You do not need to be an accountant to keep your business finances in order. A few simple habits around invoicing and bookkeeping will save you money, reduce stress at tax time and make it much easier to get a loan.
What every invoice should include
- Your business name, address and contact details
- A unique, sequential invoice number and the invoice date
- The customer's name and address
- Description, quantity and price of each item or service
- Total amount, discounts and payment terms (for example, due in 15 days)
- Bank and UPI details for payment
Extra details for a GST invoice
- Your GSTIN, and the customer's GSTIN if they are registered
- HSN code for goods or SAC code for services
- Taxable value and the GST rate and amount, split into CGST and SGST for sales within the state, or IGST for sales to another state
- Place of supply
Businesses above the notified turnover limit must issue e-invoices through the government's invoice registration portal. Check whether this applies to you as your business grows.
Simple bookkeeping habits
- Record every transaction: sales, purchases, expenses and payments, ideally daily.
- Keep receipts: save bills and invoices digitally in one folder or app.
- Separate accounts: never mix personal and business spending.
- Reconcile weekly: match your records with your bank statement.
- Track receivables: follow up politely but firmly on overdue payments.
- Review monthly: look at revenue, expenses, profit and cash in hand.
Key reports to understand
| Report | What it tells you |
|---|---|
| Profit and loss statement | Whether you made a profit over a period |
| Balance sheet | What the business owns and owes at a point in time |
| Cash flow statement | How money moved in and out |
| Accounts receivable ageing | Who owes you money and for how long |
Choosing accounting or invoicing software
Spreadsheets work at the very start, but dedicated software quickly pays for itself. Look for:
- GST-ready invoices and return reports
- Bank feed or easy bank reconciliation
- Inventory tracking if you sell goods
- Payment reminders and online payment links
- Mobile access and secure cloud backups
- Easy export for your chartered accountant
How long to keep records
Tax and GST laws require businesses to preserve books of account and supporting documents for several years. A safe practice is to keep records for at least eight years, in digital form with backups.
When to hire an accountant
Even if you do daily bookkeeping yourself, a chartered accountant is valuable for tax planning, GST filings, audits and year-end accounts. In Part 8, we look at how to win your first customers.
Start a Small Business in India: the full series
- Part 1: Choosing Your Business Structure
- Part 2: Registrations and Licences Checklist
- Part 3: Udyam (MSME) Registration
- Part 4: GST Registration and Composition Scheme
- Part 5: Bank Account and Digital Payments
- Part 6: How to Price Your Products and Services
- Part 7: Invoicing and Bookkeeping (you are here)
- Part 8: Getting Your First Customers
- Part 9: Funding and Government Loan Schemes
- Part 10: Taxes and Compliance Calendar
Disclaimer: This article is for general information only and is not legal, tax or financial advice. Rules, limits and fees change from time to time, so please check official government portals and consult a chartered accountant or company secretary for your specific situation.
