Your accountant asks you, again, to explain what a settlement report is. You pull the same three Amazon reports every quarter, hand them over, and still end up with a P&L that makes no sense. Or perhaps HMRC has been in touch about your VAT position and you have decided you cannot afford to keep explaining your business model to someone who treats it like a standard retailer.
Most Amazon FBA sellers who start looking for a specialist ecommerce accountant are not anticipating a problem. They are already dealing with one. The question is how much it has cost them so far.
What Makes Amazon FBA Accounting Different
The core problem is that Amazon generates several different reports, and each one calculates “sales” differently. A generalist accountant who does not know this will spend hours trying to reconcile figures that were never designed to match, and the result ends up in your accounts.
Settlement reports vs the sales dashboard
The Amazon sales dashboard is not an accounting document. It shows revenue before VAT and refunds, which makes it a poor basis for reconciliation. Settlement reports show what Amazon actually transferred to your bank, net of fees, refunds, and adjustments. That is the right starting point, but it is not the full picture on its own. An accountant who is working from dashboard figures rather than settlement data is building your accounts on the wrong foundation.
Fee categorisation
Amazon deducts its fees from your payouts rather than invoicing them separately, which means they can easily get lumped together in the books. They should not be. Inbound freight, the cost of shipping stock from a supplier to an FBA warehouse, belongs in cost of goods sold. FBA fulfilment fees, the per-order pick, pack and ship charges, are a selling expense. Treating them as one line understates COGS and produces margins that swing around for no obvious reason.
See how to choose an ecommerce accountant on what to expect from a specialist.
Multiple reports, different numbers
Amazon’s Sales Dashboard, Business Reports, Transaction Reports and Settlement Reports each calculate figures differently for the same period. The reasons include timing differences, differing treatment of VAT, and how returns are handled across each report type. A generalist accountant who does not know which report to trust will attempt to reconcile numbers that will never agree, and the time spent on that exercise achieves nothing.
Related: Ecommerce Bookkeeping for Multi-Channel Sellers: Streamline Accounting & VAT
Multi-marketplace VAT
If you are selling across Amazon UK, DE, FR and other European marketplaces, your VAT obligations multiply. Each jurisdiction has its own registration thresholds, filing frequencies and rules around distance selling. Handling this correctly requires more than a passing familiarity with UK VAT. The ecommerce VAT guide covers the specific obligations in detail, but the short version is that multi-marketplace selling without proper VAT accounting is one of the more common triggers for HMRC enquiries.
Signs You Have Outgrown Your Accountant
The following scenarios come up regularly on Amazon accounting. If more than one of these applies, the issue is unlikely to resolve itself:
- Your accountant asks you to explain FBA fees or how Amazon payouts work every time you meet. This is not a communication problem. They do not have the working knowledge to handle Amazon accounts without that briefing.
- Your P&L margins move sharply between periods despite stable trading. The most common cause is fee categorisation done inconsistently, settlement data being imported incorrectly into Xero, or payout periods that overlap month end and have not been split.
- You are spending hours pulling Amazon reports so your accountant can attempt a reconciliation they still cannot complete. The data exists. The bottleneck is expertise, not access.
- You incorporated and are still on cash basis accounting. Limited companies are required to use accrual accounting. It is not optional.
- Your VAT scheme has never been reviewed. Cash basis VAT is optional for smaller limited company sellers, but generalist accountants often apply it by default on the assumption it helps cashflow. For most ecommerce businesses, particularly those with significant stock holdings or advance supplier payments, accrual VAT is more advantageous.
- You have received an HMRC VAT enquiry or are concerned one is coming. Many sellers registering for VAT are in a refund position on their first return because of reclaimable VAT on existing stock. That refund frequently triggers an HMRC inspection. A generalist accountant is unlikely to be prepared for it, and HMRC inspectors themselves often struggle to interpret Amazon settlement data and fee structures. The result is delayed refunds and a process that drags on far longer than it should. Cross-border VAT positions add another layer of complexity that a generalist will not be equipped to explain on your behalf.
What to Look for in an Amazon FBA Accountant
Competence in this area is specific. General claims about ecommerce experience are worth testing with a few direct questions.
Do they use A2X, or equivalent software, to automate the flow from Amazon into Xero?
A2X pulls settlement data, maps it to the correct accounts and creates summarised journal entries in Xero, removing the manual reconciliation step entirely. If an accountant is asking you to enter settlement data by hand, or is doing it manually themselves, that is a meaningful inefficiency. See what an ecommerce accountant actually does for a clearer picture of what good practice looks like.
Can they explain why Amazon’s sales dashboard figure and the Xero balance will never match, and what reconciliation actually looks like in practice?
If they cannot, they are not familiar enough with Amazon’s reporting structure to handle it reliably.
How do they handle foreign VAT filings?
Some firms simply introduce you to a third-party VAT specialist, who then manages your filings as a separate service. You end up liaising with two firms, your accounting data and VAT data are handled in isolation, and nothing is properly reconciled across the two. A better arrangement is one where your accountant prepares the data, drafts the return, and retains the relationship with you throughout. If a third-party agent is used to submit in a particular jurisdiction, that is a back-office arrangement, not a handoff. Your numbers stay in sync and you have one point of contact. For more detail on the obligations involved, the selling on Amazon US from the UK guide is a useful reference.
Do they understand the COGS treatment for FBA, specifically the distinction between inbound freight and fulfilment fees?
Ask directly. The answer will tell you whether they have actually worked with Amazon accounts at the transactional level or are approaching it theoretically.
Have they worked with businesses at your revenue level?
An accountant set up to handle a £50k sole trader on Amazon is a different proposition from one experienced with a £2m+ brand selling across three marketplaces with multi-currency settlement, inter-company stock transfers and a complex VAT footprint. Experience at scale matters.
Related: The CFO Playbook to TikTok, Amazon, and Shopify Scaling
What to Do Next
Switching accountants, or hiring one for the first time, takes time. There is a handover process, historical data to transfer, and a period of getting someone up to speed on your specific setup. None of that is a reason to put it off indefinitely, but it is worth approaching as a considered decision rather than a reactive one.
If any of the above sounds familiar, you can find out how Elver works with Amazon FBA sellers, or book a call to talk through your current setup. No obligation, just a conversation.
