The Amazon Settlement That Straddles Two Years: Year-End Cutoff for Sellers

Most Amazon sellers have one settlement each year that opens in late December and closes in early January. It contains transactions from two fiscal years, and the payout lands in the second one. The correct treatment is to split it at 11:59 p.m. on December 31 by each line's transaction date: December's sales, fees, and refunds go into 2026, January's go into 2027, and the deposit clears what Amazon owed you. Posting the whole settlement on its close or deposit date moves the last week of December into the new year, along with its revenue and its tax.

Why the straddle happens

Amazon's payments guide on sell.amazon.com says accounts generally settle every two weeks. Your cycle start date was set when the account opened, so the cycle that covers New Year's Eve falls wherever it falls. Of the roughly 26 settlements in a year, one crosses December 31, and for most sellers it is a heavy one: it carries post-Christmas returns and the last shipping days of the year.

Three other features of the settlement make the split harder than it looks.

• The beginning balance. Each settlement starts with whatever Amazon held back at the end of the previous one. It is not new income.
• The reserve. Under Amazon's standard delivery-date reserve (DD+7), funds from an order become available seven days after delivery. Amazon holds the unavailable amount at the end of the settlement, and it becomes the next settlement's beginning balance.
• Charges that arrive late. December's FBA storage is charged after the month closes, and Amazon Ads charges sponsored ads at the credit limit or at least monthly, on the second day of the next month if you have not hit the limit, per its billing help page. Both can appear on this settlement with January dates while describing December activity.

The general structure of a settlement is laid out in Amazon settlement reports explained. This article is about the one that crosses the year.

Getting the transaction dates

You need each line's own date, not the settlement's dates. Two sources give it.

• The settlement's flat file lists each transaction with its posted date. Filter on December 31 and you have the split.
• The Date Range Transaction report in Payments, Reports Repository. An Amazon Seller Forums post from its staff explains that date range reports capture transactions from 12:00 a.m. on the first date to 11:59 p.m. on the last date, in local time. Run it for December 1 to 31 and January 1 onward and you have both halves. Amazon's help page for these reports notes that ranges beginning January 1, 2025 or later reflect updated reporting logic, including deferred transactions where applicable, so regenerate older downloads rather than reuse them.

Check the time zone. "Local time" in Seller Central and your accounting file's time zone should agree, or a few hours of New Year's Eve orders will land in the wrong year.

A worked example

Illustrative numbers. Take a seller whose settlement runs Tuesday, December 22, 2026 to Tuesday, January 5, 2027. The settlement shows:

• Beginning balance carried from the prior settlement: $18,000
• Product sales: $64,000 dated December 22 to 31, $21,000 dated January 1 to 5
• Referral fees: $9,600 December, $3,150 January
• FBA fulfillment fees: $11,200 December, $3,700 January
• Refunds: $2,400 December, $1,900 January
• FBA storage fee for December, posted January 4: $3,600
• Sponsored ads charge for December clicks, posted January 2: $5,200
• Reserve held at settlement end: $22,000

The payout. $18,000 plus $85,000 of sales, minus $12,750 of referral fees, minus $14,900 of fulfillment fees, minus $4,300 of refunds, minus $3,600 of storage, minus $5,200 of ads, minus the $22,000 reserve. That is $40,250, paid on or after January 5 and possibly reaching the bank up to five business days later, per Amazon's payments guide.

The 2026 portion, by transaction date: $64,000 minus $9,600 minus $11,200 minus $2,400, or $40,800 net. The storage and ad charges carry January dates but are December costs, so on accrual books they belong to 2026 too, either here or through the year-end accruals you would book anyway. Do not count them twice. Net 2026 effect: $40,800 minus $3,600 minus $5,200, or $32,000.

The 2027 portion: $21,000 minus $3,150 minus $3,700 minus $1,900, or $12,250.

The reserve: the $18,000 beginning balance was released and $22,000 was held, so Amazon is holding $4,000 more than before. That is a movement in what Amazon owes you, not income or expense.

Proof: $40,800 plus $12,250 minus $3,600 minus $5,200 is $44,250 of net activity. Add the $18,000 released and subtract the $22,000 held, and you get $40,250, the payout.

Now the error case. Post the settlement as a single entry on January 5 and 2026 loses $64,000 of sales and $32,000 of net contribution. December's P&L understates the peak week, 2027 opens with a week it did not earn, and tying 2026 sales to Amazon's own annual reports gets harder.

Posting it

Use a clearing account for Amazon.

1. Post the December lines dated December 31 or earlier into the clearing account.
2. Post the January lines in January.
3. Treat the beginning balance and ending reserve as movements within the clearing account, not as revenue.
4. When the $40,250 deposit arrives, record it against the clearing account.

At December 31, the clearing account balance is what Amazon owed you for activity through year-end, including amounts in reserve. That number should match the unpaid December total you can build from the date range report. If it does not, find out why before the books close, not after the CPA asks.

Doing it without a spreadsheet

The manual split takes an afternoon for one settlement if the flat file is clean, and longer if the account also sells in Canada or Mexico, or if refunds reference December orders. Software that posts each line by its own date makes the split structural. ConnectBooks reconciles the sales, fees, and refunds in Amazon settlements and syncs them to QuickBooks or Xero, with summarized or item-level entries as the seller chooses. Confirm with your setup how the straddling settlement is dated before you close the year; the check takes five minutes and prevents the $64,000 error above.

What no tool decides for you is whether a late-posted charge like December storage is accrued to 2026 or left in January. That is a policy choice, usually set by your CPA, and it should be the same every year.

Before you close 2026

Pull the straddling settlement's flat file as soon as it closes in early January. Split it at December 31, tie the December half to the December date range report, and confirm the clearing balance at year-end. Then check the same split on any other channel with an open payout cycle on New Year's Eve, because Walmart's 14-day pay periods and TikTok Shop's delivery-based settlements create the same problem on a smaller scale.

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