If you run Sponsored Products, Sponsored Brands or Sponsored Display campaigns, you will see Amazon ad spend in two different places: as a Cost of Advertising line on your Amazon settlements, and sometimes as a direct Amazon Advertising charge on your bank or credit card statement. This article explains why that happens and how to reconcile both without double counting.
What is the "Cost of Advertising" line on my settlement?
Cost of Advertising is Amazon's own transaction type for advertising invoices that Amazon has deducted from your seller balance before paying out. Link My Books groups these under LMB6: Amazon Advertising Costs (if you use our default accounts), with the tax rate you confirmed for advertising in the Accounts & Taxes Wizard. For UK VAT registered businesses the default is 20% (VAT on Expenses) for UK advertising and Reverse Charge Expenses (20%) for EU advertising. See Amazon account and tax rate mappings for UK VAT registered businesses.
Why do I also have Amazon Advertising charges on my bank statement?
Amazon pays each advertising invoice in one of two ways:
From your seller balance – the invoice is deducted from your payout and appears on the settlement as Cost of Advertising. Link My Books posts this for you.
Charged to the card on file – the invoice is taken directly from your bank or credit card. It does not appear on the settlement, so Link My Books does not post it.
Amazon will usually charge the card when your seller balance is not large enough to cover an ad invoice when it falls due, or when your advertising payment method is set to card. A given invoice is only ever paid one way, so the amounts on your settlements and the amounts on your bank statement are different invoices, not the same cost recorded twice.
How do I check which invoices were paid which way?
In Seller Central go to Advertising > Campaign Manager, then open Billing (sometimes labelled Sponsored ads billing).
Set the date range to cover the settlement period you are reconciling.
Each invoice shows how it was paid. Invoices paid from your seller account will match the Cost of Advertising lines on your Link My Books settlements. Invoices paid by card will match the charges on your bank statement.
How do I reconcile the charges?
Invoices deducted from your seller balance: nothing extra is needed. The cost is already included in the settlement invoice or journal Link My Books created, so simply reconcile the Amazon payout against that settlement as normal.
Invoices charged to your card: these are not in any settlement, so you need to record them yourself. In Xero, create a Spend Money transaction (or in QuickBooks, an Expense) for each bank charge, coded to LMB6: Amazon Advertising Costs with the same tax rate you use for advertising in Link My Books, then reconcile it against the bank line. Alternatively, enter the Amazon advertising invoice as a bill and mark it as paid from the bank line.
💡Good to know
Amazon issues a VAT invoice for every advertising charge. You can download these from Reports > Tax Document Library in Seller Central, or from the Billing page in Campaign Manager. Use these to confirm the VAT treatment on card-paid invoices.
What if the same invoice appears on a settlement and on my card?
Occasionally Amazon charges the card and then reverses the charge within a later settlement. In that case you will see a Cost of Advertising line and a matching offsetting credit on the settlement, so the net effect in Link My Books is nil and the bank charge is the only real cost. If you believe an invoice has genuinely been taken from both your seller balance and your card with no reversal, contact [email protected] with the invoice number, amount and date and we will check it against your settlement data.