Why not just record the deposit?
Because a deposit is sales minus Amazon's fees, refunds and reserves. Booking only the net understates both income and expenses, hides where margin is lost, and will not reconcile with the gross figure on Form 1099-K. See Form 1099-K.
What does a settlement report contain?
| Section | How to record it |
|---|---|
| Product sales and shipping credits | Sales income |
| Promotional rebates | Reduction of sales, or a discounts line |
| Marketplace facilitator tax collected and withheld | Not income. It passes through to the states |
| Selling fees (referral fees) | Selling fees expense |
| FBA fulfillment fees | Fulfillment expense |
| Storage and other transaction fees | Storage or other fees expense |
| Refunds | Returns and allowances, with any fee refunds |
| Reimbursements for lost or damaged stock | Other income, linked to the inventory write-off |
| Reserve held and released | A balance owed to you by Amazon, not an expense |
| Advertising charges deducted | Advertising expense |
Refunds and chargebacks are covered in how to record refunds and chargebacks.
How do you record a settlement?
Download the settlement report
For each payout period, not only the monthly summary.
Record one summary entry per settlement
Gross sales, each fee type, refunds, reimbursements and tax as separate lines.
Treat the net as money in transit
A clearing account holds it until the deposit arrives.
Match the bank deposit
The clearing account should return to zero, apart from reserves.
Record cost of goods sold
From units sold and your landed cost per unit.
How does inventory fit in?
Settlement reports show sales but not what the goods cost you. Cost of goods sold comes from your purchase records and inventory counts. See inventory and cost of goods sold.
Should you use a connector app?
Integration tools can import settlements into accounting software automatically as summary entries. They save time, but check the first few months against the reports, because mapping errors repeat every period. See bookkeeping basics.
For other channels, see eBay bookkeeping, Shopify bookkeeping, Walmart Marketplace and TikTok Shop.
What matters at year end?
Settlement periods cross month and year ends. Allocate the sales and fees to the right year, count closing inventory, and reconcile the year's gross sales to any Form 1099-K. See the year-end bookkeeping checklist.
Want your Amazon books done properly?
We record every settlement in full, reconcile payouts to the bank, track inventory cost, and give you a monthly profit and loss by marketplace.
Questions people ask
How should Amazon sellers record sales in their books?
From the settlement report: gross sales, each fee type, refunds and reimbursements as separate lines, reconciled to the bank deposit.
Is sales tax Amazon collected part of my income?
No. Amazon collects and remits it as marketplace facilitator. It passes through to the states.
How do I handle the Amazon reserve in my books?
As money Amazon owes you, not an expense. It is released in a later settlement.
Why doesn't my Amazon deposit match my sales?
Deposits are net of fees, refunds, advertising and reserves. The settlement report reconciles the difference.
Sources
Every fee, date and rule on this page was taken from these official and primary sources.
- Amazon: Marketplace Tax Collection
- IRS: Understanding your Form 1099-K
- IRS Publication 583: Starting a Business and Keeping Records
Rules and fees change. If you are reading this long after September 30, 2026, confirm the figures with the source before you rely on them.
Related guides
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This guide is general information. It is not tax or legal advice for your situation.