COD Reconciliation for Small Businesses: Eliminating Cash Leakage
Step-by-step Cash on Delivery reconciliation guide. Audit courier remittances, detect unremitted collections, and track NDR deductions with zero errors.
The COD Settlement Cycle: Where Cash Disappears
In Cash on Delivery fulfillment, delivery delivery associates collect hard cash from buyers upon doorstep handover. Carriers aggregate these funds and deposit them to the seller's bank account on fixed payout schedules (e.g. T+2 or T+7 days). During this lag, unremitted collections, dispute holdbacks, and unauthorized freight offset deductions frequently lead to unnoticed cash leakage.
Reconciling Delivered Status Against Bank Credits
A systematic weekly audit matches three critical data streams: (1) OMS marked 'Delivered' orders, (2) Courier portal remittance advice reports with unique UTR transaction numbers, and (3) Seller net bank statements. Any order delivered over 10 days ago without an associated UTR number must be instantly escalated to the courier accounts team.
Accounting for Courier COD Handling Fees & GST
Carriers deduct a COD collection fee (typically ₹30-₹50 or 1.5-2.0% of order value) plus 18% GST. Ensuring that this expense is categorized correctly as an operational logistics expense rather than a revenue markdown is critical for accurate income tax filings.
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