Sales through agents

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Soni Jeswani (Querist)
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14 June 2014 If sales made through agent to whom commission is payable.... In that case Is it necessary that in sales bills name of agents is written?

How we can check that in auditing??

Nitin Bhuta

Nitin Bhuta (Expert)
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14 June 2014 Verify and co-relating through MIS reports,TDS Returns filed by the Clients and third party confirmations to form your opinion while audit reporting

Soni Jeswani

Soni Jeswani (Querist)
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18 June 2014 But it is match with TDS returns then what is guarantee that these agents have suggested these parties and how we can verify sales amount

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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23 July 2025 Good question! When sales happen through agents and commissions are paid, here’s how to handle the audit and verification:

### 1. **Is it necessary to mention agent’s name on sales invoices?**

* Generally, **sales invoices are issued in the name of the actual buyer/customer**, not the agent.
* The **agent acts as an intermediary** and is paid commission separately.
* So, agent’s name is usually **not shown on sales invoices** but reflected in commission agreements and commission payments.

### 2. **How to verify sales through agents during audit?**

* **Check commission agreements/contracts** with agents — see which parties they are responsible for.
* **Verify commission payments and TDS on commission** (Form 26Q or equivalent) filed by your company.
* **Reconcile sales invoices with agent commissions** to check if sales amounts match expected sales through each agent.
* **Third-party confirmations** — send confirmations to agents and customers to verify their involvement and sales amounts.
* **MIS Reports or CRM system data** — check internal records showing which agent handled which customer/orders.
* **Sample check sales order documents, emails, or contracts** where agents may have facilitated sales.

### 3. **How to be sure agents actually suggested these parties?**

* Request **agency agreements or contracts** specifying territories/customers assigned.
* Check **communication records** (emails, order requests) evidencing agent involvement.
* Confirm from the agents themselves or through customer confirmations.
* Analyze **commission payment patterns** to see if it aligns with sales volumes to those customers.

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### Summary:

The agent’s name is generally **not on sales invoices**, but audit verification involves cross-checking commission payments, agreements, TDS returns, MIS reports, and third-party confirmations to ensure sales attributed to agents are genuine.

If you want, I can help draft a checklist or sample confirmation letter to send to agents/customers for audit purposes. Would that help?

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