Amazon Provision For Receivables: Amazon May Be Deducting Amount From Your Payment, Here’s Why

amazon provision for receivable

As if a decrease in purchase orders weren’t enough, now vendors have also noticed low or missing payments. When investigated, they came to know that the amount was deducted in the name of Provision For Receivables. Read on to know more about these provisions and how you can recover that amount from Amazon.

Provisions/Risk = Receivables – Payables from Amazon perspective.

What Is Provision For Receivables

Provision For Receivables means a temporary credit memo or access amount that Amazon charges on your account because the anticipated costs due to Amazon may exceed the anticipated payments owed to you. If, at any point, Amazon feels that the average revenue earned by them will be less than the average payments made to you, they will instantly hold your money in the name of Provision For Receivables. As a result, you may notice missing or reduced payments from Amazon. This amount is anticipated by Amazon and it’s not the actual cost. The forecasted payable amount determined by Amazon can be based on the following costs:

  • CoOp Agreements: Damage allowances, CRaP allowances, damage allowances, margin guarantees, Subscribe and Save, MDF
  • Returns
  • Chargebacks and shortages
  • Marketing costs

Why Does Amazon Charge Provision?

The main purpose of the provision is to make sure that none of the above-mentioned expenses create a debit balance in your account. The longer your debit balance is, the less are your chances of being paid in a timely manner. In short, Amazon wants to make sure that they are paid beforehand for doing business with you, even before they pay you. Amazon wants to “protect” themselves before paying you. Why is Amazon doing that? What is all this insecurity about? If you have been following my blogs, you may know that Amazon intends to shutdown Vendor Central in the near future. Provision For Receivables is to make sure Amazon receives all its money so they can secure their position in case you are required to make a switch from Vendor Central to Seller Central.

To stay away from all this hassle, there is a simple solution. Just switch to Seller Central. You will have more control over your inventory, pricing, listing details, you will be paid weekly instead of 60 days and the best part; you won’t have to deal with such provisions. And you will have access to almost all the tools that are there in Vendor Central. So why not switch now because you will anyway have to at a later date.

Can Amazon Calculations Be Wrong?

They certainly can be. And if they are, Amazon will definitely pay you back. Most of the “payables” determined by Amazon are estimates and not actual payable amount due to Amazon. They are anticipated/forecasted payables. The costs are calculated on average or based on your past payments. If the amount seems overstated after the actual cost is calculated, Amazon will immediately refund you back.

But My Provision For Receivables Seem To Be Increasing, Is There Something Wrong?

This is not a new practice. All the vendors have been receiving deducted payments from Amazon on a regular basis. However, they may find an increase in provisions after tent pole events like Prime Day, Black Friday, or Cyber Monday. This is because vendors or basically anyone selling on Amazon during that period experiences an increase in returns and marketing costs. As a result, Amazon deducts an “increased” amount from the payment due to you.

Here Are A Few Things To Look Out For Before Coming To A Conclusion:

  • Timeline: It’s crucial when you look at the Financial Dashboard. Provisions for Receivables are calculated on the basis of a specific timeline. It is not always necessary that this timeline matches with your payment terms. If you look on a random day, there is a possibility that it seems as if you owe more to Amazon than Amazon owes to you.
  • Seasonality: During high-sales events like Prime Day and Q4, the sales and expenses to run your Amazon store is higher. Naturally, at that time, the costs that Amazon charges you are higher. It is possible that you may owe more amount to Amazon than Amazon owes to you. 
  • Internal Costs: For calculating the amount owed to you, Amazon takes into consideration and adds all the expenses and fees. Thus it can be challenging for the vendors who pay to Amazon from various internal funds.

Is There A Way To Know If I Have Been Charged For Provision For Receivables?

You can get your hands in this data from your Vendor Central account.

  1. Go to Vendor Central > Payments.

  2. Find ”Adjustment” in the ”Total Estimates” section and click on ”View Details.”

  3. Select the data range and download the holdbacks. Here you can also take a look at the reversals Amazon has credited if the actual comings are lower than expected.

  4. From here on, you will have to do the math to find out if Amazon owes you any money or not. Select a transaction time period and filter by Transaction Type to view all the holdbacks and reversals together. If the holdbacks and reversals don’t seem to be equal, then you should generate a ticket with Amazon.

What Does A Provision For Receivable Look Like?

Provisions are not “real” deductions, so there will be no invoice copies. Therefore, the provisions will not be available in your vendor central account. Each provision placed will be displayed with the date it was placed and look like this: YYMMDD_PROVISION_FOR_RECEIVABLES. For example, a date of 181201 on your remittance means that the provision was placed on December 1, 2018. It will look like this: “181201_PROVISION_FOR_RECEIVABLES”.

