ERP requirements checklist for Indian manufacturers and traders
71 ERP requirements in 13 departments, each written so you can test it: what to ask for, why it matters, and what to make a vendor show you. Indian statutory requirements are quoted from the official text, and figures come from systems running today.
Pujan Motiwala · Statutory rules checked against the official texts on
Every line has a test: ask the vendor to do it in front of you, and check it again before go-live. Lines marked with a law are required of the business, not just good practice. To get only the lines that apply to you, use the requirements builder; to send them out, use the Excel template.
Version 1.0. Free to reuse under CC BY 4.0, with credit to Ahrom Labs. As data: JSON · CSV. Cite as: Ahrom Labs, “ERP requirements checklist for Indian manufacturers and traders”, version 1.0, ahromlabs.com/erp/requirements.
Sales and CRM
What should an ERP do for sales? Hold every enquiry, quotation and order in one place with its history, so follow-ups don't depend on someone's memory and every report reads the same records.
Can every enquiry's history be seen in one place?
Every enquiry has one current stage and a dated history from first contact to order, visible to everyone who works on it.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Follow-ups that live in one person's phone leave with that person.
What to make a vendor show
Open an enquiry from last quarter and show every call, quotation and stage change on it, with who did each and when.
What happens to the sales history in our old CRM and Excel?
History from the old CRM and spreadsheets is imported and checked row by row; a row that can't be matched to exactly one customer is held for a person, not guessed.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A migration that guesses silently attaches quotations to the wrong customer, and nobody trusts the reports after.
What to make a vendor show
Ask how many rows of your old data would be imported, how many held for review, and how a held row is resolved.
What good looks like, from a live system
20,167 of 20,167, including 154 a broken export had shifted
What went wrong without it
A broken export shifted 154 diary rows; a row-by-row check caught them instead of importing them against the wrong dates.
Where the group has more than one company, each quotation and invoice is issued under the company chosen for it, with that company's letterhead, logo and GSTIN, from one shared customer list.
Could · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Sister companies running separate software end up with two customer lists and two versions of the truth.
What to make a vendor show
Raise one invoice for each company to the same customer and show both letterheads and GSTINs.
What should an ERP do for purchasing? Turn what production and stores need into requests for quotation, compare supplier quotes side by side, and raise the purchase order from the chosen one.
How does a shortage become a purchase?
Shortfalls against orders and bills of materials become purchase requests automatically, after stock and usable remnants are counted.
Must · Manufacturing, Trading and distribution
Why
Buying what is already on the shelf is the most common, least visible waste.
What to make a vendor show
Release an order that needs more than is in stock and show the purchase request it creates, net of what's available.
Is each supplier bill checked against the order and what was received?
Every supplier bill is matched against its purchase order and the goods receipt before it is approved for payment; differences in quantity or rate are flagged.
Must · Manufacturing, Trading and distribution
Why
Paying for what was ordered rather than what arrived is how short supplies get paid in full.
What to make a vendor show
Receive less than was ordered, enter the supplier's bill for the full quantity, and show the mismatch flagged before approval.
Does the ERP track payments due to MSME suppliers?
Suppliers registered as micro or small enterprises are marked, and each of their bills shows its due date under the MSMED Act, with overdue bills listed before the year closes.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A payment to a micro or small supplier made after the legal time limit is not deductible as an expense in the year it was incurred.
What to make a vendor show
Mark a supplier as a micro enterprise, enter a bill, and show its due date and the list of MSME bills nearing or past it.
The law
Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptanceMSMED Act, 2006, section 15 (with Income-tax Act, 2025, section 37(2)(g)). In force: Payment limit since 2006; the tax link since the Finance Act, 2023, carried into the Income-tax Act, 2025. Applies to: Any buyer of goods or services from a micro or small enterprise.
Year-end reports list MSME amounts paid after the section 15 time limit separately, so the accountant can treat them correctly in the tax computation.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
The Income-tax Act, 2025 allows that deduction only on actual payment, with none of the usual grace until the return due date.
What to make a vendor show
Show the year-end list of MSME bills paid late, with bill date, acceptance date and payment date.
The law
amount payable by the assessee to a micro or small enterprise beyond the time limit specified in section 15 of the Micro, Small and Medium Enterprises Development Act, 2006Income-tax Act, 2025, section 37(2)(g) (formerly section 43B(h) of the 1961 Act). In force: From 1 April 2026 under the 2025 Act. Applies to: A business claiming the expense; confirm with your CA how it applies to you.
