Guide · 7 min read
Shopify isn't accounting software. It collects money and reports sales — but tracking fees, inventory cost, sales tax, and real profit is on you. Here's the simplest setup that works.
Shopify Payments deposits net of fees. If you only record deposits, you'll under-deduct ~2.9–3.5% of revenue in processing fees. On $200k in sales that's $5,800 of missed deductions per year. Multiply by other apps (Klaviyo, Recharge, Shipstation) and a typical store leaves $10–20k in deductions on the table.
Connect a free business checking account to Shopify Payments as the deposit account. Never run store money through your personal account.
Shopify Admin → Finances → Payouts and Finances → Summary. Export CSV monthly. These reports break each deposit into sales, refunds, fees, and adjustments.
Every order: gross sale (positive), processing fee (negative). Not just the deposit. This is the single biggest fix for Shopify bookkeeping accuracy.
Log per-unit cost when you buy inventory. When Shopify reports a sale, the corresponding COGS becomes a deductible expense. Without this, you can't tell profitable SKUs from losers.
Move collected sales tax to a separate savings account weekly. Use Shopify Tax or TaxJar to determine where you owe; never spend collected tax.
Reconcile payouts, separate fees, track inventory cost, and see real margin per month.
Start freeNo. Shopify processes payments and gives you sales reports, but it isn't accounting software. It doesn't track cost of goods, inventory value, fees from non-Shopify payment processors, or expense categories. You still need a bookkeeping layer on top.
Shopify Payments deposits net of fees (around 2.9% + 30¢ for online cards). Always record the gross sale and the processing fee separately — not just the deposit — or you'll undercount deductible fees. Pull the Finances → Payouts report monthly.
Shopify can collect sales tax for you (Shopify Tax), but doesn't remit it — that's on you. Treat collected sales tax as a liability, not income. Many small Shopify stores get burned by spending sales tax money and owing it later.
Cash basis is simpler and works for most Shopify stores under $1M average revenue. If you hold significant inventory year-round, accrual (with inventory accounting) gives a more accurate picture and may be required — talk to a CPA at $500k+.
One dedicated business bank account connected to Shopify Payments. Download the monthly Finances Summary CSV. Categorize sales, refunds, fees, shipping income, and shipping cost separately. Tag COGS per SKU as inventory ships.