that in this video watch my how to enter daily sales and QuickBooks online video there I kind of go over more so the relationship of the products and services and chart of accounts and then from if you do it that way you're going to be entering positives and negatives so if you want to do that watch one of those videos as reference after this to get that workflow for now like I said we're just going to do a journal entry so we're just going to name it Shopify sales and here we're going to make it unscheduled that's what's actually going to make it a template so it's not going to post anything it's just going to be a template that we can use here in the future all right so now we can begin the process here again the the general kind of idea here is we're first going to be entering in all of the sales portion of things and then we're going to enter in the bottom of the payment section and this will hopefully make more sense as we go down here that's and that's also the order I like to do is first the sales then the payment type what I also like to do and that's why I like having this report these reports open when I'm doing this this isn't obviously this isn't mandatory but what I like to do is put them in order that they show up in the reports and this just makes it easier but then it also limits the potential of mistakes I found so if you put returns first and then discounts in your journal entry sometimes without realizing it you might put you know you might copy and paste returns when they should have been discounts and vice versa and there'll be no way of really knowing that was a mistake until looking at it later so again I like to put it in order that's just my own personal preference so first we have the gross sales here and so what we're going to do is we're going to put that in first and again this will be easy because we have everything already in our in our chart of accounts so again we just mentioned that we're just going to put it on the bulk sales account here so let's just enter that for now we're just going to enter that we're just going to enter the account in here next looking here we have discounts and then returns so let's go ahead and add those again again I like putting it in that order personally so we got discounts given and we've got returns in this case I think it's called refunds yep so net sales don't worry about because what net sales is accrediting this and then and then debiting these two so we're not actually going to have a net sales account it's going to be the net sales is going to be the sales entered as a credit and then the two debits added up so then we have the shipping collected and this is going to be just a straight up income in this particular case so we've got shipping income so last thing we have here is tax and this is tax collected and again we're going to be doing this right now as a liability in this stage so we have the sales tax payable liability so now we have everything in that stage and and then we have so you have total sales here this isn't necessarily total sales in a way it is but this also includes like things like sales tax collected and things but anyway so we have everything on this stage entered in the template so now let's talk about the bottom portion of the template the reason I like to break it down here is because and you'll find whenever we're entering in this journal entry that these debits and credits are going to have a certain number and then these payments are also going to are going to match that essentially so let's let's look at an example let's look at the month of May for both of these reports so if you and you're in again this will make more sense when you actually enter the numbers in the journal entry but you see the total total sales here the total I like to think of this more so as the total amount collected so you have the total amount collected in regards to sales and returns and and sales tax and things the total collected is fourteen thousand one fifteen Thirty for the for the month of May now if you look at this other report and this is the payment the net payments amount so these are Shopify payment collected stripe payment collected Etc it equals four fourteen thousand one fifteen Thirty so it's the same exact dollar amount in terms of the total collected in the total sales portion of it and the payment type collected so it's the same amount and that's going to reflect as well whenever we're entering in this journal entry we're going to have the debits and credits that match in the top portion and the debits and credits are going to exactly match as well on the payment type portion and that's what makes this that's what allows us workflow work in terms of you know following you know accounting rules and things but anyway here's what's most important here so again there's two important sanctions to make whenever you're looking at the payment side of things one of them we already we already discovered and the first one is again whether they're separate deposit channels happening and what's in in this particular case again we just we we discovered that Amazon PayPal Shopify and stripe all four of them deposit separately whether depositing into our bank account or depositing into its own separate account like PayPal for example so that's the first thing to determine and we already have that determined now the second part of it and this is important the second part of it is knowing that the merchant fee stage if it happens before the funds are deposited or after here's what I mean you need to you want to make sure it says Shopify for example it's important for you to understand let's say you have a hundred dollars in sales for that day or a hundred dollars Shopify payment collected it's important for you to know if Shopify automatically keeps five let's say five dollars in this example and then deposits 95 into your bank account or if Shopify deposits the full 100 into your bank account then later on let's say once a month that's when they deduct all their fees for the month it's a really important for you in this stage to determine which one of those is the case for each of