The temporary provision for receivables will reverse when invoices for returns, marketing and rebates are settled, or a decision is made not to return the inventory. When a provision is reversed, it will show as “181201_PROVISION_FOR_RECEIVABLES-R” (notice the -R at the end). This is a tool-driven process and it does not generate any paperwork or invoice, both in the implementation stage or the reversal.

Understanding The Cost Structure Amazon Pays To You

To find the discrepancies in the amount paid by Amazon, you will first have to familiarize yourself with the payment structure and the Financial Dashboard. Basically, if you have better sales flow, fewer returns and low obstructions, chances are thinner that Amazon will charge any provisions on your account. Based on my experience, here are few of the areas to look out for:

  • Chargebacks: Chargeback, also known as charge disputes, are operational fees deducted from a vendor’s remittance checks. They usually occur when Amazon thinks that the vendor did not follow strict vendor compliances. Chargebacks can be filled for a variety of reasons and in most cases, they can be recovered. If your chargebacks are increasing, you will have to dive deep to find and address the root cause. It can be anything from PO related issues, receive related issues, prep related issues, ASIN related issues, or transportation-related issues.
  • Inventory Levels: First and foremost, keep a check on the inventory levels and your shipments; it is a possibility that you have sent more inventories to Amazon. If the inventory levels looks okay, go a step further and check the product set up, quantities and its configuration, i.e., case pack, single pack, or multiple packs. Amazon can be getting inventory in case packs because of which they may send shopper more products for each purchase and understate the amount owed to you.
  • Co-op Agreements: Do you have any duplicate agreements, or have you signed for any auto-renewal programs? If yes, then there is a possibility that you may have signed two agreements for the same item. Amazon, being Amazon, won’t get to know this and even if it knows this, won’t bother to point it out to you. You should be proactive, attentive and identify if there are any duplications in the co-op agreements or not.
  • Advertising Costs: Are the marketing costs as per your expectations? If the advertising costs seem to be too out of the line, its time you rush to your advertising portal and check your campaigns, the budget, spend and everything. If the costs are high in days like Prime Day or Q4, that’s acceptable, but if they are going continuously out of your budget, there may be something doubtful going on there.
  • Returns: Customer returns and negative reviews are a great way to identify the flaws in your product and the product detail page. If you have a higher customer rate, you need to find the reason why your customers are dissatisfied. Is there something you can add or remove in your product detail page to clarify the issue customers are facing. If the returns are low, Amazon is less likely to deduct the amount from your payables.
  • Damaged Products & Replacements Given To Costumers: Are your customers returning the products because they are arriving damaged? If that is the case, you should test-buy your products and redesign your packaging and make it more safe and sturdy. This will prevent customer returns because of damaged products and ensure that you don’t have to face additional costs of replacing the product to the customer.
  • Payment Terms: When your payment terms are stringent, Amazon will still be waiting to receive more inventory from you even after the payment to you is due. In this case, Amazon will make an estimate of how much money they owe to you and will pay only that much amount. Moreover, if you have a quick-pay discount, Amazon can take the pay discount of some of the items and apply a shortage to the remaining items to reconcile it afterward. Maybe it’s time you should renegotiate your payment terms with Amazon.  

Now, as you are aware of all these costs, you can calculate the value of each of them based on the total cost of goods sold (COGS) and estimate the total and original amount owed to Amazon. Then you can compare that amount to the payment made by Amazon to you. The next question would be what to do if there are discrepancies?

Here’s What You Should Do If There Are Any Discrepancies

If any of the deductions made in your account doesn’t seem right and you find them invalid, you can immediately begin a dispute process in the Dispute Manager section in Vendor Central. However, we would recommend you to wait for a week or two to see whether the amount is reversed by Amazon or not.

Does It All Sound Too Complicated?

Don’t worry; you are not alone. The process isn’t as simple. What you can do is take help from expert consultants from beBOLD Digital.

beBOLD is a full-service Amazon Account Management Agency that specializes in both Vendor and Seller Accounts. We can help you reverse any access provision charged to your account and will also keep a check on the provisions applied by Amazon. We have already done this process for all our vendor clients and we would happily do it for you. Just contact us to get started!


  1. Erik Ronningen

    How does this work when we don’t buy from Amazon under the same account as we sell to Amazon? Are they placing a provision for receivables on our account based on their open purchases from us that are in the process of being fulfilled? We routinely see these charges and reversals, but we don’t owe Amazon anything (all purchases are paid for at the time of the purchase so…). Amazon usually owes us a pretty decent amount, and then delays paying by claiming a Provision for Receivables against nothing (since we don’t owe them). Please explain further.

