Demystifying SAP and Amazon Marketplace Reconciliation

With the rise in ecommerce, traditional retailers are now selling on multiple channels, particularly on marketplaces such as Amazon Marketplace. The result is a proliferation of data across disparate systems that must be managed to have accurate financial and operational data. In this article, we will break down the challenges associated with two critical systems used by large brands and retailers: Amazon Marketplace and SAP. Reconciliation between SAP and Amazon isn’t just technical, it’s a strategic imperative for operational and financial accuracy. This process ensures financial accuracy, operational efficiency, regulatory compliance, and establishes a foundation for insights needed to make informed decisions.

Need for SAP and Amazon Marketplace Reconciliation

Amazon and SAP capture data differently causing frequent reconciliation gaps across orders, payments and inventory. Some common scenarios include:

• SAP shows an open invoice while Amazon marks the order as paid.
• Return orders are approved in Amazon but never updated in SAP inventory.
• Settlement reports don’t match SAP bank feeds, triggering GST filing gaps
• Inventory counts are different: Amazon shows Qty X while SAP shows Qty Y

Given that the volume of transactions is large, it is difficult to reconcile them manually, which is slow, error-prone and takes a lot of time.

Reconciliation areas between Amazon Marketplace Systems and SAP

Common discrepancies in SAP and Amazon Marketplace data are due to:

• Missing Inventory
• Commission Overcharges
• Shipping Overcharges
• Return Leakages
• Replacement tracking
• Reimbursements

We will cover these discrepancies now to understand them.

🛒 Missing inventory: Common causes include:

• Returned goods updated on Amazon but not in SAP
• Returned goods classified as damaged on Amazon without SAP intimation
• Returned goods updated at SAP but not in Amazon
• Goods not returned by customers or not deliverable but not updated on Amazon
• Manual update errors at either system

💸 Commission Overcharges: Commission and fees overcharges can happen in a variety of circumstances. Some of them are:

• Being charged extra due to wrong product classification
• Being charged for both outbound and inbound of goods when inbound does not actually occur.
• Wrong storage charges
• Seller lists in the wrong product category

🚚 Shipping Overcharges: Shipping charges are not calculated correctly in several scenarios such as

• Wrong dimensions are used
• Wrong shipping zone is used
• Wrong shipping method is used

🔁 Return Leakages: Return leakages can occur in scenarios such as

• Customer keeps the item and gets a refund
• Amazon refunds more than sales price
• Returned items are damaged or used
• Items are misplaced or lost by Amazon

🔄 Replacement tracking: Replacement tracking is important since errors are made.

• Replacements are treated as new orders
• Replacements are made for errors attributable to Amazon
• Discrepancies due to customer-initiated vs items not delivered and returned to origin discrepancies

💰 Reimbursements: Amazon does reimbursements periodically and on a different schedule as compared to SAP, where books are closed monthly or quarterly. Amazon withholds payments for Reserve balance (withholding for a certain period before paying them out) and customer metrics not conforming to Amazon parameters such as defect rate, cancellation rate, etc. Amazon’s periodic reimbursement cycle often introduces timing mismatches that challenge SAP-based accounting closures. Discrepancies introduced could be due to

• 🛒 Missing Inventory
• 💸 Commission Overcharges
• 🔁 Return Leakages

Automating the Reconciliation Process

The common discrepancies categories shown in Figure 1 cause errors in financial entries with SAP, which is the System of Record. To reconcile the discrepancies, automated software provides capabilities to:

• Data Collection and Mapping: Ingest and map data from SAP and Amazon (orders, payments, returns)
• Reconciliation and calculations: Run reconciliation engines to flag mismatches and calculate variances
• Report Filing and Dispute Tracking: Generate dispute reports for disputing reimbursements to Amazon marketplace within the stipulated timelines and tracking the resolution.
• SAP posting and resolution monitoring: Update SAP with the correct financial data once resolved.

Figure 2 shows the reconciliation process between Amazon and SAP.

Conclusion: Reconciling Amazon marketplace transactions with SAP isn’t just tedious, it’s a growing operational risk. Disparate data formats, settlement mismatches, and manual validation with SAP create bottlenecks leading to:

• Delayed financial close
• Compliance exposure
• Wastage of team resources and loss of productivity

Progressive finance teams are handling this with automated reconciliation, aligning marketplace data with SAP and ensuring:

• Faster closing
• Fewer errors
• Financial accuracy and increased revenues.

Reconciling Amazon marketplace transactions with SAP isn’t just tedious—it’s a growing operational risk. Shifting to an intelligent, automated solution is not just about fixing problems; it is about unlocking financial accuracy, improving operational information and increasing revenues.

Do you want to know how much revenue you could be missing?

Our clients have recovered significant revenue by identifying and resolving unresolved discrepancies. One of them recovered ₹27+ lakhs using automated workflows. Another reduced discrepancies by 50%.