these different channels because that's going to determine whether or not you include the merchant fees in this stage of things and whether whenever you're calculating the total amount and the clearing account whether it should be gross or net fees let's just go down as we go for the four Amazon payments let's say for them let's say that they are doing it they are depositing net fees so again if they collect a hundred dollars they keep five dollars automatically as their portion of the fees and they deposit ninety five dollars into your bank account let's say that's we determine for Amazon so because of that what we're going to do is we're going to enter in both the Amazon clearing account into this template here and then we're out we're also going to add on the Amazon fees into this template as well and the reason for that is we're going to be recording the fees at this stage of the sales entry process next we have PayPal so PayPal the way sometimes PayPal Works in this particular case this is how it's going to work there'll be a separate PayPal account let's say it's linked up to a bank feed in your cookbooks online and whenever those deposits are entering into the PayPal account it accounts for those fees whenever you have the bank feed set up and what I mean is that whenever you whenever you enter whenever you categorize those deposits it shows the gross amount deposited and then it subtracts and calculates the PayPal fees and adds that into your into your profit and loss so in that case we don't want to include the PayPal fees at this stage of things it's going to be included whenever we're categorizing the deposits so because of that all we're going to be doing and actually this should be a clearing account in this particular case so all we want to do in this case is put in the funds into a PayPal clearing account and we'll calculate the funds later on when they're being deposited next we have Shopify and let's say again Shopify is collecting the fees automatically before they deposit into our bank account so again we want to have Shopify clearing account and the fees because we're going to calculate we're going to enter those fees as we do the sales entry part of things and then finally we have stripe and same thing with stripe we have the clearing account and because they're taking their fees before they deposit we're going to enter in the fees as well so now we have what we believe to be all of the accounts into this journal entry template here first I just want to you know go over this stuff and then we'll talk about cost of goods sold after I don't want to throw too much at you all at the beginning here even though this is already a lot but we will discuss cost of goods sold if that's needed after we go through this example first so now what we can do is just go through and I like to just put in numbers here so you should in my opinion you should know if you're doing your own bookkeeping for your small business you should know you should understand and know debits and credits and whether they increase or decrease income accounts liability accounts expense accounts things like that and if you don't that's what I suggest doing I have a course for that a book full bookkeeping course where I really go in depth with this kind of stuff and specifically journal entries and debits and credits and things I am going to go over in this video of what you should be doing but again I think it's really important if you're doing this kind of stuff to get a full understanding of of what you're actually doing and not just kind of copying a video but here I like to just put in numbers of whether you're gonna be debit or accredited and you can just put in ones and at the end you can just balance it out so the sales here it's an income account we're going to be increasing the income account so it's going to be a credit these discounts Givens and refunds accounts are also income accounts and we want to have them show up as a negative under profit loss as a negative income so in order to do that they're going to be debits the shipping income again we're going to increase income it's going to be a credit sales tax liability it's a liability account we want to increase the liability when we're entering it in this stage so it's going to be a debt or a credit the clearing account so we want to be increasing these clearing accounts in this stage when we're entering in the sales and in their current asset accounts whether they're set up in the balance sheet so to increase those we want to debit them so that's going to be the case for all of these clearing accounts and then finally we just have the fees and the fees accounts are expense accounts in order to increase the expenses we want to debit those as well and then it won't let you save the template unless he's equal so I'll just put in because we need six more so I'll just put in seven here just to make sure that the totals here in the bottom are equal so this is just a way you can remember whenever you're putting in these entries again you should in my opinion you should know this but this way whenever you're copying paste and things you'll just know whether it should be a debit or credit as you go okay so now we have the description side of things here what I personally like to do is I like to put in the description column here I like to put where in the I like to first put where in these reports you can find them and then I also like to put notes if you have to do some sort of calculations which we will specifically at the bottom portion here whenever we're dealing with fees and payment accounts let's go through and do this here so we have the description first first we just have sales and that's just gross sales so I'll just put in the description gross sales and then we have discounts given and that's just discounts and then we have the returns here as well so we'll just put discounts returns and there's no sort of calculations at this stage all we have to do is just copy and paste now we've got shipping income and that's just shipping here in the report so I like to put that as well and then also too if you want just so you