Accounting Procedures Manual -Ft Junior Travel Pl

8/6/2019 Accounting Procedures Manual -Ft Junior Travel Pl

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ACCOUNTING MANUAL

FOR

CONVIEW

JULY 2010

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Internal Control Generally

Objectives:-

To carry on the business in an orderly and efficient manner, to ensure

adherence to management policies, safeguard its assets and secure theaccuracy and reliability of the records.

Measures

An appropriate and integrated system of accounts and records

Internal controls over those accounts and records

Financial supervision and control by management, including budgetarycontrol, management accounts reports and interim accounts

Safeguarding, training allocating to specific duties staff who are capable offulfilling their responsibilities, rotation of duties and cover for absences

PURCHASE ORDERS AND ORDERING

OBJECTIVES:-To ensure that goods and services are only ordered in the quantity, of

quality and at the best terms available after appropriate requisition andapproval.

To ensure that goods and services are checked against authorised ordersand receipt of the subject matter in good condition.

To ensure that all goods and services received are properly recorded in the

books.

POLICY STATEMENT

A purchase order is a request for supply of goods or services. An order,when properly completed and authorised is an official document creating aliability, which the company is obliged to settle.

Purchase orders serve as the companys official order to acquire goods

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from suppliers.

Unused order books should be kept in a secure location as security

documents

A register of issues is maintained, and is signed by the recipient when

receiving a new order book. The purchasing function is decentralized at

each business unit.

PROCEDURE1. The Accountant/Administrator issues the orders, for all purchases. The

Accountant or Administrator initiates an order after receiving apurchase requisition (could be a verbal request upon discussion)

2. A minimum of three quotations are sourced by the Accountant orAdministrator and the one offering the best advantage on

price,favourable terms and quality is accepted.

3. When raising an order, designated signatures are required to sign onbehalf of the company.

4. A pre numbered order is raised detailing:-- Name of supplier

- Date

- Quantity ordered

- Description

- Price

- Discounts if any

5. Original copy of the order is furnished to the supplier, while theaccounts copy is forwarded to accounts for marrying with invoice.

APPROVAL OF INVOICE AND PREPARATION FOR PAYMENT

POLICY STATEMENTTo outline procedure for authorizing and preparing invoice for payment.

1. On receipt of an invoice from supplier, Accounts willmarry the order to the invoicecheck invoice against order and that price quotedand quantity ordered and received agrees and that the invoicecasts.

2. A payment voucher is then prepared and the invoice and all therelevant documents are attached and then processed for payment.

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PAYMENT VOUCHER

1. Purposea. Provide the means for the request and authorisation of all

payments by cash, cheque/transfer.b. Furnish documentary proof of expenditure.c. Serve as record of expenditure.

2. Preparation and useA requisition or voucher is raised and depending on the typeof transaction will be supported by an invoice and/or

statement with reconciliation, or invoice, order, all properly

authorized. Quotation/profoma invoice and order should beattached to requisition for COD purchases.

a. A requisition should be endorsed with the following:- Payees name and address.

- Description of expenditure

- Amount

- Tick method of payment

- Cheque number if applicable

- Date

- Signature of person authorising the voucher, usuallythe Accountant or Administrator.

b. The documents in support of payment must be attached to theVoucher.

c. A cheque is drawn and signed by authorized signatories thenreturned to Accounts for dispatching and processing in thecomputer before filing of the voucher and documents in chequenumber order by month. If its a transfer payment, filing is doneusing the date sequence in the Rtgs file.

PETTY CASH PAYMENTS AND ADMINISTRATION

POLICY STATEMENTPetty Cash payments are maintained on an imprest system.A petty cash float maximum is set and reviewed from time to time.Maximum limits for cash withdrawal should be set and reviewed regularly.

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Petty cash must be administered separately from any other source of cash.Receipts from debtors must never be substituted into petty cash, except bythe express authority of the MD or Accountant.Petty cash must not be used to purchase items which would normallyfall under the procedures of voucher requisitions. Such items includestationery, fuel, electricity & water, telephones, maintenance & repairs etc.Should it be that for cost effective reasons it is cheaper to maintainthese through petty cash, dispensation must be sought from theAccountant or MDPROCEDURE1. Cash requisition may emanate from any department, and must be

authorized by the Accountant, or Head of company.2. The voucher is submitted to the Accounts clerk who ensures that

a reason for the withdrawal is clear and cashes out the required amount.

