INTERNATIONAL INSTITUTE OF PLANNING & MANAGEMENT NEW DELHI

PROJECT REPORT IN

ON THE TOPIC OF

PAYMENT MANAGEMENT SYSTEM

IN PARTIAL FULLFILLEMENT OF POST GRADUATION PROGRAMM (SPRING SUMMER 2008-2010)

SUBMITTED BY:- RAJAT CHOUDHARY

Mail-id- rajatchoudhary_59@yahoo.co.in Cell no.- +91-93501-33259

ACKNOWLEDGEMENT

I asseverate my deep sense of gratitude toward:

Mr. Sanjeev Mehta (Sr. manager Admin deptt.), Mr. Pankaj kalra (finanacial controller), Mr. Samar roy (Sr. manager finance Deptt).

This Project has been made possible through the direct and indirect Co-operation of various staff members of AIRCEL LIMITED. And without those co-operation & help the completion of this internship was not possible, who have inspired me at every step suggest alternative solutions & shared their valuable experience & knowledge with me.

who always facilitates me in gaining practical knowledge.

In my last line I would like to say thanks to Mr. Vikash gupta, Mr. Subham jain, Mr. Amir ali (finance deptt.) who helped me alot in explaining the work process of the organization & sharing other precious knowledge.

RAJAT CHOUDHARY (SS2008/2010)

PREFACE

Practical part is an essential part of management studies as it helps one to visualize the management practices in the field, the theoretical aspects of which we have learnt in the classroom.

This study of payment management system is based on on-the-job & off-the-job research, With the help of past financial data, the roll of otherdepartments in payment system, budget system, application of SAP in finance, role of different circles, contracts, vendors payment period. on all these topics research has done. This training constitutes an integral part of my master of business administration at INTERNATIONAL INSTITUTE OF PLANNING & MANAGEMENT (NEW DELHI).

The training period consist of 45 days from January 2nd to 27th January 2009

It was very challenging as well as interesting for me to work on payment management system. I have leant practical & theoretical aspects which implemented by company in its structure.

CONTENTS

1.Preface2.Acknowledge3.Organization structure

3.1- History of organization3.2- Strategic business unit3.3- About products

3.4- Financial performance 3.5- Organization chart 4. Introduction 4.1-Objective of study 4.2-Payment process 4.3-Type of payments 4.4-Budget 4.5-Involved departments 4.6-Vendors & contracts 4.7-Importance of SAP

5. Research methodologies 5.1 Introduction & objective

5.2 Research Design 5.3 Data collection Instruments 5.4 Research Limitation 6. Bibliography

7. Abbreviation 8. Conclusion

Company origin

The Aircel Group is a joint venture between Maxis Communications Berhad of Malaysia and Apollo Hospital Enterprise Ltd of India, with Maxis Communications holding a majority stake of 74%. Aircel commenced operations in 1999 and became the leading mobile operator in Tamil Nadu within 18 months. In December 2003, it launched commercially in Chennai and quickly established itself as a market leader – a position it has held since. Aircel began its outward expansion in 2005 and met with unprecedented success in the Eastern frontier circles. It emerged a market leader in Assam and in the North Eastern provinces within 18 months of operations. During this period, the company gained a foothold in 9 circles.

Circles

1. Chennai

2. Tamilnadu

3. Assam

4. Kolkata

5. Bihar

6. Orrisa

7. Himachal pradesh

8. Jammu & Kashmir

9. North east

Sr. no

The Company has currently gained a momentum in the space of telecom in India post the allocation of additional spectrum by the Department of Telecom, Govt. of India for 13 new circles across India.

These include Delhi (Metro), Mumbai (Metro), Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra & Goa, Rajasthan, Punjab, UP (West) and UP (East).

Aircel has won many awards and recognitions. Voice and Data gave Aircel the highest rating for overall customer satisfaction and network quality in 2006. Aircel emerged as the top mid-size utility company in Businessworld’s ‘List of Best Mid-Size Companies’ in 2007. Additionally, Tele.net recognised Aircel as the best regional operator in 2008.

With over 15 million customers in the country, Aircel, the fastest growing telecom company in India, has revved up plans to become a full-fledged national operator.

