Payment

Management Presented below are live cases of Financial Supply Chain Management where Axis Bank helped Corporate improve their turnaround time of service delivery as bankable as save cost. Since this information is not public published it is requested that this is used for academic purpose only. Company Name: Jayvee Cement Segment – Manufacturing Product Offered: Counter Collection, Banker Cool Go live: June 2010 Case Study: No 1 Requirement Jayvee Group Is a bankable diversified Infrastructural Industrial conglomerate In India.

It Is involved in business of Engineering & Construction, Cement, Banker, Hospitality, Real Estate, Expressway & Highways. The Cement division works on Dealer vendor Module where the goods are supplied from regional depots based on the payment received from the dealers. The dispatch of goods is purely dependent on the MIS confirming payment from the dealers. Following Is model under which the structure of company Is based ROOM DUMP Dealers are the sales point for products of the company; the company required a solution to provide a faster supply arrangement for goods from Dumps to Dealers.

It used to book orders from dealers through telephone or fax and email. Then it used to advise Its dealers to go to Its collection centers at dumps to deposit cash or Odds. At day end the cashier used to deposit the money collected Into company’s bank account with SIB. Cashier used to issue temporary acknowledgement slip to dealer and used to update internal software with payment details. The next day when clear funds banker credited to the bank account, cashier used to download the statement from internet banking platform and manually updated the payment received or ailed against each order In the Internal software.

Those orders against which payment was received the Internal system used to send email or call was made to the dealer to seen trucks to collect goods. I en wangle process was Eng 4-5 cays to release goods to dealers and was leading to dissatisfaction as bankable as the company was being susceptible to competition as products couldn’t be supplied as per market demand. Keeping in view of the above structure following banker the broad solution suggested to the company Solution 1 . Convert all payments to the company from cash and cheeses to electronic payment mode. Use cheapest electronic modes like National electronic Fund Transfer (NEFF) and Real time gross settlement (ARTS) systems. 3. For dealers who still wanted to make payment in cash or cheese they could do the same at any of the bank counters and receive an acknowledge slip. Maintaining location wise dealer data of the company at banks end. Validating all the cash, cheese.

Criteria of differentiate employment and self-employment Laid down some factors and tests by the courts, over the years, which are relevant may be useful to determine the nature of a contract. Right of Control The engaged has a right to control the employee but it is not necessarily must be used in practice. This kind of control usually used by engaged to control when and/or were the employee perform his/her services, how it is perform, and what tasks has to be performed but in some kind of work (where employee is an expert) this control will not be important.

Under the self- employment the person who perform the work is usually free to choose when and where to do so. Financial Risk The main distinction in financial risk between employee and self-employment person is that the second one is ready to risk own money by buying a materials needed to perform the work, and also paying for overheads and bearing the running costs. The employed person not bear any expenses related to the conduct of economic activity. If any of additional cost in case of job overruns will be required the self-employed person must bear them on win risk.

Equipment In this situation self-employed person might have to buy assets and equipment to perform particular job which has to be done. The employee is getting everything under the contract. Work performance and correction Also the engaged will be expected from the employee certain hours of work performed daily or weekly, and at the engaged premises, but it is possible to make an agreement between them to work flexible hour at the places accepted by both sides.

If any correction will be required for the work done, self-employed person has to make that correction with no additional payment ND in own time, but employed person is still able to make that correction within the work time. Holidays and sickness The employee has a right to go for a holiday or take a sickness with no threat that that time won’t be paid (paid leave), the same situation for self-employed means that these days will be unpaid. Exclusivity That means the employee is hired by one only employer, and he/she is an integral part of the business.

In self employment the person has usually more than one client and the person is not integral part of client business. 3. Concussions According to above tests and factors, which were applied to the case study, inclusions arises that Kathy should be treated by HOME as an employee rather than self employed. UK income TAX In I. J tax system we can define certain kind taxes into groups: direct taxes and indirect taxes. A. Direct taxes are charged on income, profits and we can to enumerate most important: income tax, capital gains tax, inheritance and corporation tax. B. Indirect taxes, e. G.

