The 10-point audit-readiness checklist every Indian MSME should run before March 31

The week before March 31, every CA's inbox in India fills up with the same message: "Can you start the audit? I'll send the missing documents tomorrow." Tomorrow becomes April 15, and the audit becomes a two-month archaeological dig.

This is the checklist we'd hand a finance team at the start of February to make that not happen. It's deliberately short. Each item is the kind of thing that's cheap to fix in February and expensive to fix in May.

1. Reconcile bank balances to the rupee#

Every bank account in Tally should match the bank's closing balance for the day. Don't tolerate "₹2,000 off, we'll figure it out later." Off-by-anything in bank reconciliation always points to a posting error somewhere upstream.

2. Close out all open temporary ledgers#

Suspense, imprest, "consultant payment pending" — any ledger with a name like that should have a zero balance by year-end. Open balances on temp ledgers are a guaranteed audit query.

3. Reconcile GSTR-2B against your purchase register, month by month#

This is the highest-leverage audit-readiness task. For each month of the year, your purchase register and the corresponding GSTR-2B should agree at the invoice level. Missing-in-2B invoices need supplier follow-up before March 31, not after.

4. Verify TDS deducted matches TDS paid#

Tally tracks the deduction; the TRACES portal tracks the deposit. Mismatches between the two are common and avoidable. Fix them while the supporting paperwork is still fresh.

5. Confirm fixed asset register matches Tally#

The fixed asset schedule in Tally should match your physical asset register. If you bought a laptop in November and it's not in either place, that's an issue. If it's in your asset register but not in Tally, your depreciation is wrong.

6. Age your receivables and write down what's uncollectible#

Anything outstanding for more than 180 days needs a decision: still expected, or written off? Carrying year-old invoices at full value into the audit overstates your debtors and is exactly the kind of thing auditors push back on.

7. Check inventory valuation method consistency#

If you switched valuation methods mid-year (FIFO to weighted average, or vice versa), that's a disclosure your auditor will need. Most accidental switches happen because someone changed a stock group setting in Tally — easy to miss, expensive to defend.

8. Reconcile related-party transactions#

Every transaction with a related party — director, group company, family — needs to be flagged in Tally and supported by board resolutions or written agreements. Surfacing these in March is much easier than reconstructing them in June.

9. Make sure statutory dues are paid before March 31#

PF, ESI, GST, TDS — anything that's deductible only on payment under section 43B of the Income Tax Act needs to actually leave your bank account by March 31, not just be accrued. Cash that's still in your operating account on April 1 doesn't help you.

10. Lock the books#

After your trial balance is clean, set a cutoff date in Tally beyond which entries require an explicit override. This isn't paranoia — it's the cheapest way to catch the well-meaning team member who posts a March 28 voucher in April.

The honest takeaway#

None of these are hard. They're just easy to defer when the business is busy. The teams that have a calm March are the ones that run this checklist twice — once at the end of January, once at the end of February. By March, the audit becomes a review, not a rescue.

For the official year-end compliance calendar, the Income Tax Department's e-filing portal publishes the canonical dates. Get the dates on your calendar in December; the checklist above is what gets you ready to actually meet them.