How do I handle bookkeeping for my Amazon seller business?
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.
Greater Nashville's Trusted Financial Partner
The Next Step:
A Quick Conversation
Tell us about your business and where you need support. We'll listen, figure out what makes sense for your situation, and give you a straightforward quote.
More Questions
What bookkeeping does a retail shop owner need?
Retail shops need daily sales reconciliation, inventory and cost of goods sold tracking, sales tax management, and regular financial reporting. The volume of small transactions and multiple payment methods make consistent bookkeeping essential.
Read answerWhat should I look for in a virtual bookkeeper in Tennessee?
Look for Tennessee-specific tax knowledge, clear communication habits, relevant industry experience, and proficiency with cloud-based tools like QuickBooks Online. A virtual bookkeeper who understands franchise and excise tax and Tennessee's sales tax rules will save you real headaches.
Read answerWhat financial reports should a medical practice review monthly?
At minimum, review your profit and loss statement, accounts receivable aging, and a cash flow summary. These three reports tell you whether the practice is profitable, whether you're collecting what you're owed, and whether you can cover upcoming expenses.
Read answerHow do I organize my books for a fix-and-flip business?
Track each property as its own project with costs broken into acquisition, renovation, holding, and disposition. Properties are inventory for most active flippers, not capital assets. This structure shows you true profit per flip and keeps your tax reporting clean.
Read answerHow do I handle revenue recognition for my SaaS business?
You recognize revenue when you deliver the service, not when you collect payment. Annual contracts get spread over the contract term, and the undelivered portion sits on your balance sheet as deferred revenue.
Read answerHow do estimated quarterly tax payments work?
Estimated quarterly tax payments let business owners pay income tax throughout the year instead of in one lump sum. The IRS expects four payments annually, with due dates in April, June, September, and January. You can base payments on your prior year's tax bill or your current year's projected income.
Read answer