VAT are charged Of spending and it is added to the price of the product or service bought. 1 Taxable person Individuals who are resident in the UK for a tax year are generally charged to income tax on all their income for the year. There are two exceptions to this general rule: A. Some forms of income are exempt from income tax B. UK residents whose home is not permanently in the UK to the extent that the income is remitted to the ASK. 4. Tax year Tax year for individuals also might be referred to as fiscal years or years of assessments and it runs from 6 April to the following 5 April.

Any changes to the tax system are usually take a n effect from the start of next tax year. They are proposed in the annual Budget speech. 5. Self assessment Self assessment effects those who get sent a tax return or request a tax turn and particular it applies to the following groups of people: self employed, business partners, company directors, employee or pensioner with complied tax affairs, trustees. Individual’s liability for a tax year must be assessed if there is not possible to collect full liability for a tax year deducted at source or PAYEE system.

In this situation that person at first must complete ‘self assessment tax return’. Taxpayer has to complete tax return and the amount of tax due and may be calculated by him/her and then check by HOME, or this calculation might be made by HOME if taxpayer prefer to do so. Self assessment tax return has a 6 pages basic document and might be added supplementary pages if needed for purposes of tax payer. There is a available shorter tax return documents which have got 4 pages and it contains simpler tax affairs.

There is also a possibility to file tax return electronically by the HOME website. Tax return filling and summation dates are as follows: A. For paper returns – 31 October following the end of the tax year B. For electronically returns – 31 January following the end of the tax year It has to complete in full and taxpayer cannot omit any figures. 6. Payment dates First payment on accounts (POP) must be made by 31 January of the tax year. Second payment On accounts has to be made by 31 July next following tax year and final balancing payment or refund is made by 31 January.

This is also first payment on accounts of the following tax year. 7. Procedures involved in application of surcharges, interests and penalties PENALTIES – TAX RETURN A. Penalties for late submission of tax return depends from length of being late and they are as follows: 1 day late El 00 and applies even when the tax own has been pair or there is no tax to pay 3 months late or each of the following day is E 10, up to 90 days Max IEEE 6 months late whichever will be higher IEEE or 5% of the amount due 12 months late whichever will be higher DEED or 5% of the amount due.

When it is serious case the tax payer might rise up to 100% of amount due instead If any of documents submitted to HOME by a taxpayer leads to understatement of the amount tax due and it is because of careless or deliberate then single penalty applies. This is expressed as a percentage of potential lost revenue as follows: A. 100% if inaccuracy is ‘concealed and deliberate’ B. 70% in case that inaccuracy was ‘deliberate but not concealed ‘ C. In all other cases the percentage is 30%, also 30% if person liable to notify HOME Of under-assessment has failed to do so.

Process general ledger transactions, including Journal entries f. Carry out bank reconciliations on a weekly basis 2. Payroll Services a. Enter staff timeshares b. Prepare payroll runs as per required frequency c. Monitor employee entitlements d. Reconcile payroll on monthly basis to ensure no discrepancies e. Prepare end of year payroll reconciliation and payment summariea. Reconcile, verify and report In relation to the SST accounting b. Prepare and Lodge Business Actively Statement as required c.

Prepare and lodge Installment Actively Statement as required d. Lease with Australian Taxation Office In relation to these services a. Provision of telephone support b. Liaise with external accountant Should you require any additional work outside the above scope could you please advise in an email before commencement. If I believe this work to be outside my experience or competency I retain the right to decline the work and/or seek help from a person who holds the expertise. Service Fees any Payments

All bookkeeping fees for the services I provide to you will be based on the time spent and the degree of skill necessary to complete the tasks required as between the parties. We will issue you with an invoice for services rendered on a monthly basis enabling you to track all costs incurred. Our bookkeeping fees are: Bookkeeping Hourly Rate $45. 00 per hour (Note: All Bookkeeping Fees will be reviewed on an Annual Basis to ensure feasibility of the work) Terms of Payment All invoices must be paid within 14 days of the date of invoice.

I reserve the right to top work if you fail to make any payment when and as it falls due This agreement may be terminated by either party with a minimum of 30 days’ notice. Yours sincerely, Bookkeeper Client Acknowledgement and Acceptance of Letter of Engagement If you are in agreement with the payment terms and terms of engagement please sign and return the attached duplicate letter to me I hereby acknowledge and accept the terms of this engagement as set out. I shall be personally liable for all fees for services performed in accordance with such agreement. Name: Print Name Signed .

