Business

Bill Discounting is one such option, which allows a business to get quick payment for their work and meet their operating expenses without having to depend on any external agency to provide the funds. Bill Discounting, also called Invoice Discounting, is a trading activity where a seller sells some goods or services to a buyer. The buyer has to make the payment as per the agreed credit period. Now, if the buyer needs money before that, he can approach a bank or some NBFC and ‘sell’ that invoice to them. The financial institution gets the invoice verified by the buyer and then makes payment to the seller on their behalf. However, they make some deductions, called ‘discount’, as their commission.  So, in a way, the seller gets a discounted payment for their bill. This way, they can run their business operations, and buyers get an extended credit period. On the due date, the seller makes the payment to the financial institution, which completes the cycle for that particular invoice. Since the seller gets payment on a ‘discount’, this transaction is called Bill Discounting. Meaning of bill discounting Bill discounting is a type of invoice financing in which funds are issued against unpaid sale invoices. The financial institutions issue an advance to the seller at discounted rates. The business is not required to pledge any asset as collateral. The loan is advanced based on unpaid sale invoices. At the time of maturity of the invoice, the business will collect the payment from its customer and make the repayment to the financial institution. It is an easy way to improve cash flow in the organisation. FEATURES OF BILL DISCOUNTING: Evaluating the seller and buyer: Before approving the bill discounting, the bank or NBFC first checks the seller’s reputation and the buyer’s creditworthiness. This is done to ensure that the buyer does not default on making the payment to the bank. Making instant cash available for the buyer: It is the most salient feature of bill discounting. The bank or NBFC purchases the invoice and immediately pays after discounting the bill. This makes life easy for the seller. They get an immediate payment and do not need to wait for the buyer to pay the bill. Discount Charge: The difference margin between the face value of the invoice and the amount approved and disbursed by the bank is called the discount. This discount is calculated on the maturity value at a certain percentage per annum. Maturity: The maturity date of a bill means the date on which payment of the invoice is due. The average maturity period is 30, 60, 90, or 120 days.  Advantages of bill discounting Fast and easy- The documentation required is very minimal. The financial institution grants loans within hours in case of emergencies.  Collateral free- No asset is required to be kept as collateral. The loan is granted against unpaid sale invoices. Cost-effective lending facility- Bill discounting has two costs, i.e. service cost and discounting charge. The service fee is usually charged as a percentage of the annual turnover, and discounting charge is the cost of lending money. Despite these two charges, it is considered the most cost-effective lending facility by ensuring quick access to cash. Maintains confidentiality- The business has complete control over its sales ledger, and the customer is nowhere in the loop in this type of financing. BILL DISCOUNTING PROCESS: The step-by-step process of bill discounting is given below: A seller supplies goods or services to a buyer and raises an invoice. The buyer accepts the invoice. This approval means the buyer acknowledges the invoice and promises to make the payment on the due date. The seller approaches the financial institution to get the bill discounted. The financial institute verifies the creditworthiness of the buyer and the legitimacy of the bill. Once approved, the bank disburses the funds to the seller after deducting the pre-defined fee, discount, or appropriate margin. Thus, the seller gets a quicker payment for the invoice, which can be used for other business purposes. At the end of the original credit period, the buyer makes the payment to the financial institution. Ways in which bill discounting help business grow Helps in improved cash flows- Instant cash availability helps strengthen the business’s momentum. By opting for bill discounting, a business has enough funds to run its operations smoothly and even carry out expansion activities. Improved customer trust- When the customers know that they have time to make payments and the business is not solely dependent on that cash for its daily operations; they will trust you more. This will bring you more customers. Helps to shorten the cash cycle- The time involved to complete the cycle of selling goods and releasing its money is an extended period. In this period, one can undertake new projects to expand the business. One can trim this cash cycle by opting for invoice discounting.  Helps to address emergencies- Businesses usually face emergencies to change in market demand of their goods or services. One can promptly face these emergencies if cash access is easy. Increased demand can be met by increasing production as cash is readily available.  Easy credit availability- Nowadays, availing credit has become hassle-free with digital financial solutions. One can just upload the unpaid bills and avail funds by following a few simple steps. Easy credit availability helps to grow business. FAQs What is bill discounting? Bill discounting, also known as invoice discounting or factoring, is a financial practice where a business can receive immediate funds by selling its accounts receivable (bills of exchange or invoices) to a financial institution at a discount. How does bill discounting work? The process involves a business selling its unpaid invoices to a financial institution or a third-party at a discounted rate. The financial institution provides an upfront payment, and when the invoices are due, the institution collects the full amount from the debtor. Who can benefit from bill discounting? Small and medium-sized enterprises (SMEs) and businesses facing cash flow challenges often benefit from bill discounting. It provides them with quick

A comprehensive guide to Class 14 of the Trademark Filing Classification. Trademarks must be applied or registered under classes and each class represents a distinct class of goods or services. Class 14 of the Trademark Filing Classification. Trademarks must be applied or registered under classes and each class represents a distinct class of goods or services. In this post, we comprehensively cover the goods which fall under Class 14 of trademark classification. Trademark Class 14 Trademark Class 14 pertains to precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; jewellery, precious stones; horological and chronometric instruments. The following goods are also classified under Class 14: Jewellery (i.e., imitation jewellery and jewellery of precious metal and stones); Cuff links, tie pins. Therefore, Trademark Class 14 includes mainly precious metals, goods in precious metals not included in other classes and, in general jewellery, clocks and watches. The following goods must NOT be classified under Class 14: Goods in precious metals classified according to their function or purpose, for example, metals in foil and powder form for painters, decorators, printers