What Is Optimal Capital Structure?Optimal capital structure is the best possible mix of debt and equity financing that minimises a business enterprise’s ordinary price of capital (WACC) and maximises shareholder value. It balances the advantages of debt, including tax benefits, with the risks of economic misery and financial disaster.Importance Of Optimal Capital StructureMinimizes Cost of Capital: Helps reduce WACC, improving profitability.Maximizes Firm Value: A nicely balanced structure complements the enterprise’s marketplace cost.Ensures Financial Stability: Prevents excessive debt, decreasing financial ruin danger.Improves Shareholder Returns: Companies can enhance investor wealth by optimising financing fees.Factors Affecting Optimal Capital StructureBusiness Risk: Companies with robust earnings can afford to take on more debt, while people with fluctuating earnings may also decide to pursue fairness.Industry Standards: Different industries have varying norms for debt-equity ratios.Market Conditions: Interest fees and financial situations affect debt affordability.Tax Benefits: Debt hobby payments are tax-deductible, making borrowing attractive.Growth Opportunities: High-growth firms rely more on fairness to avoid economic distress.Profitability: More worthwhile businesses also can use retained earnings instead of excessive debt.Key TakeawaysOptimal capital structure is an ideal mix of debt and equity that minimises a company's cost of capital (WACC) while maximising its value. It balances the tax benefits of debt with the risks of financial distress. Factors influencing it include business risk, industry norms, market conditions, tax advantages, and growth opportunities. Key theories include the Modigliani-Miller theorem, trade-off theory, and pecking order theory.

Today, organisations are increasingly relying on third-party vendors to improve their operations and increase growth. These partnerships bring multiple benefits but also several serious risks. It may cause disruption to business continuity and damage to the company’s reputation. Therefore, every large enterprise must have a strong vendor risk management programme in place to detect, measure and overcome vendor-related risks. In this article, we cover the key aspects of vendor risk management, such as audit checklists, workflows, reporting mechanisms, advantages and best practices.What is Vendor Risk Management?Vendor risk management (VRM) is a continuous due diligence process to identify, evaluate, manage and mitigate the risks resulting from third-party vendors and business partners for the duration of a business contract. The process helps an enterprise acknowledge red flags related to poor data security controls, cyber security failures, regulatory violations and supply chain disruptions that can be avoided with timely intervention. A properly structured VRM programme will make sure that the vendors are working in compliance with the company’s security policy and regulatory standards to protect sensitive business information while the business contract is active.Types of Vendor RisksVendors hold the potential to destabilise business operations with various types of risks, such as:Operational Risks: This risk stems from internal or external events with the potential to disrupt services provided by a vendor.

Did you know that almost 50% of Indian businesses are now dealing with procurement fraud? So, it’s no surprise that businesses are adopting online vendor registration through e-procurement platforms to stay clear of muddy water. However, for enterprises and suppliers new to the digital onboarding system, there are a lot of burning questions. What is vendor registration? How to fill in vendor registration forms? In this article, we will tell you all about the process of vendor registration, forms, requirements, templates and more. What is Vendor Registration? As the name suggests, it is the process where a supplier registers itself as a vendor for a company. Large companies working with multiple suppliers find it hard to scheme through vendor applications during the selection process. Hence, in recent times, companies are accepting verified vendor profiles through their own procurement platform or through vendor portals. Suppliers register themselves on the procurement or vendor portal through a vendor registration form.

Nowadays, any global organisation's long term growth and prosperity is dependent upon their supplier code of conduct. This is a kind of a manual which reflects the expectation of the company with their suppliers. But, what is the need to convey these expectations to them? This article will clarify the meaning of supplier code of conduct, how to formulate the policy and its benefits. What is Supplier Code of Conduct?This is the actual set of rules or guidelines that a company expects its suppliers to follow, that details out certain ethical and business practices required when conducting business with the company. For example: Suppliers must pay fair wages, avoid child labour, and have anti-corruption measures in place.Supplier Code of Conduct PolicyA supplier code of conduct policy is a document that displays the expected ethical business practices from a supplier. This manual usually contains the guidelines and standards and the way the organisation measures those standards.Key Elements of a Supplier Code of Conduct Policy This supplier code of conduct covers certain important aspects of a supplier code of conduct policy, though every organisation can customise it according to their specific ethical norms. Business IntegrityEthical behaviour is the base for companies in all business dealings and is the same behaviour that they expect from their suppliers.