  2. beBOLD Team

    Erik – I completely understand what you are saying and it doesn’t make sense at all. Their “formula” which we have yet to figure out automatically holding back your money to “protect” themselves (which is BS ). What is happening here ultimately is that Amazon is pushing Vendors into Seller Central. We know for a fact that this is part of what is going to be happening over the next 12-24 months so we are assuming this is part of the way to drive or protect themselves for when vendors move to Seller Central.

    The temporary provision for receivables will reverse when:
    –Marketing (Amazon Marketing, Promotions, Discounts, etc)
    are settled or a decision is made not to return the inventory. When a provision is reversed, it will also show as YYMMDD_PROVISION_FOR_RECEIVABLESR.

    The provision will be reversed as soon as the payables increased or once the receivables Co-op/returns are billed.

  3. Valery

    My question is: how am I supposed to clear a vendor’s account according to “0 euro payment” including provision for receivables? E.g., in one of those zero euro payments there were two invoices: one included a regular invoice – debt of Amazon, the second one mentioned “provision for receivables”; how is the debt going to be paid? Or will it be paid later and it is kind of “hold on” thing?
    Please explain, really need help.
    Thanks and regards,

    1. beBOLD Team

      Valery – it is more of “a hold” until whatever the Amazon algorithm for Provision for Receivable determines Amazon owes you more money than what you owe Amazon (non-returned inventory, accruals of shipping, damage, advertising including Amazon Marketing).

      So if you never sold 1 more item to Amazon today and moved all of your business to Seller Central – they are making sure that they get all of their money.

      Let us know if you have any more questions. Thank you.


  4. Stacey

    I think I have a similar question as Valery. WHen Amazon is using a provision for a payment of invoices on their account and then later reverses the provision amount at a later date, how am I supposed to record the payment? I can’t enter in a $75K provisional credit memo amount to pay 15 invoices only to reverse that provisional memo amount when it’s updated to an actual amount. I’m confused from an AR application standpoint as to how this should be handled when you get payments on a daily/weekly basis and the provisional amount changes each time.

  5. Steve

    This seems ridiculous as Amazon takes their co-op, return and freight discounts immediately out of revenues due us as soon as we ship – but pay us after 60 days. We are the ones who experience exposure, not Amazon.

    1. beBOLD Team

      Steve – I completely agree with you. To be honest – I would start to look at setting up a Seller Central account sooner than later if I was you. We are moving a lot of clients into Seller Central right now because of a number of reasons:

      • You will be paid weekly instead of 60 days. Greatly increases cash flow
      • All of the Amazon Advertising, Brand Store and other marketing tools are now available to Seller Central
      • New Products – you control your own destiny. Not Amazon’s algorithm for buying
      • Pricing – you control and change your own prices when you want to

      Have I sold you on Seller Central yet? LOL Have a great day Steve!


  6. Tracy Owen

    Amazon currently owe us circa 70K, they have not paid us for 45 days, and they keep putting provisions for receivable on our account. As soon as we reach a 0 balance, then they put another Provisions for receivable on our account. We have moved to returns allowed, they return product and then reorder it the next day. I don’t understand?
    They are using payments due to us to clear the provisions for receivable? but as you say it is a tool driven process.
    Over the past month they have sent back £13K’s worth of product, of which a lot has come back damaged (we are disputing these) we have cleared all of the COOPs 2 weeks ago, but they keep putting provisions for receivable over £20K on our account daily.

    Any help or advice would be greatly appreciated. It is like their systems have gone wrong?

    1. beBOLD Support

      Tracy – I completely understand and know it is very frustrating! There is some type of calculation (no one knows what it is) that is holding your money.

      Have you thought about not sending inventory to Amazon and creating a Seller Central account? This is ultimately what is going to be happening anyways. I suggest you get a head of the curve NOW.

      Have a great day!


  7. Rachel


    I have the same question as Stacey; what is the best accounting application to account for the provisions while still noting invoices payments?

    1. beBOLD Team

      Rachel/Stacey – there is really no best accounting application to account for the provision for receivable. There is no formula or way to account for this. I wish I had I better solution for you. All of our clients are struggling with this as well too. You just have to keep on top of it and not let slip through.

      Have a great day!


  8. Josh

    Thanks Bebold Team for writing this, this blog is the only source for insights on “Provision for Receivable” other than submitting a case. I just received my first Provision for Recievables notice last week and it was quickly reversed. I don’t mind it when the balances cancel each other out, it just makes things more difficult for our finance team to reconcile payments. It will also be more difficult when Amazon starts to reverse the entries but only reverses a portion rather than a full amount.

