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How To Enter Expenses from Amazon Income?

scottdevscottdev Member Posts: 2

We have Amazon as a Income Account, but they automatically charge us directly from the account for commissions and shipping expenses - the deposit balance into our checking. How do we enter those expenses since they don't get deducted directly from our checking? Do we setup another new Cash & Bank Account called "Amazon", and then charge that account for each months commissions and shipping expenses? Or do we show gross sales deposited into our checking account and then charge that account for each months commission and shipping expenses (even though that gross sales amount is not what was actually deposited)?

in Accounting Technical Support

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  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Hi @scottdev

    We're at work on a streamlined way to handle merchant account fees from third-party payments processors. For the time being, here's the workaround we recommend:

    • Create a special holding account to record full payment.  Head over to the "Chart of Accounts" in the Accounting tab. Click "Add an Account" and choose "Money in Transit" as the account type under the "Asset" header.

    • When you get paid, add an income transaction to this account for the full amount of the invoice before fees, and categorize this transaction to "Payment for an invoice in Wave".

    • Add an expense transaction to the holding account for the amount of the merchant fees, categorized to "Merchant Account Fees."

    • When the payment is pulled in from a bank connection (this should be the full payment amount less those fees) categorize this transaction as a "Transfer from.." and select the holding account.  

    We're building out a way to cut down the steps above, so this workflow is only temporary! For now, this will allow you to account for merchant fees as a separate expense without throwing off your ability to perform Reconciliation.

  • Eyerish_Jamaican2015Eyerish_Jamaican2015 Member Posts: 1

    I have just read this as I had the exact problem but when you pull the payment from the bank connection if your selecting 'money in transit' as the holding account you are technically not showing it coming from a bank account when it's reconciled. Does that make sense or am I reading it wrong?

    Do you also have a time line when this feature will be live without having to do this work around?

  • AlexiaAlexia Member Posts: 3,314 ✭✭✭✭

    Hi, @Eyerish_Jamaican2015.

    Your bank connection shouldn't be importing those transactions to Money in Transit, but to its own dedicated Asset account. Everything else needs to be done manually. Your transactions would look like this:

    • Income (full amount) to Money in Transit - Category: Payments for an invoice
    • Expense (merchant fee) to Money in Transit - Category: Merchant Fees
    • Income (Amount minus fee) to Bank Account - Category: Transfer from Money in Transit
    • Expense (Amount minus fee) to Money in Transit - Category: Transfer to Bank Account

    Of these transactions, only the income to your bank account can be imported automatically.

    I don't have a timeline to give as to when this workflow will be made easier, but we are working on it.

  • SellerSeller Member Posts: 1

    Hi, Is there any update on the "streamlined way to handle merchant account fees from third-party payments processors"? @Alexia

  • Jeslau88Jeslau88 Member Posts: 1

    I would also like to know if there is an update to a streamlined way to handle merchant account fees from third-party payments.

  • abcdeabcde Member Posts: 9

    is there any update on this? I deal with this Amazon problem as well, so are a whole community of users who start to explore Wave as an alternative to Intuit's and Xero's product.

    edited September 9, 2019
  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hi @Seller @Jeslau88 @abcde . We have a Help Center article on the best way to handle these fees, as the process does work really well but it does need to be done manually. Check it out in our Help Center article below:

    https://support.waveapps.com/hc/en-us/articles/115000472306-How-to-account-for-transaction-fees

  • TerryKTerryK Member Posts: 3

    Is there any update to a streamlined approach to handling merchant fees? It's been almost 2 years since the original poster. Just wondering how much of a priority this is.

  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey there @TerryK

    Unfortunately we still have not updated our system to include expenses deducted from an income at this time. My apologies. We appreciate you posting here to get more traction on this feature idea.

  • HernanHernan Member Posts: 1

    Hey Wave. I really love your accounting solution and I recommended to many friends that have their own business. However you need to help out the FBA community using Wave by making it easier to track Amazon Canada fees, etc.

    Fight for this upgrade, you guys have added many new and interesting things, just don't forget about this.

  • GautamGautam Member Posts: 13

    Another year has passed now... Any update for the Amazon FBA sellers to use this cool Wevapp accounting tool to properly account for FBA Net payments? ( we have to deduct the FBA fees, seling fees, Sales Tax withheld by Amazon etc.).

  • GautamGautam Member Posts: 13

    It is almost 4 years now since OP dt 1/29/2018!
    Still no solution for this Amazon FBA business Model.
    Hope you are working it, or just let us know that it is NOT in your roadmap.
    Then we can settle for another tool!
    @Barsin , @AlexL ?? Please jump in!

  • GautamGautam Member Posts: 13

    Looks like no cares to respond!
    Is this community supported any more?

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