How detailed should ERP stock tracking be? Down to the physical unit you actually pick and ship, a reel, a box, a plate, in each store, with stock promised to an order set aside so it can't be sold twice.
Should stock be tracked by quantity or by each physical unit?
Stock is tracked by each physical unit that is picked and shipped (a reel, a box, a plate), each with its own number and label, not only as a total quantity.
Must · Manufacturing, Trading and distribution
Why
Customers order quantities, but stores ship units of different sizes; a total can't tell you which unit fills an order.
What to make a vendor show
Receive two reels of the same part with different quantities and show each as its own unit with its own label.
Can stock promised to one customer be sold to another?
Stock is reserved against each customer order line; a reserved unit shows as reserved when scanned, and shipping it elsewhere needs a manager's override.
Must · Manufacturing, Trading and distribution
Why
Without reservations the same reel is promised twice and one customer finds out on delivery day.
What to make a vendor show
Reserve a unit for one order, then try to ship it on another and show the block and the override.
What good looks like, from a live system
Whole reels per customer PO line, oldest first; shipping one elsewhere needs a manager's override
What does a manufacturer need from an ERP on the shop floor? A bill of materials the rest of the system works from, cutting and consumption recorded as it happens, and costs that come from what was actually used.
Can our existing Excel BOMs be imported?
Bills of materials kept in Excel are imported as they are, matched to the item master and grouped into assemblies; a likely typo is suggested, never silently corrected.
Must · Manufacturing
Why
Re-entering every BOM by hand delays go-live by months and introduces its own errors.
What to make a vendor show
Import one of your real BOM sheets and show how each unmatched line is handled.
At each cut, what was used and the usable remnant are recorded; remnant weights come from dimensions and density, and remnants return to stock to be matched to waiting BOM lines before anything is bought.
Should · Manufacturing
Why
Remnants left off the books are bought again.
What to make a vendor show
Cut a plate, record the remnant, and show it back in stock with its weight and offered against a waiting BOM line.
What good looks like, from a live system
157.00 kg → 127.17 used + 15.70 remnant + 14.13 scrap
How should an ERP handle test certificates and traceability? Every certificate linked to the material and the product it went into, with links that end up in statutory paperwork confirmed by a person.
How should material test certificates be stored?
Material test certificates are kept once, in a bank, and linked to each piece of material and each product they apply to.
Must · Manufacturing
Why
A certificate filed per order is copied, misfiled and hard to find at inspection.
What to make a vendor show
Show one certificate and every product it has been used for.
Can the system link certificates to parts automatically?
The system may suggest which certificate belongs to which part, but a link that ends up in statutory paperwork is made only after a person confirms it.
Must · Manufacturing
Why
A wrong automatic link in a statutory folder is a compliance failure, not a typo.
What to make a vendor show
Show a suggested certificate link waiting for confirmation, and that it doesn't appear in any document until confirmed.
Statutory quality documents (for example a boiler's IBR folder) are assembled from the records already in the system, not compiled by hand.
Should · Manufacturing
Why
Compiling a folder by hand from files takes days and repeats errors.
What to make a vendor show
Generate the statutory folder for one finished product and check each certificate in it against the material used.
What good looks like, from a live system
IBR 2026 Forms I Part B, IV Part A, IV Part B and V Part B (Forms II(1), III, III A and IV A under IBR 1950), from a bank of material test certificates
What should an ERP do at dispatch? Release only what is ready, carry the documents the goods must travel with, and let the customer see where their order is.
Does the ERP need to generate e-way bills?
For goods moving with a consignment value above ₹50,000, the e-way bill is generated from the invoice and dispatch record, without retyping into the portal.
Must · Manufacturing, Trading and distribution
Why
Goods moving without a valid e-way bill can be stopped in transit.
What to make a vendor show
Dispatch a consignment above ₹50,000 and show the e-way bill details produced from the invoice.
The law
consignment value exceeding fifty thousand rupeesCGST Rules, 2017, rule 138. In force: Rule 138 as substituted on 7 March 2018. Applies to: A registered person causing goods to move above the value limit.
Does an Indian ERP need to do the accounting itself? Either it keeps the books, with GST, TDS and an audit trail the law requires, or it posts cleanly into Tally. What it must not do is make your accountant type everything twice.
Does my ERP need an audit trail?
Every transaction in the books has an audit trail: an edit log of each change with the date it was made, which cannot be switched off.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A company keeping its books in software must use software with this feature, and its auditor reports on it.
What to make a vendor show
Enter a purchase bill, change its amount, and show the edit log with the old value, the new value, the user and the time; then show there is no setting to disable it.
