Professional Documents
Culture Documents
INDUSTRY PROFILE
Water is vital and is, by far, the most precious commodity on earth. Without it life
cannot exist. But 97% of the total quantity is sea water, unfit for human use. Of the
remaining 3% fresh water, 2/3 rd is in glaziers or in the form of ice and snow around
poles. Only 1% of all the world‟s water is available for human consumption and should
be enough for all. Water is infinitely renewable. The biggest difficulty with water is
man‟s extravagantly wasteful misuse of it.
Our planet‟s supply of water is given, and remains exactly the same, as when the
dinosaurs walked on earth.
But each of us now use nearly twice as much water every day as we used 30 years
ago and demand is till rising.
If used at the present rate, the flows in rivers will reduce and the natural habitats of
flora and fauna will decline.
United nations has declared 2003 to be „‟INTERNATIONAL YEAR OF FRESH
WATER‟‟.
BANGALORE: It has an extremely finite fresh water source. What is unique about
water supply in Bangalore city is that, the main source of water to city. River Cauvery, is
more than 100 kms. From the city and 510 metres below the city.
With the continuous influx of people and the increasing birth-rate ,Bangalore city‟s
population is estimated to hit 11 million by 2025. Water is going to be most scarce
resource if proper water conservation and management is not addressed. A good
alternative source is rainwater. Rainwater Harvesting practice will reap rewards for the
future. Even our ancestors practiced the method of harvesting rainwater, keeping in mind
their present and future needs.
Savings water form wasteful usages or form leakages, is a joint endeavour, of the public
and BWSSB.
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BWSSB
COMPANY PROFILE
To quench the thirst of the citizens of the city is an Herculean task. Bangalore water
supply and sewage board BWSSB is committed in its mission to supply water to this
great city with a great vision. The city built by magadi chieftain kempegowda 400 ago
has grown beyond imagination. The old Bangalore was having large numbers of lakes
and village ponds. Prior to 1896, the city‟s water supply demands were met by Dug
wells and numbers of tanks in and around the city such as Dharmambudi Lake, Sampige
Lake, Ulsoor Tank and Millers Tank, Sanky Tank etc. the first water supply system in
the city came to existence way back in 1896, more than 100 years ago.
Diwan Sheshdri Lyer constructed a check dam across river arkavathi at hesaraghtta and
supplied untreated drinking water to the city in 1930; another dam across the river
arkavthy on down stream of hesaraghatta at thippagondana hally was build. It was the
vision of the architect of modern Mysore State, Sir.M.Vishveswaraiah. The result of
rapid urbanization, the water supply becomes a challenge for the city‟s administration.
Hence BWWSB came into being on 10th September 1964, through an act of legislation.
The only perennial source available was the river Cauvery, which is 100kms away from
the city.
Hence Cauvery water supply scheme (CWSS) was implemented during 1974. Among
the other Metro, Bangalore is the only Metro, where is supplied form far off distance
certainly and efficiency BWSSB to fulfill its commitment. The Cauvery water was
diverted to Netkal Balancing Reservoir (NBR) at Shiva Anicut through open channel.
To cross Handihalla, a Siphon was constructed, which is the wonders of Cauvery Water
Supply Scheme (CWSS). From NBR water was taken to Torekadanahalli through
pipeline through gravity. The raw water is treated at T K Halli and this treated water is
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BWSSB
pumped in stages over head of 500 Mts for a distance of 100 Kms using 1650 Hp pumps.
The water is pumped to Harohalli and then to Tataguni and finally to the city. Thus
power charge payable to KPTCL is also high.
The fact is about 60% of the revenue is going for making payment to power charges. The
CWSS implemented in four stages and supplying 810 million liters of water per day to
Bangalore city .The CWSS 4th stage, 2nd phase has been envisaged with the intention of
supplying additional 500 MLD of drinking water. JBIC has signed to fund this project.
The estimated of the project is Rs.3384 crores.
On the other hand BWSSB has created Sewerage network all along the city the waster
water treatment plants are constructed in various stages. K&C Valley and V. Valley
waste water treatment plants were upgraded to tertiary level. The V. Valley water
treatment plant is of 60 MLD capacity and this is the highest capacity waste water
treatment plant in India New waste treatment plants were constructed and commissioned
at Hebbal and yelahanka in 2003. The recycle waster water is commissioned to supply
for international Airport, NAL etc, for non-potable purposes.
Under the guidance of the Honorable Chief Minister of the state Sri,
H.D.Kumaraswamy, his dream project GREATER BANGALORE is being implemented
in the year Karnataka is celebrating its golden jubilee. As per the notification of GOK, 7
CMC‟s and 1 TMC and 3 village will come under GREATER BANGALORE .our
present city, which is of 300 million Sq ft area expands to its doudle to 710 million Sq ft
under GREATER BANGALORE.
The population reaches to one crore BWSSB is already greated up to meet the challenge
of providing water to all citizens of GREATER BANGALORE with efficiency, using
the existing CWSS.
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BWSSB
To meet the demands of GREATER BANGALORE, BWSSB has a vision for next
10 years. Our aim is to
Bangalore is the fastest growing city in Asia providing a fastest growing city in Asia.
