Amazon settlements are paid every 1-2 weeks (generally) but often will cross a month boundary.
For example, one settlement may start in October and run through November. A2X will split the settlement data according to which month the sales or fees actually occurred. This will ensure that your financial accounts properly record the transactions in the month they occurred. This will also make months more comparable to previous months and years for your reporting.
What is the "Carry Forward Balance" used for?
When we split the settlement entry we use a 'Carried Forward Balance' account to carry over the pending Amazon settlement balance. This then allows you to simply reconcile the deposit from Amazon to a single journal entry only reflecting the total final settlement.
A visual example of this is below:
Our example settlement period starts on September 28th and run through to October 4th.
You will see below that A2X has split the settlement so that the correct settlement data is allocated to September and the correct settlement data is allocated to October. In this case the split would be as follows:
The September journal would cover from September 28th through to September 30th.
The October journal would cover the data from October 1st through to October 4th.
Once this has been sent from A2X to QuickBooks you will see the two journals contain a Carried Forward Balance amount.
The October entry is a Debit to the Carry Forward Balance account and the November entry is a Credit to the carry forward balance account.
So effectively within the one settlement that has been split by month we are simply debiting the carried forward balance account in one month and then crediting the same account for the same amount in the very next month.
Now finally, you'll be able to reconcile your Amazon settlements!