Reconciling Amazon orders in Paragon

Reconciling Amazon orders in Paragon

You now have your orders imported from Amazon and you also have automatically created invoices, credits, and RMAs in Paragon. However, the amount of the orders and invoices is not taking into account the Amazon fees and other charges involved in those orders, because right now they are only representing the actual orders that customers have made with your products through Amazon. The next step is to reconcile any payments so that you could see which amounts have been taken out of each order, and any other non-sales related charges. 

Set up for Payment Reconciliation

First, it is important to set up for reconciliation. Transactions can affect your accounting journals, whether or not you are using accounting in Paragon. Follow this list to make sure everything is set up correctly.

3. Set up a bank account that will represent where your money is flowing in or out for your Amazon marketplaces. For each marketplace you can set up a different or the same bank account. Once you have your bank account you just need to select the correct marketplace and add the attribute Bank Account List. In the example, the bank account was named NBC001 and added to Amazon CA marketplace: 



Reconciling payments

First, navigate to the e-commerce page. To do that, hit on the settings button, then hit e-commerce

Pick the marketplace from which the order payments will be reconciled, and then hit the action button and then the reconcile payments button.




All available settlement reports (for all markets) will be imported into Paragon and will then be available for you to view or download from the attachments link.




This modal will appear and you will need to select the settlement report to be imported from Amazon: 






You will need to make sure to select the correct settlement report that has the orders that are imported to your Paragon build. In the settlement list in Paragon you will see different ID numbers, which you can check by downloading the flat file of your settlement report in Amazon Seller Central. Once you select the settlement report, hit the green accept button. A toaster will indicate that the import has begun, you might need to wait for a while for transactions to be created to reflect the reconciled payments. 



While you wait for the import to finish you can always check the log to see the progress. By hitting the log button when you are in your marketplace page you will know what transactions are being created and when the import has stopped. Don't forget to click the refresh button from time to time to make sure you have the most recent updates, here is an example of a log after payment reconciliation: 



As you can see in the log, there are different transactions that are being created: receive payments, make payments and vendor invoices, vendor credits. These transactions are created in Paragon to represent different situations. Vendor invoice represents the money owed to Amazon, and vendor credit represents money that Amazon owes you not related to sales orders. Make payment is the money paid to Amazon and receive payment is the money received from Amazon.

In Paragon, when you click on the more button, this is where you can find all the transactions mentioned above: 



Explanation of Reconciliation for Amazon Payments

When you hit the reconcile payments button in the e-commerce page, this is what gets reconciled:
  1. Amazon orders
  2. Amazon orders that have been returned
  3. Non-sales related Amazon charges 
Let's see in more detail how each situation is reconciled in Paragon.

Amazon Order Reconciliation

It is easier to understand the reconciliation of Amazon orders by taking one order as an example. So, as you know, after the order import, you will have an order and an invoice to represent a transaction that a customer made with Amazon, it is the money amount you should receive not taking into account Amazon fees.

First, when you reconcile the payments  from an invoice created off of a specific order there will be a receive payment created to show the full amount you should be receiving from that order. Then, there will be a vendor invoice created that will have all the charges associated to this order such as commission, shipping charges, FBA per unit charges and so on.  From this vendor invoice, there will be a make payment created to represent the amount paid to Amazon from that order. 

The explanation of transactions in short: 
  1. Order - Full amount customer paid to Amazon
  2. Invoice - full amount customer paid to Amazon that you should receive
  3. Vendor Invoice - the fees that Amazon takes from the order
  4. Receive payment - full amount that you should receive from Amazon
  5. Make payment - the fees paid to Amazon for that order.

Refunded Order Reconciliation 

Again, let's take an example of one order that has been returned by the customer. In this case, with the order import you already have this specific order and invoice to represent the sale, and credit and RMA to represent the return. Now, when you reconcile the payments for this order there will be again the same transactions created as for normal orders, but those transactions will look a bit different.

On the vendor invoice you will see the Amazon charges for that order, as well as returned amount for some of the Amazon charges. There will also be a line for item refund commission. The total of the vendor invoice will be the money you owe Amazon for this returned order, and the amount paid will be represented in the make payment created off of this vendor invoice. There will also be a receive payment created but it will equal to zero dollars as the credit and the invoice of the same amount are linked to this receive payment, because you are not receiving any money for this returned order.

The explanation of transactions in short: 
  1. Order - Full amount customer paid to Amazon
  2. Invoice - full amount customer paid to Amazon that you should receive
  3. Credit - full amount returned to customer
  4. RMA - product and units returned back to Amazon FBA
  5. Vendor Invoice - the fees that Amazon takes from the order, minus the fees returned, plus the fee for the return
  6. Receive payment - invoice and credit linked together equal to $0
  7. Make payment - the final amount owed to Amazon for the return

For all the non-sales related Amazon charges the reconciliation is pretty simple. With each settlement report import there will be a vendor invoice and vendor credit created to show all the amounts that you owe to Amazon or that Amazon owes to you that have nothing to do with the sales orders. Vendor invoice will show the amount you owe and vendor credit will show the amount Amazon owes you. 

I have reconciled my Amazon payments, now what? 

The next step would be seeing all this information in a report, that would take all the amounts owed and that Amazon owes you and represent them in an informative matter. This is currently a feature we are still working on.  In the meantime - please feel free to take a look at Paragon Reports for more details.

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