Payment gateway reconciliation is one of the most important controls for , and any business collecting money online.
Payment gateways like Razorpay, Stripe, Cashfree, PayU, CCAvenue, PhonePe, and others do deposit the exact invoice value — they deduct .If reconciliation is not done correctly, businesses face:
- Wrong revenue recognition
- GST mismatch (GSTR-1 vs actual collections)
- Payment disputes
- Missing settlement amounts
- Unclaimed TDS
- Incorrect gateway fee accounting
- Profit distortions
This guide provides a structured, practical reconciliation model applicable to all payment gateways.
Payment gateway statements rarely match your accounting system or GSTR-1 because:
- Gateway deducts MDR fees
- Gateway deducts GST on MDR
- Refunds/chargebacks are netted off
- Settlements occur after T+1 or T+2
- Partial payments / split settlements occur
- Foreign currency conversions (Stripe)
- TDS under Section 194-O (marketplace model)
Incorrect reconciliation causes:
- Overstated or understated revenue
- GST liability mismatch
- Unreconciled balances
- Lost money due to chargeback disputes
- Inaccurate financials
- Audit failures
To provide a simple, structured process for reconciling online payments from gateways such as Razorpay, Stripe, Cashfree, PayU, and others, and to provide ready-to-use formats for SMEs and startups.
Payment gateway reconciliation matches:
vs
vs
vs
vs
The goal is to ensure:
- Every payment received is matched
- All deductions are accounted for
- Revenue is correctly recognized
- No settlement is short or missing
- All charges are properly recorded
A structured method applicable to Razorpay, Stripe, Cashfree, PayU, etc.
From
- Payment Report (Transaction-level)
- Settlement Report
- Refund Report
- Chargeback Report
- Fee/MDR Report
- GST on MDR Report
- Payout Delays / Failed Settlement Report
From
- Sales register
- Invoice register
- Customer receipts
- GST outward supplies
Match:
- Order ID
- Invoice number
- Transaction ID
- Customer name
- Amount
Differences arise due to:
- Partial payments
- Multiple attempts
- International payments
- Currency conversion charges
MDR Fee includes:
- Gateway commission
- Convenience fee
- Platform fee
- GST on MDR
Bank A/c (Net Received) Dr
Payment Gateway Fee A/c Dr
GST Input (on Fee) Dr
To Payment Gateway (Control A/c) Cr
Never book revenue net of fees — this is a common SME mistake.
Refunds may be:
- Full refund
- Partial refund
- Auto-refund due to failed payment
- Manual refund initiated by business
Chargebacks occur when the customer disputes the transaction.
Record refunds/chargebacks separately for clarity.
Payment gateways settle net amounts:
Settlement = Gross Payment – Refunds – Charges – GST – Adjustments
Reconcile:
- Settlement date
- UTR numbers
- Amount credited
- Settlement schedule (T+1/T+2)
Variances indicate:
- Gateway-side delay
- Settlement failure
- Bank-side issue
There is always a timing difference between:
- Date of transactionvs
- Date of settlement
Create a :
Payment Gateway Control A/c
This should ideally be after reconciliation.If not, something is missing.
- Outward GST should match GSTR-1
- Refunds must reflect correctly
- Gateway fees must match GSTR-2B ITC
Under Section 194-O (marketplace operators), TDS may apply.
Gateway does not deduct TDS, but aggregators like Amazon, Flipkart, Swiggy do.
Revenue mistakenly recorded net of charges.
Causes overstated sales.
Occurs when auto-sync + manual postings both happen.
Missing UTR mapping.
Incorrect outward supply values lead to GSTR-1 deviation.
International payments require:
- FX rate reconciliation
- FX fee
- Mark-up charges
Causes inflated receivables.
Total Collections (Gross) ₹______
Less: Refunds ₹______
Less: Chargebacks ₹______
Less: Gateway Fee (MDR) ₹______
Less: GST on MDR ₹______
Expected Settlement ₹______
Actual Settlement in Bank ₹______
Difference ₹______
Reason: _____________________________
Target closing balance = .
- Gateway reports
- Invoice register
- Email confirmation of refunds
- Settlement UTR proofs
- GST 2B & GST 1 reports
- Bank statements
- Chargeback communication
Clean documentation avoids audit issues.
Online clothing brand using Razorpay Revenue inflated by ₹18 lakh because refunds and chargebacks not recorded.
• Performed 3-month reconciliation• Mapped all orders, refunds, and fees• Implemented Gateway Control Account• Created automated reconciliation format
• Accurate revenue• Correct GST liability• Reduced audit risk significantly
• Payment Gateway Reconciliation Template (Excel)• Gateway Fees Mapping Tool• Refund/Chargeback Tracking Sheet• Razorpay/Stripe Settlement Format• Gateway Control Account SOP
(Available on request.)