GEC WRITHLON: MANAGEMENT

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Sunday 5 April 2020

MANAGEMENT Sunday, April 05, 2020

FACTORING: A TOOL OF RECEIVABLES MANAGEMENT

FACTORING: A TOOL OF RECEIVABLES MANAGEMENT

INTRODUCTION

The word FACTOR has been derived from the latin word “FACERE” which means to make or to do.

Factoring is a financial transaction where a firm sells its ACCOUNT RECEIVABLES (invoice) to a third party called a FACTOR at a discounted prices .

Factoring is a financial option for the management of receivables. In others words, it is the conversion of Credit Sales into Cash.

A financial institution (factor) buys the account receivables of a company (client) & pays upto 80% of amount immediately on formation of agreement & remaining amount (balance 20%) to client when the customer pays debt .

PARTIES IN FACTORING

THE SELLER, who has produced the goods & raised invoice

THE BUYER, the consumer of goods & party to pay

THE FACTOR, the financial institution that advances the portion of funds to the seller.

ADVANTAGES OF FACTORING

· Improved efficiency

· Improved his credit standing position

· Flexible to the company

· Improved cash flow

· Meet seasonable demands

· Better purchase planning

· Saves the management time & effort

· Avoid bad debts

· Ensures better management of receivables

· Improve the liquidity of clients

FUNCTIONS OF FACTORING

· Maintain Accounts: The factor maintains the client’s sale ledger relating to the receivables & also provide periodic reports .

· Provision of collection facility: The factor undertakes to collect the receivables on behalf of client relieving the client .

· Financing: The factor provides advance money to client against outstanding debt of about 80 % & balance minus commission on maturity.

· Credit Protection: The factoring organization is required to ascertain the creditworthiness & feasibility position of buyer .

· Advisory Services: The factor is also able to provide advisory service ( financial dealing , extensive credit information ) to client .

MECHANISM OF FACTORING:

1) INTERACTION WITH FUNDING SPECIALIST: The seller interacts with funding specialist / broker & explain the funding needs.

2) PRELIMINARY CLIENT PROFILE: The broker prepares a preliminary client profile form & submit to funder.

3) NEGOTIATE CUSTOMISED FACTORING AGREEMENT: Once both party agree that factoring is possible, the broker puts the seller in direct contact with funder for further queries.

4) LEGAL RESEARCH COST: The seller may be asked to remit fee which incurred during “DUE DILIGENCE”.

5) DUE DELIGENCE: This is the process by which the buyer’s creditworthiness is evaluated & verified invoices etc.

6) ACKNOWLEDGEMENT: The seller submits an acknowledge copy of contract to factor for records.

7) SANCTION LETTER: A detailed sanction letter is given to the seller & their acceptance with required signatories.

8) DISCOUNTING RATES: The discount rate, charges are fixed at time of contract.

9) SIGNING OF AGREEMENT & INITIAL ADVANCE TO THE CLIENT: Usually within 7 to 10 days of initial contact with factor, agreements are signed , customers are notified , UNIQUE CLIENT CODE & the first advance (80%) is forwarded to company.

10) COMPLETION ACTIVITIES:

· The sellers services or delivers products, thus creating an invoice.

· The seller sends copy of invoice directly to the factor.

· The funder verifies the invoice & the advance is sent to the seller as per the agreement

· The buyer pays the factor, then the factor returns any remaining reserve, minus the fee which has been predetermined in the negotiated agreement.

BILL DISCOUNTING VS FACTORING

BILL DISCOUNTING	FACTORING
It is a provision of finance against the bills .	Factoring includes renders all services like maintenance of ledger , advisory services etc.
Advances are made against the bills .	Trade debts are purchased .
Bill discounting is always with recourse, i.e. in case of default the client will make good the loss .	Factoring may be with recourse or without recourse .
Bill discounting is always disclosed ( acceptor of bill is fully aware )\|	Factoring services may be like “undisclosed factoring” are confidential in nature .

CONCLUSION:

In factoring a company or firm covert its receivables into cash by selling them to a factoring agent or institution at discount. the factor assumes the risk of collection & loss of debts fall on the factor.

Keywords: Client, Factor, Funder, discount, receivables, credit, financing.

