Accounting Setup for New Companies in India: First 90 Days Checklist

Accounting setup for a new company in India should begin soon after incorporation, rather than waiting until the first GST return, statutory audit or income-tax filing. A structured accounting system helps the company record share capital, bank transactions, incorporation expenses, sales, purchases, payroll, taxes and financial obligations accurately from the beginning.

Newly incorporated private limited companies, startups, small businesses and foreign-owned Indian subsidiaries need reliable accounting records, appropriate financial controls and an accounting system suited to their business activities.

EzyBiz India Consulting LLP provides accounting setup, bookkeeping and outsourced accounting services for newly incorporated companies in India. Our services may include chart-of-accounts design, accounting software setup, share capital accounting, opening balance preparation, bank and expense accounting, GST and TDS ledger configuration, payroll accounting, monthly reconciliation and financial reporting.

Our multidisciplinary team includes Chartered Accountants, Company Secretaries and other professionals, including Big Four alumni, with experience in accounting, company law, taxation, regulatory compliance and international business advisory.

This guide explains the initial accounting requirements, practical bookkeeping procedures and financial controls that businesses should establish during their first 30, 60 and 90 days.

For ongoing accounting support, explore our Accounting and Bookkeeping Services in India.

Why Accounting Setup Is Important After Company Incorporation

Accounting Starts Before Revenue Generation

A company may incur costs and receive funds before raising its first customer invoice. Incorporation-related expenditure, office deposits, subscriptions, equipment purchases, director payments and capital contributions should be reviewed and appropriately recorded.

Not every payment received by the company represents revenue, and not every incorporation-related payment qualifies for immediate recognition as an expense.

Early Accounting Errors Can Affect Future Compliance

Incorrect opening entries may affect bank reconciliations, share capital balances, expense classification, tax calculations and the company’s initial financial statements.

Correcting errors early is generally easier than reconstructing accounting records at the time of statutory audit or investor due diligence.

Accounting Records Support Management and Investors

A reliable accounting system helps founders monitor initial investment, expenses, working capital, cash burn, outstanding liabilities and operating performance.

Foreign investors and parent companies may additionally require reporting on intercompany transactions, funds received and financial performance.

Accounting Requirements Under the Companies Act, 2013

Section 128 and Maintenance of Books of Account

Section 128 of the Companies Act, 2013 requires companies to maintain books of account and relevant financial records giving a true and fair view of the company’s affairs and explaining its transactions.

Books must be maintained on an accrual basis and according to the double-entry system of accounting.

The registered office and any permitted alternative location for maintaining books should comply with the applicable statutory requirements.

Electronic Accounting Records and Audit Trail

Companies maintaining books electronically must comply with the applicable Companies (Accounts) Rules.

Where accounting software is used for maintaining books of account, the applicable audit-trail or edit-log requirements must be considered, including recording changes and preserving relevant logs.

The software should also support appropriate record accessibility, storage, backup and authorised review arrangements.

Retention of Books and Supporting Documents

Section 128 generally requires preservation of books and relevant vouchers for at least eight financial years immediately preceding the current financial year, or the company’s period of existence if shorter, subject to any special requirements.

Refer to the Companies Act, 2013 for the statutory framework.

First 30 Days: Establish the Accounting Foundation

Collect Incorporation and Shareholding Documents

Begin by organising the Certificate of Incorporation, Memorandum and Articles of Association, PAN, TAN, approved share capital details, subscriber information, statutory records and initial company resolutions.

These documents help establish the legal and financial information required for the first accounting records.

Select Accounting Software and Define the Financial Year

Select an appropriate accounting platform based on the company’s operations, reporting requirements, GST and TDS needs, user access, audit-trail functionality and accounting standards.

Configure the accounting period according to the applicable Companies Act framework and the company’s actual date of incorporation.

Create Bank, Share Capital and Initial Expense Ledgers

Establish accounts for the company bank, subscribed share capital, securities premium where applicable, preliminary expenditure, professional fees, deposits, fixed assets and other initial balances.

Use accounting entries supported by the relevant transactions and legal documents.

Chart of Accounts Setup for a New Company

Create Assets, Liabilities, Equity, Income and Expense Groups

A chart of accounts is the organised list of ledger accounts used to record the company’s transactions.

It should include the relevant asset, liability, equity, income and expense categories without creating unnecessary ledger duplication.

Configure GST, TDS and Payroll Ledger Accounts

Where applicable, separate ledgers should be created for output GST, eligible input tax credit, reverse-charge liabilities, TDS payable, employee deductions, employer contributions and other statutory balances.

These accounts should support reconciliation with payments, statutory returns and accounting schedules.

