Management accounting or managerial accounting is a special branch of accounting of presenting financial statements to managers of a business to help them make better-informed decisions. It is not disclosed to the public and is only used internally.

Management accounting is a prerequisite for all businesses. As long as managers know exactly what the financial position of the business is, they can make well-informed decisions to further business growth.

Importance of Managerial Accounting

How Management Accounting Works

Management accounting provides financial and non-financial information to managers to help them make informed decisions about the business. The main functions of management accounting include:

• Communicating financial information: Management accountants gather and analyze financial data from the business’s financial statements and other sources, and then communicate this information to managers in a way that is easy to understand and use.
• Planning and budgeting: Management accountants help managers develop plans and budgets for the business. This includes setting goals, forecasting future financial performance, and allocating resources.
• Costing: Management accountants track the costs of the business’s products, services, and activities. This information can be used to set prices, make pricing decisions, and control costs.
• Decision-making: Management accountants use financial and non-financial information to help managers make informed decisions about the business. This includes decisions about pricing, products, marketing, and investments.
• Performance evaluation: Management accountants track the performance of the business and identify areas for improvement. This information can be used to set goals, improve efficiency, and make better decisions.

Techniques of Management Accounting

Management accountants use a variety of techniques to communicate financial information to managers. Here are three of the most common techniques:

• Cost accounting: Cost accounting is the process of collecting, analyzing, and reporting financial information related to the costs associated with producing a product or providing a service. This information can be used to monitor costs, set prices, and make pricing decisions.
• Performance accounting: Performance accounting is the process of measuring and reporting the performance of an organization or individual against predetermined goals and objectives. This information can be used to track progress, identify areas for improvement, and make better decisions.
• Strategic accounting: Strategic accounting is the process of analyzing an organization’s financial data in order to inform strategic decisions. This information can be used to identify trends in the market, assess the financial viability of potential business initiatives, and make data-driven decisions.

Types of Managerial Accounting

Managerial accounting encompasses a range of techniques and analyses.

Product costing

Product costing is the process of calculating the total costs involved in the production of a good or service. It identifies and measures the various direct, indirect, variable and fixed costs that go into the main revenue-generating activity.

This helps identify areas of high spending and low return, allowing managers to make decisions to improve spending and optimize processes.

Different costing methods, such as job order costing, process costing, and activity-based costing, are employed based on product characteristics. Accurate product costing is essential for pricing decisions, inventory valuation, profitability analysis, and overall business strategy.

Accounts Receivable Management

Accounts receivable (AR) management is another aspect of management accounting that can bring huge benefits to the company. AR can help businesses identify high-risk customers by categorizing invoices that routinely haven’t been cleared past the due date.

This data-driven approach helps in optimizing working capital, reducing bad debts, and improving overall financial performance. Moreover, efficient AR management can enhance customer relationships by providing timely and accurate invoicing, as well as responsive customer support.

Cash Flow Analysis

Cash flow analysis is a critical component of managerial accounting that provides insights into a company’s liquidity and ability to meet its short-term obligations. By examining the inflows and outflows of cash, businesses can identify potential cash shortages or surpluses, assess the efficiency of cash management, and make informed decisions regarding investments, financing, and operations.

Cash flow analysis is particularly valuable for forecasting future cash needs, managing working capital, and evaluating the overall financial health of a business. It helps in identifying areas where cash can be conserved or generated, such as optimizing inventory levels, accelerating collections, and delaying payments. By understanding the timing of cash flows, managers can make strategic decisions to ensure the company has sufficient cash to fund operations, invest in growth opportunities, and maintain financial stability.

Advantages and Objectives of Management Accounting

The primary objective of management accounting is to provide relevant and timely financial information to support the decision-making process. It involves:

• Planning and Forecasting: Developing budgets and financial projections to guide organizational activities.
• Decision Making: Analyzing costs, revenues, and other factors to evaluate alternative courses of action.
• Performance Evaluation: Measuring the performance of individuals, departments, and the organization as a whole.
• Cost Control: Identifying cost reduction opportunities and implementing measures to control expenses.
• Profit Improvement: Analyzing profitability and identifying strategies to increase earnings.
• Decision Making: Providing information to support strategic planning and decision-making.

Management Accounting in Business Decision Making

Here are some specific ways that management accounting can help businesses make better decisions:

• Identify problems early on: Management accounting can help managers identify problems with products, pricing, or marketing campaigns early on so that corrective action can be taken before the problems become more serious.
• Make better pricing decisions: Management accounting can help managers determine the optimal price for products and services by taking into account factors such as costs, demand, and competition.
• Allocate resources more efficiently: Management accounting can help managers allocate resources such as labour, materials, and capital to their most productive uses.
• Monitor the performance of the business: Management accounting can help managers track the performance of the business over time and identify areas for improvement.
• Plan for the future and set realistic goals: Management accounting can help managers plan for the future and set realistic goals by providing information about the business’s financial position and performance.

By using management accounting, businesses can make better decisions that lead to improved profitability and efficiency.

Management Accounting vs Financial Accounting

Limitations of Management Accounting

Better Business Financial Management

With RazorpayX, founders can supercharge every aspect of their financial operations.

• Save time, reduce manual effort and eliminate errors with instant payouts
• One single, powerful dashboard for all your money management needs
• Intelligent invoice generation for vendor payments
• Smooth integrations with all major accounting platforms

And more where that came from. Your business is in the future – it’s up to you to ensure your banking is, too.

FAQs

Payroll is the compensation a company should pay to its employees for a specified period of time or on a given date. Payroll is generally managed by the Accounting or Human Resource department of a company. For some small businesses, payroll may be handled by the owner himself.

These days payroll is usually outsourced to third party companies that perform a wide range of payroll functions. The payroll consists of processes such as creating a list of paid employees, tracking their working hours, calculating pay, providing their salary on time, employee benefits, tax withholding.

RazorpayX Payroll is a fully-automated payroll and compliance software that automatically calculates and executes payroll with just 3 clicks every month. RazorpayX Payroll comes with best-in-industry employee self-serve portals, integrations with tools like Slack, Whatsapp, Zoho People and more.

Learn more: Features of RazorpayX Payroll

Functions of Payroll

Payroll as a function encompasses the following:

Payroll policy and process

Defining organisational payroll policy around payslip components like basic & variable pay, HRA, LTA and more

Calculating salary

Calculating gross salary, statutory and non-statutory deductions like PF, taxes, etc

Creating and maintaining records

The payroll function also creates and maintains payroll records such as payslips, time and attendance records, earnings, deductions, etc.

