If you logged into your Amazon Seller Central India account recently and felt a moment of panic looking at your “Funds Available,” you are not alone.
A recent update to the Payments Dashboard has introduced a line item that is causing confusion across the seller community: Deferred Transactions.
Suddenly, your “Total Balance” looks healthy, but the amount actually hitting your bank account is significantly lower. Is Amazon charging new fees? Are your funds frozen?
This guide explains exactly what the Deferred Transaction update is, why Amazon India implemented it, and, most importantly, how to reconcile your books and manage your cash flow during the delay.
What is a “Deferred Transaction” on Amazon?
In simple terms, a Deferred Transaction is money from a sale that Amazon has temporarily set aside and will release to you at a future date.
Previously, Amazon grouped these withheld funds under a vague label called “Account Level Reserve.” The new update separates these out to give you transparency. It allows you to see exactly which orders are being held and when they will be released.
The Main Culprit: The DD+7 Policy
For 90% of Indian sellers, the reason your funds are deferred is the Delivery Date Based Reserve (DD+7) policy.
Here is how the timeline works now:
- Order Placed: Customer buys your item.
- Shipment: You ship the item.
- Delivery: The item reaches the customer.
- The Wait: Amazon holds the funds for 7 days after the confirmed delivery date.
- Release: On the 8th day, the funds move from “Deferred” to “Available for Disbursement.”
Why? Amazon does this to ensure the customer is happy with the product and to cover any potential returns or A-to-Z claims before paying the seller.
How to Reconcile Deferred Transactions (Accounting Guide)
This is where most sellers face a nightmare. Because the money is held back, your Bank Deposit will not match your Sales Report for the month.
If you use the Accrual method of accounting (recording sales when they happen, not when cash hits the bank), you need a new workflow.
The “Snapshot” Trap
The most critical thing to know is that the Deferred Transactions Report is a snapshot. You cannot run this report for a past date. You must download it on the day you are closing your books.
Step-by-Step Reconciliation:
- Set a Reminder: Mark your calendar for the last day of the month (e.g., November 30th).
- Download the Report:
- Go to Seller Central > Payments > Reports Repository.
- Select “Deferred Transactions” as the report type.
- Download the file.
- The Journal Entry:
- Total up the deferred amount from the report.
- Record this in your accounting software as “Accrued Income” (Asset) or “Funds Held by Amazon.”
- Debit: Funds Held by Amazon
- Credit: Sales Revenue
- The Reversal:
- When the next settlement period arrives and those funds are released, reverse this entry so you don’t double-count the revenue.
3 Strategies to Fix Your Cash Flow
The “Deferred” status effectively increases your cash conversion cycle by 7-10 days. To survive this, you must speed up other parts of your business.
1. Level Up in the Amazon STEP Program
This is the most powerful lever for Indian sellers. The length of your “deferral” is directly tied to your STEP Tier.
- Basic/Standard: You are subject to the full DD+7 wait.
- Premium Tier: This often unlocks Daily Payouts and reduces the reserve period significantly (sometimes to DD+3).
Action Plan: Check your STEP dashboard. Identify the one metric (usually Late Dispatch Rate or Cancellation Rate) preventing you from moving to the next tier and fix it aggressively.
2. Enable “Express Payouts”
If you have a healthy account history, you might be eligible to bypass the 3-5 day bank processing time.
- Go to Settings > Account Info > Bank Account Information.
- Look for the Express Payout option.
- Enabling this ensures that once Amazon releases the deferred funds, they hit your local Indian bank account within 24 hours.
3. Renegotiate with Suppliers
If Amazon is paying you 10 days later, you cannot afford to pay your suppliers 10 days earlier.
- Talk to your manufacturers or distributors.
- Explain the platform policy change.
- Ask for Net-30 or Net-45 payment terms.
- Aligning your Accounts Payable with your Accounts Receivable is the only way to maintain liquidity without taking a loan.
Frequently Asked Questions (FAQ)
Is Amazon keeping my money forever?
No. “Deferred” simply means “Paused.” Once the 7-day window after delivery passes, the money is automatically moved to your “Available” balance for the next payout cycle.
Does this affect B2B orders?
Yes. For Amazon Business orders paid via invoice, the deferral can last longer—typically until the business customer pays their invoice (approx. 30-45 days).
Can I opt out of Deferred Transactions?
No, this is a platform-wide policy update for Amazon India. The only way to reduce the hold time is to upgrade your seller performance tier (STEP).
Are you struggling to reconcile your Amazon India payments? Schedule a free consultation from us!