What is monthly bookkeeping?
- Governing lawCompanies Act s.128
- Close date10th of next month
- From₹1,999 per month
- Onboarding3 to 5 working days
Monthly bookkeeping is the discipline of finishing a month rather than merely recording it. Transactions are entered as they arise, the bank and cards are reconciled weekly, the purchase register is matched to GSTR-2B, month-end adjustments are posted, and a reviewer clears the trial balance before the period is locked. What reaches you on the 10th is a set of reports you can act on: what you earned, what you owe, who owes you, and what the bank will actually look like next month.
The alternative is what most small businesses default to, which is a scramble in the last quarter of the financial year. That approach was survivable when returns could be amended freely. It is much harder now. Outward liability in GSTR-3B has been non-editable since the July 2025 tax period, corrections have to be pushed through GSTR-1A before filing, and returns older than 3 years cannot be filed at all. Books that are 9 months behind are no longer merely untidy; they are, in places, unfixable.
Four separate statutes require the underlying records. Section 128 of the Companies Act, 2013 obliges every company to keep books on the accrual basis under the double entry system and preserve them for at least 8 financial years. Section 34 of the LLP Act, 2008 imposes a parallel duty on LLPs. Section 62 of the Income Tax Act, 2025, in force from 1 April 2026, sets the income and turnover thresholds at which books become compulsory. Section 35 of the CGST Act, 2017, read with Rule 56, requires a GST-registered person to keep a true account of production, inward and outward supply, stock and input tax credit. The corporate obligation is administered by the Ministry of Corporate Affairs. Across FY 2025-26 IncorpX ran monthly closes for 2,000+ businesses and released 96% of reporting packs on or before the 10th. See the wider accounting and finance services range, or the general bookkeeping services page if you are still deciding what you need.
Closed by the 10th A close date, not a best effort
A close is a sequence with an owner and a deadline. Cut-off, capture, reconcile, match, adjust, review, lock, release. Skipping any step is what turns a small discrepancy in March into a week of forensic work in November.
- Documents in by the 5th, pack out on the 10th
- Trial balance reviewed before anything is released
- Period locked so a reported month cannot silently change
Legal framework
Companies: Section 128, Companies Act, 2013 (accrual + double entry, 8-year retention) | LLPs: Section 34, LLP Act, 2008 | Income tax: Section 62, Income Tax Act, 2025 (books) and Section 63 (tax audit) | GST: Section 35 read with Rule 56, and Section 36 (72-month retention), CGST Act, 2017
The monthly reporting pack
Eight reports, released together on the 10th with a variance note. Not a spreadsheet dump: each one answers a question you would otherwise have to ask.
| Report | What it answers | Released |
|---|---|---|
| Profit and loss statement | Did the month make money, and where did the margin go | By the 10th |
| Balance sheet | What the business owns and owes as at month end | By the 10th |
| Cash-flow summary | Why the bank balance moved, separate from the profit figure | By the 10th |
| Bank reconciliation statement | Whether the ledger agrees with the bank, account by account | Weekly, final by the 10th |
| Receivables ageing | Who owes you, and for how long it has been outstanding | By the 10th |
| Payables ageing | What you owe, and what falls due in the next 30 days | By the 10th |
| GST liability and input tax credit summary | Output tax, eligible credit, and any GSTR-2B mismatch | By the 10th |
| TDS deduction summary | What was deducted, under which section, and what is payable | By the 10th |
Also included at every plan level
- A named bookkeeper who owns your ledgers month after month
- Reviewer sign-off on the trial balance before release
- Zoho Books or Tally Prime access, no separate licence fee
- Read-only bank feed so statements import automatically
- Encrypted client portal for invoices, bills and receipts
- Sector-specific chart of accounts, not a generic template
- Period locking after close, so reported months stay reported
- Full data export on exit, with no exit fee
Practitioner insight (IncorpX bookkeeping team)
Across monthly engagements, the three items that most often break a close are the same every time: expense receipts that never left someone's phone (roughly half of all missing documents), inter-company or director transfers posted without a counter-entry, and purchase bills booked against the wrong GSTIN. Fixing all three is a process change, not an accounting one, which is why the pack lists what is missing instead of estimating around it.