Providing drinking water to its population which is well over a 6 millions is a Herculean
task. The city, which had the reputation of having an assured drinking water supply
system for over a century, had a conventional drinking water supply system changing
times and growing demand necessitated for an effective drinking water system to the
growing Metro. Cauvery Water Supply Scheme (CWSS) is the result borne out of that
necessity and the unwavering commitment of BWSSB to provide its citizens with
potable drinking water. CWSS today has become the main stay of drinking water in
Bangalore.
Here‟s birds‟ eye view of how CWSS us helping Bangalore‟s citizen with pure drinking
water. Water to city of Bangalore is drawn form river Cauvery abstracted at Shiva
Anicut and conveyed through a channel to Netkal Balancing Reservoir and transferred to
treatment complex at Tore Kadanahalli, which is about 95 Kms from Bangalore on
Kanakpura Road. Through gravity mains, here water is treated at the treatment plants of
Cauvery.
Water Supply Scheme stage I, II , III, and IV. Filtered water is pumped to city through
3stage of pumping with the pumping stations located at T.K. Halli, Harohalli, (about 95
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& 40 Kms . from Bangalore respectively) Tataguni (about 20 Kms . form Bangalore)
through steel transmission mains. At present, the total supply from Cauvery is about 850
mld. The details of the scheme are as follows.
The scheme was commissioned in the year 1974 with capacity of 135 million litres per
day at the total cost of the project was Rs.36 crores Water is pumped through 1200 mm
dia steel transmission main, 5 pumps are installed at each of each of the pumping
stations with 3 pumps running round the clock.
The scheme was commissioned in the year 1982 with capacity of 135 million litres per
day at cost of Rs.85 crores. Water us pumped through 120mm dia steel transmission
main 5 pumps installed at each of the pumping stations with 3 pumps running round the
clock.
This scheme was commissioned in the year 1993 augmenting about 270 million litres per
day to the city, water is pumped through 1750mm dia steel transmission main 8 pumpare
installed at each of the pumping stations with 5 pumps running the clock. Estimated cost
of the scheme was Rs.240.00crores.
The designed capacity of the scheme is to supply 270 million litres of water per day.
Water is pumped through 1950mmdia steel transmission main. At present 4 pumps out
of 8 pumps installed at each of the pumping stations are running round the clock
supplying about 240 million litres of water per day. The scheme was commissioned on
29-07-2002. The project was implemented at a cost of Rs.1072 crores, part of which
(Rs.804 crores) is funded through financial assistance form japan Bank for international
co-operation.
ISO9001
All Water Treatment Plants at T.K.Halli and pumping stations at T.K.Halli, and Tataguni
have been awarded ISO 9901 certification for their efficiency and quality levels, during
2001.
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Providing water supply and making adequate provision for sewerage and disposal of
wastewater in existing and developing areas of Bangalore Metropolitan Area.
Preparation and implementation of plans and water supply schemes to meet the
increasing demand.
Remodeling the distribution system to supply the available water equitably.
Mobilizing the finances needed for launching new schemes.
Improvement to the existing sewerage system.
Revenue collections for the water supply, sewerage and waste water disposal system.
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BWSSB
Vision statement
BWSSB‟s vision rests on its unwavering commitment to provide value added quality
services using innovative and cost effective solutions to achieve customer satisfaction,
by ever remaining sensitive to their needs by anticipating their requirements, keeping
public interface always open and stay in the forefront in all its endeavour.
Mission statement
Quality policy
Quality assurance wing headed by an additional chief engineer (QA), comprising of an
Executive Engineer and three Assistant Executive Engineers comes under the control of
chief Engineer (Quality Assurance). The Wing is concentrating mainly on the following
activities.
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1. Providing water supply and making arrangements for the sewerage and disposal of
sewerage in the existing and developing regions of Bangalore Metropolitan Area.
2. Investigating adequacy of Water Supply for domestic purpose in Bangalore
Metropolitan area.
3. Preparation and implementation of plans and schemes for supply of water for
domestic purpose within Bangalore Metropolitan area.
4. Preparation and implementation of plans and schemes for proper sewerage and
disposal of sewage of the Bangalore Metropolitan area.
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J.P Nagar 1
South-5
J.P Nagar 3
Hosahalli
West West-1
Chandra Layout, Beggers colony
Rajajinagar
Nandini Layout
West-2
Mahalakshmi layout
Kethamaranahalli
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Magadi Road
Frazer Town
East-3 Pillanna Garden
Machalibetta
BEML Layout, Hoodi
East-4
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Ramamurthynagar
East-5
AEE Ele (E) L. Kumar Naik
Yeshwanthpur
North-2 Jayamahal
Kumara Park
Sanjaya Nagar
BEL Road
North-3 R.T Nagar
AnandaNagar
Yelahanka
North-4
Sahakaranagar
The area of operation of BWSSB is regional since its service is ltd to Bangalore
metropolitan area only.
Its operation is broadly divided into 26 divisions.
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BWSSB is the regional operating service organization which is the monopoly business
providing service to the people of Bangalore Metropolitan city. Since it the monopoly
service provider for drinking water and sewage service. There are no competitors exist
for the company since now.
Vehicles -Four-wheelers for all Senior executives for self-driving; for those who do
not want to drive themselves, car pools should be made available and the parking
facilities are provided for vehicles of all the employees.
The residential facilities are provided for the employees through company owned
houses in various locations in Bangalore.
