Earlier last week, Azeem Hussain, co-founder of the order checkout platform FlexyPe, said in a LinkedIn post that, upon a manual audit of their account book, they found that Zoho Books had marked failed transactions as paid, causing financial losses.
“The money never came in. But Zoho said it did. Silently. In our books. For god knows how long,” Hussain said in his post. Zoho, however, clarified, both as a comment on Hussain’s LinkedIn post and a separate media statement, that the incorrect payment status updates were caused by a third-party tool that FlexyPe was using. The tool, CashFree also acknowledged the issue in the reply thread.
The Zoho clarification on FlexyPe’s concerns
Issuing a clarification on the failed transaction, the Zoho team clarified that it was not an issue from Zoho Books at all – “On the issue raised by FlexyPe on Zoho Books through social media and reported in the press: this 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 Cashfree team has publicly confirmed the issue.
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.
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!”
What led to FlexyPe’s concerns
Hussain said that his company manually audited their account books for the month of March and found that Rs 3.8 lakh were marked as paid in the Zoho Books. However, the company never received that Rs 3.8 lakh. Now, the company is conducting a manual audit of the entire 2-year period to identify additional errors.
“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?” Hussain said.
Hussain added that he trusted Zoho because it’s a large corporation with about 150 million users. “Itne log use karte hain, sahi hi hoga. (So many people use it, it must be good)”, he wrote.
Taking legal action
Hussain said in his LinkedIn post that he is going to file a formal complaint against Zoho for causing financial damage.
“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.
Cashfree payment’s response
Responding to the founder’s post, Cashfree Payments said they have identified the issue on their end and are looking into it.
“The issue has been identified, and our team is actively working towards a resolution. As discussed over the call, a temporary solution has been implemented to assist you in the meantime”, the company said in a reply to the post.