Amazon FBA accounting Australian sellers: the complete guide

Most Australian Amazon FBA sellers are running their business on numbers that are wrong. Not dramatically wrong wrong in the quiet, cumulative way that only surfaces when a tax return comes back with questions, or when the profit figure doesn’t match the cash in the bank.

The source of the problem is almost always the settlement report. Amazon pays out every fortnight and the deposit that hits your account is a net figure after marketplace fees, FBA fulfilment costs, storage charges, advertising spend, returns, and reimbursements have all been bundled together. Code that deposit to sales in Xero and you’ve understated your costs, overstated your revenue, and filed a BAS that doesn’t reflect reality.

This guide covers how Amazon FBA accounting actually works, where sellers consistently get it wrong, how GST applies to different types of Amazon sales, and how to build a system that keeps your books accurate without doing it manually every fortnight.

Why FBA accounting is different from regular ecommerce

When you sell through Fulfilment by Amazon, the model creates accounting complexity at every stage. Amazon stores your inventory, picks and packs orders, manages shipping, and handles customer returns. They charge for all of it  and those charges come out of your settlements before you see a cent.

The practical effect is that your bank statement and your revenue are two different things. A seller with strong gross sales can have a small net deposit after fees, and if you’re only looking at the deposit, you have no idea what’s actually driving the gap. You don’t know your true advertising cost, your storage fees, your return rate, or your real margin by product. You just know what Amazon paid you.

Sellers who expand into international marketplaces  Amazon US, Amazon UK  have an additional layer. You’re now receiving USD or GBP, converting through Payoneer or OFX, and generating foreign exchange gains or losses on every conversion. That FX movement is taxable in Australia and needs to be tracked, not ignored.

What the settlement report actually contains

Each Amazon settlement covers all transactions in a fortnightly period. The key lines are:

• Gross product sales (your actual revenue)
• Referral fees (Amazon’s commission, typically 6 15% depending on category)
• FBA fulfilment fees (per-unit cost for picking, packing, and shipping)
• FBA storage fees (monthly, based on cubic volume in Amazon’s warehouses)
• Long-term storage fees (for inventory held more than 365 days these spike)
• Sponsored Products advertising charges
• Returns and refunds, including the reversal of fees Amazon already charged
• Reimbursements for inventory Amazon lost or damaged in their fulfilment centres
• The net deposit what actually arrives in your account.

For accounting purposes, gross sales is the revenue line. Everything below it is a cost. The net deposit is what’s left after those costs, not what you earned.

Where Australian Amazon sellers go wrong

Coding the deposit as revenue. The most common mistake by some margin. When the settlement deposit goes to a sales account, costs disappear from your books entirely. Your P&L overstates revenue, understates expenses, and the GST on your BAS is wrong.

Missing storage fees. Storage fees don’t sit neatly on their own line they appear as adjustments within the settlement. Sellers reconciling manually often miss them. Long-term storage fees are particularly easy to overlook because they only hit twice a year, then show up as a large unexplained adjustment.

Ignoring reimbursements. When Amazon loses or damages inventory in their fulfilment centres, they reimburse you. Those reimbursements appear in the settlement and need to be recorded as income. If you’re not looking for them, they either get missed or folded into the wrong account.

Reconciling annually instead of per settlement. Running a single end-of-year reconciliation from bank deposits doesn’t work for Amazon. Each fortnightly settlement has its own mix of sales, fees, returns, and adjustments. You need to reconcile period by period, or the errors from one settlement carry into the next.

Treating FX as irrelevant. Every USD or GBP deposit converted to AUD produces a foreign exchange movement — the difference between the AUD value when the income was earned and the AUD value when it was received. Those differences are assessable income or deductible losses under Australian tax law. They’re not optional to track.

GST on Amazon FBA sales: what Australian sellers need to know

GST treatment on Amazon depends on where you’re selling and who the customer is.

