CPA & Accounting Services for Amazon Sellers

Accounting that goes beyond your Amazon payout

Amazon selling involves more than recording deposits into a business bank account. FBA fulfilment charges, referral fees, advertising, refunds, inventory costs and marketplace tax adjustments can make it difficult to determine your actual profit. Shami CPA provides accounting and tax support for business owners who need organized financial records and clearer insight into their e-commerce operations.

Home » Industry » Amazon Sellers

An Amazon seller’s revenue, expenses and cash receipts do not always appear in the same place or at the same time. Customer orders generate sales activity, but Amazon settlements may combine multiple transactions, deduct fees, reflect refunds and include adjustments before funds reach the seller’s bank account.

This makes settlement reconciliation essential. Recording only the net bank deposit can obscure gross sales, selling expenses, refund activity and other amounts that should be accounted for separately.

Inventory introduces another layer of complexity. Sellers may pay suppliers well before products sell, incur freight and import-related costs, store inventory in fulfilment centres, and replenish products based on sales forecasts. A business can report positive sales while tying up substantial cash in unsold stock.

Accounting must therefore connect three views of the business:

Marketplace activity: orders, returns, refunds, fees, advertising charges, reimbursements and settlements.
Inventory and operating costs: supplier invoices, freight, landed costs where applicable, storage, fulfilment and other business expenses.
Business performance: revenue, cost of goods sold, gross profit, operating expenses, cash flow and taxable income.

The accounting process should also reflect how the seller operates. An individual running a small reselling business may have different reporting needs from an incorporated private-label brand selling in Canada and the United States.

Shami CPA’s bookkeeping, accounting and business-tax services can provide a foundation for organizing these records and preparing the financial information needed for business decisions and tax compliance, subject to confirmation of the specific engagement requirements.

Why Amazon sellers need accounting built around marketplace transactions

Overview

Accounting support for different types of Amazon sellers

who we help with

Amazon FBA sellers

Sellers using Fulfilment by Amazon may need to reconcile marketplace settlements with fulfilment fees, storage charges, returns, inventory movements and reimbursements. Their accounting should help explain both the cost of selling products and the cash tied up in inventory.

Amazon FBM sellers

Fulfilled-by-merchant businesses manage their own shipping and fulfilment arrangements. Their records may need to capture postage, packaging, shipping supplies, third-party logistics charges and other order-fulfilment costs alongside Amazon fees.

Private-label brands

Businesses developing products under their own brands may have supplier deposits, product development costs, packaging expenses, freight and inventory purchases. Separating product costs from general operating expenses helps owners assess margins and purchasing decisions.

Resellers and wholesale sellers

Resellers may purchase stock from multiple suppliers, sell different product categories and manage changing margins. Supplier-level records, inventory quantities and consistent cost allocation are important for understanding which products contribute to profit.

Incorporated e-commerce businesses

An incorporated seller may need corporate tax reporting, financial statements, owner-transaction tracking and accounting records that distinguish company funds from personal spending. The appropriate treatment depends on the entity and applicable tax rules.

Sellers operating across borders

Businesses buying from overseas suppliers, selling into multiple countries or using foreign fulfilment centres may need to assess currency conversion, import costs, indirect taxes and jurisdiction-specific filing responsibilities. Cross-border advice must reflect the seller’s actual facts and the firm’s confirmed capabilities.

Audience Index

Professional Categories

Accounting and Tax Issues That Affect Amazon Sellers

Turning Amazon Payouts into Accurate Financial Records

Challenge: Amazon settlements may include sales proceeds, referral fees, fulfilment charges, refunds, reimbursements and other adjustments within a single payout.

Why it matters:

Bank deposits alone do not show the full picture of sales or expenses. Recording only the net amount received can understate revenue and leave important costs or outstanding balances unidentified.

Accounting implication:

Match Amazon settlement and transaction reports with bank deposits and general ledger entries. Investigate differences, track settlement balances and account for fees, refunds and adjustments in the appropriate categories.

Determining Who Is Responsible for Sales Tax

Challenge: Amazon may collect and remit certain transaction taxes, but the seller’s remaining responsibilities depend on the jurisdiction, transaction type, registration status and applicable rules.

Why it matters:

Assuming that Amazon handles every tax obligation can leave gaps in registration, reporting or remittance. Canadian GST/HST requirements and U.S. state sales-tax rules operate under different legal frameworks and must not be treated as interchangeable.