Strategic business unit

HOLDING COMPANY

DISHNET WIRELESS LIMITED

AIRCEL CELLULAR

LIMITED

AIRCEL BUSINESS SOLUTIONS

DISHNET WIRELESS LIMITED-This company provides broadband services in different circles & it is one of the company which uses WI-MAX technology .

AIRCEL CELLULAR LIMITED-This company provides mobile services in different circles.

AIRCEL BUSINESS SOLUTIONS-This is the sub part of aircel cellular limited which executes the ILD, NLD,WIMAX operations for aircel cellular.

COMPANY OFFERING(PRODUCTS)

Aircel mainly deal in its core business of cellular connection. it provides variety of products such as.

-Postpaid mobile connections

-Prepaid mobile connections

-Recharge vouchers

-Value added services

-Broadband connections

with the help of these products company operate its business in the market & company launches other products but they can be depend on either the competition or customer preference

Financial performance

Chennai-based Aircel is beginning to play a major role in the financial performance of Malaysia’s Maxis Communications ever since it was acquired in March 2006 from C Sivasankaran of the Sterling Group.

Aircel has substantially increased its contribution in Maxis’ overall revenue as well as in the EBITDA growth, besides the overall subscriber growth during the first quarter of 2007.

Aircel’s contribution to Maxis overall revenue in the first quarter has gone up sharply to 15% as against 10% in the previous quarters, while the contribution to EBITDA went up to 9% as against 7% a few quarters ago, Maxis said in a communication to investors recently.

In value, Aircel contributed RM 320 million (close to Rs 390 crore) to the group’s turnover of RM 2,157 million (Rs 2,600 crore) in the quarter as against RM 29 million (Rs 38 crore) ie more than 10 times over the previous quarter.

Similarly, Aircel’s contribution on EBITDA was around RM 102 million (close to Rs 122 crore) as against group’s EBITDA of RM 1,082 million (Rs 1,300 crore), Maxis pointed out. The Indian arm was key to this increase in the group’s both revenue and EBITDA, the company said further.

Profit figures

This was possible, as the subscriber base of Aircel has more than doubled to 5.5 million as of March 2007 as compared to 2.6 million a year back, taking Maxis's total subscriber base to 14 million during the quarter. Aircel managed to retain its market share in Chennai and Tamil Nadu with 26% and 29%, respectively.

In the other five circles, the company's market share rose from 9.3% to 11% in the current quarter . In the last quarter under review alone Aircel has gained 1 million subscribers, Maxis said.

Aircel is operational in nine circles with an immediate market coverage to 350 million people, a quick gain on population from last quarter's 230 million people from seven circles.

Having earmarked around $1 billion investments in India over a period of three years, Maxis sees its Indian subsidiary become a key player in the group’s overall growth in revenue and profits.

FINANCE DEPARMENT STRUCTURE

FINANCE DEPTT.

TRESURY REVENUE TAXATION M.I.S PAYBLE

OPEX CAPEX

ORGANISATION CHART(FINANCE DEPTT.)

M.D(MAXIS GROUP)

C.F.O C.O.O

FINANCIAL CONTROLLER

OTHERS

BUSINESS CONTROLER

MANAGER/Sr. MANAGER

DIVISIONAL MANAGER/ ASTT.

MANAGER

SENIOR EXECUTIVE

OBJECTIVE OF STUDY

This study of payment management system relates with the payment which made by the company against their expenditures. The main focus of this study is on the overall payment procedure, expenditures are different in their nature company pays huge amount against these ongoing expenditures in term of fortnightly, monthly, quarterly.

Material, Money, Market, Method, Manpower, Management these are 6 important needs for running any business all relates to each other they cannot work without each other aid. In organization expenditures are as back cost & the margins are as face cost. Management of overall payment system, this tasks transparency & efficiency is depend upon the ERP system (SAP) or the employee. SAP makes work more easy in less times & employee are the helper who helps to SAP in collecting the correct data from the sources

PAYMENT PROCESS

This is the whole process starts from the required deptt. The needy department issue demand letter to commercial deptt in which they specified what they need after getting this letter by commercial deptt. they analyze this letter carefully & start contacts to their vendors they take quotations from different vendor after collecting the quotations they compare the price, quality, delivery, post sales services & other

REQUIRED DEPTT.

COMMERCIAL DEPTT.

