A Guide to Amazon Seller Bookkeeping: The Essentials

Learn about the Amazon Seller bookkeeping through this guide

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  • Are you an Amazon seller struggling to keep track of your finances?
  • Do numbers and bookkeeping make your head spin? 

This guide will break down the essentials of Amazon seller bookkeeping, giving you the tools and tips to stay organised and on top of your finances. From understanding profit margins to keeping track of expenses, we’ve got you covered. So grab a cup of coffee, sit back, and let’s take you through the essentials of Amazon seller bookkeeping!

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What is Amazon seller bookkeeping?

As an Amazon seller, keeping track of your sales and expenses is vital to maintain a healthy business. This can be done through Amazon seller bookkeeping. Amazon seller bookkeeping is tracking your sales and costs to stay organised and on top of your business finances.

There are a few essential things that you will need to get started with Amazon seller bookkeeping. First, you need a sales account to track your income and outgoing payments. You will also need an expense account to track your spending on inventory, shipping, and other operational costs. And finally, you will need a profit & loss (P&L) report to see how much profit or loss your business is making each month.

Why are accounting and bookkeeping important for Amazon seller businesses?

As an Amazon seller, it’s important to keep track of your finances and understand accounting and bookkeeping well. This will help you make sound financial decisions for your businesses, stay compliant with tax laws, and avoid potential problems down the road.

There are a few key things you need to keep in mind when it comes to your bookkeeping:

  • All income and expenses must be recorded accurately and in a timely manner. This will ensure you always have an accurate picture of your business finances.
  • You need to keep track of inventory levels and costs. This information is critical for making informed decisions about pricing, product mix, and reordering.
  • You need to understand the tax implications of your business activities. This will help you minimise your tax liability and maximise your profits.
  • Good bookkeeping practices will help you build a strong foundation for future growth. As your business expands, you’ll need to be able to rely on accurate financial statements to make sound decisions about where to invest your resources.

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What are the top benefits for Amazon sellers?

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As an Amazon seller, keeping track of your sales and expenses to maintain profitability is essential. Doing so can be daunting, but luckily many software programmes and services are available to help you.

Software programmes and services can automate many tasks associated with bookkeeping, such as tracking inventory levels, calculating shipping costs, and generating reports. This can save you a significant amount of time and money. Additionally, these programs can provide valuable insights into your business, such as which products are selling well and which are not. This information can be used to make strategic pricing, product selection, and marketing decisions.

Another benefit of Amazon seller bookkeeping is that it can help you avoid penalties and fees. If you do not keep track of your sales and expenses, you may accidentally violate Amazon’s policies or exceed their limits on certain fees. This could result in costly consequences for your business. By staying on top of your bookkeeping, you can avoid these potential problems.

In conclusion, there are many benefits for Amazon sellers when it comes to bookkeeping. Firstly, software programmes and services can automate many of the tasks associated with this process, saving you time and money. Then, these programmes can provide valuable insights into your business operations. And finally, keeping accurate records can help you avoid penalties and fees from Amazon.

What makes Amazon bookkeeping different from most other businesses?

When it comes to bookkeeping, Amazon sellers have unique needs that must be taken into account. For one thing, they often sell products shipped directly from Amazon warehouses, which complicates inventory and sales tax matters. In addition, many Amazon sellers use multiple third-party software programmes to run their businesses, making tracking expenses and income challenging.

To complicate matters further, Amazon has its own set of rules and regulations that sellers must follow when it comes to bookkeeping and accounting. Failure to comply with these rules can result in steep fines or even having your account suspended.

Given all of these challenges, it’s no wonder that so many Amazon sellers outsource their bookkeeping to third-party experts. However, even if you outsource your bookkeeping, you still need to know some basics to keep your business running smoothly. Need help with selling on Amazon? Our firm can help!

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How to do accounting for an Amazon seller business?

What makes Amazon bookkeeping different from other businesses?
How to do accounting for an amazon seller business

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As an Amazon seller, you are responsible for keeping accurate records of your business transactions. This includes sales, purchases, expenses, and other financial activities. Accounting is the process of recording, classifying, and summarising these financial transactions to provide information for decision-making.

