Accounting for IT & Software Companies in Pakistan: What's Different
Pakistani IT companies have unique accounting challenges — USD payments, freelancer payouts, SaaS subscriptions, and a Jul–Jun fiscal year. Here's how to handle them.
By Asaan Hisaab Team
Running an IT or software company in Pakistan comes with accounting challenges that most generic tools — built for Western markets — don't handle well. USD client payments, USDT freelancer payouts, SaaS tool subscriptions billed in foreign currencies, and a fiscal year that starts in July instead of January.
This guide covers the specific accounting considerations for Pakistani tech companies and how to build a clean financial system around them.
The PKR/USD Problem
Most Pakistani IT companies earn in USD and spend in PKR. This creates a constant currency conversion challenge:
- Client pays $5,000 in January
- You receive PKR at the inter-bank rate on the day of receipt
- Your expenses for that month are all in PKR
- How do you report the revenue in your books?
The right approach:
Record the transaction in the original currency (USD) and apply the exchange rate for the month. Keep your default reporting currency as PKR. Your accounting system should handle the conversion automatically.
What you should never do: manually convert everything to PKR in a spreadsheet using whatever rate you feel like using that month. This creates inconsistent records and makes year-end reconciliation a nightmare.
Common Expense Categories for Pakistani IT Companies
| Category | Examples |
|---|---|
| Salaries | Monthly payroll, bonuses |
| Freelancer Payments | Upwork, direct bank transfers, USDT |
| SaaS & Subscriptions | AWS, GitHub, Figma, Slack, ChatGPT |
| Internet & Connectivity | Fiber, backup cellular data |
| Office Rent & Utilities | Rent, WAPDA, gas, internet |
| Travel & Meetings | Client visits, conferences |
| Marketing | Google Ads, LinkedIn, design tools |
| Equipment | Laptops, monitors, peripherals |
| Professional Services | Legal, audit, tax filing |
Handling Freelancer and Contractor Payments
Many Pakistani IT companies hire freelancers — some paid in PKR cash, some in USDT, some via bank transfer. Each method needs to be recorded differently:
PKR bank transfer: Standard expense, record the PKR amount.
USDT / crypto: Record in USD equivalent at the day's rate, note the payment method. Keep a record of the wallet transaction as your receipt.
Cash: Record as a petty cash expense with a signed acknowledgment from the recipient.
For tax purposes, payments to individuals above Rs 25,000/month should be documented. Consult your tax advisor on withholding tax obligations.
SaaS Subscriptions in USD
AWS, Cloudflare, GitHub, Figma, Adobe — Pakistani IT companies typically spend $500–$3,000/month on SaaS tools. All of these bill in USD via international credit card.
How to record them:
- Create an expense in your system for each subscription
- Set the currency to USD
- Apply your monthly exchange rate
- Category: "SaaS & Subscriptions" or "Software Tools"
At year-end, you'll have a clear picture of your total software spend in both USD and PKR.
Pakistan Fiscal Year (Jul–Jun)
Pakistan's standard fiscal year runs July 1 to June 30 — not January to December. This matters for:
- Annual financial statements
- Income tax filing (deadline: December 31 for companies)
- Comparing year-over-year performance
Most international accounting software defaults to Jan–Dec and requires manual configuration or workarounds. If your tool doesn't natively support Jul–Jun, you'll constantly be fighting it at year-end.
Month-End Close for IT Companies
IT companies tend to have recurring monthly transactions that make month-end easier to systematise:
Fixed monthly:
- Salaries (usually same amounts)
- Office rent
- Internet bills
- Core SaaS subscriptions
Variable monthly:
- AWS/cloud usage bills (check these — they can spike unexpectedly)
- Freelancer payments (vary by project)
- Client receipts (foreign remittance)
Run through the fixed items first to confirm they're all logged. Then catch the variable ones. A 30-minute review at the end of each month keeps your books current.
What a Clean Monthly P&L Looks Like
After a proper month-end close, you should be able to answer:
- What was total revenue this month in PKR (and USD)?
- What was the salary bill as a percentage of revenue?
- What did we spend on SaaS tools?
- What was the net surplus or deficit for the month?
- How does this compare to last month and last year?
If you can't answer these in under 5 minutes, your bookkeeping system needs improvement.
Getting Started
Asaan Hisaab is built for exactly this setup: PKR default currency, USD/USDT as secondary currencies, monthly exchange rates, Jul–Jun fiscal year, and a clean month-end close workflow. No accountant required to get started — just add your accounts, set your categories, and start logging transactions.