Shopify Xero integration: Streamline your accounting by setting it up

If reconciling your Shopify sales feels like a second job, it's time to fire your spreadsheets! With around 4.4 million Shopify websites worldwide (Source- Statista), you're not alone in this struggle.

Wondering how to make things easy? Eliminating manual bookkeeping and data entry is the key. 

This article is for you if you want to simplify your Shopify operations. The best way to do this is to automate your accounting by integrating your Shopify store with Xero. This will not only help you stop chasing down missing sales data but also streamline your tax management and expense tracking. 

This powerful combination also automates the syncing of orders, payouts, taxes, and more into your accounting system - Xero, ensuring your books stay accurate and workflows efficient.

After reading this guide, you will feel confident setting up Shopify Xero integration. Without further ado, let's get started! 

What is Shopify Xero integration?

Shopify Xero integration sets up an effortless link between your online shop and accounting software. Instead of manually entering each sale, refund, or transaction into Xero, the integration automatically transfers this data in real-time or at scheduled intervals.

This setup builds a safe connection between the two systems so they can share information on their own. This means that when someone buys from your Shopify store, the integration grabs the financial details and organizes them to fit into Xero's accounting system automatically.

Key benefits of integration

Shopify Xero integration fundamentally transforms how you manage your business finances, delivering both immediate efficiency gains and long-term strategic benefits:

• Quicker month-end close

It helps reduce the time to close your books at month-end, thanks to automatic order syncing and instant categorization of revenue and expenses.

• Better decision-making with unified data

Having all your financial information in one spot gives you a complete picture of how your business is doing. You can track your profit margins, spot seasonal patterns, and find your most profitable sales channels, including products, which helps you make more strategic business choices.

• Support for growth and scalability

As your business grows, the integration grows with you. Whether you handle 10 orders or 10,000 orders each month, the automated system manages increased volume without extra manual work, helping your expansion without significant increases in administrative costs.

• Multichannel visibility

For multichannel sellers expanding their footprints on Amazon, eBay, Etsy, along with Shopify, tools like Webgility bring all sales into Xero, giving you one place to see all your finances.

• Better vendor and supplier management

With automatic expense tracking and accounts payable integration, you will be able to manage supplier relationships better, keep an eye on payment terms, and make smarter buying choices based on exact cost data and cash flow forecasts.

What data gets synced?

Let's look at the data that moves between Shopify and Xero when they're connected:

• Sales transactions: All sales info, including order totals, individual items, and transaction dates, goes straight into Xero. This covers both completed sales and any changes or cancellations
  
  
• Refunds and returns: When customers return items or request refunds, this information syncs to Xero, ensuring your financial records accurately reflect the true state of your business
  
  
• Discounts and promotions: Xero captures and records coupon codes, bulk discounts, and special pricing. This enables you to keep track of your actual revenue
  
  
• Shipping and taxes: Xero maps shipping costs and tax amounts to the right accounts on its own. This helps you stay compliant and keep tabs on your expenses
  
  
• Transaction processing: The integration posts transactions as invoices, sales receipts, or journal entries based on your setup, which helps maintain proper accounting practices
  
  
• Inventory updates: The integration updates stock levels and cost of goods sold in Xero, which helps you keep accurate inventory valuation and prevent overselling and stockouts
  
  
• Customer and product data: The integration can sync customer information and product details, helping ecommerce businesses grow efficiently, make smarter decisions, and deliver a better customer experience

Tools and apps to integrate Shopify with Xero

Numerous third-party tools that can help you connect Shopify to Xero effectively. Here are some popular and most practical options:

1. Webgility

Webgility is a powerful ecommerce automation platform created for fast-growing online sellers and accounting professionals. Built to handle complex workflows, Webgility connects Shopify with Xero to provide deep, order-level financial sync, make reconciliation easier, and keep accurate books as you grow.

Features:

• Complete order-level sync: Automatically posts detailed Shopify sales, refunds, taxes, shipping, and discounts into Xero, accurately and in real time
• Inventory & COGS tracking: Keeps inventory levels and cost of goods sold up to date for accurate financials and better inventory control
• Multichannel support: Syncs sales from Amazon, eBay, Walmart, Etsy and more, bringing accounting into one place in Xero
• Flexible mapping & settings: Tailor how Xero records product transactions using advanced options for the chart of accounts, taxes, and fee allocation
  
• Real-time or scheduled sync: Select how often you want to sync data, or schedule it to match your work style and review process

2. Xero's Shopify app

This is Xero's native integration for Shopify, ideal for smaller merchants. It provides a simple daily sales summary sync to Xero with minimal setup and configuration.

Features:

• Integrates without relying on other tools
• Syncs sales and refunds
• Handles basic tax mapping

3. Parex Bridge

Parex Bridge is a user-friendly app that syncs detailed Shopify order data into Xero. It strikes a good balance between automation and manual control for growing merchants.