You can use several methods to do accounting for your Amazon seller business. The most important thing is to choose a method that works best for you and that you can keep up with regularly.

One popular method is to use accounting software like Xero, QuickBooks or FreshBooks. This software makes it easy to track your income and expenses and generate reports to help you make informed decisions about your business.

Another option is to hire an accountant or bookkeeper to handle your accounting needs. This can be a good solution if you don’t have the time or inclination to do your own accounting. However, choosing a reputable professional who keeps accurate records and provides helpful advice is important. 

Regardless of which method you choose, there are some essential accounting tasks that all Amazon sellers should perform regularly. These include:


Tracking sales: You need to know how much revenue your business generates to make informed decisions about spending and pricing. Sales data can also be used for tax purposes.


Recording purchases: All the money you spend on inventory, shipping, and other business expenses needs to be tracked.



Reconciling accounts: It’s important to reconcile your business accounts regularly to ensure that your records are accurate.


Managing cash flow: You should be tracking when income is coming in and when bills need to be paid so that you can stay on top of your finances.


Generating financial statements: Financial statements provide an overview of your business’s performance, allowing you to spot trends and make better decisions.


By following these steps and keeping up with basic accounting tasks, you can ensure the success of your Amazon seller business.

What is the best way to do bookkeeping for Amazon?

There are a few different ways to keep track of your finances when selling on Amazon. One popular method is to use accounting software like Xero or QuickBooks. This can help you stay organised and track your income and expenses.

Another option is to use a spreadsheet to track your bookkeeping. This can be a good option if you’re starting out or don’t want to invest in accounting software. You can find templates online that you can use to set up your spreadsheet.

Whichever method you choose, keep track of your sales, fees, and other expenses to stay on top of your finances. If you want to discuss your business requirements, get in touch; we’d love to talk about how we can partner with you.

How should an FBA business do its accounting?

As an Amazon seller, you are responsible for keeping track of your income and expenses and filing your taxes. Doing your accounting can be a daunting task, but it is essential to maintaining a successful business.

There are a few different ways to approach your accounting. You can do it yourself, use accounting software, or hire an accountant. Whichever method you choose, you must keep accurate records of your income and expenses.

If you are doing your own accounting, there are a few things you need to keep in mind. 

  • First, you need to keep track of all of your sales. This includes recording the date of the sale, the product sold, the price, and any shipping and handling fees. You also need to keep track of any refunds or returns.
  • Second, you need to keep track of your expenses. This includes things like the cost of goods sold (COGS), shipping costs, advertising costs, and any other business expenses. Keeping accurate records of your expenses will help you when it comes time to file your taxes.
  • Third, you need to keep track of your inventory levels. This includes recording how many units you have in stock and the cost of each unit. Tracking your inventory will help you know when to reorder products and will also be helpful come tax time.
  • Fourth, you need to create financial statements. Financial statements show how much money you have coming in and going out of your business. They will also help you when it comes to making decisions about how to manage your finances.
  • Finally, you need to keep track of your taxes. You should also keep track of any deductions or credits you can take advantage of when filing your taxes.

Accounting for an FBA business can be a lot of work, but it is essential to running a successful business. Keeping accurate records will help you maximise your profits and minimise tax liabilities.

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What is e-commerce bookkeeping?

E-commerce bookkeeping tracks and records all financial transactions related to your online business. This includes sales, expenses, refunds, and other financial activities.

Keeping accurate records of your e-commerce finances is essential for two reasons:

1. It helps you track and manage your cash flow.

2. It provides critical information to make informed business decisions.

Without accurate bookkeeping, it would be very difficult to run a successful e-commerce business. Fortunately, many great software programs and services can make bookkeeping for an Amazon seller easy and painless such as Xero, QuickBooks, FreshBooks and many others.

Guide to Amazon Bookkeeping

What does e-commerce accounting entail?

Much like accounting for any business, E-Commerce accounting entails keeping track of your income and expenses and any other financial transactions related to your business. This can include sales tax collected and paid, inventory costs, shipping and fulfilment fees, advertising and marketing expenses, and more.

