Actg Guide

8/18/2019 Actg Guide

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FINANCE MANUAL

POLICIES AND PROCEDURES

VEPCO Group Distr ibution Corp

Fuel Distribution


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TABLE OF CONTENTS

Introduction

Division of Responsibilities

Basic Accounting Principles

VCFP0001: Customer Accreditation and Management

VCFP0002: Sales Order Processing and Approval

VCFP0003: Billing and Collection

VCFP0004: Receipts and Deposits

VCFP0005: Bounced Check

VCFP0006: Delinquent, Legal and Other Accounts

VCFP0007: Procurement of Non-inventory ItemsVCFP0008: Procurement of Fuel Inventory

VCFP0009: Disbursements – Request for Payment

VCFP0010: Disbursements – Purchase Requisition

VCFP0011: Accounts Payable – Fuel Purchases

VCFP0012: Payment Voucher Preparation and Release

VCFP0013: Payment Remittance

VCFP0014: Employee Cash Advances

VCFP0015: Petty Cash Fund

VCFP0016: Cashier Fund

VCFP0017: Employee Revolving Cash Fund

VCFP0018: Bank Reconciliation

VCFP0019: Accountable Forms

VCFP0020: Request for Adjustment

VCFP0021: Fixed Assets

VCFP0022: Expense Recognition

VCFP0023: Payroll

VCFP0024: Chart of Accounts

VCFP0025: Filing and Records Management

VCFP0026: Annual Business and Budget Plan


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VCFP0027: Month-end Accounting Procedures

VCFP0028: Financial Reports and Analysis

VCFP0029: Maintenance of Finance Policy Manual

Glossary of Chart of Accounts

Appendices: Forms and Templates


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INTRODUCTION

This manual has been prepared to document the internal finance and accounting policies

and procedures of VEPCO GROUP DISTRIBUTION CORP. – Fuel Distribution.

Its purpose is to ensure that company assets are safeguarded and finances are properly

managed. Compliance of the set policies and procedures will give a clear picture of the

company’s financial status based on the accurate financial statements that will be

generated.

All personnel, guided by the company’s core values, with a role in the management of

daily finance and accounting operations are expected to uphold the policies in this

manual. It is the intention of the company that this manual will serve as our commitmentto proper and accurate financial management and reporting.


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DIVISION OF RESPONSIBILITIES

The following are the list of personnel with the designated finance and accounting general roles and

responsibilities:

Chief Finance Officer:

1. Formulates the overall finance department direction

2. Develops financial strategies

3. Reviews and approves all investments and fund management proposals

4. Reviews and approves the overall capital request and annual budget

5. Reviews and approves all check payments and fund transfers

6. Reviews and approves all financial reports

Assistant Vice President – Finance:

1. Assist the CFO in formulating the overall direction of the finance department

2. Assist the CFO in developing financial strategies

3. Oversee the financial operations of the company and the issuance of financial information

4. With the CFO, reviews and approves all financial reports

5. Monitors and manages overall budget implementation

6. Reviews and approves request for payments and payment vouchers prior approval by the CFO

Executive Assistant

1. Receives and reviews all incoming documents for approval by the Executive

2. Processes all application for bank credit facilities

3.

Assists the Executive on the monitoring of policies and KPI compliance

4. Conduct finance researches as may be required by the Executive

Accounting Manager

1. Manages the overall accounting operations – receipts, disbursements, payroll, etc.

2. Prepares all financial reports

3. Maintains the accounting information system and ensures accurate recording of transactions

4. Ensures compliance to month-end and year-end closing procedures

5. Approves posting of journal entries and payment transactions in the system.

6. Conducts bank reconciliation.

Accounting Supervisor

1. Monitors processing of payroll, accounts payable and disbursements

2. Reviews encoded disbursements

3. Supervises accounting staff on their daily accounting transactions

4. Reviews accounts payable and receivable reports


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Treasury Supervisor

1. Monitors banking transactions

2. Supervises staff in the cashier’s fund and petty cash fund management

3. Monitors release of cash and check payments

4. Conduct daily cash count

Accounting Staff

1. Processes and records payroll, accounts payable and other disbursements

2. Prepares accounts payable and unliquidated cash advances report

Accounting Receiving Staff

1. Receives and reviews all request for payments and routes for processing and approval

2. Monitors all paid vouchers and follows through receipts and liquidation prior filing

Credit and Collection Staff

1.

Processes all credit line application of customers2. Monitors daily credit standing of customers

3. Processes approval of daily sales order

4. Monitors collection and reconciles accounts receivable

5. Prepares accounts receivable reports

Treasury Staff

1. Processes banking transactions

2. Safekeep PDCs

3. Monitor daily cash balances including inflows and outflows

4. Records incoming payments

Cashier

1. Releases check and cash payments

2. Processes petty cash and cashier’s fund requests

3. Monitors replenishment of funds


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BASIC ACCOUNTING PRINCIPLES

Accounting principles are rules and guidelines that govern how a company must measure, process, and

communicate financial information. These ensures that consistent accounting procedures are followed in

recording the events created by business transactions and in preparing financial statements.

1. Business Entity Concept

A business is considered a separate entity from the owner(s) and should be treated separately. Any

personal transactions of its owner should not be recorded in the business accounting book, vice versa.

Unless the owner’s personal transaction involves adding and/or withdrawing resources from the

business.

2. Going Concern

It assumes that an entity will continue to operate indefinitely. In this basis, assets are recorded based ontheir original cost and not on market value. Assets are assumed to be used for an indefinite period of

time and not intended to be sold immediately.

3. Monetary Unit

The business financial transactions recorded and reported should be in monetary unit, which is

Philippine Peso. Thus, any non-financial or non-monetary information that cannot be measured in a

monetary unit are not recorded in the accounting books, but instead, a memorandum will be used.

4. Historical Cost

All business resources acquired should be valued and recorded based on the actual cash equivalent or

original cost of acquisition, not the prevailing market value or future value. Exception to the rule is

when the business is in the process of closure and liquidation.

5. Matching

This principle requires that revenue recorded, in a given accounting period, should have an equivalentexpense recorded, in order to show the true profit of the business.

6. Time Period Accounting Concept

This principle entails a business to complete the whole accounting process of a business over a specific

operating time period. It may be monthly, quarterly or annually. For annual accounting period, it may

follow a Calendar or Fiscal Year.


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7. Conservatism

This principle states that given two options in the valuation of business transactions, the amount

recorded will be the one that will result in least favorable outcome for the business in the current period

– minimize any overstatement of assets and income and understatement of liabilities.

8. Consistency

This principle ensures consistency in the accounting procedures used by the business entity from one

accounting period to the next. It allows fair comparison of financial information between two accounting

periods.

9. Materiality

Ideally, business transactions that may affect the decision of a user of financial information are

considered important or material, thus, must be reported properly. This principle allows errors or

violations of accounting valuation involving immaterial and small amount of recorded business

transaction.

10. Objectivity

This principle requires recorded business transactions should have some form of impartial supporting

evidence or documentation. Also, it entails that bookkeeping and financial recording should be

performed with independence, that’s free of bias and prejudice.

11. Accrual

This principle requires that revenue should be recorded in the period it is earned, regardless of the time

the cash is received. The same is true for expense. Expense should be recognized and recorded at the

time it is incurred, regardless of the time that cash is paid.

12. Full Disclosure Principle

This principle requires that the financial statements of a business should be complete and should report

sufficient economic information relating to the business entity to make the statements understandable.


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General Policy and Procedure Overview

Accreditation of customers and extension of credit facilities shall undergo the standard procedure on the

submission of required documents and shall be subject to processing and approval by Credit and

Collection Division.

Customers shall be on “Cash” basis – payment first prior delivery until all documents are submitted and

requested credit facilities are approved.

Purpose

To ensure that customers are legit and have the capacity to pay requested line for credit purchases.

