Upcoming Enhancement:
ConnectBooks is currently working on a new option that will allow sales to be imported into QuickBooks based on the order ship date instead of the Amazon settlement posted date.
The Problem
Under Amazon's DD+7 rule, an order's payment posts to the settlement up to 7 days after the ship date. ConnectBooks records sales in QuickBooks based on Amazon's settlement posted date, aligning the books with the data Amazon provides. For orders shipped near the end of a reporting period, this creates a cutoff issue. Revenue earned in the current period is recorded in the following period, understating current period sales and overstating the next.
Recommended Solution
For now, we recommend using a reversing journal entry to accrue unposted revenue at period end and reverse it at the start of the next period. This is a standard cutoff adjustment.
Step 1. Identify Shipped but Unposted Orders
In ConnectBooks, open the Order P&L report.
Select the Amazon store, and set the date range to the period you are trying to reconcile and select Ship Date as the basis. For a December 2025 close, use 12/01/25 through 12/31/25.
Export the report to Excel.
Filter the Posted Date column in excel to exclude any orders posted within the current period (Dec).
The remaining orders are those that shipped in the period but will posted in the next.
Record the totals for sales and COGS in QuickBooks.
Step 2. Set Up the Deferred Revenue Account
In QuickBooks, create an account named Deferred Revenue and classify it as Other Income. Placing it under Other Income ensures the accrual appears below the standard sales section on the P&L, keeping core revenue figures undisturbed.
Step 3. Record the Accrual Entry
Post the following journal entry on the last day of the period (12/31/25):
Account | Debit | Credit |
Accounts Receivable | $17,906.83 |
|
Deferred Revenue (Other Income) |
| $17,906.83 |
COGS | $5,000 |
|
Inventory |
| $5,000 |
This recognizes the revenue and matches the related cost of goods sold in the period the sale was earned.
Step 4. Record the Reversing Entry
Post the reversing journal entry on the first day of the next period (1/1/26):
Account | Debit | Credit |
Deferred Revenue (Other Income) | $17,906.83 |
|
Accounts Receivable |
| $17,906.83 |
Inventory | $5,000 |
|
COGS |
| $5,000 |
When the orders post through Amazon in the new period, ConnectBooks will record them on the settlement post date as normal. The reversal prevents double counting.
Net Effect on the Books
December reflects all revenue and COGS for orders shipped in December.
January reflects only orders shipped in January.
Accounts Receivable and Inventory return to zero after the reversal, leaving no lasting balance sheet impact.
Amazon settlement reconciliation continues to operate on the post date without disruption.
Recommended Frequency
Apply this adjustment at any period close that affects external reporting, including:
Month end closes formally reported to stakeholders
Quarter end closes
Year end closes for tax and financial statement purposes
For routine internal months, the timing difference is typically immaterial and the entry can be omitted.
Summary
The DD+7 rule shifts revenue recognition into the period following the ship date. A reversing journal entry to a Deferred Revenue (Other Income) account corrects period end cutoff without affecting daily reconciliation between ConnectBooks, QuickBooks, and Amazon settlements.