How the Shopify integration works in FreeAgent

This article explains how FreeAgent handles sales, refunds, fees and payouts relating to your Shopify store once you’ve set up the integration to import your Shopify data into FreeAgent.

Please note that the Shopify integration is available only for UK business types and supports only UK VAT rates specified by HMRC. As the integration doesn’t support foreign VAT rates, you should apply or charge only UK VAT rates to your Shopify orders.

Sales from your Shopify store

Every 24 hours, an invoice will be automatically created in FreeAgent if there have been sales in your Shopify store. This invoice will contain the total value of all the orders you received through your Shopify store for the previous 24-hour period. If there have been no orders during this period, nothing will be created.

As soon as a payment is made by your customer, you should receive a confirmation email. This confirmation email will be sent to the email address of the registered FreeAgent account owner.

Your Shopify orders for this 24-hour period will be grouped together by VAT rate, and different VAT rates will appear on individual line items. The contact for these automatically created invoices will be listed as ‘Shopify’. (The Shopify contact is created automatically when you set up the Shopify integration.)

Here is an example of an invoice created by the Shopify integration:

Every time you receive a payment for an order in your Shopify store, a transaction will be created in your Shopify bank account in FreeAgent. (The Shopify bank account is created automatically when you set up the Shopify integration.)

You can view your Shopify bank account in the ‘Banking’ area of your FreeAgent account. This transaction will be explained automatically as ‘Invoice receipt’ against the invoice that contains the order for which the payment has been received.

Refunds from your Shopify store

Every 24 hours, a credit note will also be automatically created in FreeAgent if refunds have been issued through your Shopify store. This credit note will contain the total value of all refunds you issued through your Shopify store for the previous 24-hour period. If there have been no refunds during this period, nothing will be created.

Your Shopify refunds for this 24-hour period will be grouped together by VAT rate, and different VAT rates will appear on individual line items. The contact for these automatically created credit notes will be listed as ‘Shopify’.

Here’s an example of a credit note created by the Shopify integration:

If you refund a payment for a cancelled order in your Shopify store, this transaction will also be created in your Shopify bank account in FreeAgent.

This transaction will be explained automatically as ‘Credit Note refund’ against the credit note that contains the relevant refund.

Reconciling unpaid orders

If you receive an order that is never paid for by a customer and is then cancelled, this outstanding order will be reflected on both an invoice (for the order) and a credit note (for the cancelled order) which will be matched within FreeAgent automatically.

Shopify fees

You will occasionally incur Shopify fees, such as your Shopify subscription fee or transactional fees.

Any fees incurred over the previous 24-hour period will be recorded in your Shopify bank account in FreeAgent as a single ‘money out’ transaction. These transactions will be explained to the category you chose in the ‘Fees’ section when you set up the Shopify integration in FreeAgent.

Payouts from your Shopify bank account

A ‘payout’ is when Shopify transfers funds relating to an order (or several orders) that were put through the Shopify store to your business bank account.

When you import a Shopify ‘payout’ transaction into FreeAgent (via a bank feed or by uploading a bank statement), you’ll then need to explain the transaction as a transfer from your Shopify bank account.