Did you know that 1.75 million merchants sell via the Shopify platform and a whopping 3.76 million live websites use Shopify all over the world? In fact, Shopify recently reported record-setting Black Friday-Cyber Monday weekend sales of $6.3 billion globally.
It is easy to see why. With a web domain and payment provider, just about anyone can open a Shopify store in minutes — even those of us who aren’t exactly inventory or invoice savvy. Unfortunately, it’s easy to become so overwhelmed by the number of orders coming through on Shopify that other elements of your eCommerce business, like cash flow and accounts payable, fall to the wayside.
Between manual data entry and tedious reporting, we recommend that you connect your Shopify eCommerce platform with Xero, the cloud-based accounting software, to save you both time and money from the get-go.
Being able to track sales, profitability, and cash flow reliably ensures you can make the right decisions for your business and efficiently manage your company.
It also forces you to set up systems and places for managing various payment gateways, recognizing merchant fees, and reconciling payouts.
Fortunately, you can integrate these two popular software platforms to automate many of your accounting and bookkeeping tasks with your sales to save yourself time and reduce the potential for data entry errors.
In this post, we’re sharing how and why you should integrate Shopify and Xero.
Bean Ninjas – Shopify Integration with Xero
Should you use Shopify or Shopify Plus?
Shopify is primarily used by small to medium-sized eCommerce businesses, whereas Shopify Plus is often better suited for high-volume sellers that need more functionality and are paying high monthly merchant fees..
In comparison to the upwards of a million merchants selling on Spotify, just under 12,000 merchants currently operate on Shopify Plus, their enterprise product. Shopify Plus users are typically high-volume, multi-channel sellers with multiple country-specific or wholesale websites and minimum annual revenues in excess off $2 million. Despite a drastically smaller user base, Shopify Plus currently has quite an impressive roster.
Food and beverage retailers among the likes of Kraft Heinz Co, Anheuser-Busch InBev, PepsiCo Inc, and Nestlé operate on Shopify Plus. Large-scale athletic brands like Gymshark and Fitbit, plus legacy hospitality brands like Hyatt Hotels Corp. also chose Shopify Plus. Just about every Kardashian — including KKW Beauty, Kylie Cosmetics, and Good American — is a Shopify Plus customer as well.
A big difference at play is cost, with monthly Shopify plans ranging from USD $29 to $299 and monthly Shopify Plus starting at USD $2,000.
Aside from the steep price tag, Shopify and Shopify Plus operate in similar ways. Both variations of the platform utilize the same editor, same dashboard, and same help center. However, Shopify Plus is equipped with additional customization abilities, such as for shipping, that give Shopify Plus users greater control over their customer experiences and the look and feel of their online store.
Where Shopify plans offer flat rates, live calculated rates, and free shipping, Shopify Plus allows users to alter shipping options based on minimum order value, cart contents, and even wholesale tiers. Shopify Plus users can also edit their checkout page, which Shopify does not currently support, as well customize payment methods and tailor the homepage to individual customers.
In other words, Shopify Plus has all of the fan-favorite features of Shopify but with even greater personalization and back-end power. Shopify Plus stores can accept more than 10,000 orders per minute and run multiple websites via one management dashboard. The addition of a dedicated launch manager to write lines of custom code is another major Shopify Plus bonus.
Why should you integrate Shopify and Xero?
Though Shopify is a powerful retail tool, its accounting abilities are limited. Integrating Shopify with Xero allows each order to be synced on an ongoing basis, eliminating the need to manually input them into an accounting system. This process significantly reduces the risk of human error, such as duplicating entries or making adjustments for returns.
Integrating Shopify and Xero allows business owners to view all sales and returns in one simple dashboard, as well as compare performance between multiple sales channels. This integration is also compatible with tracked inventory, so owners can synchronize order invoices with a reduction of tracked item stock, and match invoices to existing customer records.
Enhanced visibility between areas of your Shopify business makes reporting and analysis dramatically simpler, and even imports fees from other payment gateways. Plus, owners can seamlessly manage tax rates for multiple countries and currencies, with comprehensive tax support for international sales from North America to New Zealand and beyond.
Pro Tip: Looking for more Xero integrations? Check out our guide.
What is the Xero Shopify integration?
If you’re looking to integrate Shopify with Xero, there is a direct integration that works well, especially for new or lower volume sellers. (If the business has high volume sales, you may want to look into other integrations. We’ll cover those later in this post!)
Once you connect the two systems, your Shopify sales will populate in Xero and you’ll be able to easily reconcile transactions and receive a daily summary invoice of sales and fees. To start the integration process, your Shopify account must be up to date.
Here are three simple steps to easily integrate Xero and Shopify, no third-party app necessary.
Create or login to a Xero account
If it wasn’t obvious enough, you will need a Xero account to integrate the software with Shopify.. For current users, go ahead and sign in to your account. If you don’t have a Xero account, head to the Xero website to sign up for a 30-day free trial. With no credit card required and an option to cancel any time, you can learn if you prefer the Xero integration without needing to commit to an annual plan.
