Amazon Seller Bookkeeping: How to Reconcile FBA Settlements, Fees & Sales Tax
A single Amazon settlement can contain product sales, referral fees, FBA fees, storage fees, ad spend, reimbursements, refunds, and sales tax – all rolled into one bank deposit. Here’s how to pull it apart and get your books right.
Amazon FBA bookkeeping is the process of recording, categorizing, and reconciling your Amazon Seller Central settlement reports against your bank deposits and accounting software entries. The goal is to accurately capture gross revenue, individual fee types, refunds, reimbursements, and sales tax so your financial statements and tax filings reflect reality – not just the net deposit Amazon sends every two weeks.
If you sell on Amazon – FBA or FBM – you already know that the money hitting your bank account tells you almost nothing useful. Amazon pays you in lump sum settlements, typically every 14 days. A single $5,000 deposit might represent 200+ individual orders, minus a dozen different fee types, minus refunds for returns processed that period, plus reimbursements for inventory Amazon lost in its warehouses. Trying to match that deposit to your QuickBooks entries without breaking it down is where most sellers lose hours every month.
The problem compounds because Amazon’s settlement structure is unlike any other payment processor. Stripe sends you one deposit per day. PayPal sends discrete transfers you can trace. Amazon batches two weeks of activity – sales, fees, adjustments, refunds, advertising charges, and credits – into one payout. Your bookkeeping needs to unbundle all of that into the right accounts, or your financial statements are fiction.
This guide walks through the entire process: what’s in the settlement report, how to reconcile it, the mistakes that trip up most sellers, and the tools that make it manageable.
Why Amazon bookkeeping is different
Most payment processors follow a straightforward model: customer pays, processor takes a fee, you get the rest. Amazon doesn’t work that way. Here’s what makes it uniquely complicated.
Biweekly lump sum settlements
Amazon doesn’t pay you per order. It accumulates all your activity over a settlement period (usually 14 days) and sends one deposit. That single deposit is the net result of everything that happened: product sales, referral fees, FBA fees, storage charges, advertising costs, refunds, reimbursements, and miscellaneous adjustments. You can’t look at your bank statement and know what happened. You have to go back to Seller Central and decompose it.
Fees come in layers
Amazon doesn’t charge one flat commission. On a single $29.99 sale, you might pay a 15% referral fee ($4.50), an FBA pick-and-pack fee ($3.86), a portion of monthly storage fees, and if you ran ads on that product, a per-click advertising charge. Each fee type has its own rate structure, its own seasonal variations (storage fees nearly triple from October through December), and its own line items in the settlement report.
Refunds reduce future settlements
When a customer returns a product, Amazon doesn’t pull money back from your bank account. Instead, it deducts the refund amount from your next settlement. This means a settlement in February might include refunds for orders placed in January – or even December. The refund doesn’t show as a separate bank transaction. It’s baked into the lump sum, and if you’re not reading the settlement report line by line, you won’t see it.
Reimbursements appear as credits
Amazon loses or damages inventory in its FBA warehouses more often than most sellers realize. When they acknowledge it, they issue a reimbursement – a credit added to your next settlement. These reimbursements are income (or an offset to your COGS), not revenue from product sales. They need their own account in your chart of accounts, and they need to be tracked so you can verify Amazon is actually paying what it owes.
Advertising can go two different ways
Amazon PPC (Sponsored Products, Sponsored Brands) costs can either be deducted from your settlement or charged to a credit card on file. The default is settlement deduction. But some sellers switch to credit card billing to keep their settlements cleaner. If you’re on settlement deduction, your ad spend reduces the deposit amount. If you’re on credit card billing, the deposit is higher but you have a separate credit card charge to reconcile. You need to know which method you’re using, because the reconciliation path is different.
The net-vs-gross trap
The single most common Amazon bookkeeping mistake is recording the settlement deposit as revenue. A $5,000 deposit is not $5,000 in sales. It might be $6,800 in gross sales minus $950 in fees minus $400 in refunds minus $450 in advertising, plus $0 or some amount in reimbursements. If you record $5,000 as revenue, you’re underreporting income by $1,800 and missing $1,800 in deductible expenses. That matters at tax time.
Understanding the Amazon settlement report
The settlement report is the single most important document in Amazon bookkeeping. Everything you need to properly categorize your income and expenses is in there – you just have to know where to look.
Where to find it
In Seller Central, go to Reports > Payments > Date Range Reports. Select “Transaction” as the report type and your settlement period dates. Download as CSV. The default “Statement View” under Payments gives you a summary, but the Date Range Report gives you the line-by-line detail you need for proper bookkeeping.
