The Three Excel Files a New Indian Business Actually Needs
By Arshad Ansari, software engineer. About the editor
Invoice, cash book, and P&L — what each file is for, a sample month with rupee figures, and when to add GST, salary slips, or accounting software.
A new proprietorship does not fail because it lacked a 12-tab "startup OS". It fails because nobody can say what was sold, what cash remains, and whether the month made money. Three Excel files answer those three questions. Everything else waits.
I use this stack when someone asks "what should I download first?" from TemplateHub.
File 1 — Invoice (who owes you)
If you are GST-registered for outward supplies, that file is the GST invoice. If you only bill unregistered foreign clients, the general invoice is enough. If you buy from unregistered suppliers under RCM, that is a fourth file (self invoice) — do not mix it into sales invoices.
Sample month: 8 invoices, taxable ₹2,40,000, GST 18% collected ₹43,200, grand total ₹2,83,200. That ₹43,200 is not revenue. It is tax you will pay (net of ITC) on GSTR-3B.
File 2 — Cash book (what money did)
The cash book lists receipts and payments with a running balance. Opening cash 1 Apr: ₹80,000. Receipts from customers (including GST): ₹2,10,000 (some invoices still unpaid). Payments: rent ₹25,000, stock ₹90,000, freight ₹18,500, drawings ₹20,000. Closing cash should be a formula, not a typed guess.
If closing cash is ₹1,36,500 on the sheet and ₹1,20,000 in the bank plus till, you have a reconciliation problem — not a "P&L problem". Find it before you file.
File 3 — Profit and loss (did we make money)
The P&L uses taxable revenue, not collections. Revenue for the sample month is ₹2,40,000 even if only ₹2,10,000 came in. Purchases and expenses follow the same accrual idea if you are not purely cash. Gross profit = revenue − direct costs. Net profit is after rent, freight, and other opex. Drawings are not an expense; they sit below profit.
A founder who reads only the bank app will think a high-collection month is a high-profit month. The P&L exists to stop that.
What to add in month two or three
- GST registered + unregistered inward supplies: RCM self invoice.
- Spending too noisy in the cash book: expense tracker.
- First employee: salary slip plus an attendance grid (see the HR category guide).
- HRA on that salary: rent receipt.
When Excel is no longer enough
Move to accounting software when two people must post at once, when GSTR-1 has more invoices than you will retype, or when the CA spends more time cleaning Excel than reviewing it. Until then, three clean files beat one messy "accounts" workbook with 20 hidden sheets.
FAQ
Should the cash book include GST?
Record the bank amount that actually moved. Keep GST analysis on the invoice and on the return. Do not try to make the cash book into GSTR-3B.
Cash basis or accrual?
If you are small and everything is cash-on-delivery, cash book ≈ P&L. The moment you give 15-day credit, you need invoices and a P&L that recognise sales when billed.