Personal safety equipment to all who are involved in health hazardous activities
o Ear plugs/muff for the employees working near the pumps in pump houses
o Hand gloves for staff involved in sewerage systems, mixing of chemicals in
treatment plants
o Gum boots and Gas masks for people who have' to work in manholes, marshy
areas etc.
GIS settlement is accounted on cash basis. As per the Scheme, employee is making
the defined contributions to the GIS. The liability towards assured contribution in
the form of interest to the employees as per Government policy has not been
ascertained. The Board is in the process of ascertaining the liability.
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T
Source of Water R
E
A
T
Thippagundana Hessaragatta M
Cauvery
Halli E
N
T
A
C
Water Treatment Plant
T
I
V
I
Y
Reservoir at
Pumping
Station D
I
S
T
Chemical R
Treatment Plant I
B
U
T
I
Pure Water
O
Reservoir/ Tanks
N
Tanks A
C
T
Low Level Ground I
Reservoir Level V
I
Reservoir
T
Y
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BWSSB
The board of BWSSB has taken up Cauvery Water Supply Scheme Stage IV Phase II to
augment an additional 500 MLD of water to the city with financial assistance from Japan
Bank For International Co-operation (JBIC) through Ministry of Urban Development,
Government of India. Total estimated cost of the above scheme is Rs.3383.70 Crores.
The consultants have been appointed for this scheme. The project is expected to be
completed by 2011-2012.
BWSSB is also having plans to provide water facility to the extension area of the city as
a part of the Greater Bangalore Water Supply Sanity Project (GBWASP).
BWSSB is providing water supply under GBWASP project which covers the
Mahadevapura
Dasarahalli
Bomanahalli
Yelahanka
Byatarayanapura
Krishnaraja puram.
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MCKENSY’S 7S MODEL
Introduction to McKinsey’s 7’s Model
The 7‟s framework for management analysis was developed by McKinsey and company.
7‟s model provides an effective way of analyzing an organization, in terms of dynamic
relationship among 7 key elements namely- Structure, System, Strategy, Style, Staff,
Shared values and Skills.
Richard Pascal identified these factors in his book “The art of Japanese Management”.
According to Pascal, it was because of these factors the Japanese companies excelled
over American firm. A very important feature of this model is that McKinsey consultants
in their studies of several firms have extensively tested it.
7‟s model is a very good tool available to the managers to study the organization. This
study is important from a strategic, marketing, organizational behavior and competitive
perspective.
A major premise of the model is that many performances related issues are rooted among
the factors outlined. The 7‟s are interconnected, aligned and working together in high
performing organizations.
According to this model there are seven basic dimensions which represent the core of
managerial activities. These are the „levers‟, which the executives use. The originators of
the model have coined the managerial variables with words beginning with the letter „S‟
so as to increase the communication power of the model. The 7‟s are
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7-s Architecture:
Structure
Strategy
Systems
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3.1 Structure
CHAIRMAN
Medical Officer
Cheif Engg.-Qty.
Assurance
HRD Manager
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3.1 Structure:
The way the organization‟s units relate to each other; centralized, functional division
(top- down); decentralized (the trend in large organizations); matrix, network, holding,
etc.
Finance Department:
Functions:
Administration department:
Administration department is responsible for various functions like legal affairs, welfare
of employees, personal management, wages and salary administration.
Functions:
1. Maintenance of attendance.
2. Leave records.
3. Provident funds.
4. Personal files of each employee.
5. Grievance handling.
6. Wage and salary administration.
Technical department:
The technical department is responsible for maintenance project, corporate planning,
quality assurance, and also deals with all the technical aspects of the organization.
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Functions:
1. Utility functions; under this function, the department has to ensure the operation of
generator sets, effluent treatment plant and disposal of waste,
2. Maintenance functions: under this section, it has to ensure the maintenance of all
machines and pump houses and also builds preventive methods for smooth looking
of all the machines.
3.2 Strategy
It is the plan for the allocation of firm‟s scarce resources, over time, to reach identified
goals; Environment, Competition, Customer.
Today the business is running in a dynamic world. It is required to manage internal and
external environment to be a successful in the field. Even it is required to maintain good
control over the environment to remain in the business for long run.
Strategy is nothing but the determination of the purpose and the long term objective of
an enterprise, followed by the adoption of course of action and allocation of resources
necessary to achieve these aims.
Business intelligence.
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3.3 System
The procedure, processes, and routines that characterize how important work is to be
done: financial system; hiring, promotion and performance appraisal systems;
information systems.
System refers to organization methods that are used for the flow of information from one
department to another. BWSSB has an adequate system of internal control designed to
provide reasonable assurance on the achievement of the objectives relating to efficiency
and effectiveness of operations, reliability of operations and reliability of financial
reporting. There is a system compliance to follow rules and regulations and for
safeguarding of assets.
The organization follows the system of flow of work from top level management to
lower level of management.
BWSSB has its own system, rules, regulations and procedures to follow which help the
company to develop a talent pool with competence to take challenges of present and
future. The organization has its own information system, service process and control
process that aims to delight the customers through good quality services and solutions.
3.4 Skills
The organization has various skills like managerial skills, development skills,
supervisory skills and communication skills.
HRD is responsible for giving time to time training to all employees of the organization
and cover all the skills required by an employee to carry out his/her work and to achieve
companies objectives and goals.
