Scope of Work

Invoice Discounting Software

Version 1.0
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1 Document Purpose
The purpose of this software is to provide a platform for invoice discounting and managing recurring
revenue. The software serves as an invoice discounting and recurring revenue platform. Its primary
purpose is to bridge the cash flow gap for sellers/vendors by allowing them to raise invoices and get
them funded by investors before the actual payment date. This enables sellers to access funds quickly
rather than waiting for the traditional payment cycle.

This Document specifies:

 The required behavior of the web panel in terms of user experience, operational scenarios and
interfaces.
 Features listed in Phase 1 are to be developed on priority as discussed on the call.

1.1 Document Scope

 A brief summary of the platform that is to be developed for the Audience of this document.
 Describes all considered Assumptions, Exclusions and Future Enhancements.
 Describes all Functional and Non-Functional Requirements.
 Define Product Acceptance Criteria.

2 Users
 Investor
 Seller
 Admin

3 Functional Scope
In reference to our initial meeting the entire requirement has been divided into below sections.

3.1 Investor
Investors are individuals or entities looking to invest their money in opportunities presented within
the platform. Their primary objective is to seek profitable returns on their investments.

 User registration & Onboarding

 User Registration: Enable investors to sign up on the platform, providing basic
information and contact details.
o Personal
o Company
 Profile Setup: Ability to set up a detailed profile, including name, contact information,
preferences, bank account details
 Guided Tour: An optional walkthrough to familiarize the investor with the platform's key
features.

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 KYC
 Document Upload: Facility to upload necessary documents for KYC compliance (e.g., ID
proof, address proof, financial statements, etc.).
 Digital KYC (minimal): Investors undergo a minimal KYC process, including verification
through adhaar OTP and digital document submission.
 Document Verification: Investors upload necessary documents (e.g., ID proofs) for
validation, ensuring the authenticity of their identity.
 Identity Verification: Further verification is conducted to confirm the identity of
investors and enhancing security.
 Dashboard
 Portfolio overview: It will give the overview or summary of the investment portfolio. It
will give a break-up of –
o Total invested: Displays the total amount currently invested across all
opportunities.
o Expected Returns: Provides a summary of potential returns based on current
investments.
o Account balance: Shows available funds for investment and total returns received
till date.
 Activity feed: Lists the latest investment activities with associated dates. Real-time alerts
regarding investment status updates, new investment opportunities, and platform
announcements.
 Quick investment
o Wallet: Provide a digital wallet to investors, allowing them to track their
investments and available funds.
o Invest: Shortcut to directly browse and invest in new available invoices or projects.
o Withdraw funds: Enable investors to initiate withdrawal requests to transfer funds
to their bank accounts
o Reinvestment Options: Offer reinvestment options, allowing investors to reinvest
funds in new invoices
o Account Balances: Allow investors to check their account balances, helping them
make informed investment decisions.
o Transaction History: Provide access to transaction history for transparency and the
ability to review past investments
 Investment and analytics
o Investment distribution chart: A pie chart or bar graph illustrating investments by
sector, maturity date, or risk category.
o Performance Metrics: Graphs or charts showcasing the performance of investments
over time, compared to benchmarks or platform averages.
 Upcoming Payments & Maturities
o It will display returns on the investment on the specific dates.
o List of investments can also be displayed which are nearing their maturity.
 Search and advance search

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 o It will allow investors to locate specific investments using keywords or
invoice numbers.
 Notification
o Highlights urgent or crucial notifications, such as investment maturity or significant
platform updates.
 Support
o Help & FAQ: Direct link to a section with answers to common questions related to
investments and platform use.
o Chat or Support Ticket: Icons or links to instantly reach out to customer support for
assistance.
o Resource Centre: Access to investment guides, tutorials, and other informational
content to aid decision-making.
 Invoice browsing & Investment
 Browse Invoices: Ability to see a list of available invoices with filtering options (e.g.,
industry, amount, due date).
 Invoice Details: A detailed view of each invoice, including vendor details, invoice history,
risk rating, etc.
 Invest: Select an amount to invest in a chosen invoice or fixed amount invoice.
 Investment Terms: Display terms like return on investment, duration, etc., before
confirming the investment.
 Fund management
 Account balance overview
o Available Funds: Displays the total amount currently available for investments.
o Locked-In Investments: Shows the total funds currently engaged in active
investments and not available for immediate withdrawal.
o Pending Returns: Provides a summary of expected returns.
 Payment Method
o Wallet
o Credit/Debit card
o UPI transfer

3.2 Seller
 Business onboarding
 Business Registration and Verification: Focus on the registration and verification
processes for businesses, ensuring their legitimacy on the platform.
 Document Verification: Allow businesses to upload necessary documents for validation,
including business verification. Documents like company documents, GST, ITR etc will be
uploaded which will be
 In-Person Verification Process: Implement in-person verification processes for
enhanced security and compliance.

