Closing a B2B deal in India is only half the job. The other half is getting paid, and that runs through a procurement and finance process that is often slower and more paperwork-heavy than founders expect. A verbal yes from a business head means little until a purchase order lands, a compliant invoice is raised, and the payment clears past a long approval chain. This lesson walks you through the four realities you will meet with almost every customer: purchase orders, GST invoicing, tax deducted at source, and long payment cycles, plus the one legal lever that puts collections back in your favour.
Do not deliver without a purchase order
In most Indian companies, the person who says yes to your product is not the person who pays. Payment is released only against a purchase order (PO), a formal document raised by the buyer's procurement or finance team that lists the item, quantity, price, taxes, and payment terms. Treat the PO as the real close. Never start delivery on an email or a WhatsApp confirmation alone, because without a PO number your invoice will sit unprocessed. When you receive it, check that the PO amount, GST treatment, and payment terms match what you agreed, and quote the PO number on every invoice you raise against it.
Raise a GST-compliant invoice
Your invoice must be a proper GST tax invoice or the buyer cannot claim input tax credit, and they will simply reject it. Include your GSTIN and the buyer's GSTIN, a unique serial invoice number, the HSN code for goods or SAC code for services, the taxable value, and the correct tax split: CGST plus SGST for sales within your state, or IGST for inter-state sales. If your aggregate annual turnover has crossed 5 crore rupees in any financial year from 2017-18 onwards, e-invoicing is mandatory for your B2B invoices, meaning you must report each invoice to the government portal and print the resulting IRN and QR code. Getting this right the first time avoids weeks of back-and-forth with the buyer's accounts team.
Expect TDS to reduce what actually lands
Business buyers are required to deduct tax at source (TDS) before paying you. For professional or consultancy services under Section 194J, that is typically 10 percent once your annual billing to that client crosses 50,000 rupees; for contract work under Section 194C it is usually 1 percent for individuals or HUFs and 2 percent for companies. So a 1,00,000 rupee professional-services invoice may pay out as 90,000 rupees. This is not a loss. It is tax credited to your PAN, which you claim back against your own income tax. Reconcile the deductions against your Form 26AS, and collect the buyer's TDS certificate so nothing goes missing at tax-filing time.
Plan cash flow for long payment cycles
Net 30 is optimistic. Real terms of 45, 60, or even 90 days are common, and the clock often starts only after invoice approval, not the invoice date. As a founder, build this into your runway. Ask for advances or milestone payments in the contract, invoice the moment a milestone is met, and never let payroll depend on a single large receivable landing on time.
Use the 45-day MSME rule as leverage
This is the most underused tool available to a small Indian company. Register free on the Udyam portal to become a recognised micro or small enterprise. Under Section 15 of the MSMED Act, a buyer must then pay you within the agreed period, capped at 45 days from acceptance, or 15 days if there is no written agreement. Any term longer than 45 days is void. If they miss it, they owe compound interest at three times the RBI bank rate, and under Section 43B(h) of the Income Tax Act, effective 1 April 2024, the buyer cannot claim your invoice as a tax deduction until they actually pay you. That gives their own finance team a strong reason to clear MSME dues on time. As a last resort, you can file a delayed-payment complaint on the MSME Samadhaan portal, where the Facilitation Council is meant to decide within 90 days.
Stay on top of collections
Treat collections as a sales activity, not an afterthought. Send the invoice immediately, confirm it is entered in the buyer's system with a valid PO, and follow up two or three days before the due date rather than after. Keep a simple receivables tracker showing invoice date, due date, TDS, and status. A founder who chases politely but persistently gets paid weeks earlier than one who waits to be remembered.