In this post we’ll cover how the invoices from A2X reconcile to the payments from Amazon. There are 3 main scenarios outlined below.
Single invoice, single payment
This is the simplest scenario for reconciling. Xero will see the invoice that A2X creates and the payment from Amazon and offer to reconcile the payment against the invoice, most of the time completely automatically.
Xero can match the invoice and payment automatically based on the due date and the amount. If you have a payment from Amazon for say $10,000 that is in your Xero bank account waiting to be reconciled, then A2X will send an invoice to Xero (that is then awaiting payment) for a total of $10,000 from Amazon.
Xero will then prompt you to match the payment and the invoice on the Xero reconcile screen and the invoice will be marked as paid. This way all the line items on the invoice (e.g Sales $12,000, Seller fees -$2,000) will then be properly coded in your Xero accounts.
What about multiple invoices?
If A2X splits your settlement of $10,000 into say $2,000 in March and $8,000 in April because the settlement period crosses the end of March, then you will click ‘match’ in Xero and select both invoices to reconcile the payment to. Because the totals of the invoice match the total payment from Amazon, everything will reconcile the same way as above.
The only difference is Xero cannot automatically match two invoices to one payment.
You can find out more about this Xero feature from this Xero blog post on multiple invoice payments.
What about invoices in other currencies?
If you sell in multiple marketplaces with different currencies in Amazon you will have noticed that settlements are always in the currency of the marketplace (e.g GBP in the UK, Euro in Germany). However if you have a single currency bank account (for example only GBP) then the Euro settlements will be converted by Amazon when they pay you.
This means by default Xero will not recognise that the £100 payment from Amazon.de is actually for the invoice of 136€. When you expand the match panel in the Xero reconcile screen, you can un-select the tick box to have it show all currency invoices. Select the Amazon.de invoice and Xero will automatically detect the exchange rate Amazon has applied and if it is a sane rate, then it will consider it a match and allow you to reconcile it.
Those 3 scenarios cover how to reconcile your Xero Amazon payments to your A2X invoices.