Shopify Bookkeeping Guide for 2025

What pops into your mind when you think about Shopify? A sleek online store? A lineup of amazing products? Places your business could go? Or just those sweet sales notifications?

It’s probably one of these — or maybe all of them.

But, let’s not sugarcoat it — behind every sale, number, and profit margin lies the part that no one wants to deal with: bookkeeping. And you can’t ignore it at any cost. 

The consequences of not having a proper bookkeeping set up in place are brutal.

Now, we’re not here to bore you with why bookkeeping is essential as a Shopify store owner. You already know that. It’s practically ingrained in your entrepreneurial DNA. If you know, you know.

That’s why we’ve put together doola’s Shopify bookkeeping guide — to help you simplify the process, untangle those messy numbers, and get crystal clear on your finances. 

But if you’d rather skip the guide and talk to an expert right away, just go to your system and book a demo with us.

Ready? Let’s quickly go over this guide.

What Is Shopify Accounting?

Shopify accounting is all about managing the financial side of your Shopify store. It involves tracking your sales, recording expenses, managing taxes, and keeping your books in order.

Essentially, it’s the foundation that ensures your business runs smoothly behind the scenes. 

This Shopify bookkeeping guide will bring more clarity to your understanding of Shopify sales. Keep reading.

What Does Shopify Accounting Involve? 

Here’s what Shopify accounting typically involves:

✅ Tracking Revenue: Every sale you make, whether it’s a single item or a bulk order, needs to be recorded. This helps you monitor your earnings and identify trends in customer behavior.

✅ Recording Expenses: Shopify accounting involves keeping tabs on all your costs — Shopify subscription fees, advertising costs, shipping, and inventory purchases.

✅ Sales Tax Management: Depending on where your customers are located, you may need to collect and remit sales tax. Shopify can assist with some of this, but staying compliant requires proper accounting to ensure nothing slips through the cracks.

✅ Profit and Loss Reporting: It’s not enough to know how much you’re selling; you also need to know how much you’re earning after expenses. Accounting helps you calculate profit margins and understand your store’s financial health.

✅ Cash Flow Monitoring: Keeping an eye on cash flow ensures that you always have enough funds to cover expenses, invest in inventory, and keep operations running smoothly.

✅ Tax Filing Preparation: When tax season rolls around, accurate records make all the difference. Shopify accounting also involves organizing your financial data so you’re ready to file taxes without any stress.

If this sounds like a lot, don’t worry! Our experts are here to offer you a more hands-on approach to Shopify accounting practices.

Learn more: How to Sell on Shopify in 7 Steps: Your Ultimate Guide

Key Bookkeeping Challenges for Shopify Businesses

Okay, we’ve arrived at the scary part. Feel that little churn in your stomach already? 

Don’t worry, it’s not as bad as it seems. We’re just going to point out some common bookkeeping challenges in this Shopify bookkeeping guide so you can see if your struggles fit into these categories.

And, if your challenges don’t quite match the ones we mention here, that’s okay too. Our experts are ready to hear you out and help, no matter what you’re dealing with. Just reach out, and they’ve got your back.

Here are some common challenges that might sound all too familiar:

Tracking Sales and Revenue

With daily sales rolling in, it’s easy to lose track of what’s coming in and going out. Mismanaged revenue records can lead to a distorted picture of your business’s health.

Managing Shopify Fees

From subscription costs to transaction fees, Shopify charges can quickly add up. Keeping tabs on these costs is essential to calculate your real profit margins.

Handling Taxes

Sales tax requirements vary by region, and as your store expands, staying compliant can feel like a loop. Also, missing deadlines or miscalculating taxes can result in penalties.

Inventory and Cost of Goods Sold (COGS)

Tracking inventory levels and accurately calculating the cost of goods sold can get tricky, especially if you deal with high inventory turnover or multiple suppliers.

Scaling Your Business

As your store grows, so do your bookkeeping needs. Managing multiple sales channels, new inventory, or higher transaction volumes adds layers of complexity.

Cash Flow Management

Poor cash flow management is a common pitfall. Without clear oversight, it’s easy to find yourself short on funds when you need them most.

Top Bookkeeping Tools for Shopify Sellers

Here’s a look at three of the top bookkeeping tools for Shopify sellers:

1. doola Bookkeeping: Your All-in-One Solution

doola Bookkeeping is more than just bookkeeping software — it’s your complete financial partner, built to simplify accounting for Shopify sellers. Whether you’re just starting out or scaling your business, it offers tools and support tailored to meet your unique needs.

Why doola Stands Out:

• Seamless Shopify Integration: Automatically sync your sales, expenses, and taxes with your Shopify store for a real-time financial overview.

• Expense Tracking Made Easy: doola categorizes expenses like marketing, shipping, and inventory costs, so you know where every dollar is going.