While it may seem like a lot to keep track of, proper E-Commerce accounting is essential to running a successful Amazon seller business. By keeping accurate records of your finances, you can make informed decisions about where to invest your money and how to price your products or services. Additionally, good bookkeeping practices will help you stay on top of your taxes and avoid penalties or interest charges.

If you’re new to E-Commerce accounting, there are a few key terms you should familiarise yourself with:

Sales Revenue: This is the total amount of money earned from sales of goods or services before taking into account any deductions for expenses.

Cost of Goods Sold (COGS): This is the direct cost associated with each unit of product sold. For example, if you sell a shirt for £20 that costs you £10 to produce, your COGS would be £10.

Gross Profit: This is the difference between sales revenue and COGS. In the above example, the gross profit would be £10 (£20 sales revenue – £10 COGS).

Are you new to E-Commerce Accounting or finding it difficult? ProfitPlus helps you discover the right qualified accountant through outsourcing. We will find the right fit for you, matching your business need with the right level of expertise, saving you time and money, and giving you complete peace of mind.

What do e-commerce business owners need to keep track of?

As an E-Commerce business owner, there are a few essential things you need to keep track of to maintain healthy books. Here are a few key components of bookkeeping for Amazon sellers:

1. Sales: This is the most important element to track, as it will give you an idea of your business’s performance. Be sure to track gross sales and net sales (after any refunds or returns).

2. Expenses: It’s also important to track your expenses to see how much it costs to run your business and where you may be able to cut costs. Common expenses for Amazon sellers include inventory, shipping, storage, and marketing/advertising.


3. Inventory: Tracking your inventory is crucial to ensure that you have enough stock to meet customer demand but not so much that you’re tying up too much capital in inventory. Be sure to track physical and online inventory (such as through Amazon FBA).

4. Accounts Receivable/Accounts Payable: If you offer terms to your customers (such as 30 days), you’ll need to keep track of accounts receivable (money owed to you by customers). Similarly, if you have any outstanding bills or loans (accounts payable), track these as well.

How to do bookkeeping for Amazon e-commerce sellers?

As an Amazon E-Commerce seller, you are responsible for maintaining accurate records of your sales and expenses. This bookkeeping guide will teach you the essentials of bookkeeping for Amazon sellers.

You will need a system to track your sales and expenses. There are many software programmes and apps available that can help with this. Once you have chosen a system, set up accounts for each income stream and expense category.

Income streams include:

• Sales of products

• Shipping fees charged to customers

• Refunds and returns

• Fees charged by Amazon (e.g., referral fees, closing fees)

Expense categories include:

  • Cost of goods sold (COGS) – this includes the cost of the product, shipping, and any other costs associated with getting the product to the customer (e.g., packaging, labelling)
  • Advertising – all amounts paid to promote and market your products on Amazon or elsewhere.
  • Payments to subcontractors or employees
  • Shipping costs
  • Amazon fees
  • Office expenses
  • Taxes 

Bookkeeping is important for Amazon sellers because it helps you track your progress, identify areas of improvement, and make informed decisions about your business. By keeping accurate records, you can see how much profit you are making, track your spending, and make necessary changes to improve your bottom line.

Some FAQ’s to help you

If you’re just starting with Amazon selling or selling on a very small scale, you may be tempted to save money by doing your own bookkeeping with an Excel spreadsheet and Amazon’s default reports. However, there are several reasons to choose professional bookkeeping services over this DIY approach.

First of all, it’s important to remember that as your business grows, so will the complexity of your bookkeeping. An Excel spreadsheet may be sufficient for tracking simple sales and expenses, but it quickly becomes unwieldy when you have hundreds or thousands of transactions to track. Professional bookkeeping services use specialised software designed to handle large volumes of data.

Furthermore, professional bookkeepers are trained in accounting principles and can provide valuable insights into your business finances. For example, they can help you identify areas where you may be overspending or suggest strategies for reducing your tax liability. And if you ever have any questions about your financial reports, they will be able to offer guidance and support.

In short, while saving money by doing your own bookkeeping with an Excel spreadsheet and Amazon’s default reports seems like a good idea, investing in professional services is ultimately more beneficial. Doing so will save you time, money, and headaches down the road! 

As an Amazon seller, it’s important to understand the different accounting methods available to you and which one best suits your business. The most common accounting methods used by businesses are cash basis and accrual basis.