know you can put I mean you can put in whatever you want but if you want to put in credit here if you want to put in debit here just so you get another place to remember whether it be sure that we're accredited you can do that in this stage as well so you have sales tax payable next and that's just put in his tax here so we'll just put tax okay so now we have the payment side of things looking at this report here what we're going to be doing in the case in the case where these payment meth these payment types are collecting payment keeping the fees and then depositing the net amount into your bank account so again if they collect a hundred dollars they keep five dollars deposit 95 into your bank account what you need to do in this stage of things is you need to whenever you're putting in the clearing account you need to take the total amount collected and then minus the fees from that and the reason for that is again you have a hundred dollars collected from Amazon for example and they take five dollars in fees what you would want to put as the debit and the clearing account is ninety five dollars because that's ultimately what's going to be deposited into your bank account so that's net fees and then and then so you'll take the five dollars in fees in this case so so what you would want to do here so in the description you just put let's see what it's called here Amazon payments so you can take Amazon payments net fees and what that means is after fees so you subscribe you subtract free fees from it and then here's just straightforward we have the fees here and this will help again make sense once we actually go through an example here so here we want to make sure that we have net fees now PayPal again we discussed that whenever they get deposited into the PayPal account separately in a separate Bank feed and QuickBooks at that stage is when we actually take out the full PayPal clearing amount gross and then calculate automatically at that stage the PayPal fees so because of that we don't want to enter in or subtract any PayPal fees at this stage we want to just make them gross fees so whatever every the full amount that we've collected via Paypal we want to enter in doesn't matter what the fees are at this stage we're not going to subtract them out Shopify clearing again let's say that they're taking the fees before they deposit so it's going to be net fees same with stripe let's say it's net fees and also too at this stage we so we can see here this is where we can find the the total net payments that we've collected for that month but we don't see any fees here so we need to know for for three of these accounts we need to know what the fees are whenever we're entering these and so here's where you need to open up potentially a few more reports in order to figure out what these fees are so let's duplicate a third tab here in Shopify and then what I found is that if you go under for Shopify fees for example if you go under finances here then you see these this payouts report so here we see the fees listed for the Shopify payments so we can keep the support open for now and in our journal entry for the Shopify fees and this report is called payouts if you can put something like total fees payouts report and then so let's say for example for stripe let's say that we have a separate stripe portal like this and then we can do is you can run reports and then the balance report which is showing here and then here it shows the stripe fees listed so again we can just put stripe balance report and again that shows the stripe fees that was taken out for the month and let's say again let's say for we have a separate Amazon portal that shows the fees so again at this stage you want to make sure for each of these payment methods that you know where to find the fees as well and then make a description here showing uh just a note for yourself in the future of where to find those fees and then here you can put the name that's kind of like the payee I always like doing this as well so for a lot of them let's just say we can add a new Shopify customer so that can be for things like the sales discounts given refunds and there's a lot of reasons for this I'm not going to get into it in this video but different reports and things you can run it's really important to have these really helpful I should say to have these listed like this so then we can have an Amazon vendor it doesn't really matter too much for the clearing accounts in terms of having a name here but definitely for the fees you want to have the vendor listed and then if you have any sort of different location or store or anything you can add it here but we're not going to do that in this particular case so now again we're not talking about cost of goods sold yet so now we have the template actually created here of of entering the Shopify sales so again we have the top portion here which is kind of the sales and everything collected portion and then we have the bottom portion here with the clearing accounts and the and the fees and now what I would like to do is simultaneously add in a step-by-step checklist for your future use and at the same time we're going to actually go in and enter in some numbers into this template and I suggest you do the same run a month report for all these reports and everything just to make sure everything balances out and then also at the same time adding in this checklist so you can reference it and do it quickly on a month-to-month basis we're looking at our recurring transactions list again you see this Shopify sales template so we're going to go ahead and hit use and let's say that we're going to enter in all the sales for the month of May this year so we can go back and I just like putting in for the last day of the month I just like putting it as that date and then I'll show up in your profit loss and everything you're your balance sheet on the last day of May just name it whatever Shopify sales so here in the worksheet let's say that we just let's just do it like this I like doing a worksheet because in case you need to move up and down steps a lot easier but you can use it whatever