2025-04-02 12:34:02 by Livemint

' } Copyright &copy HT Digital Streams Limited All Rights Reserved. Companies Tejas Goenka (left) with Bharat Goenka. Tejas took over as Tally Solutions’ managing director in 2019. (Sampath Kumar G.P./Mint) Summary From making textile bobbins in the 1980s to building homegrown accounting software and now developing AI-driven financial solutions, Tally and its founding family have seen it all. What lies ahead for this accounting software company loved by MSMEs world over? Bengaluru: In the dying days of 2024, Bench Accounting, a Canadian software-as-a-service (SaaS) startup that offered accounting and tax reporting services to small and medium-sized businesses, went belly up. Given its high-profile backers, the shutdown came as a shock. Over the years Bench had raised $113 million from various investors, including marquee names such as Shopify, Bain Capital Ventures, and Altos Ventures. The abrupt shutdown left thousands of small and medium businesses that used Bench’s software in the lurch, with their accounting and tax documents stuck. Hours earlier, its website had boasted that the company had over 35,000 small business customers in the US alone. Fortunately for the company’s clientele (and its 600 employees), Bench was snapped up within days by Employer.com, an American HR company, assuring them of a seamless continuation in services, and a happy new year. Bench’s quick rise and overnight demise serve as a cautionary tale for startups using venture money as a steroid. India, too, boasts of a company that, like Bench, provides bookkeeping software to small businesses. However, unlike the Canadian company, it has grown on its own steam, bootstrapping itself from the day it started out 40 years ago. That company, Tally Solutions, has stayed the course over those four decades. The Bengaluru-based business management software maker, which recorded ₹625 crore revenue in FY24 from over 7 million customers, has now embarked on its next phase of growth. Tally will have to fend off many Bench-like challengers on that journey—startups fuelled by venture money and artificial intelligence (AI), and looking to take the express elevator to success. In India, ResearchandMarkets.com estimates the accounting software market will rise from $3.38 billion in 2024 to $5.75 billion by 2030. Bharat Goenka, co-founder of Tally Solutions, says that it is ready to take on the challenge from the new age accounting software entities, emphasizing that while the company is 40 years old, it still has a startup mentality. “Tally Solutions is one of the slowest startups in the world," quips the 63-year-old. While the remark was made in jest, he was alluding to the fact that Tally is on the ball and taking the game to the upstarts around it—by embracing artificial intelligence, for instance—but at its own pace, and not in a mindless pursuit of growth. Goenka credits Tally’s startup mindset, focus on simplicity and user experience, and absence of external investors for giving the family-run business the flexibility to innovate. Today, Tally Solutions serves a massive base of micro-, small- and medium-sized enterprises (MSMEs) and bookkeeping firms, helping them manage accounting, inventory, and tax compliance despite competition from companies such as Microsoft, SAP, Intuit, Zoho, and QuickBooks. Indeed, Tally commands an estimated 70–80% market share among MSMEs in India, according to industry estimates. Alpesh Gandhi, a chartered accountant at V Gandhi & Co., is a longstanding client of the company—he has been using Tally for more than 20 years. “Tally is very simple to use. You don’t require tech knowledge. Even a newcomer can pick it up with ease," he explains. “You can customize your reports and it’s very reasonably priced. It’s also GST compliant, so you need not purchase separate GST software." Gandhi has also used other accounting software, like QuickBooks, for international accounting but sticks to Tally for local accounting as “99% of my small and large clients use Tally". The global small business accounting software market is projected to grow from $8.22 billion in 2025 to $15.11 billion by 2034, according to Market Research Future. In India, ResearchandMarkets.com estimates the accounting software market will rise from $3.38 billion in 2024 to $5.75 billion by 2030. By embracing AI to automate and power financial processes, Tally aims to free MSMEs from administrative burdens, allowing them to focus on growth—a lesson Goenka learned from his father, the late Shyam Sundar Goenka, who moved from Kolkata to Bengaluru to start a textile business over four decades ago. At the time, small-scale industries (SSIs) struggled due to economic cycles, and were often reliant on large suppliers or customers. “We were one of those sick units," Goenka recalls. Amid these challenges, he took a liking to computers and Fortran, IBM’s 1950s programming language. He later formally studied COBOL, another programming