Shopify Bookkeeping: Payouts, Fees, COGS and the Right App

Shopify bookkeeping means recording what each payout is made of: gross sales, refunds, payment processing fees and the tax you collected, besides the amount that lands in your bank account. Add your product costs so you can see cost of goods sold, keep collected sales tax or VAT apart from revenue, and close the books monthly. A connector app can do the posting for you by sending payout summaries to QuickBooks Online or Xero.

Shopify facts come from the Help Center pages on profit reports and Shopify Payments, read on October 23, 2026; app prices are as their App Store listings showed them that day. This is a bookkeeping method, not tax advice: check the tax side with an accountant in your country.

Why Shopify deposits never match your sales

Shopify Payments does not send you each sale. It collects orders over a period, takes off refunds and fees, and pays out the rest. If you book the deposit as “sales”, your revenue is understated by the fees and refunds, and the fees never show up as an expense.

An example payout (illustrative numbers):

The $1,500 itself contains $100 of sales tax you collected for the state and $60 of shipping charged. Your bookkeeping has to show all of these lines, even though the bank shows one.

Shopify bookkeeping step by step

1. Use a separate bank account for the store. Payouts, supplier payments and app subscriptions are much easier to match when nothing personal runs through the account.
2. Set up a clearing account in your accounting software, often called “Shopify clearing”. Every order goes in, every payout goes out, and the balance should come back to zero once the payout has arrived.
3. Record the orders and the payout through the clearing account. For the example above:
   • Orders: debit Shopify clearing $1,500.00; credit sales revenue $1,340.00, shipping income $60.00 and sales tax payable $100.00 (a liability account).
   • Payout: debit refunds $80.00, merchant fees $44.10 and bank $1,375.90; credit Shopify clearing $1,500.00.
   • The clearing account is back at zero once the payout is booked.
4. Match the deposit to that payout in the bank feed. One payout, one deposit.
5. Record the cost of goods sold. Enter a Cost per item on every product (Products > open the product > Price section > Cost per item). Each variant needs its own cost. Shopify’s profit reports then show cost, gross margin and gross profit per product and variant.
6. Keep tax separate. Sales tax or VAT you collected belongs to the tax office. Book it to a liability account and pay it from there.
7. Book the other income and costs that never pass through payouts: PayPal or other gateway payouts, app subscriptions and the Shopify plan on your bill, shipping labels, supplier invoices.
8. Close the month. Clearing account at zero, bank reconciled, inventory value checked against the cost data, sales tax total checked against the tax Shopify collected for the month.

Where to find the numbers in your Shopify admin

• Analytics > Reports holds the report list. Filter the Category to Profit Margin for the profit reports: Gross profit by product, Gross profit by product variant, Gross profit by POS location, Average profit margin by market and Profit margin by order.
• Cost per item sits in the Price section of each product. Shopify shows the margin right there: with a price of $50 and a cost of $30, the margin is 40%.
• The Shopify Payments activity report gives a reconciled breakdown of your Shopify Payments balance activity, fees and payouts. It is the report to compare against each deposit.
• Sidekick can answer profit questions too, if costs are recorded. Shopify’s example prompt: “Show gross profit by product variant for the last 90 days.”

Two details trip up reports. Profit is only reported for products and variants that had a cost recorded at the time they were sold, so adding costs today does not fix last year’s margins. Discounts and refunds also change the reported margin, so it will differ from the margin on the product page.

Adding costs to an existing catalog is quickest in bulk. Shopify suggests the bulk editor or a CSV import, so all products get a cost at the same time.

Shopify bookkeeping apps compared

Connector apps read your Shopify payouts and post them to your accounting software as summaries, so you do not type the split entry above by hand. Two of them, A2X (the one with the most reviews among accounting connectors we looked at) and Link My Books, as their listings showed them on October 23, 2026:

Both charge by monthly orders, so check your busiest month. Connecting either to your books is covered in our guide to QuickBooks and Xero with Shopify.

Do it yourself or hire a bookkeeper

A spreadsheet and one connector work for a single-channel store selling in one currency. Bring in a bookkeeper or accountant when: The running a store hub has the other money and admin topics.

• You sell on several channels (your store, a marketplace, POS) with separate payouts.
• You sell in several currencies, so payouts and sales are in different amounts.
• You carry real inventory and need its value on the balance sheet as well as the cost of what sold.
• You collect sales tax in several US states, or EU VAT under the One-Stop Shop. Our guide to Shopify sales tax explains the obligations.

Four bookkeeping errors that distort your profit

1. Booking deposits as revenue. Fees and refunds disappear from your books, and so does the sales tax you owe.
2. Treating gift card sales as revenue on the day they sell. A gift card is a promise to deliver goods later; accountants usually book it as a liability until it is redeemed. Shopify’s cost per item does not apply to gift card products either.
3. Forgetting the costs on your Shopify bill (plan, apps, labels). They are real expenses; our breakdown of Shopify fees lists them.
4. Adding product costs after the sales. Profit reports only use the cost recorded at the time of sale.

Frequently asked questions

Does Shopify do bookkeeping for you? Shopify records orders, payouts, fees and taxes and gives you reports on them, including profit reports when product costs are entered. It does not keep a general ledger, so you still need accounting software or a bookkeeper.

Which accounting software works with Shopify? QuickBooks Online and Xero are supported by both connectors compared above, and A2X’s listing also names Sage and NetSuite. The connector posts Shopify payouts to the accounting software as summaries.

How do I record Shopify payouts? Book the orders into a clearing account (sales, shipping income and collected tax as credits), then book the payout out of it (refunds and fees as debits, and the bank deposit for the net amount). The clearing account returns to zero when the payout arrives.

Are gift card sales revenue? Most accountants treat a sold gift card as a liability until the customer redeems it, and record revenue at redemption. Ask your accountant how your country’s rules apply.