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Our accounting services are exclusive to inventory businesses in the United States and Canada

A Deep Dive Into Amazon Seller Accounting and Bookkeeping For Small Business Owners

Michael Pignatelli
Last Updated on September 28, 2023

Starting an Amazon business requires essential bookkeeping and accounting to support your growth in the highly competitive marketplace. The vast scale of Amazon attracts numerous sellers and buyers, offering significant growth potential. Proper Amazon seller accounting is vital for identifying and capitalizing on these opportunities.

With the potential volume of transactions possible for every Amazon seller, it's important to understand the role accounting and bookkeeping play to ensure a smooth-sailing business. These can be the difference between stagnation and achieving your desired income level.

So let Unloop tackle these important business facets.  

Amazon Seller Bookkeeping Basics

If you're an absolute beginner or have little idea about bookkeeping, you must get educated. Invest time in knowing the basics of bookkeeping and how it works. 

If you have some idea already, reviewing the basics will benefit you when setting up a proper accounting system for your FBA business. Consider the following:

Learn bookkeeping essentials.

Educating yourself with fundamental lessons on bookkeeping is crucial. From there, skim other bookkeeping principles. For example, you can look into the significance of assets, liabilities, and capital and how these three relate to each other. 

You must understand the accounting cycle to get the gist of how bookkeeping services work. Bookkeepers follow the steps of the cycle to ensure proper recording and allocating of income and expenses.

You'll also learn double entry accounting and do trial balances. You can choose whether to dive deeper into the bookkeeping practice once you fully grasp how the accounting cycle works.

Determine your accounting method.

Once you've learned how the accounting cycle works, you can now practice or outsource it. But first, you must decide what accounting method you'll use. There are two:

Cash accounting

This accounting method records the transaction on a cash-received basis. The actual money must be in your bank account to qualify as an official record. 

Microentrepreneurs and other startup enterprises most commonly use cash accounting for its simple, straightforward, and accurate process. It works well for simple business transactions.

Accrual accounting

The accrual method involves a time element. It records transactions based on when the transaction happened, regardless of whether there's money paid or not.

Accrual accounting is more complex, but it provides more information for those who manage businesses involving multiple transactions. Some large-scale companies have more leeway regarding credit, so a big-ticket item sale may inevitably be paid later. 

It's also possible for you to acquire products and pay for them later or in advance before the product arrives. Accrual accounting is useful when reflecting these transactions in your accounting records.

What is Amazon Seller Accounting?

Amazon Seller Accounting refers to the financial management and record-keeping practices that sellers on the Amazon platform use to track and manage their business transactions. It involves:

  • Tracking sales revenue generated on Amazon
  • Recording expenses related to product sourcing, shipping, and fees
  • Calculating profits and losses
  • Managing inventory and cost of goods sold (COGS)
  • Preparing financial statements and reports for tax purposes and business analysis
  • Ensuring compliance with tax regulations and Amazon's policies
  • Monitoring cash flow and budgeting for future growth

Automated Amazon Accounting will give you a quick view of your business transactions and finances. These numbers will then guide you on future steps and whether your current strategies effectively make your business profitable and sustainable.

The Benefits of Accounting on Amazon

Accounting is the backbone of Amazon businesses—of any business, in fact. Monitoring your numbers keeps your online store afloat. But there are other benefits to accounting that every Amazon business owner should leverage.

An infographic about data-filled reports for decision making: Income statement report, Balance sheet, Cash flow statements, Trends, Inventory monitoring, Cash flow forecast.

Data-filled reports for decision making

Once you begin your business accounting, you can get plenty of reports to help you create strategies and make decisions.

  • Income statement report: This report will show you your business gains and losses. 
  • Balance Sheet: This one lists your assets, liabilities, and equity and lets you see your business's financial health.
  • Cash flow statements: Shows you the inflow and outflow of cash assets in different business activities.
  • Trends: A deep dive into the inventory report to show you key consumer behaviors and product performance. This is where you determine your best-selling products and decide where to invest more to get more sales. 
  • Inventory monitoring: As your products move from the Amazon warehouse to your customers, you must also decide when to replenish your stocks. Your inventory data will allow you to determine which products to replenish more or discontinue because of low sales.
  • Cash Flow Forecast: The excellent characteristic of these reports is that they can be stored, so you'll have a resource of historical data to see the progress of your business. With the past and present data, you can also simulate financial business moves to see whether a plan will make your business profitable. Doing your forecasts requires learning how to analyze financial statements.

