Small negative settlement balances rolled over by Amazon
Why some negative settlements of less than £/$/€20 get rolled over
Issue: You have some small negative settlements that have not been charged to your card by Amazon so there is nothing to reconcile them against.
Why this happens
Negative settlements happen when your balance of sales and fees for that settlement's period becomes negative - meaning you have incurred more fees than revenue.
When this happens typically Amazon charge the negative amount to your card on file but when the amount is small enough (typically less than about £/$/€20) they tend to roll these negative balances forward instead of charging your card on file.
This causes an issue as the settlement amount is what we post to Xero as the invoice total (or bill total in this case since the settlement is negative).
Since Amazon rolled the balance into the next settlement for that marketplace there is no bank transaction to reconcile the bill against.
How to identify if this has happened?
If you have small negative balance settlements that are sitting in Xero and have no bank transactions to reconcile them against then you can check the following to see if Amazon has rolled the negative balance forward:
Step 1: Take note of the small negative balance amount
In this example the amount is -$5.27 and the settlement date range is 15th June - 29th June, from Amazon.com.
Step 2: Check the settlement after the negative one contains this line:
On the following Amazon.com settlement which starts on 29th June, we can see the line item:
"Amazon Reserved Balances - Repayment of negative Amazon Balance"
The amount of $5.27 is also shown.
Step 3: Check the settlement after the negative one does not contain this line:
When Amazon charges your card on file the settlement after would always contain the line:
"Amazon Reserved Balances - Successful charge"
See example above.
Please note that if Amazon does charge your card you would see both the "successful charge" and "Repayment of balance" lines. In this case you need to check which card they charged and link that to your Xero account to reconcile the payment.
What to do if this has happened?
If you have now identified that you have a small negative balance settlement that had been rolled forward into the next settlement then you need to add a line item in Xero to the small negative balance settlement's bill.
In our example the bill in Xero would look like this:
We need to add a line item to this bill to net the total off to 0.00 since we have no payment to reconcile it against.
In our example we add:
Description: Small Balance Rolled over by Amazon
Unit Price: -5.27
Account: Amazon Reserved Balances
(The reason we use the Amazon Reserved Balances Account is because in the following settlement the line item "Repayment of negative Amazon Balance" will also use this account so will therefore cancel out the amount leaving no balance in the Reserved Balances account).
You also need to edit the "Total" box at the top right of the image above to "0.00".
Once you then approve the bill it will automatically be marked as paid since it had no value and will no longer be showing as awaiting payment in Xero.
Can't Link My Books automate this?
We are looking to automate this in the future but the issue is that until we receive the next settlement we don't know if the amount has been charged to your card or rolled over so it would mean not being able to process small negative balance settlements until the following settlements have landed also.
For now we have found the above to be the best workaround.
If you need help on this then reach out to support and we can walk you through it.