Accounting & Bookkeeping

Books are not paperwork — they are the operating dashboard of your business. When your books are clean, GST returns file themselves, audits close in days, and you walk into investor or banker meetings with numbers you can defend. When they are not, every notice, every funding round and every year-end becomes a fire drill that costs ten times more than just doing it right month-on-month.

Outsourced accounting at Legal Suvidha is built on one discipline — monthly closing within seven working days of month-end, every month, calendar-driven. You get the trial balance, the MIS pack and the statutory computations on a fixed date. No catch-up. No March scramble. No surprises in your inbox the day before an investor call.

At a Glance

• Who it's for: SMEs, startups, founders running growing entities, NRIs with Indian businesses, HNIs and professional firms that want books they can act on, not just file.
• Governing law: Companies Act 2013 Section 128 (books of account), Income Tax Act Section 44AA (mandatory maintenance), GST Act, and applicable Accounting Standards or Ind AS depending on entity size.
• Retention period: Eight financial years from the end of the relevant FY under Section 128(5) — physical or electronic, but auditable on demand.
• Books required: Cash book, journal, ledger, sales and purchase registers, fixed asset register, inventory records, and supporting vouchers linked to source documents.
• Tools supported: Tally Prime, Zoho Books, QuickBooks Online, Xero, Busy, SAP Business One and NetSuite — we work in your existing tool or migrate you to the right one.
• Monthly closing: Seven working days from month-end — trial balance locked, accruals booked, GST and TDS computed, MIS delivered. Calendar-driven, not effort-driven.
• Statutory cover: GSTR-1, 3B, 9, 9C, IMS actions, TDS quarterly returns, payroll PF / ESIC / PT, advance tax, ITR and ROC filings — single integrated team.
• Audit-readiness: Working papers, ledger scrutiny notes and sample documentation maintained throughout the year. Statutory audit closes in two to three weeks, not three months.

What's New for FY 2026-27

The compliance landscape shifted meaningfully in the last twelve months. Here is what changed on the GST, income tax and corporate sides — and what your books must now reflect.

• IMS goes live: The Invoice Management System lets you accept, reject or hold each supplier invoice on the GST portal. Your ITC in GSTR-2B now depends on the action you take — silent acceptance is no longer the safe default.
• GSTR-1A operational: You can amend GSTR-1 details before filing GSTR-3B of the same period. The reconciliation discipline finally has a corrective window built in, but it has to be used in real time.
• E-invoicing at ₹5 crore: Once aggregate turnover crossed ₹5 crore in any FY from 2017-18 onwards, e-invoicing is permanent. It now covers credit notes, debit notes and supplies to SEZ as well.
• Rule 37A reversal: If a supplier fails to file GSTR-3B by 30 September of the following FY, the ITC you claimed earlier must be reversed with interest. Your books need a supplier-compliance tracker.
• ITR forms updated: ITR-3, 5 and 6 for AY 2027-28 demand expanded balance sheet schedules, related-party transaction details, virtual digital asset disclosures and beneficial owner reporting.
• DPDP Act compliance: Employee, vendor and customer personal data in your books requires documented consent, retention policy and a breach response protocol. The accounting workflow itself must comply.

Why Disciplined Books Matter More Than You Think

Books are not just a tax obligation. They are how every external party — bank, investor, tax officer, acquirer — forms a view of your business.

• Bank credit decisions: Lenders sanction working capital and term loans on the strength of three years of audited financials and consistent monthly MIS. Patchy books mean a haircut on sanctioned amount or outright rejection.
• Investor due diligence: Every funding round opens with financial DD. Books that have to be restated mid-DD destroy valuation and push the close by months — sometimes killing the round outright.
• Tax assessments: Scrutiny under Section 143(3) goes line by line through your ledger. Mismatches between books, GST returns and TDS returns are the first issue an officer flags.
• MSMED 45-day rule: Vendor payments delayed beyond 45 days trigger Section 16 compound interest at three times the bank rate. The interest is also disallowed for income tax under Section 23 of the MSMED Act.
• Founder decisions: Pricing, hiring, capex and runway — all need real numbers in your inbox each month, not a half-baked spreadsheet pulled together once a quarter when something breaks.

