Sap tally bills consession

regarding entries regarding d expenses f al d branches f indiabulls in excel n posting in sap...... checking al d bills..........finding errors....... n 2 see everything is done within d rules f d co... i.e. d relaxation.........
APAR industries is an electrical and chemical industry Produce products like aluminum conductors and some oils. PROJECT ON EXPENSE MNAGEMENT documents..verify..dupication..feed excelbdc(batch data collection) finance manager

A summer training report On

EXPENSE MANAGEMENT AT INDIABULLS , GURGAON

Submitted in the partial fulfillment for the award of Masters degree in Business Administration

Under the guidance:

Mr. Atul Gupta Miss Parul Bansal

submitted by:
Archana MBA

Indiabulls financial services limited

Indiabulls Financial Services Limited (IFSL) is one of the Indias leading Non-Banking Finance Companies (NBFC) which is primarily into extending retail and commercial loans and distribution of third party products.The lending business of IFSL is rapidly growing with loan assets (including assets managed by the company) of over Rs. 10000 crores as of March 31,2008 .IFSL, together with its subsidiaries and associate companies offers a varied product suite to its customers in the areas of consumer finance , vehicle loans , small business enterprise loans , home loans , loan against properties , commercial credit , loan against shares and providing loans toward Initial Public Offering ( IPO) financing for customers , etc. Indiabulls Financial Services Limited was incorporated on January 10, 2000 as M/s Orbis Infotech Private Limited at New Delhi under the companies Act,1956 with Registration No. 55-103183.The name of the company was changed to M/s Indiabulls Financial Services Private Limited on March 16,2001 due to change in the main objects of the company from Infotech business to investment & Financial Services business.It became a Public Limited Company on February 27,2004 and the name of company was changed to M/s Indiabulls Financial Services Limited. IFSL shares were listed on Indian Stock Exchange in September 2004.In 2006, pursuant to a restructuring and reorganization of its businesses, the company demerged its real estate business into a separate listed entity , Indiabulls Real Estate Limited ( IBREL ).In 2007, pursuant to a restructuring and reorganization of its businesses , the company demerged its securities business into a separate entity , Indiabulls Securities Limited ( ISL ). Indiabulls Financial Services Ltd ( IFSL ) is registered with Reserve Bank of India ( RBI ) as a Non-Banking Finance Company ( NBFC ) and categorized under the systemically important category of NBFCs.

Growth Story of Indiabulls

2000-01

Indiabulls Financial Services Ltd. established Indias one of the first trading platforms with the development of an in house team.

2001-03

Indiabulls expands its service offerings to include Equity, F&O, Wholesale Debt, Mutual fund, IPO distribution and Equity Research. Indiabulls ventured into Insurance distribution and commodities trading. Company focused on brand building and franchise model.

2003-04

2004-05

Indiabulls came out with its initial public offer (IPO) in September 2004. Indiabulls started its consumer finance business. Indiabulls entered the Indian Real Estate market and became the first company to bring FDI in Indian Real Estate. Indiabulls won bids for landmark properties in Mumbai.

2005-06

Indiabulls has acquired over 115 acres of land in Sonepat for residential home site development. Merrill Lynch and Goldman sac, one of the renowned investment banks in the world have increased their shareholding in Indiabulls. Indiabulls is a market leader in securities brokerage industry, With around 31% share in online trading, Farallon Capital and its affiliates, the worlds largest hedge fund committed Rs. 2000 million for Indiabulls subsidiaries Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd. acquired 8.2%

stake.

Entered in a 50/50 joint venture with DLF, Kenneth Builders & Developers (KBD). KBD has acquired 35.8 acres of land from Delhi Development Authority through a competitive bidding process for Rs 450 crores to develop residential apartments. Indiabulls Financial Services Ltd. is included in the prestigious Morgan Stanley Capital International Index (MSCI). Farallon Capital has agreed to invest Rs. 6,440 million in Indiabulls Financial Services Ltd. Indiabulls ventured into commodity brokerage business. Indiabulls has received an in principle approval from Government of India for development of multi product SEZ in the state of Maharashtra. Dev Property Development Plc., has subscribed to new shares and has also acquired a minority shareholding from the Company.