and artists; Amalgam of gold for dentists; Cutlery; Electric contacts; Pen nibs of gold; Teapots Gold and silver embroidery Cigar boxes;. Comprehensive list of goods classified under Trademark Class 14 List of goods classified under Trademark Class 14 3D wall art made of precious metal Action figures (Decorative -) of precious metal Adhesive wall decorations of precious metal Agate as jewellery Agate [unwrought] Agates Alarm clocks Alarm watches Alloys of precious metal Alloys of precious metals Amber pendants being jewellery Amberoid pendants being jewellery Amulets Amulets being jewellery Amulets [jewellery] Amulets [jewellery, jewelry (Am.)] Amulets [jewelry] Anchors [clock and watch making] Anchors [clock- and watchmaking] Ankle bracelets Apparatus for sports timing [stopwatches] Apparatus for timing sports events Articles of imitation jewellery Articles of jewellery Articles of jewellery coated with precious metals Articles of jewellery made from rope chain Articles of jewellery made of precious metals Articles of jewellery made of precious metal alloys Articles of jewellery with precious stones Articles of jewellery with ornamental stones Artificial gem stones Artificial gemstones Artificial jewellery Artificial stones [precious or semi-precious] Atomic clocks Automatic watches Automobile clocks Badges of precious metal Bands for watches Bangle bracelets Bangles Barrels [clock and watch making] Barrels [clock- and watchmaking] Bead bracelets Beads for making jewellery Beads for making jewelry Bib necklaces Body costume jewellery Body jewellery Body-piercing rings Body-piercing studs Boxes for cufflinks Boxes for tie-pins Boxes of precious metal Bracelet charms Bracelets Bracelets and watches combined Bracelets [charity] Bracelets for watches Bracelets [jewellery] Bracelets [jewellery, jewelry (Am.)] Bracelets [jewelry] Bracelets made of embroidered textile [jewelry] Bracelets made of embroidered textile [jewellery] Bracelets made of rubber or silicone with pattern or message Bracelets of precious metal Bridal headpieces in the nature of tiaras Brooches being jewelry Brooches [jewellery] Brooches [jewellery, jewelry (Am.)] Brooches [jewelry] Buckles for watchstraps Busts of precious metal Busts of precious metals Cabinets for clocks Cabochons Cabochons for making jewellery Cabochons for making jewelry Cameos [jewelry] Cases adapted for holding watches Cases adapted to contain items of jewellery Cases adapted to contain horological articles Cases adapted to contain watches Cases [fitted] for clocks Cases [fitted] for horological articles Cases [fitted] for jewels Cases [fitted] for watches Cases for chronometric instruments Cases for clock- and watchmaking Cases for clock and watch-making Cases for horological instruments Cases for jewels Cases for watches Cases for watches and clocks Cases for watches [presentation] Cases of precious metals for horological articles Cases of precious metals for watches Cases of precious metals for clocks Cases of precious metals for jewels Ceramic discs for use as tokens of value Chain mesh of precious metals [jewellery] Chain mesh of semi-precious metals Chains for watches Chains [jewellery] Chains [jewellery, jewelry (Am.)] Chains [jewelry] Chains made of precious metals [jewellery] Chains of precious metals Chains (Watch -) Chalcedony Chalcedony used as gems Chaplets Charity bracelets Charms Charms for jewellery Charms for jewelry Charms for key chains Charms for key rings Charms [jewellery] Charms [jewellery, jewelry (Am.)] Charms [jewellery] of common metals Charms [jewelry] Children’s jewelry Choker necklaces Chokers Chronographs as watches Chronographs for use as timepieces Chronographs for use as watches Chronographs [watches] Chronological instruments Chronometers Chronometric apparatus and instruments Chronometric instruments Chronometrical instruments Chronoscopes Clasps for jewellery Clasps for jewelry Clip earrings Clips of silver [jewellery] Clips (Tie -) Clock and watch hands Clock boxes Clock cabinets Clock cases Clock cases being parts of clocks Clock dials Clock faces Clock hands Clock hands [clock- and watchmaking] Clock hands [clock and watch making] Clock housings Clock mechanisms Clock movements Clockmaking pendulums Clocks Clocks and parts therefor Clocks and watches Clocks and watches, electric Clocks and watches for pigeon-fanciers Clocks for world time zones Clocks having quartz movements Clocks incorporating ceramics Clocks incorporating radios Clockwork movements Clockworks Cloisonné jewellery Cloisonne jewellery Cloisonné jewellery [jewelry (Am.)] Cloisonné jewelry Cloisonne pins Closures for necklaces Clothing ornaments of precious metals Coins Collectable monetary coin sets Collectible coins Collets being parts of jewellery Commemorative boxes of precious metal Commemorative coins Commemorative medals Commemorative shields Commemorative shields of precious metal Commemorative statuary cups made of precious metal Control clocks Control clocks [master clocks] Copper tokens Corporate recognition jewelry Costume jewellery Costume jewelry Crosses [jewellery] Crucifixes as jewellery Crucifixes as jewelry Crucifixes of precious metal, other than jewellery Crucifixes of precious metal, other than jewelry Cubic zirconia Cuff links Cuff-links Cuff links and tie clips Cuff links coated with precious metals Cuff links made of gold Cuff links made of imitation gold Cuff links made of porcelain Cuff links made of precious metals with semi-precious stones Cuff links made of precious metals with precious stones Cuff links made of silver plate Cuff links of precious metal Cuff links of precious metals with semi-precious stones Cufflinks Cultured pearls Cut diamonds Decorative articles [trinkets or jewellery] for personal use Decorative boxes made of precious metal Decorative brooches [jewellery] Decorative cuff link covers Decorative key rings Decorative pins [jewellery] Decorative pins of precious metal

Cohort retention rate and customer stickiness are two important metrics that businesses use to understand and improve their relationships with their customers. Cohort retention rate measures the percentage of customers who continue to do business with a company over time, while customer stickiness measures the strength of a customer’s loyalty to a company and their likelihood to continue doing business with the company in the future. By analyzing these metrics, businesses can gain valuable insights into how to retain and engage their customers, and identify potential areas for growth and improvement. Cohort Retention Rate Definition Cohort retention rate is a metric that measures the percentage of customers who continue to do business with a company over time. To calculate cohort retention rate, a business first defines a cohort of customers based on a common characteristic or behavior, such as the month in which they made their first purchase. The business then tracks the behavior of these customers over time, and calculates the percentage of customers who continue to do business with the company after a certain period of time. For example, a business might calculate the cohort retention rate for customers who made their first purchase in January, and track their behavior over the next 12 months. Benefits of Using Cohort Retention Rate KPI Cohort retention rate is an important metric for businesses because it allows them to