What is COD remittance?
Reviewed by CA Apurav GargLast reviewed
In short
COD remittance is the courier or shipping aggregator paying a seller the cash it collected from customers on cash-on-delivery orders, after a set number of days and usually net of its charges.
How it works
On a cash-on-delivery order, the courier's delivery agent collects the money at the door. The courier or shipping aggregator then pays it to you:
- on a remittance cycle, such as a fixed number of days after delivery or on set days of the week;
- either in full, with shipping and COD charges billed separately, or net of those charges, depending on your agreement;
- with a remittance report listing each order's AWB (air waybill) number and amount.
Many aggregators offer early COD, a faster remittance for an extra fee. It is a form of short-term finance: compare the fee with what the same money would cost from your bank.
On marketplaces, COD cash is collected by the marketplace's logistics and paid to you as part of the normal settlement, so there is no separate COD remittance to track.
What COD costs
- A COD charge per order, often a flat amount or a share of the order value, whichever is higher.
- More RTOs: COD customers can refuse the parcel, and each RTO costs forward and return shipping.
- Cash held by others: money collected but not yet remitted is a receivable from the courier, which lengthens your cash conversion cycle.
Reconciling COD
Reconcile every cycle, not once a quarter:
- List all COD orders marked delivered in the courier's tracking.
- Match each to a line in a remittance report by AWB number.
- Match each remittance to the bank credit.
- Chase anything delivered but not remitted after the agreed cycle.
Also check orders marked RTO against your warehouse receipts. A parcel marked returned but never received may have been delivered and the cash kept.
In the books
Record COD collections as a receivable from each courier or aggregator when the order is delivered, and clear it as remittances arrive. The aggregator's shipping and COD charges are expenses, with the GST on its invoice as input tax credit. An ageing report of this receivable shows quickly whether a courier is falling behind.
Example in rupees
A brand ships its website orders through a shipping aggregator. In one week, 320 COD orders worth ₹2,56,000 are delivered.
| Line | Amount |
|---|---|
| Cash collected from customers on delivered COD orders | ₹2,56,000 |
| Remitted in this cycle | ₹2,48,000 |
| Not yet remitted | ₹8,000 |
The ₹8,000 is ten orders the courier marked delivered on the last day of the week. They should arrive in the next cycle. The shipping and COD charges are billed separately on the aggregator's weekly invoice, so the brand checks both:
- Every delivered COD order's AWB number appears in a remittance.
- The remittances add up to the credits in the bank statement.
Two orders marked delivered six weeks ago are still missing from any remittance, so the brand raises a ticket with the aggregator. The figures are illustrative.
Related terms
Work it out for your business
Want help applying this to your own accounts?
We handle bookkeeping, reconciliation, GST and TDS for D2C and marketplace sellers, and can walk you through how this works in your business.
General information only, not professional advice. Rules and rates change — check the official source before you act.