Management of IFSL
The company was promoted by three engineers from IIT Delhi. Sr.No. Name Designation

1. 2. 3.

Mr. Sameer Gehlaut Mr. Rajiv Rattan Mr. Saurabh Mittal

Chairman & CEO Vice-Chairman Director

Key Executive Officers

Name
Mr. Gagan Banga Mr. Amit Talgeri Mr. Mukesh Garg Mr. SK Vishwanath Mr. Kamal Batra Mr. Sachin Chaudhary Mr. Manish Rai Mr. DN Balasubramanian Mr. Omdutt Sharma Mr. Ajay Gupta Mr. Rajesh Menon Mr. Gaurang Chandarana Mr. Anil Malhan Mr. Tejinderpal Singh Miglani Mr. Ashok Sharma

Designation
Chief Executive Officer Chief Operating Officer Chief Finance Officer Insurance business head Commercial credit business head Head of Underwriting for Mortgages Head of Commercial Vehicles Business Part of central strategy team Operations Head Risk Head Collection Head Collection Head Chief Administrative Officer Chief Technology Officer Group Officer

Shareholding pattern of the Company ( as of the Company

)

Sr.No. Name of the Shareholder 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Sameer Gehlaut Rajiv Rattan Saurabh Mittal Oberon Limited Merill Lynch Capital Markets Espana S.A.S.V. Farallon Capital Partners L.P. Citigroup Global Capital Markets Mauritius Private Limited CLSA(Mauritius) Limited LNM India Internet Ventures Limited Farallon Capital Intitutional Partners L.P. Goldman Sachs Investments (Mauritius) Ltd.

Shareholding Percentage 14.84 7.41 7.49 4.54 3.97 3.92 3.28 3.05 2.94 2.66 2.24

12. 13. 14. 15. 16.

Quantum (M) Limited Orient Global Tamarind (Mauritius) Limited Deutsche Securities Mauritius Limited Smallcap World Fund, Inc. OTHERS TOTAL

2.22 2.04 1.69 1.69 36.02 100

Financial Results of Indiabulls Financial Services Limited

Indiabulls Financial Services Limited Balance Sheet as at March 31, 2008 As at March 31, 2008 Amount (Rs.) Sources of Funds Shareholders' Funds Share Capital Share Warrants (Refer Note B 5(b) of Schedule 18) Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability (net) (Refer Note B 18 of Schedule 18) Total Application of Funds Fixed Assets Gross Block 2,075,507,697 28,861,353,394 30,936,861,091 35,595,696,918 73,380,000,000 108,975,696,918 252,109,983 140,164,667,992 524,091,257 As at March 31, 2007 Amount (Rs.) 3,844,150,810 134,900,000 9,593,908,314 13,572,959,124 1,502,855,660 7,301,039,726 8,803,895,386 22,376,854,510 183,005,033

Less: Depreciation / Amortisation Net Block Capital Work in Progress/ Capital Advances Investments Deferred Tax Assets (net) (Refer Note B 18 of Schedule 18) Current Assets, Loans and Advances Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Total

93,080,044 431,011,213 18,104,045 449,115,258 3,106,125,000 -

15,630,308 167,374,725 20,453,697 187,828,422 7322482621 56,698,614

73,189,303 69,400,911,152 743,713,859 77,909,044,740 148,126,859,054 7,138,992,343 4,378,438,977 11,517,431,320 136,609,427,734 140164667992

75,448,000 1,645,656,403 16,093,713 14,278,509,242 16,015,707,358 184364862 1021497643 1,205,862,505 14809844853 22376854510

