Amazon FBA accounting is the practice of recording what your business actually earned and spent on Amazon, not what Amazon deposited in your bank account. Every payout bundles sales, refunds, fees, reimbursements, and reserves into a single number. Clean books require unpacking that number and posting each component to the account where it belongs.
Most sellers skip that step. They record the deposit as revenue, call the books done, and move on. The result is a profit and loss statement that understates sales, hides fees, and misleads every decision built on top of it. This guide covers how the settlement report actually works, how to record it correctly, and how to reconcile Amazon's 14-day payout cycle with a monthly close.
For the broader picture of how marketplace sales fit into your full financial stack, our ecommerce accounting hub covers bookkeeping, inventory, and cash flow across every channel. This post goes deep on the Amazon-specific mechanics.
Why the Deposit Is Not Revenue
Amazon pays most sellers on a rolling 14-day settlement cycle. At the end of each cycle, Amazon nets your gross sales against refunds, referral fees, FBA fulfillment fees, storage fees, advertising charges, and any reserve it decides to hold, then deposits the remainder. The deposit is a net figure. Revenue is a gross figure. Treating one as the other breaks your books in both directions at once.
Here is a representative settlement for a mid-size FBA seller, deconstructed line by line.
| Settlement line | Amount |
|---|---|
| Product sales (gross) | $48,500 |
| Shipping and gift wrap credits | $1,200 |
| Customer refunds | ($3,400) |
| Referral fees | ($7,455) |
| FBA fulfillment fees | ($6,100) |
| Monthly inventory storage fees | ($850) |
| Refund administration fees | ($180) |
| FBA reimbursements | $420 |
| Reserve held by Amazon | ($4,000) |
| Net deposit to bank | $28,135 |
Two details worth noting. Amazon computes referral fees on the total sales price, including shipping and gift wrap credits, which is why that line is 15 percent of $49,700 rather than of product sales alone. And real settlements also include a credit returning the referral fee on refunded orders, less the refund administration fee; the example omits it for simplicity.
The seller behind this settlement generated $49,700 in gross sales and credits. The bank account shows $28,135. A bookkeeper who records the deposit as revenue has just understated sales by 43 percent and erased $14,585 of fees from the expense side of the ledger entirely.
This is what we call the P&L distortion cycle, and it compounds. Understated revenue makes growth look slower than it is, which distorts valuation conversations and lender applications. Invisible fees make margins look healthier than they are, so the seller keeps running promotions that lose money on every unit. And because refunds and reserves never appear as their own lines, cash forecasts miss by thousands every cycle. Each bad number feeds the next one, and no single report ever looks wrong enough to trigger an investigation.
Recording Amazon Sales Gross, Not Net
The fix is structural, not cosmetic. Sales get recorded at their gross value, and every deduction gets its own line in your chart of accounts. Referral fees, fulfillment fees, and storage fees are operating expenses. Refunds are contra revenue. Reserves are neither revenue nor expense; they are cash Amazon owes you, held as a receivable until released.
Posting this way follows the basic principle of revenue recognition: you earned $49,700 from customers, and you separately spent $14,585 selling and fulfilling those orders. Both facts matter, and netting them together destroys information you need. Gross recording is also what your tax preparer, your lender, and any future acquirer will expect to see.
Advertising adds a wrinkle worth flagging. Amazon deducts ad spend from settlements when your balance allows it, and invoices your credit card when it does not, sometimes both within the same month. Sellers who only track one of those paths systematically understate their true cost of sale, so both need to land in the same advertising expense account regardless of how Amazon collected the money.
The fee side deserves its own attention because Amazon's charges shift constantly. Referral percentages vary by category, fulfillment fees change with size tiers, and storage fees spike in Q4. Our breakdown of Amazon's fee structure walks through every major charge, and our Amazon fee calculator lets you model what a specific product actually costs to sell before you commit inventory to it.
Sales Tax: What Marketplace Facilitator Laws Changed
Sales tax is one place where Amazon sellers have it easier than their Shopify counterparts, and many do not realize it. Under marketplace facilitator laws, now in effect in every US state that levies sales tax, Amazon is legally responsible for calculating, collecting, and remitting sales tax on orders it facilitates. The tax collected flows through your settlement report, but Amazon remits it to the states, not you.
Shopify is not a marketplace facilitator. Sellers who run their own storefront alongside Amazon remain fully responsible for registration, collection, and remittance on those direct sales. The same business can have zero remittance obligations on its Amazon revenue and significant ones on its Shopify revenue, which is why channel-level bookkeeping matters.
Two cautions apply. FBA inventory stored in Amazon warehouses can create physical nexus in the states where it sits, which may still require registration even when Amazon handles remittance. And marketplace facilitator rules cover sales tax, not income tax, so your business income from Amazon remains reportable as it always was. Futureproof keeps the underlying records clean; your tax professional handles the filings.
