A

PROJECT REPORT

ON

“ACCOUNTS PAYABLE PROCEDURE AT BLUE PLANET INFO

SOLUTION INDIA PVT LTD”

PROJECT REPORT SUBMITTED

TO

“SAVITRIBAI PHULE PUNE UNIVERSITY”

IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE

AWARD OF
MASTER OF BUSINESS ADMINISTRATION
BY

SACHIN RAMESHWAR TIJARE

UNDER THE GUIDANCE OF

PROF. SWATI GHUDE

SINHGAD INSTITUTE OF MANAGEMENT& COMPUTER

APPLICATION(SIMCA), NARHE, PUNE
2018-2020
 DECLARATION

I Undersigned hereby declared that all the facts and figures include in
the project title “ACCOUNTS PAYABLE PROCEDURE AT BLUE PLANET
INFO SOLUTION INDIA PVT LTD” Is result of my own research and
investigation include formal analysis of entire project work
Declaration and these same not previously submitted to any other
examination of his Pune. University this hold in wise belief with full
consciousness this is my own and original work.

Place:- Pune, Sachin Tijare

Date :- / /2019 (student Signature)

1
 ACKNOWLEDGEMENT

It Gives me immense pleasure in thinking all those who helped me in

successful Completion of this project. This project itself is an
acknowledgement to the intensity, drive and

Technical competency of many individuals who have contributed to it

First foremost I sincerely Thanks to General manager (finance) of
BLUE PLANET INFO SOLUTION INDIA PVT LTD. For keen interest. True
of management and the guiding me on various aspects of my projects
without which it would have been impossible For me to complete this
project.

I hereby take an opportunity to express my sincere to awards our

managing Director and also my guide Prof. Swati Ghude also Own
immense thank to Library, my friend and all those who were
supporting me Throughout the project.

Thanks and regards

Sachin Tijare

2
 CERTIFIACTE

This is to certify that the project report entitled “ACCOUNTS

PAYABLE PROCEDURE AT BLUE PLANET INFO SOLUTION
INDIA PVT LTD” which is being submitted here with for the award of
the degree of “Master of Business Administration” University of Pune
is the result of the original research work completed by Sachin R. Tijare
under my supervision and guidance and the best of my knowledge and
belief the work embodied in this project report has not formed earlier
the basis for the award of any degree or similar title of this or any other
university or examination body.

DR. Anamika Singh Prof. Swati Ghude

DIRECTOR SIMCA Project Guide

3
 Index

Chapter Title Page no.

No.
Executive summary

1 Introduction
6
2 Organization profile 7

3 Conceptual background 10

4 Data analysis and interpretation 31

5 Observation & findings 35

6 Conclusion 36

7 Learning’s of the student through the project 37

8 Bibliography 38

4
 Executive summary

Financial Accounts Payable is a multi-entity vouchering and cash disbursements application

that delivers results without a lot of day-to-day complexity. It features a fast and
secure smart client GUI. FPS A/P provides voucher import, G/L drill-down and cross-drill,
multiple credit card payers capability, payment matching, positive pay. A full range of
automatic check writing features is included not only to make timely payments but to help
delay cash outflow and prevent fraud.

• Provides deluxe or streamlined formats for on-line vendor invoice entry.

• Allows transaction review and edit capabilities prior to posting.

• Reports General Ledger expense distributions by any organizational entity including

department, branch or cost center.

• Supports sophisticated policies for automatic check writing by allowing separate processing
cycles by bank, project, vendor category or payable category, early processing of
discountable invoices and sorting of checks requiring an executive signature.

• Reports missing check numbers with the ability to exclude certain checks spoiled by the
printer hardware.

• Calculates due dates, discount dates and discount amounts automatically.

• Classifies transactions into four different major categories including vouchers, checks,
discounts and adjustments.

• Allows management controlled definition of transaction codes, taking advantage of familiar

keyword terminology to trigger appropriate system functions.

• Outputs credits and debits to the Financial General Ledger system with user control over the
level of consolidation.

• Designates multiple categories of accounts payable in order to segregate open invoices or

consolidate cash disbursements, including trade, taxes and even employee advances.

• Prevents redundancy in vendor address information yet allows terms and payment
authorization to be specific to the vendor and company.