INTRODUCTION OF THE STUDY UNDERTAKEN

Expense management

Manual time and expense reporting can be inefficient and inconsistently controlled. As a result, it reduces employee productivity and can translate into unnecessary costs. An automated system for managing your employee expenses supported by strong internal controlscan save you time and money.With Expense Management, you can streamline and control the entire expense reporting process including expense entry, reimbursement, approval, and auditand ensure the timely and accurate reimbursement of employee expenses. The system captures complete and accurate data at every step and database-driven workflow eliminates misrouted or lost documents, giving you greater security, reliability, and document control. Employees and managers are notified by email of documents that require their attention. Expense Management allows you to monitor and track spending with preferred suppliers and leverage this information to negotiate improved travel-related contracts and benefits for your employees. And, by using built-in control features, you can increase compliance with corporate expense policies and ensure the accurate reporting of employee expenditures. Expense Management automates the process of entering, approving, and auditing expense reports, your employees enjoy prompt and accurate payments. You also save time and further improve the accuracy of expense tracking by applying employee credit card transactions directly to expense reports. Full integration with core financial systems streamlines the expense processing function, eliminates the cost and errors associated with duplicate entries, and provides faster cycle times for employee reimbursement. Expense management improve accuracy and control over employee expenses Depending on your companys needs, your employees may have to comply with multiple expense reimbursement policies, each one outlining different rules on tracking, managing, and reporting expenses incurred while doing business. Expense Management allows you to set up multiple expense categories, define audit limits, and establish expense receipt requirements.

With Expense Management, you can establish customized payment processing and approval rules to ensure adherence to corporate reimbursement policies. If a policy limit is exceeded or if information is missing or inaccurate, you receive an immediate error notification so that you can proactively work with the employee to address the situation. By using built-in control mechanisms to automatically enforce policy rules and limits, you gain control over all travel and entertainment-related spending. By streamlining the expense reimbursement process, accurately tracking preferred supplier spending, and enforcing travel policies, Expense Management improves control and creates substantial cost savings for your organization. Feature/function Highlights Processing of business expenses Consistent user interface Simplified data entry for expense reporting Configuration reimbursement process steps User defined per diem functionality Workflow approvals Automatic exception notification Auditing capabilities User-defined policy definitions Multiple employee authority Individual or group employee profits Customized reimbursement policies Location specific policies Multicurrency capabilities Ability to charge to multiple business units VAT calculations Ability to import expenses from offline reports Direct employee reimbursement Direct credit card company reimbursement

PRODUCT RANGE

HOUSING LOAN

BUSINESS & SME LOAN PRODUCT RANGE

COMMERCIA L CREDIT

COMMERCIA L VEHICLE LOAN

LOAN AGAINST PROPERTY

Business & SME Loans The Company offers business loans, considered as a retail product, to address the borrowing needs of the community of small businessmen by offering facilities such as credit lines and term loans for expansion and/or addition of facilities and other business purposes. The average maturity for such loans is 36months. The Company does a detailed credit analysis and appraisal for each of these customers financials,

cashflows, bank statements and assets. The company entered this business in September 2007 and has a portfolio of over Rs. 1700 crores as of March 2008. Commercial Vehicle Loans The Company provides secured financing for commercial vehicle and tractors to customers such as truck operators and farmers. The average maturity for such loans is 36 months. This product was introduced in early 2006 and the current portfolio is over Rs. 400 crores as of March 2008. Housing Loan The Company offers housing loans at floating rates to both customer segments (credible salaried and selfemployed persons). The average maturity for loans offered is 10-12 years. Loan against Property The Company provides business loans to address the borrowing needs for self-employed segment by offering term loans for expansion and/or acquisition of business and other business purposes. The lending is secured by way of equitable mortgage of properties (both residential and commercial). The average maturity for such loans is 10-12 years. Commercial Credit The Company provides business loans to the mid-size corporates and companies for expansion and/or acquisition of business and other business purposes. The lending is typically secured with current assets as well as immovable property and fixed assets in some cases. The average maturity of such loans is 12 months.

EXPENSE MANAGEMENT AT INDIABULLS

Now we study some of the expenses which are incurred at INDIABULLS.and what type of expenses they are Coverage of expenses

1. Traveling expenses 2. Client verification chargesa. FCU charges b. Valuation expenses c. Legal verification d. Lip charges e. FCI charges f. Repossession charges g. Revaluation charges h. Parking charges 3. Advertisement expenses 4. Credit rating fees 5. Repair and maintenance 6. DSA Special Incentive 7. ECS charges 8. Rent 9. Egm expenses 10. Telephone expenses 11. Internet expenses 12. Salary expenses 13. Gratuity expenses 14. Incentive expenses 15. ESI expenses 16. Epf expenses 17. Interest on car loan 18. Audit fee 19. Bad debts 20. Loss on fixed assets 21. Interest expenses 22. Water expenses 23. Tea expenses 24. Petty cash 25. Electricity expense 26. Postage & courier expense 27. Printing & Stationery 28. Xerox charges 29. Fax charges

NATURE & PROCESSING OF EXPENSES

TRAVELING EXPENSE
These type of expenses are incurred by the employees of the company who do the official traveling.An amount is paid to these employees which has been

reimbursed by them.There is a travel policy, according to it the amount would be paid to the employee of company.

