Amazon to QuickBooks Online Accounting: Processing Settlements and Bank Deposits 1 month ago

Checkbook with Cash and coins

Most sellers who don’t track individual transactions likely summarize settlements into a few documents.

Because we’ve been tracking individual transactions, we’ll continue with that method. That’s the best way for sellers to manage their business because individual transactions give you far better detail and insight into your business than just summaries.

If you’re at a point where you’re spending too much time entering transactions, consider using SellerZen to automate the process.

Lumping and summarizing transactions hides all of the SKUs that are losing money. It also doesn’t tell you if there are mistakes with inbound fees or storage fees since all you see is a single number. You could be losing money on products, long-term storage fees, and inbound fees due to some simple mistake. And you’d never know.

For the following settlement transactions, some sellers choose to put all settlement transactions into one Vendor Credit and one Vendor Expense document per settlement. Leave traceable information in the Memo field, like the settlement period. This is so you can easily search these documents later.

Go to the bottom of the article to view other articles in our Amazon to QuickBooks Online accounting series.

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Previous and Current Reserve

These amounts are available on your Statement view. To access this, go to Reports > Payments.

Reports Payments

Previous Reserve

Current Reserve

If you’ve been following our guides, then you should have a Current Reserve bank account (Type: Bank and Detail Type: Cash on hand) that you’ve made a sub-account of your Amazon Undeposited Funds account.

To process reserve funds, you’d create a Vendor Credit with the Previous Reserve amount to the Amazon Current Reserve account. That’s because the Previous Reserve amount is being released.

Then you’d create a Vendor Expense to withhold the Current Reserve funds from your Amazon Undeposited Funds account.

Both choosing the same account for your Previous and Current Reserve funds, you’ll always have a running balance of what to expect on the next disbursement. This is important for sellers who need accuracy to make purchasing decisions.

Make sure you leave “Previous reserve balance” and “Current reserve balance” in the description or memo fields as well as any other identifying information so that you can easily search for these transactions.

Below is an example of a Vendor Expense document with a Current Reserve balance. While the Current Reserve amount on Amazon is negative because it reduces your settlement total. Since we’re creating an expense document, we won’t need to add a negative sign.

Vendor Expense current reserve

Here is a Vendor Credit with a Previous Reserve balance.

Vendor Credit Previous Reserve

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Reconcile your Orders with Amazon Settlements

If you’ve been creating invoices and receiving payments since your previous statement, then the orders that show up on this settlement will be exactly the same as the orders that show up in QuickBooks Online.  Assuming you haven’t made any data entry mistakes, you can see a total number of orders on Amazon for the period.

Amazon Statement Period

Run a report on QuickBooks to see the total number of orders. This should give you a total number of orders to easily compare with Amazon’s numbers. In the following screenshot, we used one default customer account for all orders on this marketplace.

Advanced Search

Payments Filter

If you’re missing orders, you’ll have to manually look for missing orders. You can just compare the values on this QuickBooks Online report with the Transaction view on Amazon.

There may be some discrepancies due to pending orders, paid orders, and orders paid and shipped around midnight. You’ll need to expand the period by a day before and after to catch those transactions.

In almost all cases, amounts are off because someone typed in the wrong numbers. So if the total value of those orders doesn’t add up, you’ll have to check each invoice against Amazon’s orders for accuracy.

Here are some common reasons why your order count may be off:

  • This is a Payments report, so if you forgot to click on “Receive payment” on the invoice, those transactions will be missing here
    • If you’ve forgotten to “Receive payment,” then you should see Open or Unpaid invoices on your QuickBooks Online dashboard
  • Sometimes, orders will miss the settlement cut-off time, and it’ll show up on the next settlement. But you may have already created the documents
  • You forgot to enter an invoice or you created the invoice but forgot to save

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Refunds

You can Filter view by Refunds on Amazon and compare those refunds with the Refunds report in QuickBooks Online. Both refunds and amounts should match if you’ve been entering the documents daily.

Amazon sometimes issues Refund documents for $0.00 if you’re using FBA. They may be included in the total number of refunds count on Amazon. You can ignore those transactions. In the screenshots below, Amazon showed 20 transactions, with 2 of them being for $0.00.

Amazon Filter by Refunds

Refunds search

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Selling Fees

These are non-order fees related to selling on Amazon. Common ones include subscription fees and storage fees if you’re using FBA.

Because they’re selling fees, you’d create a Vendor Expense document with the Amazon Undeposited Funds account selected.

You can also include these fees on the same Vendor Expense document you created for the Current Reserve transaction to keep all settlement transactions on one Vendor Expense document.

If you’re tracking specific transactions, then make sure to select the proper Expense account. Otherwise, use one Expense account like “Amazon Other Fees” to track all non-order fees like disposal fees.

Below is a Vendor Expense transaction with sample fees and accounts. We have the accounts separated here, but you can make them all sub-accounts of one main Amazon Other Expense account. This may be preferable if you want to be able to expand and collapse accounts on the reports.

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Other Transactions

These are usually reimbursements, but they could be any credits or debits to your account. They’re also non-order related transactions. You may have already processed the transactions if you’re keeping track of your Reimbursements report daily. If you haven’t, then create the proper documents and select Amazon Undeposited Funds account when prompted for one.

If you’re tracking specific transactions, like all FBA Inventory reimbursements, then make sure to select the proper account.

You’d process these as Vendor Credits or Expenses depending on whether they’re income (Vendor Credits) or expenses (Vendor Expenses). Check out our article on Reimbursements to see how to process Reversed Reimbursements.

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Creating the Bank Deposit

Once you’ve reconciled all the transactions on the settlement with the transactions you’ve entered in QuickBooks Online, the last thing you’ll need to do is create the Bank Deposit into your Bank Account.

This moves the fund from the Undeposited Funds account to your Bank account.

If you’ve made the Current Reserve account a sub-account, then the Undeposited Funds account balance should be whatever your Current Reserve is. It may be more if you’ve entered additional transactions after the settlement period.

Amazon Settlement Amount

Bank Deposit location

Filled Bank Deposit form

If there are some discrepancies in the expected amounts in your Undeposited Funds account, then here are possible causes:

  • Missing or incorrectly entered invoices, refunds, reimbursements, or other expenses
  • You forgot to select your Undeposited Funds account when creating documents
    • If this is the case, simply run a report on the accounts you may have used and edit the transactions
  • Orders that occur right on the settlement cut-off times may appear on the next settlement, meaning you’ve added an additional transaction that Amazon will credit or debit on the next settlement
    • If the amount is off by this particular transaction, then you’re fine

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Tracking your transactions from Amazon isn’t a difficult task. But it’s quite tedious and it’s prone to numerous mistakes anywhere along the way. One seemingly careless mistake can result in hours of frustration as you hunt down affected transactions.

Using SellerZen, you can automate the entire process. Because every transaction posting is automated, it’s also extremely consistent. You’ll be able to use QuickBooks Online to search for any transaction information, and it’ll always be there.

You won’t have to look at the line description and the Memo field just because you may have put it in one place while an employee put it in another.

Learn how to handle other accounting aspects for your Amazon business:

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