What bookkeeping does an Amazon seller need?
The biggest mistake Amazon sellers make with their bookkeeping is recording Amazon payouts as revenue. That deposit hitting your bank account is not your sales number. It’s what’s left after Amazon takes referral fees, FBA fees, storage fees, and deducts returns and adjustments. If you treat the deposit as revenue, you’re understating your actual sales and hiding the true cost of selling on the platform.
Start by reconciling your Amazon settlement reports. Every two weeks Amazon sends a settlement that breaks down gross sales, fees, refunds, promotions, and the net payout. Your bookkeeping needs to record gross revenue at the top and then separately categorize each fee type as an expense. This is the only way to see what Amazon is actually charging you and whether those costs are trending up over time.
Track your fees in separate categories. Referral fees, FBA fulfillment fees, monthly storage fees, long-term storage fees, and advertising spend should each have their own line. When you lump them together, you lose the ability to spot problems. Maybe your ad spend is eating your margins on a specific product, or long-term storage fees are piling up on slow-moving inventory. You can’t fix what you can’t see.
Inventory accounting is where many Amazon sellers fall behind. Every unit you purchase is not an expense at the time of purchase. It’s an asset that becomes a cost of goods sold when it sells. If you expense inventory when you buy it, your profit and loss statement will swing wildly based on when you place orders rather than reflecting actual business performance. Proper COGS tracking by product or product category shows you which items are truly profitable after all costs are factored in.
Returns and refunds need their own handling too. Amazon processes returns and sometimes issues refunds before you even know about them. These need to be recorded as reductions to revenue, not as expenses. And if Amazon damages or loses inventory in their warehouse, any reimbursements you receive should be tracked so you can verify you’re actually getting paid for what’s owed.
Sales tax is one area where Amazon simplifies things. As a marketplace facilitator, Amazon collects and remits sales tax in most states. But you should still understand where you have nexus and confirm Amazon is handling it correctly for your situation, especially if you also sell through your own website or other channels.
A small business bookkeeping service familiar with e-commerce can set all of this up so your reports actually tell you something useful. The goal is knowing your real profit margins by product, understanding what Amazon is costing you, and having clean books ready for tax time without a year-end scramble.
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More Questions
What does a bookkeeper actually do for a small business?
A bookkeeper categorizes transactions, reconciles bank and credit card accounts, and produces accurate financial statements each month. The result is organized records you can use to make decisions and a smooth tax season.
Read answerHow do I stop running out of cash at the end of every month?
Cash shortages at month-end usually come from a timing mismatch between income and expenses or a lack of visibility into your numbers. Tightening your invoicing, reviewing books weekly, and building a small buffer can turn monthly cash crunches into something you plan around.
Read answerWhat's the difference between gross profit and net profit?
Gross profit is your revenue minus the direct costs of delivering your product or service. Net profit is what's left after all expenses including rent, payroll, insurance, and everything else. Both numbers tell you something different about how your business is performing.
Read answerHow do I handle subcontractor payments in my books?
Record each subcontractor payment under a dedicated expense account, assign it to the correct job or project, and track cumulative totals per vendor so you're ready to file 1099s at year end.
Read answerIs remote bookkeeping as reliable as having someone in the office?
Yes. What makes bookkeeping reliable is accuracy, consistency, and clear communication, not physical proximity. Cloud-based tools like QuickBooks Online make it possible to manage everything remotely without sacrificing quality or access.
Read answerWhich California services are subject to sales tax and which are exempt?
Most services in California are exempt from sales tax. California primarily taxes tangible personal property, not labor or professional services. The exceptions arise when a service involves creating, altering, or transferring a physical product.
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