Before You Start

This guide assumes you have administrator access to Amazon Seller Central and are familiar with basic journal entries in your accounting software.

Overview

45 min
Setup Time
Advanced
Difficulty
Monthly
Maintenance

What You’ll Learn

  • How to deconstruct the Amazon FBA settlement report
  • Accurately record sales, refunds, and promotions
  • Allocate FBA fees, shipping costs, and advertising expenses
  • Reconcile Amazon payouts with bank deposits

1. Preparation Steps

Before recording any transactions, you need these accounts in your accounting software (e.g., QuickBooks, Xero):

Required Accounts

  • Amazon Sales (Income)
  • Amazon FBA Fees (Expense)
  • Amazon Shipping Income (Income)
  • Amazon Advertising Expense (Expense)
  • Amazon Payouts (Bank/Asset)
  • Sales Tax Payable (Liability)

Optional (but recommended)

  • Amazon Refunds (Contra-Income/Expense)
  • Amazon Promotions (Contra-Income)
  • Amazon Reimbursements (Other Income)
  • Amazon Storage Fees (Expense)

2. Choosing Your Reconciliation Method

You have two main options, each with serious pros and cons for FBA accounting.

Method A: Manual Settlement Report Entry

This involves manually creating journal entries from the detailed settlement report.

Pros:
  • It’s free (no software cost).
  • Provides full control over entries.
  • Deep understanding of each transaction.
Cons:
  • Extremely time-consuming.
  • High potential for manual errors.
  • Complex journal entries required.

Method B: Automated Settlement Report Tools (e.g., A2X)

These are paid applications that automate the breakdown and posting of settlement reports.

Expert Tip: We strongly recommend using an automated tool like A2X. It breaks down your Amazon settlement reports into detailed summaries, posting them directly to your accounting software (QuickBooks, Xero) to perfectly match bank deposits, making reconciliation a one-click process.

3. Step-by-Step: Deconstructing the Report

Here is the high-level workflow for extracting key financial data from your Amazon FBA settlement report. This process prepares the data for entry into your accounting system.

{
  "settlement_id": "FBA-123456789",
  "period_start": "2025-01-01",
  "period_end": "2025-01-14",
  "deposit_amount": 12500.50,
  "summary": {
    "sales": 15000.00,
    "fba_fees": -1500.00,
    "shipping_income": 100.00,
    "advertising_cost": -500.00,
    "adjustments": -100.00
  },
  "transactions": [
    {"type": "Order", "amount": 50.00, "fee": -5.00},
    {"type": "Refund", "amount": -25.00, "fee": 2.00}
  ]
}

4. Understanding Key Sections

  1. 1

    Income Section (Sales, Refunds, Promotions)

    Identify total product sales, shipping income, promotional rebates, and customer returns. These often need to be recorded to separate income or contra-income accounts.

  2. 2

    FBA Fees Section

    Break down fulfillment fees (pick & pack, weight handling), storage fees, referral fees, and other service charges. Each should ideally map to a specific expense account.

  3. 3

    Other Charges & Credits

    Account for advertising costs (sponsored products, brands), shipping label purchases, reimbursements from Amazon, and other miscellaneous debits/credits. Careful mapping is crucial here.

Common Error: Reconciliation Discrepancies

If your accounting entries don’t match the Amazon payout, double-check dates, ensure all transaction types are accounted for, and verify your account mapping. Small discrepancies often hide uncategorized charges.

5. Testing Your Setup

Test Reconciliation Checklist

  • Import a test settlement report from a past period
  • Verify the total payout amount matches the bank deposit
  • Confirm all income and expense categories are posted correctly
  • Check for any uncategorized transactions requiring manual adjustment

Need Help?

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Having trouble with your Amazon FBA accounting? Our team can help streamline your reconciliation process and ensure accuracy.

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