Khatabook Business Model Explained – Full Case Study

KhataBook Business Model

In this article, we will shed light on the “Khatabook Business Model” and will also explain its numerous revenue sources.

KhataBook Business Model

Recall a scenario when small retailers like shopkeepers of grocery shops relied on manual methods of bookkeeping. They would sit hunched over piles of paper, scribbling down sales and expenses in massive ledgers i.e. balance sheets or income-statement transactions. Accounting ledger journal entries include accounts like cash, amounts receivable, accrued expenses, customer deposits, etc. It is like having a lot of irons in the fire! 

Here is the point where KhataBook- a digital ledger app swept in with a technological wand. Casting away those cumbersome books and replacing them with a simple and user-friendly mobile app! Khatabook got remarkable attention for bringing a digital revolution for SMSE’s retailers. All thanks to its efficient working strategy and diverse revenue sources. Aren’t you curious to know about it?

So, let’s begin with the explanation of the “Khatabook Business Model.

Khatabook: A Brief Overview

Khatabook is a digital ledger app designed for small businesses and entrepreneurs in India. It enables businesses to manage their financial transactions, maintain digital accounts, and track their daily sales and expenses using Khatabook mobile app. This app simplifies the process of bookkeeping and helps businesses keep track of their cash flow. It gained popularity in India, particularly among small retailers and Kirana store owners who previously relied on manual methods of bookkeeping.
Before diving deep into the business model, let’s have a brief overview of Khatabook-

Company’s NameKhatabook
Type of Industryfintech
Parent OrganizationKyte Technologies Inc.
Founded in 2018
FoundersRavish Naresh (CEO), Dhanesh Kumar, Jaideep Poonia, Ashish Sonone
HeadquartersBengaluru (Karnataka, India)
Operating SpaceB2C (Business-to-Consumer) & B2B (Business-to-Business)
Market Valuation (FY22)$600 million (Rs.4,961 crore)
Revenue (FY22)Rs.71 crore
Expenses (FY22)Rs.189 crore
Net Profit/Loss (FY22)Loss of Rs.111 crore
CompetitorsQuicken, ProperConvert app, OkCredit
KhataBook: A Brief Overview

Now we will thoroughly delve into the “Business Model of Khatabook.” The business model is described in three parts namely-

  • Working Strategy
  • Revenue Sources
  • Marketing Strategies

Working Strategy: How Does Khatabook Work?

KhataBook Working Strategy

KhataBook began its operations as a digital expense manager. But soon it realized that its target audience belongs to non-metropolitan cities. Therefore, it transformed into a cash management app, especially for small business owners. This was a breakthrough decision that resulted in the success of Khatabook. But how does KhataBook work? The working strategy is the core of KhataBook business model. Have a look at various working strategies of Khatabook-

Digital Ledger

At its core, Khatabook functions as a digital ledger, replacing traditional paper-based accounting systems. Business owners can record their daily sales, track expenses, and maintain digital accounts within the app. This helps them keep a clear record of their financial transactions in a more organized and efficient manner.

Mobile App Accessibility

Khatabook provides a mobile application that can be downloaded and installed on smartphones. As you know, smartphones are widely accessible to small business owners. The app is available on popular platforms like Android and iOS, making it convenient for users.

User-Friendly Interface

The Khatabook app is designed with a user-friendly interface, ensuring that even individuals with limited technological expertise can navigate and utilize its features effectively. It aims to make financial management accessible to all, regardless of their digital literacy.

Automated Calculation

KhataBook automates various calculations, reducing manual effort and potential errors. It performs calculations such as total sales, outstanding payments, and profit/loss. Thus, it enables businesses to have accurate and up-to-date financial information at their fingertips.

Payment Reminders

This is the most alluring feature of Khatabook that made it a shining star in the digital ledger segment. The app provides features that allow businesses to send payment reminders to their customers. The customer receives a message on WhatsApp or SMS for every transaction or due payment. This helps in managing accounts receivable and ensures timely payments, improving cash flow for the business. (Note: Account receivable management refers to the process of ensuring that the customers will pay their dues on time without any delay). The feature of free payment remainders is absolutely free for the users.

Invoice Generation

Features of KhataBook

Khatabook enables users to generate invoices directly from the app through GST Billing Software. This streamlines the billing process. Thus, it helps businesses maintain a professional image while providing a clear breakdown of products or services rendered.

Insights and Analytics

Khatabook offers insights and analytics features that allow businesses to gain a deeper understanding of their financial performance. It provides reports and visualizations, showcasing trends, patterns, and key metrics. It empowers business owners to make informed decisions based on data.

Integration with Digital Payments

Khatabook integrates with digital payment platforms, allowing businesses to accept digital payments from customers. It includes UPI, mobile payments apps (like Paytm, PhonePe), NEFT, RTGS, etc. This facilitates a smoother and more convenient transaction process, reducing reliance on cash and promoting financial inclusion.

Strategic Partnerships

Khatabook forms partnerships with financial institutions and service providers. This enables businesses to access additional services such as loans, insurance, or other financial products directly through the app. It aims to expand the financial options and enhance their growth prospects.

