How to use Shopify Balance: A beginner's guide

This beginner-friendly guide explains how to set up and use Shopify Balance so you can start holding sales funds, using a business debit card, and managing routine expenses with minimal friction. The steps below assume you are an eligible Shopify merchant and have an active store; availability and exact flows may vary by region.

Step 1 — Check eligibility and enable the account

• Open your Shopify admin and navigate to the payments or finance section where Shopify lists optional financial products. Look for Shopify Balance or Business Account and follow the prompts.
• Provide requested information for verification, which typically includes business details, legal name, tax ID, and personal identity verification. The process helps Shopify comply with local financial regulations.
• Wait for approval. Some merchants get immediate access while others may need additional documents. You’ll be notified in your admin once the account is active.

Step 2 — Receive payouts into Shopify Balance

• Once enabled, you may be able to route Shopify Payments payouts directly into your Shopify Balance account. This can shorten the time between a sale and when funds are available for spending.
• Confirm your payout schedule and any instant payout options. Some merchants can access funds faster for a fee, while standard payout timing may be applied otherwise.

Step 3 — Order and use your Shopify Balance card

• Order a physical or virtual card from your Shopify admin. Virtual cards are useful for online subscriptions and ad platforms, while physical cards work for in-person or point-of-sale purchases.
• Set spending controls if available. Shopify Balance often allows you to set limits or issue virtual cards for specific team members to help control expenses.
• Use the card for business expenses like packaging, shipping, supplier payments, and advertising. Purchases draw from your Shopify Balance, avoiding the need to transfer funds to a bank first.

Step 4 — Move funds to external accounts when needed

• If you need funds in a traditional bank account, you can typically transfer from Shopify Balance to your linked external bank. Check transfer times and fees; instant transfers may incur charges.
• Plan transfers for payroll, loan repayments, or large supplier invoices that require a bank transfer. Keeping a small operational buffer in Shopify Balance can reduce frequent transfers.

Step 5 — Reconcile, categorize, and integrate with accounting

• Export transaction histories regularly or connect an accounting integration. Accurate reconciliation ensures sales, fees, and expenses are correctly recorded for taxes and reporting.
• Use built-in expense categories or map Shopify Balance transactions to your accounting chart of accounts to make month-end processes easier.

Practical tips for beginners

• Start small: Keep a modest balance in Shopify Balance at first to familiarize yourself with how payouts, refunds, and card charges appear in reports.
• Allocate funds: Consider creating an internal rule of thumb for funds allocation—e.g., 60% for operating expenses, 30% to save for taxes, 10% for reinvestment—so your working cash is predictable.
• Use virtual cards for subscriptions: Create virtual cards for ad platforms or software subscriptions so you can pause or replace cards easily without affecting your primary card number.
• Monitor fees: Be aware of instant transfer fees, ATM withdrawal fees, or foreign transaction charges, and choose the most cost-effective option for each need.

Common workflows and examples

• Pay shipping costs instantly: A merchant receives a payout into Shopify Balance and uses the Balance card to pay the carrier immediately, avoiding cash flow delays.
• Fund a marketing push: When testing a new ad campaign, keep ad spend funds in Shopify Balance for quick top-ups on advertising platforms using a virtual card.
• Vendor payments: Use Shopify Balance to pay recurring supplier invoices, streamlining procurement without extra bank transfers.

Security and compliance basics

• Enable two-factor authentication on your Shopify account to protect access to financial tools.
• Control team access by assigning appropriate roles. Limit who can issue cards, transfer funds, or change payout settings.
• Keep records of transfers and card receipts for tax and audit purposes. This reduces friction during accounting and tax filing.

When not to rely solely on Shopify Balance

• If you need full banking services like loans, merchant credit lines, or payroll deposit capabilities in certain regions, maintain a traditional business bank account as well.
• For complex corporate structures or high-volume international operations, a full-service bank relationship may be necessary for favorable FX rates and lending products.

Summary

Using Shopify Balance is straightforward for beginners: check eligibility, enable the account, receive payouts, order a card, and integrate transactions with your accounting. Start small, monitor fees and access controls, and treat Shopify Balance as a convenient operational account that integrates tightly with your store’s daily cash needs.