Understanding the Amazon Reserved Balances Account
The Amazon Reserved Balances account is used to help keep your books accurate when Amazon holds back funds or when settlements span multiple months. Here's how it works:
1. Split-Month Settlements
Sometimes Amazon sends a payout that spans across two calendar months. In these cases, we split that settlement into two invoices to keep your monthly reporting clean. This method is part of Amazon's settlement processes to ensure transactions are associated with the correct accounting periods.
To keep things balanced, the remaining amount from the first invoice is rolled forward into the second. This ensures your bank reconciliation stays nice and tidy.
You'll see this represented with the following descriptions:
Split month settlement - balance of this invoice rolled forward - This amount is being carried forward to the next invoice.
Split month settlement - balance of previous invoice(s) rolled forward - This amount is being brought in from the previous invoice.
In both cases, you'll see a debit and then a credit to the Amazon Reserved Balances account - so the net effect on your books is neutral.
Need more control? If your accountant prefers to map these split-month settlement entries to a separate account for tracking purposes, that's absolutely possible. Just adjust the account mapping in your settings.
2. Amazon-Held (Reserved) Funds
Amazon may reserve part of your payout for future release - a common practice, especially with new sellers or sudden sales spikes.
When that happens, you'll see:
Amazon Reserved Balances - Current Reserve Amount
This is Amazon holding the funds (a debit into the reserved balance).Amazon Reserved Balances - Previous Reserve Amount Balance
This is Amazon releasing the funds (a credit out of the reserved balance).
Again, these entries should cancel each other out over time.
3. Cross-Debt and Cross-Marketplace Adjustments
If you sell across multiple Amazon marketplaces (e.g. Amazon.co.uk, Amazon.de, Amazon.fr), Amazon may transfer funds between your marketplace accounts to settle debts. These adjustments appear in your settlement reports and flow through the Amazon Reserved Balances account in your accounting software.
Understanding the difference
Cross-debt adjustment: When one marketplace has a negative settlement balance (fees exceeded sales), Amazon may use funds from a positive balance on another marketplace to cover the debt. This reduces or eliminates the charge to your card on file. You will see a "Cross-debt adjustment" line on the negative marketplace's settlement (positive amount, offsetting the debt) and a corresponding deduction on the positive marketplace's settlement.
Cross-marketplace adjustment: A broader term that covers any transfer of funds between your Amazon marketplace accounts, including cross-debt adjustments. You may also see this when Amazon consolidates payouts or rebalances accounts across regions.
How these appear in your books
Both types of adjustment are recorded through the Amazon Reserved Balances account. A debit on one marketplace's settlement is matched by a credit on another, so the net effect on your Reserved Balances account is zero over time.
If you notice that your Reserved Balances account has an unexpected balance, check whether there are cross-debt or cross-marketplace adjustment entries on one marketplace that have not yet been matched by corresponding entries on another. This is usually resolved once both marketplace settlements have been sent to your accounting software.
Good to know: If you have a negative settlement that was partially or fully covered by a cross-debt adjustment (rather than a card charge), see our article Why are some of my settlements being sent as bills instead of invoices to Xero? for step-by-step reconciliation guidance.
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