Amazon accounting breaks the assumptions most accountants bring from traditional retail. The deposit is not your revenue. The timing is not when you think. And the cost of getting it wrong does not show up until a tax filing.
A traditional retail business records a sale, records the cost, and reconciles a clean bank deposit. Amazon does none of those things cleanly. The platform collects your revenue, deducts referral fees, FBA fulfillment fees, storage fees, advertising spend, and sales tax, holds a reserve, and then deposits the leftover every two weeks. Reconstructing what actually happened to your money is the entire job of Amazon accounting.
Three structural facts drive everything below: revenue is recognized when an order ships, not when Amazon deposits; cost of goods sold has to be applied separately because the deposit never includes it; and the same SKU can have a different real cost depending on where Amazon fulfilled it from.
Amazon settles every 14 days. Each settlement report breaks into transaction types: orders, refunds, FBA fees, referral fees, storage fees, advertising, service fees, adjustments, and reserves. Each type posts to a different account in your accounting platform.
The sum of every line in the settlement equals the deposit that hit your bank. If your reconciliation is off by even a few cents, a transaction type was miscategorized. The most common culprit is treating the reserve (which is your money, held temporarily) as a fee (which is an expense). Get the settlement structure right and 80% of Amazon accounting is handled. The step-by-step mechanics are in our companion guide on reconciling Amazon to QuickBooks.
The settlement deposit is revenue and fees. It contains no cost of goods sold. To close a period's books, you have to separately post the inventory cost of the units that shipped.
This requires three things: a per-unit landed cost for each SKU (wholesale price plus inbound freight plus tariffs), a count of units shipped during the period from the FBA inventory ledger, and a costing method (FIFO or weighted average) to know which cost layer the shipped units came from when you bought inventory at different prices over time.
For a seller with a handful of SKUs, this is manageable monthly. For a seller with 100-plus SKUs across multiple lots, applying FIFO by hand is a full day of work per period.
Most US states have marketplace facilitator laws, which means Amazon collects and remits sales tax on your behalf for orders shipping to those states. In your books, that tax flows through as collected and remitted, netting to zero in your sales tax liability account; you do not file on those sales.
Where Amazon sellers get into trouble is direct sales outside Amazon. If you also sell on your own Shopify store, you are the merchant of record there, and you owe sales tax in states where you have nexus.
ConnectBooks automates the work described above for Amazon and four other marketplaces: settlement reconciliation into QuickBooks or Xero, FIFO COGS applied per SKU from a live inventory ledger, marketplace-facilitator sales tax handled correctly, FBA reimbursements surfaced automatically, and SKU-level profit and loss visible inside the app. Plans start at $149/month for Gold and scale through Diamond and Platinum based on order volume and the feature depth your operation needs.
You need an accounting platform: QuickBooks Online, QuickBooks Desktop, or Xero. Amazon Seller Central is not an accounting system; it is a sales platform.
Accrual. The timing gap between when an order ships and when Amazon deposits creates real accounting impact.
Every settlement period (every two weeks for US Amazon). Monthly formal close by the tenth of the following month.
Around 200 orders a month or 15-plus SKUs, or as soon as you add a second marketplace.
Get Amazon accounting handled. Try ConnectBooks free for 30 days. Automatic settlement reconciliation, FIFO COGS, and SKU-level profit across Amazon and four more marketplaces. No credit card required.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
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