• Allows designation of special pay-to vendors for factored invoices through the use of an "A/P
Point Vendor".

• Provides on-line access of invoice level history, transaction details and vendor
balances by transaction code or category of accounts payable.

5
 Chapter 1
Introduction

Account payable is defined in Webster's New Universal Unabridged Dictionary as:

account payable: a liability to a creditor, carried on open account, usually for purchases of
goods and services.
When a company orders and receives goods (or services) in advance before paying for them,
we say that the company is purchasing the goods on account or on credit. The supplier (or
vendor) of the goods on credit is also referred to as a creditor.
As is expected for a liability account, Accounts Payable will normally have a credit balance.
Hence, when a vendor invoice is recorded, Accounts Payable will be credited and another
account must be debited (as required by double-entry accounting). When an account payable
is paid, Accounts Payable will be debited and bank account will be credited. Therefore, the
credit balance in Accounts Payable should be equal to the amount of vendor invoices that
have been recorded but have not yet been paid.
The accounts payable process involves reviewing an enormous amount of detail to ensure
that only legitimate and accurate amounts are entered in the accounting system. Much of the
information that needs to be reviewed will be found in the following documents:
1. purchase orders issued by the company
2. Goods receipt note (GRN) prepared by the company
3. invoices from the company's vendors
4. contracts and other agreements
The accuracy and completeness of a company's financial statements are dependent on the
accounts payable process. A well-run accounts payable process will include:
1. the timely processing of accurate and legitimate vendor invoices,
2. accurate recording in the appropriate general ledger accounts
3. the accrual of obligations and expenses that have not yet been completely
processed.
4. The efficiency and effectiveness of the accounts payable process will also affect
the company's cash position, credit rating, and relationships with its suppliers.

6
 Chapter 2

Organization Profile

Blue Planet Info Solutions India Pvt Ltd

• Avinash Kulkarni
CEO M.Tech IIT Kanpur 25 yrs IT, 30 Yr Business in India and US, Serial Entrepreneur

• Shubhangi Yeole
CMO Graduate Fergusson with 16 yrs Marketing + Team of 5 Sales Executives

• Aloysius Domnic
COO MBA 18 yrs Operations + 5 Admin

• Rakesh Khatri
CTO Graduate S/W, Wadia College 20 yrs IT + 4 Network Engineers

Blue Planet Info Solutions India Pvt Ltd was founded in 1997 by a group of technologists
with extensive experience in Corporate America. We provide Fortune 500 companies with
consulting, staff augmentation, system administration, and training.
At Blue Planet, we have created an environment, culture, and opportunities with our
customer-partners which enable our employees to exceed customer expectations and go the
extra mile thus creating a Magical experience of delight.
We believe – the value proposition centered on productivity, efficiency, service, cost
leadership, a strong process outlook is significantly enhanced towards creating customer
delight.
Blue Planet Info Solutions India Pvt Ltd is a state-of-the-art, multi-channel integrated Contact
Center and Software Development Offshore development center that operates 24×7 on a
multi-shift basis with an installed capacity of 100+ seats with a provision of expansion.
We provide a variety of services to companies for:

1. Voice – Inbound
2. Voice – Outbound
3. Back Office & MT
4. Web Services and Software Development

7
 Services to companies in the following industries:

1. Banking
2. Brokerage
3. Defense
4. Education
5. Healthcare
6. Insurance
7. Manufacturing
8. Pharmaceuticals
9. Telecom

Services:
Call Center – Voice Inbound

• Consumer & Commercial Debt Collections

• B2C Order Fulfillment
• B2B Supply Chain Management
• B2C Technical Help Desk
• B2C Answering Services

Call Center – VoiceOutbound

• BPA Re- qualification

• Consumer & Commercial Debt Collections
• B2B Small Business Communication Solution
• B2B – Lead Qualification & Generation
• B2C & B2B Telecom Sales
• B2C Home Loans (Mortgage)
• B2C Lead Generation & Data Enrichment

A. Purpose and Scope

• The main objective of the project is to study, accounts payable process.

• Analysis of aging of accounts payable.
Scope
• This project has given me great exposure in handling the financial documents
and invoices that the Accounts Payable department of any large scale

8
 manufacturing company does.

• During the project work I have gone through many invoices of different types
and also learned the process of booking the invoices.