    I don’t understand where Amazon would be concerned about us not being able to pay them – our largest cost bucket with Amazon is advertising and it goes on to a credit card.

  9. A

    Denny, Why on earth do you suggest amazon vendors move to a amazon seller account?
    How does that resolve the ONGOING situation of amazon delaying their payments to vendors by setting up “fake” provisions of receivables.
    We have an agreement that states amazon should pay in 60 days. Now they come up with these “provisions for receivables” putting hold on payments to their vendors, when it is amazon that is in debt to us vendors. Clear breach of agreement.
    Why should any of us vendors continue any kind of business relationship with a company that behaves like amazon???

    1. beBOLD Team

      Alexander – Amazon is protect their position and ensure they receive their money because you all of sudden make a switch from Vendor Central to Seller Central – Amazon is out money that you owe them. I don’t know anything about your business off hand (Amazon only, distribution, etc) but I would explore the possibility of moving to Seller Central sooner than later if you don’t want to deal with Provision for Receivables. Using Seller Central – you are in control of everything (inventory, pricing, etc) and you also get paid faster. I would suggest writing down the pros/cons of each and then making a decision.

      Have a wonderful day!


  10. A

    Denny, all your clients are struggling with this issue also….
    There is a word for a company that behaves like amazon, it is CRIMINAL

    1. beBOLD Team

      Alexander – My clients are not struggling with this because their retail sales are increasing week of week and their inventory is selling through. If your retail sales are increasing – Amazon doesn’t need to add in a provision for receivable.

  11. Skip Orvis

    Hi All, we figured out the mystery (for our account) and how to eliminate nearly all of our Provision for Receivable from Amazon. The true root cause, in our case, was that we had some large promotions (in terms of dollars per unit) set up and running for extended periods of time. Amazon took provisions against those promotions even though they had not even started to convert. Our accounting team hounded Amazon continuously until one day we received the magic email letting us know that was the cause. We cancelled first the largest promotion and then all of the others and re-entered them for a shorter time period and the Provisions for Receivables hold’s vanished (for the most part). This is definitely worth a try and tends to have results in 1 week or less.

    1. beBOLD Team

      Skip – that could be one of issues but ultimately is a protection for Amazon to ensure they are not losing any money. Scenario: You say that you are no longer going to ship to Amazon via 1P and you move your entire business to 3P. Amazon is going to hold funds to ensure they receive all of their accruals (shipping, damage, co-op) and any inventory they may return to you.

      If at any point in time their systems see that their AR is greater than their AP – they will hold YOUR money.

      This is great information though Skip and helpful to others in the Amazon community looking for answers about Provision for Receivable.

      Have a great day!


  12. Stephanie

    I’ve been navigating these Provision for Receivables for months now. In the last month they have increased exponentially. Now I have received one that says 190906_PROVISION_FOR_AGED_RECEIVABLE.
    The aged part is new. And it references the most recent co-op, damage allowance, and freight allowance invoices. What are these? I cannot find any information on them or if they will be reversed. They amount of this “Aged Provision” is the exact same amount as they already have charged up for the Co-Op, Damage and freight fees. How can they charge us twice for the same thing? They really are getting ridiculous! We have started a seller central account since we have been forever frustrated by the fact that Amazon always denies our price increases and are moving in that direction but we are not yet in a position to completely cut the cord.

  13. beBOLD Team

    Amazon’s Definition of Provision for Receivables:

    Provisions for receivables are temporary credit memos that Amazon can place on your account when the forecasted costs associated with returns, marketing and rebates that are due to Amazon exceed the forecasted payments owed to you

    The purpose of these provisions is to prevent returns, marketing and rebates creating a debit balance on your account.

    Provisions are deducted from payments due to you, and are subject to a subsequent adjustment based on the actual costs of returns, marketing and rebates and the actual payments due to you.

    When a provision is placed on your account, it will give the date it was placed and display as YYMMDD_PROVISION_FOR_RECEIVABLES. For example, a date of 161017 on your remittance, means that the provision was placed on October 17, 2016.

    The temporary provision for receivables will reverse when invoices for returns, marketing and rebates are settled or a decision is made not to return the inventory. When a provision is reversed, it will show as YYMMDD_PROVISION_FOR_RECEIVABLESR.

    Provisions are recalculated, adopted or reversed on a daily basis. As they are not “real” deductions, there are no invoice copies.

  14. Ambarish Patel

    What if you have a signed contract that auto renews every year? Do we just move to seller central and not ship or accept PO’s from vendor central? I believe this would start the chargebacks relating to unfulfilled PO’s; so in our case should we wait until the renewal and then jump ship? Thanks for any advise.

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