How to Reconcile Zero Total Settlements

Sometimes you will see a settlement in your dashboard with a total of $/€/£ 0.00, this article will explain how to deal with those.

We will address:

Settlements with a total of $/€/£ 0.00 occur when the total income and total fees during the settlement period offset each other, resulting in a net amount of zero. This generally occurs when Amazon reserve the balance of the settlement for future payout. They do this for various reasons, commonly for new sellers or for items that you fulfil yourself (Fulfilled by Merchant - FBM), for example.

These reserved balances are normally released on the next settlement. Rest assured, Link My Books is designed to handle these types of reserved balances automatically.

When a settlement has a total of zero and is for a mid-month date range (e.g., it does not span two calendar months), a single invoice will be created.

This is straightforward to reconcile and mark as paid: simply mark the invoice as "Approved" within your accounting software (like Xero). It will then automatically mark itself as paid, with no further action required.
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If a settlement with a zero balance spans a date range across two calendar months, Link My Books will split it into two parts. This is done to ensure your monthly figures are accurate for reporting (e.g., for VAT returns).

Why the Split Occurs:

The key factor is the 'Amazon Reserved Balance.' Because Amazon typically reserves the entire settlement balance on the last day of the settlement period, this reserved amount will fall into only one part of the split. This results in one part of the settlement being a positive figure (an invoice) and the other being a negative figure (a bill).

The positive part will typically be sent to Xero as an invoice, and the negative part as a bill.

Let's illustrate with an example:

Suppose you have a zero-balance settlement, split into an invoice for £1,000 and a bill for -£1,000. To reconcile this, you'll need to wait for the next settlement from Amazon where you actually receive a physical payment. Let's say the next settlement you receive is for a total of £500.

So, you now have:

To handle this, you would reconcile the £500 payment received from Amazon against all three of the items above:

£1,000 Invoice (from zero-balance settlement - Part 1)
-£1,000 Bill (from zero-balance settlement - Part 2)
£500 Invoice (from subsequent settlement with payment)
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£500 Total (Matches bank receipt from Amazon)
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This combined £500 total for all three (invoice, bill, and next invoice) will then reconcile precisely with the incoming payment from Amazon, thus marking both original invoices and the bill as paid. No further action would be required.

By following these steps, you can accurately reconcile zero-total settlements and ensure your books remain balanced. For a detailed, step-by-step guide on how to actually reconcile these settlements within Xero, please see our dedicated help article here.