Amount received must be acknowledged by signature of recipient in theCash book (petty).

3. At reimbursement of petty cash, a summary of all expenses isdrawn, showing recipient of cash, date, amount and allocation.

4. A top up cheque or cash withdrawal from the bank for the total amountpaid out is drawn and processed.

NOTE: Petty cash must always be secured in a cash box or safe Spare keys must be lodged with the head of Unit/company

Random checks must be conducted by a senior person Petty cash float must be reasonably sufficient to allow top up

twice or thrice weekly Cash box must be locked up in a safe or secure location

at the close of business daily.

RECEIPTS

POLICY STATEMENTReceipts must either be by cash or RTGs or exceptionally by cheque.Any bounced cheque to be followed up by person recommendingfor approval. No goods are to be released until proof ofpayment is obtained and the funds have cleared in our account.

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PAYMENT AND RECEIPTS BY RTGsAll our quotations must have our account details so that the client can thenmake a transfer into our account. All transfer confirmations must be checkedthe following:

That it has been accepted by the bank before cut off time.

The value date.

That our account details are correct.

Receipt confirmation stamp by the bank.

The Accountant or Administrator must, the following morning, check withthe bank that the funds have cleared in our account. If not get the referencenumber from the client and give it to the bank to track the transfer.Once cleared, give the buyer his/her goods; make onward payments toconcerned stakeholders.

PAYMENT BY CHEQUE

Cheques must as much as possible contain backup information to safeguardthe company from losses incurred through fraudulent means.

NOTE: When payment is made by cheque goods are not to be released untilthe cheque clears with the bank.1. PERSONAL CHEQUES

1.1 Details RequiredIf a customer is approved to pay for services by cheque theyshould be asked to produce a valid bankcard, and the followingdetails should be scrutinised: -

- Card number

- Maximum credit limit

- Expiry date

- Signature on card against the one on the cheque

- Names on both card and cheque

-Amount in words and figures on the cheque

- Date of cheque

- Any alteration must be endorsed by the authorisedsignatory

- Address

- Telephone number1.2 Processing of Personal Cheque

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- Ensure cheque card bears the same bank logo as thecheque

- Ensure that cheque and card are from a localregistered bank.

-Ensure card has not expired or is not about to expire

- Cheque must be drawn and signed by drawer in thepresence of person accepting it

- Signature on cheque should agree with signatureshown on the card

- Amount on cheque drawn should not exceed that oncard.

- If it exceeds, then the writer must be requested towrite several cheques within the limit of the card.

1.3 EndorsementEvery cheque drawn in favor of the company must be dulyendorsed (by the customer) at the back with the followingdetails: -

- Name of drawer

- Address of drawer

- Telephone both business and home if applicable

- Bank card number, expiry date, maximum limit,physical address and national identity

- ID number (check that the name on the ID agreeswith the one on the cheque)

1.4 Encashment of chequesUnder no circumstances should personal cheques and third partycheques be cashed against company funds, except by expressauthority from the MD.

1.5 Bank ChequesBank cheques must be treated with extra caution, due to the

proliferation of fake bankcheques always in circulation.

When presented with a bank cheque, proceed to phone the bankand verify the authenticity of such cheque. If authorized, then

proceed to process the transaction. If not authorised, advise theAccountant and Head of company, for further action, withoutreturning the cheque to the payer.

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2. COMPANY CHEQUESIf a company cheque is accepted special attention should be paid to thedetails on the cheque i.e. date, amount in words and figures and usuallytwo signatures.

For companies not well known, please insist on cash, RTGs or bankcheque, which must be confirmed with the bank before authorizingrelease of goods.

COLLECTION OF DEBTORS

POLICY STATEMENTThe Finance Department of the company is charged with the overall

responsibility for debt collection. (i.e. if there is a debtors system)PROCEDURE1. An Aged Analysis schedule is produced every month end showing the

status of accounts.2. Distribution of the main Age Analysis schedule is to the Managing

Director, Group Accountant and the Sales Manager.3. It is the responsibility of the Group Accountant to coordinate all units

and departments or individuals in collection efforts.4. Invoices which are recommended for write-off are as follows: -

a. An overdue status of one year or moreb. Irreconcilable disputec. Failure to locate debtor

5. A write off proposal must be initiated by the Accounts Clerk to theGroup Accountant and MD for approval. The MD will then authorize.Justification of write off must be included.

