Pay MSME suppliers on time, every time
The MSMED Act asks buyers to pay micro and small suppliers within the agreed credit period and never more than 45 days from accepting the goods. Under Section 43B(h) of the Income Tax Act, a late payment can also cost you the deduction for that year. GetL1 works out every due date and reminds you before it slips.
Due dates worked out from the law and your terms
Suppliers upload their invoice against your purchase order. GetL1 knows which suppliers are MSME from their Udyam number or your supplier list, and sets the due date: the agreed credit period capped at 45 days from accepting the goods, or 15 days if no period was agreed.
- Acceptance date taken from your goods receipt
- Non-MSME suppliers follow your agreed credit period
- Due dates recalculated if a supplier becomes MSME later
Every invoice checked before you pay
Each invoice is matched against the purchase order, the goods actually accepted, the GST rate and the supplier GSTIN. Approve it when everything matches, raise a query when it does not, and record the payment with the UTR when you pay.
- Three-way match: PO, goods receipt and invoice
- Disputed invoices go back to the supplier with your reason
- Payments recorded with date, amount and reference
Questions
What is the 45-day rule for MSME payments?
Under Section 15 of the MSMED Act, a buyer must pay a micro or small enterprise within the agreed period, which cannot be more than 45 days from the day the goods or services are accepted. Without an agreement, the limit is 15 days.
What does Section 43B(h) change?
Since FY 2023-24, an amount owed to a micro or small enterprise is allowed as an expense only in the year it is actually paid if it is paid after the MSMED Act time limit. Paying on time keeps the deduction in the same year. Please confirm details with your CA.
How does GetL1 know a supplier is MSME?
From the Udyam registration number on the supplier's profile, or when you mark the supplier as MSME in your supplier list.
Will we get reminders?
Yes. Admins get one daily summary of MSME invoices due within 7 days or overdue, and the Payments menu shows a count until they are paid.
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