you can use it in Microsoft or whatever you want to do this but let's just put the step number here I don't know how many it'll be but we'll just put in a bunch here and then it's like inserting here some check boxes and just scroll down like this so that way when you're going through it every month you can easily just check as you go and then when you can done you can just uncheck them and then here we can open this up this would be the steps so the first steps whenever you're you're doing this on a month-to-month basis is first what I like to do is just opening up all the reports that you're going to need and I like as best as possible I also like opening up reports in order that we're going to be listing them into the into the journal entry here as we mentioned before the first report here for these sections here of entering in the sales and discounts and refunds and things that's going to be this report here and what this report was is Shopify analytics reports sales over time and then you would put it for most likely last month but again in this case we're going to put it in this example we're going to put it for May so what I would do in the worksheet here is for step one I would go open report or let's say open sales over time report and then I'll put Shopify actually let me back up a little bit here and this is why I like doing it like this where I can just move this down the first thing I actually like to do log into Shopify then duplicate three tabs or however many tabs you're gonna need for the report so you can make this two three four however many reports you need in Shopify I log into Shopify duplicate all the tabs so they're already open up opened up and then you're going to the first Tab and open up their first report so we've got the sales over time report which is Shopify analytics reports sales over time last month is going to be the date range so that's Step One is opening up that report and then we have the payments because again we're looking at our journal entry here so that report there is going to bring us all the way to here so now we'll start entering in the payments here and for the payments section we need a few reports open so the first report is just this payment section here so we're gonna go for step three we're again this is just going to be clicking on the second tab in Shopify we're going to go to reports payments the date to last month and then here so now this will show all the gross payment type collected so now we need to find all the fees so first if the Shopify fees again this was in Shopify finances payouts so let's go into our checklist here we've got Shopify payments payouts and then again filter the date to last month and we're going to go through an example I just this is just creating the checklist here so then we have so we have so next we can open stripe because now again we need the stripe fees as well for this for this portion because again we're just going down here and figuring out what we're all going to need here so we have the stripe portion of it to be an open stripe then reports balance report again date as last month and this will this is going to show our stripe fees collected amount and we don't need any fees known for PayPal at this stage so the last one is just Amazon if you can open up our Amazon merch account report for last month and again that's going to show the Amazon fees collected so at this stage let's let's start to go through and we're going to go back and forth we're going to actually create the first journal entry and then we're going to edit or add or whatever we need in the steps as we go and then say now so first we'd open up all the reports and then we have Cube open up Qbo code books online and then click on the template for Shopify sales that would be the next step and then we can put enter last day of month and let's start to go through these steps we have Shopify we already have it logged in we have three tabs opened up so then we have the so first we're going to look up the sales over time report so we got reports sales over time again usually we'd make this just last month right here we're in this case going to make it for May as long we have that report opened up so let's go and check that now we got the payments so again reports under analytics if you've got payments usually be last month we're going to make it may we've got that we verified that the amounts match so we've got that checked off next is the payouts because we need to know what the merchant fees are so we've got finances payouts and then you can add a filter or the payout date again last month in this case we're gonna do custom and we're gonna make it from May to May May 1st to end of May and again this so we have these fees here that's going to show all the fees for the month of May so we did that next we've got stripe so we've got log into stripe reports balance report so now we got this report opened up for May and again this just shows the stripe fees that we're going to need when we're entering in this section here so we got that I'm I I can't do it in this video but let's say we we opened up the amazon merch report in order to get those fees and then yes we have QuickBooks we went into the template and we made it for the last day of the month so now we've got that so now we can start entering in the template itself and what I personally like to do I like having stuff like this in this checklist a separate checklist but I don't like adding in the checklist like entering in gross sales discounts because this I like having just in the description here in terms of the actual entering in of the journal entry here so now let's start entering this real numbers here and see we come up with as we go so first we have the sales again it's going to be credited and this is going to be the gross sales of everything collected in Shopify so what we're going to do and we have all the reports in the section here we have all the reports that are going to be needed already opened up ready to go so the first report here is this report here the sales over time and again this is for May so we're just going to copy and paste