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  Account creation: User will set-up unique username and password, which will be used
for accessing the platform.
 KYC
 In-Person Verification Workflow: It will be implemented for businesses requiring full
KYC.
 Biometric Verification: Introduce biometric verification methods for added security.
 Geolocation Verification: Implement geolocation-based verification for user location
confirmation.
 User Notifications: Set up notifications to guide users through the full KYC process.
 Dashboard
 Overview Panel:
o Total Invoices Raised: Displays the total number of invoices that have been
submitted.
o Total Amount Due: Shows the cumulative amount of all the invoices raised that's
pending payment.
o Total Amount Funded: Summarizes the amount the seller has received from
investors for discounted invoices.
o Total Overdue: Highlights invoices that have surpassed their due date and are still
unpaid.
 Credit Overview: Graphical representation of
o Credit Used
o Credit Available
o Credit due (in n days)
o Option to increase credit
 Account overview: High level account overview show following information –
o Status
o Rating
o Type
o Total money borrowed
o Amount paid bac on time
 Detailed view of credit due and with filter options
 Invoice overview: Categorization of invoice – uploaded, active, past, due etc.

 Invoice submission and verification

 Invoice Submission Process: Enable businesses to submit invoices for investment,
including document uploads.
 Integration with Open Banking API: Integrate with open banking APIs for seamless
financial transactions and data access.
 Integration with ERPs and Accounting Software: Connect with external ERPs and
accounting software to streamline invoice data handling, e.g., integration with Tally, Zoho,
Busy, etc.
 Integration with Vendor Modules: Integrate with vendor modules to facilitate invoice
validation and verification, e.g., FK Vendor Hub, Amazon Vendor Central, etc.

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  Invoice Validation Workflow: Develop workflows for invoice validation to ensure the
authenticity and eligibility of submitted invoices .
 User Dashboard Enhancements: Enhance user dashboards to accommodate business
specific features and information.
 Security and Compliance Updates: Update security measures and compliance checks
to accommodate business accounts.
 Testing and Quality Assurance: Conduct thorough testing and quality assurance to
ensure the reliability of business onboarding and invoice submission processes.
 Documentation and Support: Provide documentation and support resources to assist
businesses during onboarding and invoice submission.
 User Feedback and Iteration: Gather feedback from businesses and iterate on the
onboarding and invoice submission processes for continuous improvement.
 Investment Process: Investors can select invoices and invest in them, marking the
beginning of the transaction process.
 Credit scoring service
 Integration with Credit Rating Agencies: Integrate with credit rating agencies to
provide credit scores to businesses.
 User Access to Credit Scores: Enable businesses to access their credit scores for
informed financial decisions.
 Credit Scoring Algorithms: Develop credit scoring algorithms to assess
creditworthiness.
 AML Measures
 AML: Enhance anti-money laundering (AML)
 User Training and Education: Provide user training and education on AML, policies,
procedures and tax implications
 Reporting and Analytics:
 Access to detailed reports showing invoice payment history, funding trends, and
transaction records.
 Profile Settings:
 Edit and update business or personal information.
 Configure notification preferences, such as email or SMS alerts

3.3 Admin

 Login
 User management
 User Listing: Comprehensive list of all registered users, segmented by type (e.g.,
Investor, Seller).
 Account Verification: Review, approve, or decline submitted KYC documents or
account registration requests.

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 User Activity Monitoring: Access logs detailing user actions for security and audit
purposes.
 Role Assignment: Define or change user roles, adjusting permissions and access
levels as needed.
 Invoice & Transaction Management:
 Invoice Review: Approve, decline, or flag invoices submitted by sellers for further
verification.
 Transaction History: Detailed record of all transactions, including funding,
withdrawals, and reinvestments.
Dispute Resolution: Manage and resolve any disputes between users, especially related to
payments or transaction terms.