understand how well they are retaining their customers over time. By comparing the cohort retention rate for different groups of customers, businesses can identify trends and patterns in customer behavior, and identify potential areas for improvement. For example, a business might see that the cohort retention rate for customers who made their first purchase in January is higher than the cohort retention rate for customers who made their first purchase in February. This could indicate that there is an opportunity for the business to target its marketing efforts towards customers who are more likely to continue doing business with the company in the future. In addition to cohort retention rate, businesses also use the concept of customer stickiness to measure the strength of a customer’s loyalty to a company and their likelihood to continue doing business with the company in the future. Customer stickiness is typically measured using a formula that takes into account several factors, including the number of products or services that a customer uses, the amount of time they have been a customer, and the amount of money they spend with the company. By analyzing customer stickiness, businesses can identify which customers are most loyal to the company and are likely to continue doing business with it in the future. One key benefit of analyzing cohort retention rate and customer stickiness is that it allows businesses to develop strategies to retain and engage their customers. By understanding which factors influence customer retention and loyalty, businesses can develop targeted marketing campaigns and other strategies to keep their customers engaged and loyal. How to Calculate Cohort Stickiness To calculate cohort stickiness, you need first to define what cohort you want to measure stickiness for. A cohort is a group of people who share a common characteristic, such as joining a website or purchasing a product at the same time. Once you have defined your cohort, you can then measure how “sticky” they are by looking at how often they return to your website or how long they continue to use your product. To do this, you can use the following formula: Cohort Stickiness = (1 – (Cohort Churn Rate / Total Churn Rate)) x 100 Where the Cohort Churn Rate is the percentage of people in the cohort who stop using your product or visiting your website, and the Total Churn Rate is the percentage of all users who stop using your product or visiting your website. For example, a business may have a cohort stickiness rate of 80% for customers who made their first purchase in January. This means that 80% of the customers who made their first purchase in January remained active with the business during the period being measured. By comparing the cohort stickiness rate of different groups, businesses can identify which groups are performing well and which may need additional support to improve their retention rate. This formula will give you a percentage that indicates how “sticky” your customers are. A higher percentage indicates that a greater proportion of your customers are continuing to use your product or service, while a lower percentage indicates that more of your customers are churning. You can use this information to identify any issues that may be causing customers to churn and take steps to address them. How to Improve Customers Cohort Stickiness To improve customer retention, cohort stickiness and encourage repeat purchases, companies can: Providing a seamless and user-friendly shopping experience, with fast loading times and easy-to-use navigation. Improve customer support to effectively communicate with customers and provide the right level of support. Start a loyalty program to motivate customers to purchase more often. Send engaging emails to build a good relationship with customers an initial purchase. Offering personalized recommendations and product suggestions based on the customer’s previous purchases and browsing history. Offer discounts to incentivize customers to return to the site. Implementing abandoned cart reminders to remind customers about items they have left in their cart and encourage them to complete their purchase. Collect customer feedback to make customers feel valued and invested in the company. Start a referral program to use existing customers to bring in new customers. Offer personalized shopping experiences to increase revenue. Consistently delight customers to exceed their expectations. Offer fast delivery to avoid abandoned carts. Make returns easy to build trust with customers. Overall, customer cohort stickiness rate and Cohort retention rate are valuable metrics for eCommerce businesses looking to track the retention rate of their customers and identify opportunities for improvement. By measuring the cohort stickiness rate over time, businesses can gain a better understanding of their customers and take steps to improve their retention rate and

product idea and conducting product research to create a Minimum Viable Product (MVP). You release it to a small sample of your target audience and receive great feedback. But when you launch the full version of the product to the market, disaster strikes: the reviews tank, and so do sales. This is a common scenario in the product world and happens for one significant reason: not achieving successful product-market fit. What is Product-Market Fit? Product-market fit describes a scenario in which a company’s target customers are buying, using, and telling others about the company’s product in numbers large enough to sustain that product’s growth and profitability. who is often credited with developing the concept, product-market fit means finding a good market with a product capable of satisfying that market. Why is it Important? (1) Product-market fit is not a static condition. (2) The bulk of activity within any company is oriented around refining or building on their product-market fit, whether the company describes what it’s doing in those terms or not. The word “fit” is misleading. It sounds like arrival at a destination. Or a target you achieved at launch. It’s better to think of PMF as a process that can continually be refined. It’s an alignment, not an event. It’s more like market-product synchronicity. Adapting to evolving customer needs is an iterative process that never ends. What are some basic tenets of Product-Market Fit? PMF is vital at every level, from startup to enterprise.- At all stages of development, the degree of Product-Market Fit you’ve established captures your success at offering a product that will meet an audience’s needs so much that they’re willing to pay you for it. What counts as PMF changes as you add new features, reach out to new audiences, or change your messaging. PMF-finding is both an art and a science.- Applying creative elements (like your team members’ experience, artistry, and hard-won instincts) to a rigorous scientific method supercharges productivity. Data is the mine, but insights are the gold.-Insights are pieces of knowledge that change the story a company tells about its product, and that lead people to take informed action. The true value of collecting data is in the results it drives. Keep a close eye on your market!