Most of the ecommerce sellers are happy when they finally make it online. What's next they start receiving their first order, then second and then it grows. The whole experience of going online seems good. Then they may face a speed bump when the seller receives his first online payment.

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Learn Payment Reconciliation
for eCommerce Sellers
Most of the ecommerce sellers are happy when they finally make it
online.
What's next they start receiving their first order, then second and then it
grows. The whole experience of going online seems good. Then they
may face a speed bump when the seller receives his first online payment.
Expectation meets Reality:
The amount which sellers receive does not match with his online dream
expectations. The first thought which comes to his mind is that the
marketplace has done a mistake in payments. Are you sure you are
receiving the right amount due to you from marketplaces? Are you sure

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you are recording all your orders and corresponding payments? If not,
do you know where you need to optimize and where you need to cut
down?
Why tallying receivables remain a pain point for sellers?
It’s a tedious, complicated task, more so in case of high sales volume
Accommodating a big list of fees and charges like service tax, listing
fee, fulfilment fee, logistic fee, which are subject to change any time
The rate card varies from product category to product category, from
marketplace to marketplace
Lack of transparency on marketplace’s end
2-3 months product returns window period after collecting from buyers
Frequent policy changes
Importance of Payment Reconciliation
A key aspect to determine the financial health is payment reconciliation,
i.e. using two sets of records to ensure figures are accurate and in
agreement, thus arriving at the profit/loss figures.
Just like technology revolutionized many an aspect of conducting
business, books and registers used for maintaining accounts gave way to
computer software like Tally, Quickbooks etc. for payment
reconciliation.

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By automating marketplace account reconciliations, you get the
following benefits:
1. Reduce loss due to returns:
No doubt, returns are a troubling aspect of ecommerce. With multiple
policies, keeping track of returns and associated charges becomes a
herculean task. However, with advanced dashboards and reports, you
can channelize tracking of instances like:
Marketplaces don’t charge sales commission for returned products.
Sellers can claim refund from marketplaces under seller protection plan
if they receive a damaged return from logistics partner. Sometimes,
customer asks for a return after remittance for the same is received by
seller. In this case the marketplace deducts money from the next
remittance cycle.
2) Estimate cost of investment in each marketplace:
A business is profitable only when your returns are higher than what you
have shelled out from your end. Obviously, even the ecommerce channel
will take time to generate returns. But with varying payment cycles of
marketplaces, it becomes all the more essential to know you are getting
the worth of what you are spending. For example, sellers are part of
promotional campaigns run by marketplaces. So an analysis of the
remittance report will show the remitted amount to be less that the
selling price of the goods sold. With reconciliation software, you know
of the amount stuck in each remittance cycle.

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3) Pay Tax Liabilities on time:
Tax liabilities can be calculated based on the invoice sent by
marketplaces. These tax invoices are generated at the end of the month
or sometimes at the end of the quarter. The same TDS for the invoices
need to pay the tax authority before the 6th of every month. A
reconciliation report should always show the amount to be refunded
back to the seller, in case the seller claims for a refund.
What Options are there for Sellers for Payment Reconciliation?
1) No personal record, rely on marketplaces’ seller panel:
This works for sellers who sell on 1-2 online marketplaces and sell
limited products. Big ecommerce firms’ seller panel is often sufficient
for few merchants as it provides all order details, all return details,
weekly disbursement reports, and all pending dues. Marketplaces also
send regular alerts through sms’ and emails.
2) Ecommerce and reconciliation softwares:
With the growth of ecommerce industry in India, the need for
ecommerce-specific products and services too has gone up. Merchants
who sell on multiple ecommerce sites and receive high number of orders
on a monthly basis choose to outsource their tasks including payment
reconciliation to multi-channel order and inventory firms like
Browntape, Trackmypayment, LPRecon, etc. Such third-party
ecommerce service providers help to keep track of payments from

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various marketplaces, paid/unpaid order stats, and unreasonable/extra
deductions.
New tech start-ups that provide reconciliation solution exclusively have
mushroomed as well. Then there is ERP & Accounting software Tally
used by Chartered Accountants across the country.
3) Manual record keeping:
If you don’t wish to or can’t afford to spend on paid software, then
keeping a manual record is your safest bet. Most sellers use spreadsheets
like Microsoft Excel to maintain payment reconciliation record.
Use formulas and functions like Pivot Table & VLOOKUP in the excel
sheet to insert order details and track marketplace payments.
Conclusion
The aim of a seller should be to minimize the gap between the expected
payment and actual payment received. The only way it can happen is by
spotting discrepancies immediately while updating book of accounting.
References: (indianonlineseller)