Shtichakradhar.com 1 BPOI-103 Procure to Pay (P2P}-Accounts Payable GUESS PAPER- 1 QI. Deseribe an Overview of the Procure To Pay (P2P) Process Ans. Procure-to-pay is the process of integrating purchasing and accounts payable systems to create greater efficiencies. It exists within the larger procurement management process andl involves four Key stages: selecting goods and services; enforcing compliance and order; receiving and reconciliation: invoicing and payment. Digitalizing your procurement process with procure-to-pay software solutions can strengthen compliance and control among vendors, contracts, regulations, buyers, and accounts payable, Because it helps organizations buy from preferred suppliers at negotiated prices without the manual paperwork and spreadsheet headaches, process automation with procure-to-pay software can: Actively control and improve global spend Consolidate most manual commerce processes to reduce errors Streamline catalog maintenance, saving time and freeing up resources Rapidly enable the approval of new suppliers Drive savings to the bottom line to maximize the value of sourcing negotiations Q2. Explain the significance of the P2P process for a business Ans, It is imperative that all business owners, whether traditional, digital) or a hybrid.of both, grasp the procure-to- pay process and the automated solutions that may help them use it Your procurement and accounts payable teams should be able to examine'the progress Of a transaction at any moment between the time a product or service is ordered! and the time an invoice is paid. This is the procedure through which a requisition js created, an order is placed, and, once the order has been received, payment is made based on an invoice from the supplier. What procure to pay (or P2P) genuinely refers to is an autémated syste that links accounts payable with procurement in order to streamline the process, verify aceuracyyand provide cost and time efficiencies ‘The P2P method consists of the seven steps listed below. However, it is important to note that not all businesses use purchase orders for every purchase. ‘We believe the absence of purchase orders can result in énormous losses for an entire firm. In addition, businesses that have not deployed a digital solution to automate this business process are still susceptible to the human errors that frequently accompany’ paper-based and manual processes, In addition to delayed payments due to disagreements, many businesses have no visibility into the real-time status of invoices. Once a requirement for a particular procluct 6F service has been discovered and approved by management (in any department of the organisation), a purchase requisition is submitted to the procurement department. In essence, joning is the requirement that initiates the P2P process. a) Purchase order - Procurement departments will initially review their list of permitted suppliers and, based on the request information, select the most qualified supplier for the job. The purchasing department then generates a purchase order (PO) in the system, which is automatically routed for approval and sent to the supplier. Electronic purchase orders are ideally suited for this, The supplier will send an invoice to the accounts payable department upon shipment of products or completion of services, After receiving the shipment, procufement will enter shipment details into the system. b) _ Einvoicing — All preceding procedures have been handled by the procurement department; the accounts payable department now takes Over. The provider sends invoices either electronically through the supplier portal that is a component of the P2P system, or via mail, email, or fax. If the supplier is not using electronic invoicing, necessary data is retrieved, standardised, and converted to electronic invoices via scanning and. dotible-blind keying technologies (e-invoices). ©) Matehing of invoices — The invoice is then automatically matched against the PO and goods receipt, As Tongjas all goods fall within the agreed-upon limits, the invoice is instantly forwarded for approval. This is frequently referred to as two or three-way matching and is a crucial component of any P2P system. d) Approval workflow — With an automated P2P solution, invoices that pass the 2-way or 3-way match are sent directly to the organization's ERP for payment, A workflow system for invoice approval can automate this procedure. If established rules indicate that bills over a specific monetary amount require additional signatures, the solution will automatically send those invoices to the appropriate individuals and notify them that a signature is required. Those invoices will subsequently be entered into the ERP system for payment. Payment methods may differ from business to business: Although we believe that electronic payments such as ACH and virtual credit cards are the most efficient and cost-effective method of paying suppliers, many businesses continue to rely on paper checks and cash. A procure-to-pay system should have an e-payables feature; however, @ corporation may elect not to employ this technique.2 Guess Paper (Q3. Discuss the various stages in the P2P process Ans. Step I: Identify needs: With the assistance of cross-functional stakeholders, the first step of the procure-to-pay process is to identify and specify the business requirements. Once a valid requirement has been determined, procurement teams create high-level specifications for goods/products and terms of reference (TOR) and statements of work for services (SOW). Step 2: Create purchase requests: After the specifications/TOR/SOW have been finalised, a formal purchase request is created, A requester submils a completed purchase order form after ensuring that all administrative procedures have been met. For all types of procurement, from ordinary purchases to subcontracts and consignments, requisitions can be generated Step 3: Approval of the acquisition request: Afterwards, department heads or procufement officers analyse the submitted purchase requests. After reviewing the necessity, certifying the available budget, and validating the buy requisition form, approvers can either approve or deny a purchase request. Incomplete purchase orders are rejected and returned to the initiator for completion and resubmission. Step 4: Creale a purchase order or spot buy: Spot purchases are possible if the requested goods/products contain characteristics such as unmanaged category purchases, one-time unique purchases, or low-value commodities. Unless otherwise specified, buy orders are generated from approved purchase requisitions, Step 5: Approval of the purchase order: Purchase orders are now sent via an approval loop to check their legality an accuracy. Then, approved purchase orders are sent to vendors. After examining the purchase ordes, vendors may accept, reject, or initiate negotiations. A legally binding contract is established when an officer approves a purchase order. Step 6: goods receipt: Once the supplier delivers the promised goods or services, the buyer inspects them to ensure that they conform to the terms of the contract The goods receiptis then authorised or denied depending on the requirements outlined in the purchase agreement or purchase order, Step 7: Supplier effectiveness: On the basis of the data gathered in the previous stage, the performance of the provider is appraised. Several factors, including quality, on-time delivery, service, contract compliance, responsiveness, and Total Cost of Ownership, must be considered (TCO). For future reference, non-performance is flagged in existing rosters and information systems. Step 8: Invoice approval: After approving a goods receipt, a three-way match is done between the purchase order, the vendor invoice, and the goods receipt. If no problems are discovered, the invoice is accepted and sent to the finance team for payment distribution. In the case of inaccuracies, the invoice is returned to the vendor along with an explanation for the rejection. Step % Vendor payment: After receiving an apptoved invoice, the finance team will process payments in accordance with the conditions of the contract. Any contract modifications of reviews of the liquidated financial security will be considered A supplier payment will fall into one’ of the following five categories: advance, partial, progress or instalment, final, or holdback/retention. Best practises within the procurement-to-payment procedure: The five best practises listed below can assist firms in improving the efficiency and efficacy of'their procure-to-Pay process: Utilize procurement-to-paymient software ‘+ Maintain process openness ‘+ Improve supplier engagement ‘* Optimize inventory management and contract administration Q4. State the controls used in vendor set up process? Why do we need to have these controls? Ans. New Vendor Setup: With an accounting automation solution, you can speed up processes like new vendor setup, while still maintaining the necessary checks and balances. For example, your vendor management system. requires a vendor application form to be submitted and a new vendor to be setup before vendor payments can be processed. In the automation world, once a new vendor form is submitted by the requester, the system automatically double-checks to make sure the W9 is attached. If itis, the new vendor form is routed to the vendor admin to correct or update the included information As you can see, this process already includes multiple eyes on the new vendor form, as well as an automated check to confirm that all required documents are present: From there, the request will be presented to the appropriate managers for approval, again helping you maintain multiple levels of approvals and ensuring compliance. Even better, as your team is guided through the approval process, each step is recorded by the automation platform, creating a virtual “paper trail” that can easily be presented in the event of an audit. ERP System Integration ‘+ "If this automated process sounds a lot like your existing process, that’s because parts of it are. The differences can be seen when you look at accuracy of entry, ease of auditability, and the amount of time that can be saved fn once-mantial tasks like data entry. + Hlow muh time does yout team spend manually keying in dita and printing and fling documentation? When you use accounting automation, advanced OCR capture tools can be used to automatically read your documentation, and email bots can patrol email accounts searching for emails and attachments to file away in the system.Shrichakradhar.com 3 ‘+ Do you find yourself having to enter the same dala into more than one system, sometimes resulling in inaccuracies or out-of-date numbers? With ERP system integration, you're able to push data from new documents into your existing accounting software, ensuring that your records are always consistent and up to date * Douc Phase is able to integrate with your existing software, whether it’s a mainstream accounting system ot homegrown. To date, we've integrated with Acumatica, Microsoft GP, NAV, SL, NetSuite, and Salesforce, and the list continues to grow. Other Accounting Auiomalion Tools: What else woul you automate ityouknexe you wouldn have to beworred about losing your carefully implemented accounting controls? Would you begin with Accounts Payable, Purchasing & Procurement, Accounts Receivable, Collections, Expense Reports? Companies that are new to automation usually begin with the process where they need the most help and will be able to see the largest impact, and then they expand from there Q5. Describe a ‘three way match’ ‘Ans. Three-way matching is a payment verification technique used to ensure the legitimacy of a supplier's invoice When the payables department receives a supplier's invoice, the following information is compared: ‘* The information on the supplier invoice to a copy of the associated purchase order that the purchasing depariment has forwarded to it. The purchase order specifies the amount and price at which the organisation agrees to purchase the items ot services detailed on the supplier's invoice: ‘+ The supplier invoice