Amazon AU sales to Australian customers  if your annual turnover exceeds the GST registration threshold, GST applies. Amazon operates as an electronic distribution platform under Australian tax law, which means Amazon collects and remits GST on behalf of third-party sellers in many circumstances. You still need to account for this correctly in your BAS and make sure it’s not being double-counted in your books.

Amazon US sales of physical goods exports of physical goods to overseas customers are generally GST-free. You still need to include them in your BAS as GST-free supplies, but you’re not charging GST to the customer.

Inventory stored in US or UK fulfilment centres this is where things get more complicated. Having inventory in Amazon’s US warehouses may create sales tax nexus in certain US states. UK inventory may trigger VAT obligations. These are separate from Australian GST and are obligations that Australian sellers regularly discover too late, usually when a marketplace flags non-compliance. Getting specialist advice before you send stock to international fulfilment centres is worth doing.

Inventory and COGS for FBA sellers

Your FBA inventory is your asset until the moment it sells, regardless of the fact that it’s sitting in a warehouse in Melbourne or Memphis. It needs to be on your balance sheet at cost, and when it sells, the cost needs to move to COGS.

The cost figure matters. Purchase price alone understates your true cost. Landed cost which includes the supplier invoice, international freight, customs duties, import costs, and any Amazon prep fees  is the correct cost base for each unit. Use just the purchase price and your gross margin is inflated, your product-level profitability is wrong, and your pricing decisions are based on numbers that don’t reflect reality.

When Amazon loses or damages inventory in their fulfilment centres, that stock needs to leave your books as a write-off. When the reimbursement arrives, it comes back as income. Sellers who don’t track this end up with inventory balances on their books for stock that no longer exists and miss the income when Amazon pays them back.

Multi-currency accounting for Amazon US and UK sellers

If you sell on Amazon US or Amazon UK, you’re being paid in USD or GBP. Most Australian sellers receive those funds through Payoneer or OFX, then convert to AUD when they need the cash.

Each conversion creates a foreign exchange movement. The AUD value of your USD settlement changes between the date you earned it and the date you converted it — and that difference matters to the ATO. FX gains are assessable income. FX losses are deductible. Neither is optional.

In Xero, multi-currency accounting handles this automatically. You set up USD and GBP accounts, record transactions in the original currency, and Xero applies daily exchange rates to calculate the AUD equivalent. FX movements are tracked as a separate line item rather than buried in your revenue or left unrecorded.

Without that setup, you’re either recording the wrong AUD figure for each transaction or ignoring the FX movement entirely. Both create problems at tax time.

How A2X fixes the reconciliation problem

Reconciling Amazon settlements manually is slow, error-prone, and doesn’t scale. A settlement report for a mid-volume seller can have hundreds of individual line items sales by product, fee adjustments, return reversals, reimbursements. Mapping all of that to the right accounts by hand, every fortnight, is where mistakes happen.

A2X connects directly to your Amazon seller account, pulls each settlement report automatically, and converts it into a journal entry that posts to Xero or QuickBooks. You get separate lines for gross sales, each fee type, returns, reimbursements, and advertising all mapped to the correct accounts in your chart of accounts.

The deposit matches the journal entry to the cent. GST is applied correctly to each transaction type. FX conversions are handled. And every settlement period is reconciled individually, so nothing carries over incorrectly.

As A2X-certified ecommerce accountants, our team sets up the full integration connecting your Amazon account, configuring the chart of accounts mapping, applying correct GST treatment to each transaction type, and maintaining the connection as your business changes. The manual work disappears. The accuracy doesn’t.

What to look for in an Amazon FBA accountant

Not all ecommerce accountants are across Amazon FBA specifically. When you’re evaluating someone to manage your Amazon accounting, a few things are worth checking directly.

Ask how they handle settlement reconciliation. The answer should involve A2X or a comparable integration, not manual spreadsheets. Ask whether they’ve set up multi-currency accounting before if you sell internationally. Ask specifically what they do with FBA storage fees, long-term storage charges, and reimbursements these are the line items that catch out accountants who haven’t worked in the Amazon space before.

