Bengaluru Man Alleges Zoho's Accounting Glitch, Company Responds

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 stated that initial investigations indicate the problem is not with their software. According to the company, preliminary findings point to a glitch in the payment gateway integration, not in the functioning of Zoho Billing or Zoho Books.

Zoho also stated that its support team is working closely with Hussain and is coordinating with the payment gateway provider to investigate the matter thoroughly. The company reiterated its commitment to providing reliable service and said that updates will be shared as the investigation progresses.

Payment Gateway's Side

Cashfree Payments, which is mentioned in the case, stated that the issue has been resolved and will no longer be impacted. The company also stated that it is working with Zoho to determine the root cause to prevent a similar situation from occurring in the future.