Tax and compliance

Payroll is also responsible for depositing dues like TDS and PF with appropriate authorities to comply with tax and other laws

Issuing salary

The primary duty of the payroll department is to disburse salary to the employees every month or week, depending on the payroll cycle as determined in the payroll policy.

Audit and reporting

Payroll function is also responsible for ensuring that proper documentation and reporting systems are in place for any audits or checks.

Answering queries

Both employees and management constantly have payroll and payslip-related queries. It is up to the payroll department to answer these queries and ensure all stakeholders have all the information they need.

Previously, businesses relied on spreadsheets or manual methods to calculate and disburse salaries. Today, automated payroll software helps businesses manage these complexities effortlessly.

A payroll cycle is the time gap between two salary disbursements. Businesses can opt to pay salaries on a weekly, bi-weekly, or monthly basis. Generally, in India, it is processed every month.

Read more: Payroll Service Provider

Advantages of Payroll

While there are benefits to a manual payroll process, automated payroll is the way to go today. Here’s why:

Reduced costs

Automated systems reduce the risk of payroll errors, which can lead to fewer penalties and fines. They also save time and resources, leading to lower labour costs.

Enhanced compliance

Automated systems can automatically calculate and withhold taxes and generate reports that can be used to verify compliance.

Improved employee satisfaction

Employees appreciate being paid accurately and on time. Automated payroll systems ensure that employees are paid correctly and on time, wh

Error-free calculation

Automated payroll systems reduce the risk of errors in payroll calculations, leading to fewer discrepancies in employee paychecks.

Timely payments

Automated calculations and payment disbursals result in on-time payments with no errors. This results in happy employees and smooth business operations.

Time-saving

Manual payroll processes are time and resource-consuming. With automated payroll, most manual tasks are done automatically in a fraction of the time.

Data security

Robust, trustworthy payroll systems store employee data very securely. Data leaks and privacy issues are a one-in-a-million occurrence. With paper-based payroll, employee records can be stolen, mishandled or lost.

Easy data insights

With all employee data and records available digitally, employers can use analytics tools to forecast trends and employee behaviour.

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Components of Payroll

Payroll Processing in India

Here are the series of steps involved in executing payroll successfully from ground zero. 

Processing payroll is a sensitive task that involves the efforts of multiple departments like HR, finance and legal. This process includes the following functions:

Pre-Payroll Activities

Step 1: Payroll policy structure

Establish a payroll policy as a first step before beginning the payroll process. A good payroll policy should address the following:

Step 2: Consolidating payroll inputs

To process payroll, you need employee information like bank account details, time and attendance data, identity information like PAN and taxation details, etc. Consolidate all these inputs into an easily accessible and secure database in order to be able to process salaries without hassle.

Step 3: Validating inputs

Make sure you validate the employee information collected before using them in your calculations. Data validation can help avoid errors and ensure compliance.

• Verify that data entered matches the expected format (e.g., numbers for SSN, dates for birthdate)
• Match employee identification documents (e.g., driver’s license, passport) with provided information
• Conduct background checks on new employees
• Identify and remove duplicate records

Payroll Activities

Step 4: Calculating payroll

Calculating payroll manually is a tedious and highly complex task thanks to the complex taxes and deductions applicable for salaried employees in India. Automated payroll calculations take a few seconds and are error-free.

For manual calculations, you can calculate gross salary by adding the basic salary, dearness allowance, house rent allowance (HRA), other allowances, and overtime pay (if applicable).

Step 5: Deduct taxes and other statutory compliances

The next step in calculating final salary is to deduct taxes. Calculate deductions like Professional Tax (PT), Provident Fund (PF), Employee State Insurance (ESI), Income Tax (TDS), and other applicable deductions and deduct from the gross salary to arrive at the net take-home salary.

Step 6: Making the actual payment

The final step in the payroll activity is to disburse salaries to the employees. This is also a tricky step, since any errors can have huge negative consequences to both employer and employee. Make sure to double-check all calculations and payments before you make them.

Post-Payroll Activities 

Step 7: Payroll Accounting

Step 9: Payslips and tax computation sheets

A payslip is a detailed document provided to employees outlining their earnings, deductions, and net pay for a specific pay period. It serves as a record of the employee’s income and tax withholdings.

A tax computation sheet is a detailed breakdown of an employee’s income tax liability for a financial year. It outlines the calculations involved in determining the taxable income, tax deductions, and final tax payable.

Methods of Processing Payroll

There are three ways to process payroll: the manual spreadsheet route, the automated route, or outsourcing the entire process.

Depending on the budget, size of the organisation and each business’s special set of circumstances, payroll can be processed in any way.

Manual Route

Many businesses at their initial stage of operations find spreadsheet-based payroll management convenient because they only have a handful of employees to manage. 

This method involves calculations using standard templates that have set mathematical formulas for the salary and compliance payment computations. 

While this is a cost-effective method, it’s not suitable for businesses when their employee count increases. Also, the opportunity cost of using a traditional system over automated methods is very high. 

Automation 

Automated software will do away with all the challenges of using spreadsheets or outsourcing them. There are many automation tools and software available in the market that can reduce manual efforts and increase efficiency. 

Apart from carrying out payroll computations, the software needs to be updated with the latest compliance laws. 

Read more: How to switch to automated software

Outsourcing 

This means entrusting your payroll execution to an agency. A lot of businesses that don’t have dedicated personnel opt for outsourcing. 

Based on their payroll cycle, they provide the agency with salary information and other data such as attendance, leaves, reimbursement details, etc. every month. The agency then calculates dues and is also responsible for complying with statutory compliances.

Current Payroll Landscape in India

To understand the current payroll landscape in India, RazorpayX Payroll commissioned a survey by the International Research Bureau, which spoke with HR executives from 163 organizations across 12 key industries.

Take the Free Payroll Maturity Assessment to unlock actionable insights for your HR functions’ growth.

The findings?

• Payroll automation is the norm. All the businesses IBR spoke to automated their payroll functions with payroll software. Only 37% of Indian businesses perform their payroll functions manually. 
• Current payroll tools being used lack functional prowess. This was clearly indicated in the fact that 31% of organizations say that their payroll accuracy is below 90%. This is an unacceptable number since payroll is a very important function in every organization.
• There is limited insight into ideal payroll solutions. Most organizations today use sub-optimal payroll software that does not provide fundamental features like automated compliance, speedy and accurate processing, data security and more.

Best Payroll Software for Your Business

Out of all the ways to carry out your business’s payroll process, automated payroll is the most popular and economical. What does a good payroll software look like?

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Intuitive & Easy: A good payroll software is intuitive and easy to operate. It should be easy to implement with minimal training for both HR teams and the employees. 

Scalable: As a business grows, so does the size and complexity of its payroll function. A good payroll software should be able to handle payroll for businesses at all stages: small, mid-market and enterprise level.

