amazon provision for receivable

What is Provision for Receivable and how does it affect your business with Amazon?

Have you looked at your invoices and noticed a deductions from Amazon that says: PROVISION FOR RECEIVABLE.

Provisions/Risk = Receivables – Payables from Amazon perspective.

Over the next 12-24 months Amazon is going to be pushing Vendors that are not performing at a certain sales or growth number into Seller Central. Let me repeat this again – yes Vendors are going to be pushed into Seller Central.

Look at some of the facts:

  • Provision for Receivable – this 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.
  • AMS or now Amazon Marketing has all of the same marketing features for both Vendor and Seller accounts.
  • Seller Central now has all of the self-service features that Vendor Central has.

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.

Returns : The returns which have not been billed to you and Marketing & Rebates are the coop invoices in reference to the agreements which have not been billed to you.

Please note that provisions are recalculated, adopted or reversed on a daily basis. As they are not “real” deductions, there are no invoice copies. Therefore, the provisions will not be available in your vendor central 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.

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

On the other side of the coin, the holdback prevents from a large return or enter the actuals for an agreement to bill all at once, which could then end up with the vendor in debit balance. The longer that a vendor is in debit balance, the longer that you being paid in timely manner.

What does a Provision for Receivables look like?

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.

We will reverse the current provision once the risk is mitigated and the same will be refunded to your account.

If you are doing business with Amazon and still don’t understand this – feel free to reach out to ADEN Branding for help.

ADEN Branding is a full service Amazon Account Management Agency that specializes in both Vendor and Seller Accounts.


  1. 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. ADEN Team
    January 7, 2019 Reply

    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
    February 1, 2019 Reply

    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,

    • ADEN Team
      February 2, 2019 Reply

      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
    February 7, 2019 Reply

    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
    February 21, 2019 Reply

    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.

    • ADEN Team
      February 21, 2019 Reply

      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
    February 22, 2019 Reply

    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?

    • ADEN Team
      February 22, 2019 Reply

      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
    March 12, 2019 Reply


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

    • ADEN Team
      March 12, 2019 Reply

      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. Thanks ADEN 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. 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???

    • ADEN Team
      July 8, 2019 Reply

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

    • ADEN Team
      July 8, 2019 Reply

      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
    September 17, 2019 Reply

    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.

    • Denny Smolinski
      September 17, 2019 Reply

      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
    September 18, 2019 Reply

    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.


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