Scope

This policy applies to all new customers applying for credit line and term.

Department Responsible

Credit and Collection Division

Sales Department

Legal and Compliance Department

Definition of Terms

a. Credit Line – also known as credit limit, is the amount within which customer is free, at any

given time, to purchase goods from the company on credit.

b. Credit Term – refers to the period of time (number of days) commencing from the invoice date

that a customer shall pay the company for the said invoice.

Example: Php2,000,000.00/30 days where: Php2,000,000.00 is the credit limit

30 days is the credit term

VEPCO GROUP DISTRIBUTION CORP.

POLICIES AND PROCEDURES MANUAL

FINANCE POLICY

MANUAL

CUSTOMER

ACCREDITATION AND

MANAGEMENT

REF.

NUM.

VCFP0001

PAGE 1

of 5

DATE:

APRIL 1,

2015


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Detailed Policies and Procedures

I. Submission of Required Documents

For new customers the following shall be submitted:

Business Application Form (BAF) – shall be fully accomplished and duly certified by the

owner, spouse (if applicable), and/or authorized representative. The BAF shall also

incorporate endorsements from Sales.

Vital attachments as listed on the CAF:

For Single Proprietorship:

a. Photocopies of two (2) valid primary IDs of the owner and spouse (if applicable)

b. Copy of Department of Trade and Industry (DTI) Certificate of Registration of

Business Name

c. Copy of Current Mayor’s Permit Certificate and/or its Official Receipt

d. BIR Certificate of Registration

For Corporation/Partnership/Cooperative

a. Securities and Exchange Commission/Cooperative Development Authority

Certificate of Registration

b. Articles of Incorporation/Partnership and Constitution and By-laws

c. Board Resolution or Secretary’s Certificate identifying authorized representative

d. Copy of Department of Trade and Industry (DTI) Certificate of Registration of

Business Name

e. Copy of Current Mayor’s Permit Certificate and/or its Official Receipt

f. BIR Certificate of Registration

g.

Photocopies of two (2) valid IDs of the authorized representative

Additional requirement as initiated by CCD

Bank Inquiry Report with the following required data of the customer:

a. Paying Habit

b. Number of incidence of bounced check

c. Average Daily Balance



FINANCE POLICY

MANUAL

CUSTOMER

ACCREDITATION AND

MANAGEMENT

REF.

NUM.

VCFP0001

PAGE 2

of 5

DATE:

APRIL 1,

2015


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Credit and Collection Division shall keep an up-to-date record of the company’s customers by

maintaining:

a. Customer masterdata under the current system

b. Customer 201 file

II. Credit Line and Credit Term

Credit line may be unsecured or secured:

The unsecured credit limit shall generally be based on the volume requirement or projections as endorsed by Sales.

The secured credit limit shall be based on the collateral amount and its effectivity shall be

co-terminus with the security’s expiry date.

The following shall be the basis to classify whether the requested limit is secured or unsecured

Type of Customer Credit Limit Classification

Small Php700,000 Unsecured

Medium Php700,001 to Php2M 50% secured 50% unsecuredBig Beyond 2M 100% secured

Reckoning of due date shall be based on the straight term method of approved term from the

invoice date. Invoice date shall be equal to the delivery date.

III. Collateral

Following are the acceptable forms of collateral:

Irrevocable Standby Domestic Letter of Credit (ISDLC) – a payment commitment opened

by the issuing bank based on the application of the applicant where a payment will be made

by presenting the documents under the ISDLC.

a. Terms must allow partial negotiation

b. Terms must always be drawn at sight

c. Shall be accompanied by sight draft pre-signed by the customer (if applicable)

d. Shall be subject to confirmation from Issuer Bank’s Head Office



FINANCE POLICY

MANUAL

CUSTOMER

ACCREDITATION AND

MANAGEMENT

REF.

NUM.

VCFP0001

PAGE 3

of 5

DATE:

APRIL 1,

2015


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Cash Bond – an arrangement wherein a party gives to another an amount of money to

secure the fulfillment of an obligation.

a. Shall be subject to interest based on time deposit

b. Should be covered by validated official receipt

c. Accompanied by notarized Cash Bond Agreement

Surety Bond – is a promise by a surety or a guarantor to pay one party (obligee) a certain

amount if the principal fails to meet an obligation.

Chattel Mortgage – a loan arrangement in which an item of movable personal property is

used as security for the loan.

Real Estate Mortgage – a debt instrument secured by the collateral of specified real estate

property.

Anticresis – a contract between debtor and creditor by which the former yields to the latter

the fruits of a farm until the debt is paid.

Factoring Agreement – agreement in which a business sells its accounts receivable as

payment for its financial obligations.

Custodianship of collateral shall be at the Legal and Compliance Department but Credit and

Collection Division shall also maintain:

Back-up files and/or photocopies of the collateral package

Summary control listing of customer’s posted collateral and related information (customer

name/no., credit line, collateral type, collateral amount, date of issuance, confirmation

expiration)

Renewal of Collateral

For existing secured facilities, non-submission of renewal/extension of expiring collateral

shall render the credit line inoperative, thirty (30) days prior DLC expiry date.

Requirements for collateral replacement and/or renewal shall be similar to the acceptance

of the new collateral.



FINANCE POLICY

MANUAL

CUSTOMER

ACCREDITATION AND

MANAGEMENT

REF.

NUM.

VCFP0001

PAGE 4

of 5

DATE:

APRIL 1,

2015


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Discharge of Collateral

Generally, no collateral shall be discharged/released to customers with outstanding

accountabilities unless an equivalent acceptable replacement is received or until the

outstanding obligation has been fully settled. CCD shall prepare a memo for “Release ofCollateral” to be routed to different companies or business units as clearance.

Calling of Collateral or Foreclosure

As a general rule, collateral shall only be called or foreclosed in case of:

a. Customer’s default/breach of contract, or

b.

After exhausting all normal collection efforts

Requirement

a. Certification of Default signed by the CFO

b. Statement of Accountc. Original Copy of the Collateral document

d. Copy of unpaid invoices or delivery receipts

IV. Reinstatement or Re-activation of Account

Customer that has a bad credit standing shall be “F-rated” and therefore all sales order approvaland deliveries are suspended.

Customer shall be tagged as “F-rated” for the following reasons:

Any instance of bounced check

Long overdue account – beyond 30 days overdue and no specific payment commitment

Customer shall be tagged as inactive if no purchases for the last 6 months.

Credit and Collection shall issue a memo informing Sales on the tagging of customer as “F-

rated” or “In-active”.

For the reinstatement of account, Sales shall issue a memo requesting to lift “F-rating” of aspecific account. For the re-activation of account, Sales shall issue a memo for the account to

be re-tagged as active.

Reinstatement and Re-activation Memo shall be endorsed by Sales and subject for approval bythe AVP-Finance and Chief Finance Officer.



FINANCE POLICY

MANUAL

CUSTOMER

ACCREDITATION AND

MANAGEMENT

REF.

NUM.

VCFP0001

PAGE 5

of 5

DATE:

APRIL 1,

2015


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All Sales Order shall be subject for approval by Credit and Collection based on the set Credit Approval

Matrix and shall be based on the credit standing of the account at the time of the submission of order.

Purpose

To provide the standard procedure for sales orders and ensure that all invoiced orders were approved based

on standards and were properly recorded and documented.

Scope

This policy applies to all sales transactions including related companies


Sales and Logistics Department


Dispatch

Definition of Terms

a. Sales Order - a document that authorizes sale of the specified item(s), issued after receipt ofcustomer's order.

b. Delivery Receipt – a document signed by the receiver of a delivery to indicate that the items were

actually received.

c. Invoice – a document submitted to a customer, identifying a transaction for which the customer

owes payment to the issuer.



FINANCE POLICY

MANUAL

SALES ORDER

PROCESSING AND

APPROVAL

REF.

NUM.

