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Transcript of Finance
Business To Business (B2B)
Business to Customer (B2C).
Order to Cash (Customer Focus)
As a business owner, you may find that you are paying for items you did not authorize or approve, therefore, you may also prefer to pay for purchases you did authorize at a time of your choosing (30 day's after notice),instead of right when the invoice arrives.
In order to control your cash flow, you can create a
, which allows you to approve requests to pay vendors. A payment requisition is a request from a department for permission to pay a bill. The bill can only be paid when you sign the payment requisition, and this gives you
control over expenditures
Request to Payment (Supplier Focus)
Introduction to Finance
1. Recourse request is raised by the project team
2. Request will go to Human Resources
3.Human Resources will source the resource
4. Once offer is given, Employee joins the company, and background research is done.
5. Go through Induction
6. Placed in resource management group
7. RMG allocates resource/employee to the project manager.
8. Monitored by Project Manager
Hiring to Exit (Hiring of Labour Force)
refers to a broad area of finance involving the
usage of cash
Cash Management involves assessing market liquidity, cash flow, and investments. Frequently corporate treasurers or a business manager is responsible for overall cash management.
Successful cash management involves not only avoiding bankruptcy, but also reducing days in account receivables (AR), increasing collection rates, selecting appropriate short-term investment vehicles, and increasing days cash on hand all in order to improve a company's overall financial profitability.
Commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer
Business -2- Consumer (B2C)
Retail is the sale of goods and services from individuals or businesses to the end-user.
Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit.
1.Contractual relationship is established first via a Contract or Subscription.
2.Prospects - 25% of the possibility of project
3.Opportunity - 50%
5.Orders are then received via different sales channels for example, via the phone, fax, email, internet or sales person.
6. The contractual project is confirmed throught statment of work (SOW)
7. Types of Projects :
8.Fixed Bid: A contractual agreement to provide specific software services (requirements) for a specified price or price range.
9. Time & Materials: A contractual agreement where a client will pay the provider based on the number of hours put into the project plus any added material expenses. Invoices are sent weekly/ monthly which depends on each contract.
Step By Step Process of Order to Cash
ERP System Flow:
2.Order entry (creation of order / booking of order)
3.Order fulfillment (physical & digital fulfillment)
4. revenue Recognition
6.Customer payments / collection
8.Deductions (If invoice Short Paid by Customer)
1. Wright the purchase request
2. Request is sent to manager for Approval
3. It is then passed on to Finance.
4. Finance then either approves, refuses or reroutes, the purchase
request, based on the available budget.
5. Once it the purchase request is approved by the finance department it goes to the procurement department.
Purchase Request to Cash (Supplier Focus)
Contracts are already present.
Venders are Identified
Order is Placed depending on the rate available.
1. Request to Quote
If the Vender price is
above 5 Lacks
it goes to the
, which consists of =
1 Finance Department Member
1 Procurement Department Member
1 Request Department Member
2. Negotiate directly with the Venders
1 Time Purchase
Goes to Procurement Head
If Vender price is below 5 Lacks then
ONCE PURCHASE ORDER HAS BEEN ISSUED, VENDER delivers PRODUCT TO THE BUYER/CUSTOMER.
Customer Verifies and wrights a GRN (Goods Received Notes)
.Original Invoice is submitted to the Accounts payable team (Finance Team)
. Finance matches invoice against GRN and PO
.Account the Invoice
.Initiate for PAYMENT upon the accepted terms and conditions.
.Initialized payment is authorized by 2 signatures
Check is issued to Vender
1. Notice period is given
2. Resignation letter is given to Project Manager
3. Forwarded to HMR
4. Inform the payroll team
5. Employee will not receive payment during the notice period
6. Once relived, withing 15 days final settlement will be settled
Tax International Tax
FA Accounting -
Investment (Risk Free)
Cash Management is set up to :
Plan expenditure correctly
Manage Cash appropriately
Liquid Investment - 1 Day notice is need to take out money, and it has a higher rate of interest.
Working Capital (11-14% Interest)
Term Loan (11-14% Interest)
FL Loan (2-3% Interest)
Investment in SLK :
SLK invest in Risk Free Debt Funds
SLK invest in Mutual Funds
- LOCK IN Period
- It is open and fund can be taken out when ever needed.
Hedges : Risk free for outflow of cash. Money is given at a fixed deposit.
Profit and Loss in SLK
Revenue Off/On Shore
HR - (Employe, R+R)
- (Training, Reluctant)
Insurance, Sales and Marketing
Misc - Petty Expenses
Operating Profit =
Operating Margin = OP
Other Income =
Exchange Given / Loss
Net of Internal Income
Profit Before Tax = X
Profit After Tax = Y
Not specific to SLK
Make shore the accounting happens properly
External Audit - Third Party, report, verified transactions
KPMG , DELOIT
Internal Audit - Internal reports, part of SLK
- Income Tax, Ear and PAY TAX
- Wealth Tax
- Does not distinguish between different people. Don't know, cant stop it
Fixed Assets are part of the GL
- Cash flow - Day to day expenditure
management to show how much money is in your bank account.
Operating - Management costs , salary costs
2. Financing - Equity ( Shares, and stocks )
3. Investing - long term investments more than 1 year (Outflows )
More out flow than inflow (Inflow - DIVIDEND )
How fast you can arrange the money
- Is covering your self agents the foreign exchange rate - Forward Cover
set exchange rate for a further date
How the rate for Hedging is decided