Would these books survive a diligence process without three months of clean-up first?
Bengaluru has the highest density of businesses that will one day hand their books to somebody else's accountant. A funding round, an acquisition or a lender review all involve an outsider reading your ledgers with an incentive to find problems, and the difference between books that were closed monthly and books that were reconstructed annually is never more visible than in that room.
Service-led files with light inventory, heavy expense classification, revenue recognised across contract periods, foreign currency receipts, and cost centre or project tagging. Many businesses also carry ESOP accounting and investor reporting obligations that a standard bookkeeping arrangement does not contemplate.
The specific Bengaluru failure is revenue recognition rather than compliance. A subscription or contract business that books cash on receipt rather than recognising revenue across the period it relates to produces a P and L that looks fine monthly and falls apart the moment somebody tests it. Deferred revenue, unbilled receivables and accrued costs are the three schedules that get skipped and the three that diligence goes to first. Maintaining them monthly is not materially more work than maintaining them badly, and it is the difference between a two-week diligence and a two-month one.
Karnataka levies professional tax with a materially higher exemption threshold than Maharashtra, so junior salaries frequently show a nil deduction while the entity still carries its own enrolment liability.
The reason this stopped being a matter of tidiness is that reconciliation moved upstream of the return. Auto-populated outward liability in GSTR-3B has been non-editable since the July 2025 tax period and Table 3.2 has been system-locked since the November 2025 period, so a mistake in GSTR-1 is corrected through GSTR-1A before you file rather than adjusted afterwards. The Invoice Management System treats inaction on an inward invoice as acceptance, so input credit is settled by what happened during the month. And a GSTR-3B cannot be filed more than three years after its due date, so an old backlog is a shrinking asset rather than a static problem. The month is now where compliance is decided, and the return only reports it.
| Item | Position as at August 2026 |
|---|---|
| Who must keep books, individuals and HUF | Income above Rs 2,50,000 or turnover above Rs 25 lakh in any of the 3 preceding years |
| Who must keep books, others | Income above Rs 1,20,000 or turnover above Rs 10 lakh, on the same test |
| Governing provision | Section 62 of the Income-tax Act, 2025, which carries forward the old section 44AA |
| Penalty for not keeping them | Rs 25,000 under section 441 of the Income-tax Act, 2025 |
| Electronic books | Rule 46(8) of the Income-tax Rules, 2026 requires a daily backup on servers located in India |
| Retention, income tax | Seven tax years from the end of the relevant tax year, under Rule 46(9) |
| Retention, Companies Act | Eight financial years, section 128(5). The longest applicable period governs |
| Retention, GST | 72 months from the due date of the annual return, extended during proceedings |
| GST edit log | Rule 56(8). Required for electronic records, every registered person, since 2017 |
| Company audit trail | Rule 3(1), Companies (Accounts) Rules 2014, financial years from 1 April 2023 |
| GSTR-3B outward liability | Auto-populated and non-editable since the July 2025 tax period |
| MSME creditors | Deduction deferred until paid where a micro or small supplier is paid late |
| Plan | Fee | Built for |
|---|---|---|
| Essential | Rs 2,499 a month | Up to 100 transactions a month, one GSTIN |
| Growth | Rs 6,999 a month | Up to 400 transactions, up to three GSTINs |
| Controller | Rs 17,999 a month | High volume, multi-state, or reporting to outsiders |
| Backlog clean-up | From Rs 9,999 | Prior periods rebuilt, sequenced oldest first |
| Books health check | Rs 4,999 | Written diagnosis, credited against the first retainer |
Priced on transaction volume and the number of GSTINs rather than on turnover, because that is what actually drives the work.
Every price above is a professional fee, excluding GST and government charges. 50% on delivery.
All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.
Reconciled bank balances, revenue recognition, the deferred revenue and unbilled receivable schedules, related party transactions, statutory dues including GST and TDS positions, and whether the numbers reported to the board reconcile to the books. Monthly closes make all of that a review. Annual reconstruction makes it an investigation, and the finding is rarely fraud. It is usually that nobody can explain a difference from eighteen months ago.
Recognised across the period the service relates to, with the unearned portion carried as deferred revenue, rather than taken to income when the cash arrives. It changes the monthly P and L materially and it is the first thing a competent reviewer tests. Fixing it retrospectively means restating comparatives, which is why it is worth setting up correctly at the start rather than at the point somebody asks.
Capture the exchange difference at three points rather than converting at one rate: the invoice date, the receipt date, and the reporting date for anything still outstanding. Export of services also needs treating as zero-rated where the conditions are met, which requires a Letter of Undertaking to avoid charging IGST you then recover months later. Books maintained at a single blended rate will not reconcile to the bank and will not survive review.
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Reviewed by the CA and CS Team, CorporateWalla · Last updated 17 August 2026 · · Sources: GST portal, Income Tax Department, Ministry of Corporate Affairs, Udyam Registration portal
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