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IT Accounting Services for Software Companies

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Realisation tracked to closure: We follow every export invoice until the eBRC closes it, ageing realised, part-realised and outstanding amounts separately.

Export figures your bank confirms: Each month's declaration carries the same invoice values your bank holds against the remittance, so the two records never diverge.

Zero-rated invoicing kept intact: Your export invoices carry the LUT reference, so supplies go out without paying IGST and the documentation stays attached.

Withholding settled before remittance: We fix the withholding on an overseas contractor's payment while you still hold the money, so the cost is known first.

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Overview What Is It Who Needs It Services Process Documents Challenges Fees Calendar Benefits Why Patron Comparison FAQs

What IT Accounting Covers — Scope, Deliverables and Who It Suits

📌 TL;DR - IT Sector Accounting Services at a Glance

IT accounting services prove export turnover invoice by invoice, matching every software export to its FIRC or BRC. Patron runs SOFTEX filing, LUT renewal and STPI reporting on a single compliance calendar so no return slips past its window. Export proceeds are tracked against the Rule 96A one-year realisation limit, not reconstructed at audit. Appropriate for software services companies, SEZ units and STPI-registered exporters.

What lands each month is a closed ledger, a receivables ageing in the billing currency, a refund working with its supporting annexures, and a note on anything approaching a statutory deadline. At year end you get the statements, the transfer pricing data set where a foreign parent is involved, and the schedules your auditor asks for before fieldwork begins. Exporting without paying IGST is the route most of this reporting is built around.

Few software companies bill in one currency alone, so workload follows the contracts invoiced abroad, whether you operate from an SEZ or STPI unit, headcount on payroll, and the entities consolidating at year end. Bookkeeping, the export documentation trail and the close itself sit inside the engagement. Filing the returns themselves via the central GST portal and transfer pricing certification sit outside this retainer.

What Is IT Accounting?

A software company's books have to prove export turnover, at the close, invoice by invoice, each sale matched to the bank realisation that settled it. IT accounting services are what produce that evidence. They record revenue in the billing currency, track foreign-currency receivables to the date they are realised, and keep the export documentation trail ready for inspection. Gains and losses on restating those receivables at each period's closing rate are booked as they arise.

Export compliance runs on a calendar alongside the ledger, so SOFTEX filings and the annual letter-of-undertaking renewal fall due on schedule rather than at audit. Where a foreign parent is involved, it assembles the transfer-pricing data set the assessment will call for. Software billed as a product is distinguished from services supplied, since each is reported differently. IT accounting services close the month, age the receivables and hand over the schedules an auditor needs before fieldwork begins. Filing the GST returns and certifying the transfer price themselves remain separate engagements.

Key Terms for IT Sector Accounting:

STPI / SOFTEX Export FilingDeclarations that report software export earnings to STPI and the bank.
Software Export Revenue (Section 10AA SEZ)Export income of an SEZ unit eligible for a tax deduction.
Foreign Currency ReceivablesAmounts owed by overseas clients, still to be realised in foreign currency.
Transfer Pricing for IT ServicesPricing rules for transactions between a company and its related overseas entities.

What Is IT Accounting. A software company's books have to prove export turnover, at the close, invoice by invoice,

Who Needs IT Accounting in India?

IT accounting services are for software companies that earn abroad and must prove it. When most invoices bill an overseas client in another currency, the businesses below need export turnover evidenced invoice by invoice.

Software services companies invoicing overseas clients in dollars, euros or pounds each month.
STPI-registered units filing SOFTEX returns, moving to the Export Declaration Form from October 2026.
SEZ IT units running zero-rated exports under a Letter of Undertaking.
Companies matching every export invoice to the FIRC or eBRC that finally closes it.
IT captives and MNC subsidiaries with a foreign parent that needs transfer pricing data.
Firms paying overseas contractors and cloud vendors, with withholding due before each remittance.
Time-and-materials software shops converting logged effort into unbilled revenue at each close.
Exporters watching the one-year limit to realise proceeds still owed from abroad.