B. Limitations of study

• As the company is not listed, we could not get access to public information
which otherwise is available for listed companies.
• As an intern it was not allowed for me to look into few things, as the company
is closely held and sensitive information is not shared.

C. Methods of collecting data

▪ To complete the project, both primary as well as secondary data was used. Secondary
data had been collected from internet, company websites, books and journals.
Whereas primary data plays an important role since it gives first-hand information
which had been obtained by analyzing day to day work, which consists of following:

• Work related to various financial documents

• Observation of working of SAP • Observation of invoice booking
• Understanding the various terminologies and their processes

9
 Chapter 3

Conceptual background

Accounts Payable at Blue Planet Solutions.:

At Blue Planet Solutions., corporate finance division is divided into 6 section,
1. Treasury
2. Controlling
3. Accounts Payable
4. Accounts Receivable
5. Financial Accounting (GL)
6. Direct and Indirect Taxation
The main work of AP department in Blue Planet Solutions.is booking of the invoices. The
payment of invoice is done by the treasury department. Once the payment is done, the filing
of invoices is also done in AP department.
Besides the mentioned work, other works include:
1. Paying the advance.
2. Raising the debit note.
3. Booking the supplementary invoices.

10
B. p2p Process:

Initiate Purchase
requisition

Purchase goods
and services

Creation of
Purchase order

Receive Goods
and Sevices

Process Accounts
payable

Pay the Supplier

11
D: Terminologies:
PR:
A purchase requisition is a request or instruction to Purchasing to procure a certain quantity
of a material or a service so that it is available at a certain point in time.
As Blue Planet Solutions.is manufacturing company, they make the schedule of what they
have to manufacture and in what time. Depending on that, the manufacturing units check the
stock of available material for manufacturing and how much new stock is required and in
what time. They intimate this to purchase department.
It is document generated by a user department to notify the purchasing department of
items it needs to order, their quantity, and the timeframe. It may also contain the
authorization to proceed with the purchase. Also called purchase request.

The PR is an internal document; it does not constitute a contractual relationship with

any external party. The PR establishes the reservation of funds for obtaining the goods
and/or services; it also initiates the bidding process when necessary. The PR is the
prelude to the Purchase Order("PO").

PO:
The purchasing department sends a purchase order (PO) to the supplier when ordering goods
for the company. Ideally, it will show not only all the details relating to the purchase (i.e.,
quantity, price, and so on), but also any special terms that the buyer may have negotiated.
As at Blue Planet Solutions., SAP is used for booking of invoices, the person booking
invoice reviews the PO before booking the invoice, as it is important part of 3-way matching
before making payment to vendor, other two are invoices and receiving documents.

All the bills which come to AP have prior purchase requisition. For most of the invoices
purchase requisition is then converted into purchase orders and very few invoices duly
approved by user department. are booked with only purchase requisition.

Invoices which can be booked with only purchase requisition are:

1. Professional Services: Car services, Fuel Expenses, Courier services, Housekeeping
work etc.
2. Small cost expenses: Flouriest, Sound System, Office stationary
3. Salary bills of few outsourced employees.

12
 Invoice:
A non-negotiable commercial instrument issued by a seller to a buyer. It identifies both the
trading parties and lists, describes, and quantifies the items sold, shows the date of shipment
and mode of transport, prices and discounts (if any), and delivery and payment terms.
In certain cases, (especially when it is signed by the seller or seller's agent), an invoice serves
as a demand for payment and becomes a document of title when paid in full. Types of invoice
include commercial invoice, consular invoice, customs invoice, and pro forma invoice. Also
called a bill of sale or contract of sale.
Information Required on Invoices:
1. The name of vendor
2. Address of vendor
3. Registration numbers. (VAT, TIN etc.)
4. Invoice Number
5. Date of issue of invoice
6. Name of address of company/person receiving goods or availing service
7. Description of goods and service.
8. Classification of goods and service
9. Category of the service
10. Signature of Authorized signatory
11. Date/Time/Period of service rendered.
12. Declaration about registration

13
 Capital Invoices:
Invoices raised against capital expenditures are capital invoices. Capital expenditures are for
fixed assets, which are expected to be productive assets for a long period of time.

