Link My Books creates an invoice for each settlement you receive, however sometimes we create more than one invoice - why does that happen?
When a settlement spans more than one month we create one invoice per month that the settlement spans. This is to keep your monthly figures correct, which is especially important for VAT returns.
To keep the reconciling of these split settlements easy we roll the balance of the first part forward into the second part so that the first invoice will have a total of "0" and the second invoice will have the full total of the settlement - meaning you only need to reconcile the payment coming in from Amazon against the second part as the first part get's automatically marked as paid with it having a total of 0.
Example 1:
Let's assume we have an Amazon settlement for the period August 20th - September 3rd 2019 totalling £1,500.
Link my books would create two invoices for this settlement since it spans two months:
Invoice 1: For the transaction between August 20 - August 31 2019.
The total of the transactions in invoice 1 is £500 (for example).
Invoice 2: September 1 - September 3 2019
The total of the transactions in invoice 2 is £1,000.
We add a line to invoice 1 with the description "Split settlement - the balance of this invoice was rolled forward to the next invoice" with a value of -£500 so that the invoice total is reduced to 0.
We add a line to invoice 2 with the description "Split settlement - the balance of the previous invoice was rolled forward to this invoice" with a value of +£500 so that the invoice total is increased to £1,500.
This keeps the August data in the August invoice and the September data in the September invoice, whilst keeping the reconciling of these split settlements as easy as it can be.
Invoice 1 will automatically be marked as paid as soon as it is approved in Xero.
Invoice 2's total will match exactly the amount coming in from Amazon and will be a simple one click reconcile.
If you are reconciling foreign currency invoices in Xero please see this article, i.e EUR to GBP etc.
Example 2:
In a further example, in very rare occasions if you have not had many transactions in an Amazon marketplace you could end up with a settlement that spans more than 2 months.
Let's now assume we have an Amazon settlement for the period July 15th - September 23rd 2019.
Link my books would create two invoices for this settlement since it spans two months:
Invoice 1: July 15 - July 31 2019
Invoice 2: August 1 - August 31 2019
Invoice 3: September 1 - September 23 2019
Again, this keeps the July data in the July invoice, the August data in the August invoice and the September data in the September invoice.
The last thing to mention is that if when we split the settlement into multiple invoices and one of those invoices actually contains no data at all it will simply be ignored.