How It Actually Works

From sign-up to a clean monthly trial balance, the path is structured. Here is what each phase looks like in practice.

Step 1: Discovery and Books Cleanup

A two to four week setup phase. We review your existing trial balance, ledger heads, opening balances and statutory return history. The chart of accounts is rationalised — operating expenses split correctly, capital and revenue lines separated, GST and TDS ledgers reconciled to portal balances. If you want to move from Tally to Zoho, or from Excel to anything, the migration happens here.

Step 2: Daily and Weekly Capture

Sales invoices, purchase bills, expense vouchers, bank entries and journal entries are captured on a rolling basis — daily for high-volume businesses, weekly for low-volume. Bank reconciliation runs continuously, not at month-end. This is the unglamorous work that decides whether closing takes seven days or twenty-seven.

Step 3: Month-End Closing in Seven Working Days

Days one and two cover the revenue cut-off, accruals, prepaid amortisation and depreciation. Days three and four handle GSTR-2B reconciliation against your purchase register, ITC eligibility checks and the IMS action on each invoice. Days five and six are TDS computation, payroll processing and statutory deposit cheques. Day seven locks the trial balance, releases the MIS pack and triggers a founder review call. Every month. Same calendar.

Step 4: Statutory Filings on a Fixed Calendar

GSTR-1 by the 11th of next month, GSTR-3B by the 20th, TDS challan by the 7th, payroll PF by the 15th, ESIC by the 15th, Professional Tax per state schedule. Quarterly: TDS returns 24Q, 26Q, 27Q and 27EQ, plus advance tax. Each filing is computed from your books — never the other way around, which is how mismatches start.

Step 5: Year-End Closing and Audit

The 31 March cut-off triggers year-end entries — provisions, gratuity actuarial, expected credit loss on receivables, MAT computation. Statutory audit support runs from the same team that ran the books — schedules, working papers, sample selections and auditor queries handled in days. The audit does not become a parallel project that disrupts operations.

Step 6: ITR and Annual Returns

ITR-3, 5 or 6 is prepared with a full books-to-return reconciliation, Schedule 3CD, depreciation tax adjustments and MAT credit position. GSTR-9 is filed by 31 December, GSTR-9C where turnover exceeds ₹5 crore. ROC filings — AOC-4 and MGT-7 — are uploaded within statutory timelines with all required attachments and signatories.

A Real Example: Mid-Size Services SME

Consider a Delhi-based services SME with annual turnover of ₹4.2 crore, 28 employees on payroll, two offices and active TDS exposure.

• Transaction volume: Around 220 sales invoices, 180 purchase bills, 320 bank entries and payroll for 28 employees each month.
• Accounting tool: Zoho Books with payroll add-on; e-invoicing integrated via IRP API; bank feeds automated for all three accounts.
• Closing cadence: Days one and two ran cut-offs and booked ₹3.5 lakh of accruals. Days three and four flagged four supplier mismatches in GSTR-2B; ₹62,000 of ITC was held back pending invoice receipt.
• Tax computation: Day five computed TDS at ₹1.8 lakh across Sections 194C, 194J and 194I. Day six closed payroll — gross ₹14.6 lakh, PF ₹1.05 lakh, ESIC ₹52,000, PT ₹14,000 — all deposited by the 15th.
• Day seven MIS: The P&L showed ₹1.4 lakh adverse variance to budget driven by professional fees. Cash runway flagged 5.2 months. Top-five receivables ageing showed one customer at 67 days — collection call triggered the same morning.

Year-end audit closed in 18 days. ITR-6 was filed on 14 September. Zero notices received for the full year. The founder spent roughly two hours a month reading the numbers, not chasing them.

Seven days, every month. The number on the calendar matters more than the size of the team.