Bill processing process of capital invoice:

Capital Proposals

Capital PR

Capital PO

Bill Processing

14
Important things to consider while processing the capital bills:

1. Liquidated Damage:
Sum of money (agreed-to and written into a contract) specified as the total amount of
compensation an aggrieved party should get, if the other party breaches certain part(s) of
the contract.

For example, if it is mentioned into purchase contract that company should finish the
specific work within given time span or it will be charged at the rate mentioned in P.O.
Which is called liquidated damage.
The amount charged is not booked by AP department, unless told by user department. To
pay the amount of LD waiver note is required.
2. Retention:
It is amount not paid by AP department if completion of work is not done. Once the work is
completed, the retention amount is booked.
3. User Approval:
All the capital procurement invoices are needs to be approved by user department for
payment.

15
 Good receipt note:
One receipt of material at factory GRN (Good receipt note) is prepared based on the actual
receipt of material. The value of material procured is automatically calculated, in the system
based on the rates mentioned in the P.O.

After preparation of GRN the invoices are delivered to AP department on next working day
for further processing.
GRN is most important for booking of any invoice for AP department. Without GRN, AP
department cannot book the invoice.

Advance Payment:
Advance is payment made to the supplier before completion of work.
Advance is paid to contractor if such terms is made in PO/contract/service providers
agreement, except in case of statutory payments such as insurance.

For capital based PO, advance is given to contractor, so that he/she will be able to
generate the fund required for completion of project, where as in case of service, it is
given as guarantee.
The percentage of advance that can be given to each contractor varies as follows:
1. Capital Tooling: 30% of PO
2. Govt. Companies: 100%
3. Annual maintenance contract (AMC): 100%
4. Statutory fees: 100%
All advances paid based on the internal policy of the company as well as per P.O. terms and
are recovered against the invoices raised.

Adjusting the advance:

Once the advance is given, it shows as debit note in vendor account. On receipt of
material and invoice is booked, the advance needs to be adjusted against the said invoice.
The adjustment of advance is a real time activity. Otherwise possibility of double
payment arises.
When an advance is given to particular vendor, then the next advance is given to the vendor,

16
only when previous advance is closed or if the permission for next advance is given by
AP Process:
Invoices coming to AP can be classified as domestic and international. Domestic invoices
can be further classified as interstate and intra state.

A. Domestic Invoices:

PO/PC

Vendor

Transport

Companys' Gate

Factory

GRN

Invoice Booking

Payment

17
Types of Domestic invoice:
1. Interstate:
Invoice raised by vendor within same state of Maharashtra
2. Intra-state:
Invoice raised by vendor outside state of Maharashtra.

The domestic invoices are booked either manually or through LIV process.
The capital invoices are booked manually where as in revenue invoices all direct material
invoices are booked through LIV and indirect material service invoices and invoices
against PR are booked manually.Taxes
Direct:
TDS/W
CT:

WCT (Work Contract Tax) is applicable where the PO is combine for material as well as on
services. WCT is applicable for the vendor within state.
What is covered under work contract:
1. Construction contract includes construction of building, roads, water purification
plant, bridge etc.
2. Other contracts, which includes installation of plant and machinery, air
conditioners, paintings & polishing etc.
Rate of deductions:
i) 2% in case of Registered Dealer ii)
5% in case of other cases

18
Booking of invoices:
LIV:
LIV stands for logistics invoice verification. By performing LIV in SAP we can book
invoices is mass within short period of time.
Each day FIAPL receives more than 800 invoices. Booking all such invoices manually is
hectic and time consuming. Hence the invoices of direct material are booked via LIV
process.
The invoices having following errors are not booked through LIV and processed manually:
1. QA not acknowledged
2. Rate difference

19
B. International Invoices :

PO/PC

Vendor

Ship

Port

Custom Clearance

Factory

GRN

Invoice Booking

Payment

20
All the import invoices are booked
manually. In total 5 invoices are booked
against 1 GRN.
1. Vendors Invoice
2. Bill of Entry (BOE)
3. Clearing agent invoice
4. Transportation
5. International Freight
1. BOE:

21
This is document prepared/submitted to customs authorities for payment of custom of
customs duty at the time of clearance of consignment. The following details are to mentioned
at the time of preparation of BOE.
An account of goods entered at a customhouse, of imports and exports, detailing the
merchant, quantity of goods, their type, and place of origin or destination. It is issued by the
customs presenting the total assigned value and the corresponding duty charged on the cargo.
Contents in bill of entry:
1. Name of supplier
2. Invoices No. & Date
3. Terms of delivery i.e. FOB/C&F/CIF
4. Country of origin
5. Reference of Bill of Lading/Airway Bill.
6. Description of material
7. Quantity imported.
8. Tariff Number.

