Reconcile Shopify and Square Payouts Without Guessing
How to Reconcile Shopify and Square Payouts Without Guessing
You open your bank feed and see a $1,482.37 deposit from Shopify or Square… and you immediately think, “Okay, but what is actually inside that number?”
If you are trying to reconcile Shopify and Square payouts by staring at the bank feed and hoping your brain does spreadsheet magic, you are not alone.
It’s like looking at one finished quilt and trying to guess exactly how many fat quarters, notions, and bobbins went into it. The total is real, but the pieces matter.
Why it’s so hard to reconcile Shopify and Square payouts from the bank feed
Here’s the core problem: payouts hit your bank as one net deposit, but your sales activity is made up of a bunch of moving parts.
A single Shopify or Square payout can include:
processing fees
refunds and returns
chargebacks or disputes
tips
gift cards (sold and redeemed)
shipping you charged customers
sales tax you collected
sometimes shipping labels or platform add-ons
So if you try to “work backwards” from the bank deposit, it will always feel like guesswork.
Shopify also lets you view and export payout transaction details, which is the right place to pull the truth from. Shopify Help Center
Square has reporting built for reconciliation too, but the bank deposit still shows up net. Square Sales Summary Information
If this is the part you get stuck on, here’s a deeper dive into how payout timing affects cash flow: Cash Flow Mistakes (And What To Do Instead)
The clearing account method to reconcile Shopify and Square payouts
My favorite solution is simple and repeatable: use a clearing account (sometimes called a suspense account) as the “waiting room” between your sales platform and your bank.
Here’s the idea:
You record the gross activity (sales, tax, tips, gift cards, shipping, discounts) into the clearing account.
You record fees and adjustments into the same clearing account.
When the payout hits your bank, you record a transfer from clearing → bank.
Whatever is left in clearing is what’s truly still pending or missing.
This is exactly why clearing accounts exist in accounting systems. This article will show you how to set up a clearing account in QuickBooks.
This article will show you how to reconcile bulk payments received from online sales in Xero.
TL;DR flow you can pin above your desk
Post gross activity → Clearing (split income, discounts, tax, tips, gift cards)
Post fees/adjustments → Clearing
Transfer payout → Bank (from Clearing)
Clearing balance = in-transit funds (or a clue something’s missing)
Balanced Path Tip
Treat clearing like your “in-between bin.” If it does not zero out (or match known pending), don’t touch the bank feed. Go back to the platform report and find the missing piece.
For more info on the “clean books = calm decisions” side of this, you might like: You Can’t Out-Earn Disorganized Finances
What you need before you start: reports and accounts
You do not need fancy software or a custom spreadsheet empire. You just need the right reports and a consistent mapping.
Reports to pull from Shopify
Payouts details (fees, refunds, adjustments)
Sales tax report
Gift card activity (if you sell gift cards)
Tips report (if you collect tips at checkout)
Shipping labels and financing/loan repayments (if applicable)
If you want Shopify’s official help steps for finding payouts, this is the cleanest reference: View and export Shopify payout details
Reports to pull from Square
Reconciliation report (Dashboard)
Transfers/balance activity
Fees (often included in reconciliation views)
Gift card activity (if you use Square gift cards)
Tips/service charges (if used)
For Square’s official “where to find it” guidance: Square reconciliation report location
Accounts to set up once (then reuse forever)
Create one clearing account per processor:
Shopify Clearing
Square Clearing
Then make sure your basics exist:
Income: Retail Sales, Classes/Workshops, Services, Shipping Income
Contra-income: Discounts, Returns (optional separate)
Liabilities: Sales Tax Payable, Gift Card Liability, Tips Payable (if applicable)
Expenses: Merchant Fees (Shopify), Merchant Fees (Square), Shipping Labels/Postage
Bank: Checking (your real bank account)
If you use Xero and want an official example of reconciling bulk online payments with a clearing account, this is a helpful reference: Xero Central
Step-by-step workflow: Shopify daily summary → fees → payout
You can do this daily, weekly, or by payout cycle. Daily is cleanest, but do what you can actually stick with.
Step 1: Post gross activity to Shopify Clearing
Record the gross activity as a Sales Receipt (deposit to clearing) or a Journal Entry.
You want Shopify Clearing to reflect the full picture, not just “sales.”