gross sales here because it says gross sales it's gonna be a credit next we have discounts and returns so you go here copy the discounts you don't need to put in the negative there so we have the discounts there we got the returns and what I'm doing I'm just hitting command and then C and V to copy and paste now we have the shipping income which is going to be a credit and this is right here and see how again we're going along the report here so it's just as simple as copying paste I know this is a long video and I'm going over a bunch of stuff of setting everything up but whenever you're doing this monthly it's actually really easy all you do is just go through these reports and then you just copy and paste kind of as you go it's really easy once you do once you get this down so again got the shipping then we got the sales tax liability for this 1572 and tax we collected so we're going to credit that all right so now we have that kind of top portion completed now and now now we're going to start looking at the payment portion of things so first we have the so we'll just go down as can as we go so next we have the Amazon payments collected so first we need to know the gross amount of Amazon payments that were collected so we have this report again here which is the payments collected for the month and what this shows here is the and what we're eventually going to do is we're going to export this to excel to add everything together like for Shopify but for now if we just see Amazon is only one lime so we see the net collected for Amazon is 350. so you can put that in there even though I know we're going to be subtracting the fees at first just like to put the gross amount to keep it listed here so here we have the gross amount of Amazon collected now let's say we looked at the Amazon Merchant report and let's say they took ten dollars in fees so again what's ultimately going to be deposited into our bank account is going to be a separate Amazon deposit for 340 because they took their fees so what we're going to do because that's net fees so you have this 350 we're going to subtract 10 so if you do subtract 10 within the journal entry here and then tab over it automatically calculates that for you so we have Amazon payments net fees of 340 again even though this is showing 350 total Collective and then we have the Amazon fees we're going to put that in as ten dollars because again at this stage what we're doing is we're entering in the Amazon Merchant fees and then we're entering in a clearing account for 340. that's ultimately going to be deposited for 340 into our bank account and then we're going to clear that out sex you have PayPal and again what we mentioned was that we're going to take the full gross amount of PayPal we don't need to enter in the fees at this stage so I like to do here is export into the current page into an Excel sheet in order to be able to add all these together and open that up you can add that as well if you want as before you even start this stage you can add that into your into your workflow here into your checklist so let's say we have the the payments last month and then you can put export to excel then we're going to do the same thing later on with this payouts but for now let's just worry about the payments here actually no let's let's do that as let's do that also right now for the for the payouts export to excel so looking at this screen here so this shows you can just quickly work with this sheet here we're going to be doing the net payments here and we have the payment methods listed here so what we're going to do here so for example for PayPal we're doing right now all I want to do is just add these two together I just like using it in his Excel sheet especially for Shopify when they're really listed out like this you may not have to it depends on what this report looks like for you this is only a few lines you may just want to use a calculator just add them together but for something like this I just like exporting to excel but anyway we can do equals the sum of these two which are the two PayPal amounts so here we have the total PayPal amount collected and then again just copy and paste from this report into the template here so here we have the gross full PayPal amount collected so that's entered there now now we have the Shopify clearing account we go back to the same report here so first what I want to figure out is the the gross total Shopify amount collected so again we can just do equals the sum here we can take all the Shopify payments which starts here and goes down to here click that now here we have the total amount of Shopify account Ed again even though we're doing net I like to just copy and paste it into this report at this stage we're gonna we're gonna subtract out the fees later next we want to figure out the Shopify fees so this is actually a separate report as we gone over because in this report doesn't show the fees but in this report it does so here we have the payouts so here's all the Shopify payouts this is only Shopify payouts in throughout May so we ran this report already and again I just want to export this to Excel for this simple reason of being able to because it doesn't show the total fees in the bottom here of just being able to quickly add these fees together to find the total fees for for May and again we added that into the workflow here of opening up this payment report we're talking about or payouts I should say and then exporting to excel so here we have all the Shopify payouts with all the fees so I'm just going to do equals the sum of this whole column and then we've got the fees amount right here so again this is a Shopify fees for the payouts for for the month of May so we're going to copy and paste that into the Shopify fees and what I like to do because this is gross is go back click this hit minus paste again with command V and tab over and what that did is again that that took the gross Shopify clearing account collected and subtracted out the fees and then we added in the fees here because this is ultimately for the month this amount right here is what's ultimately going to be