Page Title

GROWTH CAPITAL

Frequently
Asked Questions

 

There are some questions many selling partners ask. We do our best to answer them here. For further assistance, please email AccrueMe support. 

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Click on a question below to take you to the answer

or simply scroll through our comprehensive list.

 

How Do You Calculate On Hand Inventory?

AccrueMe On Hand = Units In An FBA Warehouse + Units Inbound To Amazon With An Amazon Paternered Carrier + Units Purchased From An Authorized Supplier in the last 21 days But Not Yet Shipped + Units Reported by an Approved 3PL.

Units in an FBA Warehouse (AFN) include; Available, Reserved, Unfullfilable, Checked-In, Researching, Inbound Receiving, and Stranded Inventory in Amazon warehouses in the USA.

Units Inbound To Amazon (Inbound) With An Amazon Paternered Carrier included inventory in Shipped Status or later with an Amazon partnered carrier. Units in shipment with the following statuses are included in AccrueMe On Hand; Shipped, Pick up, Drop off, In transit, Delivered, Checked in, and Receiving.

Units Purchased From An Authorized Supplier (In-Transit) in the last 21 days But Not Yet Shipped include; units for ASINs you've purchased through the AccrueMe portal in the last 21 days that have not been marked as "Shipped" with a partner carrier by Amazon. This allows merchants to purchase inventory directly from suppliers and ship them to Amazon from an authorized 3PL without any drop in value while the inventory is being prepped or awaiting Amazon Partnered Carrier Pick Up. Inventory in this category must be shipped within 21 days of submitting the invoice for payment through the AccrueMe portal.

Units Reported by an Approved 3PL (3PL) include all of the Units and approved 3PL reports to AccrueMe. 

How Does AccrueMe Calculate Profit?

 

AccrueMe Profit = Order Revenue From Authorized Sales - COGS - FBA Fees - Settlement Adjustments - Misc Fees

Order Revenue From Authorized Sales is calculated by totaling the exact sales price for each unique Order ID of authorized ASINs during any given period. 

COGS is calculated as the total cost of goods as provided by the Merchant for each unit of each Authorized ASIN sold in a given period. 

FBA Fees are calculated by totaling the exact FBA Fees for each unique Order ID of authorized ASINs during any given period. FBA Fees include the following fees as reported by Amazon; Commission (referral fee), FBA Per Order Fulfillment Fee, FBA Per Unit, Fulfillment Fee, FBA Weight Based Fee, Fixed Closing Fee, Get Paid Faster Fee, Gift Wrap, Gift Wrap Chargeback, Gift Wrap Commission, Order Promotions, Shipping, Shipping Chargeback, Shipping Hold Back, Variable Closing Fee.

 

Settlement Adjustments are reported every time Amazon sends a payment to the Marchant and include; Amazon PPC, Inbound Shipping With Partnered Carriers, Amazon Prep (labeling, poly bagging, bubble wrap, etc.), Long Term & Short Term Storage, Refund, Returns, Removals, Reimbursements, Fee Reversals, and any other fees that are reported by Amazon but not included in live sales and inventory reports.**

Misc Fees include any fees or adjustments input by AccrueMe Admins. 

 

 

**AccrueMe considered all Settlement Adjustments to take place on the date they are reported rather than backdating and adjusting previous periods based on the dates in settlement reports (many thrid party profit tracking tools backdate settlement adjustments based on the date Amazon reports a charge to have occurred rather than reporting all of the charges on the day Amazon reports it like AccrueMe does which could result in short term discrepancies between AccrueMe numbers and third part numbers). 
 

What Is Authorized Inventory? 

 

Authorized Inventory is a specific number of units for each ASIN in a Merchant's Inventory that AccrueMe's "Brain" has Authorized for inclusion in AccrueMe Calculations like Profit Share & Qualified Capital. AccrueMe only invests against and shares in the profit (or loss) from the sale of Authorized Units. 

In general, Authorized Inventory must 1. be listed for sale on Amazon.com (USA), 2. be included in AccrueMe On Hand (see above), 3. reguarly sell for a profit after Amazon Fees & COGS, and 4. be expected to sell in less than 6 months.  

How Do I Repay AccrueMe? 

 

You can partially or fully repay AccrueMe at any time without penalty. Partial payments can be made directly in the AccrueMe system. For full and final pay-off instructions, please email support [at] accrueme [dot] com. As long as your account is in good standing, AccrueMe Capital does not represent more than 50% of the Qualified Capital in your Account, and your account is profitable with a minimal ROI, you are not required to make any payments to AccrueMe unless it makes sense for you and your business.   

What Is Qualified Capital? 