Our IT Accounting Services

Service	What We Do
Unbilled revenue and effort tracking	Project effort and timesheets converted to unbilled revenue for time-and-materials work, so income follows delivered effort each month Monthly
SOFTEX and export declaration pack	Export declarations assembled for STPI or SEZ filing and matched to invoices, following STPI versus SEZ for IT where the unit qualifies Monthly
Remittance closure and receivables ageing	Foreign inward remittances matched to export invoices via FIRC and eBRC, with receivables ageing tracked to closure against RBI timelines Monthly
Overseas subcontractor cost review	Foreign vendor invoices for cloud, licences and contractors booked, with withholding and Form 15CA/15CB support settled before each remittance On event / as needed
Fixed asset register and depreciation	Laptops, servers and software capitalised, the fixed asset register maintained and depreciation charged consistently under the applicable schedule Monthly
Payroll, contractor treatment and books	Payroll with PF, ESI, PT and TDS run, contractor versus employee treatment reviewed and monthly books closed as core it accounting services Monthly

Our Process

How IT Accounting Works — Our Process

How Patron delivers it sector accounting, step by step from onboarding to a clean monthly close.

Step 1

Opening balance takeover

The prior-year audited statements and closing trial balance are mapped into the chart of accounts and agreed before a single new month is posted. That includes the fixed asset block and any unbilled revenue carried forward.

Step 2

Effort to unbilled revenue

Timesheet and project-effort data is converted into revenue for time-and-materials work, so effort delivered but not yet invoiced sits as unbilled revenue. Fixed-price engagements are recognised against milestones instead, and the two are kept apart.

Step 3

Export declaration filing pack

Invoice-level software and IT-enabled export data is collated into the export declaration for the month. For periods from 1 October 2026 the Export Declaration Form replaces SOFTEX, and an authorised dealer bank can certify in the domestic tariff area at par with STPI.

Step 4

Remittance closure and ageing

Every export invoice is tracked until the eBRC closes it. Invoices realised, part-realised and still outstanding are aged separately, so the ones approaching the realisation deadline are visible before the bank raises them.

Step 5

Overseas subcontractor cost review

Payments to overseas contractors and offshore delivery partners are attributed to the project they served. Each is then tested for withholding and for the characterisation of the payment before remittance, with Form 15CA or 15CB filed where required.

Step 6

Asset register and depreciation

Laptops, servers and networking equipment are capitalised into the register with location and custodian. They are then depreciated on the useful lives adopted under the Companies Act, with a parallel block-wise computation kept for income tax.

Step 7

Employee versus contractor treatment

The payroll register is split between employees on roll and individuals engaged on contract. The withholding section, and the PF, ESI and professional tax position, follow that classification rather than what the engagement is called.

Documents Required for IT Accounting

Export earnings have to tie back to what the bank and STPI each recorded, which is why SOFTEX and the remittance advices lead.

SOFTEX forms filed with STPI or the SEZ Development Commissioner, or the Export Declaration Form for periods from 1 October 2026, for software and IT-enabled service exports
Timesheets or project-effort data for time-and-materials engagements
Export invoices with the LUT (Letter of Undertaking) reference, or the IGST-paid export invoices
FIRC / eBRC and bank inward remittance advices with the FIRS reference
Foreign vendor invoices (cloud hosting, overseas contractors, software licences) with Form 15CA/15CB where filed
Foreign currency receipts detail with the exchange rate applied, and the EEFC account statement if held
Purchase and expense bills including rent, and the fixed asset register for laptops and equipment
Payroll register including contractors, with PF, ESI, PT and TDS challans and returns
Prior-year audited financial statements and closing trial balance

Client Portal

How You Work With Patron

Everything happens in one secure login. You can see your active services, the Patron team on your account, and anything still pending. Once you raise a request, it moves through the same clear steps every time, so you always know exactly where your work stands.

