Reconciling your transaction records with the Amazon Pay settlement report

Settlement reports provide a detailed breakdown of your account activity for a given settlement period. By reviewing a settlement report, and matching its data to the information in your order management system, you can understand your account activity.

Understanding transactions and settlement report data

These are the typical steps in a basic transaction flow:

1. A buyer makes a purchase on your site. An Order Reference ID is generated in Amazon Pay. Optionally, you can also generate and send your own Seller Order ID to Amazon Pay prior to confirming the order (also referred to as the ORO).
2. You prepare to fulfill the order. Ideally, a Unique Fulfillment ID is generated in your system, though this might not occur until Step 4.
3. A sale is made and your merchant payable account is increased at time of fulfillment. Amazon Pay provides you with a unique Capture ID for the capture transaction. For Amazon Pay to process the sale into your account, you will need to provide Amazon with a unique Seller Reference ID; ideally, this will be the same as the Unique Fulfillment ID generated in Step 2.
   Note: Some merchants do the first 3 transaction steps at the same time, though we recommend that you wait to capture funds when the order is ready to fulfill.
4. You fulfill the order. A Unique Fulfillment ID is generated in your system, unless it was already generated in Step 2.

In accounting terms, when a customer order is made it typically generates a credit to sales and a debit to accounts receivable.

As described in the flow above, Amazon Pay's Settlement reports contain 4 ID fields that can be used by you to track transaction and settlement activity:

• Order Reference ID
• Seller Order ID
• Capture ID
• Seller Reference ID

In your order management system there are typically one or two IDs that you use for tracking a transaction (which we refer to generically as your Unique Fulfillment ID). If you follow the transaction flow shown above, your Unique Fulfillment ID can be matched to the 4 settlement report IDs listed above. Regardless of which settlement report ID you choose to work with, we refer to this as a Match key.

Note:

• If you do not generate a Unique Fulfillment ID or if you generate it only after you capture funds (as shown in Step 4 above), you will need to use one of the Amazon Pay IDs as your Match key.
• If you integrated with Amazon Pay by using an ecommerce provider plugin, your ecommerce provider may control which ID you use for a Match key.

Best practice reconciliation procedure

We recommend that you do this process daily.

Note: If you are a Shopify merchant, follow the procedure steps in the Reconciliation procedure for Shopify merchants.

1. In your system, create and download a report that lists all of your fulfillment activity for the previous day.
2. Sign in to Seller Central.
3. Either create and download a Date Range Settlement report, or view the current data on the Manage Transactions page:
   
   • Date Range Settlement report: From the Reports menu, click Payments. Click the Date Range Reports tab, and then create and download a Date Range Settlement report for the day represented by the report you downloaded in Step 1.
   • Manage Transactions page: From the Orders menu, click Manage Transactions. Data on the page is arranged in chronological order, with the most recent transaction listed first. Note that you can adjust the number of rows shown per page and move from page to page by using the buttons at the bottom of the page.
4. Match items line by line between the two reports using your Match key.
5. When you find a match, where your system's report and the Settlement report both include a record of the fulfillment activity, mark that activity as reconciled.
   In accounting terms, this process is typically referred to as matching accounts receivable (A/R) (created at the time of fulfillment), with undisbursed cash (in your merchant payable account). When completed, all increases to accounts receivable (sales) will be matched to undisbursed cash in your merchant payable account.
6. When you find activity in your system's report that you cannot match to a line item in the Settlement report, keep that line item as part of your open match set. There are reasons why the activity might not appear in the Settlement report that you just generated, usually because the activity missed the cutoff for posting to your Amazon Pay merchant ledger, and so it was not included in the report that you generated in Step 3.
   Typically, activities that missed being included in a day's Settlement report will appear in the next day's report.
7. On the next day, repeat this procedure, but start Step 4 with your open match set. Most likely, you will be able to resolve those activities by matching them to line items in the following day's Settlement report download. As you resolve activities, remove them from your open match set.
   Note: if 48 hours has passed, and activity that appears in your system's report still does not appear in a Settlement report, contact Merchant Support.

Final step: cash reconciliation

In order to match the funds transferred into your bank account to the records of transactions in the Amazon Pay Settlement report, do the following:

1. Use the same report that you downloaded in the procedure above.
2. Download a bank statement that details disbursements into your account.
3. Use the bank statement and Settlement report to match the dates and amounts transferred, making note of the following:
   • In the Settlement report, the line items marked as transfers are successful transfers, and they represent transfers that were initiated in the previous settlement period.
   • The Settlement report never contains line items for initiated transfers; it only contains successful transfers.
   • You will notice that the dates in the Settlement report will be close to the dates noted in your bank statement, but are unlikely to match exactly.
   • The transferred amount noted in the bank statement and in the Settlement report will match; however, the amount transferred may not match your expectations. This is most likely due to reserves that are held by Amazon. See the Amazon Pay reserve policy for details.

In accounting terms, this cash reconciliation process will typically result in crediting your accounts receivable and debiting your cash account.