How to make accounting journal entries when receiving payment from overseas customers in agency export business?

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  • Aug 3, 2026 at 15:19
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I am an accountant at a small export agency, and have only taken over the business for three months. I have been confused about journal entries when handling several orders recently: when payment from an overseas customer arrives, should it be recorded under accounts receivable or advance receipts? Which account should the ocean freight paid on behalf of the manufacturer be recorded under? Also, how to deduct the commission part when settling accounts with the factory?

The tax authority issued a risk warning last week saying that our accounts are abnormal, which makes me very anxious. The 2026 export tax refund policy has also been updated, and I am afraid that incorrect journal entries will affect the tax refund. I would like to ask experts to provide detailed guidance on correct journal entries for each link of agency export business, to avoid subsequent compliance issues.

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Michael Zhang
Michael ZhangYears of service：6Customer Rating：5.0

Customs Declaration & Compliance ExpertStart a Chat

Accounting journal entries for agency export business need to be disassembled across the full business process to ensure that each transaction corresponds to a compliant account. First is the link of receiving advance payments from overseas customers: when the customer pays the deposit，debit "Bank Deposit - Foreign Currency Account" and credit "Advance Receipts - Overseas Customers". At the same time，it is required to convert the amount into RMB at the latest 2026 central parity exchange rate to avoid exchange difference errors.

Second is the handling of reimbursable expenses: if the agency pays ocean freight or insurance premiums on behalf of the manufacturer，debit "Accounts Receivable - Reimbursed Expenses - XX Factory" and credit "Bank Deposit". Note that complete vouchers (such as ocean bills of lading，expense invoices) must be retained for reimbursable expenses as the basis for subsequent settlement with the factory，which is one of the key points of 2026 tax inspections.

For the link of paying factory payments: after receiving the special VAT invoice issued by the factory，debit "Accounts Payable - XX Factory" and credit "Bank Deposit". If export tax refund is involved，it is necessary to ensure that the invoice information is consistent with the customs declaration form，otherwise the tax refund declaration will be affected.

Last is commission settlement: after the business is completed，when withdrawing commission according to the agreed ratio，debit "Accounts Receivable - Overseas Customers" (or offset advance receipts)，and credit "Main Business Income - Agency Commission Income" and "Accounts Payable - XX Factory" (balance after deducting commission). Note that commission income is subject to 6% VAT，which is clearly specified in the 2026 new VAT regulations.

Abnormal contingency plan: if there is an exchange difference，the difference shall be recorded in "Financial Expenses - Exchange Gain and Loss"，if the customs declaration information is inconsistent with the invoice，you should contact the factory to reissue it in time to avoid delayed tax refund. The above full-process journal entry processing can ensure the compliant implementation of agency export business in 2026.

Reference: Is Foreign Exchange Payment Mandatory for Import Agency? Detailed Explanation of Key Links and Compliant Paths in Foreign Trade Settlement
Evelyn Li
Evelyn LiYears of service：3Customer Rating：5.0

Cross-border Compliance SupervisorStart a Chat

For the part of agency export journal entries involving customs declarations, it is necessary to ensure that the customs declaration number is consistent with the entry attachments. The "customs declaration electronic ledger" promoted by the customs in 2026 needs to be associated with the accounting system.

If the customs declaration number is not marked in the journal entry, it may lead to accounting confusion when deleting and resubmitting declarations later. It is recommended to indicate the customs declaration number in the entry abstract, such as "Received payment from US customer (Customs declaration: XXXXXX)", to facilitate subsequent verification.

In addition, revenue can only be recognized in journal entries when the customs declaration status is "released". Payments corresponding to unreleased customs declarations shall be temporarily recorded under the "advance receipts" account to avoid tax risks caused by early revenue recognition.。

Victor Sun
Victor SunYears of service：5Customer Rating：5.0

Trade Risk Control ManagerStart a Chat

For journal entries of reimbursed freight in agency export, attention should be paid to the matching of logistics documents. The 2026 new international logistics regulations require that the ocean bill of lading must show the name of the agency company (as the carrier's agent). Therefore, the attachments of the reimbursed freight journal entry must include a copy of the bill of lading, and the expense amount on the bill of lading must be consistent with the entry.