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Skills refer to the facts that the employees have the necessary skills to carry the company
strategy. Training and development ensures employees to do their jobs well and stay up
to date with latest techniques.
The interconnecting center of Mckinsey‟s model is shared values. What does the
organization stands for and what it believes in; central beliefs and attitudes.
Shared values of the organization can be characterized as the whole of the norms, views
and culture shared by the people working in the organization. The values are the things
that you would stave for even if they were demonstrably not profitable.
3.6 Style
Cultural style of the organization and how key managers behave in achieving the
organization‟s goals.
Style refers to the employee shared and common way of thinking and behavior. The top
management sets the objective to the line and functional specialists and provides clear
procedure for working.
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3.7 Staff
Number and types of personnel within the organization. Promoter of the company and
the qualities of the key staff.
The process, by which the employees are recruited, deployed and developed. staff means
the company has hired able people, trained them well and assigned them the right jobs.
Selection, training, motivation and assignment to appropriate work are all issues.
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4. SWOT ANALYSIS
SWOT analysis refers to the analyzing the strength, weakness, opportunity and threat of
the organization.
SWOT is a compound of two factors namely external factors and internal factors.
Strength and weakness are the internal factor which can be controlled by the technical
and personnel departments. Opportunity and threat are the external factors which cannot
be controlled by the company. External factors may include political factors, socio-
cultural factors, technical factors, demography, environmental factors etc.
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4.1 Strengths
The organization has been in operation for the last 48 years and the staff of the
organization had developed technical expertise concerning water supply and
sewerage treatment activities associated with a large metropolis. The technical
experts of the organization have been involved in planning and execution of
Cauvery I, II, II and IV Stages. Thus, they have gained comprehensive technical
knowledge required in planning and executing large water supply and sewerage
projects.
BWSSB is the sole organization to manage water supply and sewerage facilities in
Bangalore city. It does not have any competition from any other organizations in its
work. This monopoly situation can be use as a very powerful strength in fully
harnessing the required resources to make the organization financially and socially
vibrant.
4.2 Weakness
BWSSB, due to its past history, is still following typical Governmental practices.
This is manifested through highly bureaucratic procedures and systems in its
functioning. Sometimes, this results in enormous avoidable delay in project
execution as well as in management of Human Resources such as recruitment,
promotions, compensation etc.
The composition of the Board does not have the needed representation from
KPTCL, Pollution Control Board, and Irrigation Department.
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4.3 Opportunities
It is felt that BWSSB has the potential to change itself into an organization dealing
with Total Water Management rather than just dealing with supply of water and
treating sewage.
4.4 Threats
The changing socio-economic environment may bring in many competitors, internal and
external in the business of water needs of society. This competition, if it is not properly
and seriously considered, may lead to the development of a situation where in the
Government is forced to entrust the water management activity to private operators
rather than allow BWSSB to work as a monopoly. This probable competition is to be
addressed squarely. It calls for an urgent organizational transformation and appropriate
changes in mindset of the people working in the organization before the customers force
the government to look for alternative organizational mechanisms for the supply of good
quality of water and provide sewage treatment.
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Thousands Thousands
Liabilities:
Loans 1,51,23,291
Suspense-credit 126,070
Provisions 3395,628
Total 4,16,24,158
Assets:
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6. LEARNING EXPERIENCE
The training in BWSSB helped me a lot in studying functions of various departments.
The training was very much educative. I came to know about the production process.
Application to management concept was practically made known to us. The experience
that I had in this company enhanced my knowledge which will become handy in my
future career.
Every day was a great learning process. It is always believed that theories are being
implemented in the day to day activities but in reality I saw the other side of it wherein
theories were being adjusted as per the business activities.
Employees would suddenly react on the inadequacies caused in their work place, which
would be solved by practical negotiation rather than theoretical procedures. Learning
always supports in boosting our knowledge level. Meeting new people and adjusting to
their work environment has always been challenging to me and I feel replica of it in my
organization case.
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GENERAL INTRODUCTION
An account receivable is generated when an enterprise, having granted credit, accepts, in
lieu of cash, a written or implied promise to pay in the feature for delivery of its goods or
services. In today‟s business environment competitive pressures, customer preferences,
and promotional selling opportunities lead the management of most enterprises to offer
credit. Accounts receivable often constitute significant portion of assets and are,
therefore, a major business investment. Successful control of the accounts receivable
process demands development of appropriate credit, collection and financing policies
compatible with the enterprises profit, liquidity. The book debt or receivables arising out
of credit sales. It constitutes of three major characteristics.
It involves the element of risk which would be carefully analyzed, cash sales are
totally risk less, where cash/ payments received immediately where it is not possible
in case of credit sales such the payment is yet to be received.
It is based on the economic values of the buyer, the value of goods and service
passes immediately as the time of sales, while the seller accepts an equivalent value
to be received later on.
It implies on futurity cash payments for goods and services by the buyer will be
made by him in future period customer from the receivables are collected are called
debtors and represent the claims as assets.
Most of the companies in India have realized the importance of credit in business from
the past experience and their importance is highlighted.
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Competition
Generally higher degree of competition the company may grant more credit to its
customer.
In order to build long term relation with dealers the company may extend credit to its
customers, further the company may reward the dealers for their royalty.