How the month-end close runs
Ten steps on a fixed calendar. Steps 4 to 6 run continuously through the month; steps 7 to 9 run in the first working week of the next one.
Scope the volume and pick a monthly plan
Entity type, average monthly transaction count, GST registration status and current software decide the plan. Volume is the only variable: up to 100 transactions at ₹1,999, up to 300 at ₹3,999, up to 750 at ₹7,999. A named bookkeeper and a reviewer are assigned the same day.
Set up the ledger and the chart of accounts
Zoho Books or Tally Prime is configured with a chart of accounts built for your sector, plus GST rates, HSN and SAC masters, customer and supplier ledgers and tax heads. Getting the coding right once removes the regrouping work that otherwise resurfaces at every audit.
Load opening balances and connect the bank feed
Opening balances are taken from the last audited or filed position and tied back to it, so the new ledger agrees with what was already reported. A read-only bank feed is connected for automatic import, which removes manual re-keying and the errors that come with it.
Record transactions through the month
Sales invoices, purchase bills, expense receipts and bank entries are recorded as they arrive rather than batched at month end. Documents reach the bookkeeper through an encrypted portal, and every entry is tagged to its source document so the audit trail holds up later.
Reconcile the bank and cards weekly
Ledger entries are matched to the bank and card statements every week. An unmatched item is investigated while the payment reference and counterparty are still traceable. Waiting until year end is what turns a ₹4,000 query into an afternoon of forensic work.
Match the purchase register to GSTR-2B
The purchase register is matched line by line to GSTR-2B for the tax period, and Invoice Management System actions are taken on the portal. Suppliers who have not filed are flagged to you the same month, well before the input tax credit deadline of 30 November following the financial year.
Post accruals, prepayments and depreciation
Month-end adjustments make the report reflect the period rather than the cash timing: accrued expenses, prepaid amounts spread across their term, depreciation for the month, and provisions where required. Companies must follow the accrual basis under Section 128(1). Check the numbers with our depreciation calculator.
Review the trial balance and close the month
The reviewer checks the trial balance, control accounts, suspense entries and unusual variances against the prior month. Once it clears, the period is locked in the software so a later back-dated entry cannot silently change a month that has already been reported to you or to a lender.
Release the reporting pack by the 10th
Profit and loss, balance sheet, cash flow, bank reconciliation statements, receivables and payables ageing, GST liability and input tax credit summary, and the TDS summary, with a short variance note explaining what moved against the prior month and why.
Hand over audit-ready books at year end
Twelve closed months roll into a year-end pack with supporting schedules, ledger dumps and the document archive, ready for whichever independent auditor your company appoints. It also feeds straight into ROC annual filing and the income tax return.
The single most common failure
Documents arriving after the close. Every month a business sends the bank statement on the 12th and a folder of purchase bills on the 20th, the close either slips or runs incomplete. The fix is unglamorous: a shared upload folder that people actually use, and a bank feed so the statement never has to be sent at all. We set both up during onboarding.
Get your books on a monthly close
Talk to an IncorpX bookkeeper for free. Fixed close by the 10th, from ₹1,999 a month, with Zoho Books or Tally Prime included and no setup fee.
Why monthly stopped being optional
Three changes on the GST portal since 2024 have moved the cost of falling behind from inconvenient to unrecoverable. Each one assumes your books are current within the month.