VCFP0002

PAGE 1

of 4

DATE:

APRIL 1,

2015


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I. Receipt of Order

Customer Sales Officer receives customer orders via text message or phone call. Uponconfirmation of booking, order shall be encoded immediately in SAP.

For manually booked orders beyond cut-off time, corresponding system entry shall be made

the following business day. The same shall be done in case of bookings during non-working

days or holidays.

Sales Orders encoded shall be subject to Manual Approval.

Manual Approval – sales order shall pass through the regular processing of order by Credit

and Collection before it will be finally approved in the system.

II. Credit Evaluation and Approval

Upon receipt of notification of sales order for approval, if there are credit issues, Credit andCollection in-charge prints a copy of the sales order and indicates his or her inquiries, Salesshall write their justification and commitment on the same document. Credit either approves

or disapproves order based on authority or shall forward the document to the final approver.

Credit and Collection evaluates customer’s credit standing and approves or disapproves

forwarded sales orders from Sales. All credit extension beyond the approved credit line and

term and other hanging balances such as, but not limited to, underpayments, EWT, etc., shall

be monitored and should have specific commitment as to resolution.

Sales Order shall be processed and approved as per approved agreed cut-off with Sales andLogistics. However, sales order received beyond cut-off will still be accommodated by CCD

for special cases as requested by Management e.g., during month end.

Processing lead time for Sales Order shall be within 30 minutes from receipt of notificationfrom Sales. Sales Order with credit problems shall be approved depending on the feedback

provided by Sales.



FINANCE POLICY

MANUAL

SALES ORDER

PROCESSING AND

APPROVAL

REF.

NUM.

VCFP0002

PAGE 2

of 4

DATE:

APRIL 1,

2015


16/124

III. Delivery

Logistics in-charge receives notification of approved Sales Order and creates DeliveryReceipt in the system with the following additional entries:

Driver Name

Tanker Plate Number

Purchase Order Number (to Supplier)

Sales Order Number (by Supplier)

Logistics shall print the delivery receipt for filing and prepares Authority to Load to be

forwarded to the supplier. Delivery details shall also be sent to delivery in-charge through

message to facilitate delivery.

Drivers shall ensure to accomplish the following upon delivery of items:

Affix his signature in the Delivery Receipt under “Delivered By”

Secure signature of the customer’s authorized representative under “Received By”

Drivers shall forward the signed copies of Delivery Receipts to Dispatch in-charge whichshall forward the same to their main office. Operations Manager of the dispatching companyshall be responsible in monitoring the immediate remittance of Delivery Receipts every week

at their main office which shall in turn be forwarded to VEPCO main office.

IV. Invoicing

Within 48 hours from sales order approval, Credit and Collection shall generate the invoice

in the system, unless with prior notification on changes of deliveries or sales order.

On a regular basis, upon receipt of delivery receipts, Credit and Collection shall generate

Sales Report for reconciliation with the delivery receipts. Any noted discrepancies shall beforwarded to Sales and Logistics for settlement and if an adjustment is necessary, Sales andLogistics shall prepare the Request for Adjustment.



FINANCE POLICY

MANUAL

SALES ORDER

PROCESSING AND

APPROVAL

REF.

NUM.

VCFP0002

PAGE 3

of 4

DATE:

APRIL 1,

2015


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V. Invoice Adjustment or Cancellation

Invoiced Sales Order shall be cancelled in cases of:

Diverted deliveries

Wrong encoding (customer, price etc.)

Request for Adjustment shall be prepared by Sales and Logistics in-charge for approval by

his or her immediate superior and shall be submitted for processing by Credit and Collection

together with the corrected Sales Order.



FINANCE POLICY

MANUAL

SALES ORDER

PROCESSING AND

APPROVAL

REF.

NUM.

VCFP0002

PAGE 4

of 4

DATE:

APRIL 1,

2015


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All deliveries shall be billed to customers on a periodic basis and payment shall be monitored within the

approved credit term. Sales Representative shall be responsible in collecting payment from customer.

Purpose

The purpose of this policy is to provide guidelines to assure reasonable collection of accounts from all

available sources. To ensure that all invoices are billed and collected within the set credit term,

accompanied by proper documentation to ensure that all invoices have valid attachments to support proofof delivery.

Scope

This policy applies to all VEPCO Group Distribution invoices including related companies.



Sales Department


Definition of Terms

a. Billing Statement or Statement of Account – A bill for goods that collects several invoices from a

given period, into one document. This is presented to the customer, who is then responsible to pay

for all goods listed on it.

b. Collection Notice or Dunning Letter or Demand Letter – is a notification sent to a customer, stating

that the customer is overdue in paying an accounts receivable to the sender; typically a progression

from polite reminders to more strident demands for payment, if the customer continues to be non-responsive in paying.

c. Collection Receipt – a pre-numbered document issued to a customer as a proof of payment for the purchases of goods.



FINANCE POLICY

MANUAL BILLING AND COLLECTION

REF.

NUM.

VCFP0003

PAGE 1

of 4

DATE:

APRIL 1,

2015


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d. Charge Invoice – a commercial document issued by a seller to a buyer, relating to a sale transaction

and indicating the products, quantities and agreed prices in exchange of goods for a promise offuture payment.

e. Acknowledgment Receipt – documents or acknowledges the receipt of payment specifying theamount, check number and payor.


I. Billing

On a periodic basis (weekly or monthly), Credit and Collection shall issue a billing statement

to customers with the attached photocopies of delivery receipts and charge invoices.

Credit and Collection shall ensure the immediate remittance of billing statements with the

accurate name of addressee indicated. Follow through shall be made to check if statements

were received.

II. Collection

Daily monitoring of collection shall be made by Credit and Collection in coordination with

Sales and other Collection in-charge. CCD shall ensure that all payments should be deposited

or made on or before due date. Non-compliance shall be immediately addressed to Sales for

immediate action.

Reckoning date to determine the term maturity shall commence from the invoice date. Invoice

date shall be the same with the delivery date which pertains to the actual date of withdrawal of

stocks for delivery.

Credit and collection initializes any collection efforts that may be required, including phone

calls, reminder notices, etc, which will be directed to Sales. In the event that a customer

disputes a charge, Sales Department in coordination with Credit and Collection will be

responsible for resolving the disputed items.

Collection of accounts shall be acknowledged through the preparation of Daily Collection

Report by Sales. The original Collection Receipt shall be sent by mail to the customer upon

clearance of payment.



FINANCE POLICY


REF.

NUM.

VCFP0003

PAGE 2

of 4

DATE:

APRIL 1,

2015


20/124

Sales shall be responsible in the issuance of Collection Receipts and shall indicate the required

collection details, which shall include, but not limited to the following:

Date of Collection (Official Receipt Date)

Complete Customer Name and code

Complete mailing address of the customer

Details of payment application (invoice no., date, amount)

Details of deduction applied to invoice (EWT, Fuel Expenses, etc.)

TIN

Form of Payment and details (bank/branch, check no., check date) Amount

Sales shall be responsible in mailing the original Collection Receipts to customers.

III. Form or Mode of Payment

As a general rule, the acceptable modes of payment are as follows:

1. Currency/Bounced Proof Bank Instrument (Manager’s check/Cashier’s Check)

2.

Personal/Company Checks, provided:

Issuer is the customer himself or the duly designated bank signatory/ies of a Corporation,

Cooperative, or Partnership.

Cleared locally

Drawn from Universal Banks

3. Fund Transfers

4. Online Payments

5. Debit or Credit Card

In general, payments through cash shall be considered unacceptable and should not be received

by any company employee. In special cases, Sales representative shall be the one authorized

to receive cash payments for immediate deposit on accredited banks or remittance to Cashier

– main office.

Checks shall be payable to VEPCO Group Distribution Corp.



FINANCE POLICY


REF.

NUM.