language from the 1950s and 60s, for three months. Despite financial hardships, they purchased one of Bengaluru’s first IBM PC compatibles in 1985. His father then encouraged him to develop a simple, accessible software solution for business owners, thereby laying the foundation for Tally. Keep it simple, stupidGoenka’s father did explore software solutions from established companies such as Wipro, TCS, and Mastek, but walked away unimpressed. “The conversations barely lasted 15 minutes—they arrived in suits, spoke in jargon, and he (his father) would stare blankly at the screen," Goenka recalls. His father was clear about what he wanted and said so in as many words: “When I buy a car, I don’t want to be a mechanic, I want to be a driver. I don’t want to run a computer, I want to run my business." This pushed Goenka, then 25 and newly married, to develop his first accounting software prototype. But the demo lasted just two minutes before his father rejected it. The issue? A transaction entry labelled ‘T001’ instead of simply ‘travelling expenses’. When Goenka explained that computers understood codes, not plain English, his father challenged him: “Are you writing programs to make the programmer’s life easier or the user’s?" View Full Image As Tally grew, it faced challenges ranging from piracy to competition from global giants. That question changed everything. It led to the creation of an accounting system where users could type what they meant without memorizing codes—an approach that shaped the company’s philosophy on usability. “It was a small shift, but it changed how we thought about technology," Goenka says. In 1986, he co-founded Peutronics, which later became Tally Solutions, now known for its tagline: Power of Simplicity. “We had to build our own solutions—from database management to memory handling—to make our software resilient," recalls Goenka. This was no easy task. With no internet or modems, he relied on books for knowledge, sourcing rare technical titles from Gangaram’s bookstore in Bengaluru. For the first six-seven years, he was a one-man technical team, handling development and even customer calls, while his father, “an exceptional salesman, travelled across India to demonstrate the product". His father’s sales philosophy was simple: “There are only two types of users—those who use Tally and those who will use Tally." As Tally grew, it faced challenges ranging from piracy to competition from global giants. At one point, rivals distributed pamphlets comparing their products to Tally. But his father forbade the team from speaking negatively about competitors. “Instead, we focused on our own strengths," says Goenka. The strategy has paid off. Embracing AIToday, Tally continues to build its own core technology, with a technical team of over 400 employees. It has developed its own database and the Tally Definition Language (TDL), and releases two major updates each year. In keeping with the times, Tally Solutions is also adapting AI into its products. Specifically, the company is investing in two initiatives. The first is AI-powered invoice processing. Businesses receive invoices through various channels, including WhatsApp and email, often in large volumes. Traditionally, manual data entry was required to keep systems updated. The automated solution promises to make that history. Tejas Goenka, Bharat’s son, is particularly excited about the prospects of the solution. “Users traditionally enter data manually, which is time-consuming and error-prone. Our AI engine automates this by extracting and formatting data directly into Tally from WhatsApp, email, and other channels," he explains. The goal is to eliminate errors, reduce payment delays, and speed up working capital cycles. The system can also help businesses connect by matching buyers and sellers. Users traditionally enter data manually, which is time-consuming and error-prone. —Tejas Goenka The second initiative, says Nabendu Das, chief of engineering and head of products, involves building a digital AI assistant for business owners. Using an open-source LLM (Meta’s LLaMA) and custom classifiers (smart tools that analyze data and categorize it based on patterns they’ve learned), it enables intelligent conversations with data. Instead of compiling multiple reports, users can simply ask questions in plain English and get instant insights. However, Tally remains committed to privacy and data security, critical concerns for MSMEs. Both projects are in the early stages. Despite embracing AI, the company maintains a strong human element. Unlike many businesses that rely on IVR (interactive voice response, generated by machines), Tally Care, its customer support centre, ensures that human agents answer every call. “Customer service is one of our strongest pillars," Goenka says. Successful successionTejas first started sitting in on strategy meetings during his college summer break in 2009, when the company was already mapping its road map for 