May 7, 2025, 9:08 a.m.
Scaling is in every founder's thoughts, yet if there are no cost controls, it can easily become a financial nightmare.A recent report showed that around 70% of Indian SME’s (Small and Medium Enterprises) do not monitor spending in real-time, but instead depend on outdated spreadsheets and manual reports.
Although the Indian start-up ecosystem is a booming one, with more funding, greater market access, and progressive digital adoption—still, many companies are growing without the financial discipline to hold them.
In this blog, we'll see why cost transparency is a prerequisite before scaling, recognise and mention some common cost leaks in Indian SME’s, and show how tools like Billcostro empower businesses to grow without worry faced by confusion.
The Indian SME Landscape: Fast Growth, Hidden Risks
Over 63 million small and medium-sized enterprises in India contribute nearly 30 percent of GDP and employ over 110 million people. With Indian government schemes such as Startup India and collateral-free lending, as well as the growing number of D2C brands, the ecosystem has flourished.
However, here is the catch: while revenues are growing, untracked spending is growing even faster.
Amid the expansion, startups and SMEs often fall for traps such as:
Spending reports which are not authorised get past approval because of manual work
However, it should be noted that while revenue is rising, expenses that remain unmonitored are soaring even faster.
In their zeal for growth, entrepreneurs and owners of small and medium-sized businesses often fall prey to such traps:
The consequence? Margins are reduced, investors are doubtful, and cash flow is disrupted. All this happens even when revenue increases.
Before designing another round of financing or launching on the market, it is necessary to lay strong foundations by means of effective cost control.
The 5 Cost Leak Areas in Indian Startups
Listed below are five of the most overlooked, but generally considered, most important areas of money loss in Indian SMEs:
1. Travel Reimbursements & Advance Leaks
Employees often fill in the gaps in their travel claims or unbalance their advances. Without digital tracking, such responsibilities would be difficult to catch and report. Such micro-leaks, however, take place rapidly. First, there is a problem of suppliers being paid twice on the same invoice. It is due to poor communication between departments that these invoices are missed. Thus, there are more chances of doing something wrong due to a lack of training or QA.
2. Duplicate Vendor Payments
Payment of the same vendor on the same invoice is usually caused by manual invoice processing. In some cases, vendors are paid twice; especially when there is no PO-matching or real-time expense tracking.
3. Lack of Department-Level Budgets
Without granular budgets, departments overspend, assuming central teams will approve everything. Result: misaligned cost allocation and last-minute budget shocks. As a result, there is a misalignment of cost allocation, and last-minute budget surprises occur.
4. Manual Invoice Processing Delays
Delays in invoice processing occur when invoices are held on the computer or have to be printed and signed. These delays take place at the vendor side, therefore, the same problems would present themselves at the vendor side too. In this way, an overflow in the working capital would occur because there would probably be few or no suppliers; thus, it is a waste of time, and it could be a point of negotiation.
5. Asset Misuse or Untracked Depreciation
Many SMEs buy laptops, phones, or software licenses but never track their usage or assign accountability, causing under-utilisation or loss. These are not hypothetical—they're everyday realities in the Indian SME ecosystem.
Why Traditional Tools Are No Longer Sufficient
Excel is a perfect tool for the purpose, but not a proper one for a highly dynamic and multi-department business with a growth rate of 10–20% per quarter. To keep up with the competition, SMEs in India must possess such cost control systems that show initiative and do not wait for problems to appear.
How a Modern Cost Control System Drives Strategic Growth
Know precisely who and what is costing you money right now, and not just in terms of next quarter.
The department heads are fully entrusted to manage their budget,s and thus they are given limits and alerts to prevent overspending.
You can now approve or decline expense requests at once. All approvals are time-stamped, thus they are ready for the company audit.
Live expense data can be used for building future budgets and rather than guesswork or projections from the previous financial period.
Identify and understand the departments that make good use of finances and those that require expert guidance. Make cost a matter of performance, not authority.
Billcostro: Built for Indian Startups and SMEs
Billcostro goes way beyond just a mere expense tracker. By utilizing the full potential of Billcostro the companies start-ups and companies including the Indian ones can bring about a huge amount of accountability and efficiency in cost control and expense management tasks.
Here’s how it helps:
Easy integration with Tally, Zoho Books, and spreadsheets
How Oneomics Cut Complexity and Boosted Efficiency with Billcostro
Oneomics Pvt Ltd, a clinical services company, had more than 30 vendors and 100 clients, guaranteeing themselves some real operational struggles. With Billcostro, they have simplified the monitoring of vendors, automated workflows, and allocated the spending to cost centers.
The results?
Through Billcostro, Oneomics managed to make the financial clutter the financial transparency—providing the team with intelligent, scalable growth options.
Want to see how this works in real time?
Analyse your last 3 months of spending, identify cost leaks, and take control of your business finances—starting today with Billcostro.
Book for a free demo. Click here