1. GSTR-3B outward liability is hard-locked. From the July 2025 tax period, the outward tax liability auto-populated into GSTR-3B from GSTR-1 and IFF became non-editable on the portal. Tables 3.1 and 3.2 can no longer be overwritten at filing time. Any correction has to be pushed through GSTR-1A before GSTR-3B is filed, which is only possible if the sales register for that month is already complete and reconciled. The old habit of adjusting the 3B at the last minute has no button left to press.
2. The Invoice Management System runs on your action, monthly.IMS has been live on the GST portal since October 2024. Every invoice a supplier files sits there waiting for you to accept, reject or keep pending, and those actions decide what appears in your GSTR-2B. Nothing is decided for you. A business that visits IMS quarterly is making credit decisions on 90-day-old information, and the portal has signalled that input tax credit in Table 4 of GSTR-3B is next in line for the same locking treatment.
3. Returns expire after 3 years. The Finance Act, 2023 barred filing of returns under Sections 37, 39, 44 and 52 of the CGST Act more than 3 years after their due date, operationalised by Notification 28/2023-Central Tax and enforced on the portal from the July 2025 tax period. GSTR-1, GSTR-3B, GSTR-9 and GSTR-9C for older periods cannot be filed at all. Backlog bookkeeping now carries a hard deadline, and the oldest months are the ones to rebuild first.
| Control | Run monthly | Run at year end | Cost of the delay |
|---|---|---|---|
| GSTR-2B vs purchase register match | Mismatch flagged within 30 days | Found 6 to 11 months later | Credit lost if the supplier never files |
| Invoice Management System actions | Actioned each period | Defaults already applied | Credit flows on the portal decision, not yours |
| GSTR-1 to GSTR-3B agreement | Fixed via GSTR-1A before filing | Cannot be edited in 3B | Liability locks in as filed |
| Bank reconciliation | Weekly, trail still warm | Reconstructed from statements | Unidentified entries end up in suspense |
| Vendor advance and TDS matching | Caught in the same month | Caught at audit | Interest and late-deduction exposure |
| Sales cut-off across a month boundary | Enforced at close | Guessed later | Revenue lands in the wrong period |
Input tax credit has a fixed deadline
Credit on an invoice or debit note for a financial year cannot be taken after 30 November following the end of that year, or the furnishing of the relevant annual return, whichever is earlier, under Section 16(4) of the CGST Act, 2017. A supplier default discovered in December is a supplier default you pay for. Monthly matching exists to give you 10 months of runway to chase it.
Which records must be kept, and for how long
Four statutes, four retention clocks. The longest one wins, which in practice means keeping everything for 8 years in a form that can be produced on demand.
| Law | Who it applies to | What must be kept | Retention |
|---|---|---|---|
| Section 128, Companies Act, 2013 | Every company | Books of account on the accrual basis under double entry, at the registered office, together with vouchers | 8 financial years preceding the current year |
| Section 34, LLP Act, 2008 | Every LLP | Books of account on cash or accrual basis under double entry, plus the Statement of Account and Solvency | 8 years from the date they relate to |
| Section 62, Income Tax Act, 2025 | Businesses and specified professions above threshold | Books and documents prescribed for the business or profession | As prescribed by the Board |
| Section 35 read with Rule 56, CGST Act, 2017 | Every GST-registered person | Accounts of production, inward and outward supply, stock, input tax credit, output tax payable and paid | Held at the principal place of business |
| Section 36, CGST Act, 2017 | Every GST-registered person | Books of account and records relating to the year | 72 months from the due date of the annual return |
The penalty for a company that does not maintain books falls on individuals, not on an abstract entity. Under Section 128(6), the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person the Board charges with this duty is liable to a fine of not less than ₹50,000, extending to ₹5,00,000. The imprisonment limb was removed by the Companies (Amendment) Act, 2020, so the exposure is now financial, but it remains personal.
Cloud storage satisfies all four regimes provided the records stay accessible in India and can be produced in a legible form. That is one practical reason a monthly close on Zoho Books or Tally Prime is easier to defend than a folder of spreadsheets: the ledger, the source document and the reconciliation all live in one place with a timestamp.