Sign in securely

Your books, documents and requests all sit behind one private, password protected login. The team handling your account is shown on screen, so nothing sensitive ever needs to travel over email or WhatsApp.

Service catalogue inside the client portal

Raise your request

Choose the service you need from the menu inside the portal, where the price is shown before you go ahead. Your request is logged the moment you send it, with no phone calls or reminder emails to wait on.

Import Export Code document checklist in the client portal, with an upload button beside each item

Share what the service asks for

For every service, the portal lists the exact documents it needs, each with its own upload button. The example shown here is the Import Export Code checklist. When a service needs nothing from you, it simply asks for nothing.

Live request tracker inside the client portal

We review, prepare and file

Once your documents are in, your team checks them, prepares the work and files it for you. A live tracker shows each stage as it happens, from review to processing to done, so you never have to ask where things stand.

Collect your finished work

Every completed return, computation and certificate is placed in your Deliverables area. You can open, print or download any of them as a PDF whenever you need a copy.

Common IT Accounting Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Foreign receivables not revalued at closing exchange rates	Debtors and revenue sit at outdated rates, so reported profit misses unrealised foreign-exchange movement.	Patron revalues foreign receivables at closing rates under AS 11, booking exchange differences to the period.
Fixed-price projects recognised on invoicing, not progress	Revenue and margin swing with billing milestones rather than the work actually delivered each month.	We recognise fixed-price revenue by percentage completion, holding unbilled and unearned amounts on schedule.
In-house software build expensed instead of capitalised	Development effort meeting asset criteria is written off, understating assets and distorting the year's profit.	Patron capitalises qualifying development cost under the applicable standard and amortises it over the product's life.
Onsite and offshore costs pooled, related-party markup untested	Delivery margin per location is invisible, and inter-company charges lack the markup transfer pricing expects.	Our team splits onsite and offshore cost pools and applies documented markups on related-party billing.
Export and domestic revenue billed on one ledger	Zero-rated exports and taxable domestic sales blur together, so GST treatment and input credit go wrong.	Patron separates export and domestic revenue streams; see domestic versus export GST treatment.

IT Accounting Fees

Fee Component	Amount
Starter — one software entity with routine export invoicing and FIRC tracking	INR 2,999 per month Excl. GST & Government Charges
Growth — more export invoices, added GST states or a second entity	On quote
Managed — multi-entity books with custom SOFTEX and billing reports	On quote

Starter IT accounting services begin at INR 2,999 per month for one software entity: export invoices booked, FIRC and SOFTEX lines tracked, books kept GST-ready. Volume of export invoices and billed headcount, not office size, decides the tier. Get a scope-based quotation on +91 94594 56700.

Fees exclude GST and government charges. Final quote confirmed after a scoping review.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional accounting and compliance charges are scoped to your number of entities, funding stage and monthly transaction volume, and are separate from statutory and government charges. Contact us for a detailed, fixed quote.

Get a free IT Sector Accounting consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

IT Accounting Compliance Calendar 2026

Compliance	Due Date	Applies To
TDS / TCS deposit (Challan ITNS-281)	7th of every month (30 April for March)	Every business that deducts tax at source on salaries, rent, contractor or professional fees
GSTR-1 (outward supplies)	11th of every month for monthly filers	GST-registered businesses filing monthly returns
GSTR-3B (summary return and tax payment)	20th of every month for monthly filers	GST-registered businesses filing monthly; QRMP filers pay via PMT-06
Form 15CA / 15CB on foreign remittances	Before each outward foreign remittance	Businesses remitting payments to non-residents
SOFTEX / EDF declaration on software and service exports	SOFTEX within 30 days of invoice until 30 September 2026; single monthly EDF from 1 October 2026	Software and IT/ITeS exporters realising foreign receipts
Letter of Undertaking renewal (Form RFD-11)	31 March 2026 for the new financial year	Exporters of services or goods supplying without payment of IGST
Income-tax return, audit cases	31 October 2026	Companies and audit-liable firms
Transfer pricing report (Form 3CEB)	31 October 2026	Businesses with international or specified domestic related-party transactions
Annual GST return GSTR-9 and reconciliation GSTR-9C	31 December 2026	GST-registered businesses above the annual-return and audit thresholds

