Amazon doesn’t make this easy. Every two weeks, they deposit a single amount into your bank account. That deposit combines gross sales, referral fees, fulfillment fees, storage fees, refunds, reimbursements, advertising costs, and whatever else happened during that period. Recording the deposit as revenue gives you a completely wrong picture of your business.

You need to break that net deposit into its component parts. Gross sales should hit revenue. FBA fees should hit expenses. Refunds should reduce revenue or go to a contra-revenue account. Reimbursements from lost or damaged inventory are income, separate from sales. Without this breakdown, you can’t calculate your actual margins or understand where your money is going.

Amazon provides settlement reports in Seller Central that show every transaction. Download these and you’ll see the full detail. The problem is volume. If you’re doing any meaningful sales, you might have thousands of line items per settlement period. Manually categorizing these is tedious and error-prone.

Integration tools like A2X, Link My Books, or Settle exist specifically for this problem. They connect to your Amazon account and your accounting software, pull in the settlement data, and create proper journal entries that break everything out. They match fees to the correct expense accounts, handle refunds correctly, and reconcile to the actual bank deposit. For most e-commerce sellers doing meaningful volume, the monthly cost of these tools pays for itself in time saved and accuracy gained.

If you’re going the manual route, set up your chart of accounts to capture what matters. You’ll want separate accounts or sub-accounts for referral fees, FBA fulfillment fees, storage fees, and advertising. Some sellers combine all Amazon fees into one account, which works if you just need the total. Breaking them out helps you see where costs are climbing. Storage fees spiking might mean slow-moving inventory you need to address.

Refunds deserve attention. When a customer returns a product, Amazon refunds them and takes money back from you. But they also refund some of the fees they charged on the original sale. Your books need to reflect the revenue reversal and the partial fee reversal. If you only record the net refund amount, your fee expenses look higher than they actually are.

Reimbursements are different from refunds. When Amazon loses or damages your inventory in their warehouse, they owe you money. This shows up in your settlement but isn’t a sale. It’s compensation for lost product. Record it as other income, not revenue. Your cost of goods sold calculation depends on keeping these separate.

Reconcile to the bank every settlement period. Your accounting software should show a receivable from Amazon that clears when the deposit hits. If the numbers don’t match, something got miscategorized or missed. Catching discrepancies early keeps your books clean.

The settlement reports also tie to inventory. Products sold reduce inventory. Refunds that go back into sellable stock increase it. Products Amazon lost and reimbursed you for should come out of inventory with the cost hitting COGS. This is where Phoenix area bookkeeping services that understand e-commerce become valuable. Getting inventory movements right takes more than just recording the bank deposit.

Start with clean processes now. The longer you record Amazon deposits as a single revenue line, the harder the cleanup becomes when you need accurate financials for a loan application, a potential buyer, or just understanding whether you’re actually profitable.