Five Financial Reports Every E-commerce Brand in China Should Review Monthly
A monthly profit and loss statement can tell management whether the books show a profit. It cannot, by itself, explain whether the profit came from Tmall, JD.com or Douyin, whether the cash was collected, whether inventory is overstated, or whether platform and invoice data support the result.
Every e-commerce brand in China should review five connected reports each month: (1) platform and store contribution P&L, (2) order-to-revenue and refund bridge, (3) settlement and platform-receivables reconciliation, (4) inventory and cost-of-goods report, and (5) cash-flow, tax and invoice control dashboard. No single report is sufficient; the five reports must reconcile to one another.
1. These are management reports, not a statutory five-report requirement
The five reports in this guide are a recommended management package for e-commerce operators. They do not replace the Chinese accounting books, financial statements, tax filings or other statutory records that apply to a specific entity.
Management reporting answers operating questions that a general ledger may not answer directly: Which store made money? Why did refunds rise? How much platform cash is still unsettled? Is closing inventory physically supportable? Can the business fund the next campaign, supplier payment and tax payment?
China's Accounting Law requires accounting books to be reconciled with physical assets, monetary funds and related records. That principle is especially relevant to e-commerce: platform data should connect to revenue and receivables, warehouse data to inventory, and bank movements to cash balances. The five-report pack makes those relationships visible to management.
| Monthly report | Primary management question | Core source data |
|---|---|---|
| 1. Platform and store contribution P&L | Where did profit or loss come from? | Accounting ledger, platform sales, product cost, marketing, commissions and fulfillment. |
| 2. Order-to-revenue and refund bridge | Can reported sales be traced to valid transactions? | Orders, cancellations, fulfillment, returns, refunds, VAT and accounting cut-off. |
| 3. Settlement and platform-receivables reconciliation | Why does platform cash differ from sales? | Settlement statements, fee deductions, reserves, payment accounts and bank statements. |
| 4. Inventory and cost-of-goods report | Is gross margin supported by real inventory movement? | ERP, warehouse, purchases, transfers, shipments, returns and write-offs. |
| 5. Cash-flow, tax and invoice dashboard | Can the business fund obligations and support its tax position? | Bank, payment forecast, tax calendar, digital invoices, contracts and exception logs. |
2. Report 1: Platform and store contribution P&L
A contribution P&L shows the economic result by platform, store or another useful operating dimension. It should start with a controlled sales figure and separately show product cost, platform commissions, advertising, creator fees, fulfillment and other costs that can be attributed on a consistent basis.
“Contribution profit” is a management metric, not a statutory accounting subtotal. The brand must define it consistently. Shared payroll, rent and group costs may be shown below contribution profit instead of being allocated to stores using weak assumptions.
Minimum columns
Current month, previous month, budget, variance, year-to-date, platform, store, product category and—when reliable—SKU or campaign. Each line should identify whether the value comes directly from source data or from an allocation rule.
Questions management should ask
- Which platform grew sales but reduced contribution margin?
- Did marketing cost rise because of volume, pricing or efficiency?
- Which SKUs have revenue but lose money after channel costs?
- Are seller coupons and platform-funded subsidies classified consistently?
- Do gross-margin changes agree with purchase cost and inventory movements?
- Are one-off charges separated from recurring channel economics?
3. Report 2: Order-to-revenue and refund bridge
This report explains how platform activity becomes management sales and accounting revenue. It should not assume that gross merchandise value, paid orders, invoiced sales, platform-reported income and accounting revenue are interchangeable.
The final accounting treatment depends on the contract, transaction status, transfer of control, accounting policy, VAT and other entity-specific facts. The report's purpose is to make those adjustments explicit and traceable to individual orders or controlled summaries.
The current internet-platform tax-information reporting specification requires covered platforms to report gross income, refunds, net income and order counts. Its gross-income definition includes price and VAT and is not reduced by subsidies received or commissions and service fees paid to the platform. That official reporting concept is another reason to maintain a bridge rather than copy a net settlement figure into revenue.
Minimum sections
Paid orders, unpaid or failed orders where relevant, cancelled orders, full refunds, partial refunds, refund-only cases, unfulfilled orders, period-end cut-off, reviewed sales population, accounting revenue, VAT or tax-reporting bridge, and an unmatched-order exception list.
Red flags
- Revenue equals bank receipts every month with no settlement receivable.
- Refunds are recognized only when cash leaves the platform account.
- Current-period sales include unfulfilled or cancelled orders without review.
- Invoices are used as the only revenue source while platform transactions are ignored.
- Platform-reported gross income cannot be reconciled to accounting and tax records.
4. Report 3: Settlement and platform-receivables reconciliation
This report connects what a platform owes the brand to what actually arrived in Alipay, a platform wallet or the bank. It separates commercial revenue from cash collection and prevents commissions, advertising, refunds or reserves from disappearing inside a net revenue entry.
Run this report separately for every platform and store before consolidation. Tmall may require a link between platform finance records and Alipay transaction, funds and fee bills. JD.com depends on the merchant's operating and settlement model. Douyin may add creator commissions, agency charges, paid traffic, deposits and the difference between pending and final settlement.