Read more: Payroll for Enterprise

Robust ESS Mechanism: Payroll software is equally used by the employee to access payslips, submit declarations and other important payroll information. A good employee self-service portal thus becomes very important since it enables employees to be self-reliant.

Integrations

HRMS Integrations: Payroll is only one of the several functions that come under the purview of the HR department and is closely tied with other HRMS functions like time, attendance, and leave management.

A good payroll software should be able to integrate seamlessly with other HRMS software. For example, the RazorpayX Payroll integrates with 45+ HRMS like ZohoPeople, Springverify and more to provide an all-in-one, seamless experience for both HR and employees.

Accounting Integrations: Payroll is an important function of the finance team as well – employee salaries take up a sizeable chunk of most teams’ budgets, and ensuring that this expense is properly and accurately recorded is very important.

For this reason, most payroll software should provide you with integrations with accounting software which will automatically record payments to employees in your books of accounts.

Compliant: The tax regulations and requirements in India are ever-changing, and good payroll software should be able to keep up and stay updated in real time. Compliance includes elements like tax deductions, PF deductions and minimum salary payment requirements.

Not adhering to regulatory requirements can be very costly for a business – it can lead to hefty fines, lawsuits or even criminal punishment.

100% Accurate and Timely: Imagine if you paid the wrong salary to your employees – the consequences of this is immense; right from correcting the error to identifying the source of the error becomes a tedious, time-consuming task.

This is why it is important for payroll software to be 100% accurate right from the start, with no room for error.

Learn more: Timely & Accurate Payroll Software 

Customizable: Every business’s needs are different; good payroll software should accommodate these unique needs with customizations. For example, businesses that pay employees on a shift-wise basis are different from those that pay on an hourly or a monthly basis.

Challenges in Handling Payroll Process

Keeping Up with Compliance 

Businesses in India have to follow a legal framework while disbursing salaries to their employees. This framework is made up of four components. 

Compliance is complicated because each tax is computed differently. Businesses must also periodically file returns on four different portals or risk expensive penalties.

Most businesses use spreadsheets and other manual methods to work on compliance, which is not the most efficient way to be compliant. The computations are lengthy, time-consuming and inaccurate. 

In India, employee laws also change frequently, making it even tougher to stay updated.

Read more: Income Tax Slabs 2023 

Spreadsheet Complications

According to a survey, over 57% of businesses in India still rely on paper or spreadsheet-based payroll management and payroll processing.

Manual payroll is easy and cheap, but also time-consuming and prone to mistakes. Information can also be mishandled and tampered with.

Spreadsheets also cannot be compliant with tax laws as they change.

Data Security 

For processing payroll, employees are required to provide a substantial amount of sensitive data in the form of official documents to the concerned team. These include employee’s bank account details, rental agreements, PAN and Aadhaar details. 

This data can be compromised; failure to protect it can seriously damage the reputation of the business and the personal security of employees. 

Paper-based documents can be misplaced easily. Even if the documents are saved on spreadsheets, they are just a password away from being misused. 

How to Manually Calculate Payroll

Calculating these taxes manually for each and every employee is a tedious task. Learn more about automating your payroll with RazorpayX Payroll.

Automate your Payroll

Payroll Glossary – Important Terms

1. Gross Pay: Gross salary is the total of all the components of the salary package offered to an employee. It is the salary before any mandatory and voluntary deductions such as income tax, provident fund, medical insurance, etc.

2. Net Pay: After calculating gross pay, you must make govt. mandated deductions such as income tax, provident fund, etc. from gross pay. The amount that an employee takes home after all such deductions is termed net pay or net salary.

3. Overtime: Overtime refers to the extra hours worked by an employee in a company than the usual defined as per govt. Law. The extra salary or remuneration that the employee will get depends on the company policies.

4. Pay Period: It is a time frame defined to calculate earned wages and determine when employees receive their payslips. Pay periods are fixed and recurring on a bi-weekly, or monthly basis.

5. Compensation: It involves managing, analysing, and determining the salary, benefits, and incentives paid to the employees for their work.

6. Contractual employees: These are not permanent employees and are usually employed on a temporary basis. Their terms of employment are mentioned in the contract.

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Responsibilities of HR and Payroll

HR focuses on employee well-being, development, and legal compliance, while Payroll handles the financial aspects of employee compensation, ensuring accurate and timely payments.

HR is responsible for attracting, interviewing, and hiring qualified candidates. They also manage the onboarding process, ensuring new hires are equipped and comfortable in their roles. They are responsible for managing benefits, performance and compliances.

Payroll, on the other hand, is a complementary function that manages the calculation and disbursal of employee wages.  It also factors in deductions for taxes, benefits contributions, and garnishments.

In most businesses, payroll and HR coordinate on employee pay, benefits and taxation matters.

FAQs

A core banking solution (CBS) is a software used by banks to manage primary operations. It is a centralized system that allows customers or businesses to carry out transactions from any branch rather than only from the branch where the account was opened.

It streamlines and centralises banking operations for any bank or NBFC. With a robust CBS, banks can manage various account activities like deposits or withdrawals, loans, payments, information like account balance and more.

Today, with solutions like RazorpayX Business Banking+, businesses can harness the power of automation and technology to make cash management efficient and accurate. Businesses can now manage payroll, vendor payments, invoices and contracts, bulk payouts, and so much more from one centralized dashboard.

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What is Core Banking?

Core banking is a centralised system that allows customers or business bodies to carry on business operations regardless of the bank’s branch. 

The main objective of core banking solutions is to offer tailor-made offerings to customers at their convenience. These solutions differ in nature and are dependent a lot on the customer base. CBS refers to the networking of different bank branches that enables customers to opt for varied banking facilities from different corners of the world. The entire banking application is based on a centralised server and can be used via the internet. 

Different functions of core banking encompass transactions, payments, loans and more. Internet banking, ATMs (Automated Teller Machines), Phone banking, Fund transfer remotely and instantly (IMPS, NEFT, RTGS and more), interest computation on loans and deposits etc., are some of the core banking solutions types.

While customers or business bodies reap the benefits of carrying out transactions freely, financial institutions via core banking solutions benefit from lesser time and can save upon resources that are used for repetitive business activities. 

Some of the lucrative features of core banking solutions are:

• Transaction management

• Customer relationship management activities

• Accounts, loans and disbursal management

• Customer onboarding

• Deposits and withdrawal management etc.

Advantages of Core Banking

Both businesses and customers benefit from different core banking solutions. 

