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When your Etsy shop pays out a disbursement, Open Payout creates a payout consisting of all the sales, refunds, fees and other kinds of transactions that occurred since your last disbursement.
Most of the time, the Etsy disbursement will match the amount that your shop earned since the last disbursement it received. But sometimes a sale your store made won't have cleared by the time your disbursement is paid out. In that case your store will have earned more money than Etsy paid out to you. The sales that aren't paid out to you will be kept on your Etsy store balance and then paid out with your next disbursement.
Open Payout handles this situation by keeping track of your store balance with Balance Carried Forward and Balance Brought Down line items. Any Balance left on your store when Etsy pays you your disbursement will be recorded in the payout under Balance Carried Forward. And the same amount will be added to your next Payout as Balance Brought Down.
Over time the Balance Carried Forward and Balance Brought Down lines will cancel each other out, so when you see them you should book them to a clearing account in Xero or QuickBooks.
Imagine you open a new store on Etsy. Your store hasn't earned any money and hasn't paid any fees so its balance starts at $0
Open Payout will see that your store made $100 but was only paid $75. It will also see that your store had $25 left on its balance when the Disbursement was paid out.
Here's what your store's first payout will look like:
First Payout | |
---|---|
Sales | $100 |
Balance Carried Forward | -$25 |
Payout Total | $75 |
The $25 balance + $80 in sales means that Etsy pays you a disbursment of $105 even though you only made $80 in Sales.
Your store's second payout will look like this:
Second Payout | |
---|---|
Balance Brought Down | $25 |
Sales | $80 |
Payout Total | $105 |
The Balance Carried Forward lines and Balance Brought Down lines in your first and second Payouts cancel each other out. In Xero or QuickBooks you should book them to a clearing account.