Set Up Departments and Cost Centres

Businesses requiring project-wise, branch-wise or department-wise reporting can establish suitable cost centres from the outset.

A thoughtfully designed structure can support future budget analysis, financial reporting and profitability measurement.

Choosing Accounting Software for a New Company in India

TallyPrime and Other Desktop Accounting Systems

TallyPrime and similar accounting systems may be suitable for businesses requiring detailed ledger accounting, inventory records, taxation-related information and operational accounting functions.

Software selection should be based on actual functionality and compliance requirements rather than familiarity alone.

Zoho Books and Cloud Accounting Platforms

Cloud accounting solutions may support remote user access, digital document processing, sales and purchase accounting, banking integration and management reports.

Where available, automated workflows can help reduce manual processing, but accounting review remains necessary.

Software Ownership, Access and Data Controls

The company should retain appropriate ownership and administrative control over its accounting data and software account.

Access rights should distinguish transaction processing, accounting review and management approval.

Software backup, access removal and data-export procedures should be documented before the system goes live.

Accounting for Share Capital and Initial Funding

Recording Subscription Money and Share Allotment

Initial capital receipts should be reconciled with subscription documents, actual bank receipts, allotment details and statutory registers.

The correct accounting classification depends on the legal stage and nature of the transaction.

Share application money pending allotment should not automatically be classified as issued equity share capital.

Illustrative Equity Share Capital Journal Entry

Assume a company issues 10,000 equity shares of ₹10 each at par, with the full amount received and shares validly allotted.

Accounting entry	Debit (₹)	Credit (₹)
Bank Account Dr.	1,00,000	–
To Equity Share Capital Account	–	1,00,000

This is a simplified illustration of a completed equity allotment at par. Transactions involving share application money pending allotment, securities premium or other instruments require accounting appropriate to their legal facts.

Founder Loans and Other Funding Arrangements

Funds advanced by directors, shareholders or third parties should be reviewed according to their legal nature and underlying agreements.

Equity, permitted borrowing, reimbursement and other receipts have different accounting and regulatory consequences.

Applicable Companies Act provisions and restrictions concerning loans and deposits should be evaluated separately.

Accounting for Incorporation and Preliminary Expenses

Company Registration and Professional Expenses

New companies may incur fees for incorporation, documentation, professional services, stamp duty, regulatory registrations and other formation-related activities.

The accounting treatment should reflect the relevant expense, statutory requirement, applicable accounting standards and whether the cost relates directly to an equity transaction.

Expenses Paid by Directors or Promoters

Promoters may initially pay company-related expenses from personal funds.

When the company becomes liable to reimburse such amounts, the transactions should be supported by appropriate invoices, approvals and records.

Not every pre-incorporation payment automatically becomes a company liability.

Classification of Revenue and Capital Expenditure

Expenses should be distinguished from expenditure requiring capitalisation as an asset under the relevant accounting framework.

Accounting treatment and income-tax deductibility should be evaluated separately where they differ.

Opening Balance Sheet for a Newly Incorporated Company

Identify Initial Assets and Liabilities

The opening balance sheet should reflect actual transactions and balances, including paid-up share capital, bank balances, relevant assets, liabilities and other recognised items.

A newly incorporated company may initially have very few accounts, but the opening figures should be fully supported.

Illustrative Opening Balance Sheet

Assume an Indian private limited company receives ₹1,00,000 of issued equity capital and subsequently pays ₹20,000 for qualifying expenses recognised in profit or loss.

Particulars	Amount (₹)
Bank balance	80,000
Total assets	80,000
Equity share capital	1,00,000
Accumulated loss (debit balance)	(20,000)
Total equity and liabilities	80,000

This is a simplified educational illustration, not a complete Schedule III financial statement. The treatment of actual formation expenses and related transactions must be assessed separately.

Reconcile Opening Balances With Bank Statements

The company should confirm that the opening cash and bank figures agree with bank statements and the recorded transactions.

Unpaid expenses, advances and liabilities should not be omitted merely because cash has not yet been paid.

GST Accounting Setup for Newly Incorporated Companies

Determine GST Registration Applicability

GST registration depends on the company’s taxable supplies, turnover, nature of business, location, applicable statutory provisions and relevant exceptions.

Incorporation of a private limited company does not automatically mean that every company must obtain GST registration immediately.

Configure Sales Invoices and GST Masters

Where GST applies, the accounting software should be configured for relevant tax rates, HSN or SAC codes, GSTIN details, invoice numbering, place of supply and other required information.

Sales and credit-note accounting should be consistent with the actual transactions and applicable GST requirements.

