Author: CA Devesh Thakur
Introduction: Why Month-End Closing is a Game-Changer for Online Sellers
Running an e-commerce business is not just about receiving orders and dispatching parcels. Behind every successful online store lies one crucial but often ignored process — Month-End Closing.
Whether you sell on Amazon, Flipkart, Meesho, Myntra, Ajio, Shopify, WooCommerce, or a custom D2C website, you deal with:
✔ Multiple settlement cycles
✔ Frequent returns & cancellations
✔ Complex GST rules
✔ Marketplace commissions
✔ Ad expenses & shipping charges
✔ Inventory discrepancies
One small mistake in reconciliation can silently eat up your margins and trigger tax issues.
This blog gives you the most comprehensive and engaging month-end checklist for Indian e-commerce sellers — a perfect reference for business owners, accountants, and CAs managing online businesses.
1️⃣ Consolidate All Sales Data for the Month
Your month-end closing starts with gathering every piece of sales information across all platforms:
- Amazon Seller Central
- Flipkart Seller Hub
- Meesho Supplier Panel
- Shopify / WooCommerce
- Payment gateway dashboards (Razorpay, Cashfree, PayU)
- Offline billing tools
- POS or wholesale sales (if any)
✔ Why this step matters
Because marketplace dashboards often show gross amounts, while settlements reflect net values after deductions. If you skip this step, your books will never match your bank statements.
✔ What to do
- Export sales summary
- Separate marketplace and website sales
- Categorize into B2C, B2B, interstate, intrastate & export
- Compare order reports with dispatch logs
- Ensure all fulfilled orders appear in marketplace settlements
2️⃣ Payment Gateway & Bank Reconciliation That Protects Your Cash Flow
Your bank account is the heart of your business. Month-end closing ensures that every rupee is accounted for.
2.1 Bank Statement Reconciliation
Match every credit with:
- Marketplace settlements
- Payment gateway deposits
- COD remittances
- Refund reversals
- Dispute charges
2.2 Payment Gateway Verification
For online website orders:
- Verify website orders vs. PG settlements
- Deduct PG charges & GST on PG charges
- Identify failed transactions
- Confirm refund settlements
✔ Why this step matters
A missing settlement or double-charged fee can silently reduce your profit — and it’s more common than you think.
3️⃣ Returns, Refunds & Cancelled Orders — The Silent Killers of Profit
E-commerce returns can disrupt your stock, sales numbers, and GST reporting.
3.1 Download Complete Return Reports
Take all data:
- RTO
- Delivered returns
- Customer refunds
- Quality-check failed returns
- Lost-in-transit items
3.2 Match Returns with Physical Stock
Check your warehouse:
- Returned item received?
- Is it saleable?
- Does system stock match?
3.3 Issue Credit Notes
Every return must translate into:
- Credit note
- Reverse GST entry
- Sales ledger correction
✔ Why this step matters
If you do not manage returns properly, GST and accounting mismatches can lead to notices, loss of ITC, or misreported profit.
4️⃣ Inventory Closing & COGS: The Backbone of E-Commerce Profitability
4.1 Conduct a Physical Stock Audit
- Count every SKU
- Compare with inventory software
- Adjust missing/damaged units
- Reconcile returns
4.2 Update COGS (Cost of Goods Sold)
Formula:
Opening Stock + Purchases – Closing Stock = COGS
✔ What affects COGS?
- Damaged items
- Expiry
- Bundled offers
- Free samples
- Influencer gifting units
✔ Why this step matters
COGS directly impacts profitability, valuation, and GST filings.
