Recently, Amazon introduced changes to how payments are made available to sellers following customer orders. These changes have implications for how sales and payouts are accounted for, which may lead to mismatched reporting in accounting software if not addressed properly.
At Link My Books, our mission is to simplify and automate ecommerce bookkeeping, so we’ve been exploring potential solutions. Below, we’ll outline the issue, the solutions we’ve investigated, and why we’re waiting for Amazon to improve its reporting.
Amazon Deferred Transactions Policy
Amazon recently announced updates to its Deferred Transactions process, including a new Deliver Date + 7 Days or DD+7 policy which will mean that all orders will now have their proceeds deferred until 7 days after the delivery date.
What is a Deferred Transaction?
A deferred transaction is a sale where the payment is temporarily held and will be paid out at a future date. Most transactions go through a deferral period before they become available for payout.
Where can I see my Deferred Transactions?
In Amazon Seller Central go to Transaction View, select “Deferred Transactions” from the “Transaction Status” drop-down, and click Update. This view shows the deferral reasons and expected release dates. Once a transaction is released, it will become available for payout in your next settlement.
Why are my transactions deferred?
Your transactions can be deferred for the following reasons:
Delivery Date Policy: Orders are held until delivery is confirmed, plus a reserve period (usually 7 days). This ensures enough funds are available to cover any refunds, claims, or chargebacks.
Invoiced Orders: For Amazon Business customers, payments are deferred until the buyer pays the invoice, which typically takes 30-45 days. These orders are also subject to delivery date policies, but the invoice due date may extend beyond the delivery reserve period.
Source (Log in to Seller Central Required)
Amazon Delivery Date Reserve Policy FAQs
What is the Delivery Date Reserve Policy?
Amazon holds funds from your sales until a specified number of days after the items have been delivered to customers. These transactions are marked as "Deferred" in your Payments dashboard.
Why are funds reserved?
Funds are reserved to ensure there are enough resources to cover potential refunds, claims, or chargebacks.
How long are funds held?
The standard holding period is 7 days after the delivery date (“DD+7”). For example, if an order is delivered on January 6th, the funds will be available for withdrawal starting from January 14th.
Can the reserve period be extended?
Yes, the reserve period might be longer based on your account’s risk and performance.
What portion of funds is reserved?
Amazon reserves funds for orders delivered within the last 7 days (or your specified reserve period). You can view these transactions under the “Deferred Transactions” section on your Payments dashboard.
How to view or download your reserved transactions?
In Amazon Seller Central go to Payments > Transaction View and filter by “Deferred Transactions” to see which funds are on hold and when they’ll be released.
For detailed reporting, go to the Payments Reports repository and request the “Deferred Transactions” report.
How does Amazon determine the delivery date?
If you use Amazon’s integrated carriers, the actual delivery date is used.
If no tracking is available, Amazon uses the latest Estimated Delivery Date (EDD).
Proposed Solution 1: Ignore Deferred Transactions
One option is to simply ignore deferred transactions and let Amazon payouts reflect only the funds actually received. This avoids added complexity but comes with drawbacks:
Profit & Loss inaccuracies: Transactions will be reported when Amazon has released them for payout rather than when those transactions took place, meaning your monthly P&L will be misaligned.
VAT inaccuracies: This approach means that some orders and their associated fees would be reported in the wrong VAT period.
Essentially, you will be reporting your sales, and the fees associated to those sales, around 7 days behind when those orders were actually placed (or up to 45 days for business orders).
This might sound bad but if you think that September lost the last 7 days of sales, October gained them. Then October lost its last 7 days worth of sales and November gained them. So essentially the reporting just shifts 7 days forward.
Whether HMRC would accept this is another question though so we are obviously looking for a solution.
Proposed Solution 2: Use the Amazon Deferred Transaction Report
Another solution we explored involves leveraging Amazon’s Deferred Transaction Report. Here’s how it works and why it’s not an ideal option:
How It Works:
This report is only available via Amazon Seller Central (not through their API). Users would need to manually download it each month.
The report doesn’t allow for custom date ranges and only shows transactions deferred at the time of download.