Key columns
The report contains three columns that matter most: transaction type (what kind of activity it was), amount type (what kind of money movement), and amount (the dollar figure). Every line falls into one of the categories below.
| Category | What It Includes | Typical % of Settlement | Account Type |
|---|---|---|---|
| Product charges | What customers paid for your products (item price + any shipping charges you set) | 100% of gross (baseline) | Revenue |
| Referral fees | Amazon’s commission on each sale – typically 15% of the sale price, varies by category (8% for some electronics, 45% for Amazon device accessories) | 8–15% of gross | COGS / Selling expense |
| FBA fees | Pick, pack, and ship fees per unit. Standard-size items typically $3.00–$5.00 each. Oversize items $8.00+. Also includes labeling and prep fees if applicable. | 10–20% of gross | COGS / Fulfillment expense |
| Storage fees | Monthly inventory storage at $0.87/cu ft (Jan–Sep) or $2.40/cu ft (Oct–Dec). Long-term storage surcharges for items sitting 181+ days. | 2–8% of gross | COGS / Storage expense |
| Advertising fees | Sponsored Products, Sponsored Brands, and Sponsored Display PPC charges. Only present if billed to settlement (not credit card). | 5–15% of gross (varies wildly) | Marketing expense |
| Refunds | Customer returns and order cancellations. Amazon refunds the customer and deducts it from your settlement. You may get a partial referral fee refund back. | 2–10% of gross | Contra-revenue |
| Reimbursements | Credits for inventory Amazon lost, damaged, or destroyed in FBA warehouses. Also includes customer return reimbursements where Amazon refunded the buyer but the item was returned damaged. | 0.5–3% of gross | Other income |
| Other fees | Professional seller subscription ($39.99/mo), removal order fees, disposal fees, ASIN creation charges, high-volume listing fees. | 1–3% of gross | Operating expense |
The math you should always check
Settlement total = Product charges − Referral fees − FBA fees − Storage fees − Advertising fees − Refunds + Reimbursements − Other fees. This total is what hits your bank account. If your calculated total doesn’t match the deposit, there’s a line item in the report you’re not accounting for. Go back to the raw CSV and look for transaction types you might have missed – things like “WAREHOUSE_DAMAGE” or “REVERSAL_REIMBURSEMENT” that don’t fit neatly into the main categories.
The reconciliation process
Here’s the step-by-step process for reconciling an Amazon settlement period. This assumes you’re using QuickBooks Online, but the logic is the same for Xero, Sage, or any other accounting platform.
Download the settlement report
In Seller Central, go to Reports > Payments > Date Range Reports. Select the settlement period you’re reconciling. Download the transaction-level CSV. If you want a summary view first, the Statement View under Payments > All Statements gives you the totals – but you’ll need the detailed CSV for proper bookkeeping.
Match the settlement total to your bank deposit
Find the corresponding deposit in your bank statement. The date may lag 1–3 business days from the settlement close date. The amount should match exactly. If you have multiple Amazon marketplaces (US, Canada, UK), each marketplace sends its own settlement, so make sure you’re matching the right one.
Break down the settlement into chart of accounts categories
Sum each category from the CSV: total product charges (revenue), total referral fees, total FBA fees, total storage fees, total advertising (if settlement-billed), total refunds, total reimbursements, and total other fees. Each sum goes to its own account in your bookkeeping software. This is where the actual work happens.
Record the journal entry (or let your integration tool do it)
If you’re doing this manually, create a journal entry that debits your bank account for the settlement amount, credits revenue for gross product sales, debits each fee account for the corresponding amount, debits refunds (contra-revenue), and credits reimbursements (other income). The journal entry should net to zero – the bank deposit equals the net of all the other lines.
Compare to your QBO/Xero entries
Run a profit and loss report for the settlement period. Your Amazon revenue should match the product charges total. Your fee accounts should match each fee category. If you’re using an integration tool like A2X, these entries were created automatically – but you still need to verify the totals tie out.
Investigate discrepancies
Common causes: refunds from a previous period appearing in this settlement, advertising billed to credit card instead of settlement (or vice versa), pending reimbursement claims not yet credited, currency conversion adjustments on international sales, and Amazon “balance adjustments” that appear without clear explanation. For that last one, open a case in Seller Central – Amazon support can tell you what the adjustment was for.
Doing this manually takes 3–5 hours per settlement period for a seller with 200–500 orders every two weeks. That’s 6–10 hours per month just on the Amazon side of your bookkeeping. Most of that time is spent in the CSV, summing columns and building the journal entry. Integration tools (covered in the tools section) automate this entirely.
