Checklist: Month-End Close for Amazon Sellers

A close is not done when the bank reconciles. For an Amazon seller it is done when settlement, COGS, inventory, fees, and tax all agree. Here is the sequence that gets you there.

What a real close means for a marketplace seller

Closing the books means locking a period so the numbers are final and reliable. For a single-channel service business that is mostly a bank reconciliation. For an Amazon seller it is a multi-step tie-out across systems that do not naturally agree: marketplace settlement data, your inventory records, your fee and ad accounts, and your sales tax position. Skip a step and the period closes on numbers that are wrong, which means every decision you make from them is wrong too.

Run the close monthly. Quarterly or annual closing leaves you blind on margin and cash for most of the year and turns reconciliation into a forensic dig.

The checklist, in order

Work it top to bottom. Earlier steps feed later ones.

1. Reconcile every settlement to the bank

• Pull each settlement report that posted in the period.
• Confirm each disbursement line matches the corresponding bank deposit.
• Confirm your Amazon clearing account balance equals the live Seller Central balance.

2. Split settlements at the period boundary

• Identify any settlement cycle that straddles month-end.
• Allocate sales and costs to the month they actually occurred, on accrual.
• Carry the unreleased reserve as a balance-sheet asset, not as P&L.

3. Recognize revenue and COGS

• Confirm gross sales are recognized at the point of sale, not at deposit.
• Apply per-unit FIFO COGS to the units sold in the period.
• Verify refunds are booked as contra-revenue and reimbursements as recoveries, not sales.

4. Reconcile inventory

• Count units across all locations: FBA, in transit, 3PL, and your own warehouse.
• Value them on FIFO and tie the total to your inventory asset account.
• Write off confirmed lost or damaged units; match reimbursements to those write-offs. See /blog-posts/reconcile-amazon-fba-inventory.

5. Post fees and advertising

• Confirm referral, FBA, and storage fees are posted to their accounts.
• Capture advertising from both the settlement line and any separate card charges.
• Attribute Sponsored Products spend to SKUs where you track product-level profit.

6. Handle sales tax

• Separate marketplace-facilitated tax (Amazon collects and remits) from self-collected tax on other channels.
• Confirm you are not double-counting or over-remitting tax Amazon already handled.

7. Review the P&L and balance sheet

• Check gross sales tie to the settlement totals for the period.
• Confirm gross and net margin look reasonable against prior months, and investigate swings.
• Lock the period.

The close at a glance

Why most of this should be automatic

Almost every step above is mechanical, which means it is exactly the kind of work that should not consume a person's days each month. ConnectBooks reconciles marketplace settlements line by line into QuickBooks Online, QuickBooks Desktop, or Xero, applies FIFO COGS per unit, separates marketplace-facilitated from self-collected sales tax, and produces per-channel P&L, so the close becomes a review rather than a rebuild. ConnectStock keeps inventory reconciled across locations. See /integrations/amazon-accounting.

How often should an Amazon seller close the books?

Monthly. Closing only quarterly or at year-end leaves your margin and cash unreliable for most of the year and turns reconciliation into a slow forensic project. A monthly close, with each settlement reconciled as it posts, keeps your numbers ready for decisions and tax time.

What is the hardest part of an ecommerce month-end close?

Two steps trip sellers up most: splitting a settlement cycle that straddles month-end so sales land in the right period, and reconciling inventory across FBA, in transit, 3PL, and your own warehouse. Both are tedious by hand and both directly distort margin if done wrong, which is why they are the first things to automate.

Do I need to reconcile inventory every month?

Yes. Inventory is a balance-sheet asset that feeds COGS, so an unreconciled count silently misstates both your assets and your profit. Reconciling monthly catches in-transit gaps, lost units, and costing errors while they are still easy to trace, instead of discovering a large variance at year-end.

How do I handle sales tax during the close?

Separate the tax Amazon collected and remitted as a marketplace facilitator from any tax you self-collected on other channels. The marketplace-facilitated portion is not yours to remit, so counting it again would lead you to over-remit. Keeping the two streams distinct is what keeps your filings correct.

Can month-end close be automated for marketplace sellers?

Most of it, yes. Settlement reconciliation, per-unit COGS, inventory tie-out, fee posting, and sales tax separation are all mechanical steps that purpose-built software can handle, leaving the human work to be a review of the finished P&L and balance sheet rather than the manual assembly of them.

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