Accounting Procedure - Ok

Classification:

Title:

LEVEL 2

ACCOUNTING PROCEDURE

Document No:Issue No:

Revision No:Effectivity Date:

KAP-IACP-035-0

1

05/20/11Page 3 of 35Page No:

KAPCO Manufacturing, Inc. KIMS-016-0Integrated Management System

Purpose:

1.1 To maintain and implement efficient service for any minor expenses that are necessary for the conduct of the business.

1.2 To ensure that only authorized disbursements are allowed, accountability is clearly assigned, expenses are properly recorded and reported.

1.3 To utilize and maintain fund for the intended purposes only.1.4 To calculate the employee’s basic remuneration and also special payments such as

overtime, meal allowance less government deductions, insurance and benefits and other personal deductions for a certain period of time as a result of the services rendered for the company.

1.5 To compute and report individual benefits such as Social Security System, Phil. Health Insurance and Pag-ibig Fund for sickness, housing and salary loan and retirement benefits from the government.

1.6 To ensure accurate reporting, timely release of compensation and secure banking transactions.

1.7 To ensure that all disbursements are properly recorded, consistently monitored and strictly controlled.

1.8 To ensure that disbursements are efficiently made in accordance with approved policies, regulations and procedures and that the proper controls are implemented and functioning to protect the cash funds of the company from improper and unauthorized expenditures.

1.9 To ensure that all receivables are correctly billed and collected on a timely basis.1.10 To receive, verify and acknowledge all types of collections and payment to the

company.1.11 To maintain consistency between bank and company records.1.12 To identify errors, consistencies and irregularities through a comparison of recorded

transactions by the bank versus the company records.1.13 To ensure that proper accountability and appropriate transparency are observed and

maintained in all transactions related to the disposal of scrap materials.1.14 To prescribe an acceptable accounting and control systems for the receipt and

disbursement of the scrap fund.1.15 To ensure that all fixed assets and purchased properties and equipments are properly

identified and recorded in the company’s fixed asset ledger.1.16 To maintain and implement uniform and consistent guidelines on capitalization of fixed

assets, the corresponding depreciation calculations according to the established useful life and proper tagging and recording.

1.17 To maintain and implement traceable record movements for any additions, transfers and retirement of fixed assets.

1.18 To provide management and the different departments with timely reports and listing of the properties and equipments under their accountability.

1.19 To provide information that is needed for sound economic decision making.1.20 To prepare financial reports that provides information about a firm’s performance to

external parties such as investors, creditors and tax authorities.1.21 To communicate in the form of financial statements that show in money terms the

economic resources under the control of management.1.22 To make resource allocation decisions between and within companies, organizations

and public agencies.

I. Scope:

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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This procedure is applicable in all areas of business operation of Kapco Manufacturing, Inc.

II. Definition of Terms:

3.1 Petty Cash Fund - is a small amount of discretionary funds in the form of cash used for expenditures where it is not sensible to make the disbursement by check. Otherwise known as revolving fund.

3.2 Cash Advance Slip - is a form used for requesting petty cash for personal benefits and buying small items for company purposes.

3.3 Requisitioner - is an employee who formally request or demand for the use of something.

3.4 Liquidation Form - is a sheet used to breakdown all the expenses incurred including the meal allowance and transportation expenses.

3.5 Originator - is the employee who accomplished the cash advance slip.

3.6 Payroll - is the sum of all financial records of salaries, wages, bonuses and deductions.

3.7 Social Security System (SSS) - is a government program that provides economic assistance to persons faced with unemployment, disability, agedness, financed by assessment of employers and employees.

3.8 Home Development Mutual Fund (HDMF) - populary known as Pag-ibig Fund that provide its members salary loan and adequate housing through an effective savings scheme. It was created to address two of the nation’s basic concerns which are the generation of savings and providing shelter for Filipino workers.

3.9 Philhealth Insurance Company (PHIC) - is a premier government corporation that ensures sustainable, affordable and progressive social health insurance which endeavors to influence the delivery of accessible quality health cares for all Filipinos.

3.10 Purchase Order - is a commercial document issued by a buyer to a seller, indicating types, quantities and agreed price for products or services the seller will provide to the buyer.

3.11 Sales Invoice - is the shipping information that specifies the item number, quantity and unit price.

3.12 Delivery Receipt - is the document accompanying the arrival of items purchased which is signed receipt by Warehouseman to acknowledge possession of the item.

