Accounting entries for online sales made on ebay/amazon etc

Ravi Modi (Director) (98 Points)

08 April 2015  

Hi,

We are dealing in Computer components &  doing online selling via Ebay/Amazon/Snapdeal etc.  In this sale there are 3 parties involved. 

1st  Step : The customer places order to Ebay & makes payment to Ebay.  2nd  Step : We Invoice to customer & send the goods at his place.  3rd Step : Ebay sends us payment after deducting commission & other fees. 

We are using Tally ERP 9 for our accounting work.  Currently we are creating new customer Ledger & Debiting his Account while making Invoice.  When receiving payment from ebay we directly credit customer Account & difference in payment is debited to Ebay Service charges.

Now since all  the sales are to Retail customers, the number of Ledgers in tally has increased very much & it is becoming difficult to manage.  Hence is it OK to modify the accounting entries as follows :

1) Raise bill in the name of  Ebay &  mention customer name/address as Consignee.

2) At the time of payment,  Credit the payment to Ebay .

This method of accounting also seems logical as the order is given by ebay to deliver the goods to particular customer & payment is also done by ebay. Hence we should show sales made to ebay & not to customer.

Please give your expert advice .

Regards,

Ravi Modi