Credit policy
In order to have an effective control over the receivable a firm has to follow certain
policies on order the prevent it from meeting the contingent liabilities and loses. Credit
policy is the policy is the set of principles that gave extension of credit to the company‟s
customers. Hence the company should follow a credit policy before granting any credit
to its customers. It is the duty of the financial manager of the company to consider the
important decision‟s which influence the level of decision variables.
Credit standard
Credit terms
Credit analysis
Collection experience
Credit standards
Credit standards are the criteria which a firm follows in selecting customers for the
purpose of credit extension. The standards should define the minimum financial strength
required for a customer to be an acceptable credit client. The credit standard may vary
from company to company.
There are the credit standards one of which the company can follow they are:
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In this type of credit standards, company may sell goods to its customer only on cash
basis and may extend credit only to the reliable and strong customers. The company may
restrain the marginal customers in getting the credit. The marginal customers are those
whose financial position may be bad and doubtful.
No high risk.
Credit Terms
The other important dimension of account receivable management is to decide the terms
of credit in advance. The stipulations under which the firms sell a credit to the customers
are called credit terms. The stipulated includes.
Credit period
Credit limit
Credit Analysis
„‟How credit worth is the customer?‟‟ The company should evaluate the credit
worthiness of the customers to determine whether customer is really worthful to fulfill
the promise of paying the bills on time. Thus the company before granting the credit to
the customer has to assess the 5 C‟s credit worthfulness:
Character
Capacity
Capital
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Collateral
Conditions
Character
Character refers to the buyer‟s integrity, as perceived by the seller, and is essentially a
subjective assessment. Many credit officers consider character to be a very important
predictor of payment patterns. The company before granting the credit to the customers
has to analyze the character of customer on following back ground.
Capacity
The company before granting the credit to the customers has to analyze the capacity of
customer on following back ground.
Capital
Collateral
Collateral represents the assets available to satisfy the purchaser‟s obligation if cash flow
is insufficient to pay for the purchase. Customers may offer, or the supplier may
demand, an asset or assets as security to obtain credit.
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Conditions
Conditions refer to general economic trends and forecasts, and specific industry,
political, and technological facts that may affect the customer‟s ability to pay and the
seller‟s willingness to grant credit.
The firm while making the credit policy decision has to consider the various the cost
associated with the receivable. The costs mainly associated with the receivables are as
follows:
o Production cost
o Administration cost
These costs increase with the expansion in sales. If sales expand with in the existing
production capacity, then only the moveable production cost and distribution costs will
increase. If capacity is added for the sales expansion resulting from loosening credit
policy, then the incremental production and distribution costs will include both variable
costs and fixed costs.
The difference between incremental sales revenue and the production and distribution
costs is the incremental contribution of the change in the credit policy. A tight credit
policy means rejection or certain accounts whose credit worthiness is doubtful. This
results into basis of sales and consequently, loss of contribution. On another hand if a
firm loosens its credit policy, it accepts the all or some of these accounts which the
company will recapture lost of sales and this lost contribution. The opportunity cost has
lost contribution declines with loosening of credit policy.
Administrative cost
Collection cost
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The firm is required to analyze and supervise large number of accounts when it loosens
its credit policy. Similarly, the firm will have intensified its collection efforts to be able
to collect outstanding bills from financially less sound customers. The incremental cost
of credit administration will be nil. If the new credit policy can be implemented by the
existing credit departments without additional costs.
Bad debts losses arise when the firm is unable to collect its account receivable from the
customers. The size of the bad debt depends on the quality of the accounts adopted by
the firm.
This firm tends to sell to customers with the relatively less credit standing when it
loosen its credit policy. Some of these customers delay payments and some of them do
not pay at all. As a result, bad debt of the firm will increase; the firm can certainly avoid
and minimize loss on bad debt by adopting the very tight credit policy.
Collection Experience
The company after selling the goods on credit to the customers, the company has to
collect the money on receivables from the customers on due date. Now the question arise
here is „‟how to collect the money on receivables form the customers in cases of
default?‟‟ „‟what are the procedures should be adopted to collect money on receivable in
case of default customers?‟‟ The company may have its own collection policy and
procedures.
The company can adopt number of methods or any one of the method to speed up
collection depending upon the size of receivables.
A visit to customer may prove to be effective when bills are over due.
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Monitoring of Receivables
The company after having established a credit standards, credit policy, and collection
policy and procedures. It the duty of the financial manager to monitor the effectiveness
of the collection of receivables.
The methods that have been commonly used for monitoring the account receivables are:
Aging of schedule
The average collection period is calculated and compared with firms stated credit period
to judge the collection efficiency. The average collection period measures the quality of
book debts since it indicates the speed of their collection.
Aging of schedule
Aging of schedule breaks down firm‟s receivables by age of account. It breaks down the
book debt according to the length of time of which they have been outstanding.
The aging schedule provides more information about the collection experience; however
it suffers from demerits such as it suffers from the problem of aggregation, and does not
relate book debts to sales of same period.
Account Receivable
A current asset representing money due for services performed or merchandise sold on
credit.
The process of categorizing each account receivable by the number of days it has been
outstanding.
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Collection policy
It is which policy refers to the collection procedures such as letters, phone calls, and
personnel calls and legal action for collecting due from the customers.
Cost of receivable
The specific cost of receivable consist of cash discounts, bad debts cost and commission
expenses. In addition to these direct costs, variable costs, fixed cost also have to be taken
in the consideration. Added to this interest cost (opportunity cost receivable).
