Why you should be using Clearing Accounts for your Shopify bookkeeping

[@ecombalance3501]

Great video! It is really important to make sure that Shopify sellers don't just record all transactions but know how to record them correctly. Keeping financial records detailed and accurate leads to a stress-free tax season!

[@5MinuteBookkeeping]

Exactly! Thanks for watching.

[@dianaclark6875]

@@5MinuteBookkeeping I'm quite mixed up. In the banking window, QBO shows like 5 times the balance as what our actual bank account shows. Also, when a sale is created in Shopify (for website order) that individual sale filters into QBO and I wonder if at that time it's recorded as income. ? Another thing is, what account do you give shopify 'transfers' in the banking review window. I was putting them to 'Sales from Product Income', but I thought that was why showing such a high QBO 'bank balance', but when I created a Shopify Clearing account (bank?) and allocated to that and just recorded that transfer as a 'transfer', that didn't work either to balance. I'm sure I need to do the step where I clear out the Shopify Clearing, but not sure where to do that. I'm more of a creative, so this all doesn't come naturally to me at all.

[@aryanasmith4426]

Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This KZbin channel is really very informative and effective.

[@5MinuteBookkeeping]

Thank you.

[@Ducttapeanddenim]

Thanks so much! I sell on Etsy, Amazon, eBay, and Shopify and Shopify is by far the most confusing. I really want to figure it out especially because I want to pivot my business next year to provide bookkeeping for other online small businesses. I need to check out your courses. Sounds like we would be a good fit. Thanks again!

[@5MinuteBookkeeping]

You're welcome!

[@manzoorahmed5629]

Nice Information, thank you so much ♥

[@5MinuteBookkeeping]

You're most welcome

[@user-cd4bs7yv7n]

Great information. I struggle with the cash payments on shopify and the clearing account.

[@5MinuteBookkeeping]

Glad it was helpful!

[@RachelZwelling]

This is great! Do you have any videos on how to reconcile your clearing accounts?

[@5MinuteBookkeeping]

Reconciling clearing accounts is a more complex process. I do not have videos on how to reconcile on my KZbin channel. But, I do teach the full Shopify bookkeeping process, including reconciling clearing accounts in my online course, Shopify Bookkeeping Method here courses.5mbacademy.com/courses/shopify-bookkeeping-method

[@bn1cgitn]

What type of account is the Shopify Manual Gateway? And are there supposed to be deposits in the bank feed with the memo "Shopify manual?" Thanks!!

[@5MinuteBookkeeping]

The Shopify manual gateway is typically used in Shopify when a sale is entered in Shopify but payment is received outside of Shopify. Many B2C sellers user the Manual Gateway - they enter sales in Shopify but the customer pays them outside of Shopify.

[@rachaelfarris644]

When looking at deposits in my bank account - and the corresponding payouts in Shopify - how do I record the fees? Do I categorize the entire net amount to the clearing account, and then record fees later?

[@5MinuteBookkeeping]

Hi. Take a look at this video where I explain how to record the fees kzbin.info/www/bejne/gpuQmqFuhLd2iLM&pp=gAQBiAQB

[@anferliner]

Hi. I’m confused on how to match PayPal income. Because on Shopify Payments is so easy to match, as I match their payments to my bank account. However on PayPal “bank” I get deposita from customers individually and I set them as Deposit to PayPal Clearing. What else would be the next step so the clearing gets closer to Zero.

[@5MinuteBookkeeping]

We have stopped using the PayPal bank feed in QBO because it's too cumbersome and it doesn't always pull all the transactions from Shopify. We enter one summarized entry per month in QBO using the PayPal monthly statement. We still use the clearing account but keep in mind that the clearing account balance will likely never be 0 because of timing differences.

[@CarmenRodriguez-qj4mj]

Can you please tell me how posting on desktop version a chrismas club for employee

[@5MinuteBookkeeping]

Hi Carmen. I do not work with QuickBooks Desktop. You may want to search for videos by Hector Garcia CPA. He specializes in QuickBooks Desktop version.

[@CarmenRodriguez-qj4mj]

@@5MinuteBookkeeping thanks

[@jun_bungay]

Hi, how do you record shopify bill?

[@5MinuteBookkeeping]

That's a great question, Diosdado. You have to get the bill from Shopify and categorize the expenses based on whether the fees are for the Shopify platform, apps, shipping, or other expenses. For the Shopify platform fees and app fees, I categorize them to Software Expense.