Selling AI Tools to Sceptic SMEs is Tricky. But Tally Solutions Knows a Way

For four decades, Tally Solutions has been helping small and medium businesses (SMBs) with accounting, bookkeeping, taxation, and compliance, helping them manage day-to-day operations. But getting them to enter the AI age is another ballgame.

"SMEs are a little bit of a difficult animal if you ask me. I have been around here for about 15–16 years, and the one thing I have learned is that the Indian SMEs specifically are very demand alert, and rightly so," Tejas Goenka, Managing Director, Tally Solutions, tells AIM.

Historically, SMBs have lagged behind larger enterprises in adopting new technologies due to resource constraints and integration challenges. However, research by JPMorgan Chase shows AI adoption among small businesses has shown a steady upward trend between 2019 and 2025, with newer cohorts adopting AI faster.

Yet, building AI for SMEs requires a fundamentally different playbook.

Tally Solutions’ AI efforts focus on how SMEs interact with technology, whether through automated document exchange, conversational queries, or an eventual accounting LLM.

AI-Powered Products

Recently, Tally Solutions launched TallyPrime Release 7.1, a major update to its flagship business management software. With the update, Tally aims to help businesses reduce manual work, improve efficiency, and personalise customer-facing documents.

The new update introduces TallyIra, the company's first AI-powered feature integrated into its business software platform. It automates document processing, customises invoices, and expands banking services.

The biggest addition in the new release is Docs by Ira, an AI-powered tool that can read business documents and automatically convert them into accounting entries within TallyPrime. Users can upload documents through desktop, mobile devices, or WhatsApp, and the software extracts the information and creates GST-compliant transactions. According to the company, the feature can reduce manual accounting effort by up to 80%.

The release also introduces improved invoice personalisation features. Businesses can now customise invoices using logos, signatures, watermarks, and other branding elements through a range of modern templates.

Tally has also expanded its Connected Banking services, allowing businesses to manage banking and accounting activities from a single platform. Users can view live bank balances, track transactions, make payments, reconcile accounts, and monitor banking activity directly within TallyPrime. These features aim to help businesses gain better visibility into their finances, improve efficiency, and make quicker business decisions.

Goenka states that the company has spent significant time testing various AI products and experiences before releasing them. The team had to ensure that the technology solutions for this segment went beyond capability and addressed practical business realities.

"The way the solution [is to be] designed has to allow for affordability, has to allow for competitiveness, and has to cater to privacy," he explains.

For instance, QuickBooks, Intuit’s accounting software designed to help SMBs manage their day-to-day finances. In 2023, the company pulled the product from India, affecting 30,000 businesses, as it relied heavily on cloud-first architecture, while SMBs preferred offline desktop tools with local support.

Whilee QuickBooks may have had superior cloud and product capabilities in several areas, Tally has a much stronger understanding of Indian SMEs, deeper localisation, and an entrenched ecosystem that proved extremely difficult to displace.

What SMEs Need from AI?

Tally says its AI trials have repeatedly shown that SMEs judge AI tools on three fundamentals: trust, privacy, and affordability.

Speaking to AIM, B Srikanth Kamath, the owner of agricultural processor Sri Navadurga Industries in Mangaluru, says, “The new features in TallyPrime 7.1 have significantly enhanced the way we present our invoices.” He adds that the introduction of multiple invoice templates, watermark printing, and auto text wrapping has simplified creating branded invoices. 

“The AI-powered document scanning and invoice personalisation capabilities in TallyPrime 7.1 have made our billing process much more efficient. Invoice scanning helps reduce manual data entry, while the personalisation features allow us to create professional, branded invoices with ease,” notes Gopal, Accounts Manager (Billing) of construction material and sanitaryware supplier Srinivasaka Enterprises, Chennai. He further mentions that, along with smooth GST billing and inventory management, the product remains simple to use, even for new users. 

Goenka says the primary requirement for SMEs is to have confidence in the system's output. “The solution has to be trusted. Seems obvious, but it is not so when it comes to AI.” Unlike conventional software, AI can produce uncertain or inconsistent results, making business owners reluctant to rely on it for financial records and operational decisions.

The second concern is data security. Many SME customers worry about what happens to sensitive business information once it enters an AI workflow. SMEs are not alone. According to Threatscape, 84% of organisations want greater control over the data their teams feed into AI tools.

As Goenka put it, “There is a big fear among SMEs that if they put a customer name or if a price that they have sold to a particular customer in, it will get leaked and someone else accesses it.” Those anxieties have become more pronounced with the rise of cloud-based and generative AI services.

The third issue is cost. While the industry often assumes that cheaper computing and lower token prices will make AI widely accessible, Goenka argues that small businesses do not buy software the way large enterprises do. For them, predictable and affordable pricing matters.

"As a consumer of Claude, I pay $20 a month or $200 a month," Goenka explains. "So, the SME, from a pricing point of view, is probably going to be much more similar to a consumer than they are to an enterprise."

At the same time, these businesses expect enterprise-grade support and reliability. "The demand, however, is going to be that of an enterprise. They will expect a lot of support, a lot of custom work," he adds.

This creates a unique challenge for software providers attempting to bring advanced AI capabilities to millions of small businesses while keeping costs manageable. For Tally, the broader objective is not simply to introduce AI features but to make artificial intelligence practical for businesses that may not have dedicated technology teams or large digital transformation budgets.

While TallyPrime Release 7.1 is currently in beta, TallyPrime’s lifetime pricing ranges from ₹22,500 to ₹67,500.

The company's experience suggests that AI adoption among SMEs will be driven less by cutting-edge models and more by whether the technology can solve everyday business problems without compromising trust, privacy, or affordability.