Credit evaluation
The evaluation of the capacity of customers and his strength to fulfill the promise of
paying the bills at time.
Credit period
It is the length of time for which credit is extended to the customers. The firm credit
period is governed by the industry terms.
Credit limit
It is limit fixed by the firm to grant credit to its customers. The decision on the
magnitude of credit will depend upon the amount of contemplated sales and the
customer‟s financial strength.
DBT or days beyond terms indicates how many days past the date an invoice is late.
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BWSSB
Discount rate
Discount Rate is the percentage of the face value of an invoice that a factor holds as its
fee.
Factoring
Invoice
Invoice is a legal debt instrument which indicates the amount due from customer to pay
for goods or service.
Line of credit
A limit to the amount of credit extended to an account, which the purchaser can buy on
credit up to the limit.
A formal legal commitment to extend credit up to some maximum amount over a belated
period of time.
Receivables
A formal legal commitment to extend credit up to some maximum amount over a belated
period of time.
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BWSSB
BWSSB is a well known enterprise for supply of water and disposal of sewage in
Bangalore City. In spite of having a monopoly share the company has to supply water on
credit to some customers as it is a social obligation. By supplying the water on credit to
the customers the company as to incur some loses in form of bad debts, interest cost, etc.
therefore the study trace to highlight the importance of receivable management in
BWSSB and find out it strength and weakness.
Research Design/ plan adopted for the study of Receivable Management at BWSSB is
mainly through the financial sources and through the discussions with the executive of
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BWSSB
the company. The source for the information also included from the standard text books
and through the articles from the secondary sources.
Lastly the study comes out with a suggestion for the betterment of receivable plus
monitoring the receivables.
Sources of Data
Sources of data considered for the study of receivable management in BWSSB were
primary and secondary nature.
Primary data was collected through interactions held with the executives.
Secondary data was collected from the books of accounts of the company and through
internet references.
The instruments used for the collection of data for conducting the study or through the
casual interviews with the departmental heads as well as executives of the company.
Mostly primary data such as personal interview with the executives of the company were
made to understand the procedures and practices followed for the receivables by the
company.
Secondary data of the company available were considered and analyze to understand the
receivable management practices and procedures followed by BWSSB
The expected contribution of the study main focus on what is betterment made in the
receivable management? How it can be improved? What are the cautions should be
considered in granting the credit to the customers?
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BWSSB
The study does not aim to look into other components of working capital such as cash
and prepaid expenses.
2. Creation inferences obtained out this study such as ACP are only indicators.
4. Pure and classical financial management theories may not be applicable to this
company, like policies of successive government affect the policies of the company
tremendously.
In spite of the above limitations, the study is useful for the various people who are
interest in the company. The study will be useful to executives of the company for
efficient future decision making and future prospect of the company. The study is also
useful to the creditors, bankers and to the general public.
Meaning of Factoring
Factoring is the business activity, where by the factor (Financial Institution) purchases
the client nook debts and in relation there to controls the credit, extended to the
customers and administers the sales ledger. What is accounts receivable factoring?
Accounts receivable factoring is nothing more than the sale of a firm‟s 30 day net
commercial accounts receivable at a discount, thereby providing immediate cash flow to
efficiently manage your growing business.
Types of Factoring
Domestic Factoring
Export Factory
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BWSSB
Undertaken debt collection services by taking over the burden of realization of risks.
Extending finance.
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BWSSB
The BWSSB is providing credit facility to its customers; the credit period will be 15
days from the date of reading/billing.
If the customers don‟t pay the amount even after 15days period, the service will be
extended for next 3months only. Any delay in payment of water charges results in
payment of interest and penal interest.
Even after 3 months if the debt is not paid then the company will have to disconnect
the water supply and sewerage facility.
Collection Procedures
The company follows various procedures to collect the dues from the customers are as
follows:
Through letter of remembrance for those customers whose days are approaching.
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BWSSB
Table 1
1 MINIMUM 48.00
0- 8,000 6.00
5 75,001-1,00,000 36.00
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BWSSB
1 MINIMUM 360-00
O- 10,000 36-00
3 Industries 60.00
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BWSSB
Table 2 showing the different prices charged by BWSSB for different types of
connections. By the prevailing meter service charges.