Establish Input Tax Credit Reconciliation

Purchase records should identify GST charged by suppliers and support evaluation of eligible input tax credit.

Relevant GST records should be reconciled with available GST portal information and prescribed return data.

For official information, visit the GST Portal and our GST and Indirect Tax Services.

TDS, Income Tax and Payroll Accounting Setup

Configure TDS Accounting and Deductee Records

Where the company is required to deduct tax, accounting processes should identify applicable payment categories, deductee information, tax deduction timing and appropriate liability ledgers.

The Income Tax Act, 2025 applies from 1 April 2026, while earlier-period matters may remain subject to transitional provisions.

Set Up Payroll and Employee Cost Records

When the company begins hiring employees, payroll accounting should cover salaries, reimbursements, employee deductions, employer contributions and other relevant employee liabilities.

Applicable PF, ESI, professional tax and employment-related obligations should be evaluated according to the company’s circumstances.

Official income-tax guidance is available from the Income Tax Department.

First 60 Days: Establish Monthly Accounting Processes

Sales, Purchases and Expense Processing

By the second month, the company should have a defined process for recording customer invoices, supplier bills, operating expenses, receipts and payments.

Document collection, approval responsibilities and accounting-entry procedures should be established.

Bank, Vendor and Customer Reconciliations

All company bank accounts should be reconciled regularly against accounting ledgers.

Supplier and customer balances, advances, credit notes and outstanding amounts should also be reviewed as transactions begin to accumulate.

Expense Approvals and Payment Controls

Management should establish approval limits, authorised signatories and processes for reviewing vendor bank details.

Segregation between payment preparation and approval is particularly important where accounting functions are outsourced.

First 90 Days: Finalise the Monthly Reporting Framework

Prepare Initial Trial Balance and Financial Statements

The company should prepare an adjusted trial balance and appropriate financial reports based on recorded transactions and reconciliations.

As operations develop, management may begin receiving profit and loss statements, balance sheets and cash summaries.

Implement Monthly MIS and Founder Reporting

Reports may include cash position, operating expenditure, revenue, receivables, payables, cash burn and budget comparisons.

Foreign parent companies may require additional group reporting schedules.

Review Outstanding Issues and Finalise Responsibilities

At the end of the initial implementation period, management should review unresolved reconciliations, missing documents, software access, approval controls and recurring reporting responsibilities.

Our Month-End Accounting Checklist and MIS Reporting Services in India explain the subsequent monthly reporting process.

Accounting Setup for Foreign-Owned Indian Subsidiaries

Foreign Share Capital and FDI Accounting

Where a new Indian company receives foreign equity investment, the accounting should reconcile share subscriptions, banking records, allotment documentation, share capital and securities premium with applicable regulatory information.

FC-GPR, FLA and other FEMA filings must be considered according to the actual foreign investment and relevant requirements.

Intercompany Ledgers and Foreign Currency Accounting

Foreign-owned companies may need separate ledgers for transactions with overseas parents or group entities.

These can include service fees, reimbursements, intercompany receivables and payables, foreign currency balances and other related-party transactions.

See our Accounting for Wholly Owned Subsidiaries in India and India Market Entry Services.

Outsourcing Accounting Setup and Initial Bookkeeping

What an Outsourced Accounting Setup Engagement Includes

A professional accounting setup assignment may cover initial document review, software configuration, chart of accounts, share capital entries, accounting masters, bank reconciliation, expense classification and the initial financial reporting process.

Activities should be agreed based on the new company’s actual needs.

Benefits of Professional Setup and Ongoing Support

A professional team can assist with structured accounting processes, timely reconciliation and appropriate documentation during the early stages of business operations.

Actual efficiency and cost benefits depend on the company, transaction volume, software and implementation quality.

For a broader comparison, see Outsourced Accounting vs In-House Accounting in India.

Cost of Accounting Setup for a New Company

Accounting setup fees depend on the complexity of the chart of accounts, selected software, number of bank accounts, shareholding structure, GST and TDS configuration, number of opening transactions and reporting requirements.

Ongoing monthly bookkeeping, statutory return filing, audit, payroll and specialised regulatory work may be separately scoped.

Businesses can also explore our Managed Business Services in India.

Practical 30-60-90 Day Accounting Setup Checklist

First 30 Days Checklist

• Collect incorporation and statutory documents.
• Obtain and organise company bank statements.
• Select suitable accounting software.
• Create the chart of accounts and appropriate masters.
• Record share capital and other initial funding transactions.
• Classify incorporation and other initial expenditure.
• Determine GST, TDS and payroll accounting requirements.
• Establish financial approval and access controls.