- Too many teams over-rotate on product quality, while overlooking the pool of people willing to buy it. Keeping attention on the “M” in PMF gives your users privileged status in your development process. This market research literally pays you back—with sales. Who is Responsible for Product-Market Fit? We generally associate the concept with marketing and product management. In reality, achieving it is a shared responsibility across the company. Sales, business development, support, finance, and all other departments help the company reach this important milestone. What Are Some Best Practices For Pursuing Product-Market Fit? Constantly gather feedback.- Encourage product teams to search for and isolate moments of friction. Many startups fail to notice these and address unexpected correlations. Move rapidly and make many small steps.- Develop your minimum viable product as quickly as possible, then use both your imagination and experience to ask hypothetical questions, run lots of experiments, and gather relevant data. Trust your hunches—then test them! Recognize where improving the product involves more than refining its features.- Things that can get “better” may include your market segmentation, sales cycle, packaging and distribution, and even your business model. How do you measure Product-Market Fit? Survey your customers.- when at least 40% of users would find themselves “very disappointed” to be deprived of your product, you are experiencing PMF. Discover your Net Promoter Score.- Net Promoter Score (NPS) ranks users by their likelihood to buy more product, remain customers long-term, and make the highest number of positive referrals. Know the all-important retention rate!- “Retention rate is the single best metric to measure your product-market fit.” It’s the percentage of your customers who are actively using your product. To calculate it, divide the number of active customers by the total number of customers and multiply by 100 to get a percentage. Retention can be a particularly tricky metric to track. You need to distinguish between new customers and returning ones, and different customers will start (and stop) using your product on different dates. Graphing a retention curve is a way to visualize improvement made over time. And cohort analysis will help you understand long-term retention among your most important user groups. Each high-value user group can be its own “market”, and at any given moment you may have better PMF with certain user groups than with others. FAQs What is Product-Market Fit (PMF)? Product-Market Fit (PMF) is a concept that represents the alignment between a product’s features and the needs and preferences of its target market. It signifies that the product satisfies a real demand in the market. How do you know when you have achieved Product-Market Fit? Product-Market Fit is achieved when a significant number of customers in the target market are not just satisfied but delighted with the product. Positive feedback, high customer retention, and increased demand are indicators of achieving PMF. Why is Product-Market Fit important? Product-Market Fit is crucial because it indicates that a product has found its place in the market and is meeting the needs of its intended audience. It often leads to increased customer satisfaction, loyalty, and business success. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process

Dynamic world that is becoming complex. Environmental, social, cultural, and economic challenges on a global scale have now become a part of our daily lives. Profit maximisation is no longer the main business performance metric for corporations, but acting as responsible corporate citizens who have a responsibility to society. Companies in India now have a larger duty to establish a defined CSR framework, as to the notion of Corporate Social Responsibility (CSR), which was established by the Companies Act of 2013. The Ministry of Corporate Affairs (MCA) has now mandated that all such companies submit a comprehensive report on their CSR activities in Form CSR-2, which includes details on CSR spending, CSR projects, the creation of capital assets through CSR spend, the CSR Committee, and Polices, etc. What do you mean by CSR- Corporate Social Responsibility? The concept of corporate social responsibility is that a company has a duty to the society and environment in which it exists. A Corporate Social Responsibility (CSR) report is a document that corporations use to explain their CSR activities and their impact on the environment and community to both internal and external audiences. The CRS efforts of an organisation can be divided into four categories: environmental, ethical, charitable, and economic. “Corporate Social Responsibility” covers, but is not limited to, the following under CSR Rules: Projects or programmes that are related to the activities listed in Schedule VII of the Act. Projects or programmes relating to activities undertaken by the Board of Directors of a company in order to ensure the recommendation of the CSR Committee of the Board in accordance with the Company’s declared CSR Policy, subject to the condition that such policy cover subjects specified in Schedule VII of the Act. Applicability for CSR Reporting The minimum requirement for applicability according to Companies Act, 2013 is set under section 135 of the Act.  CSR in the Workplace:  The company’s net worth must be at least Rs 500 crore; or Company’s annual turnover is at least Rs 1000 crore; or The company’s net profit must be at least Rs 5 crore. During the immediate previous financial year, should devote 2% of its average net profit earned over the previous three financial years to CSR initiatives. The Importance of Corporate Social Responsibility for Business External and internal stakeholders can learn about an organization’s mission, activities, and outcomes through CSR reports. Customers, the local community, and society at large are among those who are affected, in addition to workers, decision-makers, and shareholders. CSR enhances a company’s public image by publicising its efforts to make the world a better place, increasing the likelihood of consumers favouring them. It generates more media attention since it casts a favourable light on the organisation. CSR increases the value of a company’s brand by forging a socially strong relationship with its customers. When firms are involved in any form of community, CSR helps them stand out from the competitors. Recent Notification on CSR by MCA The Companies (Accounts) Amendment Rules, 2022, have been amended by the Ministry of Corporate Affairs on February 11, 2022. According to the modified rules, every firm covered by u/s 135 must submit an E-Form CSR-2 report on corporate social responsibility to the Registrar for the prior financial year (2020-2021) and subsequent years. Previously, no form was necessary to submit a CSR report. The government intends to acquire a better understanding of how corporations use their CSR money and the types of activities they arrange through the new reporting format. It is also envisaged that openness would be introduced into the CSR compliance domain. Companies must file Form CSR-2 by March 31, 2022, for the fiscal year 2020-21. “For FY 2021-22 and onwards, the Form CSR-2 shall be filed as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be. Aim of MCA behind CSR-2 “A New Beginning” CSR-2 could be valuable for data mining and analysis by the MCA’s CSR section in order to implement improved policies. This reporting requirement would undoubtedly improve transparency and disclosure of CSR initiatives.  