to receiving documents forwarded by the receiving department to the accounting department to check that the products have been received, are in the cortect quantity, and are in good shape. ‘+ Thus, the idea of "three-way match” refers to the process of matching three papets - the invoice, the purchase order, and the receiving report - to confirm that payment should be made, The system enstires that only. authorised purchases are refunded, hence preventing fraud and carelessness-related losses ‘+ If this three-way comparison finds that the supplier's invoice is in order, the accounts payable department will process the invoice for payment. If not, the staff contacts the supplier to discuss any concerns discovered, Which may result in the supplier issuing a corrected invoice or credit notice. ‘+ The three-way match concept is problematic. It is quite labor-intensive) and it can be difficult to get the necessary information, which can result in delayed payments as the accounts payable team hunts for missing data. Delays can irritate suppliers and hinder a business from receiving early payment rebates. You can. increase the efficiency of three-way matching by removing small-dollar and recurring invoices from the matching criteria. Allowing the accounts payable personnel to approve invoices if the prices and quantities shown on the supplier invoice are within a few percentage points of the amounts specified on the purchase order is another efficiency strategy. Computerized Three-Way Matching: There are also automated. titee-way matching, solutions that require the usage of fully integrated enterprise resource planning Systems, however even these solutions will reject certain transactions if the automated solution fails, necessitating manual analysis of discrepancies. These automated solutions are very expensive for smaller enterprises to implement Q6. Describe how invoice processing can be done from a remote location Ans. It will be difficult for accounts payable managers to make incremental process improvements if they do not digitise how their department receives, approves, and posts invoices if remote workers are present. Remotely Manage Inquiries: Learn how atitomation is improving Work from Home at one children’s hospital, ‘Webinar Audio Recording Seven percent of accounts payable leaders who attended a recent IPS-hosted Institute of Finance and Management, OFM) webinar characterise their department as fully automated, wherein invoices can be submitted directly to an enlerprise resource planning (ERP) programme without operator intervention. In reality, 14% of accounts payable managers stated that their elepartment is entirely manual, while 28% indicated itis just somewhat automated, In these environments, receiving approving, and posting supplier bills needs significant manual effort. 22 percent of accounts payable departments that have installed software for invoice processing employ optical character recognition (OCR). Fewer departments have implemented a supplier portal (16%), digital workflows (15%), analytics (4%) and a digital mailroom (3 percent) ‘The disadvantage of manual invoice processing: Without digital technologies like OCR, ML, Al, and RPA, supporting remote work can be extremely difficult. 31% of accounts payable leaders who attended the IPS webinar ited too many invoice exceptions as their greatest remote working challenge. Similarly, 23% of participants reported that their invoice approvals take too long, Most accounts payable departments’ papet-centric processes for approving invoices and pursuing information to resolve exceptions were not designed for remote work environments. In addition to an increase in supplier queries (15 percent), low operator efficiency (8 percent), a lack of visibility (8 percent), and skyrocketing invoice processing expenses (3 percent), payable executives face additional issues when their employees work from home. ‘Many accounts payment depariments have attempted to handle the difficulties of remote work by heavily relying on. email to route bills for approval. However, the email routing of invoices may pose more problems than it helps. E- mails, unlike accounts payable automation solutions, do not provide chain of custody or separation of duties4 Guess Paper assurance, do not include escalation procedures, do not provide invoice status tracking, do not offer comprehensive audit trails or logging of actions taken on an invoice, and do not prevent supplier invoices from being deleted ahead of retention schedules, Some accounts payable departments tse their enterprise resource planning (ERP) tool to track invoices. By the time a supplier invoice reaches an ERP system, however, it may be too late for an accounts payable manager to take action. Other departments require a "skeleton staff" to enter the office in order to open mail and scan bills for email disitibution, A few payables departments transport paper invoices for approval throughout the city. It is debatable if any of these alternatives actually function. How to process invoices for remole employees ‘¢ Automated accounts payable systems keep operations going regardless of the location of employees. © A digital mailroom collects all paper and digital invoices, including, those delivered through email, submitted through a portal, and uploaded to a File Transfer Protocol (FTP) landing page. ‘+ Eliminating the need for manual data entry, optical character recognition (OCR), machine leaming (ML), artificial intelligence (Al), robotic process automation (RPA), and other data capture technologies extract and validate line-item detail and other data from invoices, ‘+ Invoices are matched immediately with purchase orders and proofs of detivery. + Unmatched bills or invoices that require approval are digitally forwarded to the relevant individual, regardless of where they are located. + Alers, notifications, and escalation mechanisms prevent invoices from being stuck, and graphical dashboards inform accounts payable managers of the current status of each invoice. Mobile feature permits approval of invoices anytime, anywhere. Approved invoices are uploaded without keying into an ERP or accounting system: With the aid of reporting and analytics, accounts payable managers may monitor operator productivity. A self-service online portal allows suppliers to provide’ onboarding details, submit invoices and get acknowledgement, and check the progress of invoices and payments; ‘+ Given that itis impossible to predict when employees will return to the office, AP departments require these capabilities, Why should accounts payable be automated? ‘+ Mote leaders in accounts payable appreciate the Value of automation when employees work remotely. ‘+ Forty percent of the accounts payable executives who patticipated in the IPS webinar intend to upgrade ot teftesh theit old invoice processing systems. One-third of accounts payable managers plan to automate theit department's receipt, approval, and posting of supplier bills, ‘+ If your accounts payable departmenttis looking to enhance its remote working environment, [PS would want to speak with you No matter where employees are located, our accounts payable automation software digitises and streamlines invoice processing Q7. Explain step by step, what happens after the payment register is sent to the bank to execute the payment instructions, Ans. Q8. Explain what service level agreements are and give some example Ans. There are three basic types of SLAs: customer, internal and multilevel service-level agreements. A customer service-level agreement is between a service provicer and its external customers, Itis sometimes called an external service agreement. Ina custormer-based SLA, the customer and service provider come to a negotiated agreement on the services that will be provided For example, a company may negotiate with the IT service provider that manages its accounts payable system to define their specific relationship and expectations in detail. A customer setvice-level agreement includes: ‘+ Exact details of the service expected by the customer; Provisions of the service availability; Standards for each level of service; Each party's responsibilities; Escalation procedures; and ‘¢ Terms for cancellation, An internal SLA is between an organization and its internal customer ~ this could be another organization, department or site. That means that although a company could have an SLA open with each of its customers, it might also have a separate SLA between its marketing and sales departments, For instance, a company's sales department has nearly $10,000 worth of sales every month, with each sale worth $500. IF the sales team’s average closing rate is 20%, then sales knows that marketing must defiver at least 100 qualified leads every month, So, the head of the organization's marketing depariment can work with the head of the sales department on an SLA that stipulates that the marketing department will detiver 100 qualified leads to the sales director by a specific date every month.Shrichakradhar.com 5 This service-level agreement could stipulate that it will include four weekly status reports every month sent from marketing to sales to ensure the leads the sales teamis getting are enabling them to hit theit monthly sales goal. A multilevel SLA will divide the agreement into various levels that are specific to a series of customers using the service. For example, a software as a service (SaaS) provider might offer basic services and support to all customers using a product, but they could also offer different price ranges when buying the product that dictates different service levels, These different levels of service will be layered into the multilevel SLA. SLA examples One specific example of an SLA is a data center service-level agreement. This SLA willinchude: ‘An uptime guarantee that indicates the percentage of time the system is available, Nothing, less than a 99.99% uptime should be considered acceptable for modern, enterprise-level data centers, ‘+ A definition of proper environmental conditions. This should include oversight anh maintenance practices as well as heating and cooling standards. ‘+ The promise of technical support. Customers must be confident that data center staff will respond quickly and effectively to any problem, and they will be available at any time toadaress it © Delailed security precautions that will keep the customer's assets sécure! This could include cybersecurity measures that protect against cyberattacks, as well as physical security measures that restrict data center access to authorized personnel, Physical security features could include two-factor authentication, gated entries, cameras and biometric authentication. ‘© Another specific example of an SLA is an internet service provider servicedevel)agreement. This SLA will include an uptime guarantee, but it will also define packet delivery expectations and latency. Packet delivery refers to the percentage of data packets that are received compared to the'total number of data packets sent. Latency is the amount of time it takes a packet to travel between clients and Servers. How to validate SLA levels «Verifying the provider's service delivery levels is Mecessaty to the enforcement of a service-level agreement. If the SLA is not being properly fulfilled, then the@lient may be able to claim the compensation agreed upon in the contract. ‘* Most service providers make their servicellevel statistics available through an online portal. This allows customers to track whether the proper service level is being maintained. If they find it is not, the portal also allows clients to see if they're eligible for compensation. ‘+ These systems and processes are frequently, controlled by specialized third-party companies. If this is the case, then itis necessary for the third party also 0 be included in the SLA negotiations. This will provide them with clarity about the service levels that should be tracked and explanations of how to track ther. ‘+ Tools that automate the capturing and displaying of service-level performance data are also available. SLAs and indemnification clauses: An indemnification