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TO STUDY THE OVERDUE ON

ACCOUNTS PAYABLE AT
TATA CUMMINS PRIVATE LIMITED

Presented by :
ANKUR MITRA
BBA+MBA 4th Year
BBD University
INTRODUCTION
Overdue :
Overdue is loans, bills of exchange, and other
obligations remaining unpaid past their due (or
maturity) date. All financial arrangements
become overdue one business day after
their due date.

Account Payable :
Account Payable is money owed by a business
to its suppliers shown as a liability on a
company's balancesheet. It is distinct
from notes payable liabilities, which are debts
created by formal legal instrument documents.
COMPANY PROFILE

 Tata Cummins Private Limited is a 50-50 joint venture between Tata motors limited,
INDIA and Cummins inc., USA.
 The entity manufactures high performance, reliable and durable mid-range (B&L)
engines in the 75 to 400 HP range
 Established in the year 1994, the company started its operations with its state-of-
the-art facility at the steel city of Jamshedpur
CONTINUE…
 The plant has 828 employees consisting of 152 staffs at managerial levels and 626
at associate’s level.
 Functional Units of company are : Shop Operation
Human Resource
Information Technology
Finance
Product Engineering
Customer Engineering
Materials
Engineering
Quality
After Market
CONTINUE..
OVERVIEW OF ENGINE’S

 First to market in India with advanced product technology and fit-


for-market solutions that meets or exceeds customer satisfaction
and compliance to existing norms
 Manufactures state-of–the-art, fuel efficient and ‘clean’ diesel
engines
 Power nodes varying from 75 to 400 HP across mechanical and
electronic platforms
 Our products caters to both on-highway & off-highway
applications, supporting a wide segment of business verticals
B series
ranging from automotive and industrial to power generation and
distribution business
 Our B5.9 is the only rugged and durable BS III compliant engine
with no electronics, ensuring easy serviceability anywhere in India
while the advanced B6.7 and L8.9 are the high horse-power
electronic engines for the premium heavy duty market segments
 Our product line also offers flexibility in its fit-for-market
solutions with the development of the ISBe 5.9 litre concept
engine for a healthy mix of product quality and optimal cost
 Manufacturing 4 and 6 cylinder B Series and L Series of engines

L series
REVIEW OF LITERATURE
 Accounts Payable Survey: The Impact of
Invoice Automation on Financial
Performance of ‘ PROACTIS : The spend
control company’.

 High-Performance Accounts Payable Three


Key Drivers to Success of ‘Canon business
process service, Inc.’
OBJECTIVE
 To study the analysis on overdue account payable at TATA Cummins

Pvt Ltd

 To find out the total value of invoices overdue

 To ascertain the different hold reasons for which the payments have

not been yet made on the invoices

 To find out the difference between the total value of invoices

overdue between two particular dates


RESEARCH METHODOLOGY
Research Design
The data has been analysed through the company’s account statements and by using the
application Microsoft office excel and TCL’s system software ORACLE.

Type Of Research Design


 Quantitative Research i.e invoice amount is numerical data.
 Analytical Research i.e the data provided from the company for analysis.

Data Collection Method


Secondary data which involves Websites & Past data records

Data Collection Tools


 Company’s account statements
 Internet
TABLE 1 TABLE 2
SUPPLIER INVOICE INVOICE REMAI REASO SUPPLI INVOIC INVOIC REMAIN REASON
S.N NAME NO. AMOUNT NING N
S.N ER E NO. E ING
O AMOUN O NAME AMOUN AMOUN
T T T
Dimensi 60148 -66764 - Partial
1 Dimension
data ltd
601488
151700
-66764 -
10014.
1 on data 81517 10014. amount
7 6 ltd 007 6 remainin
g
Pawan auto ERS000 16200 16200
2 pvt ltd 63/1482 2 Pawan ERS000 16200 16200 Quality
4953 auto pvt 63/148 hold
ltd 24953
Sati ERS526 31 31
3 Industrial 6/13813 3 Sati ERS526 31 31 Payment
075 Industri 6/1381 by check
al 3075
Well tech ERS938/ 61200 61200
4 industry 148584 4 Well
tech
ERS938
/14858
61200 61200 TCL
validatio
76 industry 476 n hold
Omkar ERS11/ 22399. 22399. Tax
5 Omkar ERS11/1 22399.2 22399. 5 suprana 161094 2 2 varience
supranation 610944 2 tional 453
al pvt ltd. 53 pvt ltd.