VENDOR

SELECT VENDOR ON THE BASIS OF PRICES

GENERATE P.O

GOODS RECEIVED BY COMMERCIAL DEPTT.

HANDOVER TO DEPTT

MADE GRN ENTRY

PAYBLE DEPTT.

factor. Than they select a vendor for buying a particular product or service after all they issue a P.O in which they describe their requirement by name, type, quantity, a predetermined delivery date. after

This vendor Sends the required product & service to commercial deptt. The commercial deptt. Checks the product/services which they ordered in term of quality, other factors along with p/s vendors send its invoice or bill commercial deptt. Except the bill & forward that bill & ordered p/s to the needy deptt. now needy deptt. signe that . Approval letter receiving from commercial deptt by their functional head after this commercial /goods received deptt send it bill to payment deptt. With all the documents such as P.O, Invoice, P.R. now payable deptt checks the all required documents & book the expense in SAP & make payment to the vendor for P/S through the D.D, CHEQUE, (ONLINE) ELECTRONIC FUND TRANSFER.

TERMINOLOGIES

P.O- (PURCHASE ORDRER)- Issued by the commercial deptt. To the vendors.P.R-(PURCHASE REQUISITION)-Made by the the department employee for bills which amount is less than 10,000.VENDOR- Is the party who sells p/s in the market.

TYPE OF PAYMENTS

OPEX- This term OPEX stands for operational expenditures, these kind of expenditure are required for running the business or we can say these kind of expenditure are operating expenditures which arises when we operates business. Such as telephone, electricity, advertising transportations these kind of expenditures consist in this category.

CAPEX-It means capital expenditure which arises when company purchase new assets or add some new values in the existing assets these expenses are not uniform in their nature but amount of these expenses are very huge these are made often not regularly.

BUDGET

WHAT IS BUDGETBudget is a financial or quantitative statement that prepared prior to a predefined period of time.

Budgeting is a method of determining the future expenditures at prior period of time.

Objective of budget

1.Helps in executing the managerial polices.2.It helps in taking precautions about the future expenditures.3.Increase the performance of the organization.4.Increase the revenue /NPAT after executing the budget.

Who makes the budget.In every organization their a separate budgeting team under the treasury deptt. they make budget with the help of following things.

-Forecasting method-Past data-Future market conditions-Analyzing the govt. polices, regulations.

Type of budgets used in the Aircel

1. Sales budget

2. Revenue budget

2. Expenditure budget -Administration budget -Advertising & Promotion budget -Other budgets

3. Capital expenditure budget

Method of budget

1.Fixed budget – In these type of budgets level of activity is already fixed & no chance for increase or decrease in their level of activity.

2.Flexible budget-In these type of budget the level of activity does not fixed or in other words it varies upon the level of activity we can increase or decrease the budget amount with the change in level of activity.

TERMINOLOGIES IN BUDGET

1. Fixed expenditures

2. Variable expenditures

3. Semi-variable expenditure

DEPARTMENT ENVOLVED IN THE PAYMENT SYSTEM

-Needy department

-Commercial department

-Payable department

-Treasury department-This deptt. plays an important role in finance deptt. the all decision related to

-Fund raising strategies -Investment plans -Policies related to finance -Overall portfolio management This department is the backbone of the other finance sub parts because finance is all about money & treasury deptt. work only & only where they finds new sources of money. They focuses on overall economic activity of the organization

-Revenue department

-M.I.S department- This department helps finance deptt. in managing their work. MIS executes different type of work at

MIS Deptt. explore, collects, analyze data & convert that data to knowledge. This knowledge is very helpful for the relative deppt. Which makes their work more & some times this deptt. is known as knowledge deptt.

Strategic

planning level

Managerial level

Operational level

-Taxation department- This department takes care of all the expenditure on which company will be paid tax. This helps to evaluating the correct figurers of profit & it also make work easier of revenue deptt.

Vendors & Contracts

Vendor-The term vendor means the person who sells good/services in the market. vendor is very important because they are the only source from which we purchase whatever we want.

Contracts- It means legal agreement in which law is enforced for the contracts two parties are required one is the company offeree & another party is (offerer). contract can be made upon any subjectBut in aircel contract used for rates.

Like aircel has more than 34,611 vendors from which aircel has made rate contract with them for particular period of time in that period of time the vendor does not increase the price of P/S from the rate mentioned in the LOI but vendor can decrease the price below than the price mentioned in the LOI.