isa contractual obligation made by one party ~ the indemnitor ~ to redress the damages, losses and liabilities experienced by another party ~ the indemnitee ~ or by @ third party. Within an SLA, an indemnification clause will require the service provider to acknowledge that the customer is not responsible for any costs incuitted through violations of contract warranties, The indemnification clause will also require the service provider to pay the'eustomer for any litigation costs from third parties that resulted fromthe contract breach, ‘To limit the scope of indemnifications, a service provider can: ‘+ Consultant anattomey; Limit the number of indemnitees; Establish monetary caps for the clause; Create time limits; and Define the'point at which the responsibility of indemnification starts, SLA petformatice metrics: SLAs include metrics to measure the service provider's performance. Because it can be challenging to select metrics that are fair to the customer and the service provider, its important that the metrics are within the control of the service provider. If the service provider is unable to control whether a metric performs as specified, i’s not fair to hold the vendor accountable for that metric. And it should be easy to accurately collect the data for the metrics — capturing the data automatically would be best. In addition, the SLA should specify a reasonable baseline for the metrics, which can be refined when more data is available on each metric SLAs establish customer expectations regarding the service provicier’s performance and quality in several ways. Some meitics that SLAs may specify include: ‘* Availability and uptime percentage. The amount of time services are running and accessible to the customer. Uptimeis generally tracked and reported per calendar month or billing cycle. ‘+ Specific performance benchmarks. Actual performance will be periodically compared to these benchmarks6 Guess Paper ‘+ Service provider response time. The time it takes the service provider to respond to a customer's issue or request. A larger service provider may operate a service desk to respond to customer inquiries. ‘+ Resolution time. The time it takes for an issue to be resolved once logged by the service provider. Abandonment rate. The percentage of queued calls customers abandon while waiting for answers, ‘+ Business results. Using KPIs to determine how service providers’ contributions affect the performance of the business '* Error rate. The percentage of errors in a service, such as coding errors and missed deadlines. ‘* First-call resolution. The percentage of incoming customer calls that are resolved without the need for a call back from the help desk. ‘+ Meantime to recovery. The time it takes to recover after a service outage. ‘+ Security. The number of undisclosed vulnerabilities, for example. IF an incident ocstrs, service providers should demonstrate that they've taken preventive measures. ‘+ Time service factor. The percentage of queued calls customer service representatives answer within a given time frame. ‘+ Turnaround time. The time it takes for a service provider to resolve a specific issue once it has been received. Other metrics include the schedule for notification in advance of network changes that. may affect users and general service usage statistics. ‘An SLA may specify availability, performance and other parameters for different types of customer infrastructure, including internal networks, servers and infrastructure components, suchas uininterruptable power supplies. Q9. What actions would you take if the quantity and price of items'6n the invoice do not match that on the PO? Ans. Getting paid is only half the struggle for a business. After a bill has been paid, it must be reconciled with your accounting records. This can be challenging. Especially if your process requires a substantial amount of additional documentation, such as shipment receipts and inspection reports, Finance departments iutilise matching (also known as PO matching) to maintain adequate control of a company’s activities. Without it, the IRS will view your paper trail as inefficient and may impose penalties, It is that crucial, AP professionals employ an automated method to ensure that there are no conflicts between a purchase order (PO) and atvinwoice through invoice matching, The automated procedure for creating invoices includes matching, data such as: Supplier name Vendor code Quantity Quantity purchased Purchase order numiber Address and Telephone Line items and product descriptions ‘+ Specific fields ‘There are three levels of invoice matching: two-way, three-way, and four-way matching, In addition to the purchase order, various supporting documents suchas a suppliét Contract, products receipt, and delivery confirmation might be employed during this process. Different Matching Methods for Invoiees: In accounts payable automation, there are three typical methods of matching, resulting in a two-way, theee-way, or four-way match. Two-Way Invoice Comparison: This occurs when a third-party invoice is matched with an order, tolerances are satisfied, and the invoice is enitéred into a database Triple Invoice Mateh: This occurs when a supplier invoice is matched with a purchase order, goods receipt, and supplier invoice. All thtee components must match within the tolerance levels agreed upon. The information is then. added to the AP system Four-Way Invoice Alignment: Similar to three-way matching, this procedure requires a purchase order, goods receipt, and supplier invoice. To make ita four-way, inspection information is also required. Typically, this has to do with tolerance for quantity. The invoice is added to the AP database once all four components match, Tolerances and Maintains: These processes rely on specific tolerances that must be met and invoice holds in the event that they are not. Typically, a tolerance entails ensuring that the invoice amount fulfils the purchase order's specifications. When an invoice and its associated purchase order do not match, or when products cannot be confirmed as received, an invoice hold occurs. Quantity deviation occurs when facts on the invoice do not match the supporting, document (purchase order, receipt of goods, supplier invoice) in terms of amount. A price divergence occurs when the price on the invoice does not match the price on the purchase order. It depends on the programme you select and the company’s regulations. Some approval processes are more permissive. Regardless of the number of required papers, all invoices must adhere to matching limits. If this is not the case, a hold is imposed and payment is withheld until the issue is remedied or manually released. ‘The advantages of atouchless invoice procedure over a manual approach include: a) Reduce Manual Bill Processing Time: Eliminating human participation from an accounts payable system eliminates paper invoices and time-intensive manual operations, When a bill does not match a related purchase order or contract, there are also tedious and lengthy enquiries,Shrichakradhar.com 7 Pricing and Expense Evaluation: When it comes to invoice matching, AP automation increases precision, This is because expense allocation for each line item is more easily discernible. Since it is evident which suppliers provide the most value, this facilitates smarter supplier selection selections. It enables cost analysis and increases the visibility of positive pricing trends. © Supplier Partnerships: Automating the accounts payable process expedites the evaluation and addition of vendors. It facilitates the establishment of new vendor connections and the maintenance of current ones. This is the benefit of the procurement and accounts payable departments collaborating with technology. Funds Flow: Automated coding and reduced lead times result in more precise cash flow projections. This improves monthly and annual closing operations and keeps individuals organised. © Early Payment Reductions: Another important advantage of automating the invoice process is the possibility to reduce payment terms and take advantage of discounts for early payment. This results in a decrease in pricing and an increase in revenue. With a consistent approaciv to touchless procedures, Remote Work AP automation software and invoice matching contribute to a global economy. With real-time access to vital financial data, teams can work remotely on the same projects with no disruption. This assists @ business in expanding its reach beyond local resources, saving money, and accelerating production. Precision and Safety: In organisations with a high rate of automation, manual process errors will be reduced, Automated scanning also aids in detecting, fraudulent invoicing and other security breaches, Getting rid of these difficulties frees up time for higher-value tasks as opposed to replicating etrors and correcting errors. al advantages of touchless invoice matching inlude: ‘+ Automate the distribution of supplier invoices to the appropriate approvers, ‘+ Enforce company policies, laws, compliance, and security. ‘* Integrate accounting systems with an ERP system to maximise ROL Q10. Provide at least six examples of the kind of expenses that are reimbursed to the employees through T&E process. Ans. Itis essential to publicise the rules and categories governing, entertainment and travel expenses. By outlining the parameters of the reimbursement procedure, you can safeguard your fitm from fraudulent behaviour and improve ‘your spend management. Examples of expense categories include- ‘¢ Transportation, including bus and train tickets, taxi prices, and aicline tickets + Client entertainment dinners, meals daring business conferences, and occasional workplace delivery are examples of business meals, ‘+ When working from home, office expenses involving!IT equipment such as computers, desks, stationary, and office supplies are incurred. Including accommodations for corporate events like conferences: It is crucial to note that not all expenses are eligible for teimbursement, Personal grooming activities such as hait cutting, for instance, are normally not reimbursable through company accounts, Also advised is highlighting this inside’your company’s reimbursement policy. Expense Management Process: ‘The manner in which your firm manages its spending depends on a variety of clements, including its size, departmental structure, and budget. The employee expenditure process can be streamlined, however, by basing your cost management strategy on predefined routines. ‘There are five steps in the conventional procedure for expenditure reimbursement: ‘* Pre-authorization © Reporting © Approval ‘* Reimbursement © Accotinting Pre-authorization ‘+ Prion toymaking a purchase, the pre-authorization phase of expense management involves reviewing your ‘TRE policy to ensure that the cost claim has a high likelihood of being approved. ‘+ If manual, this may include submitting a request form to the FIR or finance department. In contrast, organisations that automate the process should be able to speed their approval and rejection processes through the use of in-house technology. ‘+ Employees should understand how they are expected to pay for business-related travel and entertainment expenses. For instance, some companies require employees to pay using their own ctedit or debit cards upfront. Alternately, employees may be issued corporate credit cards to streamline the T&E. procedure and alleviate the financial burden on individual staff members, Reporting ‘+ The reporting step of travel expenditure management is the employees’ responsibility.8 Guess Paper ‘© Inorder to submit their spending, employees must understand what type of proof of purchase is required. Some organisations, for instance, will only accept paper receipts, while others will also accept digital proof that the purchase was done for business purposes. ‘+ Employees should also be informed of the deadline for expense reporting, For instance, should expenses be reported in ceal time, within seven days, thirty days, or ninety days? All of these conditions must be clearly specified in the company’s public expenditure