Step-by-Step: Setting Up Bookkeeping for a New Shopify Store

Step-by-Step: Setting Up Bookkeeping for a New Shopify Store

Starting a Shopify store is exciting. New products, new customers, and endless potential. But if you want to build a business that lasts, you need to get your bookkeeping right from day one.

Bookkeeping might not be the flashiest part of e-commerce, but it’s the backbone of financial clarity.

Without it, you’ll struggle to understand your margins, plan for taxes, or make smart decisions about growth.

In this post, we’ll walk you through a simple, step-by-step plan to set up bookkeeping for your Shopify store, so you stay organized, compliant, and ready to scale.

Step 1: Choose the Right Accounting Software

Start with a cloud-based accounting platform that integrates well with Shopify.

Your best options are:

• Xero (highly flexible, e-commerce friendly)

• QuickBooks Online (popular, especially in North America)

These platforms allow for automation, real-time reporting, and scalability as your store grows.

Step 2: Set Up a Chart of Accounts (COA) for E-Commerce

Your Chart of Accounts is the foundation of your bookkeeping.

Make sure it includes:

• Sales (broken down by channel if needed)

• Refunds & Discounts

• Payment Processor Fees (Stripe, PayPal, Shopify Payments)

• Cost of Goods Sold (COGS)

• Shipping Income and Expenses

• Advertising/Marketing Expenses

• Software Tools & Subscriptions

If you’re unsure how to set this up, Trustale can customize it for your business model.

Step 3: Open a Dedicated Business Bank Account

Keep your personal and business finances completely separate.

This makes bookkeeping cleaner and ensures you’re tax-compliant.

Also consider:

• A business credit card for ad spend and subscriptions

• A PayPal Business account or Stripe account connected directly to Shopify

Step 4: Connect Shopify with Your Accounting System

Use apps that sync your sales data to your books automatically.

We recommend:

• A2X – A robust tool that summarizes your Shopify sales, fees, and pay-outs accurately and posts them to Xero or QuickBooks.

• Shopify Connector for QuickBooks/Xero – Basic but useful for smaller stores.

This prevents manual entry errors and keeps your reporting clean.

Step 5: Track Your Inventory and COGS

Shopify doesn’t handle inventory accounting or COGS very well.

Use additional tools like:

• Cin7, DEAR Systems, or Zoho Inventory if you're scaling

• Or use spreadsheets early on (but plan to automate as you grow)

Update your inventory regularly and align COGS with sales for accurate profitability reports.

Step 6: Reconcile Bank Accounts Monthly

Every month, match:

• Bank transactions

• Payment gateway settlements

• Shopify pay-outs

• Credit card statements

This ensures your books reflect reality, and you'll catch errors or fraud early.

Pro tip: Use clearing accounts to handle delayed pay-outs from Stripe or PayPal correctly.

Step 7: Track Sales Taxes Properly

Shopify may collect taxes for you, but you’re still responsible for filing them correctly. Depending on where you sell, you might be liable for:

• Sales tax in U.S. states

• GST/HST in Canada

• VAT in the UK or EU

Use tools like TaxJar, Avalara, or Shopify Tax to automate this.

We can also help you figure out where and how to register.

Step 8: Create Monthly Financial Reports

Once your bookkeeping is running, you should generate:

• Profit & Loss Statement

• Balance Sheet

• Cash Flow Report

These reports will help you understand:

• Are you profitable after ad spend?

• Is your inventory draining your cash?

• Can you afford to scale operations?

Final Thoughts: Lay the Foundation for a Smarter Business

The sooner you build solid bookkeeping habits, the better decisions you’ll make. You’ll feel more in control, avoid surprises during tax season, and have real data to back up your next big move.

Need Help Getting Set Up?

At Trustale Accounting, we specialize in helping Shopify sellers just like you. We’ll set up your books, automate your reporting, and keep everything clean and compliant, so you can focus on building your brand.

Book a free call today and let us take the stress of bookkeeping off your plate.