Minimum sections
Opening balance, current-period entitlement, refunds deducted, platform commission, advertising and promotion, creator or agency fees, logistics, insurance, reserves, deposits, penalties, adjustments, amount paid, amount in transit, closing receivable and aging of unmatched items.
A healthy report does not merely make the total difference equal zero. It also explains the age and nature of open items. A receivable that is “timing” for six consecutive months may be a missing refund, a frozen balance, an incorrect store mapping or an unsupported write-off.
5. Report 4: Inventory and cost-of-goods report
Inventory is where e-commerce profit errors can remain hidden. If purchases are expensed too early, profit is understated. If shipped, damaged or returned stock remains in inventory incorrectly, profit and assets may be overstated.
The report should reconcile both quantity and value by legal owner, warehouse and SKU. Platform virtual stock, ERP stock, third-party warehouse records and physical stock are different sources; finance should reconcile them rather than assume they are identical.
Minimum sections
Opening quantity and value, purchases, goods in transit, transfers, fulfilled orders, customer returns, returns awaiting inspection, damage, samples, write-offs, closing stock, unit cost, aged inventory, negative stock and warehouse differences.
Questions management should ask
- Does cost of goods sold move consistently with fulfilled unit volume?
- Which SKUs have more than the approved inventory coverage?
- Are returned goods saleable, damaged or awaiting inspection?
- Does any store show sales for a SKU with no recorded cost?
- Are bonded, overseas and domestic inventories owned by the same entity?
- Have slow-moving and obsolete items been reviewed under policy?
6. Report 5: Cash-flow, tax and invoice control dashboard
The fifth report turns profit and working capital into an action plan. It should show actual cash movement, a rolling forecast, upcoming tax and payroll dates, supplier obligations, inventory purchases, campaign spending, financing needs and invoice exceptions.
A rolling 13-week cash forecast is often useful for an e-commerce business because campaigns and inventory commitments can create large short-term funding swings. Thirteen weeks is a management recommendation, not a legal requirement; a shorter or longer horizon may fit the company's cash cycle better.
Minimum sections
Opening cash, expected platform receipts by settlement date, customer or distributor collections, supplier payments, payroll, marketing, logistics, tax, debt, capital expenditure, closing cash, minimum liquidity threshold, digital invoice exceptions and responsible owner.
China's fully digital electronic invoices have the same legal effect as paper invoices and can be delivered, confirmed and queried through the tax digital account. When sales returns, invoice errors or discounts occur, the official rules provide red-invoice procedures. The dashboard should therefore connect refunds and purchase returns to the related invoice status instead of tracking invoices in a separate administrative list.
7. Simulated example: how the five reports work together
Report 1 and Report 2: sales and profit
| Management item | Amount (RMB) | Report interpretation |
|---|---|---|
| Paid platform orders | 3,000,000 | Starting commercial metric. |
| Cancellations and completed refunds | (300,000) | After-sales bridge, subject to cut-off review. |
| Management sales base | 2,700,000 | Reviewed management population, not a tax conclusion. |
| Cost of goods sold | (1,450,000) | From the inventory and cost report. |
| Platform and marketing costs | (500,000) | Commissions, advertising and related channel costs. |
| Attributable fulfillment | (180,000) | Variable logistics not already included above. |
| Contribution profit | 570,000 | Management subtotal before fixed operating costs. |
| Payroll and administration | (300,000) | Fixed and shared operating costs. |
| Illustrative management operating profit | 270,000 | Not cash generated during the month. |
Report 3: platform receivables and cash collection
The RMB 2.2 million entitlement is the simplified RMB 2.7 million management sales base less RMB 500,000 of deductions processed through settlement. The business received RMB 2.08 million, leaving RMB 200,000 open at month-end. Management should review the age, platform and settlement status of that balance.
Report 4: inventory and cost
The inventory value did not fall even though the company sold RMB 2.7 million of goods, because purchases replenished the cost consumed and written off. Management now needs the SKU-aging view to decide whether the unchanged balance represents healthy replenishment or slow stock.
Report 5: cash and obligations
| Simplified cash movement | Amount (RMB) |
|---|---|
| Opening cash | 600,000 |
| Platform receipts | 2,080,000 |
| Supplier payments | (1,200,000) |
| Payroll and administration paid | (300,000) |
| External logistics paid | (180,000) |
| Tax paid | (180,000) |
| Capital expenditure and other cash items | (100,000) |
| Closing cash | 720,000 |
The illustrative operating profit is RMB 270,000, but cash increased by only RMB 120,000. The difference can arise from platform receivables, inventory, supplier-payment timing, tax, capital expenditure and other working-capital movements. This is exactly why management needs all five reports.
8. How to run a useful monthly finance review
A disciplined meeting can review the five reports in 60 to 90 minutes if exceptions are circulated in advance. Avoid reading every line. Focus on decisions, unexplained movements and ownership.