Table 2
1 ½‟‟ 20 40
2 ¾‟‟ 30 60
3 1‟‟ 36 72
4 1 ¼‟‟ 40 80
5 1 ½‟‟ 50 100
6 2‟‟ 70 140
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BWSSB
Table 3
NORTH
DOMESTIC NON-DOMESTIC APPARTMENTS
3% 2%
0%
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95%
BWSSB
Graph 2 showing the area wise connections of BWSSB regarding EAST division for
the year 2007-08
EAST
DOMESTIC NON-DOMESTIC APPARTMENTS
3% 2%
0%
95%
Graph 3 showing the area wise connections of BWSSB regarding WEST division
for the year 2007-08
WEST
DOMESTIC NON-DOMESTIC APPARTMENTS
2%1%
0%
97%
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BWSSB
Graph 4 showing the area wise connections of BWSSB regarding SOUTH division
for the year 2007-08
SOUTH
DOMESTIC NON-DOMESTIC APPARTMENTS
3% 2%
0%
95%
CENTRAL
DOMESTIC NON-DOMESTIC APPARTMENTS
1%
0%
10%
89%
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BWSSB
Graph 6 showing the area wise connections of BWSSB regarding SOUTH EAST
division for the year 2007-08
SOUTH EAST
DOMESTIC NON-DOMESTIC APPARTMENTS
0%
2%
6%
92%
Graph 7 showing the area wise connections of BWSSB regarding Division wise
Domestic Connections for the year 2007-08
140000
120000
100000
80000
60000 DOMESTIC
40000
20000
0
NORTH EAST WEST SOUTH CENTRAL SOUTH
EAST
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BWSSB
Graph 8 showing the area wise connections of BWSSB regarding Division wise
Non-Domestic Connections for the year 2007-08
4000
3500
3000
2500
2000
NON-DOMESTIC
1500
1000
500
0
NORTH EAST WEST SOUTH CENTRAL SOUTH
EAST
Graph 9 showing the area wise connections of BWSSB regarding Division wise
Apartments Connections for the year 2007-08
2000
1800
1600
1400
1200
1000
APPARTMENTS
800
600
400
200
0
NORTH EAST WEST SOUTH CENTRAL SOUTH
EAST
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BWSSB
Statement of Revenue
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BWSSB
50000
45000
40000
35000
30000
10000
5000
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Analysis of Total Revenue & Credit Sales during the year 2004-2008
Objective
The main objective analysis of total revenue and total credit sales during 2004-2008 is to
know the value of total revenue and total credit sales made by the BWSSB in service
providing to the customers.
Table 5
Interpretations
The above table shows that the total revenue and total credit sales during 2004-08 was
increasing rapidly over the year, this reveals the company is expanding the market
through variety of new services which is very much essential for the rapidly developing
city like Bangalore. And also the percentage of credit sales is increasing from year after
year.
Graph 11 showing the total revenue and total credit sales during the year 2004-08
500
450
400
350
300
250 revenue in cr
200 credit sales in cr
150
100
50
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of NORTH
division during 2004-08, to know about the value of total cash sales and total credit sales
made by the company. Here the main focus is given to the total credit sales as such
receivable are raised from the total credit sales of the company as is it is the main focus
of project work.
Table 7 Showing details of Total Cash Sales and Total Credit Sales of North
Division (Rs. In cores)
Interpretations
The above Table.7 reveals about the Total Cash Sales and Total Credit Sales with
reference to North Division during 2004-2006 there is a light fluctuation but there is
wide fluctuation during 2006-2008 in the Total Cash Sales of on other hand there is a
total increase in Total Credit Sales with wide fluctuation during 2004-2007 but there is
wide decrease during 2007-2008, which reveals that due to the variation in the Demand.
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BWSSB
Graph 12 Showing Total Cash Sales and Total Credit Sales of NORTH DIVISION
during 2004-08
90
80
70
60
DEMAND
50
COLLECTION/TOTAL CASH
40
SALES
30 BALANE/TOTAL CASH
SALES
20
10
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of EAST
division during 2004-08, to know about the value of total cash sales and total credit sales
made by the company. Here the main focus is given to the total credit sales as such
receivable are raised from the total credit sales of the company as is it is the main focus
of project work.
Table 5 Showing details of Total Cash Sales and Total Credit Sales of East Division
(Rs. In cores)
Interpretations
The above Table 8 reveals about the Total Cash Sales and Total Credit Sales with
reference to East Division during 2004-2007 there is a light fluctuation but there is
wide decrease during 2007-2008 in the Total Cash Sales of on other hand there is a total
increase in Total Credit Sales with wide fluctuation during 2004-2007 but there is wide
decrease during 2007-2008, which reveals that due to the variation in the Demand. But
compare to North Division, East Division Total Cash Sales will be more.
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BWSSB
Graph 13 Showing Total Cash Sales and Total Credit Sales of EAST DIVISION
during 2004-08
120
100
80
DEMAND
60 COLLECTION/TOTAL CASH
SALES
40 BALANCE/TOTAL CREDIT
SALES
20
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of WEST
division during 2004-08, to know about the value of total cash sales and total credit sales
made by the company. Here the main focus is given to the total credit sales as such
receivable are raised from the total credit sales of the company as is it is the main focus
of project work.
Table 6 Showing details of Total Cash Sales and Total Credit Sales of West Divison
(Rs. In cores)
Interpretations
The above Table.9 reveals about the Total Cash Sales and Total Credit Sales with
reference to West Division during 2004-2006 there is a light fluctuation but there is wide
increase during 2006-2007 and wide decrease during 2007-08 in the Total Cash Sales of
on other hand there is a total increase in Total Credit Sales with little fluctuation during
2004-2006 but there is wide increase during 2006-2007 and there is wide decrease
during 2007-08, which reveals that due to the variation in the Demand. The credit sale of
West division is lesser when compare to North and East Division except during the year
2006-07.
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BWSSB
Graph 14 Showing Total Cash Sales and Total Credit Sales of West Division during
2004-08
120
100
80
DEMAND
60 COLLECTION/TOTAL CASH
SALES
40 BALANCE/TOTAL CREDIT
SALES
20
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of SOUTH
division during 2004-08, to know about the value of total cash sales and total credit sales
made by the company. Here the main focus is given to the total credit sales as such
receivable are raised from the total credit sales of the company as is it is the main focus
of project work.
