Pick delivered orders that the marketplace has not settled by your cut-off date. Compute the expected payout: gross sale less commission and fees per your agreement, a returns provision based on your own history, and expected tax deductions. Debit marketplace receivable, credit sales, and reverse or clear the entry against actual settlements next month. Confirm treatment with your auditor.
Decide which orders belong in the receivable
A receivable exists when you have earned the revenue but the marketplace has not yet paid you. Under your applicable accounting framework (Ind AS 115 or the older AS 9, depending on your company), revenue is generally recognised when control passes to the customer. For most marketplace orders that means delivery, not order date or dispatch. Confirm your policy with your auditor and apply it consistently.
- Delivered on or before cut-off, not settled: include in the receivable.
- Dispatched, not delivered: generally not yet revenue. Keep the stock as in transit.
- Returned or RTO before cut-off: exclude, and restore stock.
- Delivered but still in the return window: include, with a returns provision.
Pull the data you need before closing
Do not build this from your sales dashboard alone. You need documents that tie to the marketplace's own records.
- Order-level sales report with delivery dates.
- Settlement reports showing paid orders, payment dates and bank reference numbers.
- Your seller agreement and current rate card for commission, fixed fees, shipping and other charges.
- Returns, RTO and cancellation reports.
- Bank statement for receipts up to the cut-off date.
Fix one cut-off timestamp, usually the last day of the month, and use it for every report. Settlement cycles differ by marketplace and category, so check the payout timeline in your agreement rather than assuming one.
Calculate the expected receivable, order by order
- List all orders delivered up to cut-off.
- Remove orders already settled, fully or partly, by matching order ID and SKU against settlement reports.
- Apply commission and fees as per your agreed terms. Take the rates from your agreement or rate card, never from a general web source, and confirm the latest version.
- Estimate returns using your own historical return rate by category or marketplace, not a flat guess.
- Estimate statutory deductions such as TCS under GST and TDS under the Income-tax Act. Ask your tax adviser to confirm the current rates and how they appear in your settlement reports.
- The result is your expected net settlement, which is the receivable amount.
Doing this at order level, even if you book in summary, lets you defend the number during audit and match it next month.
Pass the month-end journal entry
A common structure is below. Adjust the ledger names and the GST split to your chart of accounts.
- Debit: Marketplace receivable (expected net settlement).
- Debit: Commission and marketplace fees expense.
- Debit: Tax receivable (expected TCS/TDS), if your policy books it this way.
- Debit: Sales returns, or a returns provision, for expected returns.
- Credit: Sales, with output GST shown separately as per your invoices.
Many teams reverse this accrual on day one of the next month and book actual settlements as they arrive. Others keep it open and clear it against settlements. Either works if you do it consistently and can show what remains open.
Handle returns, short payments and disputes
The expected receivable is rarely equal to what you finally receive. Differences usually come from returns beyond your provision, fee deductions not matching your terms, or orders missing from settlements.
- Compare actual deductions with your agreement. Do not silently absorb unexplained charges into fees.
- Track each disputed or short-paid amount as an open case with order ID, amount and status.
- Review ageing. If an amount is unlikely to be recovered, discuss a provision for doubtful receivables with your auditor.
MarketplaceMetrics by Fundle is built for this part of the job: it reconciles sales with settlements, checks commissions and fees against agreed terms, and tracks returns and recovery cases. Fundle currently reviews Myntra Excel reports, and other marketplaces are in scope discussion.
Month-end checklist
| Check | Where to look |
|---|---|
| Cut-off date applied uniformly | All sales, returns and settlement reports |
| Delivered orders only | Order report with delivery date |
| Already settled orders removed | Settlement reports and bank statement |
| Fees match agreed terms | Seller agreement, rate card |
| Returns provision basis documented | Your historical return data |
| Tax deductions confirmed | Tax adviser, settlement report |
Worked example
Illustrative example only. All ₹ figures are made up for explanation and are not real rates or results.
A brand has delivered orders worth ₹5,00,000 (invoice value) on one marketplace that remain unsettled on 31 March.
| Item | Illustrative ₹ |
|---|---|
| Gross value of delivered, unsettled orders | 5,00,000 |
| Less: commission and fees per agreement | (90,000) |
| Less: expected returns (from own history) | (60,000) |
| Less: expected TCS/TDS deductions | (8,000) |
| Marketplace receivable | 3,42,000 |
Entry: Debit Marketplace receivable ₹3,42,000, Commission and fees ₹90,000, Sales returns ₹60,000, Tax receivable ₹8,000. Credit Sales ₹5,00,000 (split out GST in practice). Debits and credits both total ₹5,00,000. In April, clear the receivable against actual settlements and investigate any difference.
Questions and answers
Should I book revenue at dispatch or delivery?
It depends on when control passes to the customer under your accounting policy. For most marketplace orders that is delivery. Dispatched but undelivered orders are usually not revenue yet. Confirm the treatment with your auditor and apply it consistently every month.
Do I book the receivable gross or net of commission?
Book what you expect to receive, so net of commission, fees, expected returns and tax deductions, with each component visible in separate ledgers. This keeps expense and margin reporting accurate. Use rates from your seller agreement or rate card, and confirm the latest terms.
How do I estimate the returns provision?
Use your own historical return rate by marketplace and category, applied to delivered orders still within the return window. Document the basis and revisit it when actual returns differ. Avoid industry averages, because return patterns vary widely by product and brand.
What if the settlement differs from my receivable?
Investigate by order. Differences usually come from returns, fee deductions or missing orders. Clear what is explained, log what is disputed as a recovery case with order ID and amount, and discuss a provision with your auditor for amounts unlikely to be recovered.