Travel policy
This policy is applicable to all employees in all functions only for official travel outside city limits/locations. Detailed travel plan for the month should be approved by the business head/function head at the beginning of the month. In the case of day travel , the expense limit is 25%. The expense limit includes hotel , food , taxi , and telephone expenses incurred at the place of visit. In case employees do not submit bills for hotel & food 25% of per day limit would be paid per day. All travel claims need to be sent along with original bills & original boarding pass/ticket along with approval ( hard copy or mail ) Use of own vehicle for conveyance travel. Vehicle registration no. should be provided with the claims.

Process Overview

Process Workflow and Key Controls

7. Employee Reimbursements 7A. Verification of claim by Finance A. Verification of claim by Finance 1. Finance Executive: Receives the Expense Claim Form (Refer Annexure 1) along with appropriate approvals and supporting documents from employees, either through courier or hand delivery Stamps the Expense Claim Form and updates Finance Control Sheet with claim details. 2. Finance Executive performs following key checks on the Expense Claim, as per defined checkpoints (Refer Annexure 2) (Key Control): Verifies if Expense Claim Form is completely and properly filled by the employee Verifies if expense is approved as per Authority Matrix (Refer Annexure 3) and Expense Reimbursement policy (Mobile / Travel / Conveyance) / Relocation policy (Refer Annexure 4) Verifies if appropriate supporting documents are attached* Validates if invoice more than 60 days old is approved by the CEO *Note: Following are acceptable supporting documents for Employee Reimbursement related claims: Original mobile / hotel bill Exception approval by Business Head in case of duplicate bill Annexure providing journey details Relocation details (relocation address, date of joining etc) in case of relocation allowance 3. If all documents are not complete as per defined supports and / or appropriate approvals do not exist as per authority matrix and in accordance with Expense Reimbursement policy, Finance Executive follows-up with the employee for missing documents / approvals. If the employee is unable to provide requisite documents / approvals, the expense is rejected by Finance. 4. If all documents are complete and appropriate approvals exist, Finance Executive performs:

7B. Accounting in SAP and claim disbursement

Note:

Duplicate payment check (Key Control). (i.e. same vendor number with same amount for an expense type processed twice in the same month) Active employees check, based on updated employee data received from HR (Key Control). (i.e. if the claimant is still active with the company or has already resigned) When CBD will be implemented for employee reimbursements, claims will first be received by CBD and then forwarded to

7A. Verification of claim by Finance

respective Finance Executive / Officer. B. Accounting in SAP and claim disbursement

1.
7B. Accounting in SAP and claim disbursement

Finance Executive prepares a BDC of reimbursement details, e-mails the BDC and submits all Expense Claim Forms along with supporting documents to Finance Officer, as per Reimbursement Schedule (Refer Annexure 5). If it is a duplicate payment / inactive employee, Finance Executive rejects the expense.

2.

Finance Officer verifies all Expense Claim Forms, uploads the BDC (Refer Annexure 8) in SAP and e-mails log file back to the Executive. Accounting entry is posted in SAP (Refer section IV for accounting entries). Note: In case of travel reimbursement, individual claims are processed in SAP through the park and post method (i.e. Finance Executive parks the entry and AM verifies and posts the entry in SAP). 3. 4. Finance Executive: Prints journal voucher from SAP Attaches respective Expense Claim Form with the journal voucher Prepares a payout sheet with bank account details E-mails the payout sheet and submits all journal vouchers to Finance Officer for verification Finance Officer / AM : Performs a count check on the payout sheet (i.e. tallies the number and value of items in the BDC file against the same in payout sheet) In case of travel reimbursement, verifies payout sheet against journal voucher. (Key Control) Verifies bank account details of employees against the data received from HR (Key Control) Submits the payout sheet along with journal vouchers and obtains signatures of bank signatories on the payout sheet (Key Control) Prepares a Bank Letter along with supporting annexure Submits the Bank Letter, payout sheet, supporting annexure and vouchers to AM Finance for verification

5. AM Finance verifies employee and bank account details in the annexure, initials the annexure and submits all documents to AVP Finance. 6. AVP Finance verifies the annexure, signs the Bank Letter and annexure and submits all documents to bank signatories.

