With so many orders, payment gateways, and bank settlements to keep track of, it’s no wonder that managing your finances can often be a headache.
That’s where A2X comes in.
A2X is a powerful accounting tool that can help automate some of the most tedious parts of pulling in transaction data across all the channels you sell on.
In this blog post, we’ll dive into why Shopify merchants should use A2X as part of their accounting tech stack.
What is A2X?
Founded in 2014, A2X makes it easy to summarize and reconcile your sales across channels in QuickBooks or Xero.
- More than 12,000 eCommerce businesses are using this platform to process 25MM orders per month, totallying over 1.1 billion orders processed since 2014.
- At a high-level here’s how it works.
- -When a customer places an order through a sales channel, like Shopify, Shopify will capture all the payment details associated with the order.
- -Then, all orders processed through Shopify Payments will usually be paid to the seller once daily.
- -Shopify will generate a file each time it pays a settlement to a seller’s bank account to detail the total payment amount.
- -Shopify has a Finance Summary Report that can be used to see which transactions occurred in any given period.
- -Each time a seller is paid, A2X pulls the corresponding transactions — including the sales, fees, refunds, and value-added tax (VAT) information — and creates a summarized entry to align with the seller’s bookkeeping preferences.
- -The summary is then posted/sent to the seller’s accounting software, like Xero, where it can be reconciled in one click once the payment arrives in the seller’s bank account.
Who should use A2X?
When you are searching for greater visibility into your sales settlement deposits, understanding of platform changes, or start selling on multiple channels (not just direct on Shopify), you should consider using A2X. A2X simplifies the accounting process.
4 benefits of using A2X
Here are some specific use cases for Shopify merchants.
Get simplified financial summaries
Many sales channels, like Amazon, provide export files that aren’t helpful. This requires a lot of manual work to get the data in a format where you can review and analyze it.
A2X fixes that by grouping all transactions into categories and time periods. They also provide all of the fees, refunds, adjustments, and appropriate tax rules.
You can also quickly fetch historical data.
Use accrual accounting
Accrual accounting is important for tax and inventory reporting. Since A2X syncs with both Quickbooks and Xero along with most major sales channels, this accounting method is easier for bookkeepers and accountants. Accrual accounting for inventory will give you greater insights into your monthly gross margins by aligning the timing of sales with the cost of goods matched against them.
A2X is also customizable, which means you and your accountant can modify account codes, transaction categories, and tax rules just to name a few things.
Automate bank reconciliation
Reconciling your bank and credit card statements is an accounting best practice. A2X makes this process easier since you can catch any inaccuracies and errors.
Have more confidence in business decision-making
As entrepreneurs, you have to make a lot of decisions with incomplete information. The least you can do is to make some decisions a little easier by having accurate financial data in an easily readable format. You don’t have to question if your numbers are correct.
You can also compare sales data across different sales channels and time periods.
How to set up A2X and Shopify
If you’re new to eCommerce accounting or don’t have much free time, it may be helpful to have your eCommerce accounting firm, like Bean Ninjas, set up A2X for you.
Overall, this can provide you with peace of mind, knowing that your accounting processes are being handled by an eCommerce accounting expert. We’ll ensure that everything is set up correctly and that your accounts are reconciled properly. Schedule a free call with a member of our team here.