policy. Approval: The approval phase involves accepting or rejecting expenditure claims. Manually doing this procedure can be cumbersome and wasteful for businesses, but there are numerous types of expenditure management software that can streamline the entire operation. Reimbursement: Actual reimbursement is the penultimate phase of expenses for cormmercial reasons, Employees should be aware of when they may expect to be reimbursed for T&E expenses, including, travel booking, rental vehicle, and airfare, as well as the net amount they should anticipate from accounts payable. Accounting: Accounting is the final step of your T&E spend process, designed to help your organisation track expenses and prepare for audit. This could be the most essential stage for small enterprises, as you are unlikely to have access to huge teams of accounting professionals. As soon as an employee submits an expense claim, the finance staff may compile the accounts and spending reports using a template, The primary advaniage of T&R expenses is that they are tax-deductible; therefore, the department will be obliged to ereate financial accounts to reflect this. This phase is the most crucial for ensuring that your organisation adheres to all legal rules. ‘This decreases the likelihood of being investigated by associations of certified fraud examiners and keeps you prepared for an audit. Introducing a T&E Policy: Every business will have a policy on fravelland expenses, Automating your whole cost, process allows your finance team to focus on optimising the business while maximising company resources. By using a company-wide mobile app, you may streamline thé acounting process and) ciecrease errors. This enables employees to seek and submit cost claims from the convenience of their home office relieving the finance department of a mountain of paperwork, In addition, your depariment can digitise expenditure reports)in only seconds and automate receipt reimbursernent for rapid reconciliation. The accounting team can work more efficiently and eréate a buffer during tax season if they do not wait until the end of the month to compile expenses.Shtichakradhar.com 9 BPOI-103 Procure to Pay (P2P}-Accounts Payable GUESS PAPER- 2 QI. Elaborate the importance of procure to pay in an organization Ans. Over the years, there has been a growing emphasis on enhancing the Procure-to-Pay procedure, Both CFOs and CPOs seek to cut expenses and boost savings through increased efficiency. Manual and paper-intensive P2P operations provide numerous issues, including inefficiency, a lack of visibility into expenditure management, and the inability to assure contract compliance, among, others. On the other side, automation aids businesses in gaining a better understanding of their expenditures, increasing compliance with contracts, negotiating for better pricing, and minimising rogue expenditures, to mention a few benefits. Principal Advantages of Using Procure-to-Pay Software a) Enhaneed Visibility for Beller Decisions: An automated procureto-pay system helps to eliminate needless ‘expenditures in manual procurement procedures, while increasing visibility, compliance, and sourcing velocity, and decreasing risk at each stage of the procurement lifecycle. Automation enables both buyers and sellers to access precise, real-time data in order to make informed judgements, By removing paper from the equation, processing, efficiency is increased. Before isstiing payment, an automated system enables end-to-end visibility between purchase orders, invoices, and goods receipt documentation to guarantee that the products have been correctly received. As a result, it safeguards against making cash flow decisions based on insulficent data When you have procure-to-pay software, all of your supplier information is digitally and conveniently stored in a single repository, making it easy to access during the sourcing, process. Buyers can readily consult the online catalogues of both current and prospective suppliers, as. well as examine and approve purchase orders and check the status of shipments in ¢lecitonic forms, This reduces the amount of time spent searching for documents by eliminating, the element of chance. Tn addition, the cloud-based solution Provides permissions, access, and encryption features that permit many levels of approval dependent on the team structure of the firm ‘The organisation is able to. delegate particular permission to users for submitting purchase orcers, as well as specify»a spending festrietion. A procure-to-pay system creates automated reminders to notify users when pending requisitions/purchase orders require their approval or a violation of purchasing policy has occurred. b) Management of Supplier Catalogs: Af organisation may-keep thousands of contract data, but just a few of supplier catalogues. Frequently, businesses prefer to purchase a particular item from a supplier from whom the same itern has been purchased in the past. The procurement officer searches the existing supplier's catalogue for information on the nedessary item, Despite the fact that the contract froma previous order is frequently available from the supplier, the catalogues frequently unavailable. In other instances, itis quite difficult. to locate the supplier's. previous contract among the thousands of other contracts. In such circumstances, an automated P2P system, such as the one provided by Zycus, enables procurement specialists to combine the procure-to-pay software with the contract management system and build a centralised repository for storing contracisin.the absence of a supplier's catalogues. When catalogues are ‘unavailable at the time of contracting, the system permits the procurement officer to save the contract. This allows the organisation to readily retrieve the details and historical cost of a previously ordered item from a certain supplier throughout the sourcing process, even if the provider's catalogue is unavailable. © Analysis and Reporting That Is Proactive: The ideal application of automation is the capacity to generate reports that provide extensive insight into supplier performance, expenditures at various levels, compliance with pre-negotiated terms, contract and shipment status, etc. Real-time reports give significant corporate knowledge for strategic spend analysis and the reduction of rogue expenditures, @) Utilizing the Advantages of Efficiency: Automation decreases the likelihood of missing payment deadlines by shortening the approval cydle time. This minimises late payment penalties, enables suppliers to provide discounts, and enhances supplier relationships. (Q2. What are the different stages inthe Procure to pay? Ans. The process of linking purchasing and accounts payable systems to increase efficiency is known as procure-to- pay. It is part of a wider procurement management process that has four stages: choosing products and services, enforcing compliance and order, receiving and reconciliation, and invoicing and payrnent. Procure-to-pay software solutions may help you improve compliance and control among suppliers, contracts, regulations, buyers, and accounts payable by digitizing your procurement process, Process automation using, procure- to-pay software may enable firms to acquire from chosen suppliers at agreed pricing without the human paperwork and spreadsheet difficulties. ‘* Actively manage and improve overall spending, ‘+ Reduce mistakes by consolidating the majority of manual commerce operations.10 Guess Paper ‘Make catalog maintenance more efficient, saving time and resources, Facilitate the approval of new suppliers prompily. Increase the value of sourcing discussions by driving savings to the bottom line ‘The procure-to-pay process flow (also known as the procure-to-pay cycle) includes various actions, such as » ° a ° 2 Procure to Pay Process Identification is required: Identifying the need for Geitain products and services, as well as the available money for the purchase Purchasing goods: Researching vendors, checking up 6n items, and Hegotiating costs are all possible steps in this process. As a result, businesses can soure® items from an approved catalog or by sending out a request for quote (RFQ) to suppliers, asking them to specify what products or services they can give and. how much they would cost. Requisition: When a vendor has been chosen)’ the buyer will enter the requisitioning step to formalize consent for the purchase. This is accomplished by prepating and approving a requisition order, an internal document used when a purchase is required. The products being purchased, as well as the vendor's quote and any delivery instructions, will normally be included in the requisition order. Placement of Procurement Ofders: When a customer places an order, he or she will issue a purchase order that contains information such as the kind, price, and quantity of the items or services being purchased. The supplier will be notified. Order Acceptance: Receiving ilems from the supplier, comparing them to the purchase order's specifications, identifying any damage that may have happened during shipment, producing a receipt, and putting information into the appropriate systems are all part of this process, Invoices from vendors: The supplicr will send the buyer an invoice that specifies the amount due and the due date, Purchase orders and invoices must be reconciled, and applicable systems must be recorded. Payable Accounts: Paying supplier billS on time and accounting for transactions are all part of the accounts payable process. The purchasing business will need to ensure that vendor payment data are up to date as, part of this process, as well asitake precautions to prevent accounts payable fraud. Reporting; After the supplier has been paid, the firm may evaluate the process to see if there are any areas ‘where it can be improved in the future, Steps in Procure to Pay Process mmmShrichakradhar.com 1 L Choosing products and services: Employees choose specifications for items and terms of reference or statements of work for services based on previously determined company needs. After that’s taken care of, they select the necessary components from supplier catalogs or other available sources. Creating purchase requisitions is a time-consuming process: Purchase requisitions (also known as purchase orders) are official requests for products or services (including subcontracts and consignments) that are required for company operations. The requestor fills out the purchase information, double-checks that it complies with aciministrative regulations, and then submits the PR for approval. Purchasing authorization: The approval chain is then reviewed and either authorized, rejected, or sent back to the originator for adjustment by team leads, department heads, procurement officials, or top management (depending on the organization's structure). The majority of the ¢hoice is based on the requirement assessment and the available money. Ordering: The requester would normally build a purchase order from theaétepted requisition and deliver it to the designated vendor. The PO becomes a legally enforceable contract after the supplier acknowledges the order. The employee, on the other hand, may execute a spot buyrif the purchase is one-time, from an uncontrolled expenditure category, of of low value. To guarantee compliance and specification correctness, certain companies may havea distinct approval system for purchase orders. Goods and services are received and inspected: To evaluate the supplier’s performance, the customer should inspect the iterns or check services after delivery. For the product receipt to be accepted by the buyer, quality, delivery schedules, Total Cost of Ownership, and other metrics indicated in the PO must conform with the contract requirements. Receiving the invoice and doing the reconciliation: I's time for a,3-way match between the PO, the receipt, and the invoice when the responsible employee authorizes the products and services receipt. The invoice passes through the review process and is sent \o the finance department for payment if there are no issues. In the event of a discrepancy, the firm fejécts the