Vendor-bill approvals that run on the 45-day clock for small-supplier dues
TL;DR Duedock routes supplier bills through a company's approval chain in order of legal urgency. Bills from micro and small enterprises carry a payment deadline, and missing it now costs the buyer a tax deduction. Finance teams at mid-size and large buyers pay a monthly fee to plug that leak.
Since assessment year 2024-25, Section 43B(h) lets a buyer deduct a purchase from a micro or small supplier only if it pays within the MSMED Act limit - 15 days without a written agreement, and never more than 45 days with one[1]. Late amounts get added back to income and show up in the tax audit report[1].
The bottleneck is rarely cash. More often it's a bill sitting in a plant head's inbox or waiting for a GRN match.
Delayed payments to MSMEs were estimated at ₹7.34 lakh crore in March 2024[2], and suppliers have filed 2,56,892 applications on the government's Samadhaan portal[3].
What it does, in regulatory terms: workflow software only. Duedock does not give tax advice, move money or lend. The buyer's own auditor decides how 43B(h) applies.
When a bill arrives by email or upload, Duedock reads it, checks the supplier's Udyam category and agreed credit days, and stamps a legal due date. Approvers see bills sorted by days left, not by arrival. If a bill stalls with one person for 48 hours then it moves to their deputy or goes up to the finance head.
A dashboard shows the rupee value of deductions at risk this quarter, and that gets the CFO's attention faster than any reminder ever will. AI handles the messy parts like reading varied invoice layouts, matching to purchase orders and GRNs, and flagging suppliers whose Udyam status changed.
I reframed the seed. Generic approval routing is a crowded field[4], and a narrow product tied to one dated legal clock gives finance teams a clear reason to buy.
The CFO or financial controller pays, and plant, project and department heads do the approving. Buyers with lots of small suppliers feel this most, such as auto-component makers, construction firms, pharma and FMCG. My estimate is ₹15,000–60,000 a month, tied to bill volume, which is small next to one quarter's disallowed deduction for a mid-size buyer.
Section 43B(h) took effect from 1 April 2024, so FY2024-25 tax audits are the first to report these dues[1]. Auditors now ask for supplier-wise ageing by MSME category, and many finance teams build that list by hand in spreadsheets every quarter (not fun).
No public figure counts companies with payables to micro and small suppliers. The pool of suppliers is huge though, with Udyam listing 5.43 crore micro and 5,45,120 small enterprises[5].
Adjacent - MSME Samadhaan shows ₹31,722.11 crore payable across cases filed[3], which tells you how much money sits in late payments.
Low-code workflow suites sell configurable multi-level approvals with audit trails[4]. Large ERP suites can tag MSME vendors but need consultants to set up escalation rules. TReDS platforms help suppliers discount invoices but don't fix the buyer's internal delays.
The gap is an approval layer built around the 15/45-day clock, sold to finance and not to IT.
| Difficulty | Moderate (38/100) |
| Starting capital | ₹60 L–1.2 Cr |
| Time to launch | 5–8 months |
The routing logic is simple. The work is in integrations with popular Indian accounting packages and mid-market ERPs, and in getting busy plant heads to approve from a phone. Sales cycles run through finance and IT together, and each pilot needs a clean vendor master before it shows results.
Duedock needs no licence of its own, because it is workflow software and moves no money. The rules it builds on belong to its customers.
Building this outside India? The categories above usually have a local equivalent, so check with your own regulator.
AI should never decide how 43B(h) applies to a bill or whether a deduction is safe. That call belongs to the buyer's auditor and tax adviser.
Want to work out the AI layer for Duedock? Talk to Yash →
Here's what can go south -
I'd back this for a founder who knows accounts payable at a manufacturer and can sell to CFOs. If you're hoping to sell to small firms then it isn't for you, since the buyer is the larger company. First prove that a pilot cuts the share of MSE bills paid after 45 days by half within one quarter.
Plan for roughly ₹60 L–1.2 Cr, mostly on ERP integrations, engineering and a long enterprise sales cycle. Launch takes 5–8 months.
No licence while the product only routes approvals and moves no money. If you add payments or invoice financing, RBI rules come into play.
The workflow travels, but the 45-day rule is Indian. You'd need a local late-payment law with real teeth to give buyers the same reason to act.
The free Duedock validation kit has the line-by-line capital breakdown, the effort scoring, the tax and data-protection checklist, a 14-day validation sprint with pass/fail targets, a 90-day launch plan, 10 interview questions for finance heads, and 5 assumptions to test. Download the kit →
Thinking about building Duedock or something close to it? The make-or-break work is getting plant and project heads to approve on time without adding work for them, and I'm happy to think that through with you. If you need a hand, you know where to find me. Talk to Yash →
For illustration only. Names are fictional and ideas hypothetical; sourced facts are real but may be out of date. Nothing here is legal, financial or professional advice, and Yash Khatri is not personally liable for any use of it. Read the full disclaimer.