You have incorporated your Pvt Ltd company, received the Certificate of Incorporation, and you are ready to build. But here is what most founders do not realise: the compliance clock started the moment you incorporated. Within 30 days, you must appoint a statutory auditor. Within 180 days, you must file INC-20A (commencement of business). GST registration, TDS deposits, ROC filings, and bookkeeping are not 'later' tasks - they are 'now' tasks.
This guide walks you through every accounting and compliance step from Day 1 of incorporation to your first statutory audit - so you know exactly what to do, when to do it, and what it costs. For the foundational bookkeeping process, see our bookkeeping guide.
Phase 1: First 30 Days After Incorporation
Day 1-7: Financial Foundation
- Open a dedicated current account - never use personal accounts for business. Most banks require Certificate of Incorporation, PAN, Board Resolution, and KYC of directors.
- Deposit share capital - founders transfer their committed capital. This is your first accounting entry: Dr Bank, Cr Share Capital.
- Apply for PAN and TAN - PAN for the company (if not received with incorporation), TAN for TDS deduction (mandatory if you will pay salaries, rent, or professional fees).
- Set up cloud accounting software - Zoho Books (Rs 899/mo) or TallyPrime. Configure company details, financial year (April-March), and chart of accounts.
Day 7-15: GST and Tax Setup
- Register for GST - if you provide inter-state services, sell online, or expect turnover above Rs 20/40 lakh. Most startups register from Day 1 to claim ITC on setup expenses.
- Set up TDS compliance - register on TRACES portal. You will deduct TDS on salaries (Section 192), rent (Section 194-I), professional fees (Section 194J), and contractor payments (Section 194C).
- Issue share certificates - within 60 days of allotment. Pay stamp duty. Maintain Register of Members.
Day 15-30: Auditor and Ongoing Setup
- Appoint statutory auditor - Board resolution within 30 days of incorporation. Choose a CA firm (not the same firm doing your bookkeeping - separation recommended). File Form ADT-1 with ROC within 15 days of AGM ratification.
- File INC-20A - Declaration of Commencement of Business within 180 days. Requires bank statement showing share capital deposit.
Set up monthly bookkeeping rhythm - daily transaction recording, weekly bank reconciliation, monthly GST filing. For software setup, see our Zoho Books guide.
Phase 2: Monthly Compliance Rhythm
| Date | Task | What/How |
|---|---|---|
| Daily | Record all transactions | Invoices, expenses, payments in accounting software |
| Weekly | Bank reconciliation | Match bank feed with books. Zero unexplained differences |
| 7th | TDS deposit | Deposit TDS deducted in previous month via challan 281 |
| 11th | GSTR-1 filing | Report all outward supplies (sales) for previous month |
| 15th | PF/ESI deposit (if employees) | Deposit employer + employee PF and ESI contributions |
| 20th | GSTR-3B filing + GST payment | Summary return + pay net GST (output − ITC). For support: |
| Month-end | MIS review | P&L, Balance Sheet, Cash Flow, Aging reports |
This rhythm must start from Month 1 - even if revenue is zero. Zero-revenue months still require nil GST returns (if registered), TDS deposits (if you pay rent/salaries), and bookkeeping entries for expenses. For MIS reporting expectations, see our MIS reports guide. For GST filing, see our GST return filing services.
Phase 3: Quarterly Compliance
- TDS returns: File Form 26Q (non-salary) and Form 24Q (salary) quarterly - by 31 July, 31 October, 31 January, and 31 May. Generate Form 16A for vendors.
- Advance income tax: Pay advance tax by 15 June (15%), 15 September (45%), 15 December (75%), and 15 March (100%) if expected tax liability exceeds Rs 10,000. Section 80-IAC eligible DPIIT-recognised startups may be exempt for 3 consecutive years.
- Board meetings: At least 4 board meetings per year (one per quarter) with a gap of not more than 120 days. First board meeting within 30 days of incorporation. Minutes must be recorded and maintained.
- Financial review: Quarterly P&L and cash flow review with your CA. Compare actual vs projection. Review burn rate and runway (months of cash remaining at current spending).
Phase 4: Year-End Closing and First Statutory Audit
March: Year-End Adjustments (Before 31 March)
- Record depreciation on all fixed assets (as per Companies Act Schedule II rates for company books, IT Act rates for tax computation)
- Record provisions - bonus, gratuity, leave encashment (if applicable)
- Record accrued expenses - rent for March (if not yet paid), professional fees, utilities
- Conduct physical inventory count (if applicable) - value at cost or NRV, whichever is lower
- Reconcile all bank accounts, receivables, and payables to zero unexplained differences
- Ensure all TDS for March is provisioned (to be deposited by 30 April for March TDS)
April-June: Financial Statement Preparation
- Prepare Balance Sheet, P&L, and Cash Flow Statement as per Ind AS (if applicable) or Schedule III of Companies Act
- Prepare Notes to Accounts - accounting policies, fixed asset schedule, related party transactions, contingent liabilities
- Director's Report - mandatory report by the board covering company affairs, financial performance, dividends, and compliance
June-August: Statutory Audit
The statutory auditor examines your books, verifies transactions with supporting documents, checks compliance with accounting standards, and issues an audit report. For Pvt Ltd companies, this is mandatory from Year 1 - even if turnover is zero and the company has only expenses. For detailed audit requirements, see our statutory audit guide.