Advantages for Customers

• Internet banking, mobile banking etc. are among the multiple channels that prove effective for faster payment processing.
• CBS (Core Banking Solution) benefits those who are living in rural areas. For instance, farmers can easily get e-payments towards subsidies directly in their accounts.
• Customers can get expedited service for routine transactions which includes withdrawals, passbooks, demand drafts, cash deposits etc.
• The provision of a 24X7 banking service is another notable advantage of core banking solutions. Moreover, the provisions can be opted at any time and anywhere. 
• Every bank branch uses applications from the data centre or central servers, hence deposits done in one branch get displayed instantly. Customers or any business owners can withdraw funds from any branch across the world.
• Core banking solutions curb the need for filling out multiple entries, thereby reducing errors and ensuring accuracy.
• It facilitates a hassle-free merging of self-service operations and back-office data.

Advantages for Businesses

• Core banking solutions facilitate standardisation and transparency within business bodies and branches of banks. Since all the branches are connected to a central server, transactions can be viewed anytime. Instant projection of the transactions helps businesses to deal with inaccurate transactions or fraud.
• Core banking solution emerged to be a saviour helping businesses cater to the increasing needs of customers. It ensures better customer retention via prompt customer service.
• This banking mode has led to the minimization of errors, thereby facilitating accurate transactions.
• It helps to bring down and manage operational costs involving lesser manpower for process execution.
• With the emergence of different core banking solution types, submission of reports to regulatory boards and the government has become convenient.
• Core banking solutions help in efficient documents and record management. CBS incorporates a centralized database that helps in the faster collection of data.
• It has become convenient for businesses to process cash, compute interest, open accounts, incorporate policy changes etc.
• In addition, businesses can offer services and products to customers at nominal rates. For instance, automating different parts of financial transactions has curbed the need for multiple staff, helping to save on wages and related costs.
• Custom-crafted banking software enables full integration of the banking system.
• Another advantage of core banking is that it adds security levels to the banking system. 
• Core banking solutions facilitate informed decision-making ability. For instance, as the overall banking procedure has become streamlined, business bodies can now decide whether to use the funds for business expansion or for lending out to customers.

How RazorpayX Has Emerged to Supercharge Business Banking?

RazorpayX, the business banking arm of Razorpay extends a suite of financial services and facilities aligned with core banking which caters to the changing market patterns. From opening a current account, scheduling payments, and applying for loans to paying taxes and viewing financial reports, everything can be easily done from one platform.

RazorpayX has curated its offerings owing to the fast-changing banking ecosystem. For instance, with RazorpayX-powered current accounts, business bodies can shift to fully automated business processes from performing manual financial operations. This account proves functional for carrying out day-to-day transactions like withdrawals, payments etc.

Even with the Forex funding facility, small businesses or start-ups can gather foreign capital. This facility aids expert-led and transparent means to ensure foreign capital inflow. The dedicated team of professionals will offer insights into forex rates and ensure that business bodies are 100% compliant.

A beneficiary is a person or organization that benefits from a will, trust, retirement plan, insurance policy, annuity, financial transaction or another arrangement. Generally, a beneficiary is entitled to receive payments or other benefits from the assets held in the arrangement.

To maintain healthy vendor & customer relationships, business owners need to make real-time payouts. However, traditional banks impose a cooling period before allowing businesses to make payments to newly added beneficiaries, making it difficult to make instant payouts. 

Modern banking solutions like RazorpayX Business Banking+ use technology and innovation to bypass the cooling off period and allow account holders to make payouts to beneficiaries instantly, in real-time.

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How to Add a Beneficiary?

Let’s have a closer look at the steps to add beneficiaries:

1. Login to your net banking portal

Log in using your user ID and password. Select the option for third-party transfers or fund transfers. 

2. Create a beneficiary

To transfer funds via NEFT, RTGS & IMPS, you’ve to select a payee or a beneficiary. 

There are two options to do this, depending on if the beneficiary account is in the same bank or other bank branches. Add the beneficiary’s bank account details. 

• Name of the account holder
• Account number
• Account type

3. Add details of funds to be transferred

Once you have successfully added the beneficiary, choose the transfer option (NEFT, RTGS, IMPS) & add the fund to be transferred. 

4. Wait for the beneficiary to get activated

Banks generally take 30 mins to 4 hrs to authenticate beneficiary details. During this cooling period in the bank, the funds will not be transferred resulting in payment delays. 

Once the beneficiary is activated, the funds are transferred to the specified account. 

Depending on the mode of payment (NEFT, RTGS, IMPS) & the cooling period in the bank for receiver detail activation, the entire process of payouts can take up to 2 – 24 hrs. 

Don’t want to wait? Make instant payouts with RazorpayX Business Banking+.

 What is Cooling-off Period? 

In banking, after adding a beneficiary usually a period of 30 min to 4 hours is needed by the bank before any transaction can be made to this beneficiary. This is known as the cooling-off period.

In cases where the vendor requires the fund to be transferred immediately, the cooling period in the bank can be a cause of concern. And if a receiver is added after banking hours, it gets approved & activated only the next day. 

Note: The cooling period varies from bank to bank. For example, the cooling period for SBI bank accounts is 4 days from the time of approval. During the SBI cooling period, you can transfer an amount of up to Rs. 5 lakhs to the receiver. After the completion of the cooling period in the bank, you will be able to transfer up to the maximum limit.

How to Add Beneficiary Without Cooling-Off Period?

Timely payments to vendors or customers are crucial for business success & any delay can cause an interruption in service. Businesses need to ensure dispute-free, quick payments to vendors & customers. 

New-tech solutions like RazorpayX Business Banking+ allow businesses to make 24×7 instant payments to customers, vendors and employees with no cooling period. 

Add beneficiaries as a contact and make single or bulk payouts without any cooling period in the bank. You can also add multiple banks accounts or UPI IDs against one contact.

Instant Payouts without Beneficiary Account Details

Adding a beneficiary requires the business to already have the receiver’s bank account details – a UPI ID, bank account number and IFSC. In certain cases like cash on delivery refunds or security deposit refunds, the business might not have these details.

Furlenco solved this problem with RazorpayX’s Payout Links solution. Simply send a payout link to the beneficiary, and the entire process is automated from there.

Read more: Furlenco Reduces Customer Complaints by 70% on Automating Refunds via RazorpayX

Learn more about RazorpayX Business Banking+

Frequently Asked Questions

Merchant banking is a special branch of banking that provides financial services to medium to small-sized businesses. They may help with underwriting, fundraising, credit or financial advice. Merchant banks may also provide services to high net worth individuals.

Some merchant banks may be affiliated with other retail or investment banks, but this specialized branch of banking does not provide services to the general public.

Today, merchant banking solutions like RazorpayX Business Banking+ allow businesses to harness the power of automation and technology to make banking efficient and accurate.