invoice and returns it to the supplier with a reason. Procure to Pay Cycle: ‘The Procure-to-Pay cyde refers to the end-to-end) purchasing process's repeated consecutive steps done in tight order, Requisitioning, purchasing, and payment are.all covered under the procure to pay procedure. The procure-to-pay cycle isn’t meant to speed up the vendor payment process because clearing bills faster hurt the company’s cash flow and prohibits them from keeping their cash for as long as feasible Q3. While selecting a vendor what are the factors that a procurement manager should consider? Ans. Suppliers determine many of the costs of Your business and can significantly impact the quality of your product. ‘The relationship with your supplier can make or break your business. Price Quality Reliability Communication Financially stable Capacity Payment terms, Price: Price is the most imporiant consideration when selecting a supplier. Not necessarily is the lowest price the greatest deal. Best advice: shop around. Whenever necessary, coniracts should be renegotiated. Join a buyers’ organisation or begin to negotiate better prices (Order strategically to receive free delivery and quantity discounts. Be on the lookout for new customer discounts from your supplier; do not assume that you are receiving the greatest price just because you have been a customer for a time. Quality Is the business's quality consistent? How is their service and communication quality? The quality of your suppliers can directly affect your reputation. ‘* Choose vendors whose quality you can depend on. ‘+ Before making a decision, order samples and inquire with other clients about their experiences working, with this source Request feedback from your staff regarding their experience with the product or service. ‘Schedule quality control tests that include the testing of similar products from other suppliers.R Guess Paper ‘+ Entrepreneur considering supplier selection factors 3. Reliability ‘* Can the supplier consistently produce on schedule and as promised? Do they have the proper amount? Do you believe the supplier will accurately deliver your orcier? ‘+ Before selecting this supplier, you should conduct research. What is their reliability's reputation? Obtain input from your staff regarding their interactions with this supplier. ‘+ Implement a method to monitor supplier dependability. 4, Interaction: Consider their communication skills while picking a supplier. Do they have a communication ‘mechanism that facilitates order placement? Know who your representative is with each of your suppliers and how to cofttact them. Test their ordering, phone, and email response systems at the beginning of the partnership. Be dear about your communication expectations. The proprietor of a small firm standing by inventory. He is pleaséd With his findings because he carefully considered the elements to consider while selecting a supplier. 5, Fiscally secure: Develop long-term partnerships with vendors you know will be accessible when you need them. + As much as your suppliers need to run a credit check on you, youu should also investigate the financial stability of your suppliers. * Be wary of large up-front deposits. ‘* Be aware of their return/refund policy and any other applicable financial regulations. 6. Capability: Consider the capability of your supplier as an essential issue. How well can they give you with ‘what you require when you need it? Can the supplier manufacire sufficient quantities to fulfil your needs? ‘© Communicate with your vendors about your needs and their timing, ‘+ If they have limited quantities of popular products, inquire about their lead time for placing orders so you don't fall short. ‘* Have an altemate supplier ‘+ A.small business owner contemplates the élemehts to consicler while selecting a supplier. 7. Payment terms ‘¢ In order to improve your own cash flow) you may choose a vendor with favourable payment terms, Consider the optimal payment method for your business. ‘+ Negotiate payment conditions prior to placing your first order. © Maintain a great credit rating by making, on-time payments, Q4. Describe the process of receiving the goods'at the biryer’s|end Indicate some metrics that are used measure accuracy, TAT and productivity in invoice processing stage. Ans. Invoice processing involves the complete cycle of receiving, a Supplier invoice, approving it, establishing a remittance date, paying the invoice, and then recording itin the general ledger. Itis a critical aspect of running a business. When vendor invoices aren't paid on time, it can interrupt your incoming stream of services, supplies and raw materials and damage your supplier relationships. One or two missed payments may be forgiven, but continued tardiness will hurt your business. Thanks to advancements in technology, excuses like “the check is in the mail” just don’t cut it anymore when it comes {0 invoice processing, Your suppliers know that most companies use some lype of automated system to receive and record their invoices and put those bills in the payment pipeline When your suppliers don’treceive timely payments, they will take action to protect their balance sheets Invoice Processing Workflow: It’s important to establish an efficient invoice processing workflow. At a basic level, this workflow includes: b) Invoice Receipt: The accounting department will verify that the product or service was procured. It will then match up the amount billed to the amount on the original purchase order (PO). If there is a discrepancy in the amounts charged (versus the PO), the issue must be resolved with the supplier prior to the invoice being routed for approval. ©) Invoice Approval: If the information is correct, the invoice is then routed for approval in accordance with ‘company policies @) Invoice Payment: Once approved, the invoice will be set for payment based on the terms that were negotiated with the vendor. In some cases, companies may choose to pay an invoice early in order to take advantage of a discount (eg,, 1% Net 10, or a 1% savings if you pay the bill within 10 days or less). Having an established invoice processing workflow with make your accounts payable department more efficient as they track what's owed to suppliers, ensure payments are properly approved and process payments, Accurate information on accounts payables is essential to producing an accurate balance sheet Q5. Discuss how the reasons for putting a non-PO invoice on hold differ from those for a PO invoiceShrichakradhar.com 13 ‘Ans. When a corporate department has to make a purchase, they often create a buy order as part of @ well-defined purchasing procedure, Certain purchases are one-of-a-kind and require a different route via anon-PO invoice. Meaning of Non-Procurement Order Invoice: A nor-PO invoice does not have any Purchase Orders (PO) linked with it, and is typically the consequence of spending outside of the normal procurement process. Often used for indirect purchases, these are also known as expense invoices. Among the expenses that require a non-PO invoice are: ‘+ Facility servicing and cleaning, (Payments for utilities such as water, power, telephone, high-speed Internet, etc.) Legal services Expenditures for marketing Expenses for travel and meals are reimbursed ‘+ Cases requiring aNon-PO Invoice Urgency - When something is needed immediately, the staff cannot afford to spend time seeking approvals from. multiple sources, Immaterial Value - Purchasing with a purchase order is a best practise. However, a purchase order is not necessary for minor transactions. A minor purchase does not warrant the work neecied in the buy order process. Business and travel-related expenses ~ These charges are likewise routed for payment via non-PO invoicing, with sufficient authorization. Positives and negatives of submitting a Non-PO Invoice: A purchase order would necessitate the consent of every stakeholder and would be distributed to multiple departments and areas of the organisation. This procedure would be much more onerous and time-consuming if many of the involved: parties are-huge and work in different departments. Other advantages of employing this technique includesaccelerated payments to suppliers Greater clari In addition, the late payment may prompt multiple calls from the vendor or the filing of a duplicate i in the invoice payment procedure Other issues associated with non-PO invoicing include: Due to the absence of a corresponding, purchase order with non-PO invoices, processing these invoices often requires additional effort and creates a variety of complications: Determining how to route nor-PO bills can be a difficult undertaking, especially when these invoices are missing vital information essential for payment processing In addition, when an invoice is entirely accepted, the accounts payables team enters data at the header level. In the case of non-PO invoices, the essential purchase details are not available, preventing the team from entering, all the necessary information into the system. Impact of non-purchase-order invoices on the buyer Within a business unit, the processing of non-PO invoices can be expedient and convenient for some, but difficult and tedious for others. In a manual system, the workload for processing non-PO invoices increases substantially. This slows accurate cost accounting and implies that the invoice may sit for weeks without causing a delay in payment. resulting in double payment. NonPurchase Order Invoice Processing, ‘* Annon-PO invoice, as opposed to a PO-based invoic® has not been pre-approved and must therefore undergo the buying department's invoice approval process, ‘+ After receipt, a non-PO invoice is normally reviewed and approved by the business department that ordered the transaction. Typically, the accounts payable department applies the code and determines the approver based on the available information on the invoice and their best understanding. ‘* Ifthe invoice information are minirnal, this could become a challenging circumstance. If the invoice is missing references to the client; department, or business unit that made the order, or if the name on the invoice is incorrect, a member of the accounts payable team must follow up and identify the invoice's approver. ‘+ Typically, intemal approval criteria indicate the invoice amounts that require numerous approvals, After obtaining all necessary invoice approvals, the invoice is transferred to the accounts payable team for final booking and payment. ‘+ Even the largest and most established businesses process both PO and non-PO invoices on a daily basis, However, they are essentially distinct and require distinct workflows. Despite the fact that businesses adopt policies and procedures favouring purchase orders over non-PO transactions, non-PO expenditure cannot be abolished. Non-PO invoices could be restricted but not eliminated entirely. Q6. Explain the direct debit form of payment Ans. When you establish a Direct Debit, you authorise your bank or building society to deduct funds from your account. ‘* The organisation has the ability to collect anything you owe them However, they must inform you in advance (typically 10 business days) of how much, when, and how frequently they will collect your blood. ‘+ Direct Debits are convenient for paying recurring payments such as gas and electricity, particularly if the amount varies frequently. ‘They save you time and effort by eliminating the need to remember to pay a bill. And you avoid late payment penalties. They save money as well. Numerous utility companies, such as gas and electricity, provide discounts for Direct Debit payments,14 Guess Paper ‘© And they are secure and safe. The bank will return any improper payments to you. Any individual holding a Current or Basic bank account. Some prepaid cards and credit union accounts can also be utilised, although Post Office cards cannot. The lowest age at which they can be used is depending on the minimum age required to create a bank account, which can be as low as 11 years old for some accounts; therefore, itis best to check with your bank or building, society. Setting up a Direct Debit: The