Many businesses and companies are selling their products on Flipkart daily which is one of the leading e-commerce marketplaces today. Therefore selling on Flipkart helps a business’s reach grow over a large area. Although selling on this platform gives vast benefits to a business, there are still numerous problems faced by a business when it comes to receiving their payments or getting accurate settlements.
This can happen as there are millions of transactions taking place on Flipkart daily. Companies that deal with Flipkart and sell on such a wide scale cannot keep up with the large-scale data handling. As the data provided by Flipkart is very vast, it requires a very meticulous and time-consuming analysis to make it readable for reconciling.
Reconciliation of this data is needed as sometimes payments or bank transactions might fail due to technical or other related problems or Flipkart itself might not be able to verify transactions and make payments to the sellers. Sometimes even Flipkart can make errors in calculation and a company can end up suffering losses. These losses if not reconciled can be high and sometimes go unnoticed.
This is where Cointab comes into the picture. Cointab offers an Automated Reconciliation System that makes this meticulous and laborious job of data handling, processing, and reconciling as easy as it comes. This system is designed to be able to adapt to any type of data through a little configuration. Once configured, all a company needs to do is put in the data that they need to be reconciled. Then the system generates the output and gives the necessary data as to which transactions are correctly reconciled and which ones have any errors. Once this task has been done all a company needs to do is get their finance team to assess this information and raise disputes with Flipkart and try to recover money for the disputed transactions.
Flipkart payment reconciliation process:
The required data for reconciliation are as follows:
- Flipkart Order Report
- Flipkart Sales Report
- Flipkart Settlement Report
- Flipkart Returns Report
Flipkart Order report
Whenever an order gets placed in Flipkart, an entry of the order gets recorded into the Order Report. This data contains item-wise details of all the orders, meaning each order will have a separate entry of each item with its quantity in this file.
Flipkart Sales Report
This file has two sheets and can also be called a GST Tax report and contains:
- The Item wise detail of the orders.
- Data on how many orders are fulfilled.
- The number of orders canceled.
- The number of orders returned by the customer.
- The invoice amount which is been collected from the customer.
The other sheet in this file is called Sales Cashback which contains the data of the seller cashback amount debited or credited by Flipkart.
Flipkart Settlement Report
This file has several sheets;
- Orders
- Ads
- Non-Order SPF
- TDS
The order-wise settlement contains the details of various charges levied such as commission fee, fixed fee, shipping fee, collection fee, etc., and the various taxes like TDS, TCS, and so on. It also contains the actual settlement amount after all the deductions for each order.
The Ads sheet contains all the deductions for the Advertisements which have been run on Flipkart by the business.
The Storage sheet contains the charges for the warehouse and the reparations for the damaged inventory.
Then the TDS sheet contains the information about TDS paid back by Flipkart.
Return report
This file contains the data of returned order items that have been collected by Flipkart from the customers. This report is useful to check if inventory is coming back to the warehouse in case of RTO and customer return.
These are the reports required to do the necessary reconciliation.
Configuration process:
Using the Order report, we create a summary report at the Order Number level.
Then for each order, we do a lookup in the Sales report to calculate the Expected Amount. Invoice Amount column of the Sales report for all rows where Event Sub Type is Sale or Return Cancellation is taken as positive Invoice Amount (like a sale) and all rows where Event Sub Type is Return or Cancellation is taken as negative Invoice Amount (like a credit note). The Sales Cashback report is also used to get the Credit Note amount and Debit Note amount. By summing all these rows using positive and negative invoice values we get the Expected Amount that Flipkart should pay a business for an Order Number. This calculation is done for all Order Numbers.
Then for each order, we do a lookup in the Settlement report to calculate the Payment Amount. From the Settlement report, the sum of Sale Amount, Total Offer Amount, My Share, and Customer Shipping Amount is taken as Payment Received and Refund Amount is taken as Payment Refunded. We then sum up these two values to get the Payment Amount.
Reconciled Output
If in any order the Expected Amount is equal to the Payment Amount, it will be considered as a Reconciled Order. It means that Flipkart is making payment for an Order as per its Invoice Amount from the sales report.
If the Expected Amount is greater than the Payment Amount, it will be considered a Less Payment Received Order. It means that Flipkart is paying less compared to an Order’s Invoice Amount as per the sales report.
If the Expected Amount is less than the Payment Amount, it will be considered a More Payment Received Order. It means that Flipkart is paying more compared to an Order’s Invoice Amount as per the sales report.
If there is no entry of payment in the Settlement Report and we are expecting the amount then we will highlight these orders as Payment Not Received.
If any orders have no entry in the Sales Report or the net invoice amount is 0 and no payment is received as per the Settlement report then those orders are considered Canceled transactions.
The result shown is as follows (for a particular date range):
Inventory Return Verification
If there is a Credit Note in the Sales report then we expect the inventory back via Return report. We have added a check for this to check whether you are getting your inventory back for RTO / Customer Returns.
Bank Statement Reconciliation
After completing payment reconciliation, we check if the amount promised by Flipkart as the Settlement amount is reflected in the bank statements.
This reconciliation will happen between the Flipkart settlement report and the bank statement. First, we extract the bank UTR from the NEFT ID column in the settlement report and then similarly read the bank narration column and extract UTRs from the bank statement. We then link both bank statements and Flipkart settlement reports on extracted UTRs.
Then we create a column named ‘Partner Amount’ in the bank statement, where we sum up all the settlement amounts as the settlement report on each UTR. Now we will simply subtract this ‘Partner Amount’ from the transaction amount to get the difference/variance between these two amounts to see if Flipkart is crediting the correct amount in the bank account.
The result is shown as follows:
Total Flipkart Settlements
These are total bank rows where narration contains the “Flipkart” keyword.
Reconciled with Flipkart Settlement Report
These are all bank rows where Flipkart promised settlement amount matches the bank credit amount.
Less Settlement Received from Flipkart
These are all bank rows where bank credit is less than Flipkart promised settlement amount.
More Settlement Received from Flipkart
These are all bank rows where bank credit is more than Flipkart promised settlement amount.
Flipkart Settlement Received but Missing from Flipkart Report
These are all bank rows where bank credit UTR is not present in the Flipkart settlement report.
Flipkart Fee Verification
For a detailed explanation of how Flipkart fees are verified, please visit this page.
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Cointab’s Automated Reconciliation System does Flipkart marketplace payment reconciliation in this level of detail which is very difficult to do manually.
If you are facing any challenges in Flipkart reconciliation then you can contact us.
