What Amazon Sellers Get Wrong About Bookkeeping (and How It Hurts Them During Exit)

Amazon FBA (Fulfilled by Amazon) businesses often enjoy rapid growth — but when it’s time to exit, poor bookkeeping becomes the #1 deal killer.

In this post, we’ll break down common mistakes Amazon sellers make in their financials, how these affect valuation, and what buyers and brokers actually look for. Whether you're planning to sell this year or just want to stay exit-ready, this is for you.

The Most Common Bookkeeping Mistakes Amazon Sellers Make

1. Using Cash Basis Instead of Accrual

Why it’s a problem: Buyers want to see accrual-based financials so they can assess your actual business performance — especially with inventory-heavy businesses.

●     Example: If you buy $50,000 of inventory in December, cash basis will show a huge expense in one month and distorted margins.

●     Accrual method smooths this by capitalizing inventory and recognizing COGS when sold.

Fix: Use accrual accounting from day one or work with an eCommerce accountant to convert books pre-exit.

2. Lumping All Revenue Together

Why it’s a problem: Amazon revenue has multiple components — gross sales, returns, FBA fees, ad spend, shipping credits, etc.

●     If everything is booked under “Amazon Sales,” you’ll miss:

○     Margin analysis

○     Advertising efficiency

○     Operational profitability

Fix: Use tools like A2X, LinkMyBooks, or Sellerboard to sync detailed revenue components into your accounting system.

3. Poor Inventory Accounting

Why it’s a problem: Inventory is often a major asset — if it's not tracked properly, buyers can’t trust your financials.

●     Many sellers:

○     Don’t reconcile inventory with COGS

○     Don’t do physical inventory counts

○     Fail to adjust for damaged or obsolete stock

Fix: Use systems like InventoryLab or QuickBooks Commerce, and reconcile monthly. Include landed cost (shipping, duties, etc.) for accurate margins.

4. No Clear P&L per Product or SKU

Why it’s a problem: Buyers want to know what products are driving profit.

●     If you sell 40 SKUs but 80% of profit comes from 5, that’s critical info during valuation.

Fix: Tag SKUs in your accounting software or use integrated tools that provide per-product profitability.

5. Advertising Costs Aren’t Matched to Revenue

Why it’s a problem: Amazon PPC costs are a key driver of success — but if they’re not aligned to the same period as the revenue they generated, it throws off ROI analysis.

●     Misaligned timing inflates or deflates ACoS and ROAS.

Fix: Record ad spend using accrual timing, or at least break it down monthly alongside sales performance.

6. Not Separating Owner Expenses or Add-Backs

Why it’s a problem: During an exit, potential buyers will want to adjust your EBITDA — but they need to see what’s discretionary.

●     Common add-backs:

○     Owner salary (if above-market)

○     Personal expenses

○     One-time consulting costs

Fix: Keep personal expenses off the books or clearly tag them to simplify due diligence.

How These Mistakes Hurt You at Exit

Mistake	Exit Impact
Cash basis accounting	Lower valuation due to inconsistent margins
Inaccurate COGS	Buyer distrust and possible re-negotiation
No SKU-level data	Harder to prove growth or defend price
Unexplained add-backs	Lower adjusted EBITDA (valuation base)
Missing ad spend matching	Buyers may assume lower marketing ROI

“We’ve seen deals fall apart at LOI stage just because the seller couldn’t provide clean accrual financials” – Broker at Empire Flippers

What Clean Books Look Like for an Amazon Exit

A potential acquirer will want:

✅ 24+ months of accrual-based P&L

✅ Clean COGS tied to inventory changes 

✅ Well-tracked returns and refund data 

✅ Proper capitalization of inventory 

✅ Clearly marked add-backs and owner comps

✅ Metrics like Contribution Margin, ROAS, TACoS, and SKU profitability

Tools to Automate and Stay Exit-Ready

●     A2X Accounting: Pulls Amazon transactions into QuickBooks/Xero

●     LinkMyBooks: Similar to A2X with more control over mappings

●     Sellerboard: Advanced profit tracking by SKU, ads, and more

Final Thoughts

Poor bookkeeping can cost Amazon sellers $50K–$500K+ at exit. Whether you’re bootstrapping or scaling to sell, setting up solid accounting now makes all the difference.

Fractional CFOs or experienced eCommerce accountants can help fix this fast — and even support your deal process when you're ready.