Common Amazon bookkeeping mistakes
These show up in almost every Amazon seller’s books at some point. Some are annoying; others cost real money at tax time.
1. Recording the settlement deposit as revenue
This is the big one. The settlement deposit is a net figure. It is not your revenue. If you sold $8,000 in products and Amazon took $2,400 in fees and refunds, your bank deposit is $5,600 – but your revenue is $8,000 and your expenses are $2,400. Recording $5,600 as revenue means you’re underreporting income by $2,400 and missing $2,400 in deductible expenses. Your net profit is the same either way, but your tax return needs to show gross revenue and itemized deductions, not just the net.
IRS implications
Amazon sends you a 1099-K based on gross sales, not net settlements. If your Schedule C shows $67,000 in revenue but Amazon reported $95,000 on the 1099-K, the IRS sees a $28,000 discrepancy and you’ll get a letter. You need to report the gross and deduct the fees – the IRS expects your revenue to match or closely approximate the 1099-K amount.
2. Not tracking FBA fees as cost of goods sold
FBA fulfillment fees are a direct cost of selling each unit. They belong in cost of goods sold (COGS), not in general operating expenses. The distinction matters for gross margin analysis – if you’re trying to figure out whether a product is profitable, you need to see the product cost plus the FBA fee together, not buried in a general overhead bucket. Some sellers put referral fees in COGS too, which is reasonable since they’re a per-sale cost tied directly to revenue.
3. Ignoring reimbursements
Amazon owes you money when it loses or damages your inventory in FBA warehouses. These reimbursements show up in your settlement as credits. But Amazon doesn’t always issue them automatically. You need to file claims for missing inventory through the FBA inventory reports. If you’re not tracking what goes into FBA vs. what comes back as sales or returns, you won’t know what’s missing. Sellers who actively audit their FBA inventory typically recover 1–3% of their annual revenue in missed reimbursements.
4. Double-counting sales tax
Marketplace facilitator tax is not your revenue
Amazon collects sales tax from buyers in all marketplace facilitator states (which is now all 45 states with sales tax, plus DC and Puerto Rico). That tax money flows through the settlement report but it’s not your income – Amazon is collecting it on behalf of the state. If you accidentally record marketplace-collected sales tax as part of your revenue, you’re inflating your income. Make sure your revenue figure reflects the product price only, not the tax Amazon collected.
5. Mixing personal and business Amazon accounts
If you buy household supplies on the same Amazon account you use for selling, those personal purchases can show up as “Other” transactions in your seller reports. This creates a mess at reconciliation time – deductions from your settlement that have nothing to do with selling. Keep your personal Amazon account and your Seller Central account completely separate, ideally with different email addresses and different payment methods.
6. Not reconciling advertising spend separately
Amazon PPC is one of the biggest expenses for most FBA sellers, often 10–15% of revenue. If your ads are billed to your settlement, the ad spend reduces your deposit amount. If they’re billed to a credit card, they don’t touch your settlement at all – they show up as a separate charge. You need to know which billing method is active and reconcile accordingly. Check this in Seller Central under Advertising > Invoices. The advertising console also has its own reporting that shows spend by campaign, which should tie to what appears in your settlement or on your credit card statement.
Sales tax for Amazon sellers
Sales tax for Amazon sellers is both simpler and more complicated than most people think. Simpler because Amazon handles most of the collection and remittance. More complicated because “most” isn’t “all,” and the tracking obligations remain.
Marketplace facilitator laws
As of 2026, Amazon collects and remits sales tax as a marketplace facilitator in all 45 states that impose a sales tax, plus Washington DC and Puerto Rico. This means for the vast majority of your sales, Amazon calculates the tax, collects it from the buyer at checkout, and remits it to the state. You don’t touch the money.
This is a significant change from pre-2019, when sellers had to register, collect, and remit sales tax themselves in every state where they had nexus. The marketplace facilitator laws shifted that burden to Amazon.
Where it gets complicated: nexus from FBA inventory
Even though Amazon collects the tax, you may still have filing obligations in states where you have physical nexus. And if you use FBA, you have physical nexus in every state where Amazon stores your inventory. Amazon moves inventory between fulfillment centers without asking your permission – your products might be in warehouses in California, Texas, New Jersey, and Georgia without you knowing.
Check your inventory placement
In Seller Central, go to Reports > Fulfillment > Inventory Event Detail. This shows where your inventory has been stored. You can also check the “Inventory Age” report under Inventory Planning to see current warehouse locations. If your inventory is sitting in an FBA warehouse in a state, you have physical nexus in that state, which may trigger a filing obligation even though Amazon is handling the tax collection.