Check their GST knowledge is specific to Amazon. The electronic distribution platform rules for Amazon AU are different from standard GST on sales. An accountant who gives you a generic GST answer hasn’t dealt with Amazon sellers before.

Also look for a team rather than one person covering everything. A single bookkeeper doing the data entry, the reconciliation, and the tax strategy is usually overpromising on at least one of those three.

Our ecommerce accounting services include a dedicated team for Amazon FBA sellers A2X integration, Xero setup, GST compliance, and monthly reporting — built around how Amazon businesses actually work.

Frequently asked questions

Is my Amazon settlement deposit the same as my revenue? No. The deposit is net of referral fees, FBA fulfilment fees, storage charges, advertising costs, and return adjustments. Your gross sales figure  shown at the top of the settlement report — is your revenue. The deposit is what’s left after Amazon’s costs come out. Coding the deposit to sales understates your expenses and overstates your profit.

Do I need to charge GST on my Amazon FBA sales? It depends on the marketplace. For Amazon AU sales to Australian customers, GST applies if you’re above the registration threshold. Amazon collects and remits GST under the electronic distribution platform rules in many cases, but this needs to be accounted for correctly in your BAS. Sales of physical goods exported to overseas customers are generally GST-free exports.

What does A2X do, and do I need it? A2X connects your Amazon seller account to Xero or QuickBooks and automatically converts each settlement report into accurate journal entries. For any seller doing meaningful volume on Amazon, yes you need it. Manual reconciliation at scale is too slow and too prone to error. As A2X-certified accountants, we set up and maintain the integration as part of our ecommerce accounting services.

I only sell on Amazon US, not Amazon AU. Do I still have Australian GST obligations? Yes. You still need to lodge a BAS reporting your overseas sales as GST-free exports. Your Australian income tax return also needs to include the income, converted to AUD. If your US inventory is stored in Amazon’s US fulfilment centres, you may also have US sales tax obligations in certain states that’s a separate issue from Australian GST.

How do FX gains and losses work for Amazon sellers? If you’re selling on Amazon US or Amazon UK and receiving USD or GBP, every conversion to AUD creates a foreign exchange movement. The ATO treats FX gains as assessable income and FX losses as deductible. You need multi-currency accounting in Xero to track this correctly  recording each transaction in its original currency and letting Xero apply exchange rates automatically.

What happens when Amazon loses my FBA inventory? Amazon typically reimburses sellers for inventory lost or damaged in their fulfilment centres, though sometimes you need to open a case. In your books, the lost stock is written off from your inventory asset account. The reimbursement, when it arrives in your settlement, is recorded as income. If you’re not tracking this, you’ll have phantom inventory on your balance sheet and missing income on your P&L.

How often should my Amazon books be reconciled? Every settlement period — fortnightly. Waiting until month end means you’re potentially carrying errors from multiple periods. With A2X, reconciliation happens automatically when Amazon releases each settlement report, so your books are always current without manual effort.

Can I use a general accountant or bookkeeper for my Amazon business? A general accountant can handle your income tax return. But Amazon-specific reconciliation — settlement mapping, FBA fee tracking, A2X setup, GST on Amazon AU transactions, multi-currency FX requires experience in the platform. A generalist accountant who hasn’t worked with Amazon sellers before will either spend a lot of time getting up to speed or miss things that cost you money.

Get your Amazon books working properly

If you’re coding Amazon deposits as revenue, reconciling manually, or not sure whether your GST treatment is right, the errors are building up quietly in your books.

Outback Accounting works with Australian Amazon FBA sellers on accounting, BAS lodgements, and tax compliance using A2X and Xero to automate reconciliation and keep every settlement accurate.

Talk to our ecommerce accounting team about getting your Amazon accounting sorted properly.