Amazon seller bookkeeping: from settlement report to books you can trust

Why the bank deposit is the wrong starting point

Every two weeks Amazon deposits a single number that is really hundreds of numbers: product sales, minus referral fees, FBA fulfilment fees, storage, advertising, refunds, and whatever Amazon held back in reserve. If your bookkeeper records that deposit as sales, your revenue is understated, your fees are invisible, and your GST/HST return is built on the wrong base.

We build Amazon books from the settlement report, not the bank feed. The deposit becomes the final step of a reconciliation instead of the first entry. That is the difference between knowing you got paid and knowing what you earned.

Settlement reconciliation, mapped line by line

We connect A2X (or Link My Books) between Seller Central and QuickBooks Online or Xero, then map every settlement line to the right account so each posting ties back to the deposit to the penny. Settlements that straddle a month-end get split, so revenue lands in the month it was earned rather than the month Amazon happened to pay.

Inventory and COGS across FBA warehouses

Your stock sits in fulfilment centres you will never visit, on both sides of the border, so inventory accounting has to run on reports rather than eyesight. Each month we reconcile the FBA Inventory Ledger against the books: units received, sold, removed, disposed, lost, and reimbursed.

• Landed cost per unit — factory cost plus freight, duty, and prep, not just the supplier invoice.
• Monthly COGS on accrual — cost is recognized when units sell, not when you wire a supplier. Cash-basis purchase expensing makes launch months look terrible and sell-through months look fake.
• FX at cost — inventory bought in USD for the .com marketplace is carried in CAD at the rate when acquired, so margin is not distorted by currency drift.

The ledger also flags stranded and aged inventory early, which matters because long-term storage surcharges compound quietly and often justify a removal order sooner than sellers expect.

Reserves and month-end timing

The two rhythms of Amazon — fourteen-day settlements and a rolling unavailable balance — never line up with a calendar month, and books that ignore this show lumpy, misleading revenue. We accrue the open settlement at each close and carry the reserve as a receivable, so a strong month looks strong even when the cash arrives in the next one. That is also what keeps a lender or buyer from discounting your numbers during diligence.

Selling on both Amazon.ca and Amazon.com adds a second settlement stream in a second currency. We keep each marketplace as its own revenue and fee stream, convert USD activity at proper rates, and reconcile each marketplace's deposits to its own settlements — so you can see whether the US expansion actually outperforms the Canadian store after fees and FX.

GST/HST, ITCs, and the marketplace tax layer

On Amazon.ca, who collects GST/HST depends on your registration status under the marketplace rules in force since July 2021 — and tax Amazon collects and remits must be kept out of both your revenue and your GST/HST return. Sales shipped to US customers are zero-rated exports for GST/HST, while US state sales tax on Amazon.com orders is collected and remitted by Amazon as marketplace facilitator in virtually every state.

The part most sellers miss: Amazon charges GST/HST on many seller fees billed to Canadian sellers, and those amounts are recoverable input tax credits if you are registered and someone captures them monthly. Left unmapped, they quietly inflate your costs. For registration strategy, entity structure, and the US filing side, see our cross-border accounting for Amazon sellers, and if payroll enters the picture as you scale, our bookkeeping service page explains how the monthly close fits together.

Source: CRA — GST/HST for digital economy businesses.