Operating cycle is the time taken between the purchase of supplies and the time when the cash is collected. It comprises of two parts: days inventory on hand and days sales outstanding. The day’s inventory on hand includes the work in progress, finished good manufacturing and the sales cycle. The day’s sales outstanding include the time between credit sales and the time taken to collect cash from the sales done on credit. So operating cycle is the count of days taken to convert cash to inventory to accounts receivable and cash.

(Needles etc, 2008) If the cash is occupied in accounts receivable and supplies/inventories, the organization will have low access to cash. This may hinder it from satisfying its short term requirements. So, Operating cycle= 365/Inventory Turnover + 365/Receivables Turnover. Cash conversion cycle, also known as the net operating cycle, on the other hand is the time duration between the times when the vendors are paid to when the cash is collected i. e. the time between payment for supplies and cash receipt for sales of these products.

Simple put, the cash conversion cycle is the time between when the cash is paid out to the time of receipt of cash. (CIMA, 2001) Cash conversion cycle helps understand how long the cash funds of an organization are blocked and cannot be used for other activities. So, Cash conversion cycle= Closing Stock/Average Daily Purchases + Accounts Receivable/Average Daily Credit – (Accounts Payable/Average Daily Credit Purchases). In a manufacturing process, the cash conversion cycle starts with the purchase of materials required to manufacture the finished products.

It goes through the manufacturing, packaging and delivering process. Then post delivering the invoice to the client, the last step is receipt of payment. So the shorter the cash conversion cycle the stronger the working capital management. With growing stress on just in time, there are companies which aspire towards a negative cash cycle. A larger organization with extensive manufacturing department would need more cash involved in inventories. Similarly if the customers take more time to pay the bills then the receivables increase.

Thus the net working capital can be lowered by managing the accounts payable and receivable. Both financial concepts help analyze the efficiency of the working capital management of an organization. An organization with a large cash conversion cycle is most likely to have cash flow issues. Say a company has bills due in recent future so it has cash flowing out, however the operating cycle is longer, so the cash coming in is longer, then the liquidity problems are likely to be high.

The basic difference between cash conversion cycle and the operating cycle is that while cash cycle refers to disbursing cash and collecting cash, operating cycle starts with owing cash to collecting cash. Hence cash cycle forms a part of the operating cycle. In a company with a shorter operating cycle the return on investment from the inventory it stocks is faster. Many industries mostly large businesses for example wineries and distilleries are found to have a longer operating cycle. Also operating cycle is calculated in terms of the duration the stock has to wait before sales, so it is not related to a definite accounting period.

Many businesses may think that investment in inventories is a good thing as it will eventually lead to returns. However there are many costs which are often neglected. For example the cost of maintenance such as handling cost, security cost, insurance etc. so inventory management is a very important concept that should be considered. In small business cash conversion cycle is considered to be key measure liquidity. It has been observed that larger organizations have a shorter cash cycle; however initiatives can be taken by smaller businesses to reduce their cash cycle.

By reducing the inventories kept in stock and applying concepts such as just in time, the case paid to acquire inventories can be reduced. Also by ensuring that the receivables are collected in time can have a positive effect on the working capital management. Cash conversion cycle also holds a positive relation with quick and current ratios, so the ratios should be maintained. Business consultants across the world have stated that cash cycles are the best measure for understanding a company’s health especially during its growth period.

John Costa from Outlook (Costa, 1997) says that while measures such as ratios can at times give misleading results, cash conversion ratio gives more accurate results. The inventory, vendor and credit policy change can only bring a change in cash cycle, since it is related to the asset turnover. So it is more dynamic and exact. Cash conversion cycle is found to be most effective in the retail industry whoever software, and consulting sector may not find the cash cycle analysis that effective. (Moss, Jimmy D, 1993)

If an organization wants to improve its cash cycle then they should consider four factors: the number of days client takes to pay the amount receivable by the company, the number of days it takes to manufacture/produce a product or deliver a service, the number of days the finished goods lies in the inventories till its sales, and the time the payment has to be made to the vendors. (Gattis, 2009) Once these factors are considered individually the organization can take measures to increase its efficiency. For example, special incentives or discounts may be given to the clients who make payments ahead of time.