Manage payroll, vendor payments, invoices and contracts, bulk payouts, and so much more from one centralized dashboard.

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How Does Merchant Banking Work?

Merchant banks work with large companies to cater to their complex financial needs. The services they provide include:

• Fundraising and capital acquisition for various purposes like mergers, acquisitions, expansion.
• They also provide underwriting, securities trading and advisory services
• Asset management, wealth management, investment management for companies and high net worth individuals and families

Read more: SEBI-registered merchant banks in India

Functions of Merchant Banks

A merchant bank’s primary function is to provide financial and advisory services to medium-sized businesses.

Portfolio Management

Merchant banking companies provide portfolio management services to high-net-worth individuals and corporate investors. These services include a selection of securities, portfolio monitoring and review, advice on the rationalization of portfolios, and tax planning.

Fundraising

 Merchant banking helps businesses raise funds from the public by issuing shares and debentures, rights issues of shares, preferential allotment of shares, private placement of shares and debentures, and other instruments.

Loan Syndication 

Merchant bankers help arrange funds for large corporate borrowers by syndicating loans from multiple lenders. They act as an intermediary between the borrowing company and the lending institutions. 

Leasing Services

Merchant banks provide leasing services to companies in the form of capital goods, vehicles and office equipment. This helps to reduce the overall financial burden of the companies.

Underwriting Services 

Merchant banks also provide underwriting services for initial public offerings (IPOs), private placements, follow-on public offerings (FPOs) and rights issues. This service helps companies to raise the required funds from the public.

Example of Merchant Banking

In 2021, merchant bank Avendus Capital helped the Indian company Piramal Enterprises acquire the debt-ridden assets of Dewan Housing Finance Corporation (DHFL) for ₹34,250 crore ($4.4 billion). This was one of the largest debt restructuring deals in India and helped Piramal Enterprises to become a major player in the Indian financial services sector.

Top 10 Merchant Banks in India

1. Kotak Mahindra Capital: India’s largest merchant bank, providing a wide range of services to businesses, including raising capital, mergers and acquisitions (M&A), and project finance.
2. Morgan Stanley India: Global investment bank with a strong presence in India, offering services such as underwriting, M&A advisory, and equity research.
3. JM Financial: Full-service merchant bank with a focus on emerging markets, providing services such as debt and equity capital markets, M&A advisory, and restructuring.
4. Avendus Capital: Leading merchant bank with a focus on M&A and private equity, providing services such as deal origination, execution, and post-merger integration.
5. Edelweiss Financial Services: India’s leading financial services company, providing a wide range of services to businesses, including investment banking, asset management, and wealth management.
6. Goldman Sachs India: Global investment bank with a strong presence in India, offering services such as underwriting, M&A advisory, and equity research.
7. Axis Capital: Leading merchant bank with a focus on debt capital markets, providing services such as debt issuance, restructuring, and advisory.
8. Citigroup Global Markets India: Global investment bank with a strong presence in India, offering services such as underwriting, M&A advisory, and equity research.
9. Nomura Financial Advisory and Securities India: Global investment bank with a strong presence in India, offering services such as underwriting, M&A advisory, and equity research.
10. Bank of America Securities India: Global investment bank with a strong presence in India, offering services such as underwriting, M&A advisory, and equity research.

Merchant Banking vs Investment Banking

Both merchant and investment banks provide financial services to businesses, but serve very different functions.

Merchant banking is a valuable financial service that can provide growing businesses with the capital and financial help they need. It can also provide advice and assistance in areas such as financial management, corporate strategy and risk management. 

By utilizing the services of a merchant bank, businesses can access capital, reduce costs and gain access to a variety of specialized services. In short, merchant banking is an essential component of any business’s financial strategy.

• One-stop banking solutions platforms like RazorpayX allow business owners to open current accounts, pay taxes, schedule payments, pay vendors seamlessly and check invoices from a single dashboard. This saves valuable time and effort. 
• It is an accounting and banking platform that fills the gap between advanced banking solutions and finance professionals. It allows easy accounting software integration.
• With RazorpayX Payroll, businesses can automate salary payments and provide insurance policies to their employees

Frequently Asked Questions

A corporate account is a bank account one can open in the name of a business. It is used to facilitate transactions, receive income, and store funds. 

Every business should have a corporate bank account; corporate accounts offer significant benefits to businesses, with features like tax filings, credit and loans, automated payments and more. 

Today, digital-first corporate accounts like RazorpayX Business Banking+ offer more than just banking; centralized dashboards for everything from vendor management to payroll, enhanced with automation at all points.

Difference between Corporate Account & Business Account

Often, people think a corporate account is the same as a business bank account. Though they both serve business needs, they differ in certain key aspects that are listed below: 

Benefits of Corporate Account

Now, let us explore the benefits of having a corporate account: 

1. Improves Credibility

Having separate bank accounts for personal and business purposes is immensely helpful because it makes the business appear more professional. When customers see that a business has a corporate account, they feel reassured about its legitimacy. Moreover, having this account also helps business owners receive better deals from vendors and suppliers. 

2. Higher Investment Opportunities

A corporate account enables businesses to park and grow excess funds through reinvesting. Companies can also use this bank account to manage an investment portfolio and sell and purchase bonds, stocks, new companies, and other assets.

3. Offers Liability Protection 

There are multiple ways to store a business’s funds. However, while users might receive more or less the same features, they will not receive the liability protection offered by a corporate account. Another essential benefit of a corporate account is that it separates a company’s assets and funds from the business owners. As a result, instead of a single person, the company as a whole is responsible for the funds. 

4. Creates better Financial Management

Other crucial benefits associated with a corporate account include management of budgeting and spending. In addition, it provides more clarity with regard to the financial position of a business as proprietors get to view detailed reports and bank statements about their company. 

5. Easier Financial Transactions 

Business owners can carry out essential business transactions smoothly and efficiently from anywhere as corporate accounts come with internet and mobile banking facilities. Multi-location transfer of funds along with deposit and withdrawal of money at any location are additional benefits of a corporate account.

How to Open a Corporate Account? 

It must be noted that the eligibility criteria and documents required to open a corporate account vary from one business structure to another. Listed below are some of the key points related to opening a corporate account in India:

• The business for which the owner wishes to open a corporate account must have a board of directors. 
• Individuals are not eligible to open corporate accounts in India. 
• Companies must receive approval from their board of directors to open a corporate account. The standard procedure involves a meeting where a vote is taken to seal the decision. The directors also engage in a detailed discussion about the account’s primary purpose, access options, and features.
• For smaller businesses without a board of directors, the owner does not need anyone’s approval or vote to open a new corporate account.
• Generally, companies appoint a dedicated person, usually the board’s treasurer, to open and operate their corporate bank accounts.