3.13 Obligation - is a requirement to take some course of action.

3.14 Statement of Account - is the summary of the sales invoice outstanding and due for payment.

Classification:

Title:

LEVEL 2




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3.15 Bank Statement - is a summary of all financial transactions occurring over a given period of time which are deposit, transfer, cash withdrawal, remittance, checks cleared, interest and bank charges and other account offered by the financial institution

3.16 Official Receipt - is a written official acknowledgment of the received remittance or money.

3.17 Bank Reconciliation - is the process of comparing and matching figures from the accounting records against those shown on a bank statement. The result is that any transactions in the accounting records not found on the bank statement are said to be outstanding. Taking the balance on the bank statement and adding the total outstanding receipts less the total of the outstanding payments, this new value should (match) reconcile to the balance of the accounting records.

3.18 Register Book - contains date of checks, particulars, clearing date, check number, debit and credit and balances.

3.19 Scrap - is a term used to describe recyclable materials left over from every manner of product consumption such as empty drums and carbouys and rejected HDD materials.

3.20 Gate Pass - is a document to inform security (who shall verify) the validity of an entry or exit of company items for disposal with approval of the authorized company personnel.

3.21 Fixed Assets - are items that have physical substance and a life (useful serviceable period) in excess of three years. Fixed assets are purchased for use in the operation of the business and not intended for resale to customers.

3.22 Cash on Hand - specifically, all money, cash and cash equivalents in the business cash registers and safes on the business premises.

3.23 Cash in Bank - is an investment portfolio, the relatively stable investments that can be easily changed into currency, such as a checking account, treasury bills, a money market account or a money mutual fund.

3.24 Accounts Receivable - is a money owed to a company by its customers, it qualifies as a current asset because the company expects the money to be paid to it within the year.

3.25 Loan/ Notes Receivable Trade - is a money owed to a company by its parent company, Kurosaka Plating Co., Ltd., which is payable for 10 years.

3.26 Unused Direct Materials - are available materials that will become an integral part of the finished product.

3.27 Accounts Payable Trade - is a debt a company must pay off within the year; that is, they are a current liability. Typically, these debts are to the company’s suppliers.

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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3.28 Accrued Expenses - is an accounting expenses recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented on a company’s balance sheet due to the high probability that they will be collected.

3.29 Advances from Parent Company - is a debt a company must pay off within 60 days to parent company for various importation of materials and other items including royalty and freight charges.

3.30 FATR - Fixed Asset Turnover Receipt

III. Reference:

4.1 Generally Accepted Accounting Principles (GAAP)4.2 Control of Records Procedure

IV. Process Flowchart:

5.1 CASH ADVANCE

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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IDENTIFY TYPE OR PURPOSE OF CASH ADVANCE

START

EMPLOYEE BENEFITS DISBURSEMENT EMPLOYEE ADVANCES

PRESENT REQUIRED DOCUMENTS TO HR

FILL-UP EMPLOYEES BENEFITS VOUCHER

REVIEW & APPROVAL BY ADMIN. & GEN. MANAGER

FORWARD EBV & DOCUMENTS TO PETTY

CASH CUSTODIAN

APPROVED ?

YES

NOINFORM EMPLOYEE OF DISAPPROVAL

GET APPROVAL OF ADMIN. MANAGER OR PRESIDENT

RELEASE CASH

FORWARD CA SLIP TO PETTY CASH CUSTODIAN

RECORD CASH ADVANCE

PRESENT PURCHASE REQUISITION DULY

APPROVED BY ADMIN. MANAGER

ACCOMPLISH CASH ADVANCE SLIP

ACKNOWLEDGE RECEIPT OF CASH

KEEP DOCUMENTS IN CA FILE

END

MONITOR CASH ADVANCE FOR LIQUIDATION

CASH ADVANCE LIQUIDATED BEFORE DEADLINE?

