Amazon pays you through settlements: it deposits the net amount of your sales after deducting fees, FBA costs, refunds and advertising. The most common mistake is booking only that net deposit: you lose the gross sales, the output VAT and the deductible expenses.
What an Amazon settlement contains
- Gross sales for the period, with VAT where applicable.
- Selling fees and FBA fees.
- Customer refunds and returns.
- Advertising and other charges.
- Reserves or holds that Amazon applies and that are not income.
How to book it
- Sales: recorded at gross amount (net plus VAT), not at what Amazon deposits.
- Fees and FBA: expense of the period.
- Returns: reduce sales and output VAT.
- Advertising: expense, with its invoice.
- Reserves and holds: neither income nor expense; reconciled until Amazon releases them.
A simple example
A seller sells €12,100 including 21% VAT (net €10,000 and VAT €2,100) and has refunds of €605 including VAT (net €500 and VAT €105). Net sales are €9,500 and net output VAT is €1,995. Fees, FBA charges and advertising are booked separately as expenses. What Amazon deposits is lower, but your books and your return start from gross sales.
Returns and currencies
Returns are booked in the period they occur and reconciled to Amazon’s VAT report. If you sell in marketplaces with another currency (pounds, zlotys, krona), each settlement arrives in that currency: convert it with a fixed, consistent method and record exchange differences.
Monthly reconciliation in four steps
- Download the month’s settlement and VAT transactions report.
- Compare gross sales and VAT with your invoices and what you filed.
- Review returns, inventory losses and adjustments.
- Match the bank deposit to the net settlement and note reserves.
With an Estonian OÜ or a US LLC the process is the same, but each country’s own obligations must also be filed: see Estonian company for ecommerce and US LLC for ecommerce.
Frequently asked questions
Can I book only what Amazon deposits?
No: you must record gross sales and expenses separately, because VAT and profit are calculated on them.
What do I do with Amazon reserves?
They go to a reconciliation account until Amazon releases or applies them.
How Data Biz helps
You reconcile less and file better when someone reviews your settlements every month: see what an accountant does for Amazon sellers or book a free consultation. General information, not advice for your case.