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Amazon Seller Accounting: Settlements, Fees, Inventory and Sales Tax
Last updated: October 7, 2026 · Independent guide · We do not sell rankings or coverage.
Amazon seller accounting means turning each Amazon settlement into proper journal entries: gross sales as revenue, every Amazon fee as an expense, cash held in reserve as a receivable, and inventory sent to FBA warehouses as an asset until it sells. Amazon pays you a net figure, so booking only the bank deposit understates revenue and hides fees. Sales tax that Amazon collects as a marketplace facilitator should pass through your books without touching revenue.
The settlement formula and the journal entries
Every Amazon settlement follows the same arithmetic. The deposit you receive equals gross product sales, plus any reimbursements and released reserves, minus refunds, Amazon fees, advertising charges and the new reserve held back. Amazon generates the settlement report automatically for each settlement period; its developer documentation says settlement reports “cannot be requested or scheduled” and that the current Flat File V2 format lists each line with an amount type, an amount description and an amount (Amazon SP-API documentation, last modified September 9, 2026).
The standard approach is to post each settlement to an Amazon clearing account and record one summarized entry per settlement, not one entry per order.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Bank | Net deposit | Matches the bank feed | |
| Amazon reserve receivable | Increase in reserve | Decrease in reserve | An asset, not an expense |
| Refunds and returns (contra-revenue) | Refunded principal | Shown below gross sales | |
| Amazon selling fees (referral, FBA fulfillment, storage, subscription) | Each fee type | One account per fee type | |
| Advertising expense | Sponsored ads deducted | When deducted from the settlement | |
| Sales revenue | Gross product sales | Gross, because you are the principal | |
| Inventory reimbursements (other income or inventory loss) | Reimbursed amount | Lost or damaged FBA units | |
| Marketplace facilitator tax clearing | Tax withheld by Amazon | Tax charged to buyers | Nets to zero in facilitator states |
Cost of goods sold is a separate entry: debit cost of goods sold and credit inventory for the landed cost of units sold, and reverse that for units returned to sellable stock.
A worked settlement example
The figures below are an illustration, not real account data. Assume a 14-day settlement with these lines.
- Gross product sales (principal): $10,000 for 400 units.
- Sales tax charged to buyers: $700, and a matching marketplace facilitator tax line of minus $700.
- Refunds to customers: minus $400 (16 units, all returned to sellable stock).
- Referral fees: minus $1,500. FBA fulfillment fees: minus $1,800. FBA storage fees: minus $120.
- Sponsored Products charges deducted from the settlement: minus $600.
- Reimbursement for units lost in an Amazon warehouse: plus $50.
- Reserve released from the prior settlement: plus $900. New reserve held: minus $1,100.
Step 1: calculate the deposit. $10,000 minus $400, $1,500, $1,800, $120 and $600 gives $5,580. Add the $50 reimbursement and the $900 released reserve to reach $6,530, then subtract the $1,100 new reserve. The deposit is $5,430. The tax lines cancel out.
Step 2: calculate the net reserve change. Amazon released $900 and held $1,100, so the amount Amazon owes you rose by $200.
Step 3: post the settlement entry.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Bank | $5,430 | Net transfer | |
| Amazon reserve receivable | $200 | $1,100 held less $900 released | |
| Refunds and returns | $400 | Contra-revenue | |
| Referral fees | $1,500 | Selling fees | |
| FBA fulfillment fees | $1,800 | Often classed in cost of sales | |
| FBA storage fees | $120 | Monthly storage charge | |
| Advertising expense | $600 | Sponsored Products | |
| Marketplace facilitator tax clearing | $700 | $700 | Collected and withheld; net zero |
| Sales revenue | $10,000 | Gross sales | |
| Inventory reimbursements | $50 | Lost units | |
| Totals | $10,750 | $10,750 | Entry balances |
Step 4: record cost of goods sold. If each unit has a landed cost of $9 (purchase price, freight in, duties and prep), the 400 units sold cost $3,600. Debit cost of goods sold $3,600 and credit inventory $3,600. The 16 returned units went back to sellable stock, so debit inventory $144 and credit cost of goods sold $144. Net cost of goods sold is $3,456. Write off the lost units at cost against the $50 reimbursement.
