What this covers
Keeping the books so that each period closes on a fixed date, every balance reconciles to an external source, and the trial balance can be handed to an auditor, a lender or an assessing officer without being rebuilt first. It covers the chart of accounts, transaction processing with the source document attached, bank and tax-ledger reconciliation, the fixed-asset register and depreciation on both bases, the period close, and financial statements in the prescribed format. It also covers the recovery case: books months behind, or a data file kept by three people with three conventions.
Statutory basis
Section 128 of the Companies Act, 2013 requires a company to keep books on an accrual basis and by double entry and to preserve them for eight financial years; section 129 with Schedule III prescribes the form of the financial statements; section 133 makes the accounting standards applicable, through the Companies (Accounting Standards) Rules, 2021 or the Companies (Indian Accounting Standards) Rules, 2015. Rule 3 of the Companies (Accounts) Rules, 2014 requires accounting software to record an audit trail of every change and forbids disabling it. Section 34 of the LLP Act, 2008 imposes a parallel duty, and sections 35 and 36 of the CGST Act, 2017 prescribe records and their retention. Books required for income-tax purposes are prescribed by the Income-tax Act, 2025 and the Income-tax Rules, 2026; the corresponding provisions under the repealed 1961 Act were section 44AA and Rule 6F of the 1962 Rules.
Who it applies to
Companies and limited liability partnerships, for which keeping books is a statutory duty whatever the turnover, including a year with no activity. Proprietorships and firms once receipts or turnover cross the limits in the income-tax provision, and in practice earlier, because a goods and services tax registration creates a monthly reconciliation of its own. Indian subsidiaries reporting to a foreign parent on a different calendar and standard. And any business whose books have fallen behind.
What we do
- 1Review the existing books, establish the last date on which the trial balance was actually reconciled, and close that gap before layering new transactions on an unreconciled opening position.
- 2Agree a chart of accounts that maps to Schedule III and to the goods and services tax and withholding classifications at once, so the annual accounts and the periodic returns come out of one ledger.
- 3Process transactions on a fixed cycle with the invoice, contract or bank advice attached to the entry, so support is found at the entry rather than searched for a year later.
- 4Reconcile monthly: every bank and credit-card account, the tax credit ledger against the auto-populated statement, tax deducted against what was reported and deposited, and each inter-company balance against the counterparty.
- 5Maintain the fixed-asset register with the date each asset was put to use, and compute depreciation on both the Companies Act and the income-tax bases, which differ in method and rate.
- 6Close the period on the agreed date with accruals, prepayments, provisions, stock and restatement of foreign-currency balances, and issue a signed-off trial balance that is not reopened without a note saying why.
- 7Confirm the software keeps the audit trail the Companies (Accounts) Rules require, that it has not been switched off, and that posting rights match who is authorised.
What you receive
- Monthly close
- A trial balance closed on the agreed date, with the working papers behind each balance.
- Reconciliations
- Bank, tax-credit, withholding and inter-company, with differences cleared rather than carried.
- Asset register
- Additions, disposals, put-to-use dates and depreciation on both bases.
- Statements
- Financial statements in the prescribed format, with the notes the standards require.
- Audit-ready file
- Ledgers, schedules and support organised so the auditor works from the file.
Documents and information required
Access to the accounting software or data file, with the opening trial balance · bank and credit-card statements for the full period · sales invoices and credit notes with the tax returns filed · purchase bills and expense claims with approvals · the auto-populated input tax credit statement · withholding challans and returns · payroll register · loan agreements with amortisation schedules · stock records and the valuation basis · fixed-asset invoices.
Key dates
The internal close date is agreed with you, and set early enough that the periodic filings are drawn from closed books rather than an estimate. The statutory dates the books have to serve are fixed: tax deducted deposited by the seventh of the following month, the goods and services tax returns on their monthly dates, financial statements adopted at the annual general meeting and filed with the Registrar, and the LLP statement of account and solvency on its own date. Books under section 128(5) of the Companies Act are preserved for eight financial years, and goods and services tax records for seventy-two months from the annual return.