Admin: Record Vendor Bills and Payments

Admin: record vendor bills and payments

Most society disputes about money are about spending, not collection. A vendor ledger with the bill attached and the approval recorded makes "why did the lift AMC cost ₹1.8 lakh, and who decided that?" a question with a two-minute answer.

Before you start

• You are a society admin or the treasurer
• The general body has adopted an approval matrix (see step 2)
• The society has a TAN, if it is required to deduct tax at source

Step 1: Add the vendor

Go to /admin/vendors and create the vendor once, with:

• Name, PAN, and GSTIN where registered
• Bank details
• Contract start and end dates, so renewals are visible before they auto-renew

One record per vendor, keyed on PAN. "Sharma Electricals", "Sharma Electrical Works" and "M/s Sharma Elec." as three vendors means nobody can see what the society actually spends on electrical work.

Deactivate old vendors rather than deleting them, so historical bills stay readable.

Step 2: Check the approval before recording

Your approval matrix should look something like this — set the figures to your society's size:

Two rules make it work: the person who approves must not be the person who receives, and a bill must never be split to duck a threshold. Splitting a ₹1.2 lakh painting job into three ₹40,000 bills is the classic audit finding and it looks exactly as bad as it is.

Step 3: Record the bill

Against the vendor, enter:

• Bill number and bill date
• A description specific enough to be meaningful — "lift AMC, quarter ending Sept 2026", not "repairs"
• Amount, with GST shown separately
• The expense head it maps to
• Who approved it, under which limit, and the resolution reference where applicable
• Attach the scanned bill

The attachment is the part societies skip and auditors ask for. A ledger line without the underlying bill is an assertion, not a record.

For works, also attach the completion certificate or note the committee member who verified the work was done.

Step 4: Record the payment

Against the bill, enter:

• Date, mode, and bank reference
• TDS deducted, if any
• Whether it is full or part settlement

The vendor's ledger should show gross bill, TDS withheld, net paid — so the vendor can reconcile against their own 26AS.

TDS: do not skip this

A co-operative housing society is liable to deduct tax at source on certain payments once it crosses the applicable thresholds. Committees often assume "we are a non-profit society, TDS does not apply." It does, and the society and its office-bearers carry the consequences.

Most commonly applies to:

• Contract payments — housekeeping, security agencies, painting contractors, AMCs. This is the big one, because these are usually the largest recurring spend.
• Professional fees — auditors, architects, legal counsel
• Rent, where the society rents premises or equipment above the threshold

Rates and thresholds are revised in Finance Acts. Confirm the current figures with your auditor each financial year rather than carrying forward last year's assumption. Deposit by the monthly due date, file quarterly returns, and issue Form 16A — late filing attracts a daily fee that accumulates quietly.

Bank-detail changes: verify by phone

If a vendor emails new bank details, do not update on the strength of the email. Verify by calling the number you already hold for them.

Vendor bank-change fraud is common and societies are soft targets.

Step 5: Review monthly

At the committee meeting: spend by head against budget, top ten vendors by value, outstanding vendor balances, and any payment made outside the approval matrix.

That last one should normally be zero. When it is not, regularise it at the next meeting rather than letting the auditor find it eleven months later.

Audit

Every entry and approval writes to the society's append-only audit log, so a bill or an approval cannot be quietly revised after the fact. At handover, the vendor ledger with attachments is the most valuable thing an outgoing treasurer can pass on.

Frequently asked questions

Does a housing society really have to deduct TDS? Yes, once payments cross the applicable thresholds — most commonly on security, housekeeping and AMC contracts. Confirm current rates and limits with your auditor.

Do we need three quotes for every purchase? No — for routine small spends it is disproportionate. Apply it above the threshold your approval matrix sets, and keep the losing quotes for those.

Can the treasurer pay a vendor without committee approval? Only within the limit the general body has authorised. Beyond it, approval must be recorded before payment, not ratified afterwards.

How long should we keep vendor bills? At least eight years, aligned with income-tax record expectations. Scanned copies attached to ledger entries are far more durable than a physical file.

A vendor sent new bank details by email. Should we update them? Not on the email alone. Verify by phone on the number you already hold. This is one of the most common frauds against societies.

What if a bill was paid without proper approval? Record it accurately, flag it at the next committee meeting, and regularise it by resolution. Do not back-date an approval.

Related: Vendor bill and payment ledger · Society vendor selection process · Housing society accounting