Following duties are applicable at the time of clearance of consignment.

1) Basic customs duty (BCD):
The customs duty rate is applicable based on the tariff code & currently it is ranging
between 7.5% and 10%
Basic custom duty is applicable on imported items that fall under the ambit of Section 12 of
the Customs Act, 1962. These duties are levied at the rates prescribed in First Schedule to
Customs Tariff Act, 1975, under the terms specified in Section 2 of the act. The levied rates
may be standard or preferential as per the country of import.

2) CVD (countervailing duty):

Current rate of CVD is 12.5%, which will be 18% as IGST, in GST regime with effect from
1 July 2017.The rate observed was 12.5%
This duty is levied on imported items under Section 3 of Customs Tariff Act, 1975. It is
equal to the Central Excise Duty that is levied on similar goods produced within India. This
duty is calculated on the assessable value of goods including BCD.

22
3) Customs Education Cess:

It is calculated on
BCD+CVD It is 1%

4) SH Custom Education Cess:

It is calculated on
BCD+CVD It is 4%

5) Additional Duty (Import):

Which is calculated on assessable value + BCD + CVD + CESS
It is 4%

2. Vendors Invoice:
An invoice from a vendor is the bill that is received by the purchaser of goods or services
from an outside supplier.
At the time of preparation of GRN the rate mentioned on the BOE is considered for paying
the customs duty and the vendor invoice is valued at P.O. rate.
International Invoices are booked and paid to vendor in respective

currency. No charges are applicable on vendors’ invoice,

For calculating the applicable custom duty, we need to ascertain assessable value of the
goods
imported. The assessable value of the goods imported. The assessable value is calculated as
under.
[(Value of international invoice in foreign currency * customs notified exchange rate) +
Freight
+ Insurance + Loading/Unloading charges invoice]

*Loading/Unloading charges are 1% of basic value + freight + insurance

23
3. Forwarder/ Clearing agent invoices:
It is invoice raised by Clearing and forwarding agent.
C&F is any person who is engaged in providing any service, either directly or indirectly,
concerned with the clearing and forwarding operations in any manner to any other person
and includes a consignment agent.
It includes

1. CMC charges: This is the charge levied by the liner towards the customer for the using of
that particular container, for the purpose of repair and maintenance of that container. It
attracted by service tax.
2. Handling duty
3. Stamp duty
4. Endorsement Charges
5. Transportation (Customs dock to factory):
Transportation is done by local transporter appointed by the buyer at the agreed rate between
them.
6. International Freight:

Freight for carrying the consignment from suppliers’ port to Indian port.

Shipping terms:
These terms relate to the delivery of the goods and they will affect the price of those goods.
FOB:
FOB means Free On Board. This means that the goods will be deemed to be delivered to the
Buyer at the point that the goods pass the ship's rail. Obviously, this will normally be as the
goods are swung in their container onto the ship.
Free on board (FOB) This pricing term indicates that the cost of the goods, including all
transportation and insurance costs from the manufacturer to the port of departure, as well as
the costs of loading the vessel are read filed in the quoted price.
This means that the buyer has to bear all costs and risks of loss of or damage to the goods
from that point. The FOB term requires the seller to clear the goods for export. FOB Price
does not include Shipping freight and Insurance charges" CIF:

24
CIF means Cost, Insurance, and Freight. This means that the Seller is providing a price which
includes the cost of the goods, the insurance of the goods for their journey to their destination
port/unloading point, and the cost of the ocean freight or whichever method of freight is
being used to transport the goods to the Buyer. Therefore, delivery of the goods when quoted
CIF will usually take place at the port of unloading.
Cost, insurance and freight" means that the seller delivers when the goods pass the ship's rail
in the port of shipment. The seller must pay the costs and freight necessary to bring the goods
to the named port of destination but the risk of loss of or damage to the goods, as well as
any additional costs due to events occurring after the time of delivery, at destination are
transferred from the seller to the buyer. However, in CIF the seller also has to procure marine
insurance against the buyer's risk of loss of or damage to the goods during the carriage. CIF
Price Includes the value of goods + Shipping freight + Insurance Cost" CFR/ C&F
CFR is also sometimes termed as C&F. This means cost and freight, and is where the Seller
is providing a price which includes the cost of the goods and of the freight, but NOT
insurance.