The information gathered through these forms could be useful in order to detect CSR fraud and design effective CSR policies.  However, the revisions to CSR reporting, on the other hand, raise the regulatory burden on businesses and may not accord with the government’s objective of encouraging ease of doing business in India. CSR-2’s broad breadth will also increase the amount of data available to the MCA, which might be used to inform future CSR legislation. Legal Provisions for Non- Filing of CSR If a corporation fails to comply with the laws relating to CSR spending, transferring, and using the unspent funds, it will be fined a minimum of Rs 50,000, with a maximum fine of Rs 25 lakh. Furthermore, all corporate officers who are responsible for the default may face comparable sanctions. The police could face a sentence of up to three years in prison, a fine ranging from 50,000 to 5, 00,000, or both. FAQs What does CSR-2 signify in the context of “A New Beginning”? The term “CSR-2 as ‘A New Beginning’” suggests a renewed or evolved approach to CSR reporting. It could imply a shift in strategy, focus, or methodology in how a company engages with and reports on its social responsibility initiatives. Why is CSR reporting important? CSR reporting is important for transparency and accountability. It allows stakeholders, including investors, customers, employees, and the community, to assess a company’s commitment to social and environmental issues and its overall impact on society. What are the key components of CSR reporting? CSR reports typically include information on a company’s environmental impact, social initiatives, governance practices, employee relations, community involvement, and efforts to contribute to sustainable development. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in

Listing fee, or insertion fee, is a type of nominal fee, which ecommerce platforms charge from sellers to post (i.e list) their products on the website. Popular examples include such websites as eBay and Amazon and also online auctions like Catawiki. The listing fee depends on the value of a product seller intends to offer on the platform – the higher the price of products the higher the listing fee will be. What Is a Listing Agreement? A listing agreement is a contract under which a property owner (as principal) authorizes a real estate broker (as agent) to find a buyer for the property on the owner’s terms. In exchange for this service, the owner pays a commission. How a Listing Agreement Works A listing agreement authorizes the broker to represent the seller and their property to third parties. The listing agreement is an employment contract rather than a real estate contract: The broker is hired to represent the seller, but no property is transferred between the two.Under the provisions of real estate license laws, only a broker can act as an agent to list, sell, or rent another person’s real estate. In most states, listing agreements must be written.Because the same considerations arise in almost all real estate transactions, most listing agreements require similar information, starting with a description of the property. The description typically includes a list of personal property that will be left with the property when it’s sold, as well as a list of personal property the seller expects to remove (for example, appliances, and window treatments).The listing agreement also specifies the listing price, broker’s duties, seller’s duties, broker’s compensation, terms for mediation, an automatic termination date, and any additional terms and conditions. Types of Listing Agreements Open Listing- With an open listing, a seller retains the right to employ any number of brokers as agents. It’s a nonexclusive type of listing, and the seller is obligated to pay a commission only to the broker who successfully finds a ready, willing, and able buyer. The seller retains the right to sell the property independently without any obligation to pay a commission. Exclusive Agency Listing- With an exclusive agency listing, one broker is authorized to act as the exclusive agent for the seller. The seller retains the right to sell the property without obligation to the broker. However, the seller is obligated to pay a commission to the broker if the broker is the procuring cause of the sale. Exclusive Right-to-Sell Listing- An exclusive right-to-sell listing is the most commonly used contract. With this type of listing agreement, one broker is appointed the sole seller’s agent and has exclusive authorization to represent the property. The broker receives a commission no matter who sells the property while the listing agreement is in effect. FAQs What is a listing fee? A listing fee is a charge imposed by a stock exchange or other financial markets for a company to list its securities (such as stocks or bonds) on that exchange. Why do stock exchanges charge listing fees? Stock exchanges charge listing fees to cover the costs associated with maintaining a fair and orderly market, regulatory compliance, surveillance, and providing services to listed companies. How is the listing fee determined? The listing fee is typically based on various factors, including the size and type of the company, the number of shares to be listed, and the services provided by the stock exchange. 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Receivables, also regarded as accounts receivable, are debts owed to a firm by its customers for goods or services used or delivered but not yet paid for.Receivables are created by expanding the line of credit to customers and are listed as current assets on the company’s balance sheet. They are considered as liquid assets since they can be used as collateral to secure a loan to help meet short-term obligations. Receivables are part of the working capital of a company. Effectively handling receivables means promptly following up with any consumers who have not paid and eventually reviewing payment plans if necessary. This is critical as it provides additional capital to fund operations and reduces the net debt of the organisation. What are receivables? Receivables are unpaid customer debt for products or services delivered. It is a current asset that affects a business’s liquidity and working capital management. Receivables are shown as current assets on the balance sheet, and the general ledger shows a debit balance. To boost cash flow, a company can reduce the credit terms of its accounts receivable or take longer to pay its accounts receivable. This lowers the company’s cash conversion time, or how long it takes to turn capital assets, such as inventory, into capital for operations. It can also sell receivables at a discount to a factoring company, which then assumes responsibility for collecting the money owed and bears the risk of default. This form of structure is referred to as the funding of receivable accounts. Basic analysts look at different ratios to measure how effectively a company extends credit and collects debt on that credit. The turnover ratio of the receivables shall be the net value of the credit sales for a given period separated by the average accounts receivable for the same period. The average receivable accounts can be calculated by adding the value of the accounts receivable at the beginning of