Open a fully-digital RazorpayX Business Banking+ account with our team of experts and experience the future of business finance.

Documents required to open a Corporate Account

Listed below are the documents required for a corporate account: 

• Filled application form
• Article of Association
• Memorandum of Association
• Board Resolution
• Certificate of Incorporation 
• Proof of Address 

Disadvantages of a Corporate Account

Although the benefits outnumber the limitations of a corporate account, it would be helpful if people were aware of them: 

• Considering that corporate bank accounts engage in significant business transactions, the expenses associated with maintaining them can be higher than regular accounts. 
• Moreover, the process of documentation is confusing and time-confusing. 

Corporate Account that supercharges your banking experience

The RazorpayX-powered current account is backed by leading financial institutions.  Let us look at some of its benefits: 

• A dashboard that provides a crisp overview of the state of the business’s finances 
• Powerful APIs to automate pay-outs
• Important tax payments from one single dashboard
• The process of adding beneficiaries is easy and instant 
• The provision of setting up approval workflows does not require OTPs 

Listed below are the registered business types that can open a current account with RazorpayX: 

• Sole Proprietorship
• LLP (Limited Liability Partnership)
• Partnership
• Private/Public Limited Companies/ OPC (One Person Company) 

7 crucial tips to manage Corporate Account 

Listed below are essential tips that will help in managing any corporate account: 

1. Decide on an investment strategy 

Business owners should formulate a suitable investment strategy for their corporate accounts based on their financial goals. While there might be many investment options that financial institutions might offer, the following two are common: 

i. Portfolio Rebalancing

The bank designates a financial adviser who manages a company’s investment portfolio. This person will make decisions based on market movements, company income, and goals.

ii. Dividend Reinvesting 

This is an important way by which companies earn extra income. Business owners can choose their preferred investment types, for instance, what they are interested in—stocks or real estate purchases- but this process can also be automated. 

2. Share access with the right person

When creating a corporate account, one must carefully determine which person should have direct access to it and when. This is especially important if the account is used for business transactions and savings. For example, the owner needs to grant the concerned manager or leader access to use the account for purchasing new equipment or paying employees’ salaries. 

RazorpayX Business Banking+ comes with customizable approval workflows, allowing you granular control on access to the right people.

Speak with an expert for free

3. Explore given interest options 

Some financial institutions offer higher interest rates on deposits in some accounts, which help businesses earn more while saving funds simultaneously. According to experts, directors should explore the interest options of different banks, discuss among themselves and choose one.  

4. Consider different features offered

It is advisable to explore the features of a current account of different banks to make a more informed decision. For example, while some banks offer a corporate account with mobile banking features, others may have specified transaction or balance limits. Therefore, business owners must check whether their goals align with the account’s features. 

5. Check local regulations 

Tax regulations of a current account may vary depending on the business type and location. Generally, companies consult legal experts who are adept at taxation rules to ensure that the business is in full compliance. 

To sum up, companies with a board of directors must open a corporate account for ease of financial management. It has numerous benefits, such as more investment opportunities and security. In addition, registered businesses can consider opting for RazorpayX-powered current accounts to manage their finances smoothly and efficiently. 

Also read: Corporate Banking 101

Fully Automated Corporate Accounts

FAQs

The TDS rates are predecided by the Government under the Income Tax Act.

In this blog, we share the Latest TDS rate chart for the Financial Year 2024-25 and Assessment Year 2025-26 to help you calculate and pay TDS error-free.

TDS Rate Chart for FY 2024-25

*Applicable TDS rate for EPF withdrawals without a PAN number is now 20%, from the previous 30%

** Essentially means there is no limit

*** From FY 2023-24, interest on debentures issued by listed companies is also included

TDS Rates Applicable for Resident of India
(Not a Company) for FY 2024-25

TDS Rate Chart for Domestic Company for FY 2024-25

TDS Rate Chart for Non Domestic Companies for FY 2024-25

TDS Rate Chart for Non Resident Indians for FY 2024-25

Union Budget 2024 New TDS Provisions

TDS on Online Gaming – Section 194BA

From April 1, 2023, 30% TDS is to be deducted when income earned from online games is withdrawn. In this case, “online games” includes games of skill like online poker, rummy or fantasy sports; it also includes games of chance like online lotteries or roulette.

Previously, TDS was only applicable if winnings from online games exceeded Rs 10,000 in a financial year.

TDS on NRI Income from Mutual Funds – Section 196A

From April 1, 2023, NRIs can choose to pay a lower tax rate on income earned from investments in mutual funds by providing a tax residency certificate. Previously, NRIs had to pay TDS of 20% on income earned from Mutual Funds.

TDS on PF Withdrawal Without PAN – Section 192A

From April 1, 2023, employees withdrawing from their provident fund without a PAN will receive their balance after a 20% tax deduction. Previously, tax was deducted at the MMR (maximum marginal rate) which could go up to 42.74%.

TDS on Interest Earned from Securities – Section 193

From April 1, 2023, tax is to be deducted from interest earned on listed securities in materialized form like debentures. Previously, since TDS was not deducted on income from interest on securities, tax reporting was not erratic and had discrepancies.

TDS on Co-operative Society Cash Withdrawal – 194N

From April 1, 2023, cash withdrawn above Rs 3 crore by a cooperative society will be taxed at 2%. Previously, the limit was Rs 1 crore.

Automate TDS Payments for your business

It’s crucial for businesses to pay monthly TDS to the government under various categories for salaries, vendor payments, and more. On average, businesses spend hundreds of hours every year manually calculating and depositing TDS on the government portal.

With RazorpayX, Indian businesses can pay TDS in less than a minute and focus more on their business growth.

• Save manual effort using prefilled tax forms
• Automatically store challans on a single dashboard
• Collaborate with CAs to approve payments seamlessly

Bank smart with RazorpayX Current Account. 

Read more:

Vendor Payments

What is Procure to Pay

Accounts Payable

What is Procurement

FAQs

A checking account is a type of bank account that allows you to deposit and withdraw money, write checks or use a debit card to make purchases or pay bills.

This type of account is sometimes called a transactional account, as an individual can draw money from it for day-to-day needs, making it easy to access. 

Generally, account holders use these accounts on a short-term basis for paying daily expenses like food bills. However, some fees are associated with checking accounts, such as monthly service fees and overdraft fees. 

How Does Checking Account Work? 

Checking accounts are highly liquid bank accounts where money is stored to make or receive payments. They are similar to savings accounts or current accounts.

While savings accounts have limits on how many transactions and deposits the account holder can make in a day, checking accounts do not have this limit – making them very useful to businesses, due to the volume of transactions that businesses engage in daily.

