What bookkeeping does an Amazon or Shopify seller need?
The biggest mistake Amazon and Shopify sellers make is recording marketplace deposits as revenue. When Amazon sends you a $3,200 payout, that number has already had referral fees, FBA fees, storage fees, and advertising costs pulled out. Your actual gross revenue might have been $4,500. If you only record the deposit, you’re understating both your revenue and your expenses, which throws off your profit margins and can cause problems at tax time.
Proper e-commerce bookkeeping starts with breaking out gross sales, marketplace fees, and net deposits as separate line items. Every payout settlement report from Amazon or Shopify contains this detail. Your books should reflect the full picture: what you actually sold, what the platform took, and what landed in your bank account.
Inventory and cost of goods sold (COGS) tracking is critical for e-commerce businesses. You need to know what you paid for the products you sold, not just what you spent on purchasing inventory overall. When you buy 500 units at $8 each and sell 300 of them in a month, your COGS is $2,400, not $4,000. The remaining 200 units are still an asset on your balance sheet. Getting this wrong means your profit numbers are meaningless.
Sales tax is another area that catches sellers off guard. If you store inventory in Amazon FBA warehouses across multiple states, you likely have sales tax nexus in those states. Amazon collects and remits in most cases now, but you still need to track it in your books and may need to file returns in certain states. Ignoring this creates a liability that grows over time.
Your bookkeeping should also capture advertising spend separately. Amazon PPC costs, Facebook ads driving traffic to your Shopify store, and influencer payments all need proper categorization. These are often the second or third largest expense behind COGS, and lumping them together with other operating costs hides whether your ad spend is actually generating profitable sales.
Tools like A2X or Link My Books connect Amazon and Shopify to QuickBooks and break out settlement reports into proper accounting entries automatically. This saves hours compared to manual entry and dramatically reduces errors. A QuickBooks ProAdvisor in Chandler can set up these integrations correctly so your books capture everything from the start.
Returns and refunds need tracking too. Amazon processes returns and deducts them from future payouts. If your books don’t account for returns separately, your revenue numbers won’t match your 1099-K and your tax accountant will spend billable hours figuring out the discrepancy.
At a minimum, an Amazon or Shopify seller needs monthly reconciliation of all marketplace payouts, accurate COGS and inventory tracking, proper fee categorization, advertising spend tracking, and sales tax documentation. Without these fundamentals, you’re guessing at profitability and potentially missing deductions or creating tax issues you won’t discover until it’s too late.
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More Questions
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