Features:

• Posts detailed orders into Xero, including line items, taxes, shipping, and discounts
• Maps Shopify payments and fees to specific Xero accounts
• Let's you customize sync schedules and rules

4. Zapier

Zapier provides simple, trigger-based workflows to link Shopify and Xero. Although it's not for accounting, it helps with basic automation tasks rather than complete financial syncing.

Features:

• Straightforward trigger-based automation workflows
• Simple data mapping and transformation
• Quick setup without coding knowledge

Shopify Xero integration using Webgility

Here's a comprehensive step-by-step guide for integrating Shopify Xero integration using Webgility:

Step 1: Log in to Webgility

• Visit the Webgility website and sign in using your Webgility credentials
• Choose the appropriate workspace if you manage multiple accounts

Step 2: Connect Shopify to Webgility Online

• Log in to your Webgility Online account
• Navigate to Connections and click the blue plus sign next to Sales Channel
• Select Shopify and click Continue
• Enter your Shopify store subdomain (the prefix of your.myshopify.com)
• Click Continue. A Shopify window will open, approve and install the Webgility app
• Wait for Webgility to download your store information. You'll see a success message once connected
• Choose to copy sync settings from an existing channel or configure new settings, then click Let's Go

Step 3: Connect Xero to Webgility Online

• After connecting Shopify, go to Connect to Accounting Software and click Connect Accounting
• Click Connect and then Connect to Xero
• Log in to your Xero account. On the Xero User Consent page, grant the necessary permissions by clicking Allow Access. If you manage multiple Xero organizations, select the correct one
• Wait for the connection to complete, a success message will confirm Webgility is now linked to Xero
• Click Finish. Webgility will begin downloading contacts, items, and other relevant data from Xero. This may take a few minutes, depending on your data volume

Step 4: Configure Xero mapping

1. Chart of accounts mapping:

• Map Shopify sales to the appropriate income accounts
• Set up accounts for shipping, taxes, and fees
• Configure discount and refund accounts

2. Customer mapping:

• Decide whether to create individual customer records or use a generic customer profile
• Set up customer naming conventions
• Configure customer class assignments if needed

3. Product/item mapping:

• Map Shopify products to Xero items
• Set up inventory tracking preferences
• Configure service items for shipping and taxes

4. Payment method mapping:

• Map Shopify payment methods to Xero payment methods
• Set up bank accounts for deposits
• Configure payment processing fee handling

Step 5: Choose sync preferences

1. Go to Settings > Automation > Sync settings
2. Choose how often to sync:
   • Manual
   • Scheduled (e.g., daily, hourly)
   • Real-time (if supported on your plan)
3. Set preferences for:
   • What gets synced: orders, products, customers, inventory, fees
   • How orders are posted: as sales receipts, invoices, or journal entries
   • Payment methods and settlement workflows

Step 6: Test the integration

• Process a test order in Shopify
• Manually trigger a sync for a small date range of orders
• Navigate to Orders > Post to Xero, select a few test orders, and click Post
• Review the result in Xero to verify:
  • Line items, taxes, shipping
  • Payment status
  • Proper account and product mapping

Confirm the order and related data appear correctly in Xero through Webgility. 

Best practices to ensure a smooth integration

To ensure your Shopify Xero integration runs seamlessly and delivers accurate financial insights, follow these proven best practices:

• Keep your chart of accounts clean: It is recommended to use clearly labeled accounts for sales, fees, taxes, and shipping. A well-structured chart of accounts makes it easier to map and offers cleaner financial reports
• Reconcile Shopify payouts weekly or monthly: You might not know that Shopify batches transactions before paying out. Thus, regular checkup ensures that gross sales, fees, and net payouts match between Shopify and Xero, catching discrepancies early
• Regularly review sync logs for failures or discrepancies: Ensure that your team checks sync activity regularly to catch issues like unmatched products, failed orders, or tax mismatches early, before they grow bigger
• Configure automatic backup and data retention policies: Also, do not forget to set up regular backups of your financial data and establish clear retention policies. This will protect you against data loss and ensure you can recover historical transaction data if needed for audits or system issues

Make your Shopify accounting smarter!

Shopify Xero integration is more than just a technical upgrade. Rather, it's a strategic move that helps you save hours of work spent on closing your books, matching your sales transactions, and analyzing your actual profits. 

By automating the flow of sales, expenses, taxes, and inventory data, you ensure your financial records are accurate and up to date. 

Not all integration tools are built the same. It's worth taking the time to evaluate which solution best matches your store's complexity, sales volume, and workflows. The right integration should do more than just connect platforms; it should unify your operations, just like Webgility.

Automate your Shopify Xero workflow and take control of your finances with Webgility. Schedule a 15-minute demo and we'll show you how.