VCFP0003

PAGE 3

of 4

DATE:

APRIL 1,

2015


21/124

IV. Collection Notices

Collection Notices or Dunning Letter shall be issued to customers with overdue account as

follows:

1st Notice – 7 days overdue

2nd Notice – 15 days overdue

Final Notice – 30 days overdue

The first and second notices (2 copies) shall be issued by CCD which shall be forwarded to

Sales, which in turn shall forward the same to the customer. Sales shall ensure that one copyof the notice will be returned to CCD with signature of the customer confirming the receipt.

The aforementioned guideline shall in no way prevent the concerned groups (Credit andCollection or Sales) from endorsing the account earlier to Legal and Compliance Department

when, upon their discretion, the account shall be deemed more effectively handled/settled

through legal means.

The final collection notice may be served earlier or later depending primarily onrecommendation from Sales, especially if terms of settlement are being negotiated with the

account. Final notice shall be already served by the Legal and Compliance Department. CCD

shall forward copies of the First and Second Collection Notices to LCD as reference for theissuance of the Final Collection Notice.



FINANCE POLICY


REF.

NUM.

VCFP0003

PAGE 4

of 4

DATE:

APRIL 1,

2015


22/124


All dated check or cash collections shall be remitted either to Sales Department at Main Office – Cagayan

de Oro or deposited to the account of the company at designated banks on the same day the collection was

made or at the latest, on the following banking day. Electronic fund transfers made by customers shall be

monitored by Sales and verified by Treasury Division. Postdated check (PDC) collections shall be turned

over to Treasury Division for safekeeping until maturity date.

Purpose

To ensure proper remittance of all collected payments and monitoring of deposits. In addition, a consistent

process of documenting receipts and deposits is an important internal control practice to ensure the

security of assets and the accuracy of revenues.

Scope

This policy applies to all customer payments including related companies.



Treasury Division

Sales Department

Definition of Terms

a. Post-dated Check – is a check on which the issuer has stated a date later than the current date and

can be encashed or deposited on that maturity date only.

b. Dated Check – check readily available for deposit.

c. Maturity Date – date on which a check becomes due for settlement.



FINANCE POLICY

MANUAL RECEIPTS AND DEPOSITS

REF.

NUM.

VCFP0004

PAGE 1

of 3

DATE:

APRIL 1,

2015


23/124


I. Remittance

The following shall be the designated centers for remittance of payments which shall in turn

be forwarded to main office or deposited to accredited banks. All remittances and deposits

shall be monitored by Sales.

RTS Tibungco Garage

Velox Gas Stations

Centro Supersales Inc.

Designated centers should maintain a monitoring of all received checks and should prepare a

transmittal form upon remittance of checks to the main office. All transmittal shall be received

by the Accounting (Receiving) Staff and will be forwarded to assigned Sales representative.

On a daily basis, upon receipt of payment, Sales shall immediately prepare a daily collection

report indicating the customer name, bank/branch, check number, amount, invoice number and

invoice date. For electronic fund transfers or deposits made outside Cagayan de Oro, the same

shall be verified and updated in the Daily Collection Report with the attached validated fundtransfer or deposit slip.

Daily Collection report together with the attached payments shall be forwarded to Treasury

Department which shall do the following:

Dated Checks – prepare immediately deposit slips and facilitate immediate deposit within

8 banking hours from receipt

Post-dated Checks – update record, prepare deposit slip and file in a vault for safekeeping

Regular monitoring should be made to ensure deposit on maturity date.

Electronic Fund Transfers – confirm credit of the fund transfer made and update record.

A copy of the daily collection report shall also be forwarded by Sales to Credit and Collection

for monitoring purposes.



FINANCE POLICY


REF.

NUM.

VCFP0004

PAGE 2

of 3

DATE:

APRIL 1,

2015


24/124

II. Deposits

Only authorized company employee shall be allowed to make deposits as initiated by Treasury

or in cases of out of town payments, by Sales.

Treasury should maintain a monitoring of all checkpayments for deposit and shall ensure the

remittance of validated deposits slips immediately after deposit.

Validated deposit slips remitted should be reconciled with the monitoring of checks for deposit

III. Recording

All confirmed deposits or payments shall be posted and applied in the system within 8 working

hours from deposit date. Below details should be reflected in the system:

Document Date – Received Date of Payment

Posting Date – Deposit Date

Due Date – Check Date

Amount – Check or Payment Amount

Check Details – Bank/Branch, Check Number

Customer Name – to which payment shall be applied

It is the responsibility of Treasury Division to ensure the accuracy of all posted payments based

on the daily collection report submitted by Sales. Upon completion of application, Treasury

shall stamped the daily collection report as posted.



FINANCE POLICY


REF.

NUM.

VCFP0004

PAGE 3

of 3

DATE:

APRIL 1,

2015


25/124


A bounced check incidence shall cause immediate suspension of deliveries and non-processing of sales

order until the returned check is redeemed and resulting penalties settled.

The same policy shall be applicable for held checks.

Purpose

To establish the standard procedure on incidents of bounced and held check and the corresponding

penalties.

Scope

This policy applies to all customers and shall include incidents of holding of checks by customers.



Treasury Division

Sales Department


Definition of Terms

a. Bounced Check – a check returned by the bank due to insufficient funds or closed account.

b.

Held Check – check put on hold for deposit by customer due to insufficient funds.

c. F-rated Customer – tagging of a customer with a record of bounced check

d. Notice of Dishonor – a letter sent to the customer notifying the incident of bounced check;

indicated in the notice is the demand to replace payment including applicable charges.



FINANCE POLICY

MANUAL BOUNCED CHECK

REF.

NUM.

VCFP0005

PAGE 1

of 3

DATE:

APRIL 1,

2015


26/124


I. Notification on Bounced Check or Holding of Check

Upon receipt of advice from Bank regarding the bounced check, Treasury Division shalimmediately prepare a Bounced Check Advice. Bounced check advice will be submitted for

approval by the Accounting Manager and shall be forwarded to Legal and ComplianceDepartment for the preparation of Notice of Dishonor. Notice of Dishonor shall be forwarded

to Sales, which shall in turn forward the same to the customer for immediate payment

Treasury shall also prepare a Request for Adjustment to be forwarded to Accounting who will

prepare the necessary adjusting entry to reverse payment.

“No Holding of Checks” policy shall be implemented. Checks received will be deposited on

maturity date otherwise an advice from customer is received prior maturity date.

All holding of checks shall be directly coordinated by customers to Sales. Sales in the form ofan email shall advise Treasury Division and Credit and Collection regarding the holding of

check. Below details shall be emailed:

Customer Name

Check details put on hold – Bank, Check Number, Amount

Upon receipt of advice from Sales regarding the holding of check, Treasury Division shall holdthe deposit of the check. Credit and Collection shall issue Notice of Held Check to Sales which

shall in turn forward the same to the customer. Applicable penalties and charges will be

indicated in the Notice. Advice to deposit the check already will also be coursed through email by Sales, otherwise shall be replaced with other mode of payment.

II. Penalties and Charges

For bounced check, customer shall shoulder bank charges and shall pay a 12% p.a interest andshall be computed based on the days arrears (from date of bounced check).

For holding of check, customer shall pay a 12% interest p.a and shall be computed based onthe days arrears (from due date based on customer’s credit term).

III. Replacement of Bounced Check or Check on Hold

Replacement for Bounced Check/Check on Hold should be made through fund transfer ordirect deposit from customer. If customer shall insist to pay through check, interest shall apply

until check payment is deposited and cleared.



FINANCE POLICY


REF.

NUM.

VCFP0005

PAGE 2

of 3

DATE:

APRIL 1,

2015


27/124

The bounced check or held check shall not be returned to the customer until a replacement is

received.

Unredeemed/outstanding returned checks shall remain in the custody of Treasury Division.