• Sales Tax Simplified: Managing sales tax across different states or countries is no longer a headache — doola handles it for you.

• Dedicated Human Support: Get a personalized account manager who knows the ins and outs of Shopify bookkeeping and is always ready to help.

• U.S. Business Bank Account Setup: For international sellers, doola helps you set up a U.S. business bank account, making it easier to manage finances.

• Custom Reports: Access profit-and-loss statements, cash flow insights, and financial forecasts that keep you in control of your business.

With a 4.6-star rating on Trustpilot and backing from industry giants like Y Combinator, doola is a trusted partner for Shopify sellers who want to simplify their bookkeeping.

2. Xero: A Flexible Accounting Tool for Growing Businesses

Xero is a cloud-based accounting software perfect for Shopify sellers who need flexibility and scalability. Its clean interface and robust features make it a great choice for businesses looking to grow.

Key Features:

• Inventory Tracking: Keep tabs on stock levels and costs directly from your Xero dashboard.

• Expense Management: Snap photos of receipts and categorize expenses on-the-go.

• Bank Reconciliation: Syncs with your bank account for easy transaction matching and reconciliation.

• Multi-Currency Support: Ideal for Shopify stores selling internationally, Xero automatically converts currencies and tracks foreign transactions.

3. QuickBooks Online: A Comprehensive Tool for Established Sellers

QuickBooks Online is one of the most popular accounting tools, trusted by millions of small businesses, including Shopify sellers. It’s packed with advanced features that help you manage every aspect of your finances.

Key Features:

• Advanced Reporting: Just like doola, get detailed insights into sales, expenses, and profitability with customizable reports.

• Sales Tax Tracking: Automatically calculate and track sales tax for different states and regions.

• Payroll Management: Handle employee wages, overtime, and taxes in one platform.

• Third-Party Integrations: Connect with Shopify, Stripe, PayPal, and other tools for seamless financial management.

Learn more: Shopify Bookkeeping Guide: Tools and Tips for Store Owners

Shopify Bookkeeping Guide for 2025

Here are a few things you should know if you’re dealing with bookkeeping. We’ll simplify the basics for you with the help of this Shopify bookkeeping guide.

Ecommerce Accounting Methods Explained: Manual vs Automated

Running the financial side of your Shopify store involves keeping accurate records of your sales, expenses, taxes, and overall profits. 

This is where accounting methods come into play, and there are two primary approaches: manual accounting and automated accounting.

Let’s break them down:

What Is Manual Accounting?

Manual accounting is exactly what it sounds like: you track everything by hand. This means logging your sales, expenses, and transactions into spreadsheets or even on paper.

Pros:

✅ Full control over your records.

✅ Low initial cost (no software needed).

Cons:

❌ Time-consuming, especially as your business grows.

❌ High risk of human error (e.g., typos, missed entries).

❌ Tedious to update and reconcile regularly.

Manual accounting might work for very small Shopify stores with limited transactions, but as your business scales, it quickly becomes unmanageable.

What Is Automated Accounting?

Automated accounting uses software or tools to handle the heavy lifting for you. Platforms like doola sync directly with Shopify, automatically tracking transactions, categorizing expenses, and generating financial reports.

Pros:

✅ Saves time by automating repetitive tasks.

✅ Reduces errors through accurate syncing of data.

✅ Provides real-time insights into your financial health.

✅ Scales easily as your business grows.

Cons:

❌ May involve a subscription cost.

❌ Requires some setup to get started.

Important Financial Reports for Shopify Sellers

Your Shopify store’s success lies in understanding these key financial reports:

📑 Profit and Loss Statement (P&L): Shows your income, expenses, and profits. It’s your go-to for tracking overall performance.

📑 Cash Flow Statement: Keeps you aware of how money moves in and out of your business.

📑 Sales Reports: Break down your revenue by product, customer, or region.

📑 Tax Summary Report: Helps you track sales tax collected and owed across different jurisdictions.

These reports are vital for making informed decisions and staying compliant.

Essential Financial Metrics for Shopify Store Owners

Keep an eye on these metrics to ensure your Shopify store’s financial health:

• Gross Profit Margin: How much profit you’re making after subtracting costs.

• Customer Acquisition Cost (CAC): The amount spent to acquire each new customer.

• Average Order Value (AOV): The average amount customers spend per order.

• Return on Ad Spend (ROAS): A measure of how effective your marketing dollars are.

Tracking these metrics helps you identify opportunities for growth and areas for improvement.

Shopify and Sales Tax: What You Need to Know

Sales tax can be one of the most confusing aspects of running a Shopify store, especially if you’re selling across multiple states or even internationally. Understanding the rules is crucial to staying compliant and avoiding penalties that could eat into your profits. 

What Are Sales Tax Rules for Shopify Sellers?