They are also useful to individuals who make frequent and high volume transactions.

Due to the highly liquid nature of checking accounts, banks and financial institutions typically do not offer interest on them. Banks also offer other features for checking accounts, like overdraft facilities, direct deposits, and more.

Checking Account vs Current Account

Checking account and current account can be used interchangeably. There is no significant difference between the two terms in terms of the basic functions of the account.

“Current Account” is more commonly used in the United Kingdom, while “Checking Account” is more commonly used in the United States. In India, current account is more popular.

Both types of accounts typically offer similar features, such as the ability to deposit and withdraw money, write checks or use a debit card for purchases, and possibly earn interest or incur fees based on certain conditions.

Types of Checking Account

Standard Checking Account

A standard checking account offers basic functionality and features like debit and credit cards, online banking, chequebook, etc. They come with a minimum balance requirement and do not earn interest. These accounts are best suited for small businesses or individuals without complex financial needs.

Premium Checking Account

A basic checking account cannot keep up with fast-growing businesses, or large corporations.

A premium checking account or current account comes with features that solve medium or large-size businesses’ complex financial needs. For example, RazorpayX’s premium offering, Business Banking+ offers features like payroll, vendor management, bulk payout services, etc – in addition to the traditional features offered in a basic checking account.

Check out RazorpayX

How to Choose a Checking Account?

The first step to managing your financing better is picking the right checking account or current account with the right provider.

Start by choosing between a traditional bank like ICICI or HDFC or a more new-age digital offering like RazorpayX, which partners with traditional banks like Yes Bank and RBL Bank. Digital solutions offer more flexibility, agility while maintaining the robust nature of traditional banking.

The next few things to keep in mind are:

• Monthly fees like maintenance fees, overdraft fees or other charges.
• Minimum balance is a requirement by most current account providers. Make sure you know the minimum requirement across banks.Read more: Why are MAB accounts better than zero balance accounts?
• Account access through various portals like a mobile app, website or in-person branches, based on your requirements.
• Extra features like accounts managers, bulk payout features, POS, etc

How to Open a Checking Account?

A founder can open a checking account offline and online. Various financial institutions offer the quick opening of this type of account with limited documentation and processing time. The process is as follows:

Step 1: Documentation
The process of opening a checking account will first require personal and professional information of the business or individual who will be the account holder. 

Step 2: Initial Deposit
Upon completion of providing the necessary information and documents, the owner will need to make the initial deposit. 

Step 3: Account Opening
Once done, the representative of the concerned financial institution will assist the entrepreneur in opening the account seamlessly. 

For those looking to open a Checking Account, RazorpayX offers business banking services that are even better than traditional checking accounts! 

RazorpayX-powered current accounts come with a plethora of features like automated payroll, effortless payment of TDS, etc. 

Benefits of Checking Account for Businesses

Checking accounts are especially useful for businesses for a number of reasons. 

1. Payment processing: A checking account makes it easy to process payments from customers, vendors, and employees, whether by check, online transfer, or debit card.
2. Record keeping: A checking account allows businesses to keep track of their financial transactions, which is essential for accounting and tax purposes.
3. Access to credit: Having a checking account with a good standing can help businesses qualify for loans and other forms of credit from financial institutions.
4. Convenience: A checking account makes it easy to manage cash flow, pay bills, and track expenses, which can save time and reduce administrative costs.
5. Security: Keeping business funds in a separate checking account can help protect against fraud and other financial risks, and can also provide a clear separation between personal and business finances.

Service Charges for Checking Accounts

Banks and financial institutions offer different types of checking accounts based on the requirements of the account holder.

The differences lie in the Minimum Average Balance and charges per transaction above the given number of free transactions.

Generally, a higher MAB gives the account holder more benefits, like a dedicated account manager, lower service charges and a higher overdraft limit. There might also be more features offered by the bank or financial institution, like payroll processing, tax payments and corporate credit cards.

Checking Account Effect on Credit

Checking Accounts can help founders get credit or funding for their businesses since banks and other financial institutions pull information from checking accounts or current accounts to determine creditworthiness.

Ensuring that there is no pending overdraft and that the account maintains the minimum account balance is a good way to maintain a healthy credit score.

RazorpayX-powered current accounts offer a great replacement for the manual financial operations of a conventional current account. Here are the following beneficial features that an individual can unlock by opting for RazorpayX: 

• Hassle-free addition of new beneficiaries with zero transfer limits
• Speedy money transfer without the requirement of multiple details 
• Facilities to schedule payments and receive reminders of payments

Check out RazorpayX

FAQs

Accounts payables refer to the money that a business owes to its vendors in the short term. Accounts payables are listed on a business’s balance sheet as a short-term or current liability.

Accounts payables could include payments to contractors or vendors who provided goods or services to the business on credit.

Managing accounts payables is very important to the financial health of the business. Most businesses choose to use software and automation to streamline the entire procurement process.

Automate Procurement Now

Importance of Accounts Payable

When businesses don’t have enough cash on hand to immediately pay their vendors, they can pay vendors at a later date, when cash is more readily available. This amount is recorded in the books of accounts as Accounts Payable.

Managing accounts payables is an important function of the finance and procurement teams. Here’s why:

• Timely payments ensure a healthy and improved relationship with suppliers, potentially leading to better terms, discounts, and extended credit lines.
• Good accounts payable management improves the business’s bottom line by improving savings and reducing costs through less errors, flexible payment terms and discounts. 
• Businesses with good procurement and AP processes enjoy better compliance, streamlined processes and better overall financial health. 

Here’s how Shark Tank’s CellBell streamlined their entire procurement process with RazorpayX Source to Pay.

Recording Accounts Payable

How Accounts Payable is Recorded

The first record of AP is in the ledger: Accounts Payable is credited and the account of the good or service purchased is debited. 

According to the rules of double-entry accounting, any transaction has to have equal debit and credit offsets.

When a purchase is made, a debit entry is made under “Purchases” (or a similar account name like “Inventory” or “Cost of Goods Sold”) to reflect the increase in goods or services received.

However, since the vendor has not yet been paid, this creates a liability. To maintain the double-entry balance, a credit entry is made under the “Accounts Payable” account. This shows the amount owed to the supplier for the goods or services acquired. These two entries, one debit and one credit, ensure financial records remain balanced and accurately reflect the impact of the transaction on the company’s assets and liabilities.

Once the payment is processed, the “Accounts Payable” account is debited and the “Cash” or “Bank” account is credited, signifying the settlement of the debt and the reduction in your liabilities.

Let’s say a bakery purchases flour from a vendor on credit. 

This is how the flour account would look in the bakery’s ledger. 

