How do I record Amazon settlements and fees in QuickBooks?

Why the bank deposit is the wrong number to record as sales

An Amazon settlement lands in your bank account roughly every two weeks as one lump sum, and that sum is already net of everything Amazon deducted. If you record the deposit itself as revenue, your books understate sales, overstate your margin percentage, and hide the fee categories a business owner actually needs to watch.

The settlement report inside Seller Central shows the full breakdown behind that number: gross product sales, shipping charged to customers, referral fees, FBA fulfillment fees, storage fees, advertising spend, refunds issued, and any change in Amazon's reserve. Each of those belongs in a different account, not folded into one deposit.

A business that only records the deposit also loses the ability to spot problems early. A sudden jump in FBA fees, a spike in refunds after a bad product batch, or advertising spend creeping past what a product line can support all disappear inside a single net figure, and by the time the owner notices the cash squeeze, months of avoidable spend have already gone out the door.

What a settlement-based journal entry looks like

A connector such as A2X or Link My Books reads the settlement report and posts one journal entry per settlement into QuickBooks, matching the bank deposit exactly so reconciliation stays clean. A simplified version of that entry looks like this:

Posting fees to their own expense accounts, rather than netting them against sales, is what lets you see referral fees, FBA fees, storage and advertising as separate lines on your profit and loss statement instead of one blended number.

Once the connector posts the entry, matching it to the bank feed in QuickBooks should be a one-click reconciliation: the journal entry's total matches the deposit exactly, so you use Match rather than Add when the transaction appears in the banking screen. If the two numbers do not line up, the mismatch is almost always a settlement that spans two bank deposits or a manual adjustment Amazon made outside the normal fee categories, and it is worth tracing rather than forcing the entry to balance.

Why sales tax Amazon collects never touches your books as revenue

Amazon collects and remits US sales tax on marketplace orders as a facilitator under state marketplace facilitator laws, a mechanism we cover in does Amazon collect US sales tax for Canadian FBA sellers. That tax passes through Amazon to the state and should never be recorded as your sales or your expense; a settlement connector routes it to a clearing line that nets to zero rather than inflating revenue.

The same logic applies to GST/HST that Amazon may collect on Amazon.ca orders under Canada's platform rules. Whichever tax authority the money is headed to, it belongs in a liability or clearing account, not on your income statement.

Handling USD settlements and the CAD conversion

Most Canadian FBA sellers are paid in USD from Amazon.com, and QuickBooks needs a consistent exchange rate policy to keep the books usable. The common approach converts each settlement at the exchange rate on its settlement date, which matches how the deposit actually lands in your Canadian or US-dollar bank account and avoids the drift that comes from picking a rate at month-end instead.

If you hold a US-dollar bank account and only convert funds to CAD periodically, keep the USD transactions in a USD-denominated account inside QuickBooks and let the software calculate the realized gain or loss when you actually convert, rather than estimating it manually. Our page on recording USD transactions in Canadian books covers this in more detail.

Inventory and cost of goods sold sit outside the settlement entry

The settlement entry captures revenue and selling fees, but it says nothing about what the inventory itself cost you. Cost of goods sold is tracked separately, usually through a periodic inventory count or an inventory management tool feeding QuickBooks, and it is combined with the settlement-based revenue to produce a true gross margin. Our page on accounting for inventory and COGS walks through the two common methods.

Combining the two is what turns a settlement report into a real profit and loss statement. Revenue from the settlement entry, minus Amazon's fees, minus the cost of the inventory sold, is what actually tells an owner whether a product line is profitable once every real cost is counted, rather than only the fees Amazon happens to show on the settlement itself.

How we set this up for clients

We connect a settlement tool to each client's Amazon account so every settlement posts automatically, then we map the fee categories to a chart of accounts built for e-commerce rather than a generic template. Where a client also sells on Shopify or another channel, we keep each platform's fees visible on its own line so the owner can see which channel actually earns its keep once fees and advertising are accounted for.

We also review the settlement history at year-end against the annual reports Amazon issues, since a missed or misclassified settlement is far easier to catch and correct in the same year than after the corporate return has already been filed on top of it.