DATA ANALYSIS & INTERPRETATION


CONTINUE…
EXPLAINATION OF REASON FOR HOLDING
 Minus (-) sign in the remaining amount represent the Debit Note.
 Plus (+) sign in the remaining amount represent the amount is to be paid.
 Partial amount remaining: The part amount has been paid from the total amount and
the remaining amount is to be paid.
 Quality & QTY REC: Quality Department hold the payment due to mis-match in
quality.
 Invoice (DFT/ORG) N.A & INV (DFT/ORG) N.A.: Missing of original invoice.
 Import: Import department hold the payment due mismatch of material received.
 Wrong bill no. entered in system: Hold the payment due wrong bill number interred in the
system.
 Debit Note & Standard Invoice off set each other:
 No bank details: Payment holds due to missing of vendor bank detail.
 TCL Validation-Hold: Others department kept the payment on hold.
 Tax variance: Difference in tax amount between vendor & company.
FINDINGS
 Invoice (DFT/ORG) not available.
 TCL Validation hold
 Quality mismatch
 Tax variance
 PO not approved
 Pending for approval
 Not payable
 No bank details
 Approval Required
 Quantity mismatch
 Budget shortage
CONCLUSION
Accounts payable (AP) is money owed by a business to its suppliers shown as a liability on a
company's balance sheet. It is distinct from notes payable liabilities, which are debts created by formal legal
instrument documents. The findings in the report show that there are many significant reasons for overdue in
accounts payable. But, the company is performing exceptionally well due to the up wising in the global market
followed by the domestic market. It is an upcoming one with good and innovation ideas and believed in
improving all the areas of its operations. The company has a good liquidity position and does not delay its
commitment to its creditor’s, it is maintaining very good relationship with their banks and their working capital
management is well balanced.
Whereas Overdue is loans, bills of exchange, and other obligations remaining unpaid past their due (or maturity)
date. All financial arrangements become overdue one business day after their due date. This report consist of
limited data, limited period & limited area. By analysis of accounts payable many reason came out behind
keeping overdue like tax variance, Quality hold, import, bank details not available, etc. and many more. By the
end of this report suggestion has been given from me, which I think it would be helpful for Tata Cummins Pvt
Ltd Company for minimising the overdue.
SUGGESTIONS
 When purchase order are revised, it’s approved by higher authority, which should be done
within the time frame, by which it helps in excluding overdue in accounts payable.

 Overdue can also help in earning in the form of interest. Like, Sometimes vendor need to pay
high amount, then company delay in payment and on due amount company can earn interest
from bank.

 At the time of contract, vendor should provide complete bank details with documents, which
helps accounts departments for payment on time. And if there some changes in vendor banks
accounts then it’s must be updated.

 For the payment procedure the account department must have original and duplicate of
invoice. And if it’s not there, then they must inform to the respective department.

 Overdue in accounts payable should not exceed the time limit because it will create negative
impact on vendor of company.
REFERENCES
BOOKS
 By C R Kothari, Research Methodology Modules & Technique (Second Revised Edition),New age
international publisher.
 Maheshwari S.N & Maheshwari S.K, an Introduction to Accountancy, Vikas Publication.
 Pandey IM, Financial Management, Vikas Publishing house, Revised ED.,2003.
 Naresh Malhotra, Market Research, Pearson Education.

WEBSITES:
 www.accountingcoach.com
 www.cumminsindia.com
 https://www.enotes.com/research-starters/accounts-receivable-inventories article retrieved on
20 june 2018.
 Onwumere, J. U. J., Ibe, I. G., & Ugbam, O. C. (2012). The impact of working capital management
on profitability of Nigerian firms: A preliminary investigation. European Journal of Business and
management, 4(15), 192-201.
 Motwani, J., Subramanian, R., & Gopalakrishna, P. (2005). Critical factors for successful ERP
implementation: Exploratory findings from four case studies. Computers in Industry, 56(6), 529-
544.
 Strategies for optimizing your accounts payable delloite article retrived on 24 june 2018

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