Sales tax laws vary widely depending on where your customers are located. Here’s what you need to know:

✅ Marketplace Facilitator Laws: In many U.S. states, Shopify is required to calculate, collect, and remit sales tax on your behalf for transactions in those jurisdictions.

✅ Your Responsibility: Even where Shopify handles tax collection, you’re still responsible for filing sales tax returns to confirm that everything is reported correctly.

✅ International Sales: Selling to customers in other countries may require compliance with VAT (Value Added Tax) or GST (Goods and Services Tax). Each country has its own rules, thresholds, and filing requirements.

How doola Simplifies Shopify Sales Tax Management

Managing sales tax doesn’t have to be overwhelming. With doola, you get tools and expert support to streamline the entire process:

🎯 Automatic Sales Tax Tracking: doola syncs directly with Shopify to record every sales tax amount collected. This ensures accurate tracking across all jurisdictions.

​​🎯 Organized Tax Records: All your sales tax data is organized in one place, making it easy to file returns and avoid last-minute panic.

🎯 Multi-jurisdictional Compliance: Whether it’s state-by-state sales tax or international VAT/GST, doola ensures you stay compliant with minimal effort.

🎯 Real-time Updates: Tax rules change, and doola keeps you informed so you’re never caught off guard by new regulations.

Reconciling Payments into the Bank from Shopify 

Reconciliation ensures that the money Shopify sends to your bank matches your sales and transactions.

Steps to reconcile:

• Compare Shopify payouts with your bank statement.

• Match individual transactions, considering fees and refunds.

• Adjust for discrepancies, like chargebacks or pending payments.

With automated bookkeeping tools like doola, this process becomes seamless and less time-consuming.

Best Bookkeeping Practices for Shopify Sellers

Adopting good bookkeeping habits can make all the difference in managing your Shopify store’s finances. Here’s what you should focus on:

✅ Separate Business and Personal Finances: Open a dedicated business bank account to avoid mixing personal expenses with business ones.

✅ Automate Your Bookkeeping: Use tools like doola to sync transactions, categorize expenses, and generate reports automatically.

✅ Track Expenses Religiously: Every dollar counts. Keep track of everything from Shopify fees to shipping costs to ensure your books are accurate.

✅ Reconcile Weekly: Regular reconciliation helps catch errors early and keeps your books in check.

✅ Prepare for Taxes Year-Round: Don’t wait until the last minute — organize your sales tax, expenses, and income consistently to avoid tax season stress.

Let doola Bookkeeping Take the Stress Out of Shopify Accounting

Bookkeeping doesn’t have to be a headache. With the right tools like doola Bookkeeping and proper practices in place, you can simplify your finances and avoid scrambling at the last minute.

Ready to streamline your accounting?

Book a demo with doola today, and let us handle the heavy lifting so you can focus on keeping your store thriving.

FAQs

How do I get the data I need from Shopify for bookkeeping?

Shopify provides built-in reporting tools to generate sales, tax, and payout reports. You can access these under “Analytics” > “Reports” in the admin panel. For detailed analysis, export data as CSV files or integrate them with your bookkeeping software.

What accounting software integrates best with Shopify?

doola connects directly to your Shopify store, syncing sales, refunds, and expenses in real time. This eliminates the need for manual data entry, ensuring your financial records are always accurate and up to date.

Is it mandatory to have a separate business bank account for Shopify?

While not mandatory, a business bank account is highly recommended. It simplifies tracking income and expenses, ensures clear financial records, and makes tax filing much easier.

What tax forms do Shopify sellers need to file?

The required forms depend on your location. In the US, Shopify sellers typically file sales tax returns for each state where they collect tax. For income taxes, include your Shopify earnings on your business tax return.

Can Shopify handle multi-currency transactions for bookkeeping?

Yes, Shopify supports multi-currency sales. However, you’ll need to use a compatible accounting tool to convert these transactions into your base currency for accurate bookkeeping and financial reporting.

How can I calculate COGS (Cost of Goods Sold) for my Shopify store?

Calculate COGS by summing up all direct expenses for the products sold in a period. This includes raw materials, manufacturing, packaging, and shipping costs. Use the formula:
COGS = Beginning Inventory + Purchases During the Period – Ending Inventory.

What does the Reverse Charge mechanism mean for Shopify sellers?

Reverse Charge is a VAT mechanism where the buyer, not the seller, reports the VAT on cross-border transactions. This is relevant for EU-based Shopify sellers dealing with business clients in other EU countries.

How do I check if Shopify is applying the correct tax rates?

Navigate to “Settings” > “Taxes and duties” in your Shopify admin. Review the rates applied for each region and ensure they align with the latest regulations from the tax authorities. Adjust the settings if needed.

How do Shopify fees impact my profit margins?

Shopify charges transaction fees, subscription fees, and payment gateway fees, which reduce your overall profit. Ensure these are tracked as expenses in your bookkeeping system to calculate accurate profit margins.