Do You Need GST Billing Software, or Just a Khata?

27 August 2026 · LenDen Team · 6 min read

Whether you need GST billing software comes down to one thing: are you GST-registered and issuing tax invoices? If yes, you need something that produces compliant invoices, and a khata app will not do it. If no, you do not, and a khata plus a bill book is enough.

Size is not the test. Registration is.

The line that actually matters

Two questions, in order:

1. Are you registered under GST? Broadly, registration becomes mandatory above ₹40 lakh aggregate turnover for goods or ₹20 lakh for services, with lower limits in special category states — and some activities, such as inter-state supply, can require it regardless of turnover. Many small shops register voluntarily below the threshold because their buyers want input credit.

2. If registered, are you issuing tax invoices? A regular registered dealer does. A composition dealer issues a bill of supply instead, because they cannot collect tax from the customer.

Where that lands you:

Notice the khata app appears in every row where you give credit. Billing and udhaar tracking are separate problems, and being registered does not make the udhaar problem go away.

Why a khata entry is not an invoice

This confusion is common and worth clearing up precisely.

A khata entry records that ₹1,400 moved between you and a party on a date, with a note about what for. Its job is to make the running balance correct and traceable. It is your internal record.

A tax invoice is a document you hand the customer, and it must carry specific things: your name, address and GSTIN, an invoice number in a continuous series, the date, the buyer's details (and GSTIN where registered), a description of the goods, HSN codes, quantity, value, the tax rate and the tax amount split out, and the place of supply. Its job is to substantiate the transaction for both parties' tax positions.

You cannot produce the second from the first. The khata does not know your HSN codes, does not maintain an invoice series, and does not compute the tax split. Any khata app claiming to issue GST invoices has become billing software.

What billing software actually gives you

If you are on the registered-regular row, this is what you are buying:

• Compliant tax invoices, numbered in series, with the tax breakup computed.
• HSN code management, so you are not looking codes up per line.
• GST return preparation — data in the shape your returns need.
• E-way bills, where consignment values require them.
• E-invoicing, if your turnover puts you above the current threshold. That threshold has been reduced repeatedly, so check where it stands rather than assuming you are below it.
• Usually stock, since billing and inventory are naturally linked.

The Indian market here includes Vyapar and myBillBook among the small-business options, and Tally or Zoho Books at the heavier end. Verify current features and pricing on the vendor's own page before choosing — this category changes faster than any article can track, which is precisely why we are not printing a price table.

What it does not give you

Billing software is built around the invoice. It is generally weaker at the thing a khata does well: informal credit across many parties, entered in seconds.

Concretely, if a regular buys ₹340 of goods on udhaar with no invoice needed, a billing package makes you create a document for it. Multiply that by thirty entries a day and you have a system nobody maintains.

This is why shops run both, and why that is not wasteful — the same reasoning as in khata app vs accounting software. Registered sales go through billing; informal udhaar goes in the khata; the two meet at your accountant's desk.

If you are not registered

The honest answer for a large share of small Indian shops: you do not need any of this.

What you actually need:

• A bill book for customers who want a receipt.
• A khata for udhaar — who owes what, since when. See how to keep a digital udhar khata.
• Your purchase bills, kept and photographed. This is the cheapest tax saving available to you, and it matters whether or not you are registered.
• An accountant, once a year.

Buying GST software before you are registered solves a problem you do not have, and the subscription is money that would be better spent on stock.

A practical decision path

1. Ask your accountant whether you must register. One conversation, definitive answer.
2. If not registered: bill book + khata app. Revisit annually or when turnover moves.
3. If registered on composition: simple bill-of-supply printing + khata app. Remember you must state that you are a composition taxable person not eligible to collect tax.
4. If registered on the regular scheme: billing software, chosen on whether it handles your HSN codes and your return format. Add a khata app if you give udhaar.
5. Either way: keep the purchase bills, and export your khata monthly.

Step 1 is the one people skip, and it is the only step that determines the rest. Everything else follows from the answer.

Where we stand

Disclosure: we build LenDen, which is a khata app. It does not issue GST invoices and we have no plans to pretend otherwise — it is a different product category with different compliance obligations, and a khata app that half-implemented tax invoices would be worse than useless, because a non-compliant invoice is a liability rather than a convenience.

So if your problem is invoices, the honest answer is that we are not your tool. If your problem is that you cannot remember who owes you ₹1,400 since when, that is what we built. And a fair number of shops need both — see best khata apps in India for how to evaluate the khata half.