STEP-BY-STEP GUIDE TO RECONCILING FOR ONLINE MARKETPLACE PAYMENTS

One of the biggest challenges in working with ecommerce is getting a true understanding of your costs of doing business on that platform. Many business owners simply book this deposit to Sales in their accounting system. Those who know that is wrong, or realize they need more information to manage their business, attempt to reconcile this manually and give up because they don’t understand “how” to properly record the entry. 

This post is designed to help business owners fully understand how to reconcile online payment settlement reports so their Income statement will provide a true picture of where their money is going and the actual costs of doing business on that platform.

ECOMMERCE PAYMENT SETTLEMENT DEPOSITS AND REPORTS

About every two weeks, ecommerce pays their sellers for their sales.  These payments are net, which means your revenue is more than what you’ll receive as a deposit. Your revenue has been reduced by any or all of the following:

  1. Rebates
  2. Refunds
  3. Amazon sales commission
  4. FBA fees
  5. Shipping fees
  6. Advertising fees
  7. Monthly subscription fees
  8. Sales tax
  9. Sales tax facilitator fees
  10. Unavailable balances

You’ll find out how your revenue has been adjusted by Amazon ( example ) by viewing the Settlement Report which can be obtained from the seller site and then going to Reports > Payments.

Here is an example of a report where you can see the ₹5,804.68 [tick mark (J)] deposit is the result of ₹8,705.09 [tick mark (A)] in sales and the deductions made by Amazon ( example ). A little confusing, right? We’ve added lettered, red tick marks to tag each number so you can see where they go later on.  

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