Reference: CIMA (Chartered Institute of Management Accountants), June 2001, Business basic, Cash flow management, London, Chapter 1, page 2 Costa, John, Outlook, September 1997, “Challenging Growth: How to Keep Your Company’s Rapid Expansion on Track. ” Moss, Jimmy D. , and Bert Stine, December 1993, Managerial Finance, “Cash Conversion Cycle and Firm Size: A Study of Retail Firms. ” Gattis, G. Christopher, September 2009, The Cash Conversion Cycle, Blue Print Strategies. Needles E Belverd, Marian Powers, Crosson Susan, 2008, Financial and Managerial Accounting, page 289-291, George Hoffman, USA

Facebook’s Messenger application, which now boasts a billion users, is introducing new capabilities that will make it possible to pay for goods and services through Messenger or though “bots,” or automated programs, that use the messaging app.

David Marcus, VP of messaging products at Facebook, said at the TechCrunch Disrupt Conference that the company was working with a number of payment providers including PayPal, Visa, Mastercard, American Express and Stripe to implement the features.

(Reporting by Jonathan Weber)

Technology is persistently changing and management has to stay ahead given that it is quite impossible to operate without new technology in this competitive world. In order to keep up with the stiff competition from competitors, Target Stores make decisions constantly that guarantee this success. Target Stores in keeping with technology, was the first to introduce smart visa cards. In 2002, they offered Target smart visa cards through affiliation with Retailers National Bank will be chipped in any target stores sale terminals where they will be accepted to make payments by customers.

This decision will enable its customers to make payment with ease. Customers’ transactions are easily monitored thus facilitating easy reward to their frequent customers. This new technology results to new valuable experiences for consumers given that it changes the image of Target Stores for customer are thus promised to pay less while expecting more through the reward system. The management authority is assigned to other staffs in Target Stores tasks and responsibility through delegation.

Delegation to subordinate in the store is utilized in the managing the functions of management. Delegation within Target Stores takes place from regional down to staff members though the responsibility lies with the higher level management. Through planning and organizing, they are able to implement the new technology in their system by posting employees to different departments in the store to ensure that work is done properly and crime is avoided (Berman, Evans & Mahaffey, 2005).

Additionally, leading and controlling make use of delegation for there is a hierarchy of management and staff in the operation and store. This facilitates the implementation of the new technology in Target Stores given that higher managers can easily control the responsibility of lower ones through delegation. References Berman, B. , Evans, J. & Mahaffey, T. (2005). Retail Management: A Strategic Approach. Canada: Pearson Education:

Of all the responsibilities that freelancers must take charge of, there’s none more important than invoicing. After all, if you don’t , then how can you expect to get paid for your services? Unfortunately,  have reported that they’ve had trouble getting paid for their services. Since we’ve experienced this as well, we decided to put together this handy guide to getting paid online. Hopefully, this information provided will ensure that you’ll never have problems getting paid again.

Know your clients

As a freelancer it seems counter-intuitive to turn down a potential client. But, it’s in your best interest to a little research before accepting a new gig from a client you’re never worked with before. Why? Because this client may have a track record of skimping on payments to freelancers who have worked for them in the past.

A quick online search could clue you in on how legit this client really. Do they have a website and social media profiles? If so, you may be able to checkout out their website, Facebook, Twitter or LinkedIn pages to see if they have a .

You can also Google the client’s name followed by “scam” or “unreliable” to see if there are any compliments from other freelancers.

Establish clear rules and make sure the client agrees

Every freelancer needs to have a set of rules before starting a new project. These rules should mainly cover your . This explains how and when you expect to be paid for your services. For example, you expect payment 30 days after the invoice is sent via PayPal.

However, you also want to discuss the scope of the work, timelines, ownership of the work, disclaimers and provisions and cancellation terms.

It’s alright to be flexible with your rules when negotiating with the client. Just make sure that you don’t budge too much.

Once you and the client agree on these terms, have a written contract in place. This will ensure that both parties live up to their ends of the bargain.

Secure a down payment

As any seasoned freelancer will inform you, always get a deposit — especially when working with a . This helps you pay for your expenses as you work on a project, and it can help lessen the blow if the client bails on the final payment. Besides, it’s an industry standard. So don’t feel awkward asking for some sort of down payment.

How much you ask for can be negotiated. It’s common to ask for 50% down, 25% in the middle of the project and 25% when the job has been completely finished. If you’re billing for time, you should at least invoice for one to two weeks upfront.