Address red flags immediately

Your business will only grow and move forward if you manage your money well. Part of proper financial management is quickly knowing the factors that hurt your business so you can inhibit these problems from happening. The key to this is proactive planning.

An infographic about Common problems with financial management: Cashflow, Payment, Payroll, Taxes

Common problems with financial management:

  • Cash flow: Not monitoring the money from sales that come out to pay suppliers and other dues is a common example of cash flow mismanagement. This challenging situation can snowball into more financial challenges in the long run.
  • Payment to suppliers and loans: Cash flow mismanagement can result in late or non-payment of your dues. When this happens, authorities can halt your business operations, and stocks won't come in. Interests from loans may also pile up.
  • Payroll: If you have employees relying on you, accounting mismanagement can also affect payroll processing.
  • Taxes: You'll be in massive trouble if you do not pay your taxes. Taxation is among the first costs you should consider. Cramming only weeks before the tax-paying day can mess up your financial status and result in late payments and incurred penalties.

Your business moves are tied to your financial capability

You can be at peace once you get in-house accountants or a third-party agency offering Amazon seller accounting services. You know your business finances are monitored. There will be individuals who can give you valuable insights about your business's current status and manage your growth. 

With that, you'll have plenty of time for the different areas in managing your Amazon store and other online stores. You can also focus on developing your products to ensure quality and increase sales. All these steps are done with coherence to the financial status of your business.

Some strategies that company executives and accountants use are the Profit First Framework and Traditional Accounting.

  • Profit First Framework: This formula goes like this: sales - profit = expenses. 

If you are increasing your profit, you should set a good amount aside as your earnings first before spending the rest on expenses. 

  • Traditional Accounting: On the other hand, you can also use this formula: sales - expenses = profit. 

Your business financial strategy is like a map. Like any other plans you have for your business, it will serve as a guide to take you to a successful end.

A woman wearing yellow v-neck shirt and a gray apron leans on metal pillar while browsing her tablet

5 Sure Steps To Begin Amazon Accounting

  1. Begin accounting early

When is an early time? It would be best if you start accounting the moment you start your business. Minding this only during tax season is a typical mistake sellers make. Monitoring your assets and liabilities should be done immediately.

The tasks you'll need to accomplish as an entrepreneur never ends, but fulfill first what ensures your business's survival and success. And that is accounting.

Attending webinars and taking courses about accounting will help, especially when you get reports from accountants. Still, it would be best to delegate this task to specialists offering accounting and bookkeeping services. All these details are best accomplished and planned with your store and product launch planning.

  1. Register for business taxation right away

Whether it's an online or physical store, you should register your business for necessary permits as soon as you start the business—this is for taxes and other legal factors. Some sellers get too busy with other tasks to launch their stores that they forget to register for taxation, while some intentionally do not write. Doing this just increases the hassle. Your business will risk getting fined for not paying on time or at all. 

Defining how much tax you must pay also ensures you know exactly how much money will come from your account. This practice will make your Profit First Framework easier to enact.

Amazon sellers, in particular, will encounter issues involving sales tax. All merchants in the marketplace have to remit this to authorities, which means tracking sales tax becomes a crucial part of their business activity. Even if Amazon is the one collecting sales tax, they only give you all the collections in a lump sum, and you still have to determine the portion of the sales tax you should remit to the government.

  1. Delegate the accounting tasks to experts

If you are a trained accountant with experience in handling Amazon Seller Central and other relevant tools, then you can control your own accounting. However, if you do not have a background in this area, it is better to delegate it to experts.

