How to Do Bookkeeping for My Amazon Business

How to Do Bookkeeping for an Amazon Business Without Falling Behind

Your Amazon dashboard might show strong sales while your bank deposit tells a very different story. That difference does not necessarily mean money is missing. Amazon normally deducts fees, refunds, advertising charges, reserves, and other adjustments before sending your payout.

This makes Amazon bookkeeping more complicated than recording deposits from an ordinary customer. If you enter the net payout as revenue, both your sales and expenses may be understated.

If you are wondering how to do bookkeeping for your Amazon business, begin with a separate business bank account, organized settlement reports, an Amazon-specific chart of accounts, reliable inventory records, and a consistent monthly closing process.

How Do I Do Bookkeeping for My Amazon Business?

Bookkeeping for an Amazon business requires recording gross product sales, Amazon fees, refunds, reimbursements, taxes, reserves, and the resulting net deposit. Reconcile each settlement with your bank account, track inventory and cost of goods sold, keep marketplaces separate, and complete a monthly close instead of recording every payout as sales revenue.

Effective Amazon seller bookkeeping connects three sources of information:

• Amazon Seller Central
• Your accounting software
• Your bank and credit card accounts

Seller Central provides settlement and inventory details. The accounting system organizes those details into financial reports. Bank records confirm the amounts that were actually received or paid. Reviewing all three helps you identify missing transactions, incorrect fees, inventory differences, and settlement timing issues.

Why Amazon Bookkeeping Is Different

Amazon usually sends a net settlement instead of depositing the total value of every sale. One payout can include many types of financial activity.

A settlement may contain:

• Product sales
• Shipping income
• Promotional discounts
• Referral fees
• FBA fulfilment fees
• Storage charges
• Advertising fees
• Customer refunds
• Inventory reimbursements
• Marketplace-collected taxes
• Account reserves
• Currency conversions
• Other adjustments

Suppose your gross sales for a settlement period were $20,000, but Amazon deposited $13,500. Recording $13,500 as revenue would ignore $6,500 of fees, refunds, taxes, reserves, or other activity. This mistake can make revenue, expenses, and product margins inaccurate. It may also make it more difficult to compare Amazon performance with Shopify, wholesale, or another sales channel. Amazon FBA bookkeeping must therefore begin with settlement activity rather than only the bank feed.

Understand Your Amazon Settlement Report

A settlement report explains how Amazon calculated the amount deposited into your bank account. Amazon provides payment and settlement reports through Seller Central.

The report may include the following components:

The exact accounting treatment may depend on your accounting method, business structure, and applicable standards. A qualified accountant can help you establish a consistent policy. The goal of Amazon settlement reconciliation is to record each component and then confirm that the resulting net amount matches the deposit.

Build an Amazon-Specific Chart of Accounts

Your chart of accounts is the list of categories used to organize transactions. A generic chart may not provide enough detail for an Amazon business.

Useful categories may include:

• Amazon product sales
• Shipping income
• Discounts and promotions
• Returns and allowances
• Referral fees
• FBA fulfilment fees
• FBA storage fees
• Inbound shipping and placement costs
• Removal and disposal fees
• Amazon advertising
• Seller subscription fees
• Inventory
• Cost of goods sold
• Freight and duties
• Reimbursements
• Sales tax or VAT clearing
• Amazon settlement clearing

Avoid creating so many categories that monthly reporting becomes difficult to maintain. The chart should provide enough detail to support decisions without becoming unmanageable. For example, separating fulfilment, storage, and advertising costs can help you understand why margins changed. Grouping every Amazon deduction into one general “fees” account would hide that information.

Reconcile Every Amazon Settlement

Every settlement should be matched with the amount deposited into your bank account.

A consistent process includes:

1. Download or import the settlement report.
2. Record gross sales for the period.
3. Separate refunds, discounts, and promotional activity.
4. Record each major fee category.
5. Account for marketplace taxes.
6. Record reimbursements and reserve movements.
7. Calculate the expected net deposit.
8. Match that amount with the bank transaction.
9. Investigate any difference.
10. Review the Amazon clearing account.

A settlement and deposit may occur in different months, particularly around month-end. The payout may also differ because of currency conversion or reserve activity.

An appropriate clearing account helps track amounts that Amazon owes the business but has not yet deposited. It should be reviewed regularly rather than allowed to accumulate unexplained balances. Reliable Amazon seller bookkeeping reconciles the detail behind the payout, not only the payout itself.

Track Inventory and Cost of Goods Sold Correctly

Inventory accounting is one of the most important parts of maintaining accurate Amazon books. Buying inventory does not always mean the entire purchase becomes an immediate expense. Under many accounting methods, products are recorded as an asset until they are sold. Their cost is then moved to cost of goods sold.