Table 7 Showing details of Total Cash Sales and Total Credit Sales of South
Division (Rs. In cores)
Interpretations
The above Table.10 reveals about the Total Cash Sales and Total Credit Sales with
reference to South Division during 2004-2008 there is a lot of fluctuation in the Total
Cash Sales of on other hand there is a slight increase in the Total Credit Sales during
2004-2008, which reveals that due to the variation in the Demand. The credit sales of
South Division are better than the North, East and West Division.
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BWSSB
Graph 15 Showing Total Cash Sales and Total Credit Sales of South Divison during
2004-08
120
100
80
DEMAND
60
COLLECTION/TOTAL CASH
SALES
40 BALANCE/TOTAL CERDIT
SALES
20
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of CENTRAL
division during 2004-08, to know about the value of total cash sales and total credit sales
made by the company. Here the main focus is given to the total credit sales as such
receivable are raised from the total credit sales of the company as is it is the main focus
of project work.
Table 8 Showing details of Total Cash Sales and Total Credit Sales of Central
Division (Rs. In cores)
Interpretations
The above Table.11 reveals about the Total Cash Sales and Total Credit Sales with
reference to Central Division during 2004-2008 there is a light fluctuation in the Total
Cash Sales of the BWSSB is lesser than North, East, West and South Division. On other
hand there is a total decrease in Total Credit Sales with wide fluctuation, on other hand
the Total Credit Sales of Central Division is lesser when compare to North, East, West
and South Division.
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BWSSB
Graph 16 Showing Total Cash Sales and Total Credit Sales of Central Division
during 2004-08
70
60
50
40
DEMAND
30 COLLECTION/TOTAL CASH
SALES
20 BALANCE/TAOTL CREDIT
SALES
10
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Objective
The main objective for the analysis total cash sales and total credit sales of SOUTH
EAST division during 2004-08, to know about the value of total cash sales and total
credit sales made by the company. Here the main focus is given to the total credit sales
as such receivable are raised from the total credit sales of the company as is it is the main
focus of project work.
Table 9 Showing details of Total Cash Sales and Total Credit Sales of South East
Division(Rs. In cores)
Interpretations
The above Table.12 reveals about the Total Cash Sales and Total Credit Sales with
reference to South East Division during 2004-2006 not yet commenced during 2006-
2007 came into existence. The Total Cash Sales wide fluctuation during 2006-2008 on
the other hand there average Total Credit Sales during the year 2007-2008. .
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BWSSB
Graph 17 Showing Total Cash Sales and Total Credit Sales of South East Division
during 2004-08
80
70
60
50 DEMAND
40 COLLECTION/TOTAL CASH
SALES
30
BALANCE/TOTAL CREDIT
20 SALES
10
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Turnover
Ratio
Interpretations
The above table 13 reveals about the Debtors Turnover Ratio which quite fluctuating
over the year because of its uncollected bills from the customers. Higher the debtor‟s
turnover the greater will be the efficiency of credit management. The industry average is
7.5 times. The above table 13 reveals the growth rate of debtor‟s turnover ratio which is
increasing subsequently except during 2007-08 this is due to increase in total revenue
and Debtors.
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BWSSB
2.5
1.5
0.5
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Graph 19 Showing the Growth Rate of Debtor’s Turnover Ratio during 2004-08
140
120
100
80
Growth Rate of Debtor
60 Turnover Ratio
40
20
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
Interpretations
The above table 14 reveals about the Average Collection Period which fluctuating in
nature. The BWSSB average collection period is with in the company average during
2004-08, this reveals the company credit collection is efficient.
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BWSSB
Graph 21 Showing the Growth Rate of Average Collection Period during 2004-08
120
100
80
20
0
2004-05 2005-06 2006-07 2007-08
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BWSSB
FINDINGS
After having the detailed analysis and interpretation of financial data which is mainly
necessary for the receivable management the conclusion can be arrived from the
following:
1. The total revenue of the BWSSB is increasing from FY 2004-05, FY 2005-06, and FY
2006-07, but there is a slight decrease in the revenue of the company during the period
FY 2007-08.
2. The Debtors Turn Over Ratio of the BWSSB is good; during FY 2004-05 to FY 2007-
08 the debtors turn over ratio is increasing rapidly this reveals sound efficiency of credit
management, but there is a slight decrease in the year FY 2007-08.
4. The total revenue of BWSSB is increasing every year and the amount of credit sales
is also increasing proportionately every year and it is also fluctuating which can be seen
from the analysis.
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BWSSB
SUGGESTION / RECOMMENDATIONS
The suggestion is made on the basis of the findings of the Receivable Management
policies and procedures followed at BWSSB.
1.They can implement the modern method of receivable management which is popularly
known as factoring which many of the commercial banks providing service to help the
organization in recovering the debts.
2. From the above analysis we can suggest that as the company is monopoly and there is
more demand service of the company it can increase the price to over come the severe
losses incurring from past few years.
3. The company should change the credit procedures from time to time as such from
view point of decreasing receivables.
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BWSSB
CONCLUSION
The overall Receivable Management of the BWSSB is satisfactory through the analysis
findings and interpretations required financial data of the BWSSB, the credit sales of
BWSSB is increasing from year to year as such the company should take some
precautions and action towards decreasing the credit sales by adopting proper receivable
management.
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