5️⃣ Purchase Register & Expense Ledger — Get Your Books Audit Ready
5.1 Record All Vendor Purchases
Include:
- Inventory purchases
- Packaging material
- Raw materials
- Office consumables
5.2 Verify Supplier GST Invoices
Check:
- GSTIN
- HSN code
- Invoice date
- GST split
- ITC eligibility
- Whether invoice appears in GSTR-2B
5.3 Record Business Expenses
Most important e-commerce expenses:
- Shipping charges
- Amazon/Flipkart commissions
- Meesho service charges
- Marketplace penalties
- Facebook/Google ads
- Marketplace advertising
- Payment gateway fees
- Agency/consultant fees
- Rent, phone, and utility expenses
6️⃣ GST Month-End Checklist for E-Commerce Sellers
6.1 Outward Supply Matching
Cross-check:
- Sales ledger vs. GSTR-1
- Marketplace uploaded data
- B2B invoice details
6.2 ITC Reconciliation
Match your purchase register with:
- GSTR-2B
- Eligible ITC
- Blocked credits
- Reversal under Rule 37 (non-payment to vendor)
6.3 GST Liability Computation
- Output GST
- Input GST
- Adjustments
- Reverse charge entries
- Credit notes impact
7️⃣ TDS & TCS Tracking for E-Commerce
✔ Track marketplace TCS
Check:
- TCS collected
- Monthly TCS certificate
- 26AS entries
✔ Track TDS you must deduct
For:
- Employee salaries
- Professionals (CA, consultant, agency)
- Freelancer contracts
- Rent
✔ Why this step matters
Incorrect TDS/TCS leads to demand notices.
8️⃣ Monthly Profit & Loss Statement (The CEO’s Favourite Report)
The P&L tells you EXACTLY how your business performed.
8.1 Compute Revenue
Include:
- Gross sales
- Less returns
- Less cancellations
- Add marketplace subsidies
- Less seller-funded discounts
8.2 Calculate Gross Profit
Gross Profit = Net Revenue – COGS
8.3 Deduct Operating Expenses
- Ad spend
- Commissions
- Payment gateway fees
- Salaries
- Rent
- Utilities
8.4 Understand Net Profit
This is the number every founder must track.
9️⃣ Balance Sheet Review — Your Business Health Snapshot
Review:
- Cash & bank
- Inventory
- Advances
- Vendor payables
- GST receivable/payable
- TDS payable
- Marketplace unsettled balances
This is the most ignored but MOST important part of financial health.
🔟 Marketplace & Website Operational Review
For Amazon
- Account health
- ODR & return rate
- Payments withheld
For Flipkart
- Return analytics
- Seller scorecard
- Weight disputes
For Meesho
- Penalties
- Commission disputes
- RTO percentage
For Shopify/WooCommerce
- Cart abandonment
- Conversion rate
- UTM tracking
1️⃣1️⃣ Document Archival & Cloud Backup
Prepare monthly folders:
- Sales
- Purchases
- Expenses
- GST workings
- Delivery partner bills
- PG statements
- Financial statements
Upload to:
- Google Drive
- Dropbox
- OneDrive
This helps during audits, notices & yearly closing.
1️⃣2️⃣ Internal Review & Team Sign-Off
Conduct a review with:
- Accounts
- Warehouse
- Marketing
- Founder / Director
Discuss:
- Profitable SKUs
- Loss-making categories
- Return percentages
- Cash flow gaps
- Next month buying plan
1️⃣3️⃣ Cash Flow Management (The Lifeline of E-Commerce)
Plan:
- Expected settlements
- GST payments
- Vendor payments
- Ad budgets
Avoid the #1 reason most e-commerce sellers struggle:
Cash Crunch.
1️⃣4️⃣ Final Month-End Sign-Off Checklist
✔ Sales reconciled
✔ Marketplace settlements checked
✔ PG and bank matched
✔ Inventory closed
✔ COGS calculated
✔ GST updated
✔ ITC matched
✔ TDS/TCS reconciled
✔ P&L created
✔ Balance sheet updated
✔ Cash flow prepared
✔ Documents archived
✔ Team sign-off done
Final Thoughts
E-commerce bookkeeping isn’t complicated — it’s just structured.
When your month-end closing becomes a routine, your business gains:
⭐ Clear profitability
⭐ Better inventory planning
⭐ Clean GST filings
⭐ Accurate cash flow
⭐ Higher marketplace ratings
⭐ Confidence during audits or inspections
This checklist is your financial toolkit to ensure your online business runs smoothly, professionally, and profitably.
