How does bookkeeping work for Amazon FBA sellers?

Amazon FBA bookkeeping requires tracking gross sales separately from FBA fees, recording COGS when inventory is sold (not when purchased), valuing ending inventory at cost for tax purposes, and reconciling your books to Amazon disbursements (net cash to your bank) rather than gross sales. Amazon issues a 1099-K when you exceed $5,000 in sales (2024 threshold). At Sharma Jyoti and Co we handle Amazon FBA bookkeeping from $250/month.

What is the difference between Amazon gross sales and disbursements?

Amazon gross sales is the total revenue from customer orders. Amazon disbursements are the net cash transferred to your bank — after deducting FBA fees (referral fee, fulfillment fee, storage fee, advertising), returns, refunds, and Amazon's reserve. The 1099-K Amazon sends shows gross sales. Your bookkeeper must reconcile gross sales to disbursements by categorizing each fee type separately. Recording only the disbursement amount misses critical P&L information.

How do Amazon FBA sellers handle sales tax nexus?

After the 2018 Wayfair Supreme Court decision, states can require sales tax collection based on economic nexus — not just physical presence. Amazon stores FBA inventory in its warehouses across the US, creating physical nexus in those states. Most states have also set economic nexus thresholds (typically $100,000 in sales or 200 transactions). Amazon collects and remits sales tax in most states through its Marketplace Facilitator rules — but you must still register in nexus states and file returns showing Amazon-collected tax.

How do Amazon FBA sellers track COGS?

COGS for Amazon FBA = beginning inventory at cost + inventory purchases + inbound shipping to Amazon warehouse − ending inventory at cost. Each unit sold reduces inventory and increases COGS by the unit cost. If you buy 500 units at $8 each and sell 300, your ending inventory is $1,600 (200 units × $8) and COGS is $2,400 (300 × $8). Accurate COGS tracking requires maintaining a perpetual inventory ledger or using inventory software (Inventory Lab, Sellerboard, A2X).

What is A2X and do Amazon FBA sellers need it?

A2X is an accounting integration that automatically pulls Amazon settlement data into QuickBooks or Xero, categorizing gross sales, FBA fees, refunds, and reimbursements automatically. It eliminates the need to manually reconcile Amazon's confusing payout reports. Most Amazon FBA sellers with more than 200 orders/month benefit significantly from A2X. At Sharma Jyoti and Co we work with A2X-connected QuickBooks accounts and can set it up for new clients.

Amazon FBA Bookkeeping for US Sellers — COGS, Fees, Inventory, Sales Tax Nexus Guide

The #1 Mistake: Recording Only the Amazon Disbursement

Amazon pays you every two weeks — a net disbursement after deducting referral fees, fulfillment fees, storage fees, advertising costs, refunds, and reserves. Many FBA sellers simply record this bank deposit as "Amazon income" and move on. This is wrong for two reasons:

You lose the breakdown of gross sales vs fee expense — you cannot see your true gross margin
FBA fees are business expenses that should be categorized separately (selling fees, fulfillment fees, storage, PPC advertising) for accurate P&L reporting

The correct approach: record gross sales as revenue, record each fee type as a separate expense, and reconcile the net disbursement to your bank account. A2X automates this reconciliation — it pulls your Amazon settlement data directly into QuickBooks.

The FBA Seller P&L — What Each Line Actually Represents

Line Item	What It Is	Where It Goes
Gross product sales	Total revenue from customer orders	Revenue
Refunds/returns	Revenue reversed when customers return items	Contra-revenue (deducted from gross sales)
COGS	Cost of inventory sold (purchase price + inbound shipping)	Cost of Goods Sold
Referral fees	Amazon's % commission (typically 8–15% of sale price)	Selling expense
FBA fulfillment fees	Per-unit pick, pack, ship fee	Fulfillment expense
FBA storage fees	Monthly fee per cubic foot stored	Storage expense
Sponsored Products (PPC)	Amazon advertising spend	Advertising expense
FBA reimbursements	Amazon repaying you for lost/damaged inventory	Other income (or COGS offset)
Subscription fee ($39.99/mo)	Amazon Professional selling plan	Platform fees expense

COGS Tracking — The Inventory Problem

For an FBA seller, COGS calculation is:

