How Synder Records TikTok Shop Discounts and Reimbursements

In this guide, you will learn how Synder records transactions from TikTok that include platform discounts reimbursed on behalf of TikTok.

Understanding TikTok discounts and reimbursements

TikTok often offers discounts to customers to boost sales, ensuring that these promotions do not reduce the seller’s earnings. TikTok covers these discounts by reimbursing the seller, allowing them to receive the full amount initially listed for the product.

Example scenario

If a seller lists an item for $30 and TikTok provides a $10 discount to the customer, the customer pays $20. TikTok then reimburses the seller for the $10 difference, so the seller still receives $30.
These reimbursements are reflected in the TikTok order breakdown and are labeled as “TikTok Shop discount on items”.

How Synder records these transactions

Synder handles these transactions by adding additional lines to the invoice that capture the TikTok reimbursement, ensuring your books can be accurately reconciled. The payment consists of both the amount received from the customer and the reimbursement from TikTok.

Example

Continuing the scenario above, Synder would record the transaction as follows:

Invoice:

• Line item: $30
• Line item: TikTok reimbursements: $10
• Discount: $10
• Subtotal: $30 + $10 – $10 = $30

Payment:

• Customer payment: $20
• TikTok reimbursement: $10
• Total: $30

Handling TikTok shipping reimbursements

When TikTok offers a shipping discount on top of the platform discount, Synder records this in the following way to ensure accurate reconciliation:

1. As a line item labeled “Shipping reimbursements”.
2. In the designated shipping field on the invoice.
3. As an expense labeled “TikTok adjustments” to offset the shipping amount from the designated shipping field on the invoice.

These shipping reimbursements are shown in the TikTok order breakdown and are labeled as “TikTok Shop shipping fee discount”.

Example scenario

A seller lists an item for $30, TikTok offers a $10 discount on the item and a 100% shipping discount for $5 shipping. The customer pays $20.

Synder would record the transaction as follows:

Invoice:

• Line item: $30
• Line item: TikTok reimbursements: $10
• Line item: TikTok shipping reimbursements: $5
• Discount: $10 + $5
• Shipping: $5
• Subtotal: $30 + $10 – $10 = $30
• Order total: $30 + $5 – $5 + $5 = $35

Expense:

• TikTok adjustments: $5

Payment:

• Customer payment: $20
• TikTok reimbursement: $10
• TikTok shipping reimbursement: $5

This dual recording process of shipping ensures that the invoice amount aligns with the payment received, which includes the customer’s payment, TikTok discount reimbursement, and TikTok shipping discount reimbursement.

Real order example

Let’s analyze a real TikTok order example and and break it down into transactions.

TikTok order breakdown

Order details:

• Order:
  • Item Price: $235.95
  • Tax: $14.04
  • Shipping: $6.50
  • Seller Discount: $35.39
  • TikTok Platform Discount: $30.00
  • TikTok Shipping Discount: $6.50
• Subtotal: $235.95 (item price) – $35.39 (seller discount) – $30.00 (TikTok platform discount) = $170.56
• Order Total: $170.56 (subtotal) + $6.50 (shipping) – $6.50 (TikTok shipping discount) + $14.04 (tax) = $184.60

TikTok settlement breakdown

Fees Breakdown:

• Fee: $32.09
• Shipping Cost Adjustment: -$1.43
  • (-$7.93 for the actual shipping cost + $6.50 TikTok shipping discount)

Payout Calculation:

• Payout: $184.60 (customer payment) – $32.09 (fee) – $14.04 (tax) + $30.00 (TikTok platform reimbursement) – $7.93 (real shipping cost) + $6.50 (TikTok shipping reimbursement) = $167.04

How Synder records this order

Invoice:

• Line Items:
  • Item: $235.95
  • TikTok Reimbursements: $30.00
    • Amount reimbursed by TikTok to offset the platform discount
  • TikTok Shipping Reimbursement: $6.50
    • Amount reimbursed by TikTok to offset the shipping discount
  • Sales Tax: $14.04
  • Subtotal: $286.49
• Discounts:
  • Seller Discount: $35.39
  • TikTok Platform Discount: $30.00
  • TikTok Shipping Discount: $6.50
  • Total Discounts: $71.89
• Shipping:
  • Shipping: $6.50
    • Recorded again in the designated shipping field to align with the payment amount. It is offset by the $6.50 line item in the expense.
• Total Invoice Amount: $286.49 (subtotal) – $71.89 (discounts) + $6.50 (shipping) = $221.10

Expense:

• Line Items:
  • TikTok Fees: $32.09
  • TikTok Marketplace Facilitator Tax: $14.04
    • To offset the taxes from the invoice remitted by TikTok
  • TikTok Adjustment: $1.43
    • The real shipping amount
  • Shipping Fee: $6.50
    • The line amount that offsets the $6.5 shipping in the invoice
• Total Expense Amount: $54.06

Payment:

• Composition:
  • Customer Payment: $184.60
  • TikTok Discount Reimbursement: $30.00
  • TikTok Shipping Discount Reimbursement: $6.50
• Total Payment Amount: $221.10

Key points to remember

1. Why is shipping recorded twice?
   To ensure the total invoice amount matches the payment received from TikTok, shipping is recorded both as a line item and in the designated shipping field. 
2. How is the shipping amount offset?
   The shipping amount recorded on the invoice is offset by an expense line item, ensuring the transaction balances correctly.

Final thoughts

While TikTok Shop provides a streamlined way for sellers to reach customers, the financial processes involved may add some complexity to the transaction records. Our integration is keeping an eye out for your books when TikTok’s financial data requires special handling.
If you encounter any discrepancies between the totals in Synder and TikTok, this guide will help explain how this transaction is captured.

Reach out to the Synder Team via online support chat, phone, or email with any questions you have – we’re always happy to help you!