6. After all required signatures have been secured, the write off proposalis forwarded to the Accounts clerk for action to write-off against the

provision for bad debts if applicable.

CREDIT CONTROL

The Group Accountant or Accounts clerk should collect all outstandingmonies, which appear, on the debtors ledger.He is also responsible for processing new accounts.a. Amounts in 30 days

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- Phone, write and visit the customer to remind them oftheir indebtedness. Establish if there are any queries,which may result in non-payment, and such queriesshould be resolved immediately with relevant

departments.b. Amount in 60 days

- Write a second reminder if there was no response tothe first one, and intensify visits to debtor.

-

c. Amounts in 90 days and over

- Send final demands for all amounts.PROCESSING OF DEBTORS INVOICES

INVOICES1. From the Sales offices and operations departments invoices are sent to

the accounts clerk.2. Accounts clerk processes the invoices into the computer in sequence

and update the Debtors Ledger3. RECEIPTINGPOLICY STATEMENT

All monies received must be acknowledged by a receiptand banked on thesame or following day. Receipts banked on a particular date must be agreedto the deposit slips of the same date and separated into cash or cheque

deposits.

1. DEBTORSa. All receipts must be issued from the debtors receipt book provided

for this purpose.b. Where no details are enclosed with cheques received, all relevant

details of the cheque must be entered on the receipt, viz. drawer ofthe cheque and date received, which might assist in allocating the

payment to the correct account.c. Where an account is paid by a third party, the cheque must be

endorsed with the name of the account to be credited as well as thereceipt number so that in the event of the cheque being returnedunpaid by the bank, all relevant details are readily available.

d. Postdated cheques are not to be receipted until due for banking.e. Where a cheque is received from a company and covers the

payment of a number of their accounts, it is not necessary to issue

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a receipt for each account, but only one receipt for the total of thecheque with details of the accounts to be credited, attached.

2. GENERAL RECEIPTSa. Monies received for anything outside the scope of the companys

services for which an invoice has not been issued must bereceipted separately from those monies received from debtors and

banked.b. Such monies may come from the sale of assets, refunds of

Insurance etc.c. When coding such receipts the principle to apply is to credit theaccount to which the debit was originally allocated.

BANKING

POLICY STATEMENTAll monies received are to be deposited into the bank daily into the current

account applicable for each branch. The amounts banked, will be the dailytotals of the receipts issued, i.e. cheques and cash received. Bank depositsmust be balanced to the relevant receipts before banking.PROCEDURE

a. CHEQUES

1. In preparing for banking, Accounts clerk must add cheques andcash which must balance to the receipts issued for the day.

2. Cheques reconciled to the days receipts are banked on a separatedeposit slip supplied by the bank to be prepared in triplicate foreach deposit and distributedas follows:-

- Original copy remains at the bank

- Fast bank stamped copy remains in the book3. Drawers name is entered individually for each cheque against the

respective amount, on the deposit slip.b. CASH

4. Cash Banking is done on a separate bank deposit slip statingCompany name and account in the appropriate space and the total

amount by denomination. Copies of deposits are treated as in 2above.

5. Total deposit slips must agree to total cash receipts.6. Checking and verification of deposits against receipts and cheques

or cash is done prior to banking, by the Accountant/Accountsclerk. For units, it is advisable for the Manager to conductdaily checks on banking.

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c. BANK DRAFTSForeign currency drafts when received are receipted and endorsed, thensubmitted to the bank for banking.(if applicable).

d TRANSFERS1. Transfer of funds is usually between SBUs and Head Office

or from Commercial Bank to short term deposits accounts and willbe made with authority from the MD or CEOTwo transfer methods can be used.a. RTGs transfer which is effected by the bank.

b. Cheque drawn from the cheque book of the transferringUnit.

c. Surplus funds may also be transferred from the currentaccount, into the call account in order to generate interest.

d. Accountant issues an instruction to the bank and confirms by

letter signed by signatories.e. Monies on call account can be called with approval of the

MD or CEO.f. Surplus funds may also be transferred into Treasury Bills,

unit trusts or Short Term deposits when not requiredimmediately, at the most available competitive rates.

g. A cheque is drawn to the institution offering the best rates,for a stipulated period.

