Should you track Shopify inventory in QuickBooks Online?

[@CourtneyHamlin-j8w]

Where is the spreadsheet?

[@carlmcguire2935]

A work around I use in QB: I run a monthly Shopify "Sell Through Rate by Product" to get products sold and quantity. I create a QB invoice and list the items sold and quantity. I then zero out the pricing. This invoice will then make the inventory adjustments and item cost of goods sold. It takes me about one hour per month to run and list the reports. I staple the reports together to create a paper trail.

[@5MinuteBookkeeping]

That's nice! Thanks for sharing your workaround. I assume you would need to track all the items in QB and enter all purchases in QB also so that it can track the proper cost per item.

[@MichaelMelo-m3f]

This is so helpful! Instant subscribe. Thank you for the thorough and clear explanation.

[@5MinuteBookkeeping]

Thank you for subscribing.

[@muntazirhussain8284]

Where’s the spreadsheet

[@catwomanva]

I can't wait for the video of how to track inventory in journal entries. I'm a new startup and still vetting apps that will handle the shipping and inventory management aspect. So the app would provide the reports, I just need to know where/how to put it in QBO. Thanks for all the helpful information! You've made this whole bookkeeping ordeal make my head hurt less. LOL

[@5MinuteBookkeeping]

Glad to be of help!

[@somenmondal2964]

Thanks for your important topic. I want to know in detail, How to tracing inventory, Tax return, VAT return, and Yearly closing.

[@5MinuteBookkeeping]

Glad you found it helpful. Watch for my future videos to learn more. However, I do not talk about VAT tax since we don't have VAT tax in the US.

[@HectorGarciaCPA]

Important topic! Great content

[@5MinuteBookkeeping]

Thank you Hector!

[@mitchellclark4890]

I believe Shopify added enhanced reporting capabilities in the second half of 2019 that allows users to track inventory at the SKU level including cost per unit. Are you aware of this new feature and have any recommendations on how to use effectively? We are struggling to try to quantify the impact of quantity adjustments entered into Shopify that need to be recorded in QuickBooks via a journal entry. I do not believe they have a report to capture this information as of today.

[@5MinuteBookkeeping]

I'm not aware nor do I find in Shopify's help pages a functionality to track inventory cost - only inventory quantity. Let me know if you find something specific about this. Not sure if you're using a software app to track inventory quantities but it is a challenge with Shopify. We have clients who use Ecomdash and they have to manually update Ecomdash for sales returns.

[@peaceisnice]

Good clear info. Thank you!

[@5MinuteBookkeeping]

You're welcome!

[@1975muse]

Is QB desktop compatible with Shopify sellers?

[@5MinuteBookkeeping]

Any version of QB (desktop or Online) is compatible with Shopify if you follow the best practices that I teach in my videos.

[@nickhorvath26]

Did shopify not allow you to enter the cost 2 years ago? I guess this is where I’m confused. On how to record these transactions. Example: Purchase a $5 t shirt to sell. Categorize as inventory from my Bank. Get t shirt screen printed -> is this inventory or cogs? I originally was breaking down the invoice from my screen printer and was breaking down the price per design. So for this t-shirt the $5 + $2 for screen print = $7 Cost So when sold I was deducting $7 from inventory and $7 to cost of goods sold. Should I be Making t shirt purchase as inventory Screen print COGS Make t shirt cost $5. Which way is correct?

[@5MinuteBookkeeping]

The cost of the inventory should include the T-shirt and the screen printing. In your scenario, the $7 is recorded initially to inventory.

[@xbiboy23]

Wait I don't get it why are you not recommending to use the built in inventory system of quickbooks? what if we use it for the purchase order and the stocks coming from it we update it on a daily basis similar with the ecommerce, will that work? I've been looking for tutorials about this but it seems no one is doing item by item inventory. we've been using excel and 3rd party apps and its really hard to track, is there a work around for the built in inventory for quickbooks?

[@5MinuteBookkeeping]

I don't recommend using inventory items in QBO because you will manually have to enter a sales receipt for every sale made in Shopify to QBO. The other alternative would be to do a manual inventory adjustment on a regular basis. That's a very manual process and I don't consider it to be a best practice. But, it is an alternative.

[@elizabethjones5700]

@@5MinuteBookkeeping I have a new client who integrated with QuickBooks Bridge and it automatically creates a sales receipt in detail with every transaction. The sales receipt is added to a Shopify Holding account. When a payout is done, the integration creates a journal entry that moves the amount out of the shopify holding account into the bank account, less the shopify fee and any other fees. They came to me because they had messed up the integration pretty badly. I have cleaned it up and it is working seamlessly, BUT they added the inventory tracking feature in the integration. This flows the information for the inventory over into QBO - I think I am going to have them track quantities in Shopify while holding the cost for the inventory items in QBO so when the sales receipts are made, the cost goes to CoGS as it should. Does this sound efficient?

[@Jamarqusmalikii]

@@elizabethjones5700 good question. I would like to know myself.

[@QRSupplyOffice]

Is this still an accurate video? I was told Shopify tracks inventory AND cost.

[@5MinuteBookkeeping]

Shopify "tracks" inventory and cost. However, it is not an inventory management system. The reporting from Shopify is also not very good from an accounting standpoint.