Objective of contract

1. It eliminates fluctuation in the price of P/S.

2. It makes constant the operating expenditure.

3. Reduce the chances of un availability.

4. Fixed payment period which is beneficial for both parties

IMPORTANCE OF SAP IN FINANCE

WHAT IS SAP:-

SAP stands for system of applications & products. It is the integration of set of software that makes the work easier, it provides efficiency, effectiveness, transparency in the business and after implementation of SAP in business it makes our business more technological where errors are very less .

SAP provides a comprehensive range of enterprise software applications and business solutions to empower every aspect of your business.You gain the visibility to pinpoint inefficiencies – and the capabilities to transform them into competitive advantage. The foresight to identify new opportunities – and the agility to respond.

The functionality to optimize your operations – and resources to extend best practices to your entire value chain.

SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management, and supplier relationship management.

RESEARCH METHODOLOGIES

5.1:- INTRODUCTION

Research always starts with a question or a problem. Its purpose is to answer to questions through the application of the scientific methods. It is a systematic and intensive study directed towards a more complete knowledge of the subject studies. Once the problem is defined properly then one can easilychalk out the Objectives for the research.

Objectives of the Research ProjectThe subject matter for this research Project is to study the behavior of the payment system against the expenditure arises in during the operation.

This project consists of different objectives.

They are as follows:

· To know the payment settlement system.

· To measure what is the major field of expenditure.

· To know how the payment made against the expenditure. · To understand the link in between different finance deptt.

5.2:-Research Design:

Research Design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance.

Descriptive Research

The type of research Design for this Research Project is Descriptive Research. Under the head of the Descriptive Research this project is based on the

Cross sectional studies.

The cross sectional studies are of two types:1. Field studies2. Surveys

This research is based on the surveys.

The complete research design is formulated with the following steps:1. Identify and define the problem2. Choice of Research Design3. Determining sources of Data4. Designing data collection Forms5. Determining sampling design and sampling size6. Organizing and conducting the field survey7. Processing and analyzing the collected data

5.3:- Data collection Instruments

There are two main methods by which primary data can be collected are:1. Primary sources2. Secondary sources3. Communication4. Other instruments

Primary sources- These sources are problem in hand sources Such as- interview

Secondary sources- These sources are those sources in which we get information from indirect way. ex- magazines, journals

CommunicationThe communication method, in effect, is the method of designing questionnaires with a view to collect the requisite information.

InstrumentsFrom the above both data collection method, Questionnaire(Communication method) is selected as the instrument for collecting the data as the respondents are directly interviewed by the researcher. The same questionnaire is attached as an annexure to this report.

Questionnaire Design:From basic aspects of measurement and meaning, we proceed to their application in designing the instruments for seeking and

recording data. Data may be obtained by either observing or asking for them, and forms are needed for field used in observation and interviewing. The accuracy and relevancy of thedata gathered depend heavily on the questionnaire.

Function of questionnaires:

Questionnaire is simply a formalized schedule to obtain and record specified and relevant information with tolerable accuracy and completeness. In other words, it directs the questioning process and promotes clear and proper recording.

5.4:- Research Limitations

One must be aware of these limitations in advance so that one is clear about what Research can and cannot do:

First, Research is not totally based on correct data because sources of information are different.

BIBLIOGRAPHY

BooksResearch Methodology – C. R. KothariCost & management accounting – Jain, Pareek

Websites:http://www.google.comhttp://en.wikipedia.orghttp://www.aircel.comDepartment documents

ABBREVIATION

1. P/S- Product & service

2. P.O- Purchase order

3. P.R- Purchase requisition

4. N.L.D- National long distance

5. I.L.D- International long distance

6. NPAT- Net profit after tax

CONCLUSION

The winter internship for partial fulfillment of Post graduate diploma in management course in training program was a very good experience for me.This training gives us an exposure to professional working culture prevailing in industry, which is very important for a management student. It also provide a mind set to work hard during the initial phase of career.

I did my training in finance department of a well reputated & well established company. I am sure that this training helps me a lot in future career.

I again thanks to everyone who has contributed to make this experience truly complete & stimulating.

RAJAT CHOUDHARYI.I.P.M (NEW DELHI)