BANK RECONCILIATION1. Bank Reconciliation must be carried out monthly as at close ofbusiness.Accounts clerk/Group Accountant obtains bank statement, whichcovers an operating month and reconciles to the cashbook.

2. On receipt of bank statement, direct debits and credits including bankcharges, which have not been posted into the cashbook, are now postedagainst the cashbook totals transacted during the month.

3. All direct debits and credits emanating from the bank statement must beinvestigated and verified with the bank then entered in the cash book.

4. Cheques drawn in the cashbook might not have been presented to the bank. A list of unpresented cheques is drawn in support of thereconciling figure.

5. When process 3, 4 and 5 are completed the cashbook and the bankbalance are now in agreement and statement reconciliation is drawn toshow this effect.

6. The cash book reconciliation is drawn in the format outlined below:-

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Cashbook Balance xxx

Add: Unpresented Cheques xx

Less: Deposits not on bank statement xx

Balance Per Bank Statement xxxxxx

The other way round is also acceptable.

7. When completed, the Accounts clerk signs and the accountant checksthe accuracy of the reconciliation and verifies authenticity by signingthe reconciliation. All reconciliations should be filed together with

bank statements related to the same period.CHEQUES UNPAID

POLICY STATEMENTAll unpaid cheques received from the bank are handled by the Group

Accountant.Upon receipt of such cheques they are recorded in an Unpaid cheques

register.

The drawer of the cheque is contacted and asked to pay cash plus penalty(100% cheque value).

a. Bona Fides PrecautionUnless it can reasonably be expected that the debtor will react asrequired, cheques should be retained until payment has been secured.

b. Refer to Drawer Chequesi. Where it is possible to contact the debtor by telephone, locally to

arrange payment of the cheque this should be done.Where telephonic contact is not possible, a letter should bemailed to the debtor. (see Annexure of standard letter below)

ii. On all returned cheques, bank charges should be recovered fromthe customer in addition to the R/D amount.

c. Payment Stopped ChequesThe following procedure applies:-

i. Where telephonic contact is possible locally, obtain reason forstoppingof payment and endeavor to rectify.

ii. If (i) is not possible the debtor should be written to, requestingthe reasons for the cheque being stopped.

iii. Should the matter be settled and the cheque authorised forpayment the procedure for receipting and banking can then becarried out.

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iv. If a reply is received and the payment is the subject of a disputewith the result that the cheque cannot be deposited, then thecheque with all relevant details must be handed over to theAccountant for further action.

d. Account Closed ChequesIn all such cases the cheque must be forwarded to the GroupAccountant for immediate action.

e. Irregularly Drawn ChequesIn all cases of irregularities, faults and omissions, these should be dealtwith immediately, advising what is required so that the cheque can bereceipted and banked in the normal way with a minimum of delay.If it is possible, the debtor can be requested to come to the offices andregularize the cheque, or alternatively, the accounts clerk may deliver

the cheque for regularization without any further delays.

Cheques Lost in TransitCheques lost in transit must be reported immediately to the GroupAccountant who will obtain a further cheque from the Drawer inreplacement.

Note Items (d), (e and (f) are specific procedure and are subjective tothe overall procedure in this paragraph.

Annexure of standard letter

Dear Sir/Madam,RE: ACCOUNTYour cheque No.. drawn on .for thesum of $ . has been returned by Bank marked Refer to Drawer and asconsequence our receipt No. .. issued at .on is hereby cancelled and this amount has been debited toyour account together with administration charge of $..Yours faithfullyGroup Accountant

CASH MANAGEMENT

POLICY STATEMENT

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It is company policy to develop sufficient internal and external sources offunds to take advantage of business opportunities, as well as to maintain asatisfactory level of liquid assets. The development of such sources

provides the means for more effective business decisions. It is companypolicy not to accumulate unproductive surplus cash. Short term funding isgenerated internally from the companys operations or from outside. The useof internally generated funds for short term needs will be the preferredmethods of funding.

Those funds, which are required for one year or longer, are considered andclassified as Long-term Funds by the company. Approval for committingthe company to such borrowing is required from the Board of Directors andthe Chief Executive Officer.

