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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.


Prerequisites:

  • 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

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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

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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. Likewise, if the settlement deposit is negative, DEAR will create a Money Sent task with the same bank details. 


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 and tax rules in DEAR to Amazon transaction fees

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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. The Default Lines Tax will be auto-filled for the Tax Rule field, but this can be edited here. 


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.


NOTE: Skip mapping will only stop DEAR from processing an entry as a manual journal. If DEAR organisation is also integrated with Xero and the Xero sync mode is Sync consolidated settlement report, even though the transaction is skipped, DEAR will capture these skipped transactions and sync them to Xero. 




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.


Load and review Amazon settlement files

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Go to the Amazon Settlement files tab to view downloaded files. DEAR checks daily whether an Amazon settlement file is available and will load it automatically. Generally, you do not need to trigger manual load of settlement data, however, if a file was not captured by DEAR or to load historical settlement data, you can use the manual Load Settlement Data option.


If you have Process Amazon Settlements Report Automatically enabled (Integration → Amazon → [select store] → Setup), settlement files will be processed automatically and your accounting records updated with the relevant transactions. If the setting is disabled, you will have to trigger manual processing of settlement files. 


Review and show the details of each transaction in a settlements file by clicking Review to open a pop up window. Export exports the settlement file data in .csv form. 


From here, you can search individual transactions and edit the account and tax rules of transactions if necessary. Users who are integrated with Xero and have enabled Consolidate by Amazon Settlement enabled in the Amazon settings can click Confirm Sync with Xero to confirm settlement details can be synced with Xero (not currently available with QBO) during next manual or automatic sync.


NOTE: This simply creates a sync entry (data will send next time sync is performed), and does not sync the data itself. 


The Review page also has a section showing the average COGs of products sold. The costs for this settlement period were calculated using the product cost data in DEAR. 


Users who are integrated with Xero and have enabled Consolidate by Amazon Settlement enabled in the Amazon settings can also click Confirm Sync with Xero to confirm COGs details can be synced with Xero (not currently available with QBO) during next manual or automatic sync. You can update new costs and to re-calculate the cost of goods sold prior to confirming Sync of COGS with Xero Accounting system. Average Cost can be edited by the user but all other fields are read-only. Average cost is only editable if the COGS record sync is not yet confirmed for Xero sync.


Consolidate sales by settlement file (Xero only)

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DEAR allows consolidating all sales from the same channel and store when exporting sale details to Xero. This is controlled by the Xero Synchronisation Mode setting (Integration → Amazon → [select store] → Setup). 


Change the setting to Consolidate by Amazon Settlement to consolidate all transactions due to sales and Amazon charges and fees into a single invoice per settlement file. Enabling this setting will enable a further setting, allowing you to group transactions by All Sales, By Product, or By Product Categories


This is in addition to the Daily Consolidation or No Consolidation selected in the Amazon integration settings.

  • If Sync as Individual Sales is selected for Xero Synchronisation mode, Amazon sales will be synced according to No Consolidation, Daily Consolidation
  • If Consolidate by Amazon Settlement is selected for Xero Synchronisation mode, this will take priority over any other consolidation in either Amazon integration settings or Xero integration settings. DEAR will only export a single settlement invoice (if settlement deposit amount is positive) or bill (if settlement deposit amount is negative)


NOTE: When the settlement report transactions does not belong to one single month, the transactions within the settlement reports will require to be spit between two months. 


NOTE: Initially when user enables Consolidate by Amazon Settlement, this could lead to duplicate data entries for already synced data. To mitigate this, DEAR adds a one time adjustment upon intial sync for settlements which contains already transactions that have already. This can only be done when No Consolidation is selected, as DEAR has no reference to individual sync items in Daily Consolidation to verify duplicates. 



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