Amazon inventory can exist in several places or conditions:

• At a supplier
• In transit
• At your own warehouse
• At an Amazon fulfilment centre
• Reserved for an order
• Being transferred
• Returned by a customer
• Damaged or lost
• Marked for removal
• Awaiting reimbursement

Your accounting records should be compared with Amazon’s inventory reports and records from other warehouses or sales channels. Landed cost may include more than the supplier’s price. Depending on your accounting policy, it can include freight, customs duties, inspection, packaging, and other expenses needed to prepare products for sale.

Inventory accounting rules vary by jurisdiction and accounting method. Work with a qualified accounting or tax professional to determine which costs should be included and how inventory should be valued.

Record Amazon Fees Without Losing Visibility

Amazon charges sellers several types of fees, and those charges can change over time. Recording them separately gives you a clearer view of profitability.

Common fees include:

• Referral fees
• FBA fulfilment charges
• Storage fees
• Inbound placement charges
• Removal and disposal fees
• Subscription fees
• Advertising deductions
• Return processing fees
• Currency conversion charges
• Other service fees

Separate accounts allow you to identify which expenses are rising. A product may continue generating sales while becoming less profitable because storage, advertising, or fulfilment costs have increased.

Fee visibility also improves pricing decisions. If your current price does not cover product cost, Amazon charges, advertising, refunds, and overhead, increased sales may create more work without producing enough profit. Review fees by product or category when possible instead of looking only at the company-wide total.

Handle Returns, Refunds, and Reimbursements

Amazon returns involve more than reversing a sale. A refunded item might be returned in sellable condition, marked as damaged, lost during processing, or never returned.

The bookkeeping process should identify:

• Customer refund amount
• Reversed sales tax
• Refunded Amazon fees
• Return processing charges
• Inventory returned to sellable stock
• Damaged or unsellable inventory
• Missing units
• Amazon reimbursements

A reimbursement should be reviewed before it is categorized. Amazon may reimburse the seller for lost inventory, damaged stock, an incorrect fee, or another adjustment. The accounting treatment depends on why the amount was received.

Do not automatically record every reimbursement as product revenue. It may need to reduce an expense, adjust inventory, or appear in another income category. Regular reconciliation can also highlight refunds for products that were never returned or inventory that disappeared from fulfilment records.

What About Sales Tax, GST, HST, or VAT?

Tax obligations depend on where your business is located, where customers live, which marketplaces you use, and where you are registered. Amazon may collect and remit marketplace taxes in certain jurisdictions. However, marketplace collection does not automatically remove every registration, reporting, or filing obligation.

A seller may still need to consider:

• Sales from a separate website
• Wholesale transactions
• Non-Amazon marketplaces
• Inventory stored in other jurisdictions
• Cross-border sales
• GST or HST
• VAT
• Local registration thresholds
• Filing requirements

Marketplace-collected taxes should not normally be treated as ordinary product revenue. They may be recorded through a clearing account so collected and remitted amounts can be reconciled. Tax rules change and depend on individual circumstances. Consult a qualified tax professional familiar with your locations, sales channels, and Amazon fulfilment arrangements.

Manage Multiple Marketplaces and Currencies

Selling through Amazon in more than one country creates additional bookkeeping work. Each marketplace may produce separate settlement reports, fees, taxes, and deposits.

Your accounting system should distinguish revenue and expenses by marketplace when that information is useful. This may involve classes, tracking categories, locations, or separate clearing accounts.

Foreign-currency activity can also create exchange gains or losses. The sales value recorded on one date may differ from the amount received after conversion.

A multi-marketplace process should account for:

• Marketplace currency
• Settlement currency
• Bank currency
• Conversion fees
• Exchange rates
• Transfer timing
• Marketplace-specific taxes
• Separate inventory locations

Businesses selling through Amazon, Shopify, and wholesale channels should also separate revenue by channel. This makes it easier to compare margins and identify where cash is being generated or consumed.

Choose the Right Amazon Accounting Tools

Software can reduce manual entry, but it does not eliminate the need for bookkeeping judgment.

An Amazon accounting system may include:

An integration tool can import gross sales, fees, refunds, and other settlement details into the accounting platform. However, account mapping must be reviewed carefully.

A mapping error can repeat across every settlement. Automating an incorrect process simply creates inaccurate books faster.

Reconcile imported entries with Amazon and bank records. Review unusual adjustments rather than assuming that software handled them correctly.

Follow a Schedule That Prevents Backlogs

Consistent bookkeeping is easier than rebuilding several months of Amazon activity at once.

Weekly work keeps missing documents and unfamiliar transactions manageable. Settlement-period work prevents payouts from accumulating without explanations.

The monthly close should confirm that bank, credit card, Amazon, inventory, and clearing accounts are reconciled. Reports should be reviewed only after these steps are complete.

A consistent Amazon seller bookkeeping schedule also makes tax preparation easier because problems are addressed throughout the year rather than discovered after the year ends.

Reports Every Amazon Seller Should Review

Your sales dashboard does not show the complete financial health of the company. Review accounting and operational reports together.

