Running an eCommerce business on Shopify requires more than just selling products; it also involves managing finances effectively. Without proper financial tracking, business owners may struggle with cash flow, profitability, and decision-making. Fortunately, Shopify provides a range of financial reports that offer valuable insights into revenue, expenses, taxes, and customer behavior.
By leveraging Shopify’s financial reports, merchants can gain a clear understanding of their business performance, identify growth opportunities, and make informed financial decisions. In this article, we’ll explore the essential Shopify financial reports you should be using, how they help, and how to maximize their benefits.
1. Overview of Shopify Financial Reports
Shopify offers different financial reports depending on your subscription plan:
Basic Shopify: Limited access to financial reports.
Shopify Plan: Access to detailed sales, profit, and tax reports.
Advanced Shopify & Plus: Full financial reports, including customer trends and custom reports.
These reports can be accessed under Analytics > Reports in your Shopify dashboard.
2. Sales Reports
Why It Matters:
Sales reports provide an overview of your revenue, order volume, and product performance, helping you track business growth.
Key Metrics in Sales Reports:
Total Sales: The sum of all sales revenue.
Orders by Channel: Breakdown of sales from different sources (e.g., online store, social media, marketplaces).
Sales by Product: Identifies best-selling products and slow-moving inventory.
Sales by Location: Helps analyze demand from different regions.
How to Use It:
- Identify top-performing products and focus on inventory restocking.
- Compare sales channels to optimize marketing strategies.
- Recognize seasonal trends and plan promotions accordingly.
3. Profit Reports
Why It Matters:
Understanding profit margins is crucial for long-term business sustainability. Shopify’s profit reports help calculate net profit after deducting costs.
Key Metrics in Profit Reports:
Gross Profit: Sales revenue minus product costs.
Profit by Product: This shows which products yield the highest profit margins.
Profit by Variant SKU: Useful for tracking the profitability of different product variations.
How to Use It:
- Focus on promoting high-margin products.
- Adjust pricing strategies based on product profitability.
- Reduce costs by optimizing supplier relationships and production expenses.
4. Financial Summary Report
Why It Matters:
The financial summary report provides an overall view of business finances, including sales, expenses, taxes, and payments.
Key Metrics in Financial Summary:
Total Sales and Discounts: Tracks revenue before and after discounts.
Net Revenue: Sales after deducting refunds and discounts.
Taxes Collected: Helps with tax compliance.
Shipping Revenue & Costs: Shows how much you earn or spend on shipping.
How to Use It:
- Monitor cash flow and revenue trends.
- Ensure tax amounts are correctly calculated.
- Adjust pricing to cover shipping costs effectively.
5. Taxes Report
Why It Matters:
Tax compliance is essential to avoid legal issues and financial penalties. The tax report provides a breakdown of collected and payable taxes.
Key Metrics in Taxes Report:
Total Tax Collected: Displays the amount of sales tax collected.
Tax by Location: Helps businesses manage state, federal, or international tax requirements.
How to Use It:
- Ensure compliance with sales tax laws in different jurisdictions.
- Work with an accountant to file accurate tax returns.
- Adjust pricing to account for tax obligations.
6. Payments Report
Why It Matters:
This report tracks incoming payments and payment processing fees.
Key Metrics in Payments Report:
Total Amount Paid: Shows earnings received from Shopify Payments or third-party processors.
Processing Fees: Displays transaction costs deducted by payment providers.
Payout Schedule: Helps track when Shopify Payments deposits funds.
How to Use It:
- Monitor cash flow to plan for expenses.
- Choose the most cost-effective payment processor.
- Identify discrepancies in payment deposits.
7. Customer Reports
Why It Matters:
Understanding customer behavior helps in retention and targeted marketing.
Key Metrics in Customer Reports:
Returning vs. New Customers: Compares retention rates.
Customer Purchase Frequency: Identifies repeat buyers.
Average Order Value (AOV): Measures how much customers typically spend per order.
How to Use It:
- Create loyalty programs for repeat customers.
- Use email marketing to re-engage inactive buyers.
- Adjust pricing strategies to increase AOV.
8. Inventory Reports
Why It Matters:
Efficient inventory management prevents stock shortages and overstocking.
Key Metrics in Inventory Reports:
Current Inventory Levels: Shows available stock for each product.
Sell-Through Rate: Measures how quickly products are selling.
Days of Inventory Remaining: Estimates how long the current stock will last.
How to Use It:
- Reorder popular products before stock runs out.
- Reduce slow-moving inventory through promotions.
- Improve warehouse storage efficiency.
9. Discount Reports
Why It Matters:
Tracking discount effectiveness ensures promotions contribute to profitability.
Key Metrics in Discount Reports:
Total Discount Amount: Shows the total value of applied discounts.
Discount Usage by Customer: Identifies who benefits most from promotions.
Sales by Discount Code: Measures the success of marketing campaigns.
How to Use It:
- Analyze which discounts drive the most conversions.
- Adjust promotional strategies for better ROI.
- Prevent excessive discounting that affects profit margins.
10. Refunds and Chargebacks Report
Why It Matters:
Excessive refunds or chargebacks can harm cash flow and business credibility.
Key Metrics in Refunds Report:
Total Refund Amount: Displays the total value of refunded orders.
Chargeback Rate: Percentage of transactions disputed by customers.
Refund Reasons: Helps identify common customer complaints.
How to Use It:
- Improve product descriptions to prevent order cancellations.
- Enhance customer service to reduce disputes.
- Implement fraud prevention strategies.
Maximizing Shopify Financial Reports
To get the most out of these reports:
Automate Data Tracking – Use Shopify analytics tools or integrate third-party accounting software like QuickBooks or Xero.
Monitor Reports Regularly – Set a schedule to review key financial metrics weekly or monthly.
Use Insights for Decision-Making – Adjust pricing, marketing, and inventory strategies based on data trends.
Hire an Accountant if Needed – For complex financial management, consult a Shopify accountant.
Shopify’s financial reports provide powerful insights that help businesses manage cash flow, optimize profitability, and improve customer retention. By utilizing these reports, Shopify merchants can make data-driven decisions to scale their eCommerce stores effectively.
Whether tracking sales, monitoring taxes, or managing inventory, these reports ensure financial transparency and long-term business success. Make sure to review and act on these insights regularly to maximize your Shopify store’s potential.