IV. F-rating of Customers

The credit facilities of F-rated customers shall be rendered inoperative and no releases shall beallowed until the account is reinstated by the AVP – Finance and CFO. A formal letter of

recommendation shall be submitted by Sales for approval by the AVP-Finance and CFO toreinstate the credit facilities of the F-rated customer.

Subsequent bounced check offense by customers previously f-rated and whose credit facilitieswere reinstated, shall automatically render the reinstated credit line/term inoperative.

Credit and Collection division shall monitor the bounced check offenses and redemptiondetails of its customers by maintaining control records.

A report on bounced checks incidences and their updated status shall be prepared by CCD on

a monthly basis.

V. Non-replacement of Bounced Check

In cases wherein the customer failed to replace the bounced check as required in the Notice of

Dishonor, the policy on the issuance of Collection Notices shall apply.



FINANCE POLICY


REF.

NUM.

VCFP0005

PAGE 3

of 3

DATE:

APRIL 1,

2015


28/124


All outstanding accounts receivable shall be collected and in case of balances shall be reconciled

immediately and collected or adjusted as the case may be.

Purpose

To ensure proper management of company’s accounts receivables.

Scope

This policy applies to all outstanding accounts receivable including that of the related companies.


Sales Department


Accounting Division

Definition of Terms

a. Accounts Receivable – a legally enforceable claim for payment from a business to itscustomer for goods supplied in execution of the customer’s order.


I.

Reconciliation and Application

On a daily basis, Credit and Collection shall check all customer outstanding balances for

follow through of collection with Sales. Hanging Balances after application of payment shal

be followed through with Sales for reconciliation and immediate collection or adjustment.

In cases of adjustments, the standard procedure on Request for Adjustments shall apply.



FINANCE POLICY

MANUAL DELINQUENT, LEGAL AND

OTHER ACCOUNTS

REF.

NUM.

VCFP0006

PAGE 1

of 5

DATE:

APRIL 1,

2015


29/124

On a regular basis as agreed with Sales, Credit and Collection shall provide report on the

updated customer balances for collection.

Follow through of collection with Sales should be properly documented by Credit and

Collection in a monitoring as basis for succeeding follow ups.

II. Delinquent Accounts

An account is considered delinquent when it incurred 60 days overdue.

CCD shall monitor delinquent accounts and shall prepare a Monthly Delinquent AccountReport, showing the details of the invoices and the updated status.

III. Legal Accounts

Accounts shall be endorsed to Legal and Compliance Department for the issuance of Final Notice of Collection or as initiated by Sales or CCD, as the case may be, after all means of

collection have been exhausted.

Relevant information on the status (age) of the account, current financial, and/or operationalcondition of the customer’s business are some of the considerations in endorsing the account

to Legal.

No further deliveries shall be allowed to accounts already endorsed for legal action.

LCD shall furnish CCD the Monthly Development report – development of each case under

Legal.

Credit and Collection Department shall, in turn incorporate these updates in the Monthly

Delinquent and Legal Accounts Reports for submission to Management.



FINANCE POLICY

MANUAL

DELINQUENT, LEGAL AND

OTHER ACCOUNTS

REF.

NUM.

VCFP0006

PAGE 2

of 5

DATE:

APRIL 1,

2015


30/124

IV. Other Accounts

Any discrepancy noted between the payment of customer and the invoice amount is

considered as other account.

Invoice Amount Php 100,000.00

Customer’s Payment 95,000.00Other Accounts Php 5,000.00

V.

Nature of Other Accounts

Expanded Withholding Tax – 1% tax withheld by a VAT entity belonging to Top 10,000corporations from their supplier of goods and services

CCD shall ensure that the customer is a withholding agent by requiring them to submit

a certification from the BIR stating that they are belonging to the Top 10,000

corporations and is authorized as a withholding agent.

All EWT withheld by the customer shall be covered by an EWT certificate to be

submitted every 10th day of the following month or 10th day following each quarter

depending on the account’s schedule of remittance to BIR

The certificate shall include the following information:

o Payer and Payee’s name

o Payer and Payee’s TIN

o Amount Withheld

o Signature of authorized representative

o Position of the authorized representative

CCD Shall reconcile EWT certificate issued by the account vs. the deductions made

from payment

In case certificate issued does not tally with the deductions, CCD shall immediately

issue discrepancy notice to Sales which in turn shall forward to account for settlementThe certificate shall be returned together with the discrepancy notice.



FINANCE POLICY

MANUAL


OTHER ACCOUNTS

REF.

NUM.

VCFP0006

PAGE 3

of 5

DATE:

APRIL 1,

2015


31/124

If reconciled already, a request for adjustment will be prepared by CCD and shall

forward the same once approved to Accounting Division for preparation of adjusting

entry. A copy of the certificate shall also be forwarded by Accounting to Legal andCompliance Department for BIR filing.

Special discounts – discount extended to selected trade partners as a subsidy or incentive forachieving targeted sales

CCD shall secure approved memo from Sales on the special discount given to the

customer. Memo should be approved by the Chief Finance Officer.

CCD shall ensure that the rate or amount specified in the memo is the same as the

customer’s computation.

CCD shall prepare a request for adjustment upon reconciliation and shall forward the

same to Accounting once approved together with the memo from Sales for preparation

of adjusting entry.

CCD shall issue a discrepancy notice to the customer through Sales in case of variance

noted.

Underpayment – any discrepancy noted between invoice amount and customer paymentwhich is not identified or recognized by Sales.

CCD shall issue a discrepancy notice to the customer through Sales and shall be paid

by the customer immediately.

Charged to Salesman or Driver – any deduction arising from the negligence of trucker orsalesman.

If deduction is charged to Driver, Delivery Discrepancy Report (DDR) will be

submitted by Logistics which states the charging of amount to the specific driver and

corresponding details of delivery.

If deduction is charged to Salesman, Salary Deduction Authority (SDA) signed by the

Salesman and approved by his Sales Manager shall be submitted.

CCD shall prepare request for adjustment upon receipt of required documents for

submission to Accounting Division for preparation of adjusting entry.



FINANCE POLICY

MANUAL


OTHER ACCOUNTS

REF.

NUM.

VCFP0006

PAGE 4

of 5

DATE:

APRIL 1,

2015


32/124

Fuel Expense – are deductions made from fuel expenses of tankers to the customer’s station

A copy of the receipt must be submitted by the customer for verification by CCD as

to the plate number and driver assigned.

Upon reconciliation, request for adjustment will be submitted to Accounting for

preparation of adjusting entry.



FINANCE POLICY

MANUAL


OTHER ACCOUNTS

REF.

NUM.

VCFP0006

PAGE 5

of 5

DATE:

APRIL 1,

2015


33/124


The company's Purchasing department will use good purchasing methods to optimize price savings

quality or value of products, and vendor working relationships and assure proper inventory control and

inspections, in accordance with company, regulatory, and customer requirements.

Purpose

To provide procedures for procurement methods and completion of related documents prior payment

processing.

Scope

This policy applies to purchases of non-inventory items.


Purchasing Department

Definition of Terms

a. Procurement - The activity of acquiring goods or services to accomplish the goals of an

organization.

b. Non-inventory Items - is a type of product that is purchased or sold but whose quantity is no

tracked. This type of items are purchased for company use or custom product purchased for

projects.



FINANCE POLICY

MANUAL

PROCUREMENT OF NON-

INVENTORY ITEMS

REF.

NUM.