IT and ITeS units feel two dates most: the LUT renewal by 31 March and the SOFTEX to EDF handover from 1 October 2026, after which your bank can certify service exports. Transfer pricing Form 3CEB then falls on 31 October. Patron's IT accounting team tracks each one against your STPI or DTA status. Download the 2026 calendar or talk to a CA on +91 94594 56700.

Key Benefits

Why Professional IT Accounting Matters

Realisation tracked to closure

We follow every export invoice until the eBRC closes it, ageing realised, part-realised and outstanding amounts separately.

FIRC and eBRC tied to each inward remittance advice
Invoices near their realisation window flagged while the customer can be chased
Without it, unrealised export invoices surface through the bank

Export figures your bank confirms

Each month's declaration carries the same invoice values your bank holds against the remittance, so the two records never diverge.

SOFTEX forms and the Export Declaration Form built from booked values
Without it, declared values disagree with the bank's records

Zero-rated invoicing kept intact

Your export invoices carry the LUT reference, so supplies go out without paying IGST and the documentation stays attached.

LUT reference held against each export invoice
Without it, a lapsed LUT means funding IGST and reclaiming it later

Withholding settled before remittance

We fix the withholding on an overseas contractor's payment while you still hold the money, so the cost is known first.

Form 15CA and 15CB prepared on the foreign vendor invoice
Without it, remit first and the tax comes out of your margin

Contractor classification that holds

Your payroll register is split between people on roll and individuals engaged on contract, and withholding follows that split.

PF, ESI and professional tax positions follow the same split
Without it, misclassifying employment as consultancy leaves arrears for every month

Revenue that follows delivered effort

You carry time-and-materials hours as revenue in the month worked, while fixed-price work is taken against milestones reached.

Delivered hours recognised in the month worked, not when invoiced
Without it, a delivery month shows cost with no income

Why Businesses Choose Patron Accounting for IT & Software Company Accounting Services

Five things a founder can check before handing over the books. Each is a claim with the proof behind it.

Export turnover you can prove, invoice matched to FIRC/BRC

For software exporters, turnover only counts once the bank confirms it. Over 15+ years we have matched every export invoice to its FIRC or eBRC, so realisation is tracked to closure, not left at the invoice date.

SOFTEX filing, LUT renewal and STPI reporting on one calendar

We run SOFTEX filing, LUT renewal and STPI reporting on one calendar, ready for the Export Declaration Form that replaces SOFTEX from October 2026. Our 25,000+ filings keep GST on IT and software exports zero-rated.

Ledger mapped to project and cost-centre, not just GL heads

You keep the ledger you already run, Zoho Books, Xero, Tally Prime or Odoo. We map your ledger to project and cost-centre, not just GL heads, so revenue follows the effort each team delivers.

Monthly export documentation pack closed every month

Every month you receive an export documentation pack, each invoice tied to the inward remittance that closed it. The cadence is monthly, and our 25,000+ completed filings show this is settled work, not a scramble at assessment.

IT services companies among 3,000+ businesses served

IT services companies, including SEZ and STPI units, sit among the 3,000+ businesses we have served since 2019. Our blog compares STPI versus SEZ, and 15+ years of experience with a 4.9 star Google rating back the work.

Figures reflect Patron Accounting LLP engagements since 2019. Scope and turnaround are confirmed in your engagement letter.

