Welcome to the second blog in our Scaling Smart series, where we’ll discuss how automating accounting processes supports growth-minded businesses like yours. Today, we’re explaining one of the most overlooked issues – accurately booking your revenue. It might sound simple, but getting it wrong can hold your business back in big ways.
Many businesses make a critical (but common) mistake when recording their revenue – they book it net of fees, refunds, and adjustments rather than capturing the complete picture. This can cost your business more than you think, particularly if you want to grow, secure capital, or even prepare for an audit. So, how do you make sure you’re booking your revenue correctly? The answer: understanding your gross sales and how to automate the process effectively.
The Importance of Gross Revenue
Recording your revenue based on the payout you receive in your bank account may seem convenient, but it’s not accurate. That payout amount is already netted down for fees, refunds, and adjustments. Plus it can contain sales tax which is not considered revenue. If you’re only booking what’s deposited, you’re not seeing the full value of your sales. This can lead to undervaluing your business, which is a problem if you’re trying to secure funding, plan for expansion, or prepare for a potential acquisition.
Booking your revenue based on gross sales is key – rather than just what’s deposited. This approach gives you a clearer picture of your financial health and ensures compliance with accounting standards. And fortunately, the right accounting software can help you comply. For example, Bookkeep maintains Generally Accepted Accounting Principles (GAAP) standards for channels such as Shopify by embedding accrual accounting practices within our accounting automation software.
How Net Revenue Misleads
Let’s take Shopify as an example. If you only use Shopify’s payout reports, you miss the detailed breakdown of your gross sales. Your actual revenue is being masked by deductions for fees, refunds, and adjustments like chargebacks or platform-specific promotions. This not only impacts your books but can also lead to errors in tax filing and misaligned financial periods – especially if payouts span multiple days or months.
Relying on payout reports leaves room for errors and missed insights. Properly booking gross sales ensures you’re getting the most accurate and complete financial data.
Automate with Confidence Using Bookkeep
Bookkeep takes the guesswork out of revenue reporting. As Shopify’s preferred integration partner, we automate the process, ensuring your gross sales, fees, refunds, and other adjustments are booked correctly.
No more sifting through reports or worrying about time zones – everything is posted daily with 100% accuracy. Plus, Bookkeep’s solution grows with you, handling everything from multiple ecommerce platforms to multi-location in-store sales.
Focus on Growth, Not Manual Work
When you’re confident in your numbers, you can focus on what matters most – growing your business. With Bookkeep, you’ll have time to scale up your operations, open new locations, or expand internationally, all while knowing that your finances are clean and ready to support your next big move.
See for yourself by booking a free demo below!
