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Month-End Closing for E-Commerce Sellers: Complete Accounting, GST & Reconciliation Guide (India)

Devesh Thakur
Month-End Closing for E-Commerce Sellers Complete Accounting, GST & Reconciliation Guide (India) by CA Devesh Thakur

Month-End Closing for E-Commerce Sellers Complete Accounting, GST & Reconciliation Guide (India) by CA Devesh Thakur

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Author: CA Devesh Thakur

cadeveshthakur@gmail.com

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:

✔ 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

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:

2.2 Payment Gateway Verification

For online website orders:

✔ 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:

3.2 Match Returns with Physical Stock

Check your warehouse:

3.3 Issue Credit Notes

Every return must translate into:

✔ 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

4.2 Update COGS (Cost of Goods Sold)

Formula:
Opening Stock + Purchases – Closing Stock = COGS

✔ What affects COGS?

✔ 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:

5.2 Verify Supplier GST Invoices

Check:

5.3 Record Business Expenses

Most important e-commerce expenses:

6️⃣ GST Month-End Checklist for E-Commerce Sellers

6.1 Outward Supply Matching

Cross-check:

6.2 ITC Reconciliation

Match your purchase register with:

6.3 GST Liability Computation

7️⃣ TDS & TCS Tracking for E-Commerce

✔ Track marketplace TCS

Check:

✔ Track TDS you must deduct

For:

✔ 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:

8.2 Calculate Gross Profit

Gross Profit = Net Revenue – COGS

8.3 Deduct Operating Expenses

8.4 Understand Net Profit

This is the number every founder must track.

9️⃣ Balance Sheet Review — Your Business Health Snapshot

Review:

This is the most ignored but MOST important part of financial health.

🔟 Marketplace & Website Operational Review

For Amazon

For Flipkart

For Meesho

For Shopify/WooCommerce

1️⃣1️⃣ Document Archival & Cloud Backup

Prepare monthly folders:

Upload to:

This helps during audits, notices & yearly closing.

1️⃣2️⃣ Internal Review & Team Sign-Off

Conduct a review with:

Discuss:

1️⃣3️⃣ Cash Flow Management (The Lifeline of E-Commerce)

Plan:

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.

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