Profit & Loss, Step by Step

Sales are not profit. Out of every order you still pay for the product, the courier, the payment gateway, cash on delivery charges, parcels that come back (RTO), refunds, packaging, ads, rent and salaries. Profit & Loss adds all of these up for each day, so you see what your store really earned.

Most numbers are filled in for you. You only tell it the things nobody else knows, once. After that it takes about two minutes a day and ten minutes a week.

A small example. You sold 20 orders today worth ₹23,000 with GST. Without GST that is about ₹20,500. The products cost you ₹7,600, couriers ₹1,300, the gateway ₹250, COD charges ₹260, one RTO ₹130, packaging ₹360, ads ₹3,450, and your rent and salaries come to ₹3,870 a day. Your real profit today is about ₹3,280, not ₹23,000.

Part 1: Before You Start

Do these four things first. Without them the profit will look better than it really is.

1. Give every product its cost price. Open Products, open a product, and fill Cost (₹) for each variant: what you paid for one unit. Many products at once: choose them in Products, press EDIT IN BULK EDITOR and fill the Cost (₹) column, or use the products CSV. If you skip a product, Profit & Loss counts its cost as zero and warns you.
2. Connect your payment gateway. With Razorpay connected (Settings › Payments), each payment's real fee and the GST on it come in every day by themselves.
3. Connect your courier. With Shiprocket or Shipway connected (Settings › Shipping › Couriers), each parcel's courier quote is kept when you make its label.
4. Keep your monthly bills handy: rent, salaries, software, your accountant, electricity and internet, and what you spend on ads each day.

Part 2: Set Up Your Costs (Once, About 15 Minutes)

Open Analytics › Profit & Loss, then YOUR COSTS.

1. The GST switch. Tick I claim GST input credit only if you are GST registered and take credit for the GST you pay on your purchases. Then type every cost without GST. If you do not claim it, leave it unticked and type costs with GST. If you are unsure, ask your CA. This one switch changes every cost, so get it right first.
2. Fixed Monthly Costs. Add each cost that stays the same every month, whatever you sell: rent, salaries, software and apps, your accountant, electricity and internet. Type the monthly amount. The page spreads it over each day of the month (₹1,20,000 in a 31-day month is ₹3,871 a day). If a cost started or ended in a certain month, set that month so earlier or later months are not charged.
   • Do not put ads, packaging or courier charges here. They have their own places below, and putting them here counts them twice.
3. Every Order. Add what you spend on each parcel you pack: the box or mailer, tape, a thank-you card, a freebie. Type the cost for one order.
4. Ad Spend. Type what you usually spend a day on Meta (Facebook and Instagram), Google and any other channel. On days you spent more or less, use CHANGE A DAY. If your ad account can export daily spend, use IMPORT CSV (date, channel, amount), check the preview, and save.
5. Rates When There Is No Actual Figure. These are used only until the real figure arrives, and every number they produce is marked ESTIMATED. Take them from your courier's rate card: courier charge per parcel, return freight per RTO, your loss on an RTO (packaging thrown away, damage), the COD fee as a % of the order, and the gateway fee with GST as a %.
6. Press SAVE.

The section Filled In for You lists everything you never type: product cost, gateway fees, courier charges, COD received, refunds, and your message and plan charges.

Part 3: Every Day (About 2 Minutes)

1. Open Analytics › Profit & Loss. Pick the dates at the top (this month is a good start).
2. Choose Realised or Booked:
   • Realised counts a cash on delivery order only once it is delivered, and a paid order on the day it was paid. This is the money that is really yours. Use it to judge your business.
   • Booked counts every order on the day it was placed. Use it to see how sales are going today, knowing some COD orders will still come back.
3. Read the Net Profit card: your profit, your margin (profit out of every ₹100 of sales), and the change from the same days last month.
4. Look at How Sure Is This? If it says some figures are estimates, follow its link (UPLOAD STATEMENT or ADD COST PRICES). The fewer estimates, the more exact your profit.
5. Ads different today? Go to Your Costs › Ad Spend › CHANGE A DAY.
6. A one-time cost today (a photoshoot, a broken batch, a trade show)? Press ADD EXPENSE, say what it was, the amount, and whether it counts on that day or is spread over the month. Spread big costs that help the whole month.

