How to record Amazon settlement data in QuickBooks

The purpose of a clearing account is to easily reconcile your bank account against your bank statement. 

If you were to deposit daily revenue directly into your bank account, it would be very difficult to reconcile because you would have to match your sales within that time interval against the lump sum.  

This is why a clearing account and why it is used in this case and this method is used for both merchant fulfilled and FBA orders.

 

Preparing QB for Amazon orders and fees

  • Clearing account for Amazon in QB:  The clearing account (or also called a holding account) is a virtual bank account used to hold amazon revenue until Amazon disburses the money in your bank account. 

  • Expense account: Amazon fees expense account 
  • QB Vendor: Amazon 
  • Unify Enterprise Setup: expenses and fees in Unify Enterprise 

 

Part 1: Daily downloading and posting orders into QuickBooks

  • Daily order posting to QuickBooks

OR

  • Consolidated order posting by Settlement ID after settlement report is downloaded in Unify Enterprise

All daily/consolidated revenue (orders) are deposited into the clearing account.

 

 

Part 2: Posting Amazon expenses and fees into QuickBooks

Every two weeks amazon deposits ($$) which is the net of your orders minus the fees Amazon has taken.  

When Amazon expenses and fees are posted to QB: 

  • Debit the expense account (increase)
  • Credit the clearing/hold account for the value that Amazon has charged for the expenses and fees. (decrease)

 

Part 3: Transferring funds from Amazon clearing account to bank account (deposit)

When Amazon puts the transfer amount (closing balance) into your bank account you need to create a transfer funds transaction in QuickBooks.  Go to Banking->Transfer funds

Important: the date and transfer amount should match the transfer amount (closing balance) in Amazon settlement report. 

 

 

Clearing account wrap-up: 

Master equation: Total rev - $ deposited by Amazon - expenses and fees charged by Amazon = $0

This is why this is called a clearing account.  

 

Note: Your clearing account may never get to $0 due to timing of new orders coming in and the reconciliation of a past settlement disbursement.  

The existing balance will be the new orders coming for the next settlement period.  

What's next:  Reconciliation of Expenses and Fees In QuickBooks

 

 

 

 

 

 

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