Cash basis accounting is the simplest method and is often used by small businesses. Under this method, income and expenses are only recorded when cash is actually exchanged. This means that revenue is only recognised when payments are received, and expenses are only recognised when paid out. This can be beneficial if you keep your books simple and don’t want to track invoices or receivables.

Accrual basis accounting is more complex, but it gives you a more accurate picture of your business’s financial health. Under this method, income and expenses are recognised when they are incurred, regardless of when cash is actually exchanged. This means that revenue is recognised when invoices are generated, and expenses are recognised when bills are received. This can be helpful if you want to handle your business’s finances better and track your receivables and payables more closely.

So which accounting method does Amazon use? Amazon sellers have the option to choose between cash-basis and accrual-basis accounting. If you need help determining which is right for you, we recommend talking to an accountant or bookkeeper who can help you make the best decision for your business.

There are two main types of bookkeeping: accrual basis and cash basis. Both have pros and cons, so choosing the right one for your business is important.

Accrual basis bookkeeping records transactions when they occur, regardless of when the money is actually exchanged. This means you’ll have a more accurate picture of your business’s financial health. However, tracking expenses and income can also be more difficult since they’re not always synchronised.

On the other hand, cash-based bookkeeping only records transactions when the money is actually exchanged. This can make it easier to track expenses and income, but you won’t get as clear of a picture of your business’s overall financial health.

Which is better for your Amazon business? It depends on what’s most important to you. Accrual basis bookkeeping is the way to go if you want a more accurate picture of your finances. But if you’re looking for an easier way to track expenses and income, cash basis bookkeeping might be a better option.

If you’re an Amazon seller in the UK, you must register for VAT if your sales exceed the VAT registration threshold (currently £85,000). You can register for VAT voluntarily if your sales are below this threshold, but it’s not legally required.

Once you’re registered for VAT, you’ll need to charge VAT on all of your eligible Amazon sales and pay it to HMRC. You’ll also be able to reclaim any VAT that you’ve incurred on eligible business expenses.

An accountant can help you keep track of your inventory, sales, and expenses. They can also help you prepare and file your tax returns with HMRC. If you are serious about selling on Amazon, consider hiring an accountant. 

ProfitPlus helps you discover the right qualified accountant through outsourcing. We will find the right fit for you, matching your business need with the right level of expertise, saving you time and money, and giving you complete peace of mind.

As an Amazon seller, you are ultimately responsible for your business’s bookkeeping. However, you may give your accountant access to your Amazon account to help with this task. If you do so, there are a few things to keep in mind.

First, be sure to give your accountant only the information and permissions they need to do their job. There is no reason for them to have access to your entire account and all of your data.

Second, be sure to set up proper security measures. This includes creating a unique login for your accountant and setting up two-factor authentication.

Third, remember that giving your accountant access to your Amazon account does not absolve you of responsibility for your business’s bookkeeping. For example, you should still review and approve all transactions before they are processed.

As an Amazon seller, having a good accounting system is important to track your sales and expenses. Unfortunately, there are many different accounting software programmes, so it can be challenging to know which one is best for your business.

A few options stand out if you are looking for accounting software specifically for Amazon sellers. One popular option is Xero, which offers a cloud-based solution that is easy to use and integrates with Amazon Seller Central. Another option is QuickBooks Online, which also has a cloud-based solution and offers features specifically designed for online sellers.

These accounting software programs offer free trials, so you can try them out before committing to a subscription. But ultimately, the best accounting software for Amazon sellers is the one that meets your specific needs and helps you run your business more efficiently.

Yes, Amazon does use Xero for its bookkeeping needs. This cloud-based accounting software is ideal for businesses that need to track their sales and expenses in real-time. It offers a variety of features that make it easy to manage your finances, including invoicing, tracking inventory, and creating financial reports.

Yes, Amazon uses QuickBooks to manage their finances. According to their website, they have been using it since 2016.

As an Amazon seller, you have a lot on your plate. You’re responsible for sourcing products, managing inventory, shipping orders, and dealing with customer service issues. And on top of all that, you must keep track of your finances and ensure your books are in order.

