Amazon bookkeeping is different from most businesses because what hits your bank account is not your revenue. Amazon collects customer payments, deducts their fees, and deposits what’s left every two weeks. If you record those deposits as revenue, your books are wrong from the start.

The settlement report is where the real numbers live. Each settlement breaks down gross sales, referral fees, FBA fees, storage fees, shipping credits, refunds, reimbursements, and advertising costs. Your bookkeeping needs to capture all of these line items separately. Gross revenue should reflect what customers actually paid, and Amazon’s various fees should show up as individual expense categories. This is the only way to see what’s actually eating into your margins.

Inventory and cost of goods sold deserve serious attention. Every unit you sell has a landed cost that includes the product price, shipping to Amazon’s warehouse, customs and duties if you’re importing, packaging, and prep costs. If you’re not tracking COGS accurately, your profit numbers are meaningless. You might think you’re making money on a product when the true margin is razor thin after all costs are factored in. Use a FIFO or weighted average method consistently and update your costs whenever supplier pricing changes.

Multi-state sales tax is another layer of complexity that catches many e-commerce sellers off guard. When Amazon stores your inventory in FBA warehouses across the country, you can trigger sales tax nexus in those states. Amazon collects and remits sales tax as a marketplace facilitator in all states that require it, but you may still have filing obligations depending on where you have physical or economic nexus. Staying on top of this prevents nasty surprises down the road.

For software, QuickBooks Online paired with an integration tool like A2X or Link My Books will automatically pull settlement data and categorize it correctly. This eliminates the manual work of parsing settlement reports and dramatically reduces errors. The integration maps Amazon’s data into the right accounts so your financials actually make sense.

The biggest mistake Amazon sellers make is waiting too long to get their books in order. Running on gut feeling works until it doesn’t, and by then you’ve made pricing decisions, inventory purchases, or advertising bets based on numbers you never actually confirmed. Working with a bookkeeper in Franklin who understands the Amazon ecosystem means your books reflect reality every month, so you can make decisions based on actual profitability rather than what your bank balance suggests.