Accounting implication:

Identify the jurisdictions relevant to the business, maintain records of registrations and marketplace-collected taxes, and distinguish those amounts from taxes the seller must report or remit. Review applicable filing obligations separately for Canadian and U.S. activities.

Identifying Which Products Generate Meaningful Margins

Challenge: Product revenue must be considered alongside supplier costs, marketplace commissions, fulfilment charges, storage, advertising and refunds to assess commercial performance.

Why it matters:

Strong sales do not necessarily translate into strong margins. Without a clear view of product-level costs, sellers may continue investing in products that contribute less to profitability than expected.

Accounting implication:

Maintain consistent product-cost records and analyse gross margins alongside identifiable selling expenses. Use available sales and cost data to compare product performance, evaluate pricing decisions and distinguish accounting profit from available cash.

Measuring the Financial Value of Unsold Stock

Challenge: Amazon sellers often purchase inventory well before products are sold, with stock held at their own premises, third-party warehouses or Amazon fulfilment centres.

Why it matters:

Inventory ties up working capital, and its accounting treatment affects reported profit. Treating all inventory purchases as immediate expenses can misrepresent the cost of goods sold and the value of stock remaining at period-end.

Accounting implication:

Maintain supplier invoices, purchase quantities, relevant freight and acquisition costs, inventory movements, returns and closing stock records. Apply an appropriate and consistent inventory accounting method to determine inventory balances and cost of goods sold.

Accounting for Product Returns and Marketplace Adjustments

Challenge: Customer refunds, returned products, damaged stock and Amazon reimbursements can create separate adjustments to sales, expenses and inventory.

Why it matters:

Refunds do not always reverse every component of the original transaction. Returned goods may also be unsuitable for resale, while reimbursements may relate to inventory losses or other specific events.

Accounting implication:

Reconcile refund and return reports with the original transactions where possible. Review the condition of returned inventory, identify the reason for reimbursements and record each adjustment appropriately to prevent omissions or duplicate entries.

Assessing the Cost of Selling Through Amazon

Challenge: Marketplace referral fees, FBA fulfilment and storage charges, sponsored-advertising costs, subscriptions and other platform expenses can affect product margins in different ways.

Why it matters:

Changes in advertising activity, product mix, fulfilment costs and sales volume can reduce margins even when revenue increases. Broad or inconsistent expense categories make it harder to identify where costs are rising.

Accounting implication:

Reconcile platform charges with supporting reports and invoices, classify expenses consistently and compare relevant costs against sales. Where the data permits, review advertising and fulfilment costs alongside individual product performance.

HOW SHAMI CPA HELPS

Accounting and tax support aligned with Amazon selling

Bookkeeping and Accounting

Organize marketplace sales, settlement activity, operating expenses and supplier transactions into structured accounting records. This creates a clearer basis for reviewing business performance and preparing financial reports.

Related service: Bookkeeping and Accounting Services

Corporate and Self-employed Tax Preparation

The appropriate tax-return service depends on how the business is structured and who earns the income. Organized revenue, expense, inventory and owner-transaction records support preparation of the relevant Canadian income-tax reporting.

Related serivce: Corporate Tax and Self-employed Tax

GST/HST Reporting

Review the seller’s Canadian sales activity, registration circumstances, relevant marketplace reports and input-tax-credit documentation. Marketplace-collected taxes and taxes for which the seller remains responsible should be distinguished before preparing applicable returns.

Related service: GST/HST

Tax Planning

Evaluate relevant business decisions in light of the seller’s circumstances, including business structure, anticipated income, inventory investment and owner transactions. Recommendations should follow an assessment of the applicable rules rather than assumed tax savings.

Related service: Tax Planning

Financial Statement Preparation

Financial statements based on properly maintained accounting records can help owners review expenses, inventory investment, liabilities and overall financial position. The appropriate reporting format depends on the business’s needs and applicable requirements.

Related service: Financial Statements

Amazon Sellers: Key Tax and Financial Issues That Can Affect Your Profit

Interpreting Amazon Transaction Reports

Amazon order, settlement, fee and tax reports capture different aspects of marketplace activity. These records must be interpreted together to establish accurate revenue, expenses and outstanding balances. Treating every report total as separate income can distort financial results.