Keep the documents, not just the entries
A ledger entry without its bill proves nothing at assessment. Attach the source document to the entry at the time of recording, not at year end when the vendor portal has expired the download link. Our monthly close will not release the pack for an entry that has no document behind it; it lists it as a gap instead.
Who should be on a monthly close?
Every registered company and LLP, by law. Beyond that, the trigger is transaction volume and GST registration rather than turnover.
| Category | Income threshold | Turnover or gross receipts threshold | Books compulsory? |
|---|---|---|---|
| Individual or HUF carrying on business | Above ₹2,50,000 | Above ₹25,00,000 | Yes, if either is crossed in any of the 3 preceding years |
| Any other person (company, firm, LLP, AOP) | Above ₹1,20,000 | Above ₹10,00,000 | Yes, if either is crossed in any preceding year |
| Specified professions | No threshold | No threshold | Yes, unless presumptive taxation is opted under Section 58(3) |
| Every company | Not relevant | Not relevant | Yes, separately under Section 128 of the Companies Act, 2013 |
| Every LLP | Not relevant | Not relevant | Yes, separately under Section 34 of the LLP Act, 2008 |
Specified professions under the 2025 Act cover legal, medical, engineering, architectural, accountancy, technical consultancy and interior decoration work, with information technology and compliance practice newly added. Practitioners in those fields maintain books regardless of income unless they opt into the presumptive scheme.
Separately, Section 63 of the Income Tax Act, 2025 triggers a tax audit once business turnover crosses ₹1 crore, or ₹10 crore where cash receipts and cash payments each stay within 5% of the total (note that a cheque which is not account payee counts as cash for this test). For professionals the trigger is gross receipts above ₹50 lakh, and the audit report is furnished on the income tax e-filing portal. Read the detail on tax audit limits and applicability, and see tax audit support when the threshold is in sight.
Ecommerce sellers
Marketplace settlement files, commission and return adjustments, and multi-state supply make a monthly reconciliation the only realistic option.
IT and SaaS companies
Deferred revenue, export invoices under LUT and foreign inward remittance tracking all need period-accurate cut-off, not a year-end estimate.
Funded startups
Investor MIS, burn and runway reporting are monthly obligations under most shareholder agreements. Late books mean late reporting.
Retail and distribution
High transaction counts, stock movement and vendor credit notes compound quickly. A month behind is a thousand entries behind.
Professional firms
Time-based billing, retainers received in advance and TDS deducted by clients need matching every month to avoid credit mismatches at filing.
Restaurants and services
Daily cash and card settlement, aggregator payouts and supplier bills need a weekly bank reconciliation to stay reliable.
What you send us each month
Six categories, due by the 5th. Connect a read-only bank feed at onboarding and the first row handles itself.
| Document | Format | Due by | Notes |
|---|---|---|---|
| Bank and credit card statements | PDF, CSV or bank feed | 5th | A read-only feed removes this step entirely |
| Sales invoices raised in the month | PDF or software export | 5th | Auto-captured if invoicing happens in Zoho Books |
| Purchase bills and vendor invoices | PDF or image | 5th | Must carry your GSTIN to support the credit claim |
| Expense receipts and petty cash | PDF or image | 5th | Mobile upload through the client portal |
| Loan, lease and investment papers | On occurrence | Needed once, then amortised monthly | |
| Fixed asset purchase invoices | On occurrence | Feeds the asset register and depreciation |
One-time onboarding documents
- PAN and GST registration certificate of the entity
- Certificate of Incorporation or partnership deed
- Last filed financial statements or trial balance
- Last 3 months of bank statements for the opening position
- Existing Tally backup or Zoho Books export, if any
- List of active bank accounts, cards and payment gateways
- GST portal credentials or GSTR-2B download access
- Fixed asset register with purchase dates and values
The bill has to name you
A purchase bill made out to a director personally, or to an old trade name, will not support an input tax credit claim and will not sit cleanly in the company ledger. Fixing vendor masters at onboarding is 30 minutes of work that removes a recurring monthly correction. We audit your top 20 vendors during setup.
