Amazon sellers often look at the deposit reaching their bank account and assume that it represents sales revenue. In reality, an Amazon deposit is usually the net result of numerous transactions processed during a settlement period.
Amazon may deduct referral fees, fulfillment charges, storage fees, refunds, advertising costs and other adjustments before transferring the remaining amount to your bank.
If the net deposit is recorded entirely as revenue, sales and expenses may be understated, profitability may be distorted, and the accounting records may not agree with Amazon Seller Central.
This guide explains Amazon settlement accounting for US sellers, including how to record sales, fees, refunds, reimbursements and bank deposits accurately.
What Is an Amazon Settlement?
An Amazon settlement summarizes the financial activity processed through a seller’s account during a particular settlement period.
Depending on the seller’s activities, a settlement may include:
- Product sales
- Shipping income
- Promotional rebates
- Sales tax activity
- Customer refunds
- Amazon referral fees
- Fulfillment by Amazon fees
- Storage and inventory-related fees
- Advertising charges
- Reimbursements
- Account-level charges
- Reserves and other adjustments
- The final bank transfer
The deposit reaching the bank is therefore not necessarily the same as Amazon sales for that period.
Why Amazon Deposits Are Not Revenue
An Amazon deposit represents a movement of cash after fees, refunds and other deductions. Revenue should reflect the underlying sales activity rather than only the amount transferred to the bank.
Assume an Amazon settlement contains:
- Product sales: $25,000
- Shipping income: $500
- Customer refunds: $1,200
- Referral fees: $3,600
- FBA fulfillment fees: $2,400
- Storage and other fees: $500
- Advertising charges: $1,000
- Reimbursements: $200
The resulting deposit would be:
$25,000 + $500 − $1,200 − $3,600 − $2,400 − $500 − $1,000 + $200 = $17,000
Recording only the $17,000 deposit as revenue would understate both income and expenses. It would also prevent the seller from understanding how Amazon fees and refunds affect profitability.
What Is Included in an Amazon Settlement Report?
Amazon payment reports provide details of the transactions included in a settlement period. These may include customer orders, refunds, Amazon-initiated charges and credits.
Reports commonly used for Amazon settlement accounting include:
- Statement View
- Transaction View
- Settlement reports
- Date Range Transaction reports
- Date Range Summary reports
- Bank statements
- Amazon Ads billing reports
- FBA inventory and reimbursement reports
The settlement report is especially important because it provides the transaction-level detail needed to break the deposit into its individual accounting components.
Step 1: Download the Amazon Settlement Report
Begin by locating the relevant settlement in Amazon Seller Central.
The report should correspond with the deposit being reconciled. Confirm:
- Settlement identification number
- Settlement start and end dates
- Deposit date
- Bank account
- Settlement currency
- Transfer amount
- Transactions included in the settlement
Amazon also provides date-range reports for reviewing financial activity across a selected period. These are useful for monthly reporting, but individual settlement reports are generally more helpful when matching a specific bank deposit.
Step 2: Create an Amazon Clearing Account
Create a separate Amazon clearing account in QuickBooks Online or the accounting system being used.
The clearing account represents funds processed by Amazon that have not yet reached the business bank account.
A typical configuration may include:
- Account name: Amazon Clearing
- Account type: Bank
- Detail type: Cash on hand or another appropriate clearing classification
Amazon sales, refunds, fees and other settlement activity are recorded through this account. When Amazon transfers the settlement to the bank, the clearing account is reduced by the amount deposited.
This approach allows the accounting records to connect:
- Amazon transaction activity
- The Amazon settlement
- The bank deposit
Step 3: Record Amazon Sales and Income
The settlement entry should record the relevant income categories separately.
These may include:
- Product sales
- Shipping income
- Gift-wrap income
- Promotional income
- Other seller credits
Businesses should use a consistent approach to presenting gross sales, discounts and returns in their financial statements.
Sales tax collected and remitted by Amazon under marketplace-facilitator rules should not automatically be treated as revenue. The appropriate accounting presentation depends on the transaction and the seller’s obligations.
Amazon sales should also be recorded in the appropriate reporting period. The settlement or deposit date may differ from the underlying order or transaction date.
Step 4: Record Amazon Refunds
Customer refunds should be recorded separately from sales.