How to create an invoice

Prior to the availability of cloud-based  software like Due, freelancers would have to create invoices manually using programs like Pages, Numbers, Word, Excel or Google Docs. Thankfully, that’s not the case anymore.

With invoicing software you can quickly create and send invoices electronically using the templates provided, as well as time-tracking, tracking which invoices have been paid, sending automated follow-ups and establishing recurring payments.

Even though invoicing software can save freelancers a whole lot of time and money, the basic components of invoices have remained the same. :

• Your brand’s logo.
• Invoice number, such as Invoice: 00001.
• The date the payment is expected.
• Both you and your client’s contact information.
• A list of itemized list of tasks and services.
• Chargeable taxes.
• Total amount due.
• Payment terms, such as 2% off the invoice total if paid within 10 days or a a 2% monthly finance charge if the due date has passed.
• Payment options such as PayPal, credit card or eCheck.

As mentioned earlier, if you have recurring clients, then you don’t have to create an invoice each billing cycle. Instead, you can set-up a recurring payment option where you automatically charge a client’s bank account or credit card are withdrawn.

If you don’t have recurring clients, then make sure that you invoice promptly and frequently. Whether if it’s immediately following the completion of a task or once a week, this will keep the cash flowing into your account. It also ensures that you won’t forget to bill the client. And, the longer you wait to invoice your clients, the less likely they’ll pay your invoice. Here is the ultimate  you can’t live without for additional expert advice.

Types of online payments

With the internet, , which makes getting paid for your services almost instantaneous. However, when you do accept payments online, there will be some processing fees. So make sure that you compare these fees before you start accepting online payments.

With that in mind, here the most popular ways for freelancers to accept payments electronically:

• Credit or debit cards. You can accept plastic by either setting up a merchant account with a bank or using a third party payment gateway like PayPal or Amazon Payments. Be aware of the expensive transaction fees involved with this method..
• eChecks. You can also accept electronic checks through ACH processing, which is governed by the National Automated Clearing House Association. All your client has to do is enter their routing and account number, name, amount and authorization in an online payment form or software interface. As with credit cards, there could be pricey transaction fees involved.
• eCash. These are electronic tokens or cryptocurrencies, such as bitcoin. Since the middleman is cut out, and the transaction is directly between the two the two parties, payments are almost immediate and there are lower transaction fees.
• Mobile digital wallets. These could be platforms like Square, so that a card is swiped on your mobile device, peer-to-peer apps like Venmo, or digital wallets like Google Wallet or Dwolla, accepting payments through mobile devices is rapidly becoming one of the preferred types of payments.
• Wire transfers. Old-school services like Western Union have embraced digital by allowing you to send money to a mobile phone. Wire transfers are fast and secure, but fees can be expensive.
• Click-to-pay email invoices. When you email an invoice to a client, they can pay that invoice simply by clicking on a link. It’s another fast and convenient method.

If you want your clients to pay your invoices more quickly, then consider accepting multiple forms of payments, such as credit cards, eChecks and eCash. In fact, most invoicing platforms allow you to accept most forms of online payments.

What to do when a client doesn’t pay?

You followed all the suggestions listed above. But, your client still hasn’t paid your invoice. What are your next moves?

• Pick-up the phone and call the client directly to find out what the hold-up is. It could be a simple oversight.
• Be firm and persistent by calling and sending them an email or letter.
• Recruit a “bad cop” who is more forceful than you are. Plus, they don’t have the relationship that you do with the client.
• Take legal action by asking your lawyer to contact the client or take them to small claims court. Since you have a contract, the law should be on your side.
• Hire a collection agency to collect the debt.
• Write the invoice off as a business loss because it may not be worth chasing the client.

While those are the most common techniques that most freelancers take then a client doesn’t pay their bill. However, another option is invoice factoring. This is for freelancers who need cash right now and involves selling the invoice to a factoring company. The terms aren’t great, but it’s an option when you’re in desperate need of cash.

Closing Thoughts

The days of manually creating and physically mailing an invoice are long gone. You can now invoice a client electronically and receive payment within a day. Even though this makes your life as a freelancer a little less hectic, you still want to make sure that you investigate a client before starting a project, have a written agreement, accept multiple forms of online payments and have a plan for dealing with clients who haven’t paid their invoice.