Important monthly reports include:

• Profit and loss statement
• Balance sheet
• Cash flow statement
• Inventory valuation
• Cost of goods sold
• Gross margin by product
• Amazon fee summary
• Advertising expenses
• Returns and refunds
• Reimbursement activity
• Settlement reconciliation
• Cash forecast

Gross margin by product is particularly important. A strong sales total can hide products that lose money after fulfilment, advertising, discounts, refunds, and storage.

The balance sheet also deserves attention. It shows inventory, credit card debt, loans, cash, tax balances, and amounts held by Amazon.

Accurate reports help sellers decide how much inventory to purchase, which products to promote, and whether pricing needs to change.

Common Amazon Bookkeeping Mistakes

Amazon sellers often fall behind because they rely on the bank feed or wait until tax season.

Common mistakes include:

• Recording net payouts as revenue
• Mixing personal and business expenses
• Ignoring settlement reports
• Failing to reconcile clearing accounts
• Combining all fees into one category
• Recording inventory inconsistently
• Ignoring inventory in transit
• Failing to track landed cost
• Treating every reimbursement as sales
• Overlooking returns and damaged inventory
• Mixing currencies and marketplaces
• Relying completely on automation
• Failing to close the books monthly
• Reviewing revenue without product margins

Correcting these problems can require substantial cleanup work. A short weekly routine and a documented monthly close are usually more manageable.

When Should You Outsource Amazon Bookkeeping?

Professional help may be appropriate when Amazon accounting takes too much time or the records no longer support confident decisions.

Consider outsourcing when:

• Several months of bookkeeping are behind
• Payouts do not reconcile
• Inventory values cannot be explained
• Fees are reducing margins unexpectedly
• You sell through several marketplaces
• You use multiple currencies
• You operate Amazon and other sales channels
• Tax preparation requires repeated cleanup
• The business is preparing for funding or sale
• You cannot produce reliable monthly reports

An Amazon bookkeeper should understand settlement reports, clearing accounts, inventory, fulfilment fees, refunds, and reimbursements. General bookkeeping experience alone may not be enough.

Why Choose Kigitz?

Kigitz provides specialized accounting services for Amazon sellers, helping ecommerce businesses organize marketplace activity into clearer financial records and reports.

The firm is led by CPA Kalen Bogdan. An independent Compass profile of Kigitz describes experience with consumer product businesses, software companies, and founder-led organizations. It also highlights the use of financial technology for data consolidation, forecasting, and scenario analysis.

This combination can help Amazon sellers move beyond basic transaction entry. Accurate settlement and inventory records provide a foundation for reviewing margins, planning inventory purchases, forecasting cash, and evaluating growth decisions.

Kigitz can help sellers create a repeatable process for settlement reconciliation, monthly reporting, and financial analysis. The exact scope should be based on the seller’s marketplaces, transaction volume, accounting platform, inventory system, and reporting needs.

Frequently Asked Questions

Can I use regular bookkeeping software for Amazon?

Yes, but the accounting system must receive properly organized settlement information. A bank feed alone only shows net deposits. An integration or detailed manual entry is needed to separate gross sales, fees, refunds, taxes, reserves, and reimbursements.

Is an Amazon payout the same as sales revenue?

No. The payout is normally a net amount after Amazon processes fees, refunds, taxes, reserves, advertising, and adjustments. Gross product sales should be recorded separately from these deductions.

How often should Amazon settlements be reconciled?

Reconcile every settlement when practical, then review all accounts during the monthly close. This prevents unexplained payouts and clearing-account balances from accumulating.

How do I record Amazon FBA fees?

Record major FBA fees in consistent expense or cost categories. Separating fulfilment, storage, advertising, and other fees provides better margin visibility than placing everything in one general account.

How should Amazon inventory be recorded?

Inventory is commonly treated as an asset until products are sold, when the related amount becomes cost of goods sold. The correct method depends on your accounting policies and jurisdiction, so seek professional guidance.

Does Amazon handle all sales taxes?

Not necessarily. Amazon may collect and remit marketplace taxes in certain locations, but sellers can still have registration, filing, or tax responsibilities, especially when using other sales channels.

What reports should an Amazon seller review monthly?

Review the profit and loss statement, balance sheet, cash flow statement, inventory valuation, product margins, Amazon fees, returns, reimbursements, and settlement reconciliation.

When should I hire an Amazon bookkeeper?

Consider professional support when settlements do not reconcile, inventory is unclear, several marketplaces are involved, reports are late, or bookkeeping takes time away from operating the business.

Keep Your Amazon Books Current

Knowing how to do bookkeeping for your Amazon business begins with one important principle: the settlement deposit is not the same as gross revenue.

Record each settlement in detail, reconcile the net deposit, track inventory and cost of goods sold, review fees and returns, and close the books every month.

Contact Kigitz to review your Amazon bookkeeping process and build a reliable system for settlement reconciliation, inventory accounting, monthly reporting, and financial planning.

Learn more about bookkeeping through our articles below:

• How to Find an Amazon Accountant or Bookkeeper
• Amazon FBA Asset Recovery Best Practices
• Tools for Quickbooks Online Integration Amazon Sellers