How do you do bookkeeping for an Amazon FBA business?

Use accrual accounting, not just the bank feed

The single biggest decision is accrual versus cash basis. Cash-basis bookkeeping records revenue and expenses when money moves; accrual records them when they're earned and incurred. For an inventory business, accrual is the right answer because it matches the cost of a product to the period you sold it, and it stops your payout timing from distorting your numbers.

FBA punishes cash-basis books in a specific way. Amazon holds a reserve and settles on a roughly biweekly cycle, so a sale on the 30th of the month may not hit your bank until the 5th of the next month. On a cash basis, that revenue jumps to the wrong period. Worse, your inventory — often your single largest cash outlay — is purchased months before it sells, so a cash view shows giant losses when you buy stock and giant profits when you sell it, with no relationship to how the business is actually performing. Accrual smooths this by treating inventory as an asset until it sells, then moving it to cost of goods sold.

Record settlements as summarized journal entries

The core mechanic of FBA bookkeeping is the settlement journal. Instead of importing thousands of individual orders, you take each Amazon settlement and book one summarized entry that breaks the payout into its components. The deposit that hits your bank is just the bottom line; the journal restores everything Amazon netted out along the way.

Here is an illustrative settlement journal (numbers are made up to show the structure, not real Amazon rates). Suppose a settlement deposits $7,200 to your bank. The journal that produces that deposit might look like this:

• •Debit: Bank / clearing account $7,200 (the actual deposit)
• •Debit: Referral fees $1,500 (expense)
• •Debit: FBA fulfillment fees $900 (expense)
• •Debit: Advertising $400 (expense)
• •Debit: Refunds $300 (contra-revenue)
• •Credit: Gross product sales $10,000 (revenue)
• •Credit: Sales tax collected $200 (liability, if Amazon passed it to you)

Build a chart of accounts that matches the settlement

Your chart of accounts is what makes the settlement journal possible. At minimum, create separate accounts for gross sales, referral fees, FBA fulfillment fees, storage fees, advertising, refunds and returns, reimbursements, and a sales-tax liability. Lumping all Amazon costs into one 'Amazon fees' line technically balances, but it tells you nothing — and the whole point of bookkeeping is to see where the money goes.

A clearing account is the unsung hero here. Because Amazon settles on its own schedule and the deposit date rarely matches the settlement period, you post the settlement journal to a clearing account, then match the actual bank deposit against that clearing balance. When the clearing account nets to zero, you know every payout has been accounted for. This is the same pattern whether you keep your books in QuickBooks or Xero; for the full setup including account mapping, see our guide to Amazon accounting in QuickBooks & Xero.

Track inventory and cost of goods sold separately

Sales bookkeeping is only half the picture. The other half is inventory: what you paid for the units you're selling, including the landed cost of getting them to an Amazon warehouse. On an accrual basis, you record purchased inventory as an asset on the balance sheet, and only move its cost into cost of goods sold (COGS) when the units actually sell. That's what produces a true gross margin.

Most FBA sellers underestimate COGS because they forget the costs beyond the unit price — inbound freight, customs duty, prep, and shipping into Amazon. Folding those into your per-unit landed cost is what separates a margin number you can trust from a guess. Tools like BeanHawk automate the settlement-to-journal side and keep a SKU-level inventory subledger so your COGS and gross sales tie out without manual entry, which is the part of FBA bookkeeping that otherwise eats whole weekends.

Frequently asked questions

Should an Amazon FBA business use cash or accrual accounting?

Accrual, in nearly all cases. Because you buy inventory months before it sells and Amazon settles on a delayed cycle, cash-basis books swing wildly and misstate profit. Accrual matches revenue to the period earned and moves inventory cost into COGS only when units sell, giving you a stable, accurate profit and loss. Note that some businesses above a certain size are required by the IRS to use accrual regardless.

Why shouldn't I just book the Amazon deposit as my sales?

Because the deposit is net of referral fees, FBA fees, advertising, refunds, and sometimes sales tax. Booking it as a single sales line understates your revenue, hides all your costs, and makes your books impossible to reconcile to Amazon's 1099-K, which reports gross. You need to split each settlement into its components.

What is a clearing account and why do I need one?

A clearing account is a temporary holding account where you post the full settlement journal before matching the real bank deposit against it. Because Amazon's deposit date rarely lines up with the settlement period, the clearing account lets you record the settlement when it's reported and reconcile the cash when it arrives. When the account nets to zero, every payout is accounted for.

What accounts do I need in my chart of accounts for FBA?

At minimum: gross product sales, referral fees, FBA fulfillment fees, storage fees, advertising, refunds and returns, reimbursements, inventory (asset), cost of goods sold, and a sales-tax liability. Separating fee types is what lets you see which costs are eroding margin instead of hiding them in one lump.

Do I need accounting software to do FBA bookkeeping?

You can do it manually in a spreadsheet, but the settlement-splitting and inventory tracking are tedious and error-prone at volume. Most sellers use QuickBooks or Xero, often with a tool that converts each Amazon settlement into a summarized journal automatically and keeps a SKU-level inventory subledger so COGS and gross sales reconcile without manual entry.

Keep learning

• How do you reconcile Amazon payouts in QuickBooks?
• How do you find cost of goods sold (COGS)?
• What is a marketplace facilitator?
• How do you calculate profit margin on Amazon?