VCFP0007

PAGE 1

of 4

DATE:

APRIL 1,

2015

http://www.businessdictionary.com/definition/activity.htmlhttp://www.businessdictionary.com/definition/acquirer.htmlhttp://www.businessdictionary.com/definition/goods.htmlhttp://www.businessdictionary.com/definition/services.htmlhttp://www.businessdictionary.com/definition/accomplish.htmlhttp://www.businessdictionary.com/definition/goal.htmlhttp://www.businessdictionary.com/definition/goal.htmlhttp://www.businessdictionary.com/definition/accomplish.htmlhttp://www.businessdictionary.com/definition/services.htmlhttp://www.businessdictionary.com/definition/goods.htmlhttp://www.businessdictionary.com/definition/acquirer.htmlhttp://www.businessdictionary.com/definition/activity.html


34/124

Detailed Policies and Procedures on Procurement of Non-inventory items

I. Order Determination and Requisition

The following non-inventory requests necessitate Purchase Request form and corresponding

Purchase Order:

Equipment

Office supplies

Uniforms

Construction/ repair tools

Repairs and maintenance (e.g. for service vehicles)

Materials for station operations (e.g. calibration bucket and dipstick)

The requesting individual or department must fill up the pre-numbered (series per department)

Purchase Requisition form (PR) with the following needed information:

Requestor’s name and contact number

Date prepared

Date needed

Cost Center

Recommended supplier (based on canvass)

Terms

Purpose

Complete description with part or model numbers if available

Quantity

UOM

Price

Any supporting documentation should be attached to Purchase Requisition form such as

quotations and contracts.



FINANCE POLICY

MANUAL

PROCUREMENT OF NON-

INVENTORY ITEMS

REF.

NUM.

VCFP0007

PAGE 2

of 4

DATE:

APRIL 1,

2015


35/124

The requesting individual or the Purchaser will perform canvass on three suppliers, at a minimum

for the needed item/s and ask for copy of the suppliers’ quotations. The terms, supplier, pricing,

quantity breaks, etc. must be analyzed accordingly in the company's best interest. The Purchase

Requisition form with the attached quotations will be submitted for recommending approval to

his/her immediate head and to the CFO for final approval. Once approved, the request will be

forwarded to the Purchaser for Purchase Order (PO) creation in the system. *Note: There is no

need to perform canvass if the company has already established preferred suppliers which have

been proven to be giving the best price and best terms. But still, the quotation of the preferred

supplier must be attached to the Purchase Requisition form.

II. Order Placement

Purchaser ensures that the details in the request are completely and correctly filled up, with

signature of the needed approvals and attached with the appropriate quotation/s.

In cases when the chosen supplier is not yet registered in the system, the Purchaser fills up

the Vendor Set-up Form and forwards to the Accounting Supervisor for system creation

(Note: All suppliers/payees must have individual vendor card in the system.)

The Purchaser will create PO in the system based on the approved request and print the PO in

2 copies- supplier copy and advanced accounting copy. The Purchaser will note the PO

number in the lower portion of the PR. Purchaser will then forward the PR with the attached

quotations and the printed POs to the AVP- Finance for the required signature.

Once approved, the Purchaser will give the supplier copy of PO to the supplier or the requesting

individual who will in turn give it to the supplier (whichever is applicable). The accounting copy

together with the PR and quotation, will be forwarded to the Accounting (Receiving) Staff,

awaiting receipt of corresponding supplier copy of PO and supplier invoice in the future.

The Purchaser may also fax or e-mail the order.

The Purchaser will follow-up on shipping, delivery, expediting and partial shipments of

ordered items to assist inventory with consistent customer demands and other departments

operational requirements.

The Purchaser may either follow up by phone (which requires adequate notes of the

conversation) or use a Purchase Order Follow-up to verify, trace, or expedite orders.



FINANCE POLICY

MANUAL

PROCUREMENT OF NON-

INVENTORY ITEMS

REF.

NUM.

VCFP0007

PAGE 3

of 4

DATE:

APRIL 1,

2015


36/124

III.

Receiving

Upon delivery of the items ordered, the supplier must be able to present his/her copy of the PO

with the corresponding invoice or delivery receipt. The supplier must not retain the original PO

once served to avoid re using PO. Without the original PO, the Receiving Personnel must not

receive the delivery. When the documents are already checked as correct and complete, the

Receiving Personnel will inspect, count the items and match the items delivered with the items in

the PO. Items received should be according to the PO description and quantity.

In cases wherein the supplier failed to present the required PO copy, the Purchaser can also provide the company receiver copy of the PO as basis to receive orders. Still, supplier has to

forward the original supplier’s copy of PO as part of the company’s payment requirement.

Note:

If there is over delivery, where the quantity of items is higher than PO or there are items

delivered not included in the PO, such excess items shall be coordinated with the

Purchaser for approval by CFO whether to accept or reject the items.

In case items are rejected, the corresponding supplier DR or Invoice shall be corrected

accordingly and signed by the supplier or the delivery agent.

Receiving Personnel shall promptly conduct a visual examination of all orders. If an order has

apparent damage, it is rejected.

Once the matching and examination is finished, the Receiving Personnel signs the supplier

invoice to acknowledge receipt of goods. The PO and the supplier invoice will be sent to the

Purchaser. Any count discrepancies will be noted on the PO and supplier Invoice.

IV. Recording and Matching

Once the PO and supplier Invoice are received from the Receiving Personnel, Purchaser willthen check that what was ordered was actually received and is priced according to the PO. For

any price variance, Purchaser will inform supplier but still PO price is followed for payment

For any noted quantity discrepancies, Purchaser will follow up with the supplier to resolve

them. Once settled, the PO and the supplier Invoice will be forwarded to Accounting

(Receiving) Staff.

For the over delivery, purchase requisition and purchase order shall be completed for the

additional stocks received and shall be submitted to the Accounting (Receiving Staff).



FINANCE POLICY

MANUAL

PROCUREMENT OF NON-

INVENTORY ITEMS

REF.

NUM.

VCFP0007

PAGE 4

of 4

DATE:

APRIL 1,

2015


37/124


The company's Purchasing department will use good purchasing methods to optimize price savings

quality or value of products, and vendor working relationships and assure proper inventory control and

inspections, in accordance with company, regulatory, and customer requirements.

Purpose

To provide procedures for procurement methods and completion of related documents prior payment

processing.

Scope

This policy applies to purchases of fuel inventory.


Purchasing Department

Definition of Terms

a. Purchase – the cost of buying inventory during a period for the purpose of sale in the ordinarycourse of the business.

b. Inventory Items – Inventories are assets:

(1.) held for sale in the ordinary course of business;

(2.) in the process of production for such sale; or

(3.) in the form of materials or supplies to be consumed in the production process or in

the rendering of services.



FINANCE POLICY

MANUAL

PROCUREMENT OF FUEL

INVENTORY

REF.

NUM.

VCFP0008

PAGE 1

of 3

DATE:

APRIL 1,

2015


38/124


I. Order Determination and Requisition

Logistics Manager will prepare a manual purchase requisition slip and shall forward it to

General Manager for approval. General Manager will run-through request, consider received

orders and indicate allowed purchase and approval. Quantity requirement will be compared

to vendor pricing schedules.

II.

Order Placement

Purchase Order should contain all applicable information, and be authorized by the

appropriate party or parties.

General Manager shall prepare in duplicate copy Purchase Orders for all items orders. For

inventory items, preprinted/prenumbered Purchase Orders shall be prepared manually and a

copy shall be sent to supplier thru email by Logistics Manager. Logistics Manager will be

responsible to follow-through orders and ask for supplier’s copy of Sales Order to ensure

accepted orders.

Logistic Manager will follow-up on shipping, delivery, expediting and partial shipments of

ordered items to assist inventory with consistent customer demands and other departments

operational requirements.

Logistic Manager may either follow up by phone (which requires adequate notes of the

conversation) or use a Purchase Order Follow-up to verify, trace, or expedite orders.

III.

Recording and Matching

Once purchase of inventory items is confirmed thru receipt of Supplier’s Sales Order,

Logistics Manager will print received document and immediately record PO in the system.



FINANCE POLICY

MANUAL

PROCUREMENT OF FUEL

INVENTORY

REF.

NUM.

VCFP0008

PAGE 2

of 3

DATE:

APRIL 1,

2015


39/124

Logistic Manager will indicate system PO number on preprinted Purchase Order and stamp it

“POSTED” accordingly after recording.