Youtube link:

https://youtu.be/fylqApusnBk

AUTHOR:

HIMANSHI CHUGH

(ASSISTANT PROFESSOR, MANAGEMENT DEPARTMENT)

GEC WRITHLON 17

Friday 3 April 2020

MANAGEMENT Friday, April 03, 2020

Now and Then Corona- A fear or Blessing in Disguise

Few days of Lock down and look how fresh everything outside feels. Air feels like pure Oxygen coming all the way from Himalayas.

When u hear Birds chirping it feels like you are in Jungles of Amazon. April 1st is feeling like its making fool of us with such a pleasant weather around. No more Danger zone alarms in Delhi or Even odd system news when it comes to Air Quality Index. No more Air Quality Index warning in cities of NCR. No more fear of wearing white shirt when you are on Scooty or Bike. No more suffocation in Traffic.

Dogs have started showing courage of Groaning looking at Humans like we are entering their territory. So quickly it’s forgotten that there use to be so many humans that these dogs never use to get place to walk. No more busting our ears with noise. No more burning of Life endangering fuel. No more fumes that choke your throat and fill your lungs with Darkest and deadly fumes.

No more factories exhausting dark cloud over the clear blue sky. No more running for work at 0830 AM. No more late night meetings. No more rushing around at 120 KMPL endangering your and other’s lives. No more synthetic food to eat. No more staying outside your home. No more traffic challans. No more road accidents. No more hatred gatherings of people spoiling the public harmony. No more burning of 500kms of fuel to see Taj Mahal which itself is getting spoiled by the fuel you burnt. No more waiting in queues for Railway tickets. No more overcrowded trains or buses. No more fight for land among countries.

Now comes time when you are with your family. When you can feel how easy or difficult it is to work in kitchen. Sky is now smiling with no dimples i.e. Ozone layer has now started recovery. Birds are not thirsty anymore. Sky is clean. Nature is now playing the smoothening music. Family started spending together now. Rivers are cleansing themselves. Roads are clean now without Swachh Bharat Abhiyaan. Yoga started at homes not willingly but out of boredom. Buildings looking clean now. You can feel the fragrance of mother earth and its creatures. You can now stand with trees and feel them actually talking to you when you close your eyes. Countries now want to look for their people rather than attacking others. Humans are now looking to gather food for them rather than racing to take other's share.

Race to be the best has come to halt and regime to survive has started now.

Finally everybody is striving for common cause to beat the demon and survive.

But question is who this demon is!!!

Is it Corona the Virus or Is it the Demon among ourselves because whatever was spoiled was not spoiled by Corona and whatever has restored back is not actually due to Corona. Reason for all this was Human and its mindset and is Human and its change in behaviour.

Corona is just an excuse to make us realise what we were, what we became and what we want to be in near future.

Corona is just helping us see our future options i.e. not just the worst one but glimpses of how better it can be.

It's upto you to decide what your and your future's future should look like.

Decide and act accordingly.

Although Human is the best creature of Mother earth but time has changed and Virus proved to be the bestie for earth now.

English may not be perfect but you will get what i meant and what our future should be like😊

With complement for present and Future.

Author:

Parul & Manjeet S. Ghangas

GEC WRITHLON 8

Friday 27 March 2020

MANAGEMENT Friday, March 27, 2020

Coronavirus (COVID 19) pandemic

INTRODUCTION

The coronavirus causes illnesses ranging from the common cold to more severe diseases such as severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), according to the WHO.

HISTORICAL AND POLITICAL FACTS

The Novel Corona virus was first found in the city of Wuhan in china on 31st December 2019.According to some research’s, it came from bats and snakes, since they were consumed at large scale in china. According to BBC News, there has also been such a strange incident that the Chinese authorities stopped a doctor from spreading the news of the virus even after finding it dangerous. According to BBC News, His name was Li Wenliang . He himself died of COVID-19(CORONA VIRUS DISEASE 2019). This is really absurd and inexplicable why they did so.

URL:( https://youtu.be/y6iikPfpXl0)

PRESENT SCENARIO

Every nation is worried about its affect over them. It is spread through touch and exposed saliva but some rumours state that it is air-borne. This virus then reaches the respiratory system and damages it, which further leads to death. As of on 23 March 2020 , there are total 338,724 cases internationally out of which 99,003 have recovered and 14,687 have died(www.wordometers.info). They circulate in animals and some can be transmitted between animals and humans.

Though the death rate is quite low, but the main trouble is that proper medication has not been made for sure till now. It has also finished economy of countries as schools, offices, public places, various industries etc. are closed. It is a big problem for those nations whose GDP is already low and cannot afford a shut down for emergency and welfare of the citizens.