Captive Unit vs STPI vs SEZ: accounting impact

Criterion	Captive Unit	STPI
What it is	In-house delivery arm of a foreign parent, billing the group at arm's length.	Software export unit registered under the STPI scheme, filing SOFTEX for exports.
Books and segregation	Standard company books; main task is clean intercompany and cost records.	Export revenue tracked separately with SOFTEX or EDF documentation per shipment.
Revenue and pricing	Revenue is cost-plus intercompany billing set by the transfer-pricing policy.	Third-party export invoices, zero-rated, matched to bank realisation.
Compliance load	Transfer-pricing study, Form 3CEB and intercompany agreements are the main burden.	Monthly or quarterly SOFTEX filing and annual STPI performance returns.
MIS clarity	Cost-plus margin is easy to read once intercompany allocation is clean.	Export-versus-domestic split is clear when SOFTEX ties to invoices.
Tax and TP impact	Transfer pricing drives the assessable margin, so documentation must hold up.	Export tax benefits now largely general; compliance value is the audit trail.
Verdict	These are structural choices, not interchangeable methods. A foreign-owned captive runs on transfer pricing, while third-party exporters pick STPI or SEZ by location. Specialist it accounting services keep the export trail defensible. See STPI vs SEZ for IT companies.

Legal and Regulatory Framework for IT Accounting

The record an IT company's statute demands is proof of export - invoice by invoice, matched to the foreign currency that settled it - and Section 10AA of the Income-tax Act is what makes that proof valuable, because the deduction it offers stands or falls on it. Around that sits the ordinary company framework, but the export layer is what defines these books.

Three regimes govern one export invoice. The income-tax law offers the SEZ deduction, the GST law zero-rates the supply under a Letter of Undertaking, and FEMA tracks the money home through SOFTEX. So STPI / SOFTEX Export Filing and the arm's-length testing behind Transfer Pricing for IT Services are not add-ons but the core of the compliance. IT accounting services keep the three aligned against the provisions below.

Section 10AA, Income-tax Act 1961A unit in a SEZ claims a profit-linked deduction on export income, subject to the SEZ Re-investment Reserve and the sunset on new units - the basis of Software Export Revenue (Section 10AA SEZ).
Section 16, IGST Act 2017 with an LUT under Rule 96AExport of IT and software services is zero-rated and supplied under a Letter of Undertaking without payment of tax.
FEMA 1999 with SOFTEX filing (STPI) and the STP schemeEach software export invoice is filed on SOFTEX and its foreign-exchange realisation is monitored against it - the origin of Foreign Currency Receivables. RBI's Master Direction on Export of Goods and Services and the transfer-pricing Safe Harbour Rules (Rule 10TD) guide the practice.
Sections 92 to 92F, Income-tax Act 1961Captive and inter-company IT services are benchmarked at arm's length and reported in an accountant's report in Form 3CEB.
Section 128, Companies Act 2013The underlying books stay on accrual and double entry at the registered office, retained for eight years.
Rule 3(1), Companies (Accounts) Rules 2014The audit trail is enabled, so a revenue reclassification or an SEZ adjustment is logged. Subscription-billing specifics sit on the SaaS accounting page.

Practical note: During assessment, SOFTEX filings are cross-checked against bank realisation, and an export invoice without a matching inward remittance is where the Section 10AA deduction gets questioned.

Official sources: Ministry of Corporate Affairs · Income Tax Department · GST Portal · Startup India (DPIIT)

How is a company set up in accounting software at the start?

Company setup takes 2 to 3 working days and covers legal name and GSTIN, financial year, a chart of accounts built for a software business, tax rates including export and SEZ codes, and opening balances from your last audited trial balance. User roles are created before any data entry begins, so the audit trail is complete throughout.

Can a company migrate off Busy or Tally without losing old company data?

Yes. We export masters and vouchers, reconcile the migrated trial balance to the original to the rupee, then keep the old company file archived as read-only rather than deleting it. Books and records must be preserved for the period the Companies Act and GST law require, so deleting an old company file is never the right step.

What difference does reliable accounting software actually make to a software company?

For a software company it mainly fixes revenue recognition and export documentation: deferred revenue on annual subscriptions is scheduled automatically, foreign currency invoices are revalued at closing rates, and export invoice data sits in one place for GST refund claims. Spreadsheets usually break at renewals, mid-term upgrades and multi-currency conversion, which is where restatements start.