START

5.2 LIQUIDATION

NO

YES

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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CHECK PETTY CASH FUND LEVEL

PREPARE PCF SUMMARY TO REQUEST FOR REPLENISHMENT

START

5.3 PETTY CASH REPLENISHMENT & RECORDING

PREPARE COPY OF CASH ADVANCE & INDICATE “FOR

PAYROLL DEDUCTION”

FORWARD TO ADMIN. MGR. FOR APPROVAL

FORWARD TO PAYROLL

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



NOTICE OF NEW EMPLOYMENT FROM HR

GETTING THE SUMMARY OF TIME CHARGES

ENCODING OF TIME CHARGES TO THE PAYROLL PROGRAM & OTHER

MONETARY BENEFITS DUE

START

5.4 PAYROLL FLOW CHART

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



CHECK AP SCHEDULE TO DETERMINE OBLIGATIONS DUE FOR PAYMENT

RETRIEVE SI, DR & PO

PREPARE SUMMARY OF CHECKS

ACCOMPLISH THE CHECK VOUCHER AND CHECKS

DETERMINE BANK FUNDS/ FUND TRANSFER

START

5.5 DISBURSEMENTS / PAYABLE

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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PRINT BANK STATEMENT

CHECK SOA AGAINST REMITTANCE OF CUSTOMER TO THE BANK

RECEIVED SOA & SUMMARY OF SALES FROM SALES SECTION

PREPARE THE SALES JOURNAL

RECORD DETAILS IN ACCTG. SYSTEM

CHECK SOA AGAINST REMITTANCE

START

5.6 COLLECTION

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



SECURE AND PREPARE COPIES OF RELEVANT BANK DOCUMENTS &

RECORD REGISTER BOOK

CHECK THE BANK STATEMENT DETAILS

ESTABLISH TRACKING MEASURE ON DISCREPANCY

PREPARE BANK RECONCILIATION SCHEDULE

PREPARE JOURNAL VOUCHER

PRINT COPY OF BANK STATEMENT

START

5.7 BANK RECONCILIATION

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



OBTAIN COPY OF GATE PASS OF SCRAPPED MATERIALS

PREPARE STATEMENT OF ACCOUNT

MONITOR PAYMENT OF SCRAP THE SOA DRAFT

RECEIPT OF PAYMENT

ISSUANCE OF OFFICIAL RECEIPT

DEPOSIT OF CHECK

OBTAIN COPY OF SOA, CHECK COPY AND DEPOSIT SLIP

SEND SOA TO SCRAPPER FOR PAYMENT

START

5.8 SCRAP FUND MANAGEMENT

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



CONFIRMATION OF RECEIPT OF PROPERTY

ASSIGN PROPERTY TAG

DETERMINE THE LIFE SPAN OF FIXED ASSET

RECORD THE DETAILS OF PROPERTY

PREPARE THE FATR

SIGN THE FATR

RELEASE / ISSUE EQUIPMENT

UPDATE/ GENERATE LAPSING SCHEDULE

PREPARE & ACCOMPLISH JOURNAL VOUCHER

RECORD IN ACCOUNTING SYSTEM

START

5.9 ACCOUNTING AND MANAGEMENT OF FIXED ASSETS

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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BA

MAKE REPORT OF INVENTORY COUNT

RECOMMEND & SIGN-OFF ANY ADJUSTMENT

UPDATE JOURNAL VOUCHJER

UPDATE RECORD IN ACCOUNTING SYSTEM

REFLECT STATUS ON BOOK OF ACCOUNTS

APPROVE THE DISPOSAL OF FIXED ASSET

GIVE INSTRUCTION OF DISPOSAL

SUBMIT STATUS REPORT

KEEP RECORDS

END

5.10 FINANCIAL STATEMENT PREPARATION

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



ENCODING OF PETTY CASHENCODING OF CHECK VOUCHERUPDATING OF CHECK REGISTER BOOKPRINTING OF BANK STATEMENT FOR ALL ACCOUNTSPREPARATION OF BANK RECONCILIATIONJOURNALIZING OF TRANSACTIONS REFLECTD IN BANK ACCOUNTSENCODING CHECK VOUCHER RECEIVINGPREPARATION OF UNUSED DIRECT & INDIRECT MATERIALS & OFFICE SUPPLIESPREPARATION OF ACCRUED EXPENSEPREPARATION OF JOURNAL VOUCHER FOR:SELECTED ITEMSRESTATEMENTLAPSING SCHEDULEAP TRADE & OTHERSW/TAX FOR AP (TRADE, OTHERS, ACCRUED EXPENSE)SALESANY ADJUSTMENT