Monthly bookkeeping vs the alternatives
Quarterly and year-end catch-up are cheaper per month and more expensive per year, because they buy the same entries without the controls that make them useful.
| Parameter | Monthly close | Quarterly books | Year-end catch-up | In-house bookkeeper |
|---|---|---|---|---|
| Reports available | Every month, by the 10th | Every 3 months | Once, after year end | Depends on the person |
| Bank reconciliation | Weekly | Quarterly | Reconstructed | Usually monthly |
| GSTR-2B matched | Every tax period | 90 days late | After the credit deadline | If they know how |
| GSTR-1A correction possible | Yes | Rarely | No | Sometimes |
| Reviewer sign-off | Yes | Sometimes | No | No |
| Cover during leave or exit | Yes | Yes | Yes | No |
| Software included | Yes | Yes | No | No |
| Typical monthly cost | ₹1,999 to ₹7,999 | ₹1,500 to ₹5,000 | ₹15,000 to ₹40,000 one-off | ₹15,000 to ₹25,000 salary |
| Audit readiness | Continuous | Partial | Built from scratch | Varies |
| Best for | GST-registered businesses of any size | Dormant or very low volume entities | Nothing, in practice | Teams above ₹25 crore turnover |
The honest case for quarterly books is narrow: a dormant company, or an entity with fewer than 10 transactions a month and no GST registration. Everything else is arithmetic. A year-end catch-up priced at ₹25,000 looks cheaper than 12 months at ₹1,999 until you add the input tax credit that expired, the interest on tax paid late, and the fortnight of founder time spent reconstructing what happened in August.
Read next: accounting basics for new founders for the records to set up on day one, and annual compliance cost for startups for how bookkeeping sits inside the wider yearly budget.
Zoho Books or Tally Prime
Both are included in the monthly fee. The choice is about how your team works, not about capability.
| Parameter | Zoho Books | Tally Prime |
|---|---|---|
| Deployment | Cloud, browser and mobile | Desktop, with remote access add-on |
| Automatic bank feeds | Yes | Manual or bank statement import |
| Simultaneous multi-user access | From anywhere | On the licensed setup |
| GST e-invoicing and e-way bill | Yes | Yes |
| Client visibility into live books | Real time | On request or via remote session |
| Familiarity for Indian finance staff | Growing | Very high |
| Included in the IncorpX monthly fee | Yes | Yes |
| Best for | Remote teams, founders who want live numbers | Established teams already on Tally |
IncorpX is a Zoho Authorized Partner, so if you choose the cloud route, setup, chart of accounts configuration, bank feed connection and migration from your existing books are handled during onboarding rather than billed as a separate implementation project. The full scope of that work is on the Zoho Books accounting page.
Zoho Authorized Partner Your books, your login
You hold the software login throughout the engagement. Nothing is kept in a file only we can open, and there is no exit fee or export charge if you move the work elsewhere.
- Live ledgers, not a monthly PDF you cannot query
- Read-only bank feeds, so no credentials are stored
- Complete backup and document archive handed over on exit
Monthly bookkeeping guides and calculators
References on the records behind a monthly close: what the books must contain, how input tax credit is claimed and lost, the GST returns your workings feed, and the audit and ROC filings the year-end pack supports.
Frequently asked questions about monthly bookkeeping
35 questions taken from real search queries, statutory provisions and the queries our bookkeepers answer during onboarding.
Start your first monthly close
Talk to an IncorpX bookkeeper for a free consultation. Onboarding in 3 to 5 working days, first reporting pack by the 10th of the following month, from ₹1,999 a month with no setup fee.
Nebin Binoy 
