2.0 Brief Introduction:

Invoice payment process is defined as per MDL PO and vendor has to submit all supporting documents mentioned in PO along with invoices.

2.1 Background:

To ensure adherence to laid down procedures, physical copies of vendor invoices were obtained from respective sections for further scrutiny. After scrutiny of records, following lapses were observed:

i. TDS declaration required by Finance Department U/s 206AB & 206CCA from suppliers is readily available on income tax portal. There is no need to obtain TDS declaration from supplier.

ii. MDL accepts hard copies of vendor invoices along with supporting documents for making payment. The movement of physical documents from Commercial/Material section to Finance section for processing of payment makes entire process slow and there is also risk of loss of documents.

2.2 Implementation:

Based on the investigation, following systemic improvements are being implemented by formation of two committees to finalise the modalities:

i. MDL Finance section shall use this functionality instead of asking TDS declaration from supplier, which can result in faster processing of Invoice payment.

ii. MDL accepts hard copies of invoices along with supporting documents and same hard copies are transported from Commercial/Material section to Finance section for processing of payment. This makes entire process slow and there is risk of loss of documents. Hence it is proposed to implement digital bill passing system where vendor can submit scanned documents for payment.

2.3 Impact and Benefits:

Due to the implementation of the aforesaid systemic improvements -

i. Online Compliance Check of a vendor for section 206AB & 206CCA will make compliance accurate & reduce delay in invoice payment.

ii. Digital invoice payment processing will reduce paper work and will make invoice payment quicker.

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