Amazon Settlement Report Reconciliation for Canadian Sellers

Amazon generally sends seller proceeds to the bank account every two weeks after the account is settled, subject to available balance, reserve holds, and bank-processing timing. The deposit amount is almost never equal to gross sales for the period. By the time referral fees, FBA fulfillment and storage costs, advertising charges, refunds, tax lines, reserve movements, and account adjustments have been netted against product revenue, the disbursement is typically a fraction of the gross sales figure a seller sees in Seller Central.

Reconciling that deposit to its components is a foundational requirement for accurate bookkeeping. Without reconciliation, revenue is misstated, expenses are buried inside a net number, and the books cannot support GST/HST filing, profitability analysis, or tax preparation.

What the Settlement Report Is

Amazon generates settlement reports automatically at the close of each settlement period. The report covers transactions processed between the settlement period start date and end date and reconciles them to a disbursement, charge, reserve movement, or carried balance. Settlement reports are available for download in the payments/reporting area of Seller Central.

There are two versions: a summary report and a detailed transaction-level report. The summary shows the net position by category. The detailed report lists every individual transaction: every order, every refund, every fee, every reimbursement that contributed to the settlement total.

Common settlement categories and amount descriptions include:

• Product charges: The selling price of items sold in the period, as collected from buyers
• Shipping credits: Amounts collected from buyers for shipping, if applicable
• Gift wrap credits: Gift wrap charges collected from buyers, if applicable
• Promotional rebates: Discounts applied to orders through Amazon promotions, which reduce product charges
• Sales tax, GST/HST, PST, or QST collected: Tax amounts collected from buyers, which should be mapped to a tax liability or marketplace-tax clearing account rather than revenue
• Referral fees: Amazon’s commission on each sale, calculated as a percentage of the selling price by product category
• FBA transaction fees: Per-unit fulfillment fees for picking, packing, and shipping each order
• FBA storage fees: Monthly inventory storage fees, based on the average space the inventory occupies in Amazon fulfillment centres
• Other transaction fees: Advertising charges billed through the seller account, removal and disposal order fees, labelling fees, and other service charges
• Other: Reimbursements for lost or damaged inventory, and other credits or one-time adjustments
• Reserve movement: Funds held back, deferred, released, or transferred between settlement periods

The ending balance of the settlement, after all credits, debits, reserve movements, and prior balances, should reconcile to the bank deposit or to the amount carried forward.

Why the Deposit Does Not Equal Gross Sales

The relationship between gross sales and the bank deposit is:

Gross product revenue

• Shipping collected from buyers
• Gift wrap collected from buyers

• Promotional rebates
• Referral fees
• FBA fulfillment fees
• FBA storage fees
• Advertising charges
• Refund amounts paid back to buyers
  +/- Referral fee refunds, refund administration fees, chargebacks, and fee corrections
  +/- Sales tax collected, refunded, remitted, or withheld under marketplace-tax rules
  +/- Reserve holdbacks and reserve releases
  +/- Reimbursements and adjustments
  = Amount disbursed

Each item in that list is a separate accounting entry. Booking only the deposit as revenue, or recording gross sales without the corresponding fee, refund, tax, and reserve lines, produces a materially incorrect set of books.

Reserve Holdbacks

Amazon maintains reserves on seller accounts to keep funds available for obligations such as refunds, chargebacks, A-to-z Guarantee claims, and other account risks. Reserve balances may also be affected by delivery-date policies, account reviews, unusual activity, or account health. The reserve amount is withheld from disbursements and released in a future settlement once Amazon treats the funds as available.

A seller who had CAD $18,000 in gross sales and expects a CAD $16,500 disbursement may see only CAD $14,500 deposited because CAD $2,000 remains in reserve. That CAD $2,000 is not lost revenue. It will appear as a credit in a future settlement when Amazon releases it.

Booking only what is deposited without tracking reserve movements will produce inaccurate Amazon receivable balances and can understate revenue on an accrual basis. Tax-ready books should treat reserve movements separately from revenue: sales, refunds, fees, and taxes are posted from the settlement detail, while funds held by Amazon are tracked as an Amazon receivable or reserve balance until released.

GST/HST on Amazon Transactions

Since July 1, 2021, Canadian GST/HST digital-economy rules have applied to non-resident suppliers, distribution platform operators, and accommodation platform operators. In certain circumstances, platform operators collect and remit GST/HST on sales made through the platform. The treatment varies by transaction type, seller residence, seller registration status, and whether the transaction is a qualifying goods supply in Canada.

For GST/HST-registered sellers, the default rule is still important: a registered vendor making taxable supplies in Canada generally collects, reports, and remits GST/HST on those supplies. Under the digital-economy platform rules, a registered distribution platform operator is generally responsible for GST/HST on qualifying goods supplied through the platform by vendors that are not registered under the normal GST/HST regime. A registered seller should therefore not assume that Amazon remitted GST/HST on a sale simply because the sale occurred on Amazon.

