Chasing Payments? Automate Reminders from Tally or Zoho and Use the MSME 45-Day Rule

Late payment is the everyday cash-flow problem for small businesses. GST falls due on the invoice, salaries and rent fall due on the first, and the buyer pays when the buyer pays. Most owners handle this by calling parties themselves in the evening. Here is a better routine, the legal rules that can help you, and how to automate the follow-ups.

Know the rules that protect micro and small suppliers

• The MSMED Act time limit. Under Section 15 of the MSMED Act, 2006, a buyer must pay a micro or small enterprise within the agreed period, which cannot be more than 45 days. Where nothing is agreed, the limit is 15 days.
• Interest on late payment. Section 16 of the MSMED Act makes the buyer liable for compound interest at three times the bank rate notified by the RBI. This interest is not allowed as a tax deduction for the buyer.
• Income-tax disallowance for buyers. Section 43B(h) of the Income-tax Act, 1961, from FY 2023-24, defers the buyer’s deduction for amounts owed to micro and small enterprises until they are actually paid, if the MSMED time limit is crossed. From tax year 2026-27 the corresponding provision is Section 37(2)(g) of the Income-tax Act, 2025.
• MSME Samadhaan. Delayed-payment cases can be filed on the MSME Samadhaan portal with the Micro and Small Enterprises Facilitation Council.

These rules help only registered micro and small manufacturers and service providers. Traders are generally outside the MSMED delayed-payment protection. If you qualify, keep your Udyam registration number on every invoice and in your contracts. A reminder that mentions it is often enough to get paid sooner.

A simple collections routine

1. Agree terms in writing on the quotation or purchase order, with the due date stated.
2. Send the invoice the same day by email and WhatsApp, with a payment link or bank details.
3. Send a friendly reminder three days before the due date.
4. Follow up on the due date, then at 7 and 15 days overdue, each message a little firmer.
5. Escalate after 30 days with a call from the owner and, if needed, a formal letter.
6. Review the ageing every week: who owes what, for how long, and which parties are always late.

What can be automated

• A daily overdue list pulled from Tally, Zoho Books or your billing software, sorted by amount and days overdue.
• A reminder drafted for each party in your own tone, in English or Hinglish, with the invoice number, amount, due date and payment details. Your Udyam number is included where it applies.
• Messages sent on WhatsApp Business or email, after your approval or automatically for routine reminders.
• Replies such as “paid yesterday” or “send ledger” flagged to your accountant, and the ledger statement prepared for sending.
• A weekly ageing summary on your phone, with the parties who need a personal call.

If you are the buyer, the same set-up can warn you before you cross the 45-day limit with your own micro and small suppliers, so you avoid interest and the tax disallowance.

How SSRA & Co. can help

We set up collections automation on your own accounts and keep the reminders accurate against your books. We also review your MSME supplier payments for the Section 43B(h) / 37(2)(g) position before your tax audit. See AI automation for businesses in South Delhi.

Frequently asked questions

Is the 45-day limit applicable to traders?
Traders registered on Udyam are generally not covered by the MSMED delayed-payment provisions. Check your classification with your professional.

Can a buyer and supplier agree to 60 or 90 days?
Under the MSMED Act, the agreed period for a micro or small supplier cannot exceed 45 days.

Will automated reminders annoy my customers?
Not if they are polite, correct and timed sensibly. Most customers find a clear reminder easier to act on than a phone call.

This article is general information as of November 2026 and not advice on any specific case.