A Xero account is available at three price tiers, each charged separately from your Shopify or Shopify Plus subscription. The Early plan is $12 per month and best suited for new businesses. The Growing plan is $34 per month and ideal for small businesses with recurring monthly sales. The Established plan is $65 per month and has advanced multi-currency features.
Once you create your account, confirm your account email to begin to activate your Xero trial. Next, input a password and select ‘Activate Your Account.’
From here, input your business details, including your business name, industry, and employee status. If you have QuickBooks, you can easily import all of these details for free. Once the details are in, you can choose to make your purchase then and there or experience the free trial.
Download the Xero Shopify app
Once you’re signed in to your Xero account, you can download the Xero and Shopify integration from the Xero app store. In the Xero marketplace, begin the download by selecting the ‘Get this app.’
The website will prompt your Xero login details to initiate the integration download.
Enter your login details to authorize the integration
Once logged in, a Shopify Integration by Xero page will load inside of your Xero dashboard. Click the ‘Connect app’ button.
A ‘Connect Shopify to Xero’ pop-up will appear for you to enter your Shopify store address. Once inputted, press connect to integrate Xero with Shopify.
After pressing ‘Connect,’ the integration will launch to automatically import Shopify sales transactions into Xero. To view sales and fees daily, toggle to the top Business or Accounting tabs to track cash in and out and more.
How to integrate Shopify and Xero for businesses that have high volume sales (i.e. over 10 sales a day)
Here are three of the most popular ways to integrate Shopify and Xero for higher volume merchants.
A2X posts your Shopify sales automatically to Xero. It monitors your store to detect payouts so it can post your sales and fees automatically to your Xero general ledger. Another intersting feature is that it also reconciles Shopify payouts and helps determine fees, refunds, and any adjustments.
A2X does this via accrual accounting. This approach can help high volume sellers that don’t need detailed sales information in their accounting program and gives an accurate picture of your cash flow.
In addition, a2x provides summarized statements. These statements are then matched to each Shopify payout summary. This process ensures an accurate reconciliation, so businesses get a clear picture of their profit and loss. a2x also works across multiple stores, currencies, markets, and tax rates. It will work with various payment types such as PayPal and Afterpay.
You will be able to connect a2x with Shopify and Xero through your a2x account. You will need to log into your a2x account or start a free trial to join.
To connect, simply click the green ‘Connect with Shopify’ button.
Then, enter the name of the Shopify store you want to connect, and click the orange ‘Connect’ button. You’ll then need to give a2x permission to access your store.
Now that you have connected a2x with your Shopify store, you’ll be automatically returned to your a2x account. Your payouts will start to import. The amount of time will vary based on the size of your store. Please note if you are using the free trial only the most recent three payouts will generate. You will need to convert to a paid version to access previous payout information. You can generate historical payout information as far back as needed by updating the appropriate settings.
From there, it is time to sync your new a2x account to Xero. To do this, click on the green ‘Connect to Xero’ button in your account. You’ll receive a series of prompts to complete the process. Then, you will be automatically redirected to a2x.
Pro Tip: You can check whether you connected to Xero successfully in the ‘Connections’ section of your a2x dashboard.
2. Bold Commerce
Here’s an alternative method to connect Shopify to Xero. Bold Commerce automatically exports your Shopify orders in detail daily to Xero. Each exported order will include all line items, taxes, and shipping.
This eCommerce tool’s daily transaction method can be helpful for smaller Shopify stores. They also offer a free basic plan for businesses that have 30 or fewer orders per month. We do not recommend this integration if your store is doing a high volume of orders as can become very time consuming matching the individual orders to each payout in your bank account.
It also allows for detailed reporting. You can record refunds, discounts, and payment fees separately if you are using Shopify Payments. You also can export orders into individual invoices and link your inventory to your product report.
To integrate Xero and Shopify with Bold Commerce, you will need to download the Bold Xero Integration app. You will receive a series of prompts to help you connect the programs.
The Zapier to Xero integration lets you automatically send information between your Shopify store and Xero. You can use preset workflows such as creating Xero invoices from your Shopify orders or create custom workflows. This integration also posts to Xero by sending over each individual order as a separate invoice.
You can connect Shopify with Xero using Zapier in a few steps. You’ll be prompted to sign in and authenticate Shopify and Xero.
You will then pick the app you want to be selected as the trigger to start your automation process.
Next, you’ll choose the resulting action you want from the other app.
Finally, you’ll select the data you would like to send from one app to the other.
When sales start rolling in on Shopify, you don’t want to be in the dark on crucial financial metrics like cash flow. Integrate Xero with Shopify today to streamline your accounting and bookkeeping efforts and supercharge your online store for better business all around.
Looking for additional information on how to integrate Shopify or other eCommerce platforms and marketplaces within Xero? We can help. Schedule a free call with a Bean Ninjas team member today.