FBA Inventory Is Your Asset, Not Amazon's
A common conceptual error among FBA sellers is treating inventory as spent money the moment it ships to an Amazon fulfillment center. On your balance sheet, that inventory remains your asset until a customer buys it. Only at the point of sale does its cost move to COGS, which is what makes unit margins measurable in the first place.
Getting this right requires tracking landed cost per SKU, meaning the purchase price plus freight, duties, and prep. It also requires adjusting for what happens inside Amazon's warehouses. Inventory gets lost, damaged, and misplaced at meaningful rates, and each incident is a write-down of your asset.
Amazon owes you money when it loses or damages your inventory, and those reimbursements arrive as credits inside settlement reports. They are easy to miss and easy to misclassify as sales. Our guide to Amazon reimbursements and recovery covers how to audit what Amazon owes you; from an accounting standpoint, reimbursements should offset inventory losses, not inflate revenue.
Reconciling 14-Day Settlements to a Monthly Close
The hardest mechanical problem in Amazon FBA accounting is that Amazon's calendar and your calendar disagree. Settlements close every 14 days, so most months contain two full settlements plus two partial ones hanging over each month boundary. A seller closing the books for April has to deal with a settlement that opened April 25 and will not pay out until May 9.
Under accrual accounting, the answer is to book activity in the month it happened, regardless of when the deposit lands. The April 25 to May 9 settlement gets split: sales, fees, and refunds dated April 25 through April 30 belong in April's books, and the rest belongs in May. The cash that has not arrived yet sits in an "Amazon receivable" account, alongside any reserve balance Amazon is holding under its delivery-date policy. A workable month-end routine looks like this:
- Pull every settlement report that touches the month, including the open one.
- Split straddling settlements at the month boundary by transaction date.
- Post gross sales, refunds, each fee category, and reimbursements to their own general ledger accounts.
- Reconcile the sum of net settlement amounts against actual bank deposits.
- Roll unpaid balances and reserves into the Amazon receivable, and verify the receivable cleared correctly from last month.
Cash-basis sellers can skip the splitting, but they pay for the simplicity with lumpy, misleading monthly numbers. Two deposits land in one month and three in the next, and suddenly the P&L says the business grew 50 percent when nothing changed. The distortion is worst in Q4, when holiday sales inflate reserves and January's books inherit December's cash, right when sellers are making their biggest inventory bets of the year. Accrual is more work, which is exactly why it is worth automating. Our ecommerce bookkeeping guide covers what that system looks like across all your channels.
Where Futureproof Fits
Most content about Amazon FBA accounting is written by settlement-parsing tools whose product ends at the journal entry. Parsing the settlement is necessary, but it is the first step of a finance function, not the whole thing. Someone still has to close the month, watch the margins, and turn the numbers into decisions.
Futureproof is an AI finance team. Vic, our bookkeeping agent, breaks down every settlement into gross sales, refunds, fees, and reimbursements, posts them to the right accounts, and reconciles deposits against your bank feed. Margo, our FP&A agent, builds forecasts on top of those clean numbers, including the cash timing gaps that reserves and 14-day cycles create. Theo tracks your inventory purchases and supplier bills so landed costs stay accurate.
Shopify and Amazon integrations are now in beta. If you sell on Amazon and want books that show what the business actually earns, join the ecommerce waitlist for early access. Sellers still deciding how to structure their presence on the platform can start with our guide to choosing the right Amazon seller account.
Frequently Asked Questions
Is the Amazon deposit in my bank account my revenue?
No. The deposit is your gross sales minus refunds, referral fees, FBA fees, storage fees, and any reserve Amazon holds. Recording it as revenue understates your sales and hides your selling costs at the same time. Revenue should be recorded at its gross value, with each deduction posted as its own expense or contra revenue line.
Do Amazon FBA sellers need to collect sales tax?
For sales on Amazon in the US, no. Marketplace facilitator laws make Amazon responsible for collecting and remitting sales tax in every state that charges it. Sellers may still need to register in states where FBA inventory creates physical nexus, and they remain fully responsible for sales tax on any direct-to-consumer channel such as a Shopify store.
Should FBA sellers use cash or accrual accounting?
Accrual accounting gives a far more accurate picture for FBA businesses. Cash-basis books swing with Amazon's deposit timing rather than actual sales activity, and they cannot represent inventory as an asset. Most sellers past roughly $250,000 in annual revenue, and any seller seeking financing or an exit, should be on accrual.
How do I reconcile a settlement that spans two months?
Split it at the month boundary using transaction dates. Activity through the last day of the month belongs in that month's books, even though the cash arrives in the next one. The unpaid portion sits in an Amazon receivable account until the deposit lands, at which point the receivable clears against the bank transaction.
Are FBA reimbursements income?
They are compensation for inventory Amazon lost or damaged, so the cleanest treatment is to offset them against your inventory loss expense rather than record them as sales. Treating reimbursements as revenue overstates your top line and obscures how much shrinkage is actually occurring inside Amazon's warehouses.