The law
has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabledCompanies (Accounts) Rules, 2014, rule 3(1), proviso. In force: Financial years from 1 April 2023 (date substituted by G.S.R. 235(E), 31 March 2022). Applies to: Every company that keeps its books of account in accounting software.
The audit trail has been on, without gaps, for every financial year from 1 April 2023, including for data migrated from an older system.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
The requirement runs for the whole year; a gap during a migration is still a gap.
What to make a vendor show
Show the audit trail for an entry made before the switch to the new system, and the first entry after it.
The law
the figures, letters and words “1st day of April, 2023” shall be substitutedCompanies (Accounts) Second Amendment Rules, 2022. In force: 1 April 2023. Applies to: Companies keeping books in accounting software.
Where aggregate turnover has exceeded ₹5 crore in any year since 2017-18, B2B invoices, credit notes and debit notes get an IRN from the invoice registration portal before they are issued.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out) · turnover above ₹5 crore
Why
Above the threshold, a B2B invoice without an IRN isn't a valid tax invoice.
What to make a vendor show
Issue a B2B invoice and show the IRN and signed QR code returned from the IRP on the printed invoice.
Where annual aggregate turnover is ₹10 crore or more, every e-invoice, credit note and debit note is reported to the IRP within 30 days of its date, and the system warns before that window closes.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out) · turnover above ₹10 crore
Why
After 30 days the portal refuses the document, and the invoice can't be made valid.
What to make a vendor show
Show the list of invoices not yet reported to the IRP, with the days left for each.
The law
taxpayers with an AATO of 10 crores and above would not be allowed to report e-Invoices older than 30 days from the date of reporting on IRP portalsGSTN advisory, 5 November 2024. In force: 1 April 2025. Applies to: Taxpayers with annual aggregate turnover (AATO) of ₹10 crore and above.
Where the business is a buyer with turnover above ₹10 crore in the previous year, purchases from a seller beyond ₹50 lakh in the year attract TDS, and the system tracks each seller's running total and deducts from the right bill.
Should · Manufacturing, Trading and distribution · turnover above ₹10 crore
Why
The threshold is per seller per year; tracking it by hand misses the bill that crosses it.
What to make a vendor show
Show one supplier's purchases this year against the ₹50 lakh threshold and the bill on which deduction started.
The law
The provision is a table whose columns are split in the Gazette PDF, so no phrase is quotable word for word; read it in the Act, row 8(ii) of the section 393(1) table and the buyer definition in its Note. Income-tax Act, 2025, section 393(1), Table, Sl. No. 8(ii) and its Note. In force: From 1 April 2026 under the 2025 Act (formerly section 194Q of the 1961 Act). Applies to: A buyer whose turnover exceeded ₹10 crore in the preceding tax year; confirm with your CA.
If Tally stays as the books, approved invoices post into TallyPrime as vouchers automatically, and each posted voucher is checked against Tally's own data so one deleted inside Tally is flagged.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out) · if Tally stays
Why
Two sets of books that aren't checked against each other diverge silently.
What to make a vendor show
Approve an invoice, show the voucher in TallyPrime, delete it in Tally, and show it flagged as unconfirmed after the next sync.
What good looks like, from a live system
30 seconds
What went wrong without it
A voucher deleted inside Tally looked posted in the app until every voucher was checked against Tally's data.
What should an ERP do for payroll? Work pay out from attendance, rates and advances, never type it, and keep each person's data visible only to those who need it.
Should payroll be typed or computed?
Pay is computed from attendance, rates and advances recorded during the month, never typed as a final figure.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A typed pay figure can't be checked; a computed one can be traced to each day.
What to make a vendor show
Show one worker's month: days present, rate, advances, and the pay the system worked out.
Do customers and suppliers need access to the ERP? A limited view: customers follow their own orders and documents, suppliers quote and record dispatch on a link, and neither ever sees your stock or prices.
Can customers follow their own orders?
Customers sign in to see each of their orders as plain-language stages worked out from what each department records, never typed for the customer.
Should · Manufacturing, Trading and distribution
Why
Status typed for the customer goes stale, and the phone keeps ringing.
What to make a vendor show
Sign in as a customer, open an order, then move it forward internally and show the customer's view change.
What should ERP reports and AI be able to do? Answer from the same records the business runs on, show where each number came from, flag what looks wrong, and never invent a figure.
Can every report figure be traced to records?
Every figure on every report can be opened to show the transactions it was computed from.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A number nobody can trace is a number nobody acts on.
What to make a vendor show
Pick a figure on the owner's dashboard and open the records behind it.
Can an AI assistant answer questions from our books safely?