September-November: Annual Filings
- Hold AGM - within 6 months of financial year end (by 30 September). Adopt financial statements, appoint/ratify auditor.
- File AOC-4 - financial statements with ROC within 30 days of AGM
- File MGT-7/MGT-7A - annual return with ROC within 60 days of AGM
- File ITR-6 - company income tax return by 31 October (if tax audit applicable) or 31 July
- File GSTR-9 - annual GST return by 31 December
What First-Year Startup Accounting Costs
| Component | Annual Cost Range (INR) |
|---|---|
| Cloud Accounting Software (Zoho Books/Tally) | Rs 3,000-15,000 |
| Monthly Bookkeeping (outsourced) | Rs 24,000-1,20,000 (Rs 2,000-10,000/month) |
| Monthly GST Filing (12 returns/year) | Rs 12,000-36,000 |
| Quarterly TDS Returns (4 returns/year) | Rs 4,000-12,000 |
| Statutory Audit (mandatory for Pvt Ltd) | Rs 10,000-30,000 |
| ROC Annual Filing (AOC-4 + MGT-7) | Rs 5,000-15,000 |
| Income Tax Return (ITR-6) | Rs 5,000-15,000 |
| Annual GST Return (GSTR-9) | Rs 3,000-10,000 |
| TOTAL - Early-Stage Startup | Rs 40,000-1,50,000/year |
| TOTAL - Growth-Stage Startup (100+ txns/month) | Rs 1,00,000-2,50,000/year |
The best approach for most startups: outsource to a CA firm that provides a bundled package (bookkeeping + GST + TDS + ROC + audit + ITR) at 15-25% lower cost than engaging individual services. Our Zoho Books accounting services start from Rs 2,999/month for startups.
8 Accounting Mistakes Startup Founders Make
- Mixing personal and business accounts - reconstruction for audit costs 3-5x the cost of doing it right.
- Not appointing a statutory auditor within 30 days - penalty under Section 139.
- Delaying INC-20A - company cannot commence business without this filing. ROC can strike off the company.
- Filing nil GST returns late - Rs 50/day penalty even for zero-revenue months.
- Not deducting TDS on rent, salaries, and professional fees - 30% disallowance under Section 40(a)(ia).
- Recording ESOP grants without proper valuation - creates problems during funding due diligence.
- Not maintaining board meeting minutes - mandatory 4 meetings/year with minutes book.
- Treating the company's money as personal money - director's loan account, unexplained expenses, and cash withdrawals invite Section 2(22)(e) deemed dividend issues.
Key Takeaways
Startup accounting begins on Day 1 of incorporation - not when revenue starts. The first 30 days require opening a dedicated bank account, depositing share capital, applying for TAN, setting up accounting software, registering for GST, and appointing a statutory auditor.
Monthly compliance rhythm from Month 1: daily bookkeeping, weekly bank reconciliation, TDS by 7th, GSTR-1 by 11th, PF/ESI by 15th, GSTR-3B by 20th, and month-end MIS review. Even zero-revenue months require nil filings and expense recording.
Statutory audit is mandatory for every Pvt Ltd company from Year 1 regardless of turnover. The auditor must be appointed within 30 days of incorporation. The audit examines books, verifies transactions, checks compliance, and produces a report for AGM and ROC filing.
First-year total accounting and compliance cost ranges from Rs 40,000-1,50,000 for early-stage startups and Rs 1,00,000-2,50,000 for growth-stage - covering software, bookkeeping, GST, TDS, audit, ROC, and ITR. Bundled CA firm packages save 15-25% over individual services.
The single most expensive founder mistake is mixing personal and business finances - it makes every subsequent compliance task (GST, TDS, audit, investor due diligence) exponentially harder and more costly. Separate finances from Day 1, record every transaction, and maintain the monthly compliance rhythm.
Starting Up? Get Your Accounting Right from Day 1
The difference between a startup that breezes through its first audit and one that scrambles is whether accounting was treated as a Day 1 priority or a 'later' task. Clean books from Day 1 mean clean financials for investors, clean compliance for regulators, and clean decisions for founders.
Explore our Zoho Books accounting services - startup-specific packages covering software setup, monthly bookkeeping, GST/TDS compliance, ROC filing, and statutory audit coordination. From pre-revenue to funded growth.
For queries, reach out at +91 945 945 6700 or WhatsApp us directly.
