Create a temporary Clearing account in QuickBooks. The purpose of a clearing account is to facilitate the reconciliation of your bank account with your bank statement. Directly depositing daily revenue into your bank account could complicate reconciliation, as matching sales within that time interval against the lump sum becomes challenging. Therefore, we recommend creating a temporary clearing account to post transactions and subsequently making a transfer entry to your bank account.
Preparing QuickBooks for Amazon Orders & Fees
Create the following in QuickBooks:
A Bank Account: Account Name Amazon Clearing. This clearing account, also known as a holding account, functions as a virtual bank account designed to hold Amazon revenue until the funds are disbursed to your actual bank account.
An Expense Account: Name the Account Amazon Expense and Fess We need an expense account to accurately track Amazon expenses and fees in QuickBooks.
Create a new Vendor in QuickBooks: Name it Amazon Vendor
Configure Webgility for downloading and posting orders and settlements in QuickBooks
Setup in Webgility Desktop: Recommended Settings for Amazon with Webgility Desktop
Order Download Settings: Recommended Order Download Settings for Amazon
Daily downloading and posting orders into QuickBooks
Refer to the following article for instructions on downloading orders in Webgility. How to Download Orders in Webgility Desktop
Refer to the following article for guidance on posting orders in your accounting software. How to Post Orders to Your Accounting
Posting Amazon expenses and fees into QuickBooks
Every two weeks, Amazon issues a settlement report containing various financial transactions, including product sales, fees, and other charges. Following the deduction of fees and expenses, Amazon transfers the remaining funds to the seller's account. Below is the screenshot of the Settlement report from Amazon.
Refer to the help article for instructions on downloading and posting expenses and fees in QuickBooks Download and Post Amazon Settlement Reports with Webgility Desktop
Transferring funds from Amazon clearing account to bank account
After posting the settlement report in QuickBooks, Webgility will record the payment transactions in the Amazon Clearing account
When Amazon expenses and fees are posted to QuickBooks:
Debit the expense account (increase).
Credit the clearing/hold account for the value that Amazon has charged for the expenses and fees (decrease).
When Amazon deposits the transfer amount into your bank account, you should create a transfer funds transaction in QuickBooks by navigating to Banking > Transfer Funds. The date of transfer should be the Deposit date.
Note: The date and transfer amount should match the transfer amount (closing balance), in the Amazon settlement report.
Clearing account wrap-up
Master equation: Total revenue - $ deposited by Amazon - expenses and fees charged by Amazon = $0
This is why this is called a clearing account.