MSME Settings

On October 2, 2006, the Government of India introduced the concept of Micro, Small, and Medium Enterprises (MSMEs) through the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 aiming to promote the growth of MSMEs in India. This provides benefits to businesses based on their size, investment in machinery or equipment, and revenue.

To ensure MSME businesses get paid on time, the Government of India has added a new clause, clause (h), in section 43B of the Income Tax Act of the Finance Act 2023. This clause states that if you make a purchase from an MSME-registered business and make a payment for that purchase within 45 days from the date of purchase, the purchase amount will be allowed as a deduction on an accrual basis (as of the bill date). However, if you make the payment after 45 days of the purchase, the purchase amount will still be allowed as a deduction on a cash basis (as of the payment date). If the payment date falls in the next financial year while the bill is in the current financial year, this will increase your tax liability for the current financial year.

In Zoho Procurement, if your organisation is registered as an MSME, you can add its MSME details. You can also enter the MSME/Udyam registration number in your organisation’s address to stay compliant with section 43B(h) of the Finance Act 2023. Furthermore, you can add the MSME details of your vendors to view your unpaid bills to your MSME vendors.

Add Your Organisation’s MSME Details

If your organisation is registered as an MSME, you can enter your organisation’s MSME details in Zoho Procurement. Here’s how:

Go to Settings in the top right corner of the page.
Select MSME Settings under Taxes & Compliance.
Change the toggle near Is your organisation MSME registered? to Yes.
Select your organisation’s MSME/Udyam Registration Type.
Enter your organisation’s MSME/Udyam Registration Number. Ensure that it is in the format UDYAM-XX-00-0000000.
Click Save.

Add MSME Number to Your Organization Address

If your organisation is MSME registered, it is mandatory that you add your organisation’s MSME/Udyam Registration Number to your organisation’s address to stay compliant with section 43(h) of the Finance Act 2023. Here’s how:

Go to Settings in the top right corner of the page.
Click General under Preferences.
Scroll down to the Organisation Address Format section.
Click Insert Placeholders.
Select MSME/Udyam No Label and MSME/Udyam No.
Click Preview to preview your changes.
Click Save.

Your organisation’s MSME/Udyam registration number will now be displayed in the transaction PDFs sent to your customers and vendors.

Update MSME Details of Existing Vendors

It will be a time-consuming process to update the MSME details of each vendor. So, we’ve made it easier for you to update your vendors’ MSME details. You can simply export your vendors, update the MSME details of the MSME registered vendors in the exported file, and import the file into your Zoho Procurement organisation. Here’s how:

Go to Vendors on the left sidebar.
Click Update MSME Details in the top right corner. You’ll be redirected to the Update MSME Details page.
Click Skip and Proceed if you’ve already added your organisation’s MSME details. If you haven’t, add them in the respective fields and click Save and Proceed.
In the next step, click Export Vendors. A CSV file with all your vendor details will be downloaded.
Click Next.
Open the CSV file and enter the MSME registration type and MSME registration number of your MSME registered vendors in the MSME/Udyam No and MSME/Udyam Type columns.
Save the exported file.
Now, go back to Zoho Procurement to upload the exported file. Click Upload File and select the file. Click Import at the bottom of the page.
Once done, click Complete Migration at the bottom of the page. The MSME details of your existing vendors will be updated.

Add MSME Details of New Vendors

Go to Vendors on the left sidebar.
Click + New in the top right corner.
Enter the necessary details.
Check the This vendor is MSME registered option in the Other Details tab.
Select the MSME/Udyam Registration Type.
Enter the MSME/Udyam Registration Number.
Click Save.

View Unpaid MSME Vendors’ Bills

To ensure you pay your MSME vendors on time, we’ve provided easy ways to find any unpaid vendor bills. To view your unpaid MSME bills:

Go to Purchases on the left sidebar and select Bills.
Click the number below MSME Vendor Bills Unpaid for 40+ Days in the dashboard. You’ll be redirected to the MSME Vendor Bills Unpaid for 40+ Days page.
(OR)
Click the dropdown filter at the top and select MSME Vendor Bills Unpaid for 40+ Days.