Shopify and Xero integration
Shopify records the orders, Xero keeps the books, and between the two there is usually a spreadsheet somebody rebuilds at month end. An integration posts the sales into Xero with the right VAT rate on every line, and reconciles the Shopify payout against the bank feed.
Why companies connect Shopify to Xero
The store knows what was sold; the accountant needs to know what has to be recorded, and those are not the same thing. Each payment method belongs on its own clearing account, Stripe and PayPal fees on a cost account of their own, EU business sales as reverse charge, and consignments under the £135 threshold carry UK VAT at the point of sale rather than at the border. Sorting that by hand every month means sorting it again every month, and finding the error at year end.
How we do it
A job reads the orders through the Shopify Admin API, maps each line to the revenue account and tax rate your accountant has set, and creates the matching document in Xero. Shopify Payments payouts arrive as bank transactions with the fee on its own line, so reconciliation runs against amounts that match and whatever stays unreconciled is a real problem rather than a rounding difference.
What you get
Every order becomes an invoice in Xero the same day, or one daily summary per tax rate if that is what your accountant prefers
Contacts are matched on email or company number before they are created, so the same customer does not arrive twice under two spellings
Shopify Payments fees land as a cost, not as an unexplained gap between turnover and the bank
Reverse charge, zero-rated exports and the £135 threshold are decided from the delivery address and the customer's VAT number
Bank reconciliation matches on the first pass, because the payout arrives with its breakdown attached
Use cases
A direct-to-consumer brand at 1,500 orders a month that emailed its accountant a monthly export
A store selling into the UK, the EU and the United States, with three VAT treatments in the same month
A move from spreadsheets to Xero, where the opening history had to stay tied to the orders that produced it
A subscription store whose recurring invoices had no link back to the original order
Frequently asked questions
Does the integration file the VAT return?
No. It writes the invoices and the payouts into Xero; the return is prepared and filed from Xero, by you or by your accountant. That is deliberate - an integration that files by itself is an integration whose mistakes nobody sees.
One invoice per order, or a daily summary?
Either. Below a few hundred orders a day an invoice per order keeps the audit trail obvious; above that a daily summary per tax rate keeps Xero quick to work in, with the order detail attached to the invoice.
What happens to refunds and partial refunds?
They arrive as credit notes against the original invoice. A partial refund needs the split across lines, otherwise the VAT does not come out right - which is exactly where hand-built exports come apart.
Tell us what you want built
A few sentences about what it should do and who for is plenty. You get scope, a date and a price back within 24 hours.
Free consultation