Flour A/C

      Dr                                                                                                                                          Cr

The corresponding credit entry in the AP account would look something like this:

Accounts Payable A/C

      Dr                                                                                                                                         Cr

At the end of the accounting period, the bakery will transfer the total sum of money it owes to its vendors to the balance sheet as we saw earlier. 

Example of Accounts Payable Record in General Ledger

Imagine a company purchases goods worth ₹50,000 from “ABC Suppliers” on October 31, 2023. The supplier issues an invoice number INV-12345. Here’s an example of how this transaction would be recorded in the general ledger:

Accounts Payable in the Balance Sheet

Condensed Consolidated Balance Sheets

Decoding Accounts Payable

In the balance sheet, businesses record the values of assets and liabilities for this accounting period and the last. 

The payables metric is also recorded in the Cash Flow Account to understand the movement of the business’s cash. A business that is able to pay its vendors in cash and on time is a business that has good cash flow. 

A high accounts payable balance means that the business has been unable to pay vendors in cash. This could be because of a number of reasons. 

1. Insufficient cash flow
2. Initial stages of business

There are many possible reasons for this: a lack of management of funds, high expenses, poor budgeting, slow and tedious procurement processes resulting in delayed payments and penalties.

There’s one solution: automating procurement processes. 

Automate Your Payables

Accounts Payable Workflow Process

Accounts payable is a part of the larger procurement process. Read more about the procure to pay process here. 

The accounts payables process includes:

1. Invoice capture: Once an invoice is received from the vendor, its details need to be entered into the system. If done manually, this is a tedious, error-prone task. Automated solutions use OCR technology to auto-capture this information, ensuring 100% accuracy.
2. Invoice approval: The next step is to get the invoice approved from department heads and the finance teams. This step too, is best when automated. Approval workflows allow all stakeholders to view and approve the invoice without delays.
3. Payment approval: Once the invoice is approved, the payment must be approved. All details in various documents like the GRN, PO and the invoice must be verified in a comprehensive 3-way matching process.
4. Payment disbursal: Finally, the payment is made to the vendor and recorded in the books of accounts. With solutions like RazorpayX Source to Pay, businesses can make thousands of payments at once without delays or errors.

As shown in the diagram above, the process is long, tedious, and error-prone.

Example of Accounts Payable Expenses

Accounts payable expenses encompass a wide range of costs depending on the nature of business. Here are some common examples:

1. Inventory-related purchases:

• Raw materials used in production
• Finished goods purchased for resale
• Packaging materials
• Supplies used in daily operations

2. Services:

• Transportation and logistics costs (freight, shipping, delivery)
• Utilities (electricity, water, gas)
• Rent and property maintenance
• Professional services (legal, accounting, consulting)
• Marketing and advertising
• Insurance premiums
• Subscription fees (software, cloud services)

3. Other expenses:

• Office supplies
• Travel and entertainment expenses (reimbursed to employees)
• Repairs and maintenance
• Taxes (property, sales)
• Interest on loans

Why Should You Automate Accounts Payable?

Automating accounts payable processes saves time and reduces manual effort by streamlining tasks such as data entry, invoice processing, and approval workflows. Automation also improves accuracy by minimizing the risk of human error inherent in manual data entry and processing.

Furthermore, automated systems provide real-time visibility into the status of invoices and payments, offering better control over cash flow and liabilities. Enhanced visibility and control not only optimize internal processes but also strengthen relationships with vendors through faster processing times and fewer errors, ultimately improving overall satisfaction.

Lastly, automated accounts payable systems offer scalability, adaptability to remote work environments, and strategic insights. They can accommodate increased transaction volumes without requiring additional resources, making them ideal for growing businesses.

These systems often include analytics and reporting capabilities, providing valuable insights into spending patterns, vendor performance, and opportunities for optimization, thereby enabling informed decision-making and driving strategic growth.

Accounts Payable Managed

RazorpayX allows for end-to-end automation for adding, tracking, and clearing invoice and TDS payments.

All you have to do is upload an invoice on the RazorpayX Dashboard or forward the invoice sent from your vendor, and we take care of everything.

• Auto-Capture Invoice Details
  Our intelligent OCR extracts and populates all the invoice details saving you the hassle of manual data entry and reducing the possibility of errors.
• Pay your Vendors
  You can make payments instantly via IMPS, UPI, NEFT, and RTGS or schedule them for a later date.
• Auto-Pay TDS
  RazorpayX automatically deducts and pays the applicable TDS before the due date. Not only that, you can view all the challans on the dashboard post-payment.

Automate Your Accounts Payable Now!

FAQs

He saw the gaps in the ergonomic office chair market – a slow, delayed supply chain and a lack of quality products. 

Thus CellBell was born.

With CellBell, Pawan and his co-founders created the perfect set of office chairs for their fellow IT employees – a workforce of a whopping 5.4 million in India as of March 2023. 

They even featured on Shark Tank, and their popularity only exploded – their product was working, their business model was sound – everything seemed to be going great.

But for business success, you need more than just a perfect product.

The Problems

No business can avoid dealing with vendors, and CellBell was no exception. They quickly realized they had to ensure a good relationship with their vendors if they wanted timely deliveries and happy customers. 

A big part of ensuring your vendors like you is making sure they are paid on time. 

The process of making these payments was extremely cumbersome. They had to fill out 30+ RTGS forms per week and make sure these forms reached the bank before closing time. 

At the bank, they’d deal with long queues, paperwork and a complete lack of transparency – once the forms went to the bank clerk, there was no way to tell if the payment went through! 

• Manual form entry leading to errors 
• Having to follow inconvenient bank timings
• Having to physically submit forms at bank branches
• Lack of transparency – each payout had to be manually checked
• Server issues and downtime on online banking portals of traditional banks

With these problems came unhappy vendors, delayed deliveries and a drop in customer satisfaction. 

The RazorpayX Solutions

It was at this point that CellBell met RazorpayX. 

Centralised Fund Management

The first thing RazorpayX did for CellBell was offer one dashboard for everything money-related. 

Before RazorpayX, CellBell managed multiple Current Accounts with different banks – for segmented information on revenue generated from different marketplaces. 

Incoming and outgoing funds from every marketplace, be it Amazon or Flipkart, now went into one Current Account. The founders of CellBell now had the utmost clarity in their money management with this new centralized money management system.

Vendor Payments Optimization

With RazorpayX Vendor Payments and Payouts, CellBell made payments to their vendors on time, accurately and with full transparency. 

As vendor trust improved, so did CellBell’s credit limits and periods with vendors. This led to better money management and more money in the bank – which meant stable, healthy business expansion.

Happy vendors deliver on time, and on-time deliveries make everyone happy.