Dictionary / COD
What does COD mean in accounting?
Quick definition
Cash & bankingCash (or Collect) on Delivery. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
A railing ships COD, not on terms
You run a custom metal shop. On March 14 you ship a $1,850 stair railing to a cafe with the carton marked COD. The driver collects $1,850 plus the carrier fee before the cafe unloads. When the carrier deposits $1,850 in checking, match that deposit to the sale in QuickBooks Online or Xero. Do not leave an open invoice on accounts receivable; the cafe already paid at the door.
Flour arrives collect on delivery
On June 3 a pallet from a flour mill arrives at your bagel shop tagged COD $1,175. You write a check to the driver before they leave the dock. In QuickBooks Online or Xero, code that check to inventory or COGS. Do not also enter a bill to that mill; accounts payable should not show this shipment as if you still have net-30 terms.
Why it matters
COD tells you when cash changes hands: at delivery, not after an invoice sits on net-30 terms. You will not see this most months unless you ship or take in collect-on-delivery freight; it shows up on a label, packing slip, or carrier remittance. Book that shipment as open accounts receivable or accounts payable and the aging still lists money that already moved at the door. COD is not cash-basis accounting and not a cashier's check, so record the cash when the driver collects and keep that sale or purchase off the aging.
Further reading
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What is COD in bookkeeping?
Cash (or Collect) on Delivery.
When should I use COD?
Use COD when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with COD?
COD is used for cod entries, while C&F covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.