Typical split:
Credit Retail Sales (net of discounts/returns)
Credit Shipping Income (if charged)
Credit Sales Tax Payable
Credit Gift Card Liability (gift cards sold)
Credit Tips Payable (if collected)
Debit Discounts (contra-income)
Debit Shopify Clearing (total collected through Shopify Payments)
Step 2: Record fees and platform adjustments
From payout detail:
Debit Merchant Fees (Shopify)
Debit Shipping Labels/Postage (if purchased through Shopify)
Credit Shopify Clearing
Step 3: Match the payout to your bank
When the deposit hits:
Debit Checking
Credit Shopify Clearing
After that, Shopify Clearing should be close to zero, or equal to the amount Shopify says is still pending.
A simple numbers example (so you can stop second-guessing)
Let’s pretend this is one day of Shopify activity.
Product sales: $1,200
Discounts: $50
Refunds processed: $40
Shipping charged: $20
Sales tax collected: $58
Gift cards sold: $100
Tips collected: $12
Processing fees: $42
Shipping label purchased: $9
Payout that hit the bank: $1,249
1) Daily summary to Shopify Clearing
First compute what Shopify collected:
Net sales after discounts/refunds:
$1,200 − $50 − $40 = $1,110
Now add the “pass-through and extras”:
$1,110 + $20 + $58 + $100 + $12 = $1,300
So your entry should reflect $1,300 collected through Shopify Payments.
2) Fees and adjustments
$42 fees + $9 label = $51 reduces cash, so it reduces clearing.
3) Payout to bank
Transfer $1,249 from Shopify Clearing to Checking.
Check your clearing balance
$1,300 − $51 − $1,249 = $0
That’s the goal.
If it’s not zero, it’s not a failure. It’s a clue. Usually it’s timing, a delayed refund, or a missing adjustment.
Quick wins, month-end checklist, and when it’s time to bring in bookkeeping help
Quick wins (do these this week)
If you want help deciding whether DIY is still working (or just quietly draining your weekends), this will feel very familiar: When To Move From DIY Bookkeeping To Professional Support For Your Shop
Month-end checklist (15 minutes)
Common traps (and fixes)
Duplicate revenue: you connected a sync app and also posted manual summaries. Pick one method.
Cash mixed into Square clearing: Square transfers do not include cash. Keep cash deposits separate.
Sales tax recorded as income: move it to Sales Tax Payable so your profit is real.
Gift card redemptions treated like new income: redemption reduces gift card liability.
If this sounds like you…
You have “mystery deposits” every week and avoid looking too closely.
Your Profit & Loss says profit, but your bank account says “cute story.”
You dread month-end because you know something will not match.
You are behind, and the idea of catching up feels like a whole personality shift.
You do not need to figure this out alone.
When it’s time to bring in bookkeeping help
If any of these are true, bringing in support usually pays for itself fast:
You sell on multiple channels (Shopify + Square + Etsy + wholesale) and payouts overlap.
Your volume is high enough that manual work is eating 6–10 hours a month.
You need clean numbers for taxes, a loan, a lease, or growth decisions.
You want someone to set up the system once, then keep it running.
For more info (and a few tools you can grab right away):
If you want downloadable checklists and resources: Balanced Path Resource Library
Key Takeaways
Use clearing accounts so payouts stop being mystery money.
Post gross activity and fees to clearing, then transfer payouts to bank.
Clearing balances tell you what’s pending or missing, fast.
Do a 15-minute month-end check to keep everything clean and tax-ready.
Service Links
Visit the Balanced Path Resource Library for downloadable resources.
FAQs
Do I have to post Shopify and Square activity daily?
No. Daily is cleanest, but weekly or per payout cycle can work if you stay consistent. The key is posting gross activity and fees before you match the payout.
What is a clearing account, in plain English?
It’s a holding spot between your sales platform and your bank. It lets you track what you earned (gross) separately from what got deposited (net), so nothing gets lost.
Why don’t my Shopify payouts match my sales totals?
Because payouts are net of fees, refunds, chargebacks, and timing differences. Your sales reports are usually gross or based on order date, while payouts follow processing and transfer timing.
How should I handle refunds and chargebacks?
Refunds reduce sales (or go to a returns account) and reduce clearing when the money leaves. Chargebacks are usually an expense or contra-revenue, and they should also hit clearing so the payout still matches.
What if I use an e-commerce sync app already?
Great, but choose one source of truth. If the app posts daily summaries, do not also post manual summaries, or you’ll double-count revenue.
Conclusion
Once you set up the clearing-account workflow, you can reconcile Shopify and Square payouts without guesswork, mystery deposits, or late-night bank-feed detective work.
If you want help setting this up (or cleaning up what’s already tangled), reach out.
Email me at [email protected]
Call/text 603-892-8879
Or book an introduction call.
