Understanding True Revenue

What is True Revenue?

True revenue is the cash you actually collected after accounting for returns, refunds, and exchanges. It represents the money that stays in your business, not the inflated numbers you see when someone places an order that later gets returned.

Unlike Shopify’s reported sales figures, true revenue reflects the economic reality of your business by treating returns and exchanges correctly from an accounting perspective.

Why Shopify’s Numbers Can Be Misleading

Shopify’s sales reports have a fundamental problem: they often deduct revenue at the wrong time. When a customer initiates a return, Shopify may reduce your reported sales immediately, even before the refund is processed or the product is received back.

This causes several issues:

  • Your daily sales reports swing wildly based on return creation dates, not actual cash movement.
  • Exchanges (where a customer swaps one item for another) can appear as double transactions or get incorrectly deducted from revenue.
  • Store credit transactions create confusion because they’re not true refunds but get mixed into return reporting.
  • Your accountant has to manually untangle the timing differences every month when reconciling with your bank statements.

How TruUp Calculates True Revenue

TruUp uses a straightforward formula that focuses on cash basis accounting:

True Revenue = Gross Sales − Actual Refunds + Exchanges (net-zero)

  • Gross Sales: The total amount customers paid for orders in the selected period.
  • Actual Refunds: Cash that left your account as refunds, measured when the refund was processed, not when the return was created.
  • Exchanges: Treated as net-zero transactions (customer returns one item and receives another of equal value), so they don’t reduce your revenue unless there’s a price difference.

What Are Discrepancies?

A discrepancy is the difference between what Shopify reports as your net sales and what TruUp calculates as your true revenue for a given period.

Common causes of discrepancies include:

  • Timing differences: Shopify deducted revenue when a return was created, but the refund hasn’t been issued yet.
  • Exchange handling: Shopify reduced your sales when an exchange was initiated, but the replacement order revenue hasn’t been recorded yet.
  • Store credit: Shopify treated store credit like a refund even though no cash left your business.
  • Partial refunds: Complex partial refunds where only some line items were returned but Shopify’s reporting doesn’t clearly separate them.

How to Use the Dashboard

The TruUp dashboard shows you four key numbers for any date range:

  1. Gross Sales: Total order value before any adjustments.
  2. Refunds: Total amount refunded to customers.
  3. Exchanges: Estimated value of exchange transactions.
  4. True Revenue: The final cash-basis revenue figure.

Below the summary cards, the discrepancy table shows you exactly where your Shopify numbers diverge from reality. You can group by order or by day to identify patterns.

When discrepancies exceed your configured threshold, TruUp highlights them so you can investigate further or export adjustments to correct your books.

Exporting Adjustments

Once you’ve reviewed your discrepancies, you can export a CSV file formatted for QuickBooks Online. This file contains journal entries that adjust your books to match your true revenue.

Your accountant can import this file in minutes, saving hours of manual reconciliation work every month.

Next Steps

Ready to get started? Read the Getting Started guide or install TruUp from the Shopify App Store.

Have questions? Contact us at [email protected].