organisation collecting the payments will instruct you on your next steps, Typically, you fill out a form and send it to them, or you arrange it online or by phone. They will notify your bank. You can cancel a Direct Debit at any time by contacting your bank; in some cases, this can be done online. Thete are no fees associated with initiating or setting up Direct Debits. However, be wary of declined payments. If there are insufficient funds in your account to Support a Direct Debit, your bank may refuse to make the payment and may assess a fee. Typically, this fee ranges between £5 and £25. Even if they do complete the payment, you may overdraw your account without realising it. This implies you will incur overdraft fees. Many banks may attempt to call you if a payment fails, giving you time to deposit funds. If they do not offer this, you should consider transferring to a different supplier who does. Q7. What are the quality checks that are put in place while processing invoices? Ans, Invoice verification ensures that the vendor is charging clients for the services rendered. This is accomplished by comparing the received bills to the purchase order and delivery receipt. A bill is only paid if its specifics correspond to the supporting documentation. And if there are any discrepancies, the invoice is denied and the seller is asked to submit the proper one. Accounts payable supervisors are often allowed to verify and»approve invoice payments. Depending on the company’s size, kind, and workflow, the invoice approval proceduite differs amongst businesses. Consequently, if you are unsure of which type of invoice verification you should practise, let’s discuss the most important types of invoice verification. The procedure of reviewing invoices is dependent on the nature of the trade, However, tie majority of organisations employ the three techriiques of invoice verification outlined below. Invoices Originating from Purchase Orders: In the purchase order-based invoice verification, the invoice is compared against the purchase order. Typically, the authority that placed the order is responsible for preventing communication gaps. This strategy does not take partial deliveries into account» It simply accounts for the whole quantity and invoice total. Invoices Based on Products Receipt: When goods are delivered in sections, invoice verification based on goods receiptis a viable option. Consequently, individual items are billed separately. Invoices without a Reference to a Purchase Order: Occasionally, when no PO is available, organisations verify the invoice directly with the accounts payable manager, marital accountant, or general ledger accountant, Upon receipt of the invoice, the first step of invoice processing: is to verify the invoice number. The invoice number must correspond tothe number on the purchase order or goods receipt. ‘Now that the invoice number is right, we can begin verifying the invoice. a) Verify Billing Accuracy: Verifying invoice accuracy:is the most important phase in the verification process. Checking for accuracy begins with determining, whether the invoice to be processed is intended for your business. Frequently, the vendor may send invoices to the incorrect address. In addition, this includes confirming that the rates for the services or products comply with the agreement, You should also verify that the sales tax, discounts, and total invoice amount have been calculated accurately. b) Confirm the Date of Invoice: Checking, invoice validity by examining invoice dates. It has enormous relevance in a bill:Ibcan determine whether you lose or win legal challenges about transactions. Therefore, you should constantly verify the invoice's date. Aside from that, it prevents double payments, If the date is incorrect, it) will be far more difficult to locate the invoice for future auditing purposes. In addition, an incorrectly dated invoice could fesult in an issue during tax calculation © Confirm with the project manager the delivery: Verifying the delivery with the project manager prevents fraudulent payments. Among the best practises is ensuring that you have received the services/products for which yout have paid. Before approving the delivery, the manager must compare the number and quality of the line items indicated on the invoice to those of the aciual shipment. Sometimes, ifthe delivery is late, the dient can, Pay the vendor less, saving the business money. This is only feasible ifthe delivery is confirmed with authority. | Check the Vendor Details: Verifying vendor information is one of the simplest ways to prevent fraudulent Payments, In your accounts payable process, you should cross-teference the vendor information on the invoice ‘with the information on previous invoices. Verify the company’s name, logo, phone number, mailing address, and email address. This cross-checking not only alerts you to potential fraud, but also helps you maintain accurate system data, Before starting witha new vendor, you must verify their contact information, In addition, if you want to save time and avoid payment problems, you should examine the invoice for payment terms such as account number, tax ID number, and desired payrnent method, ©) Date of invoice due: Noting the invoice due date allows you to pricritise invoice payments and enhance cash flow. Noting the payment deadline provides additional economic benefits for your organisation. It prevents you from incurring late payment costs and enables you to take advantage of early bird discounts, as per the payment terms.Shrichakradhar.com 15 D _ Planily the Payment: Once all of the following checks have been completed, the payment must be planned and approved by the accounts payable manager a few days beforehand This provides you an opportunity to cancel the payment if there are any concerns, As previously stated, invoice verification is an essential step that requires your undivided focus. However, each phase of the procedure has nearly zero tolerance for ‘error, as it might result in disastrous financial accounting outcomes. Therefore, it would be prudent to put accepted invoices through a final check list before submitting, them for payment. Ensure that the bill is unpaid: Before submitting bills for payment, you should verify that the invoice has not been paid. The most accurate technique to determine this is to check the "paid invoices" logs for invoice number matches. W) Clarify Discrepancies: Invoicing errors are not an uncommon occurrence. And suppose you discover a discrepancy in the invoice, which has been confirmed. In such a circumstance, you must explain it with the accounts payable & accounts receivable clerk, the project manager, or the proper authorities. However, if you have any problems, you should contact the vendor to get them resolved i) Document the Invoice for Authenticity: Once you realise that the invoice remains unpaid. You should ‘ross-check it with all accessible supporting documentation pertaining to the purchase. For instance, it contains the purchase order, quotation, and delivery receipts. Q8. What should be done in case a credit note is processed as an invoice? Ans, A credit note is a document sent by one party to another that indicates the crediting of the recipient's account in the sender's books. If there is a reduction in the taxable value of the items delivered after the supplier has issued the tax invoice, he may issue a credit note with the necessary information It is not quite a refund, but it serves as an alternative for a refund by allewing the customer tb purchase the products at no cost in the future A debit note decreases the buyer's liabilities, and the credit note is the seller's acknowledgment of the debit note the buyer issued. Motives for credit note issuance: In accordance with Section 34(1) of the CGST Act, supplier may issue a credit note When a tax invoice must be adjusted to reduce the tax burden stated on the invoice, Some common reasons why a seller issues a credit note are as follows: ‘+ Owing to sales returned by the buyer due to quality difficulties, setvice rejection, or receipt of damaged oducts. + Ineomeciy collected adkiional fes fom dhe ber, or thé ammount paid by the buyer exceeds the amount billed ‘+ Give the buyer a post-sale discount ‘The quantity received by the customer is less than that shown on the tax invoice. Cancelling arty outstanding invoice payments Other comparable reasons: All information of credit notes issued during the month must be reported on the GSTR-1 form for the corresponding month. The previously created credit note is amendable, and any changes should be recorded on the monthly GSTR-1 Corresponding details will automatically refiect on the recipient's GSTR-2B and GSIR-A. It is a convenient method for avendor to modify his first issued tax invoice, He can lower his tax liability with minimal effort and without having to file for refunds. In addition, all debit and credit notes issued pursuant to section 34 of the CGST Act must be reported to the IRP for e-invoicing, Conditions for credit note issuance under GST include: ‘¢ Itshould be issued within the timeffames outlined in the next section. ‘+ Itmmust include the original invoice number against which the credit is being awarded. Under the new system, such connectivity is no longer necessary. + Credit note issuing procedure An illustration of the credit note issuance procedure is provided below. ‘+ Supplier A sells Buyer B iterns accompanied by a tax invoice. ‘+ BuyerB discovered certain quality flaws and so returned the goods with a debit notice. ‘+ Supplier A received the debit note and issued a credit note to buyer B as an acknowledgment. ‘Time limit for éredit note issuance ‘+ Notime fimit applies to the issuance of debit or credit notes. The issuance of debit and credit notes must be reported on the GST return for the month in which these documents are issued, The GST law specifies the time restriction for declaring the same in GST returns if it applies to a specific fiscal year. It must be declared by the earliest of the following dates ‘+ 30 September of the year subsequent to the yearin which the supply was made. ‘* Thedate on which the yearly return for the specified period is actually submitted. + The details of a credit note ‘The following is an example of a credit note: ‘+ Supplier's business name, address, and GSTIN ‘+ Thedocument's type, whether debit or credit note,16 Guess Paper ‘A unique serial number with a maximum length of 16 characters. It may be numerical, alphabetic, alphanumeric, ot contain special characters. Date of document's issuance Name, address, and GSTIN number of the supplier ‘The taxable value of the supply, rate, tax, and buyer's tax credit. Signature of the vendor or his authorised agent. ‘* Methods for generating a credit note A credit note can be written in Excel, Word, or any other programme used by the company, organisation to create invoices. The steps for creating a credit note are as follows: Select a credit note template for use. ‘* Refresh the company’s logo. Input the credit note's issuance date and its unique number, Include the invoice reference number that the credit note is issued against ‘Add the GSTINs of both the provider and the customer, as well as the locationof the supply Keep the credit note safe. Q9. Describe the travel and expense process briefly Ans, Management of travel and expenses (T&E) entails documenting) and processing business expenses for tax purposes. The legal definition of tax-deductible expenses varies depending, on the business's place of origin. Inthe majority of countries, business expenses are tax deductible, meaning that corporations pay reduced or no tax on them, And these expenditures must be business-related to qualify for a lawful tax deduction In addition, each country's tax authority determines the reporting procedures for expenses. To maximise and reduce Your tax liability, you rnust disclose all qualified costs, regardless of your location ‘Common travel expenses for business include: Lodging: hotels, accommodations ‘Transportation: plane, rail, and bus tickets, auto rentals, and gas costs Restaurants, shows, and events