the period to their value at the end of the period and dividing the sum by two. Another indicator of the company’s ability to recover receivables is the days of unpaid revenue (DSO), the total number of days taken to collect payments after the sale has been made. What is the significance of receivables? Receivable entries are beneficial to businesses and their clients because they allow businesses to maintain a steady supply of products. The relationship between the business owner and the account holder can be documented using various receivable entries. In bookkeeping, the different types of receivables are recorded in the financial statements. When a business has a claim against a customer for a short-term extension of credit, they create a receivable entry in its accounting system and send an invoice to the client to request payment. Receivables can be used as collaterals to secure loans that can enable businesses to meet short-term obligations. They are considered liquid assets and are a key part of the business’s working capital. It is critical for any enterprise to handle receivables effectively as they offer additional capital to fund operations and allow the enterprise to reduce its net debt. What are the different types of receivables? There are various types of receivable entries that can be used to note the relationship between the business owner and the account holder. Majorly, receivables can be divided into three types: trade receivable/accounts receivable (A/R), notes receivable, and other receivables. What is trade/accounts receivable (A/R)? Accounts receivable are the outstanding money owed to a business by its clients or customers for goods or services that have been provided but not yet paid for. It represents the amount of money that a company is entitled to receive and is considered an asset on the balance sheet.  The longer your A/R remains unpaid, the more difficult it will be to arrange funds for manufacturing goods for further sales. Uncollected payments reduce working capital and delay business cycles. Collecting all unpaid dues should be a top priority to have a better cash flow. Failure to do so will negatively affect the cash flow available for other business needs.  Often, finance leaders tend to overlook the cash that is tied up under the accounts receivable (A/R) entry on the balance sheet while coming up with financial strategies to optimize their business’ working capital. What is notes receivable? Notes receivable is a common type of receivable, and it’s similar to the standard accounts receivable except for the payment deadlines. With a conventional receivable, you would ordinarily give a customer a two-month window to pay you back, but with notes receivable, the payment due date can be extended up to a year or more. In notes receivables, a promissory note is used to agree on a longer payment period between you and the second party (the debtor). A promissory note helps enforce your legal claim to payment from the debtor. For the debt settlements achieved within the agreed time frame, no interest will be charged. If the debtor asks for an extension of the payment period, interest will be set on a monthly basis.  This series of journal entries will repeat every year until the note is paid in full. On the balance sheet, notes are normally divided into current and long-term categories. The amount due within the following year is the current component of the notes, and the amount which has more than a year’s time to be repaid is categorized as long-term notes. What are other receivables? Other receivables include interest receivables, salary receivables, employee advances, tax refunds, loans made to employees or other companies, and advances on wages paid to employees. Having an understanding of the different types of receivables can help you track who owes you what and when—in a more structured manner. And that’s an essential step in ensuring you have the finances you need to keep and develop your business! FAQs What Are Receivables? Receivables refer to the money owed to a company by its customers for goods or services provided on credit. Why Do Companies Offer Credit to Customers? Offering credit can attract more customers and stimulate sales, providing flexibility in payment terms. It is a common practice to encourage business relationships. How Do Companies

Gross Merchandise Value (GMV), also referred to as gross merchandise volume, is the total amount of sales a company makes over a specified period of time, typically measured quarterly or yearly. GMV is calculated before accrued expenses are deducted. Accrued expenses include costs associated with advertising/marketing, delivery costs, discounts, and returns. What Is Gross Merchandise Value (GMV)? Gross merchandises value (GMV) is the total value of merchandise sold over a given period of time through a customer-to-customer (C2C) exchange site. It is a measure of the growth of the business or use of the site to sell merchandise owned by others. Gross merchandise value (GMV) is often used to determine the health of an e-commerce site’s business because its revenue will be a function of gross merchandise sold and fees charged. It is most useful as a comparative measure over time, such as current quarter value versus previous quarter value.GMV is also known as gross merchandise volume; both phrases indicate the total monetary value of total sales. How to Calculate Gross Merchandise Value Gross Merchandise Value can be calculated in a number of different ways. The simplest and most often used formula is given below: Gross Merchandise Value =  Sales Price of Goods  x  Number of Goods Sold GMV, using the calculation above, can be seen to also represent gross revenue. For example, if an online company sells 15 customized notebooks at $10 per notebook, the GMV would be $150. Advantages and Disadvantages of GMV Advantages- Since retailers may or may not be the producers of the goods they sell, measuring the gross value of all sales provides insight into the company’s performance. This is especially true in the customer-to-customer market, where the retailer serves as a third-party mechanism for connecting buyers and sellers without actually participating as either. It may also provide value to retailers in the consignment sector, as they never officially purchase their inventory. Even though the items are often housed within a company’s retail location, the business functions as the authorized reseller, often for a fee, of another person’s or entity’s merchandise or property. Generally, they are never the true owner of the items, as the person or entity that placed the item on consignment may return and claim the item if they so choose. Disadvantages- Although GMV represents the total value of goods sold on a C2C exchange, it doesn’t truly reflect the profitability of a company; primarily the true revenue that a company earns from fees. For example, if a company’s GMV was $500 for the month, that entire $500 does not go to the company; the majority of it will go to the individual who sold the goods. The company’s true revenue would be the fee that it charges for the use of its site. If the fee was 2%, the company’s true revenue would then be $500 x 2% = $10. Depending on the type of e-commerce site, GMV can have other disadvantages. For example, if a company were an online retailer that produced and sold its