Receiving will then be furnished with the Supplier’s Sales Order and a copy of posted

purchase order. Purchasing copy of PO will be filed by series.

IV. Receiving

Receiving Report shall be generated immediately upon approval of Purchase Order by theSupplier and once received by the driver/delivery man.

The Logistics Manager should record receipt of items in the system and print 2 copies ofreceiving report(RR) , indicating the supplier or vendor’s name, the PO number, Delivery

receipt number and the invoice number, the date of receipt, the description and quantity of theitems. The receiving report must be signed by the Logistic Manager as authorized personnel

to input Goods Receipt Purchase Order (GRPO) in the system.

A copy of purchase order, Goods Receipt Purchase Order in the system, delivery receipt and

supplier invoice should be sent by Logistics to Accounts Payable department to process payment.

A copy of the receiving report is to be retaining for filing by logistics.



FINANCE POLICY

MANUAL

PROCUREMENT OF FUEL

INVENTORY

REF.

NUM.

VCFP0008

PAGE 3

of 3

DATE:

APRIL 1,

2015


40/124


Disbursements shall be documented by a standard Request for Payment form as basis by Accounting to

process payment. This will only cover expenses indicated in this policy.

Proper internal control will be followed to ensure that only valid and authorized payables are recorded

and paid. Accounting procedures will be implemented to ensure the accuracy of amounts, coding of

general ledger accounts and appropriate timing of payments.

Purpose

To explain the procedures for documenting, recording and processing of Request for Payments.

Scope

This policy applies to all disbursements subject to Request for Payment.


Accounting Division

Definition of Terms

a. Request for Payment - This form is used to request payment to a company or individualwhen a purchase order is not required. This will serve as the basis of Finance to process

payment together with the required attachments.



FINANCE POLICY

MANUAL

DISBURSEMENTS -

REQUEST FOR PAYMENT

REF.

NUM.

VCFP0009

PAGE 1

of 5

DATE:

APRIL 1,

2015


41/124


I. Documentation

The following transactions/expenses do not necessitate Purchase Orders and thus need the

Request for Payment (RFP) form from the requesting individual:

Construction/renovation works

Communication expenses Fuel and transportation expenses

Postage expenses

Registration expenses

Taxes and licenses

Trucking expenses

SSS, Philheath and Pag-ibig contributions

Employee benefits

Entertainment and representation expenses

Meal and snack allowances

Professional fee

Notarial expenses

Salaries expense

Travel expenses

Utilities expense

Security expense

Rent expense

Donations and contributions

Bank service charges

DSLC charges

Insurance expense

Interest expense



FINANCE POLICY

MANUAL

DISBURSEMENTS -

REQUEST FOR PAYMENT

REF.

NUM.

VCFP0009

PAGE 2

of 5

DATE:

APRIL 1,

2015


42/124

The RFP form must be filled up completely with the following needed information:

Date prepared

Date required

Payee

Total amount

Mode of payment if in check/cash/fund transfer

Details of the transaction

Requesting individual’s name, signature and contact number

RFP must be attached with the proper documents. To complete the form, the requesting individual

must secure the recommending approval of the immediate head.

Below are the transactions with RFP and their appropriate attachments which must be forwarded

to the Accounting Department for processing:

Expenses

o Request for Payment

o SOA/Billing

o Confirmed Delivery Receipts/Driver’s Report (additional for Trucking)

o

Charge Invoices (for fuel expense)o Contract (for Rent) or confirmation from Legal regarding the completion of

contract

o Appropriate form from the Government Office (for Taxes)

Construction/Renovation works


o Notice to Proceed (upon down payment)

o Contract/Written Agreement (upon down payment)

o SOA/Billing (from 1st – 2nd billing)

o Acknowledgment/Certification from Engineer on the progress of work

o

Certificate of Acceptance (final billing) – shall be required for contractor final progress billing only

Payroll/ Other Government-mandated benefits


o Summary Report from HR Department



FINANCE POLICY

MANUAL

DISBURSEMENTS -

REQUEST FOR PAYMENT

REF.

NUM.

VCFP0009

PAGE 3

of 5

DATE:

APRIL 1,

2015


43/124

Fund


o Petty Cash Fund (Expense Report, Petty Cash Vouchers and receipts)

o Revolving Fund (Expense Report, Cash Vouchers and receipts)

o Weekly Itinerary/Activity Report, Fuel Monitoring Card (additional for Salesreplenishment of revolving fund)

Employee Development (Training, Seminars, other company activities


o Activity Form

Reimbursements


o Expense Report

o Receipts

Cash Advances


o Cash Advance Form

Once the accounts payable department has all of the above documents, the following steps will be

performed to ensure proper authorization, validity of transaction, and accuracy of amounts.

Accounting (Receiving) staff ensures that all the data fields in the RFP must be completely

and correctly filled up, with signature of the recommending approval and attached with theappropriate documentation.

Incomplete forms and those lacking the required documentation and signature will not be

received by the Accounting (Receiving) Staff.

If the documents are already complete and correct, Accounting (Receiving) Staff notes the

date and time of receipt on the lower part of the RFP and indicates the cost center of the

said request. For monitoring purposes, Accounting (Receiving) Staff makes excelmonitoring and logs all received requests. The control number generated from this

monitoring will also be noted on the RFP. The form and its attachments will then beforwarded to the AVP- Finance for final approval.



FINANCE POLICY

MANUAL

DISBURSEMENTS -

REQUEST FOR PAYMENT

REF.

NUM.

VCFP0009

PAGE 4

of 5

DATE:

APRIL 1,

2015


44/124

AVP- Finance evaluates the nature of the request and checks the amounts on the

SOA/billing/contract and other required attachments prior approval.

Once approved, Accounting (Receiving) Staff updates the status of the RFP in the excel

monitoring and forwards the documents to the AP Analyst.

II. Recording

AP Analyst will record the transaction by creating Journal Voucher Entry (JVE) in the system.

Once created, Vendor number and JVE number are filled in on the lower portion of the RFP. The

RFP with the appropriate attachments will then be forwarded to the Accounting Supervisor for

checking.

Accounting Supervisor reviews the completeness of the form, attachments and needed approvals,

and checks the accuracy of cost center and GL account/s used. Once reviewed, this will be

forwarded to the Accounting Manager for final approval and posting of the entry in the system

The approved documents will be forwarded back to the AP Analyst.

These will be temporarily filed alphabetically by supplier name in the unpaid invoice files to await

payment.

III. Payment of Accounts Payable

AP Analyst selects outstanding payables for payment according to their terms. Accounts payable

should normally be paid within two days before their due dates unless otherwise determined by

the Accounting Manager.

Any debit balances (amounts owed to the company) should be applied to credit amounts when

determining payment.

AP Analyst will create an outgoing payment and send it via the system for approval to the

Accounting Manager. The Accounting Manager checks the correctness of the applied payments.

Once approved by the Accounting Manager, AP Analyst forwards the documents to the Treasury

Staff.



FINANCE POLICY

MANUAL

DISBURSEMENTS -

REQUEST FOR PAYMENT

REF.

NUM.

VCFP0009

PAGE 5

of 5

DATE:

APRIL 1,

2015


45/124


Purchase of office equipments, furnitures and fixtures and other non-inventory items shall be subject to

Purchase Requisition. Proper internal control will be followed to ensure that only valid and authorized

purchases are recorded and paid. Accounting procedures will be implemented to ensure the accuracy of

amounts, coding of general ledger accounts and appropriate timing of payments.

Purpose

To explain the procedures for payment processing of purchase requests.

Scope

This policy applies to all disbursements subject to Purchase Requisition.


Accounting Department

Definition of Terms

a. Non-inventory Items - is a type of product that is purchased or sold but whose quantity is not

tracked. This type of items are purchased for company use or custom product purchased forProjects.


