How to input Amazon Transactions onto Quickbooks VAT Cash Based

It’s not straight forward at all because the VAT is due when you make the sale on Amazon (effectively the customer has paid you for the product) but the disbursement paid to you from Amazon has a lag in it and you’ll have a reserve owed to you at all times.

The summary statement also doesn’t split out all the various parts, it groups various bits together. The VAT code required for various items may also be different - your sales are likely to be at 20%, if you have advertising, this include VAT at 20% that Amazon includes in the invoice as it’s billed by Amazon UK, but all Amazon fees are billed from the EU so should have a vat code of 20% ECG on purchases in Quickbooks. You might also then have refunds which you can claim the VAT back on.

We used to do it manually by creating a long journal for every disbursement and using a bank account named ‘Amazon’ in QB to hold the reserved funds. However, once we started to disburse on a weekly basis it was too much hassle and I was spending a couple of hours a week just trying to reconcile the statement and create a journal.

We now use A2X - it’s really good and definitely value for money for us. It automatically generates the journal whenever a disbursement is made and creates a payment which matches the amount Amazon pay. It itemises all the Amazon charges so you can really see how your disbursement is calculated - there are currently 17 line items that Amazon might include and if you really wanted to, most of these can be split into further sub items. It’s also helped us analyse where we can make savings such as in Amazon warehousing costs.

There is some initial setup as you have to configure which accounts the various Amazon sales and fees should be posted to in your QB and what VAT code to use but once it’s setup there’s no manual work. You just get an email the day after the disbursement was initiated telling you that a new journal has been created.

The other feature we really like is that when a disbursement covers a period over a month end it will automatically create two journals - one with a date of the first day of the disbursement period and covering the sales up to the end of the month and a second journal covering all the sales in the following month and dated at the beginning of that month. This means that when you run P&L reports then everything is in the correct month or quarter.

Hope that’s useful,

Mike