START

PREPARATION OF NECESSARY ACCOUNT SCHEDULE

PREPARATION OF BALANCE SHEET & INCOME STATEMENT

PREPARATION OF TRIAL BALANCE FOR THE MONTH

SUBMIT TO ADMIN. MANAGER & PRESIDENT FOR ANALYSIS

END

KEEP RECORDS

5.11 BUDGET ALLOCATION

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



MANAGEMENT FUNCTIONS ACCOUNTING SYSTEM

V. Procedure:

Process Activity Responsible Applicable Docs. & Forms / Notes

6.1 CASH ADVANCE/ BENEFITS

PLANNING BUDGETS

COORDINATE & CONTROL

ACTING

EVALUATING

ACCOUNTING RECORDS (LEDGERS & JOURNALS)

PERFORMANCE REPORTS (COMPARISON OF ACTUAL RESULTS WITH BUDGETS)

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



6.1.1 Present necessary documents such as wedding certificate, funeral certificate, birth certificate of the child and other documents to the HR staff.

6.1.2 Request employees benefits voucher.6.1.3 Attach the certificate to be signed by Admin.

Manager for approval.6.1.4 Present the employees benefits voucher with

documents to the petty cash custodian.6.1.5 Hand over the cash to the employee.

6.2 CASH ADVANCE/PERSONAL

6.2.1 Get the approval of Admin. Manager or President for cash advance.

6.2.1.1 Personal cash advance will be approved for the following reasons: sickness/ hospitalization family members and extended family who are living with or dependent on the said employee. Requirements are medical certificate, receipt of medicine, company doctor’s certificate, bill of hospitalization.

6.2.1.2 Maternity for female who is giving birth can get P10,000.00 as SSS cash advance.

6.2.1.3 ATM problem brought by about inadvertent debit. Any valid reasons upon mgt decisions.

6.2.2 Accomplish cash advance slip. Attach necessary documents.

6.2.3 Hand over the cash to the employees.

6.3 CASH ADVANCE/ DISBURSEMENT

6.3.1 Accomplish Purchase Requisition signed by Section Manager.

6.3.2 Receive by Purchasing Staff then forward to Admin. Manager.

6.3.3 Admin. Manager review the purchase requisition if approve or disapprove.

6.3.4 Return to requisitioner if not approve, if approve forward to petty cash custodian.

6.3.5 Accomplish the cash advance slip.6.3.6 Attach the purchase requisition or any supporting

document.

Requisitioner

HR Staff / Admin. Manager

PCF Custodian

Requisitioner

- do –

PCF Custodian

Requisitioner

Purchasing Staff

Admin. Manager- do-

PCF Custodian

Requisitioner- do -

Employees Benefits Voucher

Cash Advance Slip

Purchase Requisition

Cash Advance Slip

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



6.3.7 Hand over the cash to the requisitioner.6.3.8 Signed to confirm receipt on the cash received.6.3.9 Keep cash advance slip in the CA file.

6.4 LIQUIDATION

6.4.1 Monitor cash advance that needs to be liquidated. Advise CA originator that are near the 3-day deadline for liquidating CA.

6.4.1.1 For overdue CA, prepare a copy of CA & indicate “For Payroll Deduction”. Forward to Admin. Manager for approval and to payroll for further processing.

6.4.2 Fill in liquidation form and attach relevant supporting documents.

6.4.3 Revise liquidation form and check supporting documents signed by Admin. Manager for approval. Otherwise, return to originator of CA for revision or completion of supporting documents.

6.4.4 Review if disbursements cited in the liquidation form are within the petty cash fund policies on allowable disbursements. Sign to approve if disbursements are allowable. If not return and inform any revision or reason for disapproval.

6.4.4.1 The fund should only serve the purpose for which it has been set up, expenses, transportation, meal allowance and benefits, purchase of non-stock items, office supplies, small representation & miscellaneous items.

6.4.4.2 Any single disbursement from the fund shall not exceed ten thousand pesos (Php 10,000.00). All disbursements exceeding this amount shall be paid using checks withdrawal from the regular current or checking account.

6.4.5 Forward approved Liquidation Form to Petty Cash Custodian.

6.4.6 Check liquidation form if duly approved by Admin. Manager

6.4.7 Match disbursements in liquidation form and all supporting documents.

6.4.8 Receive excess or hand over cash based on discrepancy between actual expense and cash advance.

6.4.9 Stamp “PAID” to liquidation form and all supporting documents.

PCF CustodianRequisitioner

PCF Custodian

PCF Custodian

- do -

Requisitioner

PCF Custodian / Admin. Manager and Sr. Acctg.

Officer- do-

PCF Custodian

- do -

- do-

- do -

- do-

- do -

Liquidation Form

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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6.4.10 Prepare petty cash voucher based on the liquidation form.

