How foreign trade e-commerce sellers confirm income and precautions

For cross-border e-commerce sellers, revenue recognition is a crucial step. This is not only related to the accuracy of accounting and financial statements, but also a key indicator for evaluating the seller’s operating status and financial health. Here During the process, sellers need to ensure the standardization and compliance of revenue recognition to avoid economic losses, legal risks and reputational losses caused by violations.

Order revenue confirmation

The order revenue of foreign trade e-commerce sellers can be confirmed in two ways:

1. When the buyer confirms receipt of the goods and there are no quality problems, the seller can confirm the order revenue.
2. After the return period has passed, the seller can confirm the order revenue. The specific return period needs to be determined according to different platforms and national regulations.

Confirmation of handling fees and commissions

The platform usually automatically deducts handling fees and commissions after the seller confirms the order income. The seller needs to calculate and confirm these fees.

Exchange rate confirmation

Exchange rate fluctuations directly affect sellers’ income and profits, so sellers need to confirm revenue based on real-time exchange rates and record relevant information for subsequent accounting and financial statements.

Sales discounts and offers confirmation

Sellers need to record the sales discounts and promotions provided and perform accounting after confirming the revenue. This helps to accurately calculate relevant indicators such as profits and taxes.

Principles of revenue recognition

Recognition of export cross-border e-commerce revenue should follow the following principles:

• The goods have been dispatched and shipping documents confirmed.
• The buyer confirms receipt of the goods and completes payment.
• Service completed and fees charged.
• Equity transfer completed.
• The seller has received financial benefits.

Method of revenue recognition

Common revenue recognition methods include:

• Cash-based revenue recognition method: Suitable for small-amount quick settlement.
• Based revenue recognition method for accounts receivable: Suitable for situations where the amount is large and the settlement cycle is long.
• Percentage of completion method: Suitable for service-type cross-border e-commerce business.

Notes

Attention should be paid to the following when recognizing revenue:

• Accurately record sales, cost of goods sold, and gross profit.
• Save documents and vouchers for verification.
• Adjust accounts in a timely manner.
• Comply with laws and regulations and pay taxes on time.
• Ensure financial transparency.

Tax issues

Cross-border e-commerce sellers need to understand relevant tax policies and pay taxes as required. At the same time, pay attention to customs declaration and tax payment when making cross-border remittances. You should choose a reputable payment platform to ensure the safety of funds.

In short, correctly recognizing revenue is crucial for export cross-border e-commerce sellers. Only by following the above principles and methods and paying attention to relevant details can we better manage our business and improve operational efficiency.

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This article comprehensively refers to the content of multiple articles and provides a detailed explanation of how foreign trade e-commerce sellers recognize income.