own goods, GMV would indicate its revenues, but it would only be one metric, providing a limited view. It would not tell you the number of customers visiting the site or how much revenue is from repeat customers, which are important indicators in terms of customer satisfaction and thus the long-term health of the company. Pros Provides insight into a company’s performance Allows for comparison with competitors Simple and quick calculation to perform Cons Not a true reflection of a company’s actual revenue A limited metric that does not take into consideration other factors, such as repeat customers Customer-to-Customer Retailers Customer-to-customer (C2C) retailers provide a framework, or system, for sellers to list items they have in inventory and for buyers to find items of interest. The retailer functions as an intermediary, facilitating the transaction, commonly for a fee, without actually being a buyer or seller at any point within the transaction. In many of these customer-to-customer sales, the retailer facilitating the transaction never comes in contact with any of the physical merchandise. Instead, the seller will send the item directly to the buyer once the financial portion of the sale is complete.This model may differ drastically from other retail models in which the retailer purchases merchandise from producers, manufacturers, or distributors and then essentially functions as an authorized reseller of goods the company has purchased. Gross Merchandise Value (GMV) vs. Gross Transaction Value (GTV) While GMV can be defined as the total dollar value of everything sold through a marketplace in a given period of time, gross transaction value (GTV) is a calculation of the revenue in relation to commissions. GTV is used more in businesses that operate on commissions, as GTV is equal to the number of items sold multiplied by the price collected. It is calculated by multiplying the number of transactions by the average order value by the total number of transactions made and items sold. It tends to be used by e-commerce companies with a marketplace where multiple sellers transact. FAQs Is Gross Merchandise Value the Same as Revenue? Depending on the type of e-commerce site, GMV is the same as gross revenue. However, for sites like eBay, it is a reflection of the total value of goods sold, but not the actual revenue the company makes, as a portion of those revenues is for the sellers of the goods. The actual revenue that eBay makes would be from the fees it charges on the sales. What Is Gross Merchandise Value in a Startup? In a startup, GMV is the gross merchandise revenue: the total revenue that a company generates through the sale of its goods or services. It is important that GMV is measured in conjunction with net sales, which takes into account deductions. How Is Gross Merchandise Value Calculated? GMV is calculated by multiplying the total amount of goods sold by their sales price in a given period. GMV = Sales Price of Goods x Number of Goods Sold. The Bottom Line– Gross merchandise value (GMV) is the total value of goods sold

The term average selling price (ASP) refers to the price at which a certain class of good or service is typically sold. The average selling price is affected by the type of product and the product life cycle. The ASP is the average selling price of the product across multiple distribution channels, across a product category within a company, or even across the market as a whole. What is the Average Selling Price (ASP)? The average selling price (ASP) is a term that refers to the price that a good or service is sold for. As the name implies, it is an average price. If a company sells hundreds of thousands of cell phones each year at different prices, you calculate the ASP by taking the total revenue earned by cell phone sales and divide that amount by the total number of units sold. The average selling price can be used as a benchmark in a few different ways. Companies entering a new market may look at the ASP of a good or service to position themselves when they bring their product to market.Companies will often report their ASPs during quarterly earnings calls. Analysts and investors will look at the trend of a company’s average selling price and draw conclusions from it. The price of a product will depend on the type of product and where the product is in its product cycle. As a product ages and becomes obsolete, the average selling price often decreases. Other names for average selling price include “average order value,” which is commonly seen in e-commerce. In the hospitality industry, a similar metric called “average daily rate” shows the average rate customers will pay for one day’s stay at their properties. How to Calculate Average Selling Price (ASP) A luxury handbag maker saw a big year in 2020. They sold 10,000 units at $250 each, 13,000 units at $220 each, and 20,000 units at $180 each. Let’s calculate what their average selling price was. First, let’s calculate the total amount of revenue the company earned. 10,000 * $250 = $2,500,000 13,000 * $220 = $2,860,000 20,000 * $180 = $3,600,000 The total amount of revenue earned by the company was $8,960,000. Next, we add up the number of units sold, which comes out to 43,000. The final step is to divide the total revenue by the number of units sold. The calculation results in an average selling price of $208.37. Uses of the Average Selling Price 1. Entry strategy- Companies that are entering a new market can use the average selling price to create their strategy on how they want to position themselves. Imagine that a company is looking to begin manufacturing men’s sunglasses. When they look at the market, they see that the ASP of sunglasses is $65. The business may decide to set their price at $100 to position themselves as a premium retailer. They may set the price at $50 to be a value retailer or come in with a price equal to that of the market. It depends on what the business thinks is the best and most profitable route.Entering at a lower selling price may result in tight profit margins. Entering at a premium price may lead to higher margins, but lower sales numbers. 2. Trends and decision-making- For companies currently in the market with a specific product or service, they can use the average selling price to identify trends and make decisions. If a company specializes in financial services and sees the average selling price of a certain service dropping over time, it can be a sign that the market for that service is drying up. The demand is declining, and the company must exit the market. A rising ASP isn’t always a positive thing, and a declining ASP isn’t always a negative thing. For example, a company initially sells video game consoles at $400 per unit and sells 100,000 units in the first year. That is $40,000,000 in revenue. The next year they drop their average selling price to $300 per unit. A 25% drop may sound frightening, but with the fall in price, the company ended up selling 200,000 in the second year for $60,000,000 in revenue. Revenue increased by 50% even though the selling price decreased. Lowering prices to achieve a larger volume of sales is a tradeoff that businesses are willing to make. It works in the other direction as well. A rising ASP will eventually reach a point where each increase in price drives down the volume of sales, eventually making it detrimental to