What accounting and billing stack do you recommend for an Indian SaaS company?

Zoho Books suits most Indian SaaS companies because it handles subscriptions, multi-currency invoicing and GST together, while larger product companies move to NetSuite or SAP as headcount and entities grow. QuickBooks is no longer sold in India after Intuit withdrew it in 2023, so companies still on it need migration. We implement Zoho Books and Xero directly.

How do you handle export invoices and GST refunds on software exports?

Software exports are zero-rated, so we either invoice under LUT without paying IGST and claim refund of accumulated input credit, or invoice with IGST and claim that refund instead. Each invoice is tied to its bank realisation document. Refund applications are filed well inside the time limit prescribed under GST law rather than at the last moment.

How is revenue recognised on annual SaaS subscriptions?

An annual subscription billed upfront is recognised over the 12-month service period, with the unearned portion held as deferred revenue on the balance sheet. Booking the full amount as income in month one overstates profit and creates a tax mismatch. Upgrades, downgrades and mid-term cancellations are prorated, and the deferred balance is reconciled at every month end.

Should software be expensed or capitalized?

Software is capitalised as an intangible asset when it will be used beyond one year and its cost can be measured reliably, and expensed when it is a subscription or a small one off purchase. Under AS 26 and Ind AS 38, internally developed software is capitalised only from the point technical feasibility is established, while every rupee of research phase spend goes to the profit and loss.

How do you handle TDS on payments to foreign cloud and software vendors?

Each payment is tested for withholding under Section 195 read with the relevant tax treaty, and Form 15CA and 15CB are prepared before the remittance goes out. Whether a payment is royalty, fees for technical services or a plain purchase changes the outcome, so we document the basis per vendor. Treaty benefit needs a valid tax residency certificate.

Is software depreciated or expensed?

Capitalised software is amortised over its useful life in the books, while cloud subscriptions and annual licence fees are expensed in the year they relate to. That book treatment is separate from the income tax position, where software bought outright is depreciated within the relevant block of assets and a subscription is claimed as revenue expenditure. We document the basis chosen for each vendor.

What does accounting for an IT company cost per month?

A services company with 20 to 50 employees usually pays Rs 20,000 to Rs 45,000 a month covering bookkeeping, GST including export refunds, TDS, payroll and monthly MIS. Product and SaaS companies with multi-currency billing and deferred revenue schedules sit at the upper end. Transfer pricing, statutory audit support and remittance certificates are quoted separately.

Quick Answers

IT Sector Accounting Deadlines You Cannot Afford to Miss

TDS / TCS deposit (Challan ITNS-281) is due 7th of every month (30 April for March). GSTR-1 (outward supplies) is due 11th of every month for monthly filers. GSTR-3B (summary return and tax payment) is due 20th of every month for monthly filers. Patron tracks each against your books so nothing is reconstructed after the fact. Call +91 94594 56700 to set up a filing-reminder schedule.

Start Your IT Accounting with Patron Accounting

Bankers, assessing officers and foreign parents all read the same ledger, and this page has been asking whether one set of books can satisfy all three. It can, provided the export trail is built as invoices are raised rather than assembled afterwards from bank statements months later. That is what IT accounting services deliver.

A foreign parent's auditor tests one thing early: that revenue booked in India ties to cash received abroad, invoice by invoice. When the realisation position stays current, group reporting timetables stop depending on how quickly someone here can assemble bank advices and certificates at each quarter end.

An initial conversation looks at your customer contracts: how they are priced, in which currency each bills, and whether any of them are with a related party abroad. Contract terms decide treatment here, as they do in books kept for subscription products.

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Reviewed by the CA & CS Team, Patron Accounting LLP

ICAI & ICSI registered · 15+ years in Indian accounting & compliance · Last reviewed 23 July 2026 · Next review 23 October 2026

Official sources: MCA Income Tax Department GST Portal Startup India (DPIIT)