- A Bengaluru startup founder reported failed transactions marked as successful in Zoho Books
- The issue caused financial mismatches and operational stress for FlexyPe over two years
- A manual audit revealed a Rs 3.8 lakh transaction recorded as paid without funds received
A Bengaluru-based startup founder has raised serious concerns about accounting discrepancies in Zoho Books, alleging that failed transactions were incorrectly marked as successful payments. The issue, he said, led to financial mismatches and caused significant operational stress for his company.
Azeem Hussain, co-founder of checkout platform FlexyPe, shared his experience on LinkedIn, expressing his displeasure over a serious flaw in Zoho's invoicing system.
He explained that his company had been using Zoho Books for invoicing and reconciliation for the past two years, but the experience left him disappointed. According to him, many transactions that were actually unsuccessful were recorded as successful payments in the system, even though the money was never received.
Hussain described this situation as ironic. He said that his company handles transactions worth crores of rupees daily, yet his team initially failed to recognise the flaw. He also said that due to the large user base, he trusted the software, thinking that a platform used by over 150 million people would be reliable, but this trust was later proven wrong.
Flaw Revealed In Audit
The issue was discovered during a manual audit of March data. According to Hussain, a transaction worth Rs 3.8 lakh was recorded as a payment in the accounts, even though no amount was actually received. He stated that everything appeared normal in the records.
Following this revelation, the company has begun investigating financial records from the past two years to determine the full extent of the discrepancy.
Hussain criticised the invoicing software, stating that its most important function is to maintain accurate financial records. He questioned how its reliability can be trusted if it cannot fulfill even this basic responsibility.
He also mentioned the operational pressures caused by this problem, including sleep deprivation, repeated manual checks, and increased workload on the team. He stated that he is extremely angry and distressed by this situation.
The founder further stated that his company is preparing to file a formal complaint and seek compensation for losses incurred, as well as mental stress and additional workload. He also urged other founders to immediately check their records and verify the failed transaction, rather than blindly trusting the software.
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Zoho's Response
Responding to the allegations, Zoho said, "On the issue raised by FlexyPe on Zoho Books through social media and reported in the press: this issue was not from Zoho Books at all. It was caused by incorrect payment status updates from a third-party tool that FlexyPe was using called Cashfree, which marked incomplete or dropped transactions as successful, leading to reconciliation discrepancies."
They also mentioned, "We at Zoho, have actually helped FlexyPe identify the issue and CashFree has acknowledged that the issue was on their side. The Cashfree team has publicly confirmed the issue. Unfortunately, while the investigation was still underway, FlexyPe prematurely took to social media and made a big attack on Zoho Books that was entirely false. Even after it became clear that the issue was not with Zoho, they have not retracted their falsehood. They continue to insinuate that somehow Zoho was partially at fault, which is again false. As a result, we are compelled to pursue stringent legal action on FlexyPe for posting this malicious false claims."
"False statements like these are not going to change the value we provide to our partners and customers. Thank you to all of you for standing with us and looking out for us," Zoho added.