2030. However, the mechanical engineering graduate from Penn University initially had different ambitions—he wanted to build cars. When his father asked if he wanted to return and run Tally, Tejas was unsure. “Most of my peers were going into finance or consulting. But friends convinced me. Who else gets an opportunity like this at 20, they asked," he recalls. Nupur Goenka, his sister, was also hesitant to join the company. She co-founded a data analytics firm, Clustr, in 2013 and continues to run a digital mental health publication called Semicolon. But she eventually fell in love with Tally after witnessing the deep emotional connection users had with the software. “It commanded a reputation in the market with so many people, people who had no affiliation with the company," she says. View Full Image Nupur Goenka, executive director, Tally Solutions. The official transition at Tally came about rather unexpectedly. “In 2019, during a car ride, my father casually announced: ‘From 1 April, Tejas will be MD, Nupur will be ED, and I’m retiring to vice-chairman.’ We were stunned. My first thought? ‘If something goes wrong, I’m going to jail,’" Tejas recalls with a laugh. Bharat, who once worked for his father, quips, “Now, I work for my son." The transition wasn’t without challenges. “Being young in a company full of experienced professionals was tough. People resisted new ideas," Tejas explains. Many still sought his father’s advice, but the elder Goenka backed him to the hilt. “Once a decision was made, he supported it completely. He never second-guessed us privately or told us how to do things differently. He let us make mistakes, learn, and grow." This hands-off, empowering culture extends to Tally employees. Manjeet Jindal, who joined as a trainee in 2012 and is now an associate director in engineering, emphasizes the company’s commitment to continuous learning. “I have the freedom to email senior leadership with product suggestions, and some even get implemented—like the widely used ‘GoTo’ feature I proposed in 2016," he says proudly. Elizabeth Paul, from Tally’s brand and communications team, echoes the sentiment. “My three years here have been dynamic, with exposure to various roles and leadership interactions that are uncommon in other industries. The open culture allows seamless collaboration across teams. I can even discuss ideas with Tejas directly," she says. Looking aheadTally Solutions now serves over 7 million users across industries in more than 100 countries, and is supported by 28,000 partners—many of them small businesses selling computer peripherals alongside Tally software. In recent years, the company has expanded beyond India to the Middle East, Africa, Southeast Asia, and Bangladesh, says Jayati Singh, Tally’s chief marketing officer. India remains Tally’s dominant market, contributing 85–90% of revenue. However, the Middle East and Africa have become significant. While Middle Eastern customers prioritize cloud and mobile solutions, compliance differences shape localization strategies. Tally supports multiple languages, including English, Arabic, and Bangla, to cater to regional needs. The company now has over 1,200 direct and ancillary employees. “It took us 35 years to reach a million customers, but within five more, we hit two million. Now, we’re on track to reach three million by next year," says Tejas. While it commands the lion’s share of the MSME market, Tally has a minimal presence in the enterprise resource planning (ERP) sector, where it competes with Microsoft, Oracle, Intuit, Sage, Zoho, Infor, SAP, and QuickBooks. It took us 35 years to reach a million customers, but within five more, we hit two million. —Tejas Goenka Sanchit Vir Gogia, chief analyst and chief executive officer of Greyhound Research, sees Tally at a crucial turning point. Its integration of AI into TallyPrime, along with automated bank statement reconciliation through partners such as Entera Global, reflects its commitment to reducing manual workload for customers, he says. Gogia also highlights the company’s investments in AI, automation, and employee upskilling as smart long-term moves. However, Tally’s biggest strength—its vast installed base—also presents a challenge, says Gogia. “Many users are accustomed to desktop-based processes and may not transition easily to cloud environments," he notes. While Tally offers a cloud-hosted Amazon Web Services (AWS) version, it has yet to fully embrace a SaaS model. Meanwhile, agile fintech startups, (the likes of Paytm, PhonePe, Cred, Razorpay, Lendingkart, etc.) are launching compliance-ready, real-time analytics and API-driven solutions that could outpace Tally’s gradual evolution, according to Gogia. “The next 12–18 months are crucial," he cautions, concluding, “Tally must push its automation-first approach while ensuring it doesn’t alienate its loyal customer base." Catch all the Corporate news and Updates on Live Mint. 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