 

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Qualified Capital is how AccrueMe defines the Asset Value of a Merchant's Business. 

Qualified Capital = Cash In Control Account + Authorized Inventory Value at Cost + Amazon Receivable. 

Cash In Control Account is the daily balance reported by the bank where you have your AccrueMe Control Account set up. 

Authorized Inventory Value at Cost is the Merchant's total units On Hand (as defined above subject to Authorized Invneotry limits) X CPU.

Amazon Receivable is the current balance that Amazon reports to owe the Merchant plus any recent ACHs Amazon reports to have sent to the Merchant's Control Account. 

How Is AccrueMe Capital & Profit Share Calculated?

 

AccrueMe's share of the profit is calculated and "Accrued" at the end of every calendar month. 

AccrueMe Capital = AccrueMe Investment(s) in the Merchant + Accrued Profit to Date - Any Repayments Made By The Marchant To AccrueMe. 

AccrueMe Profit Share = (AccruMe Capital / Qualifed Capital) / 2

Every month, AccrueMe calculates its share of the profits and adds that amount to its AccrueMe Capital in the AccrueMe Portal. 

For example, if your Account has $100k in Qualified Capital, AccrueMe Capital is $25k, and your Monthly Profit is $10k; AccrueMe represents 25% of the total capital and thus earns 12.5% of the profit that month. At the end of the month, $1,250 of the $10k (12.5%) in Merchant Profit would be added to AccrueMe Capital and then the calculation would start again for the next month.  

Why Can't I Take More Cash Out of My Account? 

 

Sometimes, Merchants will see that they can't take cash out of their AccrueMe account even if they have cash in their AccrueMe Control Account. This occurs for 5 main reasons...

1. AccrueMe Capital is Greater Than 50%

Challenge: AccureMe Capital represents more than 50% of the Qualified Capital (asset value) in the Merchant Business. This means AccrueMe's investment(s) and Accrued Profit represent more than 50% of the business's assets and AccrueMe has more capital invested in business assets than the seller does.   

Fix: There are multiple ways to fix this error so you can start using your cash again including; 1. providing any missing CPUs by emailing AccrueMe Support, 2. Sending more inventory to Amazon or a 3PL that you've already paid for, and/or 3. Partially repaying AccrueMe to decrease its capital percentage

2. The Merchant Is Not Profitable For Multiple Consecutive Months

Challenge: If a Merchant has not generated a meaningful profit for more than 2 consecutive months, a Merchant may be limited in what money movements they can complete. Because AccrueMe doesn't charge fees or interest and has its own capital costs if a merchant isn't earning a profit it is costing AccrueMe money.  

Fix: AccrueMe Support will reach out to non-profitable sellers to understand the unprofitable Merchant's situation in an effort to build an action plan to either get the merchant back to profitability or exit AccrueMe's Investment in the Merchant in a way that preserves AccrueMe's Capital and has a minimal business impact on the Merchant. 

3. There is A Major Breach

Challenge: If a Merchant is in Major Breach of the AccrueMe Operating Agreement, their account will be frozen until the breach is corrected and the Merchant's account is a risk of Amazon Account Suspension. 

Fix: Contact AccrueMe Support immediately to resolve the Major Breach

4. Significant Inbound or In-Transit Inventory

Challenge: If a relatively large amount of a Merchants Asset Value is represented by In transit or In Bound Inventory not yet in an Amazon FBA or Authorized 3PL warehouse, there is a greater risk that that inventory is not properly shipped or does not arrive to a proper warehouse. A large amount of Inbound or In-Transit inventory may temporarily decrease money movement amounts. 

Fix: Make sure all In-Transit inventory is quickly shipped to Amazon and maintain a high delivery rate for In-Transit & Inbound records.  

5. Underwriting Account Flag

Challenge: The AccrueMe Underwriting Team has flagged your AccrueMe account for high-risk behavior. 

Fix: Contact the AccrueMe Support team for more info

 

How Do I File Taxes? 

You are responsible for collecting, filing and paying sales taxes. Most Amazon business owners are doing that via Amazon. Income taxes are your responsibility to file and send AccrueMe a K1 consistent with our share of the profit (which will be included in your AccrueMe reports).

For your accountant: Provided that, to the extent the Company deducts costs of goods sold pursuant to the cash method of accounting in a given tax year that exceed the costs of goods sold attributed to actual goods sold in such tax year, such excess deductions shall be allocated to the Profit-Share Member in an amount equal to such excess deductions multiplied by a fraction, the numerator of which is the total Profit-Share Member Profit for the tax year and the denominator of which is the Apportionable Profit for such tax year.

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