How to Reconcile Your Amazon Settlement Report

Why Amazon Settlement Reconciliation Matters

If you sell on Amazon FBA, you receive a settlement report every two weeks. This report details every transaction in the settlement period: product sales, refunds, fees, reimbursements, and the final payout amount. Getting this right in your books is critical for accurate financial reporting and tax compliance.

Many bookkeepers and sellers struggle with Amazon settlements because the reports contain dozens of fee types, mixed refund lines, and amounts that don't obviously map to standard accounting categories. This guide walks you through the reconciliation process step by step.

Understanding the Amazon V2 Settlement Report

Amazon's V2 settlement report (also called the "Date Range Report" or "Transaction" report) is a tab-separated file with these key columns:

• settlement-id: Identifies the settlement period
• amount-type: The broad category (ItemPrice, ItemFees, Promotion, etc.)
• amount-description: The specific fee or charge type
• amount: The dollar amount (negative for fees and deductions)
• total-amount: The net payout amount (shown in the header rows)

The first few rows contain header metadata including the settlement ID, start/end dates, currency, and total deposit amount. The remaining rows are individual transaction lines.

Step 1: Download Your Settlement Report

1. Log in to Amazon Seller Central
2. Navigate to Reports > Payments > Date Range Reports
3. Click Generate Report for the settlement period you need
4. Select Transaction as the report type
5. Download the generated .csv or .txt file

Make sure you download the full transaction-level report, not the summary. The summary doesn't have enough detail for proper reconciliation.

Step 2: Group Transactions by Category

Each line in the settlement has an amount-type and amount-description that together identify what the charge is. Common categories include:

Amount Type	Description	Accounting Treatment
ItemPrice / Principal	Product sale revenue	Credit to Sales
ItemPrice / Shipping	Shipping charged to buyer	Credit to Shipping Revenue
ItemFees / Commission	Amazon referral fee	Debit to Referral Fees
ItemFees / FBAPerUnitFulfillmentFee	FBA pick & pack fee	Debit to FBA Fees
Promotion / Principal	Promotional discounts	Debit to Promotions
Refund / Principal	Customer refund	Debit to Refunds

The key is to sum all amounts by category. Each category becomes a line in your journal entry.

Step 3: Build Your Journal Entry

A properly structured journal entry for an Amazon settlement should:

1. Credit revenue accounts (product sales, shipping revenue)
2. Debit expense accounts (referral fees, FBA fees, storage fees)
3. Debit contra-revenue accounts (refunds, promotions)
4. Debit your bank account for the net payout amount

The total debits must equal the total credits. If they don't balance, something was missed or miscategorized.

Step 4: Verify the Balance

Cross-check your journal entry total against the total-amount field in the settlement header. This is the amount Amazon actually deposited to your bank account. Your journal entry's bank debit should match this amount exactly.

Common reasons for discrepancies:

• Missed fee categories: Amazon occasionally introduces new fee types
• Currency rounding: Small rounding differences on individual transactions
• Tax withholdings: Marketplace facilitator tax that Amazon collects and remits

Step 5: Record in Your Accounting Software

Once your journal entry balances, import it into QuickBooks, Xero, or your accounting software of choice. Most accept CSV imports for journal entries.

Automating the Process

Manual reconciliation works for a few settlements, but becomes tedious at scale. If you're handling settlements monthly across multiple accounts, consider using a tool like SettleBooks that automates the parsing, categorization, and journal entry generation.

Upload your settlement file, review the categorized journal entry, and export in your accounting software's format — the entire process takes seconds instead of hours.

Common Mistakes to Avoid

• Don't record the gross payout only. You need to break out sales, fees, and refunds separately for accurate P&L reporting.
• Don't ignore small fee categories. Storage fees, disposal fees, and advertising charges add up over a year.
• Don't mix settlement periods. Each settlement is a discrete accounting event. Don't combine multiple settlements into one journal entry.
• Do reconcile every settlement. Skipping months creates a backlog that's much harder to clean up later.

Summary

Amazon settlement reconciliation is straightforward once you understand the report structure. Download the transaction-level report, group by fee category, build a balanced journal entry, verify against the payout amount, and record it in your books. Consistent reconciliation keeps your financials accurate and makes tax time much less stressful.