An AI assistant answers from fixed look-ups in code; it never writes a number itself, and any written answer containing a number not in the data is dropped.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
An assistant that writes its own figures will, sooner or later, give one that doesn't match the accounts.
What to make a vendor show
Ask the assistant this month's sales in plain English and in Hinglish, then compare its answer with the sales report.
What good looks like, from a live system
55 of 55 test questions and 57 unseen real phrasings, including Hinglish
Which systems should an Indian ERP connect to? Whatever you can't replace: TallyPrime, the GST portals, your bank statements and the Excel sheets people already keep.
How can a cloud ERP connect to TallyPrime?
The ERP connects to TallyPrime through an agent on the Tally PC (Tally's gateway only listens there), with vouchers pushed and outstandings synced back on a fixed schedule.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out) · if Tally stays
Why
TallyPrime has no cloud API; a vendor who says otherwise should show how.
What to make a vendor show
Show the agent running beside TallyPrime and the last sync times for vouchers and masters.
What good looks like, from a live system
4 — local agent, hardened agent, MCP server, CSV/JSON files
Receivables with ageing, payables, registers, cash, bank and stock are copied out of TallyPrime into the business system on a schedule, and show the last sync when Tally is off.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out) · if Tally stays
Why
Sales chasing payments without Tally access calls accounts for every balance.
What to make a vendor show
Show receivables ageing in the ERP and the time of its last sync from Tally.
What do ERP buyers forget to ask for? What happens when the internet drops, who can see what, how you get your data out, and how fast someone answers when it breaks.
What happens when the factory internet drops?
When the connection drops, work in progress isn't lost: syncs retry by themselves, and a real error (a missing ledger, a rejected voucher) waits for a person.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Factory and office connections drop every week; a system that loses data then is unusable.
What to make a vendor show
Pull the network cable during a sync and show what happens to the queued entries when it's back.
All business data can be exported at any time in standard formats, during the contract and at its end.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Data you can't take with you ties you to the vendor more than any contract.
What to make a vendor show
Ask for a full export of the demo data and open it in Excel.
Does the ERP need to protect personal data?
Personal data of staff, customers and contacts is protected with reasonable security safeguards, and a breach can be traced and reported.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A business holding personal data is a data fiduciary under the DPDP Act, with duties for safeguards and breach intimation.
What to make a vendor show
Ask who can see employees' personal details, how access is logged, and how a breach would be detected and reported.
The law
reasonable security safeguards to prevent personal data breachDigital Personal Data Protection Act, 2023, section 8(5). In force: As the Act's provisions are brought into force; the DPDP Rules, 2025 on safeguards and breach intimation apply from May 2027 (rule 1(4)). Applies to: Any business processing digital personal data.
How fast is support after go-live?
Support requests have a stated response time in the contract, and the vendor has written documentation that lets another developer take the system over.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
A system only one person understands stops when that person is unavailable.
What to make a vendor show
Ask for the response time in writing, and to see the system document for one of their live systems.
Contract and ownership
What should an ERP contract settle before the build? Who owns the code, what the licence covers and for how long, how changes are priced, and how your data leaves with you.
Who owns the code?
The contract states who owns the source code and the software, and what the buyer gets: the code itself, or a licence to use the system for a stated term.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Both models exist and both can be fair; an unstated one becomes a dispute.
What to make a vendor show
Ask for the ownership clause in writing before the build starts.
How should a custom ERP be priced?
Work is priced in fixed phases, each quoted before it starts, rather than an open-ended hourly bill.
Should · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
An open hourly bill puts the whole risk of the estimate on the buyer.
What to make a vendor show
Ask for the phase plan with a fixed price and a go-live date for each phase.
What happens when requirements change mid-project?
A change is written down, priced and agreed before it is built, never billed after the fact.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
Changes priced afterwards are where budgets go.
What to make a vendor show
Ask how the last change on one of their projects was priced and approved.
What does the annual maintenance contract cover?
The AMC states what it covers (licence, hosting, fixes, small changes), what it costs per year, and what is quoted separately.
Must · Manufacturing, Trading and distribution, Project businesses (interiors, fit-out)
Why
An AMC with no stated scope turns every request into a negotiation.
What to make a vendor show
Ask for the AMC scope and price in writing, and an example of something it doesn't cover.
Answer five questions about your business and get the requirements that apply to it, ready to send to vendors.
A guide written by Ahrom Labs from the systems it runs; not legal or tax advice. Statutory lines quote the official text, and the text governs wherever this page differs from it; how a rule applies to your business is a question for your CA. Last updated .
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