raise prices any further. For Investors and Analysts 1. Draw conclusions- The investment community will analyze the average selling price to try to make conclusions about a product or service, a business, or a market. Take GoPro as an example. GoPro’s business primarily revolves around one device – action cameras. When a company is mainly built on one product, the investment community will monitor the average selling price of that product. A drop in price can point to rising competition, lower pricing power with their customers, or a decrease in demand, which can lead to failure. FAQs Why is the ASP important for businesses? ASP is important for businesses as it provides insights into pricing trends, helps in setting competitive prices, and serves as a key metric for evaluating the overall revenue performance of a product or service. What factors can influence changes in ASP? Changes in production costs, demand fluctuations, competitive pricing strategies, changes in market conditions, and shifts in consumer preferences can influence variations in ASP. How often should businesses calculate ASP? The frequency of calculating ASP depends on the industry, market dynamics, and the need for up-to-date pricing information. It is common for businesses to calculate ASP quarterly or annually. 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A related party transaction is a two-party contract which is accompanied by a pre-existing business relationship or mutual interest. For example, it would be a related party agreement to have a contract between a major shareholder of a company and the company if such shareholder agrees to renovate the offices of the company. Companies also aim to establish business relationships with parties they are familiar with or have common interests. While these kinds of transactions are legal, they may pose a conflict of interest or lead to another illegal situation. Therefore, related party transactions have to be approved by agreement of management or board of directors of the company. If unchecked, the misuse of related party transactions could result in fraud and financial ruin for all parties involved. Who is a Related Party? Following are the related parties with respect to Company LMN Ltd (LMN Ltd is taken as an example for explaining purposes). Let’s say, Mr L, M, and N are directors in this company. The related parties for the company, in general, are as under: Sl no Related Parties Examples 1. A director or his relative (Relative means a member of the same HUF, husband, wife, father, stepfather, mother, stepmother, son, stepson, son’s wife, daughter, daughter’s husband, brother, stepbrother, sister, step-sister) Mr L, Mr M and Mr N are directors and the relatives of these Directors are considered as related parties. 2. Key managerial personnel or his relative Say, Mr O is a Company secretary, his relatives will be considered related parties 3. A firm in which a director, manager, or relative is a partner Mr L is a partner at RST. Pvt. Ltd, another firm. This firm will also be considered as a related party. 4. A private company in which a director, manager, or relative is a member or director Mr. M is a director in M Pvt Ltd – In this case M Pvt. ltd becomes a related party. Even when Mr. M’s relative is a member or director in M Pvt ltd, this company will be considered as a related party. 5. A public company in which a director or manager is a director and holds along with his relatives more than 2% of its paid-up capital Mr. N along with his relatives holds more than 2% of the paid-up capital of N ltd. In this case, N Ltd will be considered as a related party. 6. Any body corporate whose board of directors, MD or manager is required to act in accordance with the advice, directions or instructions of a director or manager (NA in cases when these directions are followed in a professional capacity) When P Ltd acts on the directions of Mr. L, P Ltd will be a related party. 7. Any person on whose advice, directions or instructions a director or manager is required to act (NA when this is done  in a professional capacity) Mr A holding 51% in LMN Ltd on whose advice Mr L has to act will be considered as a related party. 8. Holding, Subsidiary or Associate of such company These all will be considered as related parties:– ABC Ltd holding 51% in LMN Ltd (Holding Company)– LMN Ltd holding 51% in XYZ Ltd (Subsidiary Company)– DEF Ltd holding 30% in LMN Ltd (Associate Company) 9. Any company which is a subsidiary of a holding company to which it is also a subsidiary PQR & LMN are both subsidiaries of ABC ltd. Thus, PQR also becomes a related party Meaning of Related Party Transactions Since we are acquainted with the term related party let us dive into the transactions covered. The broad categories are mentioned hereby: Sl no Transactions as per Companies Act requiring approval of the Board by resolution Transactions as per The Companies (Meetings of Board and its Powers) Rules 2014 requiring approval by the company by resolution 1. Goods and Material: Sale, purchase or supply Sale/Purchase/Supply of goods/material directly or through an agent covering 10% or more of turnover OR one hundred Crores (whichever is lower). 2. Property: Selling or buying or leasing Sale/Purchase of property directly or through an agent that is 10% or more of net worth OR one hundred Crores (whichever is lower). In case of leasing of property directly covering 10% or more of turnover OR one hundred Crores (whichever is lower). 3. Agent for (1) and (2) above Availing or rendering of services directly or through an agent which is 10% or more of turnover OR fifty Crores (whichever is lower). (All the above limits are to be taken on all transactions done on a financial year basis.) Sl no Transactions as per Companies Act requiring approval of the Board by resolution Transactions as per The Companies (Meetings of Board and its Powers) Rules 2014 requiring approval by the company by resolution 4. Others:– Availing of or the rendering of services– Underwriting of securities or derivatives– Related partys’ appointment to a place of profit or office* in the company/subsidiary/associate– If the Director or individual other than director/firm/private company/body corporate receive from the company an amount over and above the remuneration (In the case of directors) and anything by way of remuneration for others will need the approval of the Board by a resolution. – Related party’s appointment to the place of profit or office* in the company/subsidiary/associate where the remuneration exceeds two and a half lakh.– Underwriting of securities or derivatives when remuneration exceeds 1% of the net worth. Related Party Transactions in India In India, various regulations clearly outline the definition of a related party transaction. It helps to ensure that they are conflict-free. In the case of a company, it helps to ensure that it does not negatively affect the shareholders’ value or its profits. The Institute of Chartered Accountants of India (ICAI) introduced Accounting Standard 18- ‘Related Party Disclosures’ and made it mandatory for businesses to report related party transactions in the financial statements. Apart from this, various laws refer to these transactions. SEBI Governs Related Parties and Related Party Transactions The SEBI Clause 49 also states certain regulatory requirements for related party