Once you have sent a settlement to Xero you will be able to reconcile the settlement against the disbursement Amazon will have paid out to your bank account.
The good thing about settlement based Amazon accounting is that when you do so the amount shown on the invoice in Xero and the amount you receive into your bank from Amazon will be exactly the same. This makes it really easy for you (or your accountant) to reconcile your bank account.
Below are 3 steps that you will take to reconcile your Amazon settlements in Xero.
Step 1 - Navigate to the invoice(s)
You can do this one of two ways:
Option 1 - click the "View in Xero" link on the Link My Books view settlement page, as shown below:
Option 2 - Navigate directly to Xero and pull up your draft invoices by following the path:
Business > Invoices > Draft
Step 2 - Check the invoices are accurate
We always recommend that you or your accountant check your invoices in Xero ensuring that the correct account and tax rates have been applied, then Approve them and move to the next step.
Step 3 - match the Amazon disbursement to the settlement invoice(s)
The last step is to locate the Amazon disbursement on your bank statement reconciliation and click on the Match tab, as shown below:
This will reveal all account transactions. Your job is to locate the right one(s) to match to the amount received from Amazon.
You can use the search boxes on the right to narrow down the list if you have multiple transactions. Try searching for the marketplace for example (Amazon.fr in this instance).
IMPORTANT - If a settlement period is between two months then Link My Books will automatically split the settlement into two invoices (one for each month).
As you can see below in our example we have the split scenario so we would need to check both of the checkboxes on the left of the two invoices to match up to the final amount received from Amazon.
Below you will see that once we tick both of the invoices, the amount goes green and we can now click OK or Reconcile to allocate this amount to those two invoices, thus marking them as paid and reconciling the bank statement line.
Why are some of my settlements being sent as bills instead of invoices to Xero?
When Link My Books sends your Amazon settlements to Xero we do so in the form of an invoice (almost always).
You may have noticed that we sometimes send your settlement (or part of it) as a bill instead of an invoice and wondered why we do that...
Since Xero does not allow negative total invoices, if you have a settlement which is for a negative amount then we have no choice but to send it as a bill instead.
Why would I have a negative invoice for a settlement?
There are two main reasons as to why you may have seen this happen in your Link My Books account.
- You have a negative settlement. This can occur if your Amazon fees and advertising costs are larger than your sales amount. In this case Amazon will actually charge your card on file with the settlement amount and produce a negative total settlement report.
- If you have a settlement that spans two months and you also have a large reserved balance by Amazon. In this case we split the settlement by month so we create two invoices but because the reserved balance will always fall in one or the other invoice it will end up meaning that one of your invoices will be for a negative total.
How do I reconcile a settlement if it consists of one invoice and one bill?
Great question! If you end up with the second situation described above then you would do the following to reconcile the invoice and the bill against a single payment into your bank from Amazon:
Step 1 - Send the settlement to Xero from Link My Books.
Step 2 - Approve both the invoice and the bill in Xero.
Step 3 - Find the incoming payment from Amazon on your bank reconciliation page.
Step 4 - Click Find & Match and then tick the checkbox to Show Spent Items
Ticking this means that you will be able to then see both invoices and bills.
Step 5 - Find the invoice and the bill and tick them both and the transaction should go green and allow you to click OK to reconcile it.
If you have any questions around reconciling your settlements then please get in touch with support and we'll be happy to help.