June 30th is the end of the Australian financial year. We usually see store owners start freaking out a few weeks in advance. Maybe they’re not confident in how GST is set up on their store. Their books are a mess and they don’t know how to get them in any kind of order before they’re due to submit their tax returns.
It’s understandably stressful. Getting it wrong can mean serious headaches with the tax office for months. It can wind up costing you lots of money in fees and back-taxes. That’s a giant hassle that just distracts you from your business. We’re going to try to make things a little easier for you by showing you how to set up GST and Xero on Shopify.
GST on a Shopify Store
We’ve talked about this before in this post. let’s recap it here to get it up and run right away. To be compliant with Australian GST regulations, you need to display the GST during the checkout process, show your ABN and company name on the tax invoice, and include taxes on the receipt.
Note: You’ll need to have access to your store’s Administration Panel. You can access it at YourStoreDomain.com/admin.
First, set all your products to “Charge Taxes” (there’s a checkbox beneath the Title, SKU and selling price – make sure this is ticked). This will tell Shopify to reach into your Tax Settings and include them in your product’s price. Go to Admin > Products, open each individual product, make sure each one has the checkbox ticked. If you have lots of products and don’t want to do this one by one, you can use the .csv export and import via Products.
Next, go to your Admin, then select Regions & Taxes. Check that you have Australia set to 10% GST:
Once that’s done, you want to update your checkout language to ensure it’s 100% clear to your customers that GST is included in their purchase. Go to Admin > Preferences > General > Checkout Language > Inspect, and rename “.. including %s taxes.” to “Including %s GST (Goods and Services Tax).” This will update the wording that shows up on the checkout page and protects you from any confusion.
Add your company information to your customers order confirmations, go to Admin > Preferences > Email & Notifications.
3 More Steps :
- The word “Invoice”, to keep everything nice and official
- Your Company Name
- Your Company’s ABN (Australian Business Number)
Open the Order Confirmation Template, and add the word “Invoice”, your Company Name and your ABN into the template, like this:
Finally, add an unobtrusive note somewhere on your checkout page that states that all prices are inclusive of GST. The placement depends on your theme, but if you go to Admin > Template Editor > Cart.liquid, you’ll be able to find somewhere subtle to put it.
Once the tax is all set up, it’s time to tackle your book-keeping.
The Xero Integration on Shopify
Xero is one of the most popular accounting software for e-commerce businesses. It lets you do online accounting, bank reconciliations, invoicing, payroll, inventory, quotes, expense claims, payments and reporting… all from a single dashboard. You can also have as many users as you like, which means that it’s a breeze to send all your financial information to your accountant or book-keeper.
Until recently, there was no direct Shopify integration. You had to use a middle-man app that cost $30 a month. The two companies have finally built a direct integration, allowing you to do everything yourself with unnecessary fees. It’s really easy to get set up and will save you a lot of headaches at tax time each year.
Set up your Xero account, then head to the Shopify App store get the Xero app. You’ll then be shown some simple click-through instructions to connect your accounts, as you normally do with Shopify Apps.
Once that’s all done, start syncing your Shopify data with the Xero dashboard. Select the date range you want to see, click “Export Shopify Orders”. You can do this as often as you like, monthly, weekly or daily. Set it up so that the data is synced automatically. You don’t have to worry about it. Tax time will be much less complicated with this than trying to reconcile all the data, receipts and invoices from multiple sources. Your accountant will love you! You can watch an in-depth tutorial on the process here.
Do you have any questions about this? Drop them in the comments and we’ll get back to you.
P.S. We’re not lawyers so can’t guarantee that this contains everything you need to fully tax compliant. You need to talk to your tax advisor about that. This tutorial is simply designed to better equip Australian businesses on Shopify with their GST and bookkeeping requirements.
Thank you for your interest in our Shopify Insider Blog @ Blackbelt Commerce. We invite you to check out our portfolio and other terrific blog articles on Going Global With Shopify Internationalization, Shopify Checkout , what are the vital elements of a good e-commersce, an overview of the e-commerce regulations, and Stockists On Shopify. — We are Blackbelt Commerce, a TOP Shopify & BigCommerce developer.
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