How to reconcile zero total settlements
What to do when your settlement total is 0
Sometimes you will see a settlement in your dashboard with a total of $/€/£ 0.00, this article will explain how to deal with those.
We will address:
- Why this happens
- How to reconcile these settlements when they are a single invoice
- How to reconcile these settlements when they are split into an invoice and a bill
Why this happens
Settlements with a total of 0.00 occur when the total income and total fees during the settlement period are equal to zero. This generally occurs when Amazon reserve the balance of the settlement for future payout. They do this for various reasons but normally for new sellers or items that you fulfil yourself for example.
These reserved balances are normally released on the next settlement and in case you were wondering, Link My Books already deals with these types of reserved balances yes.
How to reconcile these settlements when they are a single invoice
When a settlement has a total of zero and is for a mid month date range (e. it does not span two months) then a single invoice will be created. This is actually really simple to reconcile and mark as paid as all you need to do is mark the invoice as "Approved" and it will automatically mark itself as paid, with no further action required.
How to reconcile these settlements when they are split into an invoice and a bill
If the settlement with the zero balance spans a date range across two months then it will be split in two parts to ensure the monthly figures are accurate. Since the balance of the entire settlement is reserved by Amazon on the last day of the settlement period this means that the line item for the Amazon Reserved Balance will fall into just one part of the split settlement causing one part to be a positive figure and one part to be a negative figure.
The positive part will be sent to Xero as an invoice and the negative part as a bill.
Let's say the invoice was for £1,000 and the bill was for -£1,000 for example.
The way to handle this is to wait for the next settlement to come through that you actually receive a physical payment from Amazon for. Let's say in this example the next settlement is for a total of £500.
So now we have one invoice for £1,000, one bill for -£1,000 and another invoice for £500 and we have a payment in from Amazon on our bank statement for £500 that needs to be reconciled.
All you would do is reconcile the £500 payment in from Amazon against all three of the invoices/bill above.
£1,000 Invoice 1
-£1,000 Bill 1
£500 Invoice 2
This £500 total for all 3 invoices/bill will then reconcile to the penny with the incoming payment from Amazon and thus mark both invoices and the bill as paid. No further action would be required.