This can be a lot to handle, but luckily there’s Xero. Xero is a cloud-based accounting software that offers a complete solution for Amazon sellers. With Xero, you can track your income and expenses, generate financial reports, and stay on top of your bookkeeping. Plus, Xero integrates with Amazon, so you can automatically import your sales and expenses data.

Xero offers a complete solution for Amazon sellers’ bookkeeping needs. With Xero, you can track your income and expenses, generate financial reports, and stay on top of your bookkeeping. Plus, Xero integrates with Amazon, so you can automatically import your sales and expenses data into the software.

Amazon uses a variety of software programs for payroll, including QuickBooks and ADP (Automatic Data Processing, Inc.). They also have an in-house system that they use for their own employees.

As an individual, you can sell items on Amazon without having a business. You will need to provide your tax information and will likely pay taxes on your earnings, but you won’t need to register a business or obtain a business licence. However, there are some restrictions on what types of products you can sell as an individual, so be sure to check Amazon’s policies before listing anything for sale.

If you sell products on Amazon, you must pay taxes on your earnings. Your tax amount will depend on the laws in your country or region. In the United States, for example, you will need to pay federal and state taxes on your Amazon earnings. You can learn more about paying taxes on Amazon earnings by talking to a tax professional or reading the HMRC guidance on e-commerce businesses.

If you’re selling on Amazon, you’re considered self-employed. That means you’re responsible for your own bookkeeping and taxes. So here are the essentials you need to know to keep everything organised and up-to-date.

First, keep track of your inventory. This includes your stock and any products you sell on consignment. Knowing what you have on hand will help you stay organised and avoid overspending.

Next, track your sales. This includes the income from product sales and any fees Amazon charges. Keep good records of both to accurately report your earnings come tax time.

Finally, keep track of your expenses. This includes anything from the cost of goods sold to shipping and packaging costs. Keeping tabs on your spending will help you maximise profits and keep your business running smoothly.

If you’re selling on Amazon, you’re considered self-employed. That means you’re responsible for your own bookkeeping and taxes. So here are the essentials you need to know to keep everything organised and up-to-date.

First, keep track of your inventory. This includes your stock and any products you sell on consignment. Knowing what you have on hand will help you stay organised and avoid overspending.

Next, track your sales. This includes the income from product sales and any fees Amazon charges. Keep good records of both to accurately report your earnings come tax time.

Finally, keep track of your expenses. This includes anything from the cost of goods sold to shipping and packaging costs. Keeping tabs on your spending will help you maximise profits and keep your business running smoothly.

As an Amazon seller, you are responsible for keeping track of your sales and expenses and ensuring that you pay any applicable taxes. An Amazon accountant can help you with this and provide other valuable services such as bookkeeping, tax preparation, and financial planning.

An Amazon accountant can help you save time and money by keeping accurate records of your sales and expenses. They can also help you avoid costly mistakes by ensuring that your books are in order and that you comply with all applicable tax laws. In addition, an Amazon accountant can provide valuable insights into your business finances, which can help you make more informed decisions about where to invest your resources.

Overall, an Amazon accountant can be a valuable asset to any seller who wants to save time and money and avoid costly mistakes.

If you’re selling on Amazon, having a good accountant to help you with your bookkeeping is important. Here are some tips on how to find an Amazon accountant:

1. Look for an accountant who has experience with online businesses. This will ensure that they understand the unique aspects of selling on Amazon.

2. Find an accountant familiar with Amazon’s accounting software, such as Xero or QuickBooks. This will make the transition to using an accountant much easier.

3. Ask for referrals from other Amazon sellers. They may know of someone who is great at helping with bookkeeping and accounting for Amazon businesses.

4. Once you’ve found a few potential candidates, interview them to see if they fit your business well. Ask about their experience, fees, and process for handling Amazon seller accounts.

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Need help with selling on Amazon?

Whether you need support with bookkeeping, VAT, tax, or cloud accounting software, we can help.

ProfitPlus helps you discover the right qualified accountant through outsourcing. We will find the right fit for you, matching your business needs with the right level of expertise, saving you time and money, and giving you complete peace of mind.

If you would like to discuss your business requirements, get in touch; we’d love to talk about how we can partner with you.

Contact Us