Granting you, the Amazon seller, some well-deserved rest and reconciliation
January 7, 2020
It goes without saying, running an e-commerce business is hard work. Business owners are often in charge of running multiple aspects of their business, such as branding, accounting, and inventory management. Looking to lessen their workload, many sellers leverage the Amazon platform for hands-off fulfillment, storage, and shipping.
While offloading some of these responsibilities is advantageous, there are certain things that don’t get any easier. Making sense of Amazon’s settlement report is one of them.
Amazon Seller Central complaints
When perusing the Amazon Seller Central, you needn’t look very far before you run into the following:
“I was wondering if anyone could recommend the best service for Amazon reconciliation. It’s taking far too much time and we are looking at the best way to streamline this, considering how much of a headache we all know it tends to be.”
As evidenced by the above, ‘reconciliation’ is a term fraught with tension in the Amazon seller’s vocabulary. A quick search of the word on the Amazon Seller Central forum returns messages from disgruntled sellers who are tired of spending time and effort trying to accurately reconcile their FBA orders, refunds, and payments.
Wait, what is the settlement report?
“Settlement reports provide a detailed breakdown of your account activity for a given settlement period.” The report includes information about orders that have been placed, any returns that have been sent in, and data on the seller fees Amazon charges FBA sellers.
Though this data is crucial, Amazon doesn’t make it easy for sellers to glean value from these numbers. The settlement report gives no visibility into what charges and fees apply to specific orders, making it increasingly hard for sellers to properly account for sales and returns.
Why is reconciling such a hassle?
Reconciliation is extremely time-consuming as it requires manual data checking in spreadsheets and parsing apart of huge data sets. There are also discrepancies between sales reported on the Seller Central dashboard and the payment deposits Amazon makes at the end of the settlement period. For example, you might be seeing $40k worth of goods sold on your dashboard, but confusion arises when only $25K in payments are deposited into your account.
Things get even trickier when you try to use the report’s information to make in-depth assessments into how your business is doing. Since payments aren’t tied to specific orders, sellers have no idea whether one product was more profitable than another, what their peak time for sales was, or even why an item was returned.
Deciphering your settlement report with ParagonERP
We took all of this into account and built a brand new reconciliation feature in ParagonERP for Amazon that will automatically import the settlement report provided by Amazon and accurately reconcile your FBA orders, refunds, and payments.
The value this feature brings is enormous. When it comes to Amazon orders, returns and refunds, it allows sellers clear insight into who is buying what product, and the ability to determine the popularity and profitability of their product range. Since order and refund transactions are tied together with an Amazon Order ID, you can actually determine how profitable an individual order is through reporting.
It is operationally excellent, too: for every customer that places an order through any of your marketplaces, a sales order and invoice will be created in Paragon. This gives the user total insight into a customer’s order history and recurring customer purchase patterns.
Once Paragon automatically pulls in the report and imports its data, it marks all the correct orders as paid and shipped while breaking out the fees paid to Amazon by category for each specific order. Even the changes to inventory can be connected to your original shipments to Amazon so you can track lots and costs from the supply chain to the consumer.
Your bookkeeper and accountant will reap the rewards as well. Invoices, payments, credits and service charges paid to Amazon can be set up to automatically generate journal entries into your general ledger.
The beauty of this feature is that all these processes happen automatically. We’ve taken a task that could easily be multiple full-time human jobs – terribly frustrating and time-consuming ones, to say the least – and made them simple. You need no longer dread the day the settlement report makes its way into your inbox – Paragon will take care of it instead. Rather than spending your time decoding complex numbers, you can dedicate time to what really matters – slicing and dicing your profitability by order, by customer or by month to help you drive sales and reduce costs. Rest and reconciliation, successfully achieved.