7.
8.

Bank signatories sign the Bank Letter and annexure, after tallying details with the approved payout sheet (Key Control). AM Finance e-mails the annexure and hand

delivers hard copy of the Bank Letter annexure to the Bank. 9. Field boy delivers the Bank Letter and annexure to the Bank and obtains bank stamp on copy of the Bank Letter.

10.

Finance Officer files the stamped copy of Bank Letter for record (for a period of 7 years). 11. end Submission of Finance Control Sheet at month-

Finance Officer updates the Finance Control Sheet (Refer

Annexure 6) on WD+15 of each month, providing an expense-wise update on invoices reimbursed. Annexure 7) for management review and further action, highlighting the number of invoices more than 60 days old, that were processed during the period.

Finance Manager prepares a Monthly Expense Metrics (Refer

Note: All employee reimbursements are credited to respective employees salary account. No expense is reimbursed either through cheque or in advance, as a normal process.

Key Accounting Entries

Stage of posting entry in SAP At the time of recognizing liability Traveling Expense Boarding and Lodging Expense Air Traveling Expense To Employee (vendor) At the time of disbursing payment Employee (vendor) To Bank GL Head Dr. Dr. Dr. Cr. Dr. Cr. SAP Code 58040004 58040037 50100174

Annexure
1. Expense Claim Form 2. Checkpoints 3. Authority Matrix 4. Expense Reimbursement Policies 5. Expense Reimbursement Schedule 6. Finance Control Sheet 7. Monthly Expense Metrics 8. Mandatory Data Fields for SAP narration

1.Expense Claim Form

2.Finance Control Sheet

3.Mandatory Data Fields for SAP narration Following fields are mandatory to be recorded in SAP, as part of narration:

Invoice Number (in Reference field) Invoice Date (in Document Date field) Period of Expense (in Narration field) Nature of Expense (in Narration field) Branch Name (in Cost Center field) Product (in Narration field)

CLIENT VERIFICATION CHARGES

Many customers apply for the loan to company.Then the company does client or customer verification.whether to issue loan to the client or not.The expenses incurred in the client verification are referred as client verification charges. Client verification charges include following charges-------1. 2. 3. 4. 5. FCI charges Valuation charges Legal verification charges LIP charges FCU charges FCI charges ( field credit investigation ) This part include the verification of address, contact ,office ,bank statement , salary statement etc.and the expenses incurred in these verifications are called as FCI charges. Valuation expenses This part includes valuation of property which the customer has been claimed.The expenses incurred in the valuation are referred as valuation expenses. Legal verification charges The company verifies has the customer taken loan from other institutions or not? Are the EMI s continous or not ? LIP charges ( liquid income profile ) This part includes the verification of the customers current income. The expenses incurred in this type of verification comes under LIP charges. All the above verifications are done by the vendors hired by the INDIABULLS. After doing verifications , vender do claim its expense amount.

Process Overview

Key Accounting Entries

Stage of posting entry in SAP At the time of recognizing liability GL Head SAP Code

LIP Charges/ Valuation Expenses/ Legal Verification Expenses/ FCU (Fraud Control Unit) Charges/ FCI, Tvr and Other charges/ Repossession Expenses/ Parking Expenses/ Revaluation Expenses/ Legal Expenses To Vendor To TDS

Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Dr. Cr. Cr. Dr. Dr. Cr.