For accuracy, users would need to download it on the 1st of each month as close to midnight as possible.
Link My Books could process this report and create an adjustment in users’ accounting software to reflect deferred transactions.
Why We Decided Against It:
Manual effort: Link My Books is designed to automate bookkeeping. Asking users to manually download and upload reports undermines this core value.
Limited scope: The inability to backdate the report means users could only correct data from January 2025 onwards (assuming a solution is implemented before then). Deferred data from September 2024 onward would remain uncorrected.
Complexity for users: This process introduces an unnecessary burden on users and increases the potential for errors.
Multiple reports: Since the Deferred Transaction Report is marketplace specific users would need to download one for each marketplace they sell on.
We have built a manual Excel worksheet to process this report so if you’d like to see how it would look please get in touch with our support team with a copy of your Deferred Transaction reports for each marketplace and we can show you.
Proposed Solution 3: Use the Amazon Order Reports
The final solution we explored was to use the Amazon Order reports to correct the dates seen in the Amazon Settlement reports so that each transaction reflected the correct order date instead of the date the transaction was released for payment.
How It Works:
Settlements would be processed as normal but we’d look up the order dates for each order transaction (ignoring refunds - they would continue to use the payment release date).
Settlement periods would need to change to reflect the new span of order dates contained in the settlement.
Order transactions (and their associated fees) would then be accounted for in the correct period.
Why We Decided Against It:
Settlements could contain invoiced orders for business customers that had an order date up to 45 days before the start date of the original settlement period.
This would mean a settlement received on the 2nd December could contain orders back to 18th October.
This would mean you’d not be able to close your accounting period until at least 45 days after the month end (which would mean you’d not be able to submit your VAT return on time).
Refunds (and their fees) would need to be assumed they occurred on the date they were added to the settlement report but refunds may also have been subject to deferred payment.
The Amazon Order report contains the original order dates but not the refund dates.
So once again, this was not a solution we could stand behind.
Proposed Solution 4: Amazon make the Deferred Transaction report available to connected apps
This is our biggest hope. If we can convince Amazon to make the Deferred Transaction Report available through their SP API (the place apps gather their Amazon data from) then we could make Proposed Solution 2 (above) work on autopilot.
Unfortunately, even though we have been in touch with our developer contacts at Amazon and begged them for this, there doesn’t seem to be much hope of this happening any time soon.
How you can help:
Message Amazon Seller Support and ask them to make the Deferred Transactions Report available via the SP-API.
Explain that you need this to ensure your bookkeeping and taxes are accurate.
If we can demonstrate to Amazon that enough sellers have this issue and that it needs their immediate attention hopefully we can see some action.
Proposed Solution 5: Amazon include deferred transactions in the settlement reports
A long shot, but if Amazon decided to make this easy for us all (we can hope) then they could include ALL orders in the settlement files based on the date they were placed.
They could then hold back a deferred transaction amount in each settlement and release it into future settlements based on when those orders were released for payment.
Essentially this is just like they used to do with reserved balances.
If they did that, Link My Books would work as normal and we could all rest easy at night!
Why We’re Waiting
Ultimately, while we’re committed to providing a solution, none of the above options aligns with our philosophy of automation and simplicity. The ideal solution is for Amazon to enhance its reporting capabilities to:
Accurately reflect deferred transactions.
Make reports available through their API.
Provide date-range flexibility.
We’re in ongoing discussions with Amazon and monitoring their updates closely. As soon as a practical solution becomes viable, we’ll implement it to ensure your bookkeeping remains seamless and accurate.
What Should You Do in the Meantime?
For now, we recommend downloading your Deferred Transaction report on the 1st of every month (as close to 00:00 on the 1st as possible). Remember to download this for each marketplace you sell on.
We can then guide you though the manual process we have developed in Excel to adjust for these deferred transactions. Get in touch with support to learn more.
While it’s not perfect, this will help you understand the timing of payouts and ensure your records are as accurate as possible.
We’ll keep you updated on any developments and let you know as soon as a robust solution is available.
If you have any questions about this article or feedback on how we could make it better please reach out to the support team via the blue chat icon on the bottom right of the page or via email to [email protected].