Refund-related activity may include:
- Refunded product charges
- Refunded shipping
- Refunded promotional amounts
- Refunded sales tax
- Reversed referral fees
- Refund administration fees
- Other refund adjustments
Recording refunds separately allows the seller to calculate return rates and net sales accurately.
A high refund rate may indicate problems with product quality, listing accuracy, fulfillment or customer expectations. Combining refunds with other settlement activity hides this information.
Step 5: Separate Amazon Fees
Amazon fees should be divided into meaningful expense categories rather than recorded as one unidentified amount.
Depending on the business, these categories may include:
Referral Fees
Amazon generally charges referral fees based on the product category and sale amount.
FBA Fulfillment Fees
These may cover picking, packing, shipping, customer service and handling returns for products fulfilled through Amazon.
Storage Fees
FBA sellers may incur monthly storage charges and additional inventory-related costs.
Selling-Plan Fees
A seller may incur per-item fees or a recurring Professional selling-plan charge, depending on the account.
Advertising Costs
Amazon advertising charges may be deducted from settlement funds or billed separately. They should be reconciled with the corresponding advertising reports.
Other FBA and Account-Level Fees
These may include:
- Inbound placement charges
- Removal or disposal fees
- Returns-processing fees
- Aged-inventory charges
- Transportation fees
- Subscription charges
- Other adjustments
Separating these costs provides a clearer picture of Amazon channel profitability and the cost of using FBA.
Step 6: Record Amazon Reimbursements
Amazon may issue reimbursements or credits for certain inventory events, fee corrections, claims or other adjustments.
These amounts should be reviewed before being categorized. Depending on their nature, they may represent:
- Inventory reimbursements
- Reversed fees
- Shipping credits
- Claim settlements
- Other Amazon credits
Automatically recording every reimbursement as sales revenue can misstate both revenue and inventory-related activity.
The accounting treatment should reflect why the reimbursement was received.
Step 7: Record the Settlement Deposit
Once the settlement activity has been recorded, transfer the net settlement amount from the Amazon clearing account to the business bank account.
Using the earlier example:
- Total income and credits: $25,700
- Refunds and deductions: $8,700
- Net settlement: $17,000
The $17,000 deposit should increase the bank account and reduce the Amazon clearing account.
It should not create an additional $17,000 of sales because the underlying Amazon transactions have already been recorded.
Step 8: Match the Bank Deposit in QuickBooks Online
When the Amazon deposit appears in QuickBooks Online’s bank transactions, match it to the settlement deposit already recorded.
Before completing the match, confirm:
- The deposit agrees with the Amazon settlement
- The correct bank account received the payment
- The settlement has not already been recorded
- The entry uses the correct settlement period
- The Amazon clearing account was used
- Currency differences have been considered
Do not add the deposit as new sales revenue if the settlement activity is already recorded. Doing so will duplicate income.
Step 9: Reconcile the Amazon Clearing Account
After recording all settlement activity and deposits, review the Amazon clearing-account balance.
A balance may remain because of:
- Funds held in reserve
- Unsettled transactions
- Timing differences
- Transactions crossing month-end
- Missing settlement reports
- Unrecorded refunds or fees
- Currency conversions
- Failed or delayed transfers
- Incorrect opening balances
- Duplicate entries
The balance should be supported by Amazon reports. Avoid forcing it to zero through an unexplained journal entry.
Amazon Settlement Accounting and Inventory
Settlement accounting records Amazon’s financial transactions, but it does not automatically calculate accurate inventory or cost of goods sold.
Amazon sellers must also maintain records for:
- Inventory purchases
- Freight and import duties
- Units received by Amazon
- Units sold
- Customer returns
- Damaged or lost inventory
- Reimbursements
- Removals and disposals
- Inventory held at period-end
Inventory purchases are generally recorded as assets and recognized as cost of goods sold when the related units are sold.
Settlement reports, inventory reports and the general ledger must therefore work together to produce reliable gross-profit and inventory balances. Accurate inventory and COGS figures also support essential ecommerce financial metrics, including gross margin, inventory turnover and channel profitability.
Common Amazon Accounting Mistakes
Recording Net Deposits as Sales
This understates revenue and Amazon fees and prevents accurate margin analysis.
Combining Every Amazon Fee
Lumping all fees together makes it difficult to monitor referral fees, fulfillment costs, storage charges and advertising expenses.