 Dashboard
 Overview: Upon logging in, the admin is presented with an overview dashboard. This
dashboard provides key statistics and metrics related to the invoice discounting
process. It may include data such as the number of active discounting requests,
approval rates, and fee collection.
 Managing Discounting request: The admin can view and manage all the active invoice
discounting requests. This includes -
o Reviewing pending requests awaiting due diligence.
o Checking the status of approved requests.
o Monitoring requests awaiting client payments.
o Tracking completed requests.
 Due Diligence Review: For pending requests, the admin can access detailed
information about the due diligence process.
 Approval or Rejection: Based on the due diligence results, the admin can approve or
reject the discounting requests.
 Fee Management: The admin can access a fee management section to review and
manage fees collected from each discounting transaction. They can view the fee amount
collected from each transaction and ensure it aligns with the agreed-upon fee structure.
 Audit Trail: The admin can access an audit trail that records all actions taken within
the admin panel. This is crucial for maintaining a transparent and compliant process
 Regulatory Compliance: Monitoring the entire process for compliance with financial
regulations and ensuring that the discounting process adheres to legal and ethical
standards. This user's journey includes regulatory oversight and intervention if
necessary.

 Buyers and sellers

 List of buyers will be displayed along with relevant information of the buyer.
 Admin will be ablet to add a buyer.
 List of sellers will be displayed under seller section
 Admin will be able to create a seller.
 Risk management

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  Risk Parameter Settings: Set and adjust risk parameters for evaluating invoice quality
or user authenticity. APIs can be integrated to calculate risk score for an invoice.
 Flagging System: Review and manage items or users flagged by the system for potential
risks.
 Audit Logs: Detailed logs of all activities on the platform, essential for identifying
irregular patterns or ensuring compliance.
 Reporting & Analytics
 User Statistics: Detailed analytics regarding user sign-ups, activity levels, and retention
rates.
 Financial Reports: Generate reports on platform financials, including transaction volumes,
revenue, and fee collections.
 Feedback & Reviews: Access and review feedback provided by users to understand areas of
improvement.

3.4 Integrations
 KYC related integration
 Payment gateway integration
 Bank integrations.
 Integration with credit rating agencies.
 ERP software's like ZOHO, TALLY etc.
 Reporting software's.
 Other third-party APIs.

3.5 User Journey

 User Journey for Seller (Company X).

 Step 1: Invoice Generation - Company X generates a 500,000 invoice for the completed
metaverse project. They send the invoice to the client with net 60 days payment terms.
 Step 2: Due Diligence - Company X identifies the need for immediate cash flow for their
AR/VR project. They research and select a financial institution (Investors) specializing in
invoice discounting. They provide the necessary documentation and information to Investors
for the due diligence process. They await the results of the creditworthiness assessment and
reliability evaluation of their client.
 Step 3: Invoice Submission - Once Investors approve the discounting process, Company X
submits the 500,000 invoice to Investors for discounting. They provide any additional
information or documents required by Investors.
 Step 4: Fund Release - After submission, Investors approve the invoice and release 90% of
the invoice value, which is 450,000, to Company X. Company X receives the immediate cash
flow they need for their AR/VR project.
 Step 5: Client Payment - Company X's client pays the full invoice amount of $500,000 to
Investors on the 60th day as per the payment terms. This payment goes directly to Investors.
 Step 6: Remaining Balance and Fees - Investors deduct a 2% fee ($10,000) and release
the remaining balance of $40,000 to Company X. Company X successfully secures the remaining
funds.

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 User Journey of investor
 Step 1: Due Diligence - Investors receive Company X's request for invoice discounting. They
initiate the due diligence process, assessing the creditworthiness of Company X and the
reliability of Company X's client. If due diligence is successful, they proceed to approve the
discounting process.
 Step 2: Invoice Submission - Investors receive the 500,000 invoice from Company X. They
confirm the accuracy and authenticity of the invoice .
 Step 3: Fund Release - Upon approval, Investor’s release 90% of the invoice value, which is
450,000, to Aarna Tech. This action provides Company X with immediate cash flow.
 Step 5: Client Payment - On the 60th day, Company X's client pays the full invoice amount of
500,000 to Investors

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