How Bookkeeping Works
Understanding how your Shopify transactions move to Xero helps you keep track of your cash flow and reconciliation.The 3-Step Process
1
Checkout & Logging
As soon as a customer pays, the app creates a draft entry in Xero to record the sale and the expected funds.→ Invoice created in Xero
2
Clearing (In Transit)
Payments are held by your processor (Stripe/PayPal) in a “Clearing Account” until they are ready to be paid out to your bank.→ Funds tracked in clearing account
3
Payout & Finalization
When the payout hits your bank, the system automatically moves the funds from the clearing account to your bank account and records any fees.
Automatic Accounting Entries
Here’s what a typical payout looks like when it’s recorded in Xero:
The net amount ($242.50) is balanced against your bank statement automatically.
Enable Bookkeeping
Toggle Automated Bookkeeping Sync to enable or disable this feature. When disabled, no payout-related journal entries are created in Xero. Click Save after toggling.Payout Mode
Choose how payouts are recorded in Xero:
Auto
Cloudify will automatically push your payout data into the Xero journal. No manual action needed — payouts sync as they happen.
Manual
Your payouts from Shopify will be available in the Cloudify Dashboard. You can review them and push to Xero manually when you’re ready.
Journal Entry Preferences
This section lets you set up preferences for adding journal entries to Xero. Journal entries can be created for Shopify Payments (to record customer payments), Shopify fees, and payouts to your bank account. This ensures accurate bookkeeping, with each entry going into the correct journal and account.Shopify processes merchant payouts cumulatively by consolidating multiple payouts and disbursing the total amount in a scheduled transaction. Set your preferences for journal entries using the settings below.
Bookkeeping Settings
Configure which Xero accounts each type of transaction is posted to:
Click Save when you’re done configuring your bookkeeping accounts.
The Shopify Payments Clearing account and Shopify Fee account are Cloudify-generated accounts in Xero. The Payout Account, Adjustment, and Reserved accounts need to be selected from your existing Xero chart of accounts.