In Khatabook mobile app, you can manage customer debits and credits in a single place. In case the transaction occurred or the money is due or you need to collect money. It will send a notification to the customer on WhatsApp or SMS. And this feature is totally free. With the Lending Partners, Khatabook facilitates loans in partnership with RBI-approved NBFCs. Some of its key partners are-

  • Western Capital Advisors Private Limited
  • Liquiloans- NDX P2P Private Limited
  • Lendbox- Transactree Technologies Private Limited

Safety & Security

This must be your first concern whenever you’re asked to manage your financial transactions digitally through a mobile app. Isn’t it? Well, that’s true because there are innumerable frauds nowadays on digital platforms. But don’t worry. Khatabook is very brilliantly designed to keep your finances safe and secure. This is one of the safest digital ledger books for business in the market.

Multilingual Feature

Having a majority of the audience from tier-2 & 3 cities, Khatabook is available in more than 10 regional languages. Some of the major ones are-

  • Hindi
  • Kannada
  • Bengali
  • Tamil
  • English

Revenue Sources: How does KhataBook make money?

Revenue Sources of KhataBook business model

Did you know in the fiscal year 2022, Khatabook earned revenue worth Rs.71 crore? Here the major revenue sources were software development, consultancies, and utility services. The collection from utility solutions like convenience fees and financial services contributed Rs.13 crore. Whereas the income from interest on deposits and gain on investment was worth Rs.7 crore. The rest 77.5% of the revenue came from the export services provided to its parent company i.e. Kyte Technologies Inc.

Now, let’s look into some other major sources of revenue for the Khatabook business model-

Value-Added Services

While the core features of KhataBook’s app are free to use, the company offers value-added services for which it charges a fee. These services may include advanced features, premium customer support, or additional functionalities that go beyond the basic offerings. By providing enhanced services, Khatabook creates revenue streams from businesses willing to pay for the added benefits. Some of the 3 flagship Khatabook services are-

  • Biz Analyst: It is a SaaS (Software as a Service) business management solution. It offers premium value-added and on-demand services like sales & purchase reports, livestock updates, etc.
  • Pagarkhata: It is a staff management platform offering superb features like staff attendance, payroll, attendance, etc.
  • Cashbook: It is a cash handling and tracking solution that helps in cash sales & expense management.

Partner Commissions

As you have read above, KhataBook forms strategic partnerships with financial institutions, payment service providers, and other relevant entities. Through these collaborations, KhataBook may earn commissions or referral fees when businesses access financial products or services offered by its partners through the app. This revenue-sharing model allows KhataBook to monetize the user base it has built.

Data Monetization

As businesses use the Khatabook app, they generate valuable data related to their financial transactions, sales patterns, and customer behavior. Khatabook can potentially leverage this anonymized and aggregated data in a privacy-compliant manner to gain insights and provide market research or analytics services to interested parties. By extracting valuable insights from the data, Khatabook can generate revenue through data monetization strategies.

Advertising and Promotions

Khatabook may explore advertising and promotional opportunities within its app. This could involve partnering with relevant brands or service providers to display targeted advertisements or sponsored content to its user base. By leveraging its extensive user reach and engagement, Khatabook can attract advertisers and charge them for advertising space or promotional campaigns within the app.

Marketing Strategies

Marketing Strategies of KhataBook Business Model

Khatabook has implemented several marketing strategies to promote its services and reach its target audience. Here are some key marketing strategies that Khatabook has employed-

Word-of-Mouth marketing 

Khatabook has leveraged the power of word-of-mouth marketing, recognizing the influential role of satisfied users in spreading awareness. By providing a valuable solution to small businesses, Khatabook encourages users to recommend the app to their peers and business networks, creating a ripple effect of positive referrals.

Referral Programs

This is one of the most effective marketing strategies that are employed by startups in this decade. People love to earn money quickly. And referral programs fit the best in this scenario. It helps to expand the user base within a stipulated time.

Digital Marketing

Khatabook has utilized digital marketing channels to increase its visibility and engage with its target audience. This includes running online advertisements, social media campaigns, and content marketing initiatives to showcase the benefits and features of Khatabook. Social media platforms like Facebook, Twitter, LinkedIn, and Instagram have been leveraged to connect with entrepreneurs, share success stories, and address user queries. Some of the successful marketing campaigns of Khatabook are-

  • Naam hi kafi hai” campaign
  • Dil se local” campaign
  • Business hua easy” campaign & tagline

Television Commercials

Do you remember when you heard the name “KhataBook”? Probably through television commercials in IPL seasons. Khatabook’s advertisements featured famous Indian cricketer MS Dhoni. This was enough to catch the attention of Indians! Eventually, this method of marketing was successful and aided in the rise of fame of the Khatabook company.


KhataBook business model revolves around providing a free mobile app that simplifies financial management for small businesses. Through its user-friendly interface, businesses can record sales, track expenses, and maintain digital accounts. The core features are offered for free, while value-added services and partnerships with financial institutions create additional revenue streams. By leveraging technology, KhataBook empowers small businesses to streamline their financial processes, make informed decisions, and access financial services. It’s a business model that combines innovation, accessibility, and strategic collaborations. It supports the growth and success of small businesses in an increasingly digital world.

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Published By: Supti Nandi
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Shivangi Kant
Shivangi Kant
1 year ago

Totally agree with the business model explained above. Khatabook app offers a digital ledger to all small business owners in India. It helps to manage books of accounts and it also offers reminders through WhatsApp and SMS for collecting money and making due payments. Much easier to record transactions in a second.Likely designed for Small shop owners to maintain their data in a digital world.