(Credit for image npr.org)

CORONA IN INDIA

Our respectable Prime minister also declared 22 march as “Janata Curfew” to overcome rapid spread of this dangerous disease. He also organised a presentation of gratitude to army officers, doctors, nurses, cleaners, delivery men etc. who serve for us without thinking for themselves. This was done by a Clapping, striking platters with spoons etc. by each and every citizen at the same time for 5 minutes.

(credit - the hindu)

PRECAUTIONS

Help us to stop coronavirus

1 HANDS Wash them often

2 ELBOW Cough into it

3 FACE Wash Your Face Often

4 SPACE Keep safe distance

5 HOME Stay home if you can

General public health information

There’s currently no vaccine to prevent coronavirus disease (COVID-19). You can protect yourself and help prevent spreading the virus to others if you:

Do’s

Regularly Wash your hands for around 20 seconds, with soap and water or alcohol-based hand rub

Cover your nose and mouth with a mask and flexed elbow when you cough or sneeze

Maintain a social distance of 1 meter or 3 feet with people who are unwell

Stay home and isolate yourself from others in the household

Don't

Avoid touching your eyes, nose, or mouth if you have not washed or sanitised your hands.

Lost sense of smell could also be a peculiar clue to COVID-19 infection

https://economictimes.indiatimes.com/news/international/world-news/lost-sense-of-smell-may-be-peculiar-clue-to-coronavirus-infection/articleshow/74767666.cms?from=mdr

Seeing todays condition, we must take the precautions directed by the government and take a quarantine till prescribed date. Still some small vendors, shopkeepers etc. are not listening the media and considering money superior to and more important than life. They must realize that by doing so they are also putting their family’s life to danger or crisis. We must not panic or get frightened as humanity when united can fight against this dangerous pandemic with ease. Nothing I difficult if all are united and have same mindset. Take care of yourself and avoid public gatherings.

Authors :

Krishna Saluja

Dr. Prerna Dawar Saluja

GEC WRITHLON 23

MANAGEMENT Friday, March 27, 2020

Social Distancing Vs Productivity- Finding a Balance

In this time of social distancing and home quarantine. I want to introduce to you people something which I have been practicing for, it’s realizing your inner strength and making your self strong emotionally, mentally and physically.

This is a stage where I am believing in myself and exercising day to day activities to make my health and intellect better by each passing day for value addition to hold deep wisdom and trusting in it. And analysing the changes personally to move forward towards transformation and nourishment.

Opportunity creation by practicing 3P’s:-

1. Passion- (Why)

2. Precious- (How)

3. Purpose- (What)

Let us look a bigger picture of these 3P’s

P Passion:- You want to recognize your inner passion, zeal, something that has fascinated you for a longer period. It could be

· Reading

· Writing

· Painting

· Fitness

· Yoga

· Beauty

· Poetry

Precious:- What value that you are adding to your self and what value this project is adding to you. You are contributing to this situation daily.

You all have to ask few questions from self

· What you are findin

· What you are trying to learn?

· What are you exploring?

· Purpose:- Time that you have invested in yourself, Time that you all have saved from social distancing by adding value to it daily from your planned and unplanned work.

· To become the best

· The brightest

· The brilliant version of yourself.

· Anything preferably indoors keeping in mind the consideration.

3 Sign of Deep Understanding

1. You all are the purpose

2. Its just the matter of Realization

3. This time nature has given us a chance to think again, think twice, what we are doing with our self to become better than the best.

Top 5 big secrets on Efficiency:-

Connecting your heart with soul
Practicing Joy
Creating a healthy relationship between you and your body
Mind relaxation
Questioning yourself

Meaning of Social Distancing in effective way

S - Situation D - Deep

0 - Over I -Immersion

C- Control S- Start With

I- Identifying T -Time

A - Actual A - And

L - Limits N - Noticing

C - Care

I - In

N - Number of

G- Generations

Conclusion:-

By understanding the situations prevailing Throughout the whole world. There is still a ray of hope which is within our self. And We all will make India proud again by practicing social distancing and working upon all the major domains by facing reality and fighting for a better future. History is repeating. Earlier we fight for a free India and now we are fighting for a safe India. was India has already proved in the past and will be a proud nation in the future. Disease and distraction like COVID-19 will no longer stop us to dream for a better tomorrow.