The company will not use institutional funds for short-term purposesunless it is unable to generate cash internally from operations.When it is necessary to get short-term funding from external sources,Refer to the CEO or MD.

PROCEDURE1. The Accounts clerk or Group Accountant of each company prepares a

Weekly cash flow schedule(a.k.a. Position)which shows the cashbook balances and bank balances.Bank statements are obtained from the internet through the integratorsystem.

2. The cash flow schedule helps control outflows against inflows andmanagement is kept informed of the current cash position.

3. The schedule is produced every Monday projecting the current week.4. The schedule is distributed to the MD and the Chief Executive officer.5. If long-term funding is required the Group Accountant with the

authority of the Managing Director will prepare the necessary proposalfor the need of funding. This could mean liquidating forex reserves.

STOCK MANAGEMENT

POLICY STATEMENTStock management involves control and maintenance of inventories to

protect profit margins. The Finance Department is responsible for providingsupport services to all departments involved in stock management, and toensure that controls are upheld at all times.

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PROCEDURE1. When stationery is received into the company, the PA records all the

items into the stationery register and kitchen groceries registerimmediately on receipt of goods as acknowledgement that goods

have been received.2. Stationery stocks of a security nature are kept in the custody of the

accounts department, and administered by maintenance of a registerwhich is a history sheet, and is signed by the recipient when receivingstocks. Documentary stocks must be issued in sequential order.

3. All security documents are registered numerically and individually inorder to facilitate the sequential issuing and control. Such documents

include: -- Invoice books

- order books

- receipt books4. Re order levels of security documents are monitored by the Accounts

clerk and orders are authorized by the Accountant to replenish whennecessary.

ANNUAL FINANCIAL BUDGETS

POLICY STATEMENTEach company of the group is required to prepare and submit an AnnualFinancial Budget for approval. The budget is drawn by the Accountant, inconjunction with the General Manager of the SBU. The head of Company

budgets for the revenue and the cost budget is completed in conjunction withaccounts dept. Budgets are submitted to the Group Accountant for reviewand subsequent approval and ratification by the board.If approved, the heads of companies will be responsible for taking thenecessary actions to meet the plan. Quarterly, budgets are reviewed with

more current assumptions.

PROCEDUREAt the end of each month, the accounts department draws accountswhich show comparisons of actual results versus budget.

1. An explanation of all major variances is done and circulatedto all recipients of monthly management accounts.

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2. Recommendations for any required corrective action should beprepared by the operating company and forwarded to the HQ.

3. If subsequent actions fail to correct the budget variances beyond thecompanys expectations, the Managing Director must be notified.

4. All budgets submitted must be measurable, reasonable and reflect thecurrent economic situation based on realistic assumptions.

5. In the case of capital budgets, all proposed acquisitions are discussedwith the Managing Director and CEO.

MANAGEMENT ACCOUNTS

POLICY STATEMENTProfit & Loss statement will be issued on a monthly basis and distributed toheads of companies by the 7th working day of each month. Accountants ofrespective SBUs are responsible for the analysis of the accounts while the

respective Heads of companies are accountable for the control. Companypolicy requires that significant variances in actual costs from approvedbudget be reported and explained.

PROCEDUREThe Finance Department is responsible for ensuring that monthly profit &loss statements are prepared for each operating company of the group.1. A set of accounts is drawn on a prescribed format and submitted to HQ

by the 7th working day of each month. These accounts detail thebalance sheet, profit and loss, commentary notes and supportingschedules.

2. The profit and loss statement will compare the current monthsperformance with the budget and last year, and the cumulativeperformance with the budget and prior year.

3. Alongside the month and cumulative comparisons will be thepercentage variances against the budgets. Analysis of percentagechanges will indicate areas needing attention.

4. The comparison is also a tool for management to assess performance.5. The Accountant is responsible for producing the profit & loss which is

discussed with the Head of company before submission to HQ.6. A consolidation of all companies is carried out by the Group Accountant

for distribution to various parties.

EXPENSE ACCOUNT CLASSIFICATION

POLICY STATEMENT

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All personnel responsible for budgeting and allocating expenses will do sousing account classifications, which are issued by the Group Accountant.Any revisions to the classifications should be in consultation with HQ asvarying classifications tend to disrupt the consolidation process.Items charged to expense accounts are classified below:

Accountancy and Audit Fees - Includes charges for professionalservices rendered by independent accountants or auditors forauditing accounts, tax advice, rendering reports and otheraccounting services.