62000020 62000012 62000019 62000010 62000009 58241027 50100069 58241026 58040013

At the time of making vendor payment

2) Service Tax Refund 3) Vendor To Bank

4. Checkpoints

5.Branch Control Sheet

Appropriate Department Control Sheet

finance Control Sheet

REPRIR AND MAINTENANCE

Following are expense items covered under the Expense Group Repairs and Maintenance Office Maintenance AMC Software AMC Hardware Computer AMC Hardware Generators AMC Air Conditioners Repair & Maintenance The AMC is made on the day, month & year specified in the schedule to this agreement between the two parties : company and the service provider. The company here by appoints the service provider & the service provider here by accepts the appointment to render the services more fully described in the agreement to the company. The schedule also sets out an estimate of the expenses that the service provider would incur in rendering the services which the company has agreed to reimburse. The service provider carries on the business of providing certain kinds of services that are more fully described in the agreement and for the providing of which the service provider has been engaged by this company under this agreement and has represented to the company that it would be able to render such services in a timely , efficient and professional manner.

Process Overview

Key Accounting Entries

Stage of posting entry in SAP At the time of recognizing liability GL Head PO-backed invoices 1. GR/IR Service Tax (Input Clearing) To Vendor To TDS 2. Expense To GR/IR 3. Vendor To Bank 4. Service Tax Refund To Service Tax Clearing PO-backed invoices (AMC) 1. GR/IR Service Tax (Input Clearing) To Vendor To TDS 2. Service Tax Refund To Service Tax Input Clearing 3. Expense To GR/IR 4. Vendor To Bank Non-PO backed invoice1. Expense Service Tax Clearing To Vendor 2. Vendor Dr. Dr. Cr. Dr. Dr. Dr. Cr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Dr. Cr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. SAP Code

To Bank 3. Service Tax Refund To Service Tax Clearing Expense Codes 1) Expense (Office Maintenance) Expense (Security Charges) Expense (AMC Software Expenses) Expense (AMC Hardware Computer) Expense (AMC Hardware Generators) Expense (AMC Air Conditioners) Expense (Repair & Maintenance) Expense (Computer Repair)

Cr. Dr. Cr.

58165006, 50100036 58242001 50100044 50100045 50100047 50100048 50100051 58040024(IFSL, ICL),62100049(IHFL)

Branch Control Sheet

Finance Control Sheet

COMMUNICATION EXPENSES
Following are expense items covered under the Expense Group Communication: Postage and Courier Charges MPLS Charges Telephone Expenses (Fixed/WLL) / Mobile Internet bandwidth

Process Overview

ADVERTISEMENT EXPENSE
There is a team in MUMBAI branch of INDIABULLS which look after all the advertisement decisions. The advertisement companies are hired by this team.The amount paid for the advertisements are decided by this team. Also the decisions about nature of the advertisement i.e television , magazines or hoardings etc. are taken by this team. After providing services , the advertisement company raise the bill to the company of the specified amount.

Process Overview

Checkpoints

6.Marketing Control Sheet

finance Control Sheet

STAFF WELFARE EXPENSES

Following are the expense items covered under the Expense Group Staff Welfare Staff Welfare Recruitment and Training Tea and Refreshments Water Staff Welfare Conference Expenses Incentives

Process Overview

Checkpoints

7.Branch Control Sheet

DSA Special Incentive

The company appoints some vendors. And these vendors provide customers to company. After verification , the company would issue loan to the customer. Before providing customer to the company, vendor and the company comes to an agreement. These vendors provide customers to the company and do charge some commission from company. The commission rate of these vendors will be decided in the agreement and the commission rate depends on the loan amount that has been issued to the customer ( the customer provided by the vendor ) .

Process Overview

CREDIT RATING FEE

What is CREDIT RATING ? A credit rating assesses the credit worthiness of an individual , corporation , or even a country. Credit ratings are calculated from financial history and current assets and liabilities. A credit rating tells a lendor or investor the probability of the subject being able to pay back a loan. A poor credit rating indicates a high risk of defaulting on a loan , and thus leads to high interest rates , or the refusal of a loan by the creditor. CREDIT RATING AGENCIES In United States , the main credit bureaus are Experian , Equifax , Transunion. In United Kingdom , the main credit reference agencies for individuals are Experian , Equifax and Callcredit. There is no universal credit rating as such , rather each individual lendor credit scores based on its own wish list of a perfect customer. In INDIA , the main credit bureaus are CRISIL , ICRA and CRD (Credit Registration Office ) .The largest credit rating agencies (which lend to operate world wide ) are Moodys , Standard and Poors and Fitch ratings. So , these agencies do charge some fees for providing services.This fee is referred as CREDIT RATING FEE. Therefore it is regarded as an expense for the company.

