How do I do bookkeeping for my Amazon FBA business?
The main challenge with Amazon FBA bookkeeping is that Amazon doesn’t pay you per sale. They send settlements every two weeks that net out sales, fees, refunds, and reimbursements into a single deposit. If you just record that deposit as revenue, your books will be wrong and your margins will be a mystery.
Start by separating gross sales from Amazon fees. Every settlement report breaks down what sold, what Amazon charged in fees, and any adjustments. Your bookkeeping needs to reflect gross revenue with separate expense accounts for FBA fulfillment fees, referral fees, storage fees, and advertising costs. This gives you accurate margin data by product instead of just knowing what hit your bank account.
Inventory tracking is where many FBA sellers struggle. You need to record inventory purchases when you send goods to Amazon warehouses, then recognize cost of goods sold when items actually sell. Without this, profit numbers are meaningless. You might show a great month because you sold through inventory purchased three months ago, while the books show nothing about the cash tied up in that stock.
Sales tax creates real complexity for e-commerce sellers using FBA. Amazon stores your inventory in warehouses across the country, and having inventory in a state typically creates nexus. Amazon collects and remits sales tax in marketplace facilitator states, but you still need to track where you have obligations and may need to file returns showing zero liability.
Returns and reimbursements need their own treatment. When a customer returns a product, Amazon adjusts your settlement. Sometimes Amazon loses or damages inventory and owes you money. These reimbursement claims require tracking because Amazon doesn’t always pay what they should. Some sellers recover thousands in missed reimbursements just by auditing their reports.
Use software that integrates with Amazon Seller Central. Tools like A2X or Link My Books pull settlement data and translate it into proper accounting entries for QuickBooks or Xero. Manual bookkeeping from settlement reports is possible but time-consuming and error-prone once you scale beyond a few hundred orders monthly.
Consider accrual basis accounting rather than cash basis. FBA timing issues make cash basis misleading. You might ship $50,000 in inventory to Amazon in December, sell it in January, and not receive payment until February. Accrual accounting matches revenue and expenses to when they actually occur.
A small business bookkeeping service that understands FBA won’t just record transactions. They’ll help you understand true margins by product, identify fee creep, and keep sales tax obligations current. The complexity of FBA bookkeeping is why many sellers move from DIY to professional help once volume grows.
The Merrimack Valley's Trusted Accounting Partner
The Next Step:
A 15-Minute Call
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a straightforward quote.
More Questions
How do I set up QuickBooks for my small business?
Start by choosing QuickBooks Online over Desktop for most situations, then focus on getting your chart of accounts right before connecting banks. The initial setup takes a few hours, but doing it correctly saves significant cleanup time later.
Read answerWhat are the bookkeeping requirements for trucking companies?
Trucking companies need to track IFTA fuel tax by jurisdiction, calculate per-mile costs, manage equipment depreciation, and maintain DOT-compliant records. The requirements go beyond standard small business bookkeeping.
Read answerHow often should I run payroll for my employees?
Your state determines the minimum frequency. Massachusetts requires weekly or bi-weekly payment for most employees. Within legal limits, bi-weekly is the most common choice because it balances administrative work with employee cash flow needs.
Read answerWhat is the difference between a W-2 employee and a 1099 contractor?
A W-2 employee works under your direction with taxes withheld from their pay, while a 1099 contractor operates independently and handles their own taxes. The distinction affects your payroll obligations, paperwork requirements, and legal exposure.
Read answerHow much does a bookkeeper cost for a small business?
Small business bookkeeping typically costs $200 to $600 monthly for basic services. The actual price depends on transaction volume, industry complexity, and which services are included beyond basic monthly books.
Read answerWhat are the most common bookkeeping mistakes small businesses make?
Mixing personal and business finances, not reconciling accounts monthly, and waiting until year-end to organize records cause the most problems. These mistakes lead to missed deductions, cash flow issues, and stressful tax seasons.
Read answer
