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How to Connect Shopify to Accounting Software

Manual bookkeeping wastes hours every week and introduces errors. Connecting your Shopify store to accounting software automates the flow of financial data, giving you accurate books with minimal effort.

Flex Commerce Team
•Updated February 2024

Why Integrate Accounting

Many Shopify merchants start by manually exporting orders and entering them into their accounting software. This works when you have a handful of orders per day, but quickly becomes unsustainable. A proper integration eliminates this manual work entirely.

Beyond time savings, integration improves accuracy. Manual data entry inevitably introduces errors, whether from typos, missed orders, or incorrect categorisation. Automated systems do not make these mistakes.

Benefits of Accounting Integration

  • •Save hours weekly: No more manual order entry or export/import cycles
  • •Real-time visibility: See your financial position at any time, not just month-end
  • •Accurate VAT: Tax rates sync correctly, simplifying VAT returns
  • •Better reporting: Understand profitability by product, channel, or period
  • •Easier audits: Clean, connected records make accountant review straightforward

For most growing businesses, the question is not whether to integrate, but how to do it correctly. A poorly configured integration creates more problems than it solves.

Choosing Accounting Software

If you do not already have accounting software, or are considering switching, here is how the main options compare for Shopify merchants:

Xero

UK Favourite

Cloud-based, user-friendly, and popular with UK businesses. Excellent Shopify integration options and strong multi-currency support.

Best for: Small to medium businesses, UK-based companies, those wanting simplicity

Pricing: From £15/month

QuickBooks Online

US Standard

Intuit's cloud accounting solution with native Shopify connector. Well-established with extensive third-party integrations.

Best for: Businesses with US presence, those already using Intuit products

Pricing: From £12/month

Sage Business Cloud

Enterprise Ready

Traditional accounting vendor with cloud offerings. Good for businesses needing more advanced features or using other Sage products.

Best for: Larger businesses, complex requirements, those already on Sage

Pricing: From £12/month

FreeAgent

Freelancer Friendly

Designed for freelancers and small businesses. Simple interface with good UK tax compliance features.

Best for: Sole traders, very small businesses, those wanting simplicity

Pricing: From £19/month (free with some banks)

Pro Tip

Before choosing, ask your accountant what they prefer. Most accountants have expertise in specific platforms and can work more efficiently if you are on software they know well.

Integration Methods

There are several ways to connect Shopify with your accounting software. The best method depends on your volume, complexity, and budget.

Native Connectors

Both Xero and QuickBooks offer official Shopify connectors. These are free or low-cost and handle basic sync requirements well.

Pros: Simple setup, low cost, officially supported

Cons: Limited customisation, basic features only

Third-Party Integration Apps

Apps like A2X, Synder, or Bookkeep offer more sophisticated sync with better handling of fees, refunds, and multi-currency.

Pros: Better data mapping, handles complexity, good support

Cons: Monthly cost (typically £15 to £50), another vendor to manage

Custom Integration

Built specifically for your needs using Shopify and accounting APIs. Full control over data mapping and timing.

Pros: Complete flexibility, handles any requirement

Cons: Higher upfront cost, requires maintenance

Which Method to Choose

  • •Under 100 orders/month: Native connector is usually sufficient
  • •100 to 1,000 orders/month: Third-party app recommended for better accuracy
  • •Over 1,000 orders/month: Custom integration often makes sense
  • •Multi-currency or complex fees: Use A2X or similar specialist app

Setting Up Xero

Xero is the most popular accounting software among our UK clients. Here is how to set up a proper Shopify integration:

Using the Native Xero Connector

  1. 1
    Install the Xero app from Shopify App Store

    Search for the official Xero app and install it on your store.

  2. 2
    Connect your Xero account

    Authorise the connection and select your Xero organisation.

  3. 3
    Map your accounts

    Configure which Xero accounts receive sales, shipping, discounts, and fees.

  4. 4
    Set tax rates

    Map Shopify tax rates to Xero tax rates for correct VAT handling.

  5. 5
    Configure sync settings

    Choose when orders sync (daily, hourly) and what data to include.

Using A2X for Xero

A2X is recommended for stores with significant volume or complexity. It handles payment processing fees, refunds, and multi-currency situations more accurately than the native connector.

