How to Reconcile Razorpay Settlements in Tally Prime

For digital businesses, D2C brands, and subscription platforms in India, payment gateways like Razorpay are essential for collecting payments. However, reconciling bank statement deposits against original sales invoices can be a significant administrative challenge.

Because Razorpay deposits funds as a net settlement (gross customer payment minus transaction processing fees and GST), mapping these splits in Tally is necessary. Let's look at how to set up your configurations.

1. The Net vs. Gross Payout Challenge

When a customer pays ₹1,000 via credit card on your website, Razorpay charges a Merchant Discount Rate (MDR) fee (typically 2% plus 18% GST on the fee). The net deposit in your bank is:

If you simply record the ₹976.40 bank receipt against the ₹1,000 sales invoice, a balance of ₹23.60 remains outstanding. Reconciling this requires a clearing account workflow.

2. Configuring Clearing and Fee Ledgers in Tally

Create these ledger accounts in Tally Prime to record the transactions:

1. Razorpay Clearing Account: Create this under **Current Assets**. This temporary account holds gross balances during sales transactions.
2. Payment Gateway Charges: Create this under **Indirect Expenses**. Ensure **GST Applicable** is set to **Applicable** so you can record the GST charged on transaction fees and claim it as Input Tax Credit (ITC).

3. Booking Sales and Payout Vouchers

Reconciling payment gateway transactions involves a three-step process:

Step 1: Record Sales Vouchers

Record your daily or order-wise **Sales Vouchers (F8)**. Debit the **Razorpay Clearing Account** for the gross order value (including taxes) and credit the Sales account.

Step 2: Record Payout Vouchers

When the settlement is deposited in your bank, record a **Receipt Voucher (F6)** (or Journal Voucher) to distribute the funds:

This receipt voucher clears the gross balance from the Razorpay Clearing Account, bringing it to zero.

Step 3: Reconcile with Monthly Razorpay Invoices

At the end of the month, match the accumulated processing fees and GST in your **Payment Gateway Charges** ledger with the official tax invoice issued by Razorpay. Any differences can be adjusted using a journal voucher.