Some states require you to file a $0 return even when Amazon collected and remitted all the tax. Not filing can trigger delinquency notices. The safest approach: register in states where you have FBA inventory and file returns showing Amazon as the marketplace facilitator that collected the tax.
Tax-exempt buyers
Amazon has its own Tax Exemption Program (ATEP) where qualifying buyers – resellers, non-profits, government agencies – can upload exemption certificates. When a tax-exempt buyer purchases through ATEP, Amazon doesn’t collect sales tax. This is handled automatically. But not all exempt buyers are enrolled in ATEP. If a tax-exempt customer buys from you outside the program, they may contact you asking for a tax refund. You’ll need to verify their exemption status and handle it through Seller Central’s tax settings.
FBM sellers and sales tax
If you fulfill orders yourself (Fulfillment by Merchant), the marketplace facilitator rules still apply – Amazon still collects sales tax on your behalf. The difference is your nexus footprint is smaller since you’re not storing inventory in Amazon’s warehouses across the country. Your nexus is limited to states where you have a physical presence (office, warehouse, employees) and states where you’ve crossed economic nexus thresholds through your own website or non-Amazon sales channels.
QuickBooks chart of accounts for Amazon sellers
Getting your chart of accounts right from the start saves enormous headaches at reconciliation time and at tax time. Here’s a recommended structure specifically for Amazon sellers using QuickBooks Online.
| Account Name | Account Type | Detail Type (QBO) | Maps To |
|---|---|---|---|
| Amazon Product Sales | Income | Sales of Product Income | Product charges from settlement |
| Amazon Shipping Income | Income | Sales of Product Income | Shipping credits from settlement (if you charge shipping) |
| Amazon Refunds & Returns | Income (negative) | Discounts/Refunds Given | Refund line items from settlement |
| Amazon Referral Fees | Cost of Goods Sold | Cost of Labor – COS | Referral fee deductions from settlement |
| FBA Fulfillment Fees | Cost of Goods Sold | Cost of Labor – COS | FBA per-unit pick, pack, ship fees |
| FBA Storage Fees | Cost of Goods Sold | Cost of Labor – COS | Monthly and long-term storage charges |
| Amazon PPC Advertising | Expense | Advertising/Promotional | Sponsored Products/Brands/Display costs |
| Amazon Reimbursements | Other Income | Other Miscellaneous Income | Lost/damaged inventory credits from Amazon |
| Amazon Other Fees | Expense | Other Business Expenses | Subscription, removal orders, ASIN fees, disposal |
Why this structure matters for Schedule C
On Schedule C (or your business tax return), the IRS expects to see gross receipts that approximate your 1099-K. If you report $95,000 in gross Amazon sales and deduct $14,000 in referral fees, $12,000 in FBA fees, $2,000 in storage, and $8,000 in advertising, those numbers map cleanly to your settlement reports and your 1099-K. An accountant (or audit examiner) can trace every dollar. If you recorded the net settlement as revenue instead, your reported income is $59,000 – a $36,000 gap from the 1099-K that demands explanation.
Keeping fee types in separate accounts also lets you analyze profitability. You can see that referral fees are eating 15% of gross revenue while FBA fees are taking another 13%, and make informed decisions about pricing, product selection, or whether to switch some SKUs to FBM fulfillment.
Multi-channel sellers
If you sell on Amazon and also through Shopify, eBay, or your own website, consider using sub-accounts or tags to track Amazon-specific revenue and fees separately from other channels. In QuickBooks, you can create “Amazon Product Sales” and “Shopify Product Sales” as sub-accounts under a parent “Product Sales” income account. This gives you channel-level profitability without cluttering your top-level chart of accounts.
Tools and approaches
There are several ways to handle Amazon bookkeeping, ranging from fully manual to fully automated. The right choice depends on your order volume, how many sales channels you have, and how much time you want to spend on bookkeeping vs. running your business.
Manual reconciliation (spreadsheet + journal entries)
Download the settlement CSV, sort and sum each category in a spreadsheet (or a pivot table), then create a journal entry in QuickBooks for each settlement. This works for low-volume sellers (under 100 orders per settlement) and costs nothing beyond your time. Expected time: 3–5 hours per settlement period. The downside is that it’s error-prone and tedious. One misclassified line item in a 500-row CSV throws off the whole journal entry.
A2X Accounting
A2X is purpose-built for this exact problem. It connects to your Seller Central account and your accounting software (QuickBooks, Xero), reads each settlement report, and automatically creates summary journal entries that split the settlement into revenue, fees, refunds, and reimbursements. It maps each line item to the correct account in your chart of accounts. For most Amazon sellers doing 200+ orders per month, A2X pays for itself in time savings within the first settlement period. Pricing starts at $19/month for low-volume sellers.