Step 5: check the result. Net sales are $9,600. After cost of goods sold and $4,020 of fees and advertising, contribution is $2,124. Booking only the $5,430 deposit would have understated sales by $4,570.
If a settlement crosses a month end, split it by posted date. Link My Books, which sells a settlement tool, gives the example of a September 25 to October 9 period becoming two entries (Link My Books help center, no date shown).
The rules behind the entries
Gross revenue (ASC 606). Under the principal versus agent guidance that starts at ASC 606-10-55-36, an entity is a principal if it controls the goods before they transfer to the customer, and a principal records revenue at the gross amount (Deloitte DART, Revenue Roadmap section 10.1, no date shown). Third-party sellers own their inventory, so Amazon’s fees are expenses.
Amazon fees. The Professional plan costs $39.99 a month and the Individual plan costs $0.99 per item sold. Referral fees are a percentage of the total price or a category minimum, whichever is greater; many categories are 15% and most have a $0.30 minimum (Amazon, Selling on Amazon fees, no date shown). FBA adds fulfillment, monthly storage, aged inventory (items stored more than 181 days), returns processing, removal and inbound placement fees (Amazon, Fulfillment by Amazon, no date shown).
Reserves. An Amazon moderator on the US Seller Forums states that “the default standard setting reserve period is 7 days after delivery date” and that the period can be extended after a review of risk and performance (Amazon Seller Forums, “Understanding Account Level Reserves,” no exact date shown). Amazon calls this the DD+7 reserve policy.
Inventory and COGS for tax. IRS Publication 538 allows specific identification, FIFO or LIFO, and lets small business taxpayers skip formal inventories and treat inventory as non-incidental materials and supplies (IRS Publication 538, revised January 2022). For tax years beginning in 2026, the gross receipts test for that small business exception is average annual gross receipts of $32,000,000 or less over the prior three years (Rev. Proc. 2025-32, section 4.30, released with IR-2025-103, October 9, 2025).
Marketplace facilitator sales tax. After South Dakota v. Wayfair in 2018, states began requiring remote sellers and marketplaces to collect sales tax. Missouri was the last of the 45 states that impose sales tax to adopt economic nexus rules, and its marketplace facilitator collection requirement took effect January 1, 2023 (BDO, July 14, 2021). Amazon states that in covered states it is responsible to “calculate, collect, remit, and refund” sales tax on third-party sales, but that some local taxes fall outside facilitator laws (Amazon, Marketplace Tax Collection, no date shown). Registration rules for sellers still vary. Missouri, for example, says you do not have to register if you sell only through a marketplace facilitator, but you must register once total receipts including marketplace sales exceed $100,000 and you also sell separately (Missouri Department of Revenue FAQ, no date shown).
Common mistakes
- Expensing the reserve. Held funds are a receivable.
- Expensing inventory purchases on arrival. Unless you use the small business method, purchases go to inventory until units sell.
- Counting facilitator tax as income. The tax lines should net to zero. A2X, which sells a settlement tool, recommends a dedicated account to hold the MarketplaceFacilitatorTax lines so they offset the tax Amazon charged (A2X support, July 20, 2023).
- Ignoring reimbursements and removals. Lost, damaged and disposed units must leave inventory.
How to report it
On the income statement, show gross sales, then refunds as contra-revenue, then cost of goods sold. Many sellers place fulfillment and referral fees in cost of sales and storage and advertising in operating expenses; apply one policy consistently. Show inventory (including FBA stock) and the reserve receivable as current assets.
For income tax, Amazon payments fall under Form 1099-K reporting. The IRS confirms that the One, Big, Beautiful Bill retroactively reinstated the earlier threshold, so a form is required only when payments exceed $20,000 and transactions exceed 200 (IRS, IR-2025-107, October 23, 2025).
How we researched this
We read the top-ranking pages for “amazon seller accounting” from LedgerGurus, ConnectBooks, Beancount.io and BooksTime, all of which sell services or software. None showed a full settlement entry or explained how to book the reserve. We used Amazon’s own fee, developer and help pages, IRS publications and procedures, state revenue guidance, and vendor pricing pages checked on October 7, 2026.