  • Hire in-house accountants: The advantage of having your accountant on your team is that these accountants know the details about your business as they experience it firsthand. Their insights will also be more in-depth. 
  • Partner with an agency: There are already agencies offering Amazon and eCommerce accounting. Delegating it to a third-party agency lifts the load of managing another team in your company. However, you need to explain how your business works so these accountants know what they are dealing with.
  1. Have regular accounting reports

Your period-specific reviews should always have accounting reports. As a business owner you can personalize the reports you want to have and when. Here are some samples:

ReportDetails You Can include
Cash Flow Management ReportQuick ratio, current ratio, cash balance, days sales outstanding, days payable outstanding
Profit and Loss ReportGross profit margin, operating expense (OPEX) ratio, operating profit margin, net profit margin, earnings before interest and tax, income statement, net profit
Financial Performance ReportBalance sheet, assets return, working capital ratio, equity return, debt-equity ratio
Financial Key Performance Indicators ReportCurrent working capital, current liabilities, cash conversion cycle, vendor payment error rate, working capital
Financial StatementRevenue, gross profit, earning before Interest and tax (EBIT), operating expenses, net income, economic value added (EVA), berry ratio, employee satisfaction, customer satisfaction

All these reports will be more pleasing to the eyes and easy to understand if you establish a template and maximize the usage of graphs. In addition, information contained in the reports are not fixed, which means they can change depending on your company’s priorities. 

  1. Automate everything

If you have an automated system, all these reports can be checked anytime—even daily— to acquire the data. If Excel works for you, automation would make your systems a breeze. Still, the most advanced and convenient way to do accounting, especially on Amazon, is through software.

Here are the benefits of using software:

  • Reports on Amazon KPIs
  • Reports are available even on mobile
  • Allows integration not only on Amazon but in other ecommerce platforms

Many software allow a free trial, but most work on paid plans. Your investment is worth it with the automatic insights.

A logo of Intuit on a screen of a horizontally flipped smartphone; at the back is a computer screen showing Intuit’s website homepage.

The Best Accounting Software To Use

Efficient Amazon accounting means choosing the right accounting software for your business. Here are some of our top recommendations:


Intuit's QuickBooks Online is one of the most popular and user-friendly, cloud-based accounting software out there. With the right third-party app, QuickBooks easily syncs to your Amazon seller central account, feeding the software with business transactions which you or your accountant can easily manage. Most Amazon sellers use this accounting software to handle their business finances.


If you’re only looking into accounting for Amazon FBA, you'll get more with Fetcher. This software can deliver you the following:

  • Generate reports related to your PPC campaigns
  • Track refunds  
  • Give visuals and an idea of your business's status

The order coverage Fetcher offers depends on the plan you will avail of. 


Another popular choice among accountants and small business owners is the software Xero. You can use the functions of this free accounting software for a time and enjoy essential reports that management needs. Xero can also give you better features if you’re willing to pay.


As the name of this software suggests, Taxomate is a tool that can assist you with all your tax reports. It’s best if you use it hand-in-hand with the software QuickBooks or Xero. Whether you use FBA or FBM or sell in other marketplaces, your tax report will automatically generate. 


GoDaddy is the tool to use if you are an accounting beginner or would like to give it a try in handling your business accounting while looking for specialists to partner with. You can monitor the following on the platform:

  • Sales and revenue
  • Balances
  • Profit and loss

The software also lets you create invoices if you’re participating in different marketplaces other than Amazon. 


Another software you'll often hear in the Amazon accounting world is A2X, which should be combined with several other platforms to maximize its accounting capabilities. Note some of the important ones it can link to below:

  • QuickBooks
  • Amazon
  • Shopify
  • Xero 

Everything you need to know about your FBA expenses can be tracked and turned into easy-to-understand reports through A2X. 

What's Next?

Now that you know all these nitty-gritty details about Amazon accounting, it is time to take action. 

If you’re still relying on excel sheets, it’s time to level up your processes and reporting by moving to automated reports from software. 

You have invested so much effort, time, and money to grow your business, so secure the ascension of your sales and growth of your store by ensuring your financial stability. We'd love to discuss how we can help you with Amazon accounting. Contact Unloop now.

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About unloop

Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.