Why Payment Platforms can distort Revenue, Fees, and Cash Flow

Antravia Advisory is an accounting, tax, and financial advisory firm specialising in travel businesses, U.S. businesses operating internationally, and complex U.S. businesses.

Modern payment platforms have fundamentally changed how businesses get paid. Funds can be collected instantly from customers around the world, across cards, wallets, local transfer schemes and buy-now-pay-later options and often without the business ever touching a traditional merchant account.

From an operational perspective, this feels like progress vs years ago, when getting paid was more restrictive. Money can appear in a dashboard almost immediately. From an accounting perspective, however, this is where problems can begin.

Most founders and many finance teams, assume that if a payment platform shows a completed transaction and money later appears in the bank, the accounting should be straightforward. In practice, however, payment platforms introduce layers of timing differences, netting, withheld balances, rolling reserves, fee structures, and dispute mechanics that fundamentally distort how revenue, costs, and cash flow appear in the books.

Payment platforms are not banks and not revenue systems

One of the most common structural misunderstandings is treating a payment platform as either a bank account or a sales ledger.. this is not correct, as platforms such as Stripe and PayPal act as intermediaries. They sit between the customer, the card networks, local clearing systems, and the business’s eventual bank account. They aggregate transactions, deduct multiple categories of fees, manage disputes, and control the timing of settlement.

This creates a structural separation between three things that used to be closely aligned, namely the customer payment, the recognized revenue and cash received. When these three elements diverge, accounting that relies on bank feeds or net settlement reports stops working

Gross revenue versus net settlement?

The first distortion appears at the top line in revenue. Payment platforms almost always settle net of fees. The business charges a customer $1,000. The platform deducts processing fees, interchange, platform fees, FX spreads, and sometimes taxes. The amount that is finally paid in the bank might be $940, $910, or less.

When businesses record only the settled amount as revenue, they understate revenue and overstate margins at the same time. Fees disappear into the net number, making costs look artificially low. Revenue trends become unreliable and especially when fee structures change or volumes scale.

This issue compounds in marketplace and platform models where additional fees are deducted before settlement, including commission splits, partner payouts or escrow holds. Without explicit gross-up accounting, the financial statements stop reflecting the true size and cost structure of the business.

Settlement timing and cash flow

Payment platforms decouple the moment a customer pays from the moment cash becomes available. So some transactions settle in one or two days. Others are delayed due to risk reviews, rolling reserves, weekend batching, cross-border clearing or local payment rails. Refunds and chargebacks can reverse cash weeks or months after the original transaction.

From a cash flow perspective, this is confusing.. Dashboards show sales growing, however the operating bank account does not move in line with reported performance. Businesses assume this is a temporary lag, but in reality it is an actual feature of the payment stack.

When forecasting relies on platform dashboards instead of settlement schedules and reserve mechanics, working capital planning becomes guesswork. This is one of the most common reasons otherwise profitable businesses experience liquidity stress.

Fees are not a single line item

Payment platform fees are rarely simple. For example, a single transaction may include card network fees, processor fees, platform fees, FX conversion spreads, dispute protection fees and additional charges for premium payment methods. These fees are often deducted at different times and reported across multiple statements.

When accounting systems record only a single “merchant fee” based on net settlements, fee leakage becomes invisible to track. Businesses lose the ability to analyze true payment costs by geography, currency, payment method, or customer segment.

This matters not just for cost control, but for pricing strategy. If international customers or certain payment methods are significantly more expensive to serve, that information must be visible in the financials to inform commercial decisions.

Refunds, chargebacks, and negative revenue cycles

Refunds and chargebacks are another structural issue for businesses to deal with - Platforms may deduct refunds immediately, hold dispute amounts in reserve or reverse transactions long after revenue has been recognized. In some cases, the original revenue remains in the ledger while the refund hits as a cost, creating artificial volatility in margins.

Chargebacks are even more complex. Fees are often non-refundable. Penalties apply regardless of outcome. Funds may be frozen during investigation periods, distorting both revenue and cash availability and accounting treatment, these mechanics create months where revenue appears to collapse or margins swing wildly, even though the underlying business activity is stable.

Platforms inside platforms

The complexity multiplies when businesses operate across multiple layers of platforms, for example an ecommerce business might sell through its own site, marketplaces and social commerce channels. A SaaS business might collect through a billing system that sits on top of a payment processor. A marketplace might collect customer funds, deduct commissions, and pay suppliers through the same platform.

Each layer introduces its own settlement logic, fee structures and reporting limitations and when finance teams attempt to “simplify” this by recording only bank movements, theaccounting systems ceases to explain how the business actually operates.

International payments amplify every problem

Cross-border payments magnify settlement issues, as, for example, FX conversion may happen at authorization, settlement, or payout. Platforms often apply their own exchange rates, which differ from spot rates and are not always transparently disclosed. Some platforms hold balances in multiple currencies, creating unrealized FX exposure that never touches the bank.

From an accounting perspective, this raises important questions. When is revenue recognized and in which currency? How are FX gains and losses measured? Which fees are transactional and which are embedded in exchange rates?

Without a clear accounting policy aligned to how the platform operates, financial statements become inconsistent across periods and geographies.

Why bank-driven accounting fails here

Many accounting systems are still built around bank reconciliation as the primary control and that model assumes that cash movements explain the business, but this is clearly not the case with payment platforms. Bank statements show net settlements that combine multiple days of activity, multiple fee categories, and sometimes multiple currencies. They provide no visibility into gross sales, dispute timing, or reserve movements.

When accounting is driven primarily by bank feeds, the ledger becomes a shadow of the platform dashboard rather than a representation of economic activity. This is how businesses end up profitable on paper but constantly surprised by cash shortfalls.

A potential fix?

Solving payment platform distortion is not about better spreadsheets or more detailed reconciliations. Revenue must be recorded gross and aligned to performance obligations rather than settlement. Fees must be classified consistently and analyzed as real costs and not just netted away. Platform balances must be treated as restricted cash or receivables and not ignored because they do not sit in a bank account.

Most importantly, accounting systems must be designed around how money flows through platforms, not how it eventually arrives in the bank. This is why payment accounting sits naturally across ecommerce, platforms, subscriptions, and international business pillars.

Why does this matters beyond compliance? This is not about making auditors happy or satisfying tax reporting. When payment platforms distort revenue and cash flow, leadership loses visibility. Pricing decisions are made without understanding true costs. Growth appears healthy until liquidity tightens unexpectedly. Expansion into new markets happens without clarity on payment friction and margin erosion.

Businesses that fix this early gain an advantage. They can forecast accurately, price confidently, and scale without being surprised by their own numbers.

How Antravia Advisory approaches platform complexity

At Antravia Advisory, our work starts by understanding how funds move through each platform, how and when fees are applied, and where timing differences arise. From there, we design accounting structures that reflect economic reality rather than settlement convenience. This approach supports businesses across ecommerce, SaaS, marketplaces, and international operations, particularly those operating at the intersection of multiple platforms and jurisdictions.

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.

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