Link My Books
Link My Books does the same thing as A2X – automated settlement-to-accounting sync – with a slightly different interface and pricing model. It supports QuickBooks and Xero, handles multi-currency, and includes inventory COGS tracking. Some sellers prefer its reporting dashboard. Both A2X and Link My Books are solid choices; the practical difference between them is small. Pick whichever one has better support for your specific platform combination.
CodeIQ for everything else on your bank statement
A2X and Link My Books handle the Amazon-specific piece: turning settlement reports into clean accounting entries. But your bank statement has plenty of non-Amazon transactions that also need categorizing – rent, utilities, insurance, supplier payments, shipping supplies, software subscriptions, payroll. CodeIQ handles that side. It learns your chart of accounts and your historical coding patterns, then categorizes transactions automatically. Upload your bank statement and CodeIQ sorts everything into the right accounts in minutes – including those Amazon settlement deposits, which it codes to your “Amazon Clearing” or “Amazon Payout” account so they don’t accidentally get classified as generic income.
ReconcileIQ for the final check
After A2X (or Link My Books) has posted your Amazon settlement entries and CodeIQ has coded everything else, ReconcileIQ runs the final reconciliation: does the bank statement match the books? It catches discrepancies between what’s in QuickBooks and what’s in the bank – timing differences, missing entries, duplicate postings, or settlement deposits that didn’t get properly recorded.
The recommended stack for Amazon sellers
A2X or Link My Books for the Amazon settlement → QuickBooks/Xero sync. This handles the complex decomposition of lump-sum settlements into granular accounting entries.
CodeIQ for every non-Amazon transaction on your bank statement. Rent, supplier invoices, shipping supplies, software, payroll – all coded automatically.
ReconcileIQ for the final reconciliation pass. Bank statement vs. books, catch anything that slipped through. Together, your entire bookkeeping workflow – Amazon and non-Amazon – is handled in minutes instead of hours.
Let A2X handle Amazon. Let CodeIQ handle everything else.
CodeIQ codes the non-Amazon transactions on your bank statement – rent, suppliers, utilities, payroll, subscriptions – automatically, across QuickBooks, Xero, Sage, and Pandle. Your entire bank statement, done in minutes.
See how CodeIQ worksFrequently Asked Questions
How do I reconcile Amazon FBA settlements with my bank account?
Download your Amazon Settlement Report from Seller Central (Reports > Payments > Date Range Reports). Match the total settlement amount to the corresponding bank deposit. Then break down the settlement into its components: gross product sales as revenue, FBA fees and referral fees as cost of goods sold or expenses, advertising fees as marketing expense, refunds as contra-revenue, and reimbursements as other income. Compare these figures to your QuickBooks or Xero entries and investigate any discrepancies.
Should I record my Amazon settlement deposit as revenue?
No. The settlement deposit is a net figure after Amazon has deducted referral fees, FBA fees, advertising costs, and refunds. Recording the deposit as revenue underreports both your gross revenue and your expenses, which distorts your profit margins and can cause problems at tax time. Instead, record gross product sales as revenue and each fee category as a separate expense. The net of revenue minus expenses minus refunds should equal your bank deposit.
What are Amazon FBA fees and how do I categorize them?
Amazon FBA fees include fulfillment fees (picking, packing, and shipping each unit, typically $3.00–$5.00 per standard-size item), monthly storage fees ($0.87 per cubic foot from January to September, $2.40 from October to December), referral fees (a percentage of the sale price, usually 15% depending on category), and other charges like removal order fees, long-term storage fees, and label service fees. Most sellers categorize fulfillment and storage fees as cost of goods sold, referral fees as either COGS or a selling expense, and advertising fees as a marketing expense.
Does Amazon collect sales tax for me?
Amazon collects and remits sales tax as a marketplace facilitator in all 45 states (plus DC and Puerto Rico) that impose a sales tax. This means Amazon handles calculation, collection, and remittance for sales made through its marketplace. However, you still need to track sales tax in your records for accurate bookkeeping, and you may still have filing obligations in states where you have inventory stored in FBA warehouses.
What is the best accounting software for Amazon sellers?
QuickBooks Online is the most popular choice for Amazon sellers because of its wide integration support. The recommended setup uses a dedicated Amazon integration tool like A2X or Link My Books to automatically sync settlement data into QuickBooks, breaking each settlement into gross sales, fees, refunds, and other components. For the non-Amazon transactions on your bank statement, CodeIQ can categorize everything in minutes by learning your chart of accounts and coding patterns. Xero is also well-supported by A2X and works the same way.