One of the major aspects of GST compliance is the timely and accurate filing of GST returns. Along with regular monthly and annual return forms such as GSTR-1, GSTR-3B and GSTR-9, various other return formats exist under the GST system for different purposes. For effective compliance, it is essential for taxpayers to understand and file the right return forms. This article discusses the different return formats and how to file GST return step by step. GST Filing Process & ProcedureGST filing involves the official submission of information related to a business’s sales, purchases, taxes paid, and input tax credits (ITC) claimed, in structured formats. The frequency of furnishing these details in relevant formats varies, and taxpayers are required to file these forms online in the GST portal. Along with returns to be submitted by taxpayers, the GST portal also auto-generates certain types of GST return documents to help taxpayers reconcile their purchase invoice data. Different Types of GST Return Forms Category of taxpayers Returns to be filed Returns auto-generated by the system Frequency Due date for submission /auto-generation  Information contained Regular taxpayers GSTR-1  Monthly / Quarterly 11th day of the succeeding month for monthly filers;  13th of the month succeeding the quarter for taxpayers under the QRMP schemeDetails of outward supply of goods and services Regular taxpayersGSTR-1A Monthly / Quarterly After filing GSTR-1 and until the filing of GSTR-3B for the return periodAmendment of GSTR-1 dataRegular taxpayers GSTR-2AMonthly A dynamic statement updated in real time following submission of data by suppliersDetails related to inward purchases and ITCRegular taxpayers GSTR-2BMonthly A static statement available on the 14th of the succeeding monthDetails related to inward purchases and ITC for a tax periodRegular taxpayersGSTR-3B Monthly / Quarterly20th day of the succeeding month for monthly filers;22nd / 24th of the month following the quarter for taxpayers under the QRMP scheme, based on the principal place of businessSelf-declaration on outward supplies, ITC, claimed, tax liability ascertained, and taxes paidComposition taxable personsGSTR-4 Annual 30th June of the succeeding year Details of ITC availed, tax paid for local, interstate and import/exportsNon-resident foreign taxpayersGSTR-5 Monthly 13th of the succeeding month  All outward supplies made, inward supplies received, credit/debit notes, tax liability and taxes paidOIDAR (Online Information and Database Access or Retrieval) services providerGSTR-5A Monthly 20th of the succeeding monthOutward taxable supplies and tax liability Input Service Distributor (ISD)GSTR-6 Monthly 13th of the succeeding monthITC received and distributed by the ISDPersons required to deduct tax at source (TDS)GSTR-7  Monthly 10th of the succeeding monthTDS deducted, the TDS liability payable, TDS paid and TDS claimed, if any e-Commerce operators liable for collecting tax at source (TCS)GSTR-8  Monthly 10th of the succeeding monthSupplies made through an e-commerce platform and TCS collected on the sameRegular taxpayers GSTR-9  Annual 31st December of the succeeding year All outward supplies made and inward supplies received during the relevant financial year, along with details of taxes payable and paid and a summary value of supplies under every HSN code,All taxpayers GSTR-9C Annual 31st December of the succeeding year Self-certified reconciliation statement between the books of accounts and the GSTR-9Taxable person whose registration has been cancelled or surrenderedGSTR-10 Final return Within 3 months from the date of cancellation or surrender of GST registration Unique Identity Number (UIN) holder, like foreign diplomatic missions and embassies, eligible for a refund under GSTGSTR-11 Monthly 28th of the month succeeding the month in which inward supply is received by the UIN holderInward supplies received and refund claimed How to file GST returns online?Filing GST returns is a simple task as taxpayers just need to follow a few steps and furnish relevant details in the prescribed formats. However, a taxpayer needs to have a GST Identification Number (GSTIN) and an register their account on the GST portal first. The following is a step-by-step guide on how to file GST returns online.Step 1: Log in to the GST portal with your user ID and password.

The Central Goods and Services Tax (CGST) is an important part of India’s GST system, introduced on July 1, 2017. The GST law replaced several old indirect taxes from the central and state governments with one unified system. Let’s take a closer look at CGST, its key features, benefits, and calculation. What is CGST?Beginning with the full form, CGST refers to Central Goods and Services Tax and is a type of indirect tax under Goods and Services Tax (GST) in India. CGST ApplicabilityCGST applies on intrastate transactions, i.e. on goods and services that are traded within the same state. On such transactions, the government collects both CGST and SGST (State Goods and Services Tax).

