How to record Shopify sales in FreeAgent

Since FreeAgent switched off its Shopify integration on 30 April 2025, the method FreeAgent itself recommends is to explain each Shopify payout as it arrives in your bank feed. This guide follows FreeAgent's article Managing Shopify transactions in FreeAgent and adds where to find each number in Shopify.

It assumes you take card payments with Shopify Payments and the payout lands in your main bank account in pounds. If your customers pay with PayPal, skip to PayPal orders.

What you need for each payout

1. The payout itself. In Shopify, go to Finance > Payouts, click the payout date, then the payout. You see the payout amount and a breakdown of charges, refunds, adjustments and fees. To keep a record, use Export payout transactions (one CSV row per order with Amount, Fee and Net).
2. The VAT split. The payout CSV does not show VAT. Note the order numbers in the payout, then in Orders export those orders to CSV and add up the tax columns by rate (for example 20% and 5%). If you only sell at one rate, you can skip this.
3. The bank transaction in FreeAgent. The payout appears in your FreeAgent bank account for the net amount (sales minus fees and refunds).

Worked example

FreeAgent's article uses this payout: sales of £200 at 5% VAT and £430 at 20% VAT, £30 of fees and £100 of refunds on 20% VAT sales. Shopify pays out £500, and that is what appears in your bank feed.

Step 1: add the fees

Open the £500 transaction in FreeAgent and choose Adjustments > Fees and commissions. Enter £30 and pick Bank / Finance Charges (or a custom "Shopify fees" category if you created one). Click Save and add another. The transaction now covers £530.

Step 2: split out each VAT rate

Click Switch adjustment type > Split transaction. Choose type Sales, enter £200 and pick 5% VAT. Click Save and add another.

If you have no refunds, explain what is left as Sales at 20% and you are done.

Step 3: record the refunds

Click Switch adjustment type > More options. Increase the value to the remaining sales plus the refunds (£430, which is £330 net in the bank plus £100 refunded), pick 20% VAT and click Create New Explanation. FreeAgent creates a new money-out line for the £100 difference. Explain it as Sales Refund with 20% VAT. If refunds cover sales at different VAT rates, split that line again per rate.

The payout is now fully explained: £630 of sales across two VAT rates, £30 of fees and £100 of refunds, net £500.

PayPal orders

For orders paid with PayPal, FreeAgent suggests connecting FreeAgent to PayPal and ticking Guess bank transactions so PayPal fees are split out automatically. Then explain the sales directly in the PayPal bank account, with no invoices. A personal PayPal account cannot connect; upload statements instead.

Things that catch people out

• VAT Flat Rate Scheme: if some sales are outside the scope of UK VAT, FreeAgent says to split them into a separate sale so they stay out of your flat rate turnover.
• Several stores or currencies: explain each payout in the bank account it arrives in. If Shopify pays out in euros into a pound account, explain any difference to Realised Gain / Loss on Foreign Exchange.
• Timing: a payout can include sales from more than one day. If you need income in the month it was earned, FreeAgent lets you accrue or defer income.
• Not sure which VAT rate applies? Ask your accountant, as FreeAgent's article also says.

When this gets too slow

The manual method is fine for a few payouts a month. With daily payouts and mixed VAT rates it becomes an evening a month, and FreeAgent still has no record of who bought what.

That is why we are building Ledgerline, a Shopify app that sends each paid order to FreeAgent as a sales invoice with the VAT rate per line, marks it as paid in a bank account you choose, and turns refunds into credit notes. It is not on the Shopify App Store yet. For the other options available today, see FreeAgent Shopify integration discontinued: what to do now.

More Shopify and FreeAgent guides

• FreeAgent Shopify integration discontinued: what to do now
• Shopify and FreeAgent VAT a penny out? Why it happens and how to fix it
• How to record Shopify refunds in FreeAgent as credit notes

Ledgerline: Shopify to FreeAgent