A2X Account Mapping Example

Revenue Accounts:
  Product Sales → Sales (4000)
  Shipping Income → Shipping Income (4100)
  Gift Cards Sold → Gift Card Liability (2200)

Expense Accounts:
  Shopify Fees → Payment Processing Fees (6100)
  Discounts → Discounts Given (4900)
  Refunds → Refunds (4950)

Asset Accounts:
  Shopify Payouts → Shopify Clearing Account (1200)

Pro Tip

Create a Shopify clearing account in Xero. This holds funds between when orders are placed and when Shopify pays you. It makes bank reconciliation much easier.

Setting Up QuickBooks

QuickBooks Online has a native Shopify integration that works well for basic needs. For more complex requirements, third-party apps like Synder or A2X provide better control.

Native QuickBooks Integration

  1. 1
    Access the Shopify connector in QuickBooks

    Go to Apps in QuickBooks and search for Shopify, or use the Shopify admin.

  2. 2
    Connect and authorise

    Sign in to your Shopify store and grant QuickBooks access.

  3. 3
    Configure account mapping

    Map sales, fees, and other transactions to appropriate QuickBooks accounts.

  4. 4
    Set up product sync

    Decide whether to sync products as individual items or summarised by category.

  5. 5
    Run initial sync

    Start with a small date range to test, then expand once verified.

QuickBooks Specific Considerations

  • •Sales receipts vs invoices: Use sales receipts for B2C orders, invoices for B2B
  • •Customer creation: Decide whether to create individual customers or use a generic Shopify customer
  • •Class tracking: Use classes to separate online vs retail or by product category
  • •Location tracking: If using multiple locations, map to QuickBooks locations

Data Mapping Best Practices

Correct data mapping ensures your books accurately reflect what happened in Shopify. Here are the key decisions to get right:

Revenue Recognition

When should revenue be recorded? Most businesses use one of these approaches:

  • •Order date: Revenue recorded when order is placed (accrual basis)
  • •Payment date: Revenue recorded when payment is received (cash basis)
  • •Fulfilment date: Revenue recorded when order ships (conservative)

Handling Fees

Payment processing fees should be recorded accurately:

  • ✓Record Shopify Payments fees as an expense
  • ✓Record PayPal fees separately if using PayPal
  • ✓Do not net fees against revenue

Discounts and Refunds

Track these separately to understand their impact:

  • •Discounts: Record as contra-revenue or a separate discount account
  • •Refunds: Record as reduction of revenue in the period issued
  • •Partial refunds: Allocate proportionally across line items

Gift Cards

Gift cards require special treatment:

  • •When sold: Record as a liability, not revenue
  • •When redeemed: Reduce liability and record as revenue
  • •Breakage: Unredeemed balances eventually become revenue

Reconciliation

Even with automated integration, regular reconciliation is essential. This catches sync errors, configuration issues, and edge cases that the integration might not handle correctly.

Monthly Reconciliation Process

  1. 1
    Compare gross sales

    Shopify Analytics total vs accounting software sales account. Should match exactly.

  2. 2
    Verify refunds

    Total refunds in Shopify should match refund account in accounting software.

  3. 3
    Check payment processing fees

    Compare Shopify Payments fees to expense account. Also verify any PayPal fees.

  4. 4
    Reconcile payouts to bank

    Shopify payouts should match deposits in your bank account.

  5. 5
    Review VAT

    VAT collected in Shopify should match VAT liability in accounting software.

Common Reconciliation Issues

  • !Timing differences: Orders placed vs orders paid vs orders synced
  • !Currency conversion: Exchange rate differences between systems
  • !Rounding: Small differences from rounding calculations
  • !Sync failures: Orders that failed to sync and were not retried

Pro Tip

Create a reconciliation spreadsheet template. Each month, fill in the numbers from both systems. This documentation is valuable for audits and helps identify patterns in discrepancies.

Next Steps

Ready to connect your Shopify store to accounting software? Here is your action plan:

  1. 1
    Choose your accounting software

    If not already decided, consult with your accountant and evaluate options.

  2. 2
    Set up your chart of accounts

    Ensure you have the right accounts for sales, fees, refunds, and other Shopify data.

  3. 3
    Install and configure the integration

    Follow the setup guides above for your chosen integration method.

  4. 4
    Test with a small period

    Sync a week of orders first, verify accuracy, then expand.

Related Resources

ERP Integration Guide

For larger system integrations

Integrate Shopify with Sage

Sync orders and inventory with Sage

Need Accounting Integration Help?

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