Form MSME-1 is a statutory compliance under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It is used by companies to report any outstanding payments to suppliers classified as MSMEs that are overdue beyond the prescribed period. The objective of this compliance is to ensure timely payment to MSMEs, promote transparency in business transactions, and prevent delayed payment practices that could adversely affect small enterprises. Companies must provide details such as the amount due, the supplier’s information, the due date of payment, and reasons for any delay. Filing must be done annually on the official portal, and failure to comply may attract penalties or prosecution under the MSMED Act. Proper record-keeping, verification of transactions, and timely submission of Form MSME-1 are essential to maintain compliance and good business relations with suppliers. Engaging professional assistance is often recommended to accurately prepare the form, reconcile records, and ensure that all statutory requirements are met, thereby avoiding disputes, penalties, and reputational risks.