Handicrafts Seller - Multi-Marketplace Reconciliation

Monthly Accounting + GST + Marketplace Management

Handicrafts Seller – Multi-Marketplace Reconciliation

Client Profile

  • Business: Handmade handicrafts and artifacts
  • Platforms: Amazon, Flipkart, Meesho, own website
  • Stage: 2 years old, ₹3 Cr revenue
  • Challenge: Accounting chaos across multiple platforms

The Challenge

Karthik's handicrafts business was thriving with sales across four channels. However, his accounting was a nightmare:

Multiple Platform Complexities:

  • Different commission structures: Amazon (15%), Flipkart (12%), Meesho (10%)
  • Different settlement cycles: Amazon (7 days), Flipkart (15 days), Meesho (10 days)
  • TCS deductions varying by platform
  • Returns and refunds happening across all platforms
  • Promotional charges deducted randomly
  • No unified view of profitability per platform

Accounting Mess:

  • Recording only final settlement amounts (not gross sales)

  • GST returns showed different numbers than bank statements

  • No tracking of marketplace commissions, shipping fees, promotional charges

  • Returns and refunds not properly accounted

  • TCS deducted by platforms not claimed in ITR

  • Couldn't answer: "Which platform is most profitable?"

  • Annual turnover showing ₹1.8 Cr but actual sales were ₹3 Cr

    "My CA asked for sales data. I gave him bank statements. He said that's settlement, not sales. I was completely confused about my own business numbers!"

Our Solution

Phase 1: Historical Data Cleanup (Month 1)

Downloaded All Platform Reports (24 months):

  • Amazon: Sales, returns, fees, settlements
  • Flipkart: Transaction reports, fee structure
  • Meesho: Order and payment reports
  • Website: Razorpay/Stripe transaction logs

Reconciliation Process:

  1. Gross Sales Recognition:

    • Recorded actual customer invoices (₹3 Cr)
    • Not just settlement amounts (₹1.8 Cr)

  2. Expense Categorization:

    • Marketplace commissions: ₹36L
    • Shipping & logistics: ₹18L
    • Payment gateway fees: ₹4.5L
    • Promotional charges: ₹8L
    • Returns & refunds: ₹12L

  3. GST Reconciliation:

    • Calculated GST on gross sales (₹3 Cr)
    • Matched with GSTR-1 filed (was understated)
    • Filed revised returns for 6 months
    • Voluntary payment: ₹2.8L (avoided penalty)

  4. TCS Credit:

    • Identified ₹4.2L TCS deducted by platforms
    • Claimed in Form 26AS
    • Adjusted against tax liability

Phase 2: System Implementation (Month 2)

Created Accounting Framework:

Daily Recording:

  • Each order recorded as gross sale
  • Marketplace commission as expense
  • GST on gross sale amount
  • Returns/refunds as contra-entries

Platform-wise P&L:

Amazon:
- Sales: ₹1.5 Cr
- Commission: ₹22.5L (15%)
- Shipping: ₹9L
- Promotions: ₹4L
- Net Revenue: ₹1.145 Cr
- Margin: 76.3%

Flipkart:
- Sales: ₹90L
- Commission: ₹10.8L (12%)
- Shipping: ₹5.4L
- Promotions: ₹2L
- Net Revenue: ₹71.8L
- Margin: 79.8%

Meesho:
- Sales: ₹45L
- Commission: ₹4.5L (10%)
- Shipping: ₹2.7L
- Promotions: ₹1.5L
- Net Revenue: ₹36.3L
- Margin: 80.7%

Own Website:
- Sales: ₹15L
- Payment Gateway: ₹1.5L (3%)
- Shipping: ₹0.9L
- Net Revenue: ₹12.6L
- Margin: 84%

Implemented Tools:

  • Automated data extraction from platforms (via APIs)
  • Excel-based reconciliation tool
  • Monthly dashboard with KPIs
  • GST auto-calculation based on sales

Phase 3: Monthly Compliance (Ongoing)

Monthly Workflow:

  1. Download platform reports (1st-5th of month)
  2. Reconcile sales with bank settlements
  3. Record all expenses and commissions
  4. Calculate platform-wise profitability
  5. File GSTR-1 (by 10th)
  6. File GSTR-3B (by 20th)
  7. TDS/TCS reconciliation
  8. MIS report to owner

Value-Added Services:

  • Quarterly business reviews
  • Platform performance analysis
  • Pricing strategy recommendations
  • Working capital planning

The Results

Financial Clarity Achieved:

Discovered True Business Metrics:

  • Actual Sales: ₹3 Cr
  • Total Platform Fees: ₹36L
  • Net Revenue: ₹2.64 Cr
  • Overall Margin: 28% (after all costs)
  • Most Profitable Platform: Own website (84% vs. Meesho 80.7% vs. Amazon 76.3%)

Tax Compliance Fixed:

  • Corrected GST returns (voluntary payment ₹2.8L)
  • Claimed TCS credit of ₹4.2L
  • Net Tax Savings: ₹1.4L
  • Avoided potential penalty & Interest of ₹5-8L

Strategic Insights Enabled:

  • Realized Amazon's volume (50% of sales) but lowest margin
  • Meesho's higher margin justified increased focus
  • Own website most profitable - needed marketing investment
  • Data-driven decisions on promotional spends

Business Impact (12 months later):

Revenue Optimization:

  • Shifted 20% traffic from Amazon to own website
  • Increased Meesho focus (grew from 15% to 25% of sales)
  • Website sales tripled (₹15L to ₹48L annually)
  • Overall margin improved from 88% to 91%

Profitability:

  • Year 1: ₹3 Cr sales, ₹36L platform fees → ₹2.64 Cr net
  • Year 2: ₹4.2 Cr sales, ₹42L platform fees → ₹3.78 Cr net
  • Margin improvement: 3% = ₹12.6L additional profit

Operational Efficiency:

  • Monthly books closed within 5 days (vs. 45 days earlier)
  • Real-time profitability visibility
  • Data-driven inventory planning
  • Better working capital management

Client Testimonial

“For 2 years, I was flying blind. I knew I was selling ₹25 lakhs per month, but had no idea if I was making money. Task360's platform-wise reconciliation was eye-opening - I was losing money on Amazon promotions while my own website was printing cash! Now I make decisions based on data, not gut feel. Revenue up 40%, profit up 55%.”

Karthik N. — Founder, Heritage Handicrafts

Key Takeaways

✓ eCommerce accounting must capture gross sales, not just settlements
✓ Platform fees, commissions, and TCS must be tracked separately
✓ Platform-wise profitability analysis drives strategic decisions
✓ Proper accounting reveals where business actually makes money
✓ TCS credit can be significant tax saving
✓ Monthly reconciliation prevents year-end disasters
✓ Data-driven decisions increase profitability more than revenue growth

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