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SUMMER TRAINING REPORT ON PAYMNENT EFFICIENCY & DATABASE ON VENDOR MASTERAT ITC LIMITED, MUNGER
Project submitted in partial fulfillment of the requirement of the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Under the guidance of:- Submitted By:- ANKIT KUMAR (BBA/3022/10)
DEPARTMENT OF MANAGEMENTBIRLA INSTITUTE OF TECHNOLOGYMESRA, RANCHI2012
Prof. Nidhi Tiwari
OBJECTIVE OF THE PROJECTTo prepare vendor master, which helps in to know about all the data of the vendors.Checking, monitoring pending bills regularly & sorting out issues.To developed better interface between other functions to reduce delays.Previous data has to be analyzed for better understanding the problem in delay in payment.Designing of a score card for better control over payment efficiency.To reduce the time gap & make payment to vendor on time.
INTRODUCTION OF COMPANYITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changedfrom Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were removed effective September 18, 2001.The Company now stands rechristened 'ITC Limited.ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
My project is on payment efficiency of Purchase Order based vendor with agreed payment terms.
Standard payment term of ITC MUNGER:- Payment will be made either by cheque / demand draft or any other appropriate banking instrument / mechanism normally within one month of submission of bills, unless otherwise agreed, subject to vendor complying with the terms & conditions.
RESEARCH METHODOLOGYPrimary data:- As per my research primary data is collected through questionnaire which is filled by vendors.
Secondary data:- Secondary data is collected by the help of various PVRS (Personal vouchers) and through various documents provided to me by ITC.
The universe size was to cover the whole vendors. The view of vendors is taken into account. Data is also collected from various vendors of ITC LTD. MUNGER for comparison and tabulation. Out of 96 vendors sample of 56 was taken in the project and efforts have been made to get the maximum information. And method used for sampling is convenience sampling.
Payment Efficiency Score CardPayment from due datePoint scored (-5 to 10)Up to +/- 3 days (27 to 33 days)10Up to +/- 4 days (on 26 or 34 day)9Up to +/-7 days (23-25 or 35-37)8Up to +/- 10 days (20-22 or 38-40)6Up to +/- 13 days (17-19 or 41-43)3+/- 13 days (=44 days)0> 30 days -5Payment Efficiency= (Total point availed) x 100 Max. Point
Payment Efficiency during May 11 January 12
INTERPRETRATION OF RESULTSQuestion: What kind of business relationship do you intend to develop with ITC MUNGER?
Question: How do you fell about business relationship that ITC has created over the years?
Question: You are providing to ITC?
Question: How many days credit period you are providing to ITC?
Question: What type of grade you want to give to ITC for its performance regarding payment efficiency?
Suggestions given by vendors for improving of Payment efficiency
It will be more helpful if ITC attach the deduction or short payment details with cheque , if any.Some of the vendors are asking for e-payment in place of payment through cheque.Make an acknowledgement of bill & generate a unique no. regarding bill so that a vendor can easily get queries related to its bill.If there is any problem regarding bill or goods then immediately inform it to vendors so that vendors can quickly correct its mistake & no delay is made in his payment.Can try RTGS (Real time gross settlement) facility of banks for making payment fast.
CONCLUSION Almost all vendors want long term relationship with ITC, MUNGER.All the vendors are aware of ITC vendors term & policies .Some vendors think that relationship can get better with more business & some vendors that its fulfilling relationship.Almost all the vendors are satisfied with payment methodology adopted by ITC, MUNGER.Vendors want their payment in 15 to 45 days period.None of the vendors think that ITC, MUNGER have ever made any wrong deduction from their bill amount.Most of vendors gave very good grade to ITC & some vendors thinks good about the overall performance of ITC, MUNGER regarding payment efficiency.
RECOMMENDATIONSDuring my observation I found that in some cases bill is sent by the vendors on time but engineering department doesnt submit it to commercial dept. on time thats why delay is made so it have to be sorted out.
Develop better interface between other functions to reduce delays.
Make an acknowledgement of the bill to the vendors when it is received.
A bill tracking register is to be made to know about the current status of the bill.
Monthly reconciliation of document so that outstanding bills can easily identify.
Make a separate column in score card system for those bills which is early made on request of vendors to find out exact score.
Vendors Payment Efficiency Questionnaire
Name/Code of the vendor: ______________________________ Phone number: ______________________________ (optional)Address: ________________________________________________________Q1: What kind of business relationship do you intend to develop with ITC MUNGER?a) Short term b) Long term Q2. Have you gone through ITC organizations brochure & vendor term & policy ?a) yes b) NoQ3. How do you feel about the business relationship that ITC have created over the years?a) It is a fulfilling relationshipb) It is a straining relationshipc) The relationship can get better with more businessQ4. You are providing to ITC ?a) Goods b) Services c) Both Q5. By which method ITC pays your bill ?a) Cash b) Demand Draftc) Cheque d) Any Other Q6. Are you satisfied with the payment methodology adopted by the ITC Ltd.?a) Yes b) No
Q7. How many days credit period you are providing to ITC ?a) 00-15 days b) 16-30 days c) 31-45 days d) 46 and aboveQ8. Do u think that ITC made your payment during your given credit period ?a) Yes b) No Q9. Do u think that ITC made any wrong deduction from the bill amount ?a) Yes b) NoQ10. Do u think that ITC made any delay in making payment if all the invoices / goods are correct in number/amount ?a) Yes b) No Q11.Which type of grade you want to give to ITC for its performance regarding payment efficiency ?a) Very Good b) Goodc) Satisfactory d) Dissatisfactory
Q12. Do you have any suggestions for improvement in performance of ITC regarding payment efficiency ? If yes please specify below! .. I am thankful to you for your important suggestions and feedback . Thanking You . Ankit kumar
PVR FILE OF :- May 2011June 2011July 2011August 2011September 2011October 2011November 2011December 2011January 2012And other various documents of ITC, MUNGERwhich is related to payment of the vendors.