Bad debts written off - Includes charges of bad debts that areunrecoverable and have previously been set aside in a baddebts provision account.

Cost of sales Includes all costs paid to airlines or other travel agencies.

Directors fees - Includes fees paid to the directors in respect of boardmeeting attendance.

Depreciation - Includes the depreciation expense for equipment,furniture & fittings, computers and vehicles and

buildings if being depreciated.

Electricity & Water - Includes electricity & water charges levied by therelevant authority.

Insurance General - Includes charges for insurance premiums coveringbuildings, motor vehicles and all otherassets.

Advertising - Includes charges for advertising in the press, on

television, in directories, calendars, diaries, brochures,

christmas gifts, prizes for sponsored sports andtournaments or any other form of advertising such aslaunching costs and complimentary clothing such as T-shirts and caps.

Bank Charges - Shall be charged with all bank charges including fees in

respect of establishing loans and draw down fees.

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Donations - Includes expenses in respect of payments made to thirdparties as donations to individuals, organizations orsporting organisations.

Legal fees - Includes charges for legal fees and services inconnection with corporate business and thecollection of bad debts and related charges thereto.

Office machinery repairs & maintenance. - Includes the cost ofservice contracts on office equipment, i.e. computers,calculators,andand repair costs to these and other equipment or office furniture, andlease hire charges for equipment other than telephonic equipment andswitchboards.

Maintenance General - Includes charges in respect of buildingmaintenance, tarmac, roofs and durawallrepairs or enhancement, together withmaterials, renovations to offices, all electricalfittings and repairs, and tiling of offices.

Motor vehicles - Fuels & Oils -Is charged with fuel and oil expended onvehicles.

Motor vehicles - Repairs & maintenance - Is charged with repairs &

maintenance of vehicles

Printing and Stationery - Includes all charges in respect of stationerypurchases, postage, parcels, office accessoriessuch as staplers, pocket calculators, punchs,

Rates - Includes rates as levied by the municipality on land,buildings & improvements.

Rent - Includes all rentals.

Security - Includes the cost of hiring security guards at companypremises and electric fence.

Salaries - Includes all salaries paid to staff and management.

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Pension - Charged with the companys pension contribution

Medical Aid - Charged with the companys contribution of medical aid.

Leave Pay -Charged with the value equivalent of outstanding leavedays.

Exchange Difference - Includes the variation (debits or credits) causedby the conversion of one currency into another.

Teas & cleaning - Includes kitchen groceries, detergents &lunches.

Training - Includes the cost of tuition paid in respect of training

employees, i.e. strategic and operational seminars,

external and internal training costs, conference hall hire charges,meals at seminars, accommodation at seminars and refunds onapproved courses undertaken by employees.

Travel Local

Charged with costs incurred in respect of visits to localUnits and subsidiaries within a country, and all costsrelated to marketing and operations visits, bymanagement. Such costs would include hotelaccommodation, lunches, flight tickets, car hire charge

and travel allowances etc.

Foreign TravelCharged with all costs incurred in respect of travel outsidethe country i.e. airfares, hotel accommodation, travelallowances, hire of car etc if applicable.

PROVISIONS

POLICY STATEMENTOn a continuous basis, the Finance Department is required to reviewexpenses and make provisions for contingencies, which are identified andforeseeable.

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POLICY & PROCEDURE1. Bonus Provision

The company pays a bonus once a year, December, based on thecompanys performance. This is to the discretion of management.

- Bonus provisions are calculated at equivalent grosssalary bill and provided for monthly.

- When a payment is made, it is paid out of theprovision in the balance sheet, and not from the P/L.

2. Leave Pay ProvisionEmployees of the company are entitled to 22 working days per annum

but accumulated on a monthly basis. It is not a company policy to paycash in lieu of leave except under exceptional circumstances, or whenan employee leaves the company. Outstanding leave days are

converted into value equivalent at the end of each month.3. Audit Fees Provision

- Includes provisions for charges relating to externalaudit of the books, held, at least once a year, for theholding company and all its subsidiaries. Anestimated percentage is applied on the currents yearsactual fees charged or the auditors are requested to

provide estimation.

Based on the estimation, a provision is raised basedon equal monthly amounts.