How accounting systems automate Amazon seller accounting
A2X turns Amazon settlement data into summarized entries for QuickBooks Online, Xero or NetSuite. Its Amazon plans start at $29 a month for up to 200 orders, rising to $79 for 5,000 orders and $1,499 for 250,000 orders, with larger volumes quoted by sales (A2X Amazon pricing, checked October 7, 2026).
Synder syncs sales channel and payment data into QuickBooks Online or Xero. Its Basic plan lists $65 a month, or $52 a month billed yearly, for 500 synced transactions (Synder pricing, checked October 7, 2026).
Webgility posts orders, fees and inventory to QuickBooks. Its Pro plan is $69 a month billed annually or $79 monthly for 300 orders and two sales channels, and extra orders on the higher plans, though not Pro, at $10 a month per 500 orders (Webgility pricing, checked October 7, 2026). For the wider stack these tools sit within, see our guide to the software needed to run an ecommerce business, our comparison of the best accounting software for small business, and our look at sales tax automation in accounting software.
Frequently asked questions
Should I record Amazon sales gross or net of fees?
Record them gross. You control the inventory before it reaches the buyer, which makes you the principal under ASC 606, so Amazon’s fees are expenses.
How do I account for the Amazon reserve?
Treat the held amount as a receivable. Debit it for funds held, credit it for funds released, and reconcile it to the Deferred Transactions report in Seller Central.
Do I need to file sales tax returns if Amazon collects the tax?
Amazon collects and remits state sales tax in facilitator states, but seller registration rules differ. Missouri does not require registration if you sell only through a marketplace, while sales on your own website can create obligations.
Is inventory stored in FBA warehouses still my asset?
Yes. You own FBA inventory until it sells, so it stays on your balance sheet at cost. Write off lost or disposed units and match any reimbursement against them.
Will Amazon send me a Form 1099-K?
Only if your payments exceed $20,000 and your transactions exceed 200 in the year, the threshold the IRS confirmed in October 2025. Reconcile it to gross sales, not deposits.
Do I need A2X or a similar tool?
A seller with a few settlements a month can post them by hand. Once you sell on several marketplaces, a tool such as A2X, Synder or Webgility usually saves more time than it costs.
Sources
- Amazon, SP-API settlement report type values, last modified September 9, 2026. developer-docs.amazon
- Amazon, Selling on Amazon fees and plans, no date shown, checked October 7, 2026. sell.amazon.com
- Amazon, Fulfillment by Amazon, no date shown, checked October 7, 2026. sell.amazon.com
- Amazon Seller Forums, “Understanding Account Level Reserves” (moderator post), no exact date shown. sellercentral.amazon.com
- Amazon, Marketplace Tax Collection, no date shown. amazon.com
- Deloitte DART, Revenue Roadmap, section 10.1 principal versus agent, no date shown. dart.deloitte.com
- IRS, Publication 538, Accounting Periods and Methods, revised January 2022. irs.gov
- IRS, Rev. Proc. 2025-32, section 4.30, released October 9, 2025 (IR-2025-103). irs.gov
- IRS, IR-2025-107, Form 1099-K threshold FAQs, October 23, 2025. irs.gov
- BDO, Missouri: Final State to Enact Sales Tax Economic Nexus and Marketplace Legislation, July 14, 2021. bdo.com
- Missouri Department of Revenue, Remote Seller and Marketplace Facilitator FAQs, no date shown. dor.mo.gov
- A2X (sells settlement software), What is marketplace facilitator tax and how do I account for it, July 20, 2023. support.a2xaccounting.com
- A2X, Amazon pricing, no date shown, checked October 7, 2026. a2xaccounting.com
- Link My Books (sells settlement software), Amazon deferred transactions, no date shown. help.linkmybooks.com
- Synder, pricing, no date shown, checked October 7, 2026. synder.com
- Webgility, pricing, no date shown, checked October 7, 2026. webgility.com
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Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
