A periodic report from a marketplace or payment processor that summarizes all transactions, fees, refunds, and the net amount deposited into a seller's bank account.
Understanding Settlement Report
A settlement report is a detailed financial document issued by a marketplace or payment processor that summarizes all transactions, fees, refunds, adjustments, and the resulting net payout for a specific period. It is the primary source document for reconciling marketplace activity with your accounting records.
Amazon settlement reports cover 14-day periods and include order revenue, FBA fees, referral fees, refunds, reimbursements, advertising charges, subscription fees, and the net transfer amount. Shopify provides similar payout reports for each deposit. Each platform uses a different format and level of detail.
Settlement reports are essential for accrual accounting because they provide the granular transaction-level data needed to record each component (revenue, fees, refunds) in the correct accounts. Simply recording the net payout as "Amazon income" dramatically understates both revenue and expenses.
Why It Matters for Ecommerce
Settlement reports are the source of truth for ecommerce accounting. Without parsing them properly, you're flying blind on fees, refunds, and profitability. Converting settlement reports into QuickBooks-compatible formats (IIF or QBO) using tools like PrimeConnect ensures every transaction component is captured in the right account.
Practical Example
An Amazon settlement report for the period March 1-14 shows: Gross Sales $18,500, Referral Fees -$2,775, FBA Fees -$3,200, Refunds -$925, Advertising -$1,100, Net Payout $10,500. Each of these figures should be recorded in separate accounts in QuickBooks, not as a single $10,500 deposit.
Related Terms
Payout
The net amount a marketplace or payment processor transfers to a seller's bank account after deducting all fees, refunds, and reserves from gross sales.
EcommerceMarketplace Fee
A general term for any fee charged by an ecommerce platform for facilitating a sale, including referral fees, closing fees, and payment processing fees. Directly reduces a seller's net payout.
Accounting1099-K
An IRS tax form issued by payment processors and marketplace facilitators to report gross payment transactions exceeding the federal threshold. Sellers must reconcile this form against their own records at tax time.
Related Tools
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