Amazon sales in QuickBooks Online, one payout at a time

Why one entry per payout

• It matches the bank. Your bank feed shows one Amazon deposit, not hundreds of orders.
• It's what your accountant needs: sales, refunds and each kind of Amazon fee as separate amounts, not every order.
• It stays small. Twenty-six entries a year instead of thousands of sales receipts that still wouldn't match the deposit, because Amazon pays in lump sums with fees and reserves already taken out.

How the entry works: the Amazon Clearing account

Each journal entry credits your income accounts with what Amazon collected for you, debits your expense accounts with Amazon's fees, and debits the payout itself to an Amazon Clearing account (an Other Current Asset). When the deposit shows up in your bank feed, record it as a transfer from Amazon Clearing to your bank account: Amazon Clearing goes back to zero and your bank balance matches. You can also post the payout straight to your bank account instead.

A worked example

A made-up two-week payout of $5,821.30, dated the day Amazon paid it and numbered AMZ- plus the settlement ID, with MyProfit's recommended accounts:

Debits and credits are both $10,335.23, and Amazon Clearing gets exactly the $5,821.30 that reached the bank. Sales and reimbursements are income; referral fees, FBA fees, storage, promotions and ads are expenses; the $122.40 Amazon held back is still your money, so it sits in an asset account until Amazon releases it.

Which settlement lines go where

Amazon's settlement report has dozens of line names. MyProfit sorts each into one of these categories, and each category posts to one account, MyProfit's recommendation or one of yours:

The lines that trip people up

• Sales tax. In most states Amazon collects the sales tax and pays it to the state itself, so in the settlement the tax comes in and goes straight back out. Whatever is left posts to Amazon Sales Tax Collected, a liability, never to income.
• Refunds are negative sales lines: they reduce Amazon Sales. The fees Amazon gives back come in on the fee lines.
• Reserves. Amazon sometimes holds part of a payout and releases it in the next one. The held amount goes to an asset account and comes back out when Amazon releases it. A payout your bank turned down and Amazon re-sent belongs there too.
• Negative payouts. When fees are more than sales, Amazon charges your card or bank instead of paying you. The entry then credits Amazon Clearing instead of debiting it.
• Ads. If Amazon charges your card for Sponsored Products, the ads aren't in the settlement: record the card charge as advertising. If Amazon takes them from the payout, they're an Advertising line in the entry.
• Cost of goods isn't in the settlement at all. Record inventory purchases as you do now.

Doing it by hand

1. In Seller Central, go to Payments, then All statements, and download the Flat File V2 for the payout (how to read it).
2. Total the amount column by line type with a pivot table on amount-type and amount-description, and group the totals into the categories above. They should add up to the total-amount in the first row.
3. In QuickBooks Online, choose + New, then Journal entry. Date it the deposit day, add one line per category, put the payout on Amazon Clearing, and check that debits equal credits.
4. When the deposit reaches your bank feed, match it to Amazon Clearing.

It works, but it's an afternoon every couple of weeks, and Amazon adds new line names now and then.

Or let MyProfit send it

MyProfit loads every Amazon settlement report for you and sends each payout to QuickBooks Online as exactly the entry above:

• Connect: on MyProfit's QuickBooks page, choose Connect to QuickBooks, sign in to QuickBooks and pick your company.
• Map: keep MyProfit's recommended accounts (created in your QuickBooks on the first send) or pick your own for each category, with the last three payouts' amounts beside each one.
• Preview the exact journal entry before it goes.
• Send one payout, or every payout not sent yet. Each entry is numbered AMZ- plus the settlement ID, so a payout is never sent twice.

MyProfit only creates its accounts and the journal entries; it never changes or deletes anything else in your books, and you can disconnect at any time. The same payouts also get a profit figure in MyProfit, after the landed cost of the units sold. See it in the sample store, or read how the connection works. It's part of the Seller plan, $19.99 a month (US dollars), with a 30-day free trial.

On QuickBooks Desktop?

The Settlements page in MyProfit downloads each payout as files for QuickBooks Desktop's batch entry, adding up to the deposit the same way (settlements help).

Questions

• Which QuickBooks Online plans? Simple Start, Essentials, Plus and Advanced: MyProfit only uses accounts and journal entries, which every plan has.
• Which Amazon payouts? Amazon.com payouts in US dollars.
• Does it change my existing books? No. It adds its own accounts (only those you don't map to yours) and one journal entry per payout you send.
• What if I disconnect in QuickBooks? Entries already sent stay. Reconnect from MyProfit's QuickBooks page when you want to send more.

The payout above is an example; real payouts carry more categories. Intuit and QuickBooks are registered trademarks of Intuit Inc. Used with permission.