ECS CHARGES Electronic clearance system

INDIABULLS maintain a proper EMI system after issuing loan to the customer. For an effective EMI system has hired some vendor i.e TECH SOLUTION. A proper description about the customer is being forward to the TECH SOLUTION. After getting information , TECH SOLUTION verifies all the transactions from customers bank. After verification , TECH SOLUTION forward invoice having information regarding verified transactions to HO. Operation department do confirm all the transactions. After that the claimed amount would be paid to the TECH SOLUTION.

ESI expense Employee state insurance

INDIABULLS get registered itself under the govt. After that the do insurance of all its employees. This is referred as EMPLOYEE STATE INSURANCE. The employee contribution remains 1.75% of gross salary. And the

employers contribution remains 4.75% of gross salary. Therefore employers contribution is taken as expense for the company.

Epf EXPENSE Employee provident fund

In employee provident fund , the employees contribution remains 12% of the basic salary . And the employers contribution also remains 12% of the basic salary. So , employers contributions referred as an expense for the company.

GRATUITY EXPENSE
The gratuity is paid to those employees of the company who has been working for the company since 5 years. Therefore , this would be referred as an expense for the company.

FINDING AND ANALYSIS

Objective of developing standard operating procedure

Key objectives of developing standard operating procedures around the process of expenses processing are: Ensuring employee reimbursement claims are in accordance with Expense Policy Enabling accounting of payments and liabilities at correct amounts, in correct accounts, in correct accounting period and based on appropriate authorization Enabling efficient receipt of goods / services in accordance with Purchase Order raised / Vendor Agreement Ensuring timely and accurate reimbursements to employees Ensuring timely and accurate payments to vendors Ensuring timely and accurate payments to regulatory authorities Ensuring compliance to applicable laws and regulations

Authorization matrix of expenses payments of INDIABULLS

Expen se Appro val

Exp/ CAPE Nature X/ of Statut Expenses ory Paym ent Credit Rating Fees/ Opinion

Categor y of Expense s

User

Exp

Business Exp

CEO

Dep Head

Payment Approval Final Approval Cont rol Finance Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac VP CFO > 1 Fin Lac

Travellin g Exp

Exp

Business Exp

EVP / CEO

VP SM Fin

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac

Advertise ment Expenses

Exp

Business Exp

CEO

VP Mkt SM Fin

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac

FCI Charges

Exp

Business Exp

Risk Head/ Ops Head

VP Risk / Ops

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac SM Fin

VP Ops ECS Charges Exp Business Exp Ops Head SM Fin Commiss ion and Brokerag eMarketin g Associate s

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac

Exp

Incent/C omm

CEO

Process/ CFO Ops

Sr Mag CEO <50k, VP Fin <1Lac, CFO > 1 Lac

Staff Welfare

Exp

MRE As per Agree ment

SM Adm

SM Fin

Sr Mag <50k, VP Fin <1Lac, CFO > 1 Lac

Om Singh < 1 Lac, Group CAO & CEO > 1 Lac

ESI

Exp/R ec

Statutory Payment s VP Fin

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac SM HR VP Fin

Telephon e Expenses

Exp

MRE As per Agree ment

SM Adm

SM Fin

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac

Repairs & Maintena nce Vehicle

Exp GRE VP Admin SM Adm VP Adm

Sr Mag Om Singh < 1 <50k, VP Lac, CEO > 1 Fin <1Lac, Lac CFO > 1 Lac

Process workflow
Verification of claim by Finance Finance Executive: Receives the Expense Claim Form along with appropriate approvals and supporting documents from employees, either through courier or hand delivery Stamps the Expense Claim Form and updates Finance Control Sheet with claim details. Finance Executive performs following key checks on the Expense Claim, as per defined checkpoints Verifies if Expense Claim Form is completely and properly filled by the employee Verifies if expense is approved as per Authority Matrix Verifies if appropriate supporting documents are attached* Validates if invoice more than 60 days old is approved by the CEO 1. If all documents are not complete as per defined supports and / or appropriate approvals do not exist as per authority matrix and in accordance with Expense policy, Finance Executive follows-up with the employee for missing documents / approvals. If the employee is unable to provide requisite documents / approvals, the expense is rejected by Finance. 2. If all documents are complete and appropriate approvals exist, Finance Executive performs: Duplicate payment check (i.e. same vendor number with same amount for an expense type processed twice in the same month) Active employees check, based on updated employee data received from HR (i.e. if the claimant is still active with the company or has already resigned)

