If you're selling on Amazon North America and your business is established in the US then Amazon will send you an annual summary called "1099-K" of your processed payments for that year through the platform.
1099-K is only issued to sellers who made over $20,000 in over 200 transactions on Amazon North America.
The 1099-K can cause some confusion with sellers when it comes to reconciliation against their figures showing in Xero or QuickBooks. In this article we will cover how to reconcile your 1099-K against both the Amazon Date Range Reports and also the figures in Link My Books.
Reconciling the 1099-K figures against Amazon Date Range Reports
When you receive your 1099-K from Amazon it will look something like this:
The second page will include a table like this:
To validate these figures directly in Amazon, you can use the Date Range Reports page to generate summary reports for a specific date range.
To generate a date range report, follow these steps in Amazon Seller Central:
From the Reports link, select Payments
Select Date Range Reports. You will need to generate a report for both Standard and Invoiced orders (if applicable).
Click Generate Report
In the Generate date range report pop-up box, proceed as follows:
Select report type: Transaction
Select reporting period: Month or Custom, and the specified date information
Click Generate
Review your report in the list on the Date Range Reports page
Filter the type column by Order
Add the total of Product Sales + Product Sales Tax + Shipping Credits + Shipping Credits Tax + Gift Wrap + Gift WrapTax + Promotional Rebates + Promotional Rebates Tax for both Standard & Invoiced Orders (if applicable).
Reconciling the 1099-K figures against Link My Books summaries
Link My Books has a built in 1099-K reconciler feature. This makes it super easy to verify that the figures being pushed to your bookkeeping system by Link My Books line up exactly with the 1099-K figures.
To reconcile your 1099-K figures with Link My Books summaries, follow these steps inside the Link My Books app:
From the Accounts & Taxes menu, select 1099-K Reconciler
Select the Year you want to reconcile
Generate the reconciliation report
The generated file is a CSV file showing all the lines that formed part of the Link My books summary settlements for the year that you selected.
Note that the generated file contains only settlements that are showing in your Link My Books. Eg. if you generate the file for 2022 but you only have settlements showing in Link My Books for September-December 2022, then we can only include those months.
The generated file will look something like this:
The easiest way to validate the figures is to generate a pivot table from the raw data.
To generate a pivot table in Excel, follow these steps:
Highlight all the data showing in the file
For the Insert menu, select Pivot Table
Click OK to accept the Table/Range and the placement of the pivot table in a new worksheet
From the PivotTable Fields box, drag the channel to the Filters section
Select from the filter the Amazon Marketplace you wish to reconcile
From the PivotTable Fields box, drag the description to the Rows section
From the PivotTable Fields box, drag the amount to the Values section
Filter the Row Labels column to show only the descriptions listed below:
Amazon Sales - Principal |
Amazon Sales - Shipping |
Amazon Sales - Gift Wrap |
Amazon Sales - Principal (Marketplace VAT Responsible) |
Amazon Sales - Shipping (Marketplace VAT Responsible) |
Amazon Sales - Gift Wrap (Marketplace VAT Responsible) |
Amazon Sales - Promotional Discounts (Marketplace VAT Responsible) |
Amazon Sales - Shipping Promotion (Marketplace VAT Responsible) |
Amazon Sales - Principal Marketplace VAT Collected |
Amazon Sales - Shipping Marketplace VAT Collected |
Amazon Sales - Gift Wrap Marketplace VAT Collected |
Amazon Sales - Shipping Promotion |
Amazon Sales - Promotional Discounts |
Amazon Sales - Promotional VAT/Tax Discount |
Amazon Sales Tax - Sales Tax (Gift Wrap) |
Amazon Sales Tax - Sales Tax (Principal) |
Amazon Sales Tax - Sales Tax (Shipping) |
Note that you may not have all the above transaction types in your file as this depends on if you have had any Busch transactions pass through your Amazon account.
When you're done it should look something like this:
As you can see the final figure showing is $118,149.31 which matches our figure on the 1099-K.
Here is a video showing the full pivot table process:
Reconciling the 1099-K figures with QuickBooks
To reconcile the figures in your QuickBooks account with the 1099-K figures you can use the Transaction Detail by Account report.
To download the Transaction Detail by Account report, follow these steps in QuickBooks:
From the Reports menu, select the Transaction Detail by Account report from the For my accountant section
Select Customize
Set the Report period date range as the year of your 1099-K
Under Filters select Distribution account and then check Amazon Sales and Amazon Sales Tax
Under Filters select Customer and then check the Amazon Marketplace you wish to reconcile
Click Run Report
From the Reports menu, select the Transaction Detail by Account report from the For my accountant section:
Select Customize:
Set the Report period date range as the year of your 1099-K:
Under Filters select Distribution account and then check Amazon Sales and Amazon Sales Tax:
Under Filters select Customer and then check the Amazon Marketplace you wish to reconcile:
Click Run Report and you should end up with something that looks like this:
Click the export icon and select Export to Excel to download the report.
Once you have the report downloaded open it in Excel or similar and follow these steps to reconcile the data with your 1099-K:
Apply a Filter to the row containing the column titles
Filter the Memo/Description column to show only the transactions below
Sum up the Amount column and it should match the total showing on your 1099-K
Amazon Sales - Principal |
Amazon Sales - Shipping |
Amazon Sales - Gift Wrap |
Amazon Sales - Principal (Marketplace VAT Responsible) |
Amazon Sales - Shipping (Marketplace VAT Responsible) |
Amazon Sales - Gift Wrap (Marketplace VAT Responsible) |
Amazon Sales - Promotional Discounts (Marketplace VAT Responsible) |
Amazon Sales - Shipping Promotion (Marketplace VAT Responsible) |
Amazon Sales - Principal Marketplace VAT Collected |
Amazon Sales - Shipping Marketplace VAT Collected |
Amazon Sales - Gift Wrap Marketplace VAT Collected |
Amazon Sales - Shipping Promotion |
Amazon Sales - Promotional Discounts |
Amazon Sales - Promotional VAT/Tax Discount |
Amazon Sales Tax - Sales Tax (Gift Wrap) |
Amazon Sales Tax - Sales Tax (Principal) |
Amazon Sales Tax - Sales Tax (Shipping) |
Note that you may not have all the above transaction types in your file as this depends on if you have had any Busch transactions pass through your Amazon account.
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