deposited into our bank account because Shopify is collecting those fees and then finally we have stripe so again what I always like to do is first put in the gross here and then subtract out the fees later so we're going back to this so again this is that report where it shows all the the payment type collected and these last four we see the stripe amounts here and the net payments so again we're going to do equal sum we're going to add in the last four that's the amount of stripe collected we're going to put that in here even though we're going to subtract out the fees later we open up the stripe report we already have open we have this balance summary already listed out for May and also too it's cool you can verify so we have this stripe payment clearing of 2503.83 which is the amount of the total listed out here in Shopify and then if you look at the stripe report it's the same exact amount that's that's put here so that's a good thing to verify as well but anyway we have the fees here of 92.71 in this report so we're going to go back we're going to copy that go back into our template and QuickBooks and we're going to put that in as the fees and then we're going to subtract that out from the stripe payment clearing account now you'll see and I know this a lot but I promise you once you start getting into this Rhythm and especially that's why I like having a checklist like this so essentially all you'll do is go into your checklist you'll duplicate some Shopify tabs you open up if you need to stripe or PayPal or whatever else you need you'll open up all the tabs run all the reports that are listed out exactly where to find them run all the reports export some stuff to excel then essentially all you're doing when you go into your template is you're just copying pasting things it's really it's really pretty straightforward you just kind of copy and paste and as you go running through these reports so that so far is the is the workflow here and you'll see here so we have the debits and credits total columns here you'll see that they match which they need to so that's good and that means that we're doing something right here and what I personally like to do I just like to I personally just like to delete all the descriptions you you obviously don't have to I like to delete them but I like to keep them in the template but then delete them before I save just to keep things clean but now what I think I'd like to do is move forward again and talk about kind of the talk about a little bit what we actually did and then more importantly talk about the back end what I like to call the back end of this workflow a bit and then after that I'll briefly finish with just with discussing cost of goods sold if you if you if you're doing cost of goods within Shopify what that looks like so let's go back and look I'm just going to create another tab here in QuickBooks Online let's look at the what we actually just did there because again I think it's really important to actually understand what you're doing and not just kind of copy and paste and things off of the video like this so we can look at the actual journal entry in one screen and I like looking at transaction journals to see like what the actual debits and credits are so at this stage what I like to do is think about what again what I like to call the the back end of the of the workflow so you want to see what's kind of what's open-ended so far and then you'll want to know whenever you're working with your bank feed of what you need to do and kind of the the second stage of this so let's just go by line by line down line by line here and see if anything's open-ended or closed out so first we have the the sales account I would consider just as closed out you entered in the Shopify sales for the month so that's there's nothing else you need to do in regards to this same with discounts given to refunds they're entered for what they were in Shopify there's nothing else you need to do here again shipping income that's closed out you entered in your shipping income for the month for Shopify that's all you need to do so here we see sales tax payable this is open-ended what you did whenever you entered this again this is a liability account you credit it you increased it so what you did is you said I collected 1572 in in tax sales tax for the month of May or last month whenever so I now have on my balance sheet a liability of 15.72 on my balance sheet of sales tax owed you'll see here looking at the journal entry the sales tax payable was credited for 15.72 so again that's a that's a liability on your balance sheet so what you need to know is whenever you go because what you'll eventually do is pay the sales tax right so what you need to know is that whenever you pay the sales tax out of your bank account or right or whatever you need to lower this liability so what I like to do is create Bank rules I'm not going to go over Bank rules in this video because I talked way too long in this topic but I have other videos regarding that but what you could you can create a bank rule if you like or make a note somewhere that you just know again that whenever this sales tax is paid that you're gonna debit this same exact liability account so you're just going to increase the liability and the sales entry portion of it whenever it's paid you're going to decrease the same liability this is where mistakes start to happen if you whenever that sales tax payments made you're going through your bank feed or whatever and you calculate it or you categorize it as a sales tax expense that's wrong because then you're increasing expenses but you're also increasing liability it's never going to decrease or if you decrease a sales tax liability that's different from this exact liability account that you're entering at this stage that's wrong as well you want to make sure and note here that whenever the sales tax is made you're debiting the same exact sales tax payable account that was included in the original sale entry now usually hear there's always back-end stuff here regarding the payment portion of the things here so we have Amazon payments clearing