I. Documentation

The Accounting (Receiving) Staff will match the supplier copy of the PO and supplier invoice

received from the Purchaser against the advanced accounting copy of the PO and attached PR and

quotations. Once matched, the documents are forwarded to the AP Analyst, attached in the

following order:

Supplier Invoice

Purchase Order(2 copies)



FINANCE POLICY

MANUAL

DISBURSEMENTS –

PURCHASE REQUISITION

REF.

NUM.

VCFP0010

PAGE 1

of 3

DATE:

APRIL 1,

2015


46/124

Purchase Requisition form Quotation Canvass forms (if required)

For monitoring purposes, Accounting (Receiving) Staff makes excel monitoring and logs the POnumbers of the transactions forwarded to AP Analyst.

The following steps will be performed by the AP Analyst to ensure proper authorization, validity

of purchase, receipt of purchased items or services, and accuracy of amounts.

AP Analyst checks the completeness and correctness of the documents forwarded for

processing.

AP Analyst reconciles the supplier Invoice with the PO.

Calculations on the invoice will be recomputed such as quantities received multiplied by

unit price and totals.

II. Recording

AP Analyst will post the system Receiving Report (RR) based on the goods acknowledged as

received in the supplier invoice by the receiving personnel and consequently post thecorresponding AP Invoice.

The RR and AP Invoice will be printed and attached on top of the assembled documents. These

will be forwarded to the Accounting Supervisor for review of the attachments, the accuracy of cost

center and GL account/s used. Once reviewed, the Accounting Supervisor

affixes signature on the AP Invoice. The documents will be forwarded for final approval to the

Accounting Manager.


AP Analyst will create an outgoing payment. Any debit balances (amounts owed to the company)

should be applied to credit amounts. The outgoing payment will be sent via the system for approval

to the Accounting Manager. The Accounting Manager checks the correctness of the applied

payments.

Once approved by the Accounting Manager, AP Analyst forwards the documents to the Treasury

Staff.



FINANCE POLICY

MANUAL

DISBURSEMENTS -


REF.

NUM.

VCFP0010

PAGE 2

of 3

DATE:

APRIL 1,

2015


47/124

IV. Purchase Requisition with Request for Initial Downpayment or Full Payment

For purchase requests with initial downpayment, once the purchase requisition and purchase orderis approved, this will be immediately forwarded by the Accounting (Receiving) Staff to the APAnalyst for processing.

A/P downpayment or Advances to Suppliers or Advances to Employee (whichever is applicable)shall be entered. The A/P downpayment voucher or journal voucher will be forwarded to the

Accounting Supervisor for review and to the Accounting Manager for posting. The same shall beforwarded to the Treasury staff for check processing.

For cash purchases or full payment, Advances to Suppliers or Advances to Employee shall beentered.

Upon completion of purchase and payment, the Supplier’s invoice, official receipt and copy ofPurchase Order will be collected by the Accounting (Receiving) Staff for the standard

documentation process.

Upon receipt by the AP Analyst of the complete documents, a Receiving Report and AP Invoiceor Journal Voucher (to close Advances to Supplier/Employee) will be generated for recording

purposes and the printed copies shall be attached to complete the documentation. Documents wil be stamped “Paid” (if full payment was made) in order to avoid double payment of the transaction

If initial downpayment was made, balance shall be processed based on the generated AP invoice

and will go through the standard process of review and approval.



FINANCE POLICY

MANUAL

DISBURSEMENTS -


REF.

NUM.

VCFP0010

PAGE 3

of 3

DATE:

APRIL 1,

2015


48/124


Proper internal control will be followed to ensure that only valid and authorized payables are recorded

and paid. Accounting procedures will be implemented to ensure the accuracy of amounts, coding of

general ledger accounts and appropriate timing of payments.

Purpose

To explain the procedures for documenting, recording and issuing payments for accounts payable

transactions for fuel purchases.

Scope

This policy applies to accounts payable for fuel purchases.


Accounting Department

Definition of Terms

a. Accounts Payable - This current liability account will show the amount a company owes foritems purchased on credit. This account is often referred to as trade payables (as opposed to

notes payable, interest payable, etc.)


I.

Documentation

The following documents shall be forwarded to Accounting Division by Logistics for the processing of Accounts Payable

Acquisitions

o Purchase Requisition (if applicable)

o Purchase Order (PO)



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o

Supplier’s SO

o Goods Receipt Purchase Order (GRPO) , Receiving Report

o Supplier’s Invoice/Statement of Accounts (SOA)

Once the accounts payable analyst has all of the above documents, the following steps will be

performed to ensure proper authorization, validity of purchase, receipt of purchased items and

accuracy of amounts.

The supplier invoice will be stapled on top of the packing slip/supplier’s SO and receiving

report followed by the purchase order and purchase requisition.

The purchase order should be evaluated for proper authorization and the nature of the purchase and pricing as shown on the invoice reviewed for validity.

The quantities shown shipped or delivered on the invoice will be compared to the packing

slip and/or receiving reports. Any discrepancies must be followed-up and resolved prior

to commencing with the voucher process.

Calculations on the invoice will be recomputed such as quantities received multiplied by

unit price and totals.

II. Recording

Once the accounts payable voucher package has been properly assembled and reviewed, the

voucher package will then be posted through an A/P Voucher entry. Accounts Payable Voucher

will then be printed and routed for review and validation to the accounting supervisor. Accounting

supervisor shall also review the accuracy of GL accounts used.

The voucher package will then be temporarily filed alphabetically by vendor name in the unpaid

invoice files to await payment.


Accounts payable vouchers will be selected for payment according to their terms of payment.

Accounts payable should normally be paid within two days before their due dates unless otherwise

determined by the General Manager.



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Any debit balances (amounts owed to the company) should be applied to credit amounts when

determining payment.

A payment voucher will be sent for approval in the system to the Accounting Manager or his

alternate.

Once above conditions are met, AP Analyst prints the vouchers and check or fund transfer slip

Payment Vouchers shall be printed in 3 copies and shall be filed as follows:

CHECK COPY HOW PROCESSED

Original Mailed to the suppliers along with any necessary payment

stubs.

1st copy Attached to the voucher package and filed alphabetically

in the paid supplier files.

2nd copy Filed sequentially in check register folders.

After the checks or fund transfer slip are printed, they will be submitted together with the voucher

package to the CFO for signing.

Signed payment vouchers and checks or fund transfer slip shall be forwarded to Treasury Division

for release or transfer of payment. Once checks are released, voucher package and original

documents shall be perforated to avoid double payment and document reuse. Vouchers shall be

forwarded back to Accounting for filing and follow through of official receipts.

IV. Accounts Payable Aging Report

On a monthly basis, Accounts Payable analyst shall generate an aged trial balance of vendorsaccounts with individual invoice information and days outstanding.

The aging report contains the individual invoices coming to a total balance due to each vendor

along with an age category (30, 60, 90, >120 days). The aging report shall regularly be analysed

overdue identified and addressed immediately.

Timely identification of potential problems and remedial action is the key to successful accounts payable management and good vendor relationship.



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Payment vouchers shall be prepared upon completion of required approval and recording. Approved

vouchers shall be released only to the Payee or its authorized representative. Appropriate internal control

shall be followed to ensure the monitoring of released and unreleased payment vouchers.

Purpose

To explain the procedures for the preparation and release of payment vouchers.

Scope

This policy applies to all disbursements paid through check, cash, and electronic fund transfers.


Treasury Division

Accounting Division

Definition of Terms

a. Payment Voucher – a document which can be used as proof that a monetary transaction hasoccurred between two parties. In business, it acts as a receipt for a check or cash transaction or

indicates that an invoice or disbursement has been approved for payment.

b. Check or Cheque – a written, dated and signed instrument that contains an unconditional order

from the drawer that directs a bank to pay a definite sum of money to a payee; a bill of exchange

where t

Actg Guide

Documents

Transcript of Actg Guide