make up the entertainment Per diems are country-specific allowances for meals, lodging, and travel miles. ‘+ Blectronics and other crucial equipment: computers, mobile phones, and tablets Employees frequently pay for business expenses out of pocket, then make a claim for reimbursement to their employer. Employees are required to submit all expense receipts to finance teams by the end of each fiscal period. ‘This is a common difficulty for many businesses, Which we will discuss momentarily, In the event of an audit, businesses must present evidence (stich as purchase receipts and bank statements) that all reported corporate expenses are necessary and directly support business operations. Companies adopt T&CE rules to restrict how team members spend company funds on work travels and business- related expenses to facilitate travel expense management. All circumstances in which workers do work-related activities outside the office should be covered by T&E policies. This encompasses domestic and international travel, as well as day vacations. Note that T&E rules do not cover scenarios involving remote work, which require a different policy. Implementing an internal policy for travel and spending is advantageous for organisations of all sizes and industries. A well-written T&E policy outlines precisely What constitutes essential employee spending and assists finance teams in streamlining, expense reporting and approvals. This ensures tax compliance and audit readiness for firms. ‘Typically, your T&E policy should address the following topics: ‘+ How and whete to reserve travel ‘+ The criteria tsed to approve or reject itineraries ‘+ The expenditure teimbursernent process ‘+ Accepted flights and trains, including class, spending limits, and budgets Accepted hotels, including the permitted star category based on location, as well as admissible and nor-allowable ine dental charges. Ground transportation regulations for rental automobiles, ride-sharing services, and personal vehicle use Meal stipends: As previously stated, expenditure reporting, and reconciliation are typically onerous and difficult tasks for both individuals and finance departments. Without clear expenditure processes and infrastructure, it becomes impossible for a growing business to keep track of paperwork. Inefficient T&E, processes make it difficult for teams to spend when necessary and even more difficult to track transactions, ‘These are typical sources of discomfort in organisations with ineffective or obsolete T&E processes: a) Many businesses still issue a single corporate credit card that is used by the entire staff. When shared business cards are physically moved from employee to employee, they are difficult to locate and often misplaced, This creates significant problems when team members need to spend money quickly. b) Generic payment methods do not attribute payments to a specific buyer, posing a significant security risk. And it is difficult to detect dishonest spending when expenses cannot be traced. This makes businesses susceptible to a variety of financial dangers anytime their payment methods are utilised,Shrichakradhar.com 17 ° 4) 3 Finance teams with limited visibility into expenditures generally struggle with budgeting and cash flow management. This makes scaling corporate growth challenging, Effective finance departments must always bbe aware of where and why corporate funds are being spent. Manual expense reporting and approvals are frequently handled via lengthy email chains, resulting in slow refunds. It can take weeks to months for reimbursements to be issued, assuming they don't get lost in a sea of correspondence in the meanwhile. Both staff and finance teams waste time with these obsolete procedures. Unorganized accounting: Poor T&E management makes it difficult to deietmine which expenses qualify as allowable. When some employee purchases qualify and others do not, the process of weeding through them becomes tedious and manual, making the conclusion of the fiscal year much more stressful than it should be. QUO. Why are approval and verification stages important from the point of view of control over T&E process? ‘Ans. Despite the fact that there are similar issues in T&E management, each firm is unique. Your company's structure and culture will determine the most effective way to monitor employee spending, In conjunction with a sound T&E strategy, however, following these best practises will make any travel and expenditure procedure more effective and efficient - regardless of industry, 1 Use a travel expenditure policy template: It is not always simple or enjoyable t0 draught company policies, Utilize a policy template to facilitate the work of your finance tear and staff. Here is a template we've designed just for this purpose. Alll the legal terms are included; simply adel your company's information and customise the template to your liking. Draft your T&E policy in plain language: The consensus is thal legal. texts are tedious to read. The bulk of your employees will not read your T&E, policy word for Word unless they are searching for a specific answer. What is the solution? Keep your written poliey straightforward and Scannable, Avoid jargon and lengthy, rambling paragraphs. Format it for easier reading by including the following: Listing of contents ‘* Utilize bullet points, flowcharts, and tables to visually highlight information ‘+ Clarified headlines and italicised information that summarises crucial topics +A policy that is straightforward offers no possibility for misunderstanding and is simple for staff to implement. (Here are other stiggestions for drafting a concise T&E policy.) Apply fiscal discipline: When. setting spend guidelines, it is optimal to apply the identical criteria to the complete staff, Instance: If you give managers miich more company spending allocation and flexibility for business trip reservations than other team members, don't be shocked if there is grumbling around the ‘water cooler. Consolidate T&F management using exhaustive tools: Numerous businesses utilise various SaaS technologies to handle their travel and. cost operations. However, itis simple to squander time by switching between duplicate dashboards ancl applications to execute a single activity. Select solutions with broad ‘capabilities and complimentary integrations. For instance, a travel management system that enables your staff to book their own lodging and transportation froma list of pre-approved vendors, ‘Combine this with an expenditure management application that seamlessly integrates data from your travel ‘management solution, streamlining receipt capture, expense reporting, approvals, and reimbursements. Adopt a paperless policy: Your staff should be able to access modern spending, policies at any time, from any location. This does not occur when the documents are stored in a filing cabinet. Asmioted in the preceding section, incorporating your T&E, policy directly into your travel management and expenditure management software enables employees to spend confidently without needing to consult the guidelines for each transaction. This makes business travel stress-free (even enjoyable!) for your staff and. keeps finance teams and managers in charge of travel expenditures. Regularly update your T&E policy: As your company develops and evolves, employee travel and cost habits will inevitably alter. Your expenditure policy should be updated to reflect the company’s current requirements. Having an up-to-date T&E policy guarantees that staff do not have to worry about booking, travel with the wrong vendors or going over budget. Instruments and procedures for faultless travel expense administration It is evident that the comerstone for effective travel and expenditure management is a robust expense polic supported by all-encompassing software solutions.18 Guess Paper ‘© The most efficient T&E procedures reduce time-consuming, reimbursements by preventing employees from incurring out-of-pocket expenses. Here are some additional tools and procedures that your finance staff can uiilise to support more prudent company spending, Enhance transparency with real-time spend data ‘+ Spend management solutions, such as Spendesk, integrate sophisticated automation features into the expense policy and the spend process. Finance teams can monitor and track all expenditure in real-time, approve purchase requests, assign and alter individual spending limits, and issue reimbursements ~ all froma single platform. ‘+ With real-time spend data, every expense is recorded instantly and connected back’ to the individual consurner, making it simple to always know what is being spent, by whom, and for what purpose. + With this knowledge, finance teams can anticipate budgets more precisely andymanage cash flow more efficiently. Real-time data on expenditures also enables businesses to improve their travel and cost policies. Virtual corporate credit cards for travel bookings ‘* For online transactions, virtual cards are a highly handy and secure payment option For optimal protection, they can be generated instantaneously as one-time or reoccurring payment cards wilh customised spending restrictions ‘+ With virtual corporate cards, employees do not need to pay for traveliexpenditures in advance ot out of pocket They can plan trip details independently and easily), saving both themselves and the finance department time, Physical expense cards for business travellers ‘+ The most effective approach for employees who travel frequently-for work may be to provide them with their own, personalised debit card. ‘These have predetermined budgets that can be used for in-person and online purchases ‘+ Employees can readily request additional funds online, which managers can. approve or deny with a single lick, Managers can also establish cettain spending, lithitations, suchas whether cash withdrawals are permitted and when the card can be used. ‘+ Users can check their card balance, request additional cash, and follow payments in real-time via a connected smartphone application Mobile receipt capture ‘* Keeping track of paper receipts may be a pain and a significant time drain during financial close for accounting, Never again misplace a receipt by automating this process. ‘+ Mobile receipt capture enables employees to snap photo of the receipt immediately following a purchase, allowing, for fast payment reconciliation. OCR technology hatvests receipt information to transmit vital details to your software application. You can also configure automatic notifications for payments lacking receipts ‘+ Nomore searching for personnel at theend of the montit Finally, reconciliation during tax preparation can be simpleShtichakradhar.com 19 BPOI-103 Procure to Pay (P2P}-Accounts Payable GUESS PAPER- 3 QI. Explain the difference between scanning and document managment tools. Ans. There are numerous benefits associated with document scanning, including time and cost efficiency, streamlined security, and space conservation. Boosting Speed + Document scanning, can improve workflow in multiple ways, including the capacity to remotely access digital information, which eliminates the time spent filing and re-filing paper documents, ‘+ Using document management system (DMS) software to manage digital files.can improve the sharing, organisation, and collaboration of papers, in addition to their accessibility. Enhancing Cost-Effectiveness + Thekey ways in which document scanning saves money are time and space: Considering that time is money, the capacity to quickly locate docurents frees up additional time for more productive endeavours. ‘+ Inaddition to saving time, going paperless also frees up storage space, Instead of filing cabinets, the valuable real estate can be utilised for more employees who generate money. ‘+ Simplifying Security Scanning improves security by making it easier t keep track of files, hence reducing the likelihood of files being lost, stolen, or compromised. + Regarding natural disasters and environmental damage, automated backups for stanned documents can be configured such that a secure, up-to-date copy is always saved securely off-site, ‘+ With the ongoing progress of Digitization, individuals seek to reduce their paper-based work and anticipate having access to their vital papers from anywhere. ‘+ Document Management Systems are the optimal choice for simplifying this work PDF Readers are the ideal example of a Document Management System via which PDF files may be accessed offline, stored, viewed, printed, and published at any time and in any location. ‘+ Document Management Systems, often known as Content Management Systems, is commonly regarded as an clement of Enterprise Content Management(ECM). This pertains to Record Management, Workflow Management, Digital Asset Managernent, ee. Guidelines for a better knowledge of Document managemer ‘+ Documents are edited concurrently but independently to minimise conflicts caused by overwriting. In the event of an error, revert to the previous version of the document that was correct. Use version control to distinguish between two distinct versions. Documentary reconstruction Existing Document Management solutions range. from/simple standalone programmes to enterprise-wide systems with conventional document filling capabilities ‘These features consist of: Location of Storage Secutity and access control Auditing and Cataloging Aerangement, Search and relieval Compatibility with desktop application ‘© Document Management is the electronic management and access of documents. Enterprise Content Management Systems monitor and regulate digital documents created with Microsoft Office Suite and accounting software, such as CAD, etc. Effectiveness of the Electronic Document Management System requires the following components: ‘* Import: To introduce a new file into the system. Maintaining system files and utilising storage. Toreirieve documents precisely through the assignment of indexes. To eliminate objects from the system, Certain files are password-protected for authorised users. Q2. What is the purpose of efficiency tools? Ans. Employees across organizations use productivity tools to create and produce documents, databases, charts, graphics, and presentations. Toclay, these tools are required for both corporations and individuals to successfully implement their overall strategy. Online productivity tools are required to ensure that your employees are performing optimally and contributing to increased business productivity, ‘There are many productivity tools you can use for your business, for example: ‘+ A project management tool for task prioritization and resource coordination. ‘+ A team chat app that allows for more efficient team communication,20 Guess Paper A time-tracking tool for monitoring work activity and calculating profitability. Let’s look at the advantages of using a productivity tool to boost as well as improve work efficiency. a) Improve work quality: Productivity and efficiency are important factors that enable businesses to be better every day and provide better service, resulting in more satisfied customers, Productivity tools help you set goals, assign tasks, track progress, create reports, ancl communicate with employees in real time. Itis critical to emphasize that quality improvement should not be accomplished solely through a few mouse licks and a productivity tool, but that teams must be committed to the process, share information, check the project's status, and review everyone's work. This improves both the overall process and the end result This job is made easier by productivity tools! 1) More effective collaboration: The majority of small businesses struggle with managing multiple projects and tasks, They need apps for effective collaboration and individual accountability that allow them to focus ‘on what is important, which is critical for increasing productivity. As a biisifiess owner, you must manage the hierarchy, identify the tasks, and ensure that your employees complete their tasks on time. Itis simple to assign tasks and projects and track their progress with productivity tools. Productivity tools also allow you to combine information from multiple sources and shate updates with team members so they can stay up to date on the project's progress. Messages can be sent to individuals in order to easily catch up with them and keep them up to date on what is going,on. Better communication ‘* Emails have become a burden in many businesses that are looking for more'éfficient ways to communicate, Chat tools are an ideal solution ‘+ Slack, for example, allows you to create a channel for each conversation, Channels, unlike email threads, can be left or joined at any time. Threads allow for side conversations, and direct messaging allows team members to communicate with specific colleagues. + Chat tools are a game-changer for small business owners: There will beno more cc‘ing into emails, Instead, you get a clear, real-time picture of how well your company communicates. Easy performance tracking Q3. ‘* Managers can use productivity tools in busifiess to create tasks and objectives before assigning those tasks to team members. In addition, you can view the performance of employees in relation to the designated goals in real-time, ‘+ Ttnot only allows you to highlight mistakes or bottlenecks, but italso allows you to promote good work done by employees or goal achievement, It improves! Overall productivity by increasing transparency and accountability in your syste and motivating other tearm members to perform better. Tf you want to meet your deadlines, you must keep track of your progress. ‘+ There are numerous other advantages to implementing productivity tools in your organization, These tools can easily optimize your business processes and produce impressive results However, you can only take advantage of these benefits if you have the right tools. As a result, before you choose any, think about what benefits are important to you. ‘+ Whether effective communication and-collabofation are your top priorities, or if performance tracking and reporting are at the top of your list You will be better equipped to decide which tools will best suit your business needs and project requirements once you have determined your requirements. Choosing the right tools can go along way toward strengthening the employer-employee relationship. ‘How does a workflow tool facilitate collaboration across the teams? Ans. Globally technology has transformed how teams work and how business is conducted. Our smartphones, tablets, laptops, anid. cloud technologies have spawned remote work, thereby expanding the talent pool and enabling teams to operate more efficiently. ‘This increase in telecommuting has been made possible by the growing acceptance of a digital working environment that enables individuals to work fromany location they want, ‘+ More than 77% of remote workers report increased productivity, and 52% use fewer vacation days «Approximately 91 percent of remote workers in the United States believe they are more productive at home than in the office, according to a survey. ‘+A ConnectSolutions survey indicated that 77 percent of remote workers do more in less time due to less interruptions such as meetings, conversations, and loud peers. Collaboration via Technology in the Workplace ‘+ Digital collaboration is cooperating and completing tasks with the aid of technology and digital gadgets. These may be apps, tools, software, techniques, procedures, or a whole novel approach to accomplishing tasks.Shrichakradhar.com 24 Digital collaboration is fundamentally a fundamental shift in an organization's working mentality intended to facilitate enhanced productivity and workflow. ‘The digital collaboration attempts to enhance workplace communication, collaboration, content management, document management, and information flow throughout the organisation, resulting in greater employee productivity and efficiency. In addition to work applications, the cloud is an integral component of digital collaboration since it enables firms to operate across regional and time zone boundaries, We are aware that digital collaboration facilitates teamuvork and increases productivity, but the question arises as to how. Let’s examine how digital cooperation genuinely improves the organization's workflow. » 2 3) 4) 5) Enhances team interaction: Digital collaboration has a significant impact on enhancing team engagement, particularly among geographically scattered team members. Email, Skype, Slack and other applications have made it very simple for teams and individuals to connect at any time using text, audio, and even video, There are software tools available for conducting talks with screen shating, and video chat. No matter where your team members are in the world, digital collaboration maintains a continuous and smooth ‘workflow and facilitates real, meaningful connections. ‘Access to Information Rapidly ‘+ How much time do we spend searching for information at work? How can you rely on yourself to discover the exact piece of information you need when you need it, given that all your key business files and papers are dispersed throughout Google Drive, OneDrive, Dropbox, ermail attachments, PC folders, and USB sticks? ‘+ Nearly 20% of a workweek, or one day each week, i8 16st due to employees Searching for knowledge necessary to perform their jobs successfully. ‘+ Consequently, digital collaboration in the workplace enhances Workflow, by ensuring that employees hhave access to the approptiate files and content ab/the appropriate moment. A digital workplace provides a central repository for all files, documents, weblinks, afid other forms of rich media. ‘+ This makes it exceedingly simple for team members to instantly access information from any device, regardless of their location. Employees no, longer need! to log)in to their numerous online storage systems, save data to their hard drivesjor place them on those easily-lost USB sticks. Simply log in to your digital workspace, and you're all set! ‘¢ Workflow Management Software Should Be Used by All Businesses Enhancement of Business Execution ‘* Digital collaboration technologies enable employees to work and solve problems wherever and whenever they choose. Especially. with a mobile-tirst approach to communication and collaboration, ‘employees can stay informed whenever they choose ‘+ Since collaboration solutions provide a one-stop-shop for team members to speak, work, and exchange files and data, decisions are made and work is completed much quicker ‘When employees are always aware of what is occurring in the company and have the means to communicate with the team at any time, they have the much-needed time and space to generale new ideas for advancing the firm. Knowledge Transfer ‘+ Knowledge is your company's tibst Valuable asset since it gives you a competitive advantage that neither software nor money éan deliver. ‘+ As baby: boomers continue to retire, they take with them a vast amount of information and experience. By failing to share expertise, Fortune 500 organisations lose almost $31.5 billion annually, according to research, ‘+ This ack of expertise causes a void in the company, which is often filled by expensive and extensive training at great expense. Knowledge sharing is incredibly beneficial for eciucating new employees the ‘onganization's dos and don'ts and quickly creates the groundwork for a lot more productive staff. ‘* Digital workplace solutions such as knowledge management systems enable firms to record the ‘expertise and experience of senior managers so that the organization's information is not lost when an employee deparis. ‘+ With a knowledge management system in place, your existing and future employees will have quick access to this material and will be able to continue working without difficulty. Remove Organizational Silos ‘+The majotity of organisations function as a single entity to the outside world, but ate divided within into specialised silos. This restricts the flow of information and expertise from one department or staff to another, resulting in inefficient and, on occasion, catastrophic effects. ‘+ Digital collaboration affords an astounding amount of chances to stay in constant contact with colleagues and enhance workflow.