Therefore, it is similar to CIF but does not include insurance of the goods on their journey
to the Buyer.

25
C. Other Important terms:
Debit Notes:
Debit note or debit memorandum (memo) is a commercial document issued by a buyer to a
seller as a means of formally requesting a credit note.
Debit notes at Blue Planet Solutions.are mostly issued due to following reasons:
1. Warranty:
If warranty of material provided by vendor voids, then warranty debit note is raised against
the supplier.
2. Inspection:
Debit note for cost incurred for inspection of material provided by supplier. Such inspection
is carried out by third party in presence of vendor.
3. Transport Recovery:
If any employee of vendor/service provider travels by transport facility provided by Blue
Planet Solutions., then debit note is raised against.
4. Canteen:
If any employee of vendor/service provider uses canteen facility provided by Blue Planet
Solutions., then debit note is raised against.
4. Material Rejection:
If any material is rejected for any reason, such as non-conformity to quality, material
rejection debit note is raised against that vendor.

Reconciliation:
Dictionary meaning of reconciliation is restoring of faith or friendship.
When transaction takes place between two parties, due to timing difference in booking of
entries it can happen that balance of both the parties will not match with each other. This
can create dilemma in mind of both parties. To prevent this, reconciliation is done.
In reconciliation the statement of account of vendor for Blue Planet Solutions.is matched
with the Blue Planet Solutions’s statement of account for given vendor. Ideally both
statements should match. But due to various reasons, few times it does not match.

26
The reasons can be one or more of the following:
1. Debit notes issued are not booked by vendor.
2. The invoice raised are still not received by Blue Planet Solutions..
3. Invoice sent at end of month are processed in next month, in this case also balances will
not match.

Depending on the quantum of business with the vendors, reconciliation is done monthly,
quarterly or even annually.

Supplementary Invoices:
In case of upward revision in the PO rates with retrospective effect, supplementary invoices
are raised by vendor.
On the receipt of supplementary invoices from vendor the same is processed based on the
liability/credit available against the said PO/GRN

27
 Cash Module:

a) Determining cash requirement:

Here as the administrative office & unit are at different places, the cash requirement decision
at both the places is taken by different authorities.
At the administrative office the Senior Commercial Executive is responsible for determining
the minimum cash requirement.
At the unit the plant manager decides whether more cash is needed for operations.

b) Maintenance of Petty Cash:

Minimum cash maintained in the administrative office is Rs. 10000/-. The cash box is under
the supervision of the accounts head. The balance is checked on a daily basis. The cash book
is also maintained by the accounts head.
In case of cash being below the minimum level, the Senior Commercial Executive has the
authority to approve cash withdrawal from the bank.
Minimum cash maintained at the units is Rs. 30000/-. The cash book here is maintained by
the Stores head/ factory assistant. In case of cash being below the minimum level a verbal
intimation is made by the plant manager to the Senior Commercial Executive at the
administrative office.

c) Disbursement of Cash and Documentation:

Cash Payment Vouchers are prepared by the accounts head and these payments are
authorized by the senior commercial executive.
The factory cash expense vouchers are sent to the administrative office along with the
monthly list of expenditures. The vouchers are prepared by the factory assistant and
authorized by the plant manager. These vouchers are also stored in the administrative
office.
After the approval of the senior commercial executive cash is sent to factory as and when
needed.
In this case 2 vouchers are prepared. Cash receipt voucher for the bank withdrawal and cash
payment voucher for cash disbursement to the factory.

d) Reimbursement to employees:
Any amount to be paid to employees for office expenses has to be first approved by the V.P /
M.D. The employee is reimbursed for his extra expenses only after providing the proper
supporting documents. In absence of
Proper supporting documents the expenses are debited to the employees account.

28
e) Accounting treatment:
In case of cash being sent to factory
Factory Cash A/c Dr.
To Cash A/c
( being cash transferred to factory petty cash)

In case of expenses being paid through cash:

Expenses A/c Dr.

