Services
ERP Software for Services and Consulting Businesses in India
Service businesses have different ERP needs from manufacturers. This guide covers what a services-focused ERP should do — and how Indian consulting, IT, and professional services firms can benefit.
Services Businesses Are Different
Manufacturing and trading businesses deal in physical goods — purchase, hold, sell. Their ERP needs centre around inventory, production and dispatch.
Services businesses deal in time, expertise and outcomes. A consulting firm does not have inventory. An IT services company does not dispatch goods. But they still have:
- Clients with project-based billing
- Recurring retainer billing
- Expense tracking per project
- GST on services (SAC codes)
- Outstanding receivables
- TDS deductions from customer payments
- Multiple employees whose time is billed to projects
What Services ERP Should Do
Customer and Project Management
Every client has ongoing projects or retainer agreements. ERP should track: - Client contact and billing details - GSTIN (for B2B billing) - Current outstanding balance - Payment history
Quotation and Invoice Workflow
Service businesses often quote before a project begins and invoice at milestones or monthly. The workflow: Enquiry → Quotation → Agreement → Milestone Invoice → Payment
Zoplax supports this via: - Enquiry with customer, service type, budget - Quotation with line items (service description, hours, rate, GST) - Convert quotation to sales order → generate invoice
GST on Services (SAC Codes)
Service businesses must assign SAC (Services Accounting Code) codes to each type of service, just as product businesses use HSN codes. Common SAC codes:
- 9983: IT software services
- 9961: Management consulting
- 9954: Construction and project work
- 9972: Rental and leasing
Zoplax supports SAC codes on service product entries. All service invoices include the correct SAC code and GST rate.
TDS on Service Income
When your client is a registered company, they deduct TDS before paying you: - Professional services: 10% TDS (Section 194J) - Consulting: 10% TDS - Technical services: 2% TDS (Section 194C)
The invoice amount may be ₹1,18,000 (including GST) but you receive ₹1,00,000 after 10% TDS. In Zoplax, TDS details are recorded on payment receipt — the TDS report tracks all TDS deducted by clients for Form 16A / 26AS reconciliation.
Expense Tracking
Service businesses incur project-related expenses: travel, accommodation, communication, subcontractor fees. Tracking these against each project shows the true project margin.
Zoplax records expenses with GST (for ITC-eligible expenses like business travel) and category codes.
Receivables Management
Late payment is common in services, especially from large corporate clients. The outstanding dashboard, ageing report and payment follow-up workflow in Zoplax apply equally well to service businesses.
Example: IT Services Company
An IT services firm in Chennai bills clients monthly for managed services and project work. In Zoplax:
- Add each client as a customer with GSTIN and TDS section
- Set up services as product entries: "Monthly Managed Services - Server", "Software Development - per hour"
- Each month, raise invoices for each client
- Record TDS when clients pay (e.g., receive ₹90,000 against ₹1,00,000 invoice with 10% TDS)
- At quarter end, download TDS report for Form 26AS reconciliation
- At month end, export GSTR-1 from the accounts module
The entire workflow is handled in one system — no Excel, no Tally, no separate TDS tracker.
Service businesses across Chennai and India use Zoplax for end-to-end client billing. Start your free trial today.
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Written by the Zoplax team
We build Zoplax, a cloud ERP for Indian businesses, in Chennai — and write about what we learn from manufacturers, transporters, traders and their accountants.
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