The Finance Bill 2022 introduced a new section in the Central Goods and Services Tax (CGST) Act, 2017 by way of substituting the existing Section 38. The revised Section 38 was proposed in a bid to further tighten input tax credit (ITC) claims, owing to the extent of ITC fraud that takes place by way of fake entities and fake invoices. The provisions of this section will also help avoid any matters of litigations in the court of law.The revised Section 38 has not yet been passed by parliament nor notified for taxpayers at the moment. However, it could become part of the GST law in the months to come. Latest updatesUnion Budget 2025- 1st Feb 2025Manual validation of invoices may now be required as GSTR-2B may no longer be fully system-generated as CGST Section 38(1) is being amended to omit the expression "autogenerated".New clause (c) under CGST Section 38(2) allows the government to specify additional ITC statement details, increasing compliance requirements.Let’s decode the new Section 38 and find out how it will impact the ITC claims of a business.How does the existing Section 38 govern ITC claims?The existing Section 38 of the CGST Act is titled ‘Furnishing details of inward supplies’. It governed the furnishing of details of outward supplies (i.e.

Accurate and timely financial reporting is critical for managing business finances. However, doing it manually for companies with operations spread across geographies is an endless struggle with collecting, collating and corroborating spreadsheets. Thankfully, standardised business processes, like R2R, have made financial reporting and management much easier. This article discusses everything you must know about the Record to Report process flow.  R2R Full FormR2R is the abbreviation of the Record-to-Report process.  What is Record to Report (R2R)? Record-to-Report is a financial and accounting management practice that aims to standardise the process to capture, collect, process, and timely deliver financial and accounting data accurately for management reporting purposes. Companies with geographically distributed operations or presence in multiple industries with dissimilar financial reporting standards follow R2R practices to maintain parity in financial and accounting management reports.  Common types of businesses following R2R practices: Multinational companies Publicly traded companies Global business process outsourcing companies Large tech companies with global operations Companies managing operations through global business service centres Large consumer goods companies Global e-commerce companies Importance of R2R in FinanceRecord to Report in finance and accounting processes is important for several reasons, like,Compliance Transparency Strategy Audit Compliance - Listed companies and companies with business operations in multiple countries need to comply with regulatory guidelines across different jurisdictions. R2R practices help to maintain uniformity in financial reporting for legal and regulatory compliance. Transparency - The business reputation of a company, to a large extent, depends on how accurately it maintains transparency in financial and accounting reports for internal and external stakeholders.

To run your business smoothly, you must learn how to manage your vendor data properly. Yet, many organisations struggle with incomplete information, outdated records, and miscommunication with suppliers. SAP’s Vendor Master tables provide a structured framework to store, manage, and track vendor information across different domains to address specific challenges you might face in building a reliable community of suppliers. What is the Vendor Master Table in SAP?The vendor master table is a central database used by a company to store and retrieve vendor-related information. This table simplifies how every team of a business, from procurements to accounts payable, interacts with vendors. As every member of your business is accessing unified information, this eliminates the risk of errors, such as incorrect payments or miscommunication with suppliers. When you manage several vendors without streamlined data, it becomes difficult to keep a tap on efficiency and meet compliance with regulations.

Supply chain visibility is a concept that can be game-changing for businesses and keeps them one step ahead of their competitors. It involves collecting real-time data and allowing businesses to track goods at every step of the supply chain. In this blog, we discuss what is supply chain visibility and how businesses can benefit by applying it. We will also explore the challenges companies face, the supply chain visibility metrics and ideas for improvement.What is Supply Chain Visibility?Supply chain visibility gives businesses the ability to track their products and components in real-time, throughout the supply chain, by collecting and sharing data. To put it simply, supply chain visibility aims to monitor the movement of goods across the entire supply chain from the supplier to the manufacturer to the consumer.When the companies have the right data about the supply chain at the right time, it ensures that:The management makes informed decisionsDisruptions are managed proactivelyOperations are optimisedThe process becomes time-efficientSupply chains have grown bigger and become complex over time. More and more countries are dependent on global suppliers who dominate world trade.