Pay MSME suppliers on time, keep deductions
Kinnow flags MSME supplier bills nearing the 45-day legal limit and suggests which to pay first.
Live in partWhat does MSME 45-day Watchdog do? Spot MSME supplier bills before they pass the 45-day limit, so late payment does not bring interest or put the tax deduction at risk.
How it works
When a bill from an MSME supplier is entered, Kinnow works out the legal due date from the agreed terms, capped at 45 days. It shows bills nearing or past the deadline, with a risk level for each, because late payment can bring interest under MSME law and can cost you the income-tax deduction. It then suggests which bills to pay first.
Every bill from a flagged MSME supplier joins the watchlist the moment it is entered, and finance is notified as its date nears.
Step by step
- Mark your MSME suppliers. A supplier has to be flagged as MSME-registered. A bill from an unflagged supplier is not tracked at all, so the flag matters.
- Enter the supplier's bill as usual. When a purchase bill is raised for an MSME supplier, Kinnow adds it to the watchlist automatically. It counts from the bill date and works out the due date from the agreed credit terms, capped at 45 days.
- Kinnow sets a risk level each day. Every open bill is Low, Medium, High or Breached. Medium means due within 21 days, High means within 7 days, and Breached means already overdue.
- Finance is told as the date nears. A notice goes to the notification hub when a bill becomes High or Medium risk, and again when it is breached.
- Ask for a payment batch. Enter how much cash you have. Kinnow suggests which MSME bills to pay: breached first, then highest risk, oldest due first within each.
- A person pays. The suggestion only suggests. Nothing is paid and nothing is recorded until you act on it. Your CA confirms how the statutory rules apply to your books.
See your MSME bills sorted by how close each is to the deadline.
What you see on screen
These are the screens under Finance.
| Screen or button | What it shows or does |
|---|---|
| MSME watchlist | Bills owed to MSME-registered suppliers, sorted by how close each is to the 45-day deadline. A selector, Show bills due within, takes a number of days. Columns: Supplier, Invoice, Outstanding, Due by, Days left (or the number of days overdue) and Risk. |
| Bills with no usable date | A line says how many bills had no usable due date and were left out, instead of being shown as not yet due. |
| MSME payment batch | Cash available, a Suggest a batch button, and the batch total, the number of invoices and how many are already breached or high risk, with Supplier, Due by and Outstanding for each. |
| Empty state | If nothing is due in the window, the screen says so, or says that none of your suppliers are flagged as MSME yet. |
Who uses it
| Who | When |
|---|---|
| Accounts payable executive | Looks at the watchlist every week and pays the bills at the top. |
| Finance head | Decides how much cash goes to the payment batch. |
| Procurement team | Flags suppliers as MSME-registered when they are set up. |
| CA or tax adviser | Confirms how the 45-day rule and the section 43B(h) deduction apply at year-end. |
Related
- Finance and tax: accounting: the bills and payables this watches.
- Buy: purchasing: where supplier bills are entered.
- Get paid by link, UPI or mandate: the receivables side.
- Five named kinds of rogue spend: checks on supplier spend.
- 30-60-90 day cash forecast: planning the cash for supplier payments.
Questions
What is MSME 45-day Watchdog in Kinnow?
Kinnow flags MSME supplier bills nearing the 45-day legal limit and suggests which to pay first.
What changes for the business?
Spot MSME supplier bills before they pass the 45-day limit, so late payment does not bring interest or put the tax deduction at risk.
Is it available today?
It is live in part: the core is built and parts are completing with early customers.
What is the 45-day rule?
Under the MSME law, a buyer must pay a registered micro or small supplier within the agreed time, which cannot be more than 45 days. Late payment can bring interest, and can affect the income-tax deduction for that expense. Your CA confirms how it applies to you.
How does Kinnow know which suppliers are MSME?
You flag them. A supplier that is not flagged is not tracked, and the screen can say that none of your suppliers are flagged yet.
Can Kinnow pay the bills for me?
No. It suggests which bills to pay with the cash you give it. Paying is a separate step done by a person.
What if a bill has no due date?
It is left out of the list and counted on a line saying so. It is not shown as safe.
Send us your list of MSME suppliers and open bills and we will show the watchlist.
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