To Cash / Factory Cash A/c

In case of Employee being given advance for expenses

Employee s A/c Dr.

To Cash A/c
(being cash paid to employee for . In advance)

Supporting Documents produced

Expenses A/c Dr.

To Employee s A/c
(being employee paid for ____expenses through advance already given)

Bank Module:

a) Bank receipts procedure:

All the bank receipts methods and procedures are already mentioned in one of the above
modules.

b) Inter-Bank / Inter Branch transfers:

A credit advice is sent by the bank to the office. A journal voucher is made by Account
Executive. An entry is made against this voucher. (No base Document)
Bank receipt voucher
This voucher is prepared by accounts executive.
The Voucher contains the following details:

1. Account Head
2. Code
3. Sub code
4. Narration
5. Amount

The actual bank advice is stored in the BANK VOUCHER FILE.

This file contains both: bank payment voucher and bank receipt details.
29
The voucher has the JOURNAL ENTRY no. written on it on the right top corner.
The intimation of fund transfer is given via telephone only. There is no base document for
this transfer.

Accounting Entry for this transaction:

The Lark Goa bank ledger account is debited and the branch account from which the fund is
transferred is credited.
This is done only after intimation is received or an advice is received from the bank.

c) Maintenance of documents:
All the bank vouchers are stored in each bank s voucher file. All the bank advices are also
attached with the respective voucher.
All the covering letters received from the customers are stored in respective customer
correspondence file.
The L.Cs are stored in separate L.C files.
The discounted bills of exchange are also stored in different files.

d) Bank Payment Procedure:

All the bank payment procedures are mentioned in one or more of the above modules.

e) Reconciliation:
Bank reconciliation is done by the accounts executive at the end of every month.
Reconciliation report is stored in the respective bank statement file.

30
 Chapter 4

Data Analysis and Interpretation

A. Introduction:
The definition of an aged accounts payable report is to place all of the unpaid invoices into aging
buckets.
Usually, these buckets are as follows:
Current (i.e. under 30 days)
31-60 days
61-90 days
>90 days

The age of any given invoice is determined by taking the current date (usually, this is as of the end of
the month, but the report can be run at any time for management purposes) minus the due date.
The report is for management purposes and to manage cash flow as well as reasoning for overdue
outstanding for those companies with liquidity issues.

31
 Analysis of Aging of Accounts Payable Report:

Vendor Code: 5105

Vendor Type: Domestic

5105
6

0
Jan Feb March April May

0-30 31-60 61-90 >90

(figures in million₹ )

0-30 31-60 61-90 >90

Jan 5.2 0 2.1 1.2

Feb 5.5 0 0 1.2

March 5.4 1.6 0 1.2

32
April 5.3 1.3 1.6 1.2

May 5.4 0 0.7 1.2

On an average AP books invoice of around 5million. Most of the invoices are paid within 30 days. In
month of March, invoice of ₹1.6 million is in basket of 31-60 days and the same amount is in 61-90
days for month of April, as the amount is same and significant, we can say that reason is either
retention or invoices are pending for user approval.

In month of April, invoices of ₹1.3 million are pending, out of which only of 0.7 are in 6190day
basket. Hence reason can be LD/retention is applicable for the said invoice.
In basket of >90days, the invoices of 1.2 million are not booked. It can be due to addition of
LD/retentions.

Vendor Code: 4072

Vendor Type: Domestic

4072
14

12

10

0
Jan Feb March April May

0-30 31-60 61-90 >90

0-30 31-60 61-90 >90

Jan 12.1 2.7 0.3 0.3

Feb 10.4 3.1 0 0.4

March 11.2 2.4 0.05 0.45

April 9.3 1.4 0 0.45

May 12.7 2.1 0 0.45

(figures in million₹)

33
On an average AP books invoices of 11 million from given vendor, out of which 80% gets booked
within span of 30 days,

Very few amount of invoices goes into 61-90 days’ basket. Here invoices worth 3 lakhs rupees were
in basket of 61-90 days. Out of which 2 lakhs rupees’ invoices are booked and only invoices of 1 lakh
rupees’ gets are still spending and hence goes into >90-day basket.