account we did we so we entered in the merchant fees so that's closed out and now all we need so but we what we have here is we have a debit to this Amazon payments clearing account which is going to show up in our balance sheet so what we need to do whenever these Amazon deposits are being made into our bank account we need to transfer those over or debit and credit that this Amazon payment clearing account over into the bank account so again A lot of times you just make this a bank rule of just saying whenever Amazon deposits funds to the bank account created as a transfer from Amazon deposits clearing account to the bank to the checking account regular bank account that's the back end here for the PayPal we didn't enter any fees yet so in this back end of the workflow we know that whenever These funds are being deposited into the PayPal account that we need we need to take out the gross PayPal clearing account amount from from this account and then also need to add in the PayPal Merchant fees the striping Shopify same thing whenever those particular Avenues get deposited into your bank account we need to categorize them as transfers from the clearing account to the bank account and the fees have already been accounted for so what you can do over time is once you've done this for a while and you go through these processes is start to look at these registers of these clearing accounts look at the Amazon clearing account Shopify whatever PayPal and make sure that they're eventually every once in a while going back down to zero because that's what should be happening you should be decreasing these clearing accounts throughout the month remember these transfers are being made and then bringing them back up to zero whenever this sale entry is made and again that's something that you can audit as you go throughout the month throughout the months so now that's kind of the just quick discussion of the back end of this workflow and again the main thing here is just is is fully understand what's open-ended here what's going to happen in the future and make sure they're linked together that's where this is a lot of that stage there is where I see a lot of mistakes happening that stage and also the stage here of figuring out the fees and what should actually be debited in this clearing account but now I'm going to just quickly discuss the cost of goods sold if you are so there's a few things that could be happening here let's if you're let's say first thing like for Shopify for example if you're selling like merchandise like t-shirts or whatever and it depends on your entire workflow of how you're handling costs of goods sold you could potentially whenever you're buying these things t-shirts or whatever you could at that time just be categorizing as cost of goods sold whenever you pay for it if that's the case then you don't want you don't have to be entering any cost of goods sold at this stage whenever you're earning in the sales however if you're entering it as an inventory asset account so let's say you have a Shopify whatever merchandise whatever inventory asset account your balance sheet and that's what you're increasing whenever you're making these purchases then at this stage whenever you're entering into sales like this is whenever you need to be calculating the and entering the cost of goods sold and and lowering that inventory asset account so first off obviously it's important to know which one you're doing and if this is needed but if it is needed I want to briefly go over in this video how you can do that and you can do it separately you can do a separate journal entry and just add it as another checklist to your to your workflow or you can even just add it to the same exact template that we've been using so let's go ahead and edit this because it's going to be the same where you're going to be doing is adding in two lines and it's going to be the same Deb in credit so you can very well add it to the same exact report and it might be nice to kind of review when you're entering in your cost of goods sold making sure that it makes sense with the sales you have 10 000 in sales with 12 000 in cost of goods sold then you could realize that something's wrong so what we're going to do here so first same thing make sure we have everything first in our chart of accounts so first if you're doing this already you'd most likely already have an inventory asset account that you're putting these purchases into so let's just go ahead and create one really quickly now and then same thing with cost of goods sold so we have we already have that's a good sword account in here and if you want to separate it out of course you can do that too so essentially what you're doing so let's first let's just go into the template again here is essentially what you would do so everything else be the same up to this point what you would do whenever you're entering in this template is you would add two more lines here so first you would add the costs a good sold line and then you're going to add in the inventory asset line and the cost of goods sold is going to be a debit inventory is going to be credit so the the debit is going to increase the cost of goods sold the credit to the inventory is going to lower your inventory if you find the report in Shopify that you need for this in this particular case we can go to analytics reports and then there's a cost of goods sold report right here so you can add that in the workflow just Shopify analytics reports we can just put cogs last month so you can add that in the workflow to open up that report and I'm not going to go over the report specifically because it's going to show too much of uh my client info it would be hard for me to blur it all out yeah but essentially you look at that report and you would find the dollar amount of the total cost of goods sold calculated in Shopify for that month and I'm not going to get into much of this but in order for this to work you need to make sure that your products and things in Shopify have the correct Associated cost for them at the very least as close as possible because you can you can bring this to