Accounting in SAP and claim disbursement Finance Executive prepares a BDC of reimbursement details, e-mails the BDC and submits all Expense Claim Forms along with supporting documents to Finance Officer. If it is a duplicate payment / inactive employee, Finance Executive rejects the expense. Finance Officer verifies all Expense Claim Forms, uploads the BDC in SAP and e-mails log file back to the Executive. Accounting entry is posted in SAP. Finance Executive: Prints journal voucher from SAP Attaches respective Expense Claim Form with the journal voucher Prepares a payout sheet with bank account details E-mails the payout sheet and submits all journal vouchers to Finance Officer for verification Finance Officer / AM : Performs a count check on the payout sheet (i.e. tallies the number and value of items in the BDC file against the same in payout sheet) Verifies bank account details of employees against the data received from HR . Submits the payout sheet along with journal vouchers and obtains signatures of bank signatories on the payout sheet Prepares a Bank Letter along with supporting annexure Submits the Bank Letter, payout sheet, supporting annexure and vouchers to AM Finance for verification 1. AM Finance verifies employee and bank account details in the annexure, initials the annexure and submits all documents to AVP Finance. 2. AVP Finance verifies the annexure, signs the Bank Letter and annexure and submits all documents to authorised signatories. 3. Authorised signatories sign the Bank Letter and annexure, after tallying details with the approved payout sheet . 4. AM Finance e-mails the annexure and hand delivers hard copy of the Bank Letter annexure to the Bank. 5. Field boy delivers the Bank Letter and annexure to the Bank and obtains bank stamp on copy of the Bank Letter. 6. Finance Officer files the stamped copy of Bank Letter for record (for a period of 7 years). 7. Submission of Finance Control Sheet at month-end

Finance Officer updates the Finance Control Sheet on WD+15 of each month, providing an expense-wise update on invoices reimbursed.

 Finance Manager prepares a Monthly Expense Metrics for management review and further action, highlighting the number of invoices more than 60 days old, that were processed during the period.

LIMITATIONS

Changing of policies at regular basis

Management changes policies at regular basis especially traveling , mobile and conveyance policies. Therefore executives faces many problems. They have to remember the policies so many times. Also they need to remember the employees limits so many times.

Processing of expenses takes a lot of time

Initially bills are received at HO. Then , CBD ( central billing desk ) forward it to finance department. Executive receives the Expense Claim Form along with appropriate approvals and supporting documents. Then executive updates finance control sheet and verifies the expense claim form , approvals and supports as per defined checkpoints. After it executive prepares BDC ( batch data collection ) and submits BDC to his/her team leader along with all expense claim forms , then team leader uploads BDC in SAP. Then executive prepares payout sheet with bank account details. Officer verifies payout sheet with bank account details. Officer verifies payout sheet and obtains signatures of bank signatories. Officer prepares bank letter and supporting annexure. AM verifies bank account details of all employees specified in annexure. AVP verifies and signs bank letter and annexure . Bank signatories sign bank letter and annexure . AM e-mails the annexure and hand delivers hard copy of bank letter and annexure to the bank. Field boy delivers the letter and annexure to the bank and obtains bank stamp on the copy of letter. I At last reimbursement credited to the employee salary account or credited to the vendor account. Therefore , it is a very lengthy process.

Approvals from higher authority need to be required

Approvals from higher authority need to be required. Sometimes it may happens , it takes a lot for taking approval from higher authority. So , it results in delaying the payments.

Suggestions

 Formalities require like team leader checks all the bills and signs it , Then senior manager signs the bills. After it the bills are forward to signatories , should be minimum. It can also be sufficient that signatories would receive the bills after checked by team leader. By doing so , it will help in reducing the expense processing cycle. policies like traveling policy , mobile and conveyance policy should not changed at regular basis. Otherwise , it do create problems for executives. Because they have to remember the policies so many times. Thus , it leads to decreasing their efficiency.

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