The Annual Statutory Calendar

Monthly closing is the foundation. The annual layer sits on top and the calendar is dense — missing any of it carries real cost in interest, penalty or disallowance.

• 30 April: TCS quarterly return Form 27EQ for the January-March quarter.
• 31 May: TDS quarterly returns 24Q and 26Q for Q4, followed by Form 16 to employees and Form 16A to deductees.
• 30 June: PF and ESIC annual reconciliations; new-joiner formalities Form 11 and 12B.
• 31 July: Non-audit ITRs — ITR-1 and ITR-4 for salaried persons and presumptive taxpayers.
• 30 September: Tax-audit ITRs for companies, LLPs and proprietorships requiring audit; Form 3CA / 3CB and 3CD.
• 31 October: TDS return for Q2; Form 3CEB transfer pricing report where applicable; AOC-4 and MGT-7 typically due within 30 and 60 days of the AGM.
• 31 December: GSTR-9 and 9C for the previous financial year.
• 15 March: Final advance tax instalment for the running FY.

Where It Goes Wrong

After running thousands of monthly closings, the recurring failure modes are predictable. Watch for these.

• Cash basis dressed up as accrual: Revenue and expense recognised only on receipt or payment. The books look fine until audit, when restatement wipes out reported profits and triggers tax demand.
• ITC claimed without GSTR-2B match: Section 16(2)(c) requires the supplier to have paid the tax. Rule 37A forces reversal next year with interest at 24 percent if the supplier defaults — a cash outflow you did not plan for.
• TDS deducted but not deposited: Interest at 1.5 percent per month under Section 201(1A), plus 30 percent of the expense disallowed under Section 40(a)(ia). The disallowed amount becomes taxable profit.
• Cash payments over ₹10,000: Full disallowance under Section 40A(3). A genuine business expense converts into taxable income for one filing slip.
• MSMED interest not provisioned: Vendor payments beyond 45 days carry compound interest at three times the bank rate, disallowed under MSMED Act Section 23. Disclosure in financial statements is mandatory.
• Related-party transactions un-benchmarked: Section 92BA and Form 3CEB requirements ignored. Penalty up to 2 percent of transaction value plus disallowance of the expense.
• Books not retained for 8 years: Companies Act Section 128(5) and Income Tax Section 44AA both require eight-year retention. Non-retention is itself an offence and prevents you from defending an old assessment.

The cheapest accounting setup is the one that costs you nothing in penalty, disallowance or audit drama. Cleanliness compounds.

What You Receive at the End

• Monthly MIS pack — profit and loss, balance sheet, cash flow, KPI dashboard and variance analysis
• Bank reconciliation statements for every account and the locked monthly trial balance
• GSTR-1, GSTR-3B, GSTR-9 and GSTR-9C — prepared, reviewed and filed
• Quarterly TDS returns 24Q, 26Q, 27Q and 27EQ, plus Form 16 and 16A to recipients
• Payroll register, individual payslips, PF, ESIC and Professional Tax challans and returns
• Annual financial statements compliant with Schedule III and applicable AS or Ind AS
• Statutory audit support pack with working papers and sample selections
• ITR computation, filed acknowledgement, refund tracking and assessment defence support
• ROC filings — AOC-4 and MGT-7 — with all attachments and signatory coordination
• Document vault with eight-year retention as required under Section 128(5)

How to Get Started

Begin with a 30-minute discovery call. Share your latest trial balance or last filed ITR, one recent bank statement and a recent GST return. We assess the volume, complexity and current state of your books and quote a monthly retainer aligned to that workload — not a generic slab rate. The scope, deliverable calendar and service-level agreement are documented in a one-page engagement letter you can put in front of your Board or business partner.

Onboarding takes two to four weeks depending on how much cleanup the existing books require. From the first full closing cycle onwards, you receive the MIS on a fixed day each month. The objective is simple — your books stop being a recurring problem and become a real decision tool, while statutory compliance runs in the background on a calendar you can plan around.