Ecommerce Reconciliation Demystified: A Step-by-Step Guide for Indian Sellers

Introduction

Running an e-commerce business in India is a thrill—whether you're selling on Amazon, Flipkart, Myntra or any other platform, there’s always something new happening. But with this excitement comes the challenge of managing your finances effectively. Between orders, platform fees, returns, refunds, and taxes, it’s easy to lose track of where your money is going.

As someone who’s navigated this journey firsthand, I understand how overwhelming it can be. But don’t worry—we’ve got you covered. In this guide, we’ll walk you through the e-commerce reconciliation process step by step.

What Is E-commerce Reconciliation?

At its core, e-commerce reconciliation is the process of matching your internal financial records with the data provided by platforms like Amazon India, Flipkart, or Myntra. The goal is to ensure that everything matches:

• Payments for Fulfilled Orders: You want to ensure that you’ve received the correct amount for each order you’ve shipped.
• Refunds and Returns: Refunds should be properly accounted for, and returns should be processed in line with platform policies.
• Marketplace Fees: Every platform charges a fee for using their services. It’s essential to check that these fees match what was agreed upon and are deducted correctly.

Think of reconciliation as your financial audit—a safety net that ensures no money slips through the cracks.

Why Reconciliation Is Critical for Indian Sellers

If you’re not reconciling your accounts regularly, you’re setting yourself up for potential losses. Here’s why:

• Revenue Leakage: In e-commerce, there are several fees, refunds, and deductions you need to track. Without proper reconciliation, you might miss out on payments or get overcharged on platform fees. This can seriously affect your bottom line.
• Inaccurate Financial Reporting: Imagine reporting inaccurate figures to senior management. this could mislead your business decisions. Your accurate financial records helps avoid costly mistakes.

By staying on top of your reconciliations, you can make sure your business is avoiding any nasty surprises.

Step-by-Step Guide to E-commerce Reconciliation for Indian Sellers

Now that you understand why reconciliation is crucial, let’s dive into how you can effectively reconcile your e-commerce accounts:

1. Collect Financial Data from All Sources

Start by gathering all relevant data from your sales reports, bank statements, invoices, and fee breakdowns from the platforms. This includes:

• Sales Reports: Download your sales data from your financial records and from the platforms like Amazon or Flipkart.
• Bank Statements: Verify the payments credited to your account, including any adjustments made by the platform.
• Payment Reports: Get the payment advices from the platforms and merge them into once file.
• Fee Breakdown Reports: Platforms charge various fees—commissions, shipping, and promotional costs. Having a detailed breakdown will help cross-check if the charges are accurate.

Make sure you have everything in hand for a thorough review.

2. Verify Order Payments

Now, match the orders with the payments advice received from marketplace portals. Pay attention to:

• Missing Payments: Sometimes, payments for fulfilled orders may not reach your bank account on time.
• Partial Payments: Check if the platform has deducted any charges that haven’t been communicated to you.
• Delayed Transfers: Verify if there’s a delay in payments from the platform’s end, which is common, especially during festive seasons or sales events.

Take the time to cross-check each order to ensure you're getting paid for every completed sale.

3. Account for Refunds and Returns

Refunds and returns are a part of every seller's journey. Here’s how to make sure they’re processed correctly:

• Platform Refunds: Cross-check the refunds processed by the platform against your records. Platforms often charge you for returned goods, so ensure that the amounts are accurately reflected.
• Seller Protection Policies: Ensure that the platform has reimbursed you for returns covered under their seller protection policies.

4. Review Marketplace Fees

E-commerce platforms in India charge various fees, and they can be tricky to track. Common fees include:

• Commission Fees: These vary depending on the product category and the platform.
• Shipping & Fulfillment Fees: These are deducted if you’re using the platform’s logistics services.
• Advertising Fees: Many platforms charge for sponsored product listings, which should be tracked separately.

Ensure you compare the fees charged by the platform with the terms of your agreement. If you’re unsure about any fee, reach out to their support for clarification.

5. Identify and Investigate Discrepancies

Once you’ve reviewed all your data, look for discrepancies such as:

• Uncredited Payments: Orders that were fulfilled but not paid for.
• Overcharged Fees: Any fees that seem higher than what was agreed upon.
• Refund Issues: Incorrect refund amounts or missing reimbursements.

Document these discrepancies using spreadsheets or reconciliation tools to make them easier to resolve later.

6. Resolve Issues with the Platform

Discrepancies are bound to happen, but resolving them is easier than you think. When you spot an issue:

• Contact Seller Support: Reach out to the platform’s seller support team with detailed information—transaction IDs, screenshots, and a clear explanation of the issue.
• Keep Records of Communication: Always document your conversations, as this will help in case you need to escalate the issue.
• Follow Up: Don’t be afraid to follow up until the issue is resolved. Be persistent, but always professional.

Remember, there is time limit to raise the issue for these platforms, timely raising a claim or issue if necessary.

Conclusion

E-commerce reconciliation might seem like a tedious task, but it’s essential for ensuring your business remains profitable. By following a systematic approach and leveraging the right technology and tools, you can keep your financial records accurate, avoid costly mistakes, and focus on growing your business.

Call to Action:
Feeling overwhelmed by the reconciliation process? Let us take the burden off your shoulders. We specialize in e-commerce reconciliation services for Indian sellers and can help streamline your financial processes. Reach out today to simplify your financial management and keep your business on track!