Similarly, in month of March, invoice of 50,000 is not booked. The reason can be LD/retention. And
hence such small amount is not paid by company as LD/retention.
Also, it can be observed that, once invoice comes into >90-day basket, the invoices in this basket are
not paid regularly.

Vendor Code: 1007

Vendor Type: International

0-30 31-60 61-90 >90

Jan 137.2 91.3 11.2 2.1

Feb 145.5 94 4.3 2.1

March 147.4 89 5.2 2.4

April 141.2 103 5.7 2.4

May 135.3 95 8.3 2.4

(figures in million₹)
On an average AP books invoices of 137 million from given vendor, out of which less than 50% gets
booked within span of 30 days,

Most of invoices goes into 61-90 days’ basket. This is due to fact that, import takes time and hence it
takes time to book the invoices

34
The import is mostly from the sister companies of FCA such as FCA Brazil or FCA Detroit.
Also, it can be observed that, once invoice comes into >90-day basket, the invoices in this basket are
not paid regularly.

Chapter 5

OBSERVATIONS & FINDINGS

Blue Planet Solution is growing software development company and has manufacturing units
at different locations. During my project work I observed that there is no such controlling
authority for accounts to all units.

Considering the growth of company accounting software FME which is currently in use
needs to be changed. The software FME has limited usage considering the increasing
turnover of company and various reports required for managerial decisions.

Customer order processing software LOTS which is used to track orders, production
planning, invoicing, dispatch, finished goods stock etc., it deals only with sales order
processing. It is a helpful software but it has certain limitations also. using FoxPro base
developed software for maintenance of finished stock inventory.

There is no any specific software for maintaining Raw Material and Consumables Inventory
in all units.

Information Network of company required effects of business transactions which should be

immediately visible in various reports and same set of records is available to every one at
same instant across the organization.

35
36
 Conclusion

• Accounts Payable is important part of a company. In my internship I tried to

understand the Account Payable Process at Blue Planet Solutions.

• Also I tried to understand aging of accounts payable for few vendors.

• In my internship project I have developed my soft skills, way of behaving in a
corporate office and positive attitude towards work and so life. It gave me great
experience of handling pressure like here in this case making of payments to
vendor on time, and if gets delayed then dealing with it.
• A great percentage of hesitation within me evaporated while interacting with
senior executives of the corporate, but important thing is, I developed building
bond and establish rapport for building up relations with people.
• During internship I learned about the corporate rules.
• In GST there is no differentiation between Goods and Services. GST will
subassume Central excise, Service Tax, VAT, CST, Customs, CVD etc. It
would reduce tax burden on producers and foster growth through more
production.

37
 Chapter . 7

LEARNING OF THE STUDENT THEROUGHT THE

PROJECT.

LEARNING OF THE STUDENT THROUGHT THE PROJECT.

Today's anytime-anyplace work environment demands sophisticated communication

skills, a flair for teamwork, respect for diversity, a talent for ad hoc decision-making and good
project- management skills. Whether it is an entrepreneur launching a new product, an architect
unveiling a new building, or a photo journalist introducing a new exhibit, people in business
and industry around the globe are achieving remarkable accomplishments one project at a time.
"Today’s education system faces irrelevance unless we bridge the gap between how
students live and how they learn. "To address this need, a growing number of innovative
education systems around the United States and worldwide is engaging their students in
project-based learning. Project-based learning, often called PBL, is an instruction methodology
in which students learn important skills by doing actual projects. Students apply core academic
skills and creativity to solve authentic problems in real world situations. Students use a wide
range of tools and the culminating projects are tangible and observable "artifacts" - that serve
as evidence of what the students have learned. Student- produced videos, artwork, reports,
photography, music, model construction, live performances, action plans, digital stories and
websites are all examples.

Project-based learning is based on the "constructivist" learning theory, which finds

that learning is deeper and more meaningful when students are involved in constructing
their own knowledge. Students are given the opportunity to select a topic that interests them
within the required content framework and then they are responsible for creating their
project plan, Rather than a lecture, typically, the teacher's role is that of an academic
advisor, mentor, facilitator, "task master" and evaluatevaluato

38
 Chapter 8

BIBLIOGRAPHY

References

• Company profile- Company official website,

• Wikipedia
• http://blueplanetsolutions.com/
https://en.wikipedia.org

• Financial terms- Investopedia http://www.investopedia.c

39
40