Beginning Inventory (at cost) + Inventory Purchases + Inbound Shipping − Ending Inventory (at cost) = COGS

You need to know, at year-end, the cost value of every unit sitting in Amazon's warehouses. This requires either:

Inventory Lab or Sellerboard: Tracks unit costs and auto-calculates COGS as items sell
A2X with inventory module: Pulls settlement data and applies unit costs
Manual spreadsheet: Works for small product counts, becomes unmanageable at scale

At Sharma Jyoti and Co we work with your inventory tracking tool to pull accurate COGS figures monthly. At year-end we perform an inventory reconciliation — Amazon inventory report vs your COGS ledger — to catch discrepancies before they become tax problems.

Sales Tax Nexus — What FBA Sellers Must Know After Wayfair

Physical nexus from FBA warehouses: When Amazon stores your inventory in its fulfillment centers, you have physical nexus in those states — even if you never set foot there. Amazon has warehouses in dozens of states. You are required to collect and remit sales tax (or confirm Amazon is doing it as a marketplace facilitator) in each of those states.

Marketplace Facilitator rules (the good news): In all 50 states with sales tax, Amazon collects and remits sales tax on FBA sales as the marketplace facilitator. You generally do not need to collect tax — Amazon does it for you. But you may still need to:

Register for a sales tax permit in nexus states (required in some states even if Amazon collects)
File periodic sales tax returns showing $0 owed (Amazon collected on your behalf)
Track exempt sales (wholesale, resale) separately

Sales tax compliance for FBA sellers is a specialist area — we recommend TaxJar or Avalara for automated nexus monitoring and filing, coordinated with your bookkeeping records.

What Sharma Jyoti and Co Handles Monthly

Amazon settlement reconciliation via A2X — gross sales, fees, refunds, all categorized
Bank reconciliation — disbursements matched to QuickBooks
COGS calculation using your inventory tool data
Ending inventory valuation monthly (important for management P&L visibility)
FBA reimbursement tracking — Amazon owes you money for lost/damaged inventory
Monthly P&L — gross sales, gross margin (after COGS), operating expenses, net profit
Year-end inventory count reconciliation and COGS finalization for your CPA
1099-K reconciliation — matching Amazon-reported gross sales to your records

Cost Comparison

Provider	Monthly Cost	Notes
US e-commerce bookkeeper	$600–$2,000/mo	FBA specialist knowledge adds cost
Bean Ninjas / FBA specialist firms	$500–$1,500/mo	FBA-specific but expensive
Sharma Jyoti and Co	$250–$500/mo	A2X-connected QuickBooks, settlement reconciliation, COGS tracking, inventory valuation, year-end workpapers

Frequently Asked Questions

Record gross sales as revenue, categorize each FBA fee type (referral, fulfillment, storage, PPC) as separate expenses, track COGS per unit sold, and reconcile to your bank disbursements. Amazon sends a 1099-K for sales above the threshold. At Sharma Jyoti and Co we handle it from $250/month using A2X-connected QuickBooks.

Gross sales is what customers paid. Disbursements are net cash to your bank after Amazon deducts referral fees, fulfillment fees, storage fees, PPC costs, refunds, and reserves. Recording only disbursements as revenue understates your gross sales and hides your fee structure from your P&L. A2X automates the correct reconciliation.

Amazon stores FBA inventory in warehouses across the US, creating physical nexus in those states. Amazon collects and remits sales tax as a marketplace facilitator in all states — but you may still need to register and file zero-balance returns in nexus states. Use TaxJar or Avalara for automated nexus monitoring.

COGS = beginning inventory (at cost) + purchases + inbound shipping − ending inventory (at cost). Use Inventory Lab, Sellerboard, or A2X with inventory module to track unit costs automatically. We perform a monthly COGS calculation and year-end inventory reconciliation — Amazon warehouse inventory report vs your cost ledger.

A2X pulls Amazon settlement data into QuickBooks or Xero automatically, categorizing gross sales, each fee type, refunds, and reimbursements. It eliminates manual settlement reconciliation. Recommended for sellers with 200+ orders/month. At Sharma Jyoti and Co we work with A2X-connected accounts and set it up for new clients.