Amazon settlements are generally paid every 1-2 weeks, but will often 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 runs through to October 4th.
A2X will split the settlement so that the correct settlement data is allocated to September and the correct settlement data is allocated to October.
In our example, the split would be as follows:
- September journal covering the data from September 28th - September 30th.
- October journal covering the data from October 1st - October 4th.
Once you send these invoices 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.
Effectively, 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, within the one settlement that has been split by month.
Now, you can go on and reconcile your Amazon settlements!
A2X and QuickBooks Desktop/QuickBooks Enterprise: For more information on how to use A2X for Amazon accounting with QuickBooks Desktop and QuickBooks Enterprise, read our article here.
Uploading your Chart of Accounts File: For more information on uploading your chart of accounts, read our article here.
Enabling Account Numbers: Account numbers are required for A2X / QuickBooks Desktop or QuickBooks Enterprise users. For more information on enabling chart of account numbers, read our article here.