4. Other ProvisionsFrom time to time there is need to accrue expenses during a period ofaccounting. Provisions are raised and reversed when the actual invoiceis paid or received.

5. In all cases, the Accountant must verify all calculations beforeauthorising the journals for processing.

SALARIES.

POLICY STATEMENTSalaries are paid on or before the 25th monthly, except where the 25th fallson a weekend, in which case salaries will be paid on the Friday precedingthe 25th.

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PROCEDURE1. A personal file is opened for each employee on commencement of

employment. Such a file contains all the personal details includingremuneration.

2. When processing salaries, all information required by the computerisedpayroll is obtained from the personal file. Several reports are generatedat the end of each month.

3. At the completion of each run, the Accountant must submit thepayslips, summarised payroll, bank schedule and source document tothe Managing Director or CEO for checking, verification andauthorization.

4. Disks are submitted together with Processing Data Advice 4 daysbefore payday to the respective banks.

5. The Group Accountant has to facilitate opening of bank accounts for

new employees who do not have accounts.6. On cessation of employment, the employee is deleted from the master

file in the computer.

GOVERNMENT TAXES

POLICY STATEMENTThe company is obliged to pay to Government a percentage of profit astaxation, on estimated current years profits, at designated QuarterlyPayment Dates (QPD). The company is also obliged to pay (PAYE) Pay asYou Earn withheld from employees and VAT withheld on sales(commissions).

PROCEDURE1. Estimated income tax, based on monthly accounts, is provided for

monthly and paid on a quarterly basis.2. As and when the QPD (quarterly payment due) falls due, the relevant

tax percentage payment is paid to Zimra as an Rtgs using Special Zimra

transfer forms available from the bank.3. At the close of the annual financial year, a tax computation is drawn

and agreed with the auditors, to determine the correct company taxpayable.

4. At this stage the accumulated monthly provision will be adjusted toreflect the computed tax amount into the balance sheet.

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5. The relevant tax return form is completed and together with thecomputation and statutory accounts, submitted to the tax authorities.

6. As and when the QPD falls due, the relevant tax percentage payment islodged with the tax department. The dates for QPDs and percentagesare as follows : 25 march 10%

25 June - 25%25 Sept 30%25 Dec 35%

7. PAYE is deducted monthly and must be submitted on the 15th of themonth following the month of recovery. Late payments attract

penalties and interest.

8. VAT is levied on sales transactions and must be submitted by theperiod allocated by the Tax Authorities stipulated date following themonths of recovery. Late payments attract interest and penalties.

9. Should the company foresee a situation where payments cannot beGenuinely submitted, a letter must be submitted to the TaxCommissioner, giving reasons for the delay and requesting for anextension.

ACQUISITION OF ASSETS

POLICY STATEMENTA Capital Expenditure proposal should be submitted to the ManagingDirector /Chief Executive Officer for approval.

A Fixed Assets register must be maintained to record all assets.

PROCEDURE

FIXED ASSETS1. On establishing that an asset is required, approval to purchase will

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be sought from the Managing Director in consultation with theChief Executive Officer. Three quotations will be obtained fromdifferent suppliers and compared for competitiveness on quality,

price and payment terms.2. The Accounts Clerk/Group Accountant will then raise a purchase

order in favor of the preferred supplier.3. Goods are accepted if in good condition and rejected if not.

FIXED ASSET REGISTER AND MAINTENANCE

1. On receipt of invoice for purchase of an asset, the Accounts clerkwill in the month of purchase record the information outlined

below, in the asset register:-

- Date of Purchase

-Description

- Cost

- Depreciation Rate

- Depreciation Monthly

- Depreciation Accumulated

- Net Book Value

2. Fixed Asset categories which must be reflected in the register are:-

- Motor vehicles

-Furniture and fittings

- Land & Buildings

- Computer & Equipment

3. From the month of purchase, reducing balance depreciation will becharged to the nominal ledger and credited to the individual assetaccounts on a cumulative basis to reflect monthly book values.

4. Depreciation on assets is applicable as follows:-

Motor Vehicles 20%Furniture and Fittings 10%Land & buildings 5%Computers Equipment 25%

5. When assets are fully depreciated, they will remain in the books as

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memorandum items with a value of $1 for ease of physicalaccounting.

