Amazon generates Settlement Reports for its sellers, providing breakdowns of Item Price, Amazon commission fees, shipping fees, and total amount earned by the seller - detailed information of a seller’s account activity for the settlement period. Approximately every two weeks, Amazon will deposit the sales money, minus charges for Amazon fees, in the seller’s Amazon account directly into the seller’s bank account.
Amazon generates a report (Amazon Settlements Report) detailing these fees at approximately two-week intervals. The fees can then be processed manually by the user or automatically by DEAR. This article will show you how to enable automatic capturing and processing data from the settlement report for faster reconciliation of the settlement report with your accounting records.
DEAR uses the settlement report data to:
- Create a Money Received task for the settlement deposit paid from the Amazon seller account (specified accrual account) to the seller's bank account.
- Expenses related to sales (such as commissions and FBA fulfilment fees) will be created as additional COGS/journal lines on the sale order.
- Fees not related to sales will be created as Manual Journal tasks.
- Notify the master user of the account if the settlement report contains an unmapped transaction type in DEAR.
- Set up Chart of Accounts and Bank Accounts.
- Amazon eCommerce Integration
- Select a default Customer for Amazon store (Integration → Amazon → [select store] → Setup → General Settings).
- Ensure Amazon Tax rules are mapped with DEAR tax rules.
- Ensure Amazon payment methods are mapped with DEAR payment accounts.
- Define Money Settlement Bank Account.
Table of Contents:
- Enable automatic processing of Amazon settlement reports
- Define Money Settlement Bank Account
- Map DEAR payment methods to Amazon payment methods
- Map Accounts in DEAR to Amazon transaction fees
Enable automatic processing of Amazon settlement reports
You will need to enable the Process Amazon Settlements Report setting for DEAR to automatically capture and process data from the settlement report. Go to Integration → Amazon → [select store] → Setup → Account & Cash Settings and enable Process Amazon Settlements Report. When enabled, DEAR checks for settlement reports to load and process automatically every hour.
If this setting is disabled, you will need to download and process the settlements report manually.
Define Money Settlement Bank Account
Select the bank account that is used to receive settlements from Amazon (Integration → Amazon → [select store] → Setup → Account & Cash Settings). This will be used for to create a Money Received task when processed Amazon settlement report contains a settlement deposit to the sellers bank account from Amazon for the settlement period.
NOTE: Currency of the Amazon settlement will not be captured while processing the settlement file. Bank account currency and Amazon settlement currency must be the same to avoid discrepancies.
Map Accounts in DEAR to Amazon transaction fees
You will need to map Amazon transaction fees to the appropriate expense accounts from your DEAR Chart of Accounts to process the settlements report automatically. DEAR uses this mapping to add charges/fees/payments against sale orders and to generate manual journals, ensuring financial data between DEAR, Amazon, and QBO/Xero if applicable reconcile.
NOTE: DEAR creates internal notifications, and notifies the account master user via email, in the event of unmapped transactions, e.g. Amazon introducing a new fee.
Go to Integration → Amazon → [select store] → Setup → Link Accounts in DEAR to Amazon Transaction Fees to carry out account mapping. Click Load from Amazon button to load all fee types and then on the right hand side map each fee type to an account from the chart of accounts.
Not every transaction listed in the Amazon settlement report needs to be mapped against DEAR accounting. For example, other-transaction type "Current reserve amount" is not a fee/charge that requires to be mapped against DEAR accounting as it is not a charge or a fee but rather its the merchant's reserve money that gets accumulated periodically. These transaction types can be skipped by checking the Skip mapping next to that transaction type - these transaction types will be ignored by DEAR.
You're done! DEAR can now automatically process the Amazon settlement report.
NOTE: Expenses related to tasks (such as commissions and FBA fulfilment fees) will be created as additional COGS/journal lines in sales. Fees not related to sales will be created as Manual Journal Task entries.