The meeting pack should distinguish actual, estimate and unresolved values. If final platform or supplier data is unavailable, document the estimation method, amount and reversal plan. An unexplained plug should never be presented as a finalized figure.
9. Five data-quality rules behind the reports
- One store-to-entity register: identify the legal seller, payment account, warehouse and taxpayer for every store.
- One common date policy: distinguish order, payment, shipment, customer receipt, refund, settlement, invoice and bank dates.
- One SKU master: map platform SKUs to the ERP and accounting product master without losing original IDs.
- One expense taxonomy: separate commissions, advertising, creator fees, logistics, insurance, deposits, penalties and subsidies.
- One exception log: record platform, source reference, amount, issue, owner, due date and resolution for every material difference.
These controls make the reports reproducible. They also reduce the risk that a commercial dashboard, accounting ledger, tax file and headquarters report each carry a different number with no documented bridge.
10. How Caigeek supports monthly e-commerce reporting
Caigeek focuses on e-commerce finance outsourcing and management analysis. Its role can extend beyond bookkeeping to connect platform transactions, settlements, inventory, invoices, tax support and management reporting.
A practical engagement can include:
- mapping entities, stores, payment accounts, warehouses and source files;
- reconciling orders, refunds, settlement statements and bank receipts;
- building platform, store, product or SKU contribution reporting;
- closing inventory quantities, values and cost of goods sold;
- organizing digital invoice, tax and reporting exceptions;
- building rolling cash visibility and assigning issue owners; and
- delivering a bilingual monthly pack linked to the Chinese accounting records.
The scope should be configured around the brand's legal entities, platforms, order volume, SKUs, warehouses, refund complexity, tax profile, systems and reporting deadline. No provider can responsibly guarantee a profit improvement, tax saving or reporting result without reviewing those facts.
Replace five disconnected data sources with one monthly management pack
Caigeek can review one representative month, identify the missing reconciliations and build a reporting scope that connects platform profit, revenue, settlement, inventory, cash, invoices and tax.
Discuss your monthly reporting requirementsFrequently asked questions
What five financial reports should a China e-commerce brand review monthly?
Review a platform and store contribution P&L, an order-to-revenue and refund bridge, a settlement and platform-receivables reconciliation, an inventory and cost-of-goods report, and a cash-flow, tax and invoice control dashboard. Together, they explain profit, cash, working capital and compliance evidence.
Why is a standard profit and loss statement not enough?
A standard P&L may show total revenue and expense without explaining which store, platform, campaign or SKU created the result. It also does not prove that orders reconcile to revenue, settlements reconcile to cash, inventory reconciles to cost, or invoices and tax data support the entries.
How can an e-commerce company report profit but have little cash?
Profit can be tied up in unsettled platform receivables, inventory and other working-capital balances. Cash may also be used for supplier prepayments, tax, payroll, debt repayment or capital expenditure. The settlement report, inventory report and cash forecast explain movements that the P&L alone cannot.
Should monthly reports show profit by platform or SKU?
At minimum, show profit by platform and store. Add product, category, campaign, live room or SKU detail when source data and allocation rules are reliable. Avoid highly granular profit reports if shared costs are allocated with arbitrary assumptions that management cannot verify.
How soon after month-end should management receive the reports?
Many brands target a management pack within five to ten business days, but the appropriate deadline depends on platform data availability, refund cut-off, inventory closing, invoice records and headquarters requirements. Accuracy, documented estimates and an exception log matter more than an unsupported early total.
How can Caigeek help build the monthly reporting pack?
Caigeek can map platform and finance data, reconcile orders, refunds, settlements, bank receipts, invoices and inventory, calculate platform or SKU profitability, build cash and exception dashboards, and deliver a bilingual monthly management pack linked to the Chinese accounting records.
Conclusion: review the relationships, not five isolated totals
The monthly review should answer a connected chain of questions. Did valid orders become revenue? Did revenue generate platform receivables? Did receivables become cash? Did inventory movement support cost of goods sold? Can cash fund suppliers, payroll, marketing and tax?
If management can answer those questions by platform, store and product—and trace material figures to source evidence—the finance function becomes a decision system rather than a filing process. Start with five controlled reports, a consistent close date and an exception log that assigns real ownership.
Official references and further reading
- Ministry of Finance — Accounting Law of the People's Republic of China (2024 revision)
- State Taxation Administration — Internet-platform tax-information reporting specification
- State Taxation Administration — Nationwide application of fully digital electronic invoices
- State Taxation Administration, Shanghai — Value-Added Tax Law of the People's Republic of China
- Alibaba Developer — Platform and Alipay financial reconciliation guidance
- Caigeek — E-commerce finance outsourcing and management analysis
Disclaimer: This article provides general management information and a simplified illustrative example. The five reports are a recommended operating framework, not a statutory list. This content is not legal, tax, audit or accounting advice for a specific entity. Applicable treatment depends on contracts, transaction status, taxpayer status, accounting policy, products, invoices, systems and current rules. Obtain entity-specific professional advice before implementation.