6. Disposal of assets will be conducted according to the Companysdisposal procedure. When an asset is disposed of, the cost andaccumulated depreciation must be written out of the AssetRegister, recording date of disposal and amount realized.

7. Proceeds of sale must be credited to the Profit and Loss account.

8. Physical counts must be conducted once a year and checked to theAsset Register by the Accounts clerk. Any discrepancies must beinvestigated and accounted for.

DISPOSAL & TRANSFER OF ASSETS WRITING OFFREDUNDANT AND UNSERVICEABLE ASSETS

POLICY STATEMENT

To ensure write off of assets is properly controlled, recorded and processed.

1. SBU heads identify assets or stocks that have becomeobsolete, redundant or unserviceable.

2. Compiles a list of such assets or stocks and in the case of vehicles,indicates the fleet and registration numbers submits a request seekingauthority to dispose from the MD or CEO.

3. Once approved, disposal takes place through the auction or otherapproved means.

4. Transfer of assets between companies is initiated by the GeneralManager and referred to the Chief Executive Officer for approval.

5. When transfer is approved, General Manager and Group Accountantare advised by copy of approval, to action the transfer in their books.

MANAGEMENT ACCOUNTS

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POLICY STATEMENTManagement accounts except at year-end are drawn monthly and distributed

by the 7th working day of the month following. A laid down format isadopted for actual and budget accounts. Management accounts arecomputerised on a financial package and completed on a spreadsheet

package for consolidation with Group Accounts.

PROCEDURE1. During the month, various source documents are furnished to the

Accounts Department.2. Such documents include

- Suppliers invoices

- Transfers,cheque requisitions

-credit notes

- debit notes

- receipts

- journals

- customer invoices3. These are captured into Pastel resulting in the generation income

statement & balance sheet.4. In each case, the audit trails must be checked by the Accounts clerk or

Group Accountant, to verify correctness to source documents.

A Trial Balance is generated and if it balances it is exported to thespreadsheet packages where it is formatted into the ManagementAccounts.

5. The Management Accounts are comprised of the income statement,Balance Sheet & commentary notes.

6. Reconciliation of debtors and creditors are reviewed, if applicable,together with variance analysis reports. After review the accounts aredistributed to all stakeholders.

9. Other schedules may be drawn as and when required.

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INTERCOMPANY TRANSACTIONS

COMPANY POLICYAll intercompany transactions within the group must be conductedthrough the use of debit notes, and not invoices that would normally be usedwhen charging third parties. When raised, debit notes must be furnished tothe recipient company.

PROCEDURE1. A debit note is raised where a sister company has carried out a service

on behalf of another i.e. subcontracting or where a payment has beeneffected on behalf of another company.

2. A debit note can be initiated from any department and drawn by theAccounts clerk, stating the company charged, date, transaction

description and amount.3. A debit note is raised in duplicate as follows:-

- Top copy to recipient company

- Bottom copy for Audit filing4. The debit note is authorised by the Group Accountant.5. Both companies must process the transaction in their respective books

of accounts, either as debit or credit in the same period.6. If any transactions are processed through the debtors ledger as it

happens sometimes, the balance must be transferred to the General

Ledger Intercompany Account.7. If any transactions are processed through the Creditors Ledger, theymust also be transferred to the Intercompany at month end.

8. All transactions must be from intercompany into the allocatedrespective expense or recovery accounts.

9. Effectively, on consolidation these transactions must clear within thegroup.

10. A reconciliation is drawn by each company and agreed with the othercompanies.

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INSURANCE

POLICY STATEMENTIn order to protect the company losses, the Group Accountant and the ChiefExecutive Officer/Managing Director shall be responsible for thedevelopment of insurance requirements. Insurance shall protect against fire,theft, accident, injury to employees and various other perils.

PROCEDUREThe insurance plan will be reviewed to determine if changes arerequired to protect the company.

1. Insurance purchases shall be made only after review and approval withthe Chief Executive Officer.

2. All properties, shall be covered at replacement values.3. Insurance premiums shall be reviewed periodically to ensure that

amounts are competitive.4. Claims handling shall be done by Group Accountant.5. The use of umbrella coverage policies will be considered whenever

this affords the company broad protection at rates which are equal to orlower than individual policies.

Accounting Procedures Manual -Ft Junior Travel Pl

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