Amazon Seller Central Accounting Integration

Amazon Seller Central generates a large volume of financial data, but it is not designed to be an accounting system. Settlement reports lump together sales, fees, refunds and adjustments into a single fortnightly payout, making it difficult to know what you actually earned and what you owe in VAT.

Integrating Seller Central with your accounting software breaks these reports apart and posts the individual components to the correct accounts automatically.

What Amazon settlement reports contain

Amazon pays sellers every 14 days via a settlement report. Each report rolls up all activity for the period into a single net payout.

The challenge is that your accounts need to record gross revenue and each fee category separately, not just the net deposit. Recording only the settlement amount understates your revenue and hides your true cost structure.

How the integration works

When you connect Amazon Seller Central to your accounting software, the integration:

1. Pulls transaction-level data from Seller Central via API
2. Breaks down each settlement into its component parts
3. Posts revenue at gross (the full sale price including VAT)
4. Records each fee type as a separate expense
5. Matches refunds to original transactions
6. Reconciles the net payout to your bank deposit

Accounting entries for a typical sale

A product sells for £24.00 (including £4.00 VAT). Amazon charges a 15% referral fee (£3.60) and an FBA fee (£3.25).

Revenue entry:

Referral fee (£3.60 including £0.60 VAT):

FBA fee (£3.25 including VAT):

Settlement payout (£17.15):

VAT implications

VAT is the most complex part of Amazon seller accounting in the UK. Getting it wrong can lead to underpaying or overpaying HMRC.

Your VAT obligations

If you are a UK-established seller shipping from UK stock to UK customers, you are responsible for charging and accounting for VAT on your sales. Amazon does not handle this for you in most cases.

Reclaiming VAT on Amazon fees

Amazon charges VAT on all its fees (referral fees, FBA fees, advertising, subscription). Amazon’s UK entity provides a VAT invoice each month which you should download from Seller Central.

For a business processing £10,000/month through Amazon with roughly £2,500 in total fees, the reclaimable input VAT on those fees is approximately £417/month. Many sellers miss this.

FBA Pan-European and VAT registration

If you enrol in Pan-European FBA or the European Fulfilment Network, Amazon may move your stock to warehouses in France, Germany, Italy, Spain, Poland or the Czech Republic. Each country where stock is held requires a local VAT registration.

This creates a significant compliance burden:

• VAT returns in multiple countries
• Intrastat declarations for stock movements
• Different VAT rates and filing deadlines per country

Many UK sellers now opt for UK-only fulfilment to avoid this. If you do use Pan-European FBA, you will need either a specialist VAT agent or a tool like AVASK, Meridian or SimplyVAT to manage the filings.

Inventory tracking

For Amazon FBA sellers, inventory accounting has additional layers because Amazon holds and manages your stock.

Stock movements to track

Reconciling FBA inventory

Amazon provides an inventory adjustment report showing units received, sold, returned, lost, damaged and disposed of. Your accounting software should reconcile against this report regularly.

Common discrepancies include:

• Lost stock – Amazon loses items in its warehouses more often than you might expect. You are entitled to reimbursement, but you need to file a claim
• Damaged stock – similar to lost stock; check the reimbursement report and claim anything Amazon has not automatically reimbursed
• Quantity mismatches – differences between what you shipped to Amazon and what Amazon received

Stock valuation at year end

Your closing stock must be valued at the lower of cost and net realisable value. For Amazon sellers:

• Cost includes the purchase price, import duties, customs fees and inbound shipping to the FBA warehouse
• Net realisable value is the expected selling price minus Amazon fees and any other selling costs

Slow-moving stock should be written down. Amazon’s aged inventory report helps identify items that have been sitting in the warehouse for 180+ days.

Advertising costs

Amazon PPC (Sponsored Products, Sponsored Brands, Sponsored Display) is a significant cost for most sellers. The integration should record advertising spend separately from other fees.

Record advertising as a marketing expense, not a cost of sale. This gives you a clearer view of your gross margin versus your net margin after marketing.

Refunds and returns

Amazon’s refund policy is generous, which means returns are a regular part of the accounting cycle.

How refunds affect your accounts

When a customer returns a product:

1. Amazon refunds the customer (deducted from your next settlement)
2. Amazon may refund part of the referral fee (usually yes) but not the FBA fee
3. The returned item goes back into FBA stock (if resaleable) or is flagged as unfulfillable

In your accounts:

• Reverse the revenue and output VAT
• Record the fee refund (if any) as a reduction in expenses
• Adjust stock – returned items in sellable condition go back into inventory; unsellable items are written off or removed

Setting up the integration

1. Connect your Seller Central account via the Amazon MWS or SP-API credentials
2. Map nominal codes – assign accounts for revenue, each fee type, the clearing account and VAT codes
3. Set the import period – start from the beginning of the current tax period or backfill historical data
4. Configure inventory tracking – link your stock accounts to FBA inventory data
5. Review the first settlement import – verify that totals match the actual bank deposit
6. Enable ongoing sync – new settlements import automatically

Common issues and fixes

Tips for clean Amazon accounting

• Always record revenue at gross, not the net settlement amount – this is an HMRC requirement
• Download Amazon’s monthly VAT invoice and record it for input VAT claims
• Reconcile FBA inventory at least quarterly against Amazon’s reports
• Track advertising spend separately from product fees to understand your true customer acquisition cost
• Review reimbursement reports monthly – Amazon owes you money for lost or damaged stock more often than you think
• Use separate nominal codes for each Amazon fee type (referral, FBA fulfilment, storage, advertising) so you can see where your money goes

For more on the accounting challenges specific to Amazon sellers, see our guide to Amazon seller accounting .