Reconciliation answers one question precisely: does the money you expected equal the money you received, and if not, have you explained every part of the difference?
The three numbers that must agree
- Expected. What the orders say you are owed.
- Settled. What the marketplace says it paid you for the period.
- Received. What actually landed in your bank.
The gap between 1 and 3 is the sum of everything that happened in between — charges, refunds, taxes, timing. Reconciliation is closing that gap line by line.
Expected — from orders
Expected starts from the order feed: selling prices per order. It already differs from “received” because it is gross of the charges you owe and the taxes the marketplace handles.
Received — settlements and payouts
The settlement report restates your sales minus charges, refunds with their reversals, GST, and TCS/TDS. The payout is the net amount the marketplace actually remits, sometimes minus additional items like TDS and processing adjustments.
Matching orders to settlements
Each settlement line refers to orders. Link them:
| Settlement line | Matches to |
|---|---|
| Order value | Expected sales per order |
| Commission and fees | Charge lines per order |
| Refund value | Reversal of prior order entries |
| TCS / TDS | Tax positions per order and period |
| Net amount | The settlement total |
When the settlement and the order-level view refer to the same identifiers, the two numbers agree by construction.
Matching settlements to bank
Larger movements, per-period and per-currency deposits, payment-processing differences, and fractions of a period can split a settlement across multiple bank lines. Match each deposit to its settlement, and flag why one expected payment is split.
Explaining the residue
Even after matching, a residue usually remains. The goal is not zero residue — it is residue that is fully explained:
- A refund that arrived after the original settlement.
- A charge introduced by a marketplace policy change.
- TDS on the payout not visible in the order feed.
- A correction or clawback of a prior period.
Track each residual bucket with counts and amounts. When every bucket is explained, the close can be trusted.
Reconciliation at scale
At hundreds or thousands of orders, do this algorithmically:
- Import settlement and payout data from each marketplace.
- Link settlement lines to orders.
- Match expected to settled.
- Match settled to bank.
- Report the residue, with every residual line flagged for review.
What comes after reconciliation
Reconciled data is the input for trustworthy accounting. Once events are explained at order level, GST-wise and warehouse-wise accounting and ERP posting rest on facts instead of guesses.