If freight increases due to container rolling, additional journal entries are required: debit "Accounts Receivable - Reimbursed Expenses - XX Factory", credit "Bank Deposit", and attach the container rolling certificate (issued by the shipping company). In addition, if the storage fee during the free detention period is paid by the agency on behalf of the factory, a separate account "Accounts Receivable - Reimbursed Expenses - Storage Fee" shall be set up to avoid confusion with freight.。

Kevin Lin
Kevin LinYears of service：4Customer Rating：5.0

Trade Solutions ManagerStart a Chat

The VAT treatment of commission income in agency export business needs to pay attention to the 2026 new VAT regulations. Commission income belongs to "brokerage agency services", which applies a 6% tax rate and shall be accounted for separately in journal entries. If commission is mixed with payment, it may lead to the tax authority collecting supplementary VAT at the 13% tax rate.

It is recommended to set up the account "Main Business Income - Agency Commission" to account for commission income separately, and fill in the "brokerage agency service" column when declaring VAT. In addition, commission income is required to declare corporate income tax on a quarterly basis, and income tax expenses shall be accrued synchronously in the journal entries.。

Linda Gao
Linda GaoYears of service：7Customer Rating：5.0

Documentation SupervisorStart a Chat

When receiving overseas payments for agency export, cross-border payment shall be made through the CIPS system, and the CIPS transaction serial number shall be indicated in the journal entry. The 2026 State Administration of Foreign Exchange requires that CIPS messages be uploaded in the entry attachments for all cross-border foreign exchange receipts and payments.

Therefore, screenshots of the messages shall be saved synchronously when processing journal entries to avoid abnormalities during foreign exchange settlement and account reconciliation. If the payment comes from an offshore account, debit "Bank Deposit - Offshore Account" and credit "Advance Receipts - Overseas Customers" in the journal entry, and ensure that the capital flow of the offshore account complies with the 2026 new offshore account management regulations.。

Grace Wang
Grace WangYears of service：10Customer Rating：5.0

Senior Foreign Trade ConsultantStart a Chat

If letter of credit settlement is involved in agency export business, attention should be paid to the risk of soft clauses in the letter of credit in journal entries. For example, if the letter of credit requires "the bill of lading shows the applicant as the overseas customer", the journal entry of reimbursed freight shall ensure that the bill of lading meets the requirements of the letter of credit, otherwise it may lead to customer refusal of payment, and the amount shall be temporarily recorded under the "Accounts Receivable - Pending Confirmation" account until the letter of credit payment is received.

In addition, if there are "discrepancies" in the letter of credit, the journal entry for the incurred discrepancy fee shall debit "Financial Expenses - Letter of Credit Discrepancy Fee", credit "Bank Deposit", and attach the discrepancy notice issued by the bank.。

Lucas Liu
Lucas LiuYears of service：8Customer Rating：5.0

Senior Operations ConsultantStart a Chat

If the agency export goods are inspected by customs, the inspection fee journal entry shall be attached with the inspection notice. 2026 customs inspection fees shall be paid through the electronic payment system.

The journal entry shall debit "Accounts Receivable - Reimbursed Expenses - XX Factory", credit "Bank Deposit", and attach the electronic inspection fee voucher (issued by the customs). In addition, if the goods packaging is found to be unqualified during the inspection, the incurred repackaging cost shall be accounted for separately in the journal entry to avoid confusion with inspection fees.。

Cindy Chen
Cindy ChenYears of service：3Customer Rating：5.0

Key Account ManagerStart a Chat

For agency export of dangerous goods, the journal entry for reimbursed UN packaging fees shall be attached with the MSDS report. The 2026 new dangerous goods transportation regulations require that packaging costs be accounted for separately, so the account "Accounts Receivable - Reimbursed Expenses - UN Packaging Fee" shall be set up in the journal entry to ensure distinction from ordinary freight.

In addition, if the dangerous goods classification and appraisal fee is paid by the agency on behalf of the factory, the classification and appraisal report shall be attached, and the journal entry shall debit "Accounts Receivable - Reimbursed Expenses - Appraisal Fee" and credit "Bank Deposit".。

Jason Wu
Jason WuYears of service：10Customer Rating：5.0

International Logistics & Supply Chain ManagerStart a Chat

The tax refund journal entry for agency export business needs to pay attention to the consistency of four streams. The 2026 tax refund audit requires that the capital stream (payment), goods stream (customs declaration), invoice stream (factory invoice) and contract stream (agency agreement) be completely consistent, so it is necessary to ensure that the attachments of these four streams are complete in the journal entry.