6.4.11 Route PCV for signature. The signatories are petty cash custodian, Admin. Manager and Sr. Accounting Officer.

6.4.12 Stamp “PAID” with PCV number.6.4.13 Keep the Petty Cash Voucher, Liquidation Form

and supporting documents in the PCV file.

6.5 REPLENISHMENT

6.5.1 Conduct cash count.6.5.2 If cash on hand is below 30% of the Petty Cash

Fund (PCF), prepare PCF summary based on closed/ paid transactions in the PCF journal.

6.5.3 Forward the PCF summary and PCV to Sr. Acctg. Officer and Admin Manager for review, checking and approval.

6.5.4 Compare PCF summary with the liquidation forms and supporting documents. If everything is in order, sign the PCF summary to approve replenishment. Otherwise, indicate revisions on the report and return to the petty cash custodian for finalization.

6.5.5 Prepare check for replenishment.6.5.6 Present the check to the bank for encashment.6.5.7 Keep the cash in the petty cash box.6.5.8 Forward the petty cash replenishment form, the

PCF summary and the PCVs to Sr. Accounting Officer.

6.6 RECORDING

6.6.1 Receive the documents from the Petty Cash Custodian.

6.6.2 Access Special Journal in the Accounting System.6.6.3 Using the PCF Summary and the PCVs, enter all

necessary information in the PCV Journal including PCV number, date, debit and credit account charges/ particulars and amount, description and reference number.

6.6.4 Verify if all entries are correct prior to saving.6.6.5 Stamp all PCV with “RECORDED” and date of

actual entry.6.6.6 Keep all the documents in their designated file.

6.7 PAYROLL

6.7.1 Notice of new employment submitted by HR section to the Accounting Dept. on or before

Admin. Mgr & Sr. Acctg. Officer

PCF Custodian- do -

PCF Custodian & Admin Mgr

PCF CustodianSr. Acctg. Officer

& Admin. Mgr.- do -

PCF Custodian- do -- do –

Sr. Acctg. Officer

Sr. Acctg. Officer

- do-- do -

- do -- do –

PCF Custodian

HR Staff

Cash Voucher Receiving Petty Cash Voucher A check revolving fund (petty

cash fund) amounting P50,000 shall be maintained to pay petty cash expenses. Petty cash disbursement summary with PCV’s for the week is submitted to Sr. Acctg. Officer and Admin. Manager every Monday for checking verification.

Petty Cash Voucher

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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employees starts working with the following information:a. Full nameb. Employee Numberc. Position, Section/ Dept. assignedd. Date of Birthe. SSS/TIN/HDMF/PHIC Numberf. Tax Statusg. Date Hiredh. Addressi. Salary/ Wages

6.7.2 Receive summary of time charges from HR Section two days before submission to bank.

6.7.3 Encoding of each employee’s number of worked hours, perfect attendance and other allowances. The payroll software will automatically compute SSS, Philhealth, Pag-ibig Premiums (HDMF) and withholding taxes base on the table of Computation mandated by law.

6.7.4 Encoding of salary deductions such as bank loan and other personal advances. SSS loan and Pag-ibig loan will be done after receiving copy of their salary loan voucher from employee.

6.7.5 Printing of payroll summary for checking and verification by Sr. Accounting Officer.

6.7.6 Submission to the President for signature & approval.

6.7.7 Submission of summary of net salary to the bank through diskette one day before the pay day and withdrawal of cash payroll for those employees without ATM.

6.7.8 Printing and issuance of payslip every 6th and 21st

of the month or during pay day.

6.7.8.1 The payslip will be given only during breaktime and after woking time. No issuance of payslip will be done during working time. Failure to get the payslip on payroll date will mean issuance of the said payslip in the next payroll.

6.7.9 Prepare journal voucher.6.7.10 Record the details of the journal voucher in the

accounting system.

6.8 DISBURSEMENTS/ CHECKS ISSUANCE

6.8.1 Check accounts payable schedule to determine obligations due for payment.

Acctg. Officer

- do -

- do -

Sr. Acctg. Officer

President

Acctg. Officer

- do -

Sr. Acctg. Officer- do -

Acctg. Officer

- do -

Timesheet

SSS & Pag-ibig Salary Voucher Form

Payslip

Journal Voucher

Sales Invoice Delivery Receipt Purchase Order

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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6.8