Part 4: Every Week (About 10 Minutes)

Couriers send their real charges and your COD money once or twice a week. Bring them in so estimates become actual.

1. Open Courier Charges and COD (from Profit & Loss).
2. If you use Shiprocket, press READ NOW to fetch the charges of recent parcels.
3. In your courier's own panel, download the shipping charges report and the COD remittance report for the week, as Excel or CSV. You can find them where your courier shows your bills and remittances.
4. Under Drop a Courier Statement, press CHOOSE FILE and pick the file.
5. Check Before Applying shows each line matched to its order by tracking number (AWB):
   • MATCHED lines will update those orders.
   • Lines not found are usually parcels from somewhere else (another sales channel or an old order). Leave them, or SET ASIDE.
   • If the page could not read the columns, press SET THE COLUMNS and tell it which column is the tracking number, freight, COD charges, RTO charges, GST, amount paid and bank reference (UTR). It remembers them for that courier.
6. Press APPLY.
7. Look at COD Money:
   • Received: COD money the courier has paid to your bank.
   • Due: delivered COD orders the courier has not paid for yet.
   • Overdue: due for longer than your limit (9 days unless you change it in Settings › Checkout).
   • Still with the courier: COD parcels on their way to shoppers.
8. A remittance marked SHORT BY paid you less than the parcels it covers. Note the bank reference (UTR) shown and ask your courier for the difference.

Part 5: At Month End

1. Pick the whole month in the dates.
2. Switch to Realised.
3. Check How Sure Is This? is as small as it can be (upload the last statements first).
4. Press EXPORT CSV. It downloads each day with its orders, revenue and every cost, without GST, plus a total. Send it to your accountant with your other books.
5. Compare with last month: which cost grew faster than your sales?

Part 6: Try Ideas with What If

Press WHAT IF. It builds a 30-day month from the days on your screen, then lets you move five things:

• Orders a day and average order: what if you sold more, or each order were bigger?
• Cash on delivery share: what if more shoppers paid online (for example with part payment for COD)?
• RTO on COD orders: what if fewer parcels came back (for example with RTO Shield's confirmation)?
• Ad spend a day: is spending more on ads worth it?

The page shows the month's profit as things are and with your changes. Nothing in your store changes. If you like a plan, press SAVE AS A TARGET to keep it.

Part 7: What Each Line Means

The badge next to each line tells you how exact it is: ACTUAL came from Razorpay, your courier or your store; ESTIMATED used one of your rates; YOU ENTERED is what you typed.

Part 8: Mistakes That Make the Profit Wrong

1. Products without a cost price. Their cost counts as zero, so profit looks too high.
2. Costs typed with GST when you claim GST credit (or without GST when you do not). Fix the switch in Part 2.
3. Ads or packaging inside Fixed Monthly Costs. They are then counted twice.
4. Forgetting one-off costs. Add them with ADD EXPENSE on the day they happen.
5. Reading Booked as money in the bank. Booked includes COD orders that may still come back. Judge the business on Realised.
6. Never uploading courier statements. Shipping, COD and RTO then stay estimates.
7. Wrong fallback rates. If your courier's rates changed, update them in Your Costs.
8. Comparing a few days with a whole month. Compare the same number of days (the card does this for you).

Questions

Why is my profit different from my bank balance? Your bank shows money that arrived; Profit & Loss shows what you earned. COD money can still be with the courier (Due, Still with the courier), Razorpay pays out a day or two later, and some bills are paid once a month but counted a little each day.

Does a cancelled order cost me anything? It earns nothing. If it was paid online, the gateway fee for that payment still counts on the day it was paid, because Razorpay keeps it.

Is the product cost of a refunded order counted? Yes: you bought the product. If the item comes back in good condition and you sell it again, the next sale counts as normal.

Who can see this page? You, and staff with full admin access. To give it to someone else, add the Profit & Loss right to their role in Settings › Staff.

My courier is not Shiprocket or Shipway. Use the fallback rates in Your Costs. Each shipment is then marked ESTIMATED.

For every line in detail, see Profit & Loss.