The settlement may show tax collected from buyers, tax refunded to buyers, marketplace-tax amounts collected or remitted by Amazon, or no separate tax line depending on the report and transaction. Those amounts should be mapped to GST/HST payable, a marketplace-tax clearing account, or a non-revenue tax adjustment after confirming how Amazon presents tax for that seller account. See the Amazon GST/HST guide for how Amazon’s facilitator rules interact with seller registration obligations.

FBA fees, referral fees, storage charges, and advertising charges from Amazon are business inputs. Amazon may charge GST/HST and, where applicable, provincial sales tax or QST on these fees based on the relevant tax rules and the seller account’s tax profile. GST/HST-registered sellers should record the GST/HST portion separately so they can claim input tax credits (ITCs) where the fees relate to commercial activity and the seller has the required supporting tax invoices.

A seller who books Amazon fees as a single gross expense without separating the GST/HST component may miss ITCs. On a CAD $5,000 fee invoice before tax, 5% GST alone is CAD $250; the recoverable amount can be higher where HST applies, subject to the invoice and ITC documentation rules.

Mapping Settlement Categories to Accounting

A standard mapping for settlement line items:

The specific chart of accounts depends on the seller’s bookkeeping setup and the level of SKU-level or channel-level reporting required. The important point is that each category maps to a different account. Collapsing them into a single revenue or expense line obscures both profitability and the GST/HST position.

Common Reconciliation Issues

Unmatched transactions. Transactions that appear in the detailed settlement report but cannot be matched to a specific order in Seller Central order management. Common sources: returns still in process at the settlement cut-off, adjustments from prior periods, fee corrections applied retroactively.

Lost and damaged inventory reimbursements. Amazon reimburses sellers for inventory that is lost or damaged within the fulfillment network. Some reimbursements are automatic; others require seller review or claims within Amazon’s eligibility windows. These reimbursements appear as credits in the settlement. A seller who does not track expected reimbursements against what Amazon has paid may be leaving money in the settlement without recognizing it.

Fee discrepancies. Referral fee rates vary by product category and are generally calculated on the total sale price, including item price, shipping, and gift wrapping. Sellers operating across multiple categories may find individual fee amounts that do not match the expected rate. Reconciling fee amounts against the applicable rate schedule for each product identifies possible listing category issues or overcharges. Amazon publishes referral fee information on its Canadian pricing page.

Advertising charges crossing settlement periods. Sponsored Products charges are billed as of advertising activity, but the billing date may fall outside the same settlement period as the related sales. Advertising charges in a given settlement may correspond to clicks and impressions from a prior period.

Currency settlement for multi-marketplace sellers. Canadian sellers selling on Amazon.ca are paid in CAD. Sellers with Amazon.com accounts are paid in USD or through Amazon’s Currency Converter. A seller receiving both CAD and USD disbursements needs to account for the foreign exchange gain or loss on the USD portion at the time of conversion. This is separate from the settlement reconciliation process but intersects with it for sellers active on both marketplaces.

The Settlement Reconciliation Workflow

A repeatable workflow for each settlement period:

1. Download the settlement summary and detailed transaction report from Seller Central
2. Confirm the settlement period start and end dates
3. Verify the opening balance equals the prior period closing balance
4. Reconcile each summary category to the corresponding accounting entries
5. Identify all reimbursements and confirm they reflect expected inventory loss recovery or fee credits
6. Separate sales tax collected from buyers into GST/HST payable or a marketplace-tax clearing account
7. Separate GST/HST on Amazon fees from the gross amounts; record ITCs only where supported by valid tax invoices
8. Post any reserve movement as a balance sheet item (Amazon receivable, increase or decrease)
9. Confirm the ending balance, transfer amount, and reserve balance match the bank deposit or carry-forward amount
10. Flag any unreconciled items for follow-up before the next settlement period closes

Performing this reconciliation at the end of each settlement period rather than attempting to reconstruct multiple periods at year-end reduces the time required and the risk of errors that compound across periods.

Scope of This Guide

This guide covers the structure of Amazon settlement reports for Canadian sellers, the mapping of settlement categories to accounting entries, GST/HST treatment of Amazon fees, and a settlement reconciliation workflow. It does not cover:

• SKU-level profitability analysis (covered in the Amazon FBA true profitability guide)
• Inventory reconciliation between physical stock and Amazon fulfillment records (covered in the inventory reconciliation guide)
• Payout reconciliation for Shopify, Etsy, or Walmart (covered in their respective guides)

Amazon settlement reconciliation is one of the more data-intensive bookkeeping tasks for marketplace sellers. A clean reconciliation requires mapping each summary category to accounting entries, separating GST/HST components on fee charges, and tracking reserve balances across periods. Sellers managing multiple platforms or both a .ca and .com storefront face additional currency and period-matching complexity.

Get in touch if your current bookkeeping records Amazon deposits as a single revenue line. That gap shows up in margin reporting and GST/HST filings, and it is easier to correct the recording approach going forward than to reconstruct prior settlement periods.