Days 31 to 60 Checklist

• Record sales, purchases, expenses and bank transactions.
• Reconcile bank balances.
• Review vendor and customer ledgers.
• Account for advances, fixed assets and outstanding liabilities.
• Reconcile applicable GST and TDS balances.
• Review payroll entries and statutory liabilities.
• Resolve incomplete or incorrectly classified transactions.

Days 61 to 90 Checklist

• Finalise the monthly trial balance.
• Complete key balance sheet reconciliations.
• Prepare initial profit and loss and balance sheet reports.
• Introduce monthly management reporting.
• Review budget, cash flow and working capital.
• Document remaining accounting and compliance issues.
• Approve the recurring month-end closing process.
• Confirm responsibility for tax, ROC, payroll and annual reporting.

For ongoing statutory deadlines, refer to our Accounting Compliance Calendar in India.

Frequently Asked Questions About New Company Accounting

When Should a Newly Incorporated Company Start Bookkeeping?

Accounting records should be established from the beginning so that initial funding, expenditure and other financial transactions are appropriately recorded. The company should not wait until its first revenue or statutory audit.

Does a company need accounting records before starting business?

Yes. Financial transactions may occur before commercial operations begin, including share subscriptions, deposits, professional fees and other relevant expenditure.

Is GST registration compulsory immediately after incorporation?

Not in every case. GST registration depends on the company’s business activities and the applicable statutory provisions.

Which accounting software should a startup use?

The appropriate software depends on its business model, accounting requirements, transaction volume, tax needs, reporting expectations and applicable statutory controls.

Can a New Company Outsource Its Accounting Setup?

Yes. A newly incorporated company can engage a professional accounting team to establish its books and perform ongoing accounting functions while retaining management oversight and statutory responsibilities.

How should initial share capital be recorded?

Share capital accounting should follow the actual receipt, allotment and relevant corporate documents. Amounts pending allotment and securities premium require appropriate separate classification.

Does every startup need a full-time accountant?

Not necessarily. The staffing model depends on the complexity and volume of transactions, operational support needs and management reporting expectations.

Can EzyBiz India Manage Accounting From Incorporation?

Yes. EzyBiz India can provide agreed initial accounting setup, bookkeeping, reconciliation, financial reporting and other managed accounting support for Indian companies and foreign-owned subsidiaries.

How can we obtain an accounting setup quotation?

Share the company’s date of incorporation, business activities, ownership structure, expected transaction volume, accounting software preferences, GST registration status and reporting requirements. Our team can assess the proposed scope.

Related Services and Contact EzyBiz India

Related Accounting and Company Registration Services

• Accounting and Bookkeeping Services in India
• Month-End Accounting Checklist in India
• Accounting Compliance Calendar India
• MIS Reporting Services in India
• Accounts Payable and Receivable Outsourcing
• Outsourced Accounting vs In-House Accounting
• Accounting for Wholly Owned Subsidiaries
• Branch, Liaison and Project Office Accounting
• E-commerce Accounting and Bookkeeping Services
• India Market Entry Services
• Foreign Company Registration in India
• GST and Indirect Tax Services
• Corporate Secretarial and ROC Compliance Services
• Managed Business Services in India

Contact Our New Company Accounting Team

Planning to establish accounting records for a newly incorporated company? EzyBiz India Consulting LLP can assist with accounting setup, share capital accounting, bookkeeping software, initial transaction recording, reconciliations and monthly financial reporting.

Contact our team to discuss your company’s accounting and finance support requirements.

EzyBiz India Consulting LLP
306, 3rd Floor, Vishwa Sadan Building, District Centre, Janakpuri, New Delhi – 110058, India.

Mobile: +91 98992 17778

Email: anil@ezybizindia.in

WhatsApp: Discuss New Company Accounting Setup

Contact: Contact EzyBiz India

Reviewed By: CA Anil Agrawal, Founder, EzyBiz India Consulting LLP. Over 20 years of professional experience in taxation, regulatory compliance, international business advisory and corporate finance.

Last Updated: October 2026

Disclaimer: This article provides general information concerning accounting setup, bookkeeping and financial reporting for newly incorporated companies in India. Actual accounting requirements, share capital classification, statutory record-keeping obligations, GST and TDS applicability, software requirements and financial reporting depend on the company’s circumstances and applicable law. Illustrative accounting entries and financial statements are simplified examples and should not be used without reviewing actual legal and accounting facts. Outsourcing accounting activities does not transfer statutory responsibilities from the company or its responsible persons. Audit, certification, regulatory filings and other specialised professional services are separately scoped and undertaken by appropriately eligible professionals where required. Specific professional advice should be obtained before making accounting, taxation, investment or regulatory decisions.