eCommerce ERP Consultant, India

COD, shipping aggregators and the cost of RTO

Cash on delivery remains a large part of website orders for many Indian D2C brands, especially outside the metros. The shipping aggregator or courier collects the cash, deducts its freight and COD charges, and remits the rest on its own cycle. Meanwhile a share of COD orders are refused or undelivered and travel back as return to origin, costing forward freight, reverse freight and handling, and sometimes arriving damaged or incomplete.

If the ERP books revenue at dispatch and waits for someone to update RTO in a spreadsheet, revenue is overstated and stock is wrong. I design the flow so each state change comes from the shipping partner's data:

• Delivered COD orders become a receivable from the aggregator, not from the customer.
• Remittance files post cash received and charges, and leave a clear list of unremitted AWBs.
• RTO parcels reverse the sale, add reverse freight to the order's cost and return to a quarantine location until inspected.
• Lost or damaged shipments raise a claim against the partner, tracked to settlement.

With this in place, RTO rate and RTO cost can be reported by pin code, product and campaign. Many brands then adjust their COD policy, for example by confirming orders before dispatch or limiting COD in high-RTO areas. Those are business choices, but they need reliable data, and my ERP integration work makes sure the aggregator feeds provide it.

Marketplace settlements, TCS and TDS

Marketplaces in India settle sellers net of commission, fixed fees, shipping and fulfillment charges, advertising, returns and claims. On top of that, e-commerce operators generally collect tax at source under GST and deduct tax under income tax rules on payments to sellers. Those amounts are not lost: they appear as credits that you can claim, but only if your books record them correctly and they match what the marketplace reported.

I design a clearing account per marketplace. Orders post gross sales and output GST. The settlement file posts each deduction separately: commission and fees with their input GST, TCS as a GST credit receivable, TDS as an income tax receivable, refunds and reimbursements. The bank credit clears the balance.

Reconciliation then runs in two directions. Settlement to bank, to make sure every payout is explained. And TCS and TDS in the books to the figures shown in the government portals, so credits are claimed and mismatches are chased with the marketplace. Your CA should confirm the treatment and the claim process; the ERP provides the data in a form that makes their review quick.

Stock sent to marketplace fulfillment centers in other states raises its own GST registration questions, which are covered in more depth on my Zoho Inventory page for India. The India ERP consultant page explains how GST, e-invoicing and e-way bill requirements shape the rest of the system.

Gateway settlements, refunds and customer data

Prepaid website orders arrive through a payment gateway that pays out UPI, card, net banking and wallet collections on a settlement cycle, after keeping its fee and adjusting refunds made since the previous payout. Some brands also use pay-later or EMI options with their own settlement terms. Each gateway gets a clearing account, so every settlement is broken into orders, fees with GST, refunds and chargebacks, and the bank credit clears it.

Refunds need clear routes. A prepaid order refunds through the gateway. A COD order that was delivered and then returned is refunded by bank transfer or as store credit, which needs bank details and an approval step. A marketplace return is handled by the marketplace and appears in its settlement. I define each route, the approval rules and the credit note or reversal entry that follows.

India's consumer protection rules for e-commerce set expectations on disclosures, grievance handling and refunds, and the Digital Personal Data Protection Act shapes how customer data is collected, used and retained. Your legal advisor should confirm obligations. In the design, I limit access to phone numbers and addresses, keep consent with the customer record and avoid order exports circulating on chat groups, which is a common habit in fast-growing teams.

CM1, CM2 and CM3 per order, SKU and channel

Indian D2C founders and investors often talk in contribution margin layers. The labels are familiar, but the definitions differ from brand to brand, so the first job is to agree them in writing. A common structure is:

1. CM1: net revenue after discounts, returns and GST, minus the cost of goods sold, with inbound freight and import duty included.
2. CM2: CM1 minus fulfillment, packaging, forward shipping, COD charges, RTO cost, gateway fees and marketplace fees.
3. CM3: CM2 minus performance marketing spend on Meta, Google and marketplace ads, allocated by an agreed rule.

The ERP should hold CM1 and CM2 at order level from its own data and the integrations described above. Ad spend arrives by campaign and day from ad platforms, so CM3 needs an allocation rule: by channel, by new versus repeat customers, or by attributed orders. I document the rule so the number means the same thing in every board deck.

This is where my paid marketing experience joins the ERP work. When CM3 by SKU and pin code is reliable, budgets can move to SKUs and pin codes that still earn after RTO and shipping, rather than those that simply convert cheaply.

Choosing a platform and moving off Tally and spreadsheets

Many Indian D2C brands run their website on a hosted storefront, use a shipping aggregator dashboard, download marketplace settlement files, and post monthly summaries into Tally. That can work early on, but it breaks down as SKUs, channels and GST registrations multiply.

I score options on your scenarios: aggregator and marketplace connectors, settlement imports including TCS and TDS, multi-GSTIN stock, COD receivable handling, CM reporting and cost of ownership. Some brands keep Tally for statutory books and add an order and inventory layer; others move accounting into the ERP. Both can be right, and the choice depends on volume, team and your CA's preferences.

Migration covers SKU masters with HSN codes, bundles and combos, open orders, unremitted COD by AWB, pending marketplace settlements, TCS and TDS receivables, gift card balances and stock at each warehouse and fulfillment center, counted near switchover. I avoid going live close to Diwali and the major marketplace sale events.

Work is remote on IST, with workshops in English or Hindi as your team prefers. See the India hub and the eCommerce industry page for more.