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Zoho issues clarification after Bengaluru founder claims Zoho Books error led to financial loss
Azeem Hussain, co-founder of checkout platform FlexyPe, expressed frustration over what he described as a serious issue in the invoicing software by Zoho.
A Bengaluru-based startup founder has alleged discrepancies in accounting entries on Zoho Books, claiming that failed transactions were incorrectly marked as paid, leading to financial mismatches and operational stress. Taking to LinkedIn, Azeem Hussain, co-founder of checkout platform FlexyPe, expressed frustration over what he described as a serious issue in the invoicing software by Zoho.
“I am done with Zoho / Zoho Books. Absolutely done. 2 years. We trusted Zoho Books for 2 years with our invoicing and reconciliation. And they f***ed us. Badly,” he wrote, alleging that despite transactions failing, the system recorded them as successful payments. “The money never came in. But Zoho said it did. Silently. In our books. For god knows how long.”
“The sad and irony is, we're a payments and checkout company. We process transactions in crores every single day. And even we didn't catch it because why would you doubt your invoicing tool on something this basic? 150M+ users use Zoho. That's why we trusted them. ‘Itne log use karte hain, sahi hi hoga.’ Wrong,” he added.
Founder files formal complaint
Hussain said his team discovered the issue during a manual audit of March data, where ₹3.8 lakh worth of transactions were marked as paid despite no actual inflow. “One month. ₹3.8 lakhs. Gone in the books like it was all fine,” he wrote, adding that they are now reviewing two years of records to assess the full extent of the discrepancy.
“Bhai, you're an invoicing product. You had ONE job. Get the numbers right. If you can't even do that - shut it down. Seriously. Don't sell it. Don't market it. Just shut it down,” Hussain wrote.
He also flagged the operational burden caused by the issue, including sleepless nights, repeated manual checks and added workload for his team. “I can't even put into words how angry and frustrated I am right now,” he said.
The founder further said they plan to file a formal complaint and seek recovery of losses along with damages. “We're filing a formal complaint. And I'm going after every single rupee - plus the damages for the mental pressure and unnecessary workload this has caused,” he wrote.
“To every founder reading this - go open your Zoho Books right now. Check your failed transactions. Don't trust it blindly like I did,” the founder concluded.
What did Zoho say?
Responding to the post, Zoho said its preliminary findings suggest the issue may not lie within its software. In a statement shared via Zoho Cares, the company said, “Our preliminary analysis clearly points to an issue with the payment gateway integration rather than an issue with Zoho Billing/Zoho Books functionality.”
Zoho added that its support team has been working closely with the founder and is coordinating with the payment gateway provider to investigate further. The company reiterated its commitment to reliability and said updates would be shared as the probe progresses.
In a statement to HT.com, Zoho further clarified that the “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.We at Zoho, have actually helped FlexyPe identify the issue and CashFree has acknowledged that the issue was on their side," the company said.
“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,” the statement continued.
“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!” it added.
Meanwhile, Cashfree Payments, the payment gateway mentioned in the exchange, said the issue had been resolved and assured that there would be no further impact. The company added that it is working with Zoho to identify the root cause and prevent recurrence.
