Things to know about Payment Reconciliation
It won’t be wrong to say that the marketplaces are becoming moody, unpredictable or temperamental in terms of their policies and guidelines for their sellers. The giant companies of eCommerce keep on changing their mindset regarding returns, tax payment, order cancellation, penalties, etc. which makes it cumbersome for their sellers to track the overall record of their payments. It may happen sometime to the sellers that they have calculated a lump sum to get reimbursed from Amazon for their sales, but Amazon has deducted few more bytes from the amount giving a reason of the change in deduction rate (whether for returns, refunds or tax rate) as per the new policy. This raises a big question to the sellers- how to manage the accounts with the frequently changing policies and tax rates and how to keep update their accounts with the current policies?
The answer is- Payment Reconciliation
It is a process of accounting in which the sellers record their sales, regarding payments so as to get reimbursed from Amazon within a certain interval. It is easier said than done. The seller needs to manage the records as per their sales and Amazon’s agreement. The payment reconciliation ensures the money that goes out from the sellers account must match with the money that comes in at the recording period termination. The reconciliation brings accuracy in financial figures and accounts.
But this is not that much easy. The sellers find it difficult to maintain their accounts in the following cases:
- When they are experiencing huge sales figures, it would be complicated to track all records and amounts regularly.
- When they sell on multiple marketplaces, managing account becomes horrible.
- Every marketplace varies in terms of rate cards from product to product and category to category.
- With a bucket full of charges as service tax, shipping fees, warehouse fee, refunds, cancellation fee and too with anytime changing policy make it all complicated.
- Due to discrepancy and unclarity in marketplaces penalties and reimbursement policies.
- Post buyer collection due to return, the marketplaces like Amazon may extend the return window period of the seller.
The Solution for Sellers:
The only solution is to track the records regularly at the decided period of reimbursement. Even though the sellers can opt for the given solutions:
- Track the records from the marketplaces: The sellers who are the king at multiple marketplaces would be having a list of figures to management and accounting. Thus they can track the sales and reimbursement details from their seller account where the marketplaces complete all the details of orders, returns, weekly disbursement information, dues to pay and all tax payment details. These marketplaces also send the account reports through SMS and even send the emails notifying the sellers about their account reports. The Amazon sellers can check all the payment details on the payment page of their seller central account. By clicking on view tab >> Transactions, sellers can know their paid orders and even can download weekly disbursement statements through the All statements tab on this page.
- Manage and maintain the records on their own: Another solution is to help yourself on your own. There are many sellers who keep and manage the account reports either manually (handwritten) or through spreadsheets. Managing every sale and the payment updates can be troublesome and it will be more tedious when you sell on omnichannel. You need to be a pro in excel sheets to use functions as VLOOKUP or Pivot table and various to fill the order details and marketplace payments.
- Use reconciliation software or eCommerce service providers: If you are having any trouble in managing your account financially you should take assistance from Amazon Seller support or rush to Amazon service provider network. Furthermore, the best solution is to outsource your tasks to the service provider companies who not only take care of your online store but can also handle the sales, records, and accounts financially. Payment reconciliation can also be handled through the reconciliation software that efficiently tracks the multi-channel orders and reimbursement details. Just you need to pick the right one who completely understands the marketplace policies(even if frequently changing). When you are selling on Amazon, you should latch up with the right accounting partner because you already know how Amazon is strict with its policies and what it can do to its non-follower!
Epilogue: Whether you are an Amazon, eBay or any other marketplace seller or omnichannel seller you need to manage the accounts because these calculations show the actual profit you are having through your online store. The money going out and coming into your account should be accounted for properly. After all, The main purpose of doing all the hard work and taking all stress is Revenue!!