Ignoring Settlement Timing
Amazon transactions and their related deposits may occur in different accounting periods.A seller may reconcile every Amazon deposit while still reporting inaccurate profit because inventory and cost of goods sold are incorrect. This is one reason many ecommerce stores do not know their true profit.
Duplicating Revenue
This often happens when accounting software records settlement activity and the bank deposit is later added as additional income.
Recording Every Reimbursement as Revenue
Reimbursements should be categorized according to their underlying purpose.
Ignoring Inventory and COGS
A seller may reconcile every Amazon deposit while still reporting inaccurate profit because inventory and cost of goods sold are incorrect.
Forcing the Clearing Account to Zero
A legitimate balance may relate to reserves, unsettled transactions or timing differences. Every difference should be investigated and supported.
Manual Entries vs Amazon Accounting Software
A seller with limited activity may record summarized settlement entries manually.
As order volume, marketplaces and fees increase, automation may become more practical. Ecommerce accounting integrations can help translate Amazon settlement data into summarized entries for QuickBooks Online.
Automation still requires proper setup and review. Common risks include:
- Incorrect account mappings
- Duplicate settlement imports
- Missing marketplaces
- Misclassified reimbursements
- Incorrect sales-tax treatment
- Unsupported clearing-account balances
- Inventory systems that do not agree with accounting records
The appropriate solution depends on the seller’s transaction volume, sales channels, inventory complexity and reporting needs.
How Often Should Amazon Settlements Be Reconciled?
Amazon settlements should be reviewed throughout the month and fully reconciled during the monthly close.
At month-end, confirm that:
- Every Amazon deposit is recorded
- Deposits agree with settlement reports
- Sales and refunds are recorded separately
- Amazon fees are categorized correctly
- Reimbursements have been reviewed
- Advertising charges are complete
- The clearing-account balance is supported
- Inventory and COGS are updated
- Revenue is recorded in the correct period
- Financial statements agree with the underlying reports
Regular reconciliation prevents errors from accumulating and gives management more timely information about Amazon profitability.
When Should You Hire an Amazon Accountant?
Specialized ecommerce accounting support may be appropriate when:
- Amazon deposits do not match QuickBooks
- Sales or expenses appear understated
- The clearing account has an unexplained balance
- Amazon fees cannot be categorized
- Reimbursements are missing or incorrectly recorded
- Inventory and COGS are unreliable
- The business operates across several marketplaces
- Monthly reporting is delayed
- Product or channel profitability is unclear
- Historical Amazon transactions require cleanup
AYBE Finance provides ecommerce accounting services for Amazon, Shopify and multichannel businesses across the US. We help reconcile settlements, clean up QuickBooks Online, track inventory and COGS, categorize marketplace fees and produce reliable financial reports.
Frequently Asked Questions
What is an Amazon settlement?
An Amazon settlement is a summary of financial activity processed during a settlement period, including sales, refunds, fees, credits, adjustments and the resulting bank transfer.
Is an Amazon deposit the same as revenue?
No. The deposit is generally a net amount after Amazon deducts fees, refunds and other charges. The underlying transactions should be recorded separately.
What is an Amazon clearing account?
An Amazon clearing account temporarily holds Amazon transaction activity until the corresponding settlement reaches the business bank account.
Which Amazon report is used to reconcile a deposit?
The settlement report provides transaction-level details for a particular settlement. Statement View, Transaction View and date-range reports can provide additional information.
How should Amazon FBA fees be recorded?
FBA fulfillment, storage and other inventory-related fees should be assigned to appropriate expense categories based on their nature and the business’s accounting policies.
Are Amazon reimbursements revenue?
Not always. The appropriate classification depends on whether the reimbursement relates to inventory, reversed fees, a claim or another type of adjustment.
How often should Amazon settlements be reconciled?
Amazon sellers should generally complete the reconciliation monthly. High-volume sellers may need weekly monitoring.
Get Accurate Amazon Financial Reports
Amazon settlement accounting requires more than matching bank deposits. Sales, refunds, referral fees, FBA charges, reimbursements, advertising expenses and timing differences must be recorded and reconciled accurately.
If your Amazon deposits do not match QuickBooks or you cannot determine the true profitability of your Amazon channel, AYBE Finance can help.
