Amazon Deferred Transactions (DD+7): Accounting Challenges and A2X Workarounds

If your Amazon sales seem slightly off when reviewing your books, you’re not alone. Even with tight accounting processes, Amazon’s recent delivery-date-based payment policy (often referred to as DD+7 or Deferred Transactions) is wreaking havoc on Amazon bookkeeping.

We have it on good authority that Amazon is looking into these changes and their accounting implications, but in the meantime, this post will outline what’s happening with Amazon DD+7 and Deferred Transactions, why it’s causing accounting issues, and some A2X workarounds to help you accurately account for Amazon sales in the meantime.

What is Amazon DD+7 and Deferred Transactions?

Amazon’s DD+7 policy means that Amazon now holds funds for 7 days after delivery before releasing payment to sellers. This is a major change from the previous system, where funds were typically included in settlements shortly after shipment.

• Before DD+7: Sales were included in Amazon payouts shortly after shipment.
• After DD+7: Even after an order is delivered, Amazon holds the payment for an additional 7 days before it is included in a settlement.

Example of a DD+7 transaction:

• Order placed: November 1
• Order delivered: November 3
• Payment released: November 10 (Delivery + 7 days)

This means sellers have delayed access to funds and their sales figures in Amazon reports may understate actual revenue for the period.

Key points to note:

• Amazon may hold back 20-25% of your revenue in any given period due to DD+7.
• These Deferred Transactions do not appear in normal Amazon reports until released.
• Third-party tools like A2X cannot see Deferred Transactions until they are included in settlements.
• This delay shifts revenue into the next period, making financial reports inaccurate.

Why Amazon’s DD+7 policy is causing accounting issues

DD+7 and Deferred Transactions introduce a timing mismatch between when revenue is earned vs. when it appears in reports and settlements. Here’s why that’s a problem:

1. Sales shift to the next month

• If an order is delivered late in a month, its payout might not be released until the next month.
• Example: A sale made on March 30 and delivered on April 2 won’t be counted in March’s Amazon reports, it will appear in April’s settlement instead.

2. Inconsistent Amazon reports

• Amazon’s reports are now on a cash-basis schedule, not accrual.
• Your Amazon Sales Dashboard still shows sales by order date, but Amazon payouts and financial reports do not.
• Amazon’s 1099-K form reports gross sales by delivery date, while Amazon’s payout reports count sales by when funds are released, causing mismatches. Not to fret, A2X also has a workaround for 1099-K and Deferred Transaction process.

3. Impact on cash flow and forecasting

• Because sellers get paid later, reinvesting in inventory and paying expenses requires more cash planning.
• Permanent payout delay (unless there’s a policy change): There will always be one week’s worth of revenue locked in Amazon’s Deferred Transactions at any time.

How to identify Deferred Transactions in Amazon

To track your Deferred Transactions, go to:

• Amazon Seller Central → Payments → Reports → Reports Repository → “Deferred Transactions”
• Or: Amazon Seller Central → Payments → Transaction View → Filter: “Deferred Transactions”

This report will show which orders Amazon is holding and when they will be released. However, this report is limited, as it only provides a live snapshot and cannot generate past deferred data.

Best practice:

• Download this report on the 1st of each month to capture all Deferred Transactions from the previous month before they disappear.

A2X workaround: How to accurately account for Amazon Deferred Transactions

Since A2X and other accounting tools cannot see Deferred Transactions, you need a manual adjusting entry to properly recognize revenue in the month it was earned.

How the A2X workaround works:

• Step 1: Identify Deferred Transactions.
  • Download Amazon’s Deferred Transactions Report on the last day of the month (or the 1st of the new month).
  • Sum up the total deferred sales and fees using a pivot table or spreadsheet.
• Step 2: Create a new “Amazon Deferred Payments” account.
  • In your accounting software (QuickBooks, Xero), create a current asset account called “Amazon Deferred Payments” to track these funds.
• Step 3: Post an adjusting journal entry.
  • At month-end, record the deferred revenue as income.
  • Debit: Amazon Deferred Payments (Asset) → Amount of deferred sales.
  • Credit: Amazon Sales Revenue → Amount of deferred sales.
  • This ensures the sales appear in the correct month’s financials, even though Amazon has not paid yet.
• Step 4: Reverse the journal entry next month.
  • On the 1st of the next month, automatically reverse the entry.
  • This prevents the revenue from being counted twice when Amazon finally pays.

Optional: Adjust Cost of Goods Sold (COGS)

• If you track inventory on an accrual basis, you may also need to adjust COGS to match deferred revenue.
• Similar to revenue, COGS should be accrued at month-end and reversed when the Amazon payout is received.

What might happen with Amazon DD+7 and Deferred Transactions in the future

Amazon’s DD+7 (Deferred Transaction) policy has introduced an unwelcome twist for sellers and accounting professionals, but with awareness and the above workaround, you can keep your books in order. By capturing deferred sales in the right period, you’ll maintain accurate financial statements and avoid surprises in your revenue reporting.

The good news is that Amazon is aware of these issues. A2X (and other accounting integrators) have been actively lobbying Amazon to address the problem, and it’s reportedly been escalated on Amazon’s side​. That said, please share your feedback with Amazon as well to keep this topic top of mind for their teams.

In time, we anticipate Amazon will adjust their reporting or payout system to make this easier on sellers – or will at least give third-party tools access to the deferred transaction data. Until a permanent fix is in place, this manual solution is the best way to handle the timing gap. Many accounting professionals and A2X users are already doing this each month to ensure their monthly sales figures are correct.

If you need help implementing the workaround, don’t hesitate to reach out to our support team.