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Carried Forward Balance Account - Xero
Carried Forward Balance Account - Xero

How to carry over the pending Amazon settlement balance in Xero

Mariko Newman avatar
Written by Mariko Newman
Updated over a week ago

Amazon settlements are generally paid every 1-2 weeks, but will often cross a month boundary. For example, one settlement may start on February 20th and run through to March 06th.

A2X will split the settlement data according to which month the sales or fee actually occurred in. This ensures that your financial accounts properly record the transactions in the correct month. This also makes months more comparable to previous months and years for your reporting purposes.

Please Note: When we split the settlement invoice in Xero, we use a 'Carried Forward Balance' account to carry over the pending Amazon settlement balance. This allows you to simply reconcile the deposit from Amazon to a single invoice only reflecting the total final settlement. The name of this account is based on the marketplace name and the appended text 'carried balance', for example ' carried balance'.

Our example settlement period starts on Mar 28th and runs through to Apr 11th.

As you see below, A2X splits the settlement, so the correct settlement data is allocated to March and the correct settlement data is allocated to April.

In our example, the split would be as follows:

  • March invoice covering Mar 28th through to Mar 31st

  • April invoice covering Apr 1st through to Apr 11th

After sending these from A2X to Xero, you will only see the one invoice dated for (second half of settlement) and within the invoice, it will contain a Carried Balance amount.

The first half of the settlement has already been approved and will sit in ‘paid’ if you would like to review it for accounting and tax purposes.

The April entry is a debit to the Carried Balance account and the May entry is a credit to the Carried Balance account.

Invoice for March

Invoice for April

Effectively, we are simply debiting the carried balance account in one month and then crediting the same account for the same amount in the very next month, all within the one settlement that has been split by month.

This allows you to reconcile to the one invoice only, rather than trying to match the deposit to multiple entries.

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