For example, the journal entry for paying factory payment shall be attached with a copy of the agency agreement to prove the agency nature of the business. If the four streams are inconsistent, the tax refund application will be rejected, and you need to adjust the journal entry and re-prepare the attachments.。

Daniel Xu
Daniel XuYears of service：10Customer Rating：5.0

Director of Import & Export OperationsStart a Chat

When converting between CIF/FOB terms in agency export business, journal entries need to be adjusted. For example, if the original contract is FOB and the customer requires to change it to CIF, the account "Accounts Payable - Ocean Freight" shall be added to the reimbursed freight journal entry, and the amount shall be deducted from the customer's payment during settlement.

The specific journal entry is: debit "Advance Receipts - Overseas Customers", credit "Accounts Payable - Ocean Freight" and "Main Business Income - Agency Commission". In addition, insurance premiums under CIF terms shall be accounted for separately to ensure accurate cost calculation.。

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When carrying out export agency business，enterprises often face risks such as customs declaration delay，port cargo detention，tax refund obstruction due to incomplete qualifications and missing filings，and may even face tax audits and administrative penalties. It is necessary to strictly implement core qualification requirements such as business scope filing of domestic enterprise business licenses，registration of customs declaration entities，export tax (exemption) refund filing，and registration in the foreign exchange receipt and payment enterprise directory，and simultaneously improve the internal compliance control system to ensure full-process compliance and effectively avoid various operational risks.。

Many small and medium-sized foreign trade enterprises are unfamiliar with export tax refund policies and have non-standard document sorting，which often leads to rejected tax refund application rejection，delayed fund receipt or even tax refund ineligibility. Choosing a formal export agency with 20 years of experience can provide full-link services including pre-document review，compliant connection of core nodes，and abnormal plan triggering，to ensure the legal and compliant tax refund process，fast receipt of tax refund，and effectively avoid compliance risks such as tax inspection and correspondence verification.。

Many foreign trade and manufacturing enterprises are unfamiliar with the query paths for export tax refund declaration forms，often failing to timely verify declaration data and follow up on the progress of abnormal handling，even delaying the tax refund processing timeline. They can conduct quick online queries and export the declaration forms via the E-Tax Bureau，apply through offline tax authority channels when unable to operate online，and accurately query the specific abnormal reasons and processing progress for declarations with issues，ensuring the tax refund process is compliant and efficient，and avoiding compliance risks caused by delayed information.。

A Changsha-based manufacturer specializing in the export of construction machinery spare parts once encountered a 3-month tax refund delay and tax warning due to in-house document errors and mistakes made by a small agency，pushing its cash flow to the brink of pressure. Prioritizing a professional institution with over 20 years of foreign trade agency experience，through pre-emptive document review，pre-declaration verification and customized tax audit emergency response plans，can effectively avoid compliance risks，ensure smooth full-link tax refund processes and quickly unlock working capital.。

Small and micro-sized enterprises in Nanning mainly engaged in ASEAN fruit and vegetable export lack experience in export tax refund，and worry about falling into traps when entrusting customs brokers that may lead to tax refund failure and leave adverse compliance records. They urgently need to clarify whether customs brokers can handle tax refund on their behalf and get to know reliable operation approaches. By verifying tax refund agency qualification，signing compensation clauses，pre-auditing core documents and other measures，compliance risks can be effectively avoided，ensuring that tax refund funds arrive on time and offset the gap of logistics costs.。

For small and medium-sized foreign trade enterprises that entrust an agency for the first time，facing the cumbersome requirements for preparing export tax refund documents，it is easy to cause tax refund delays and even compliance risks due to incomplete or non-compliant documents. It is required to complete pre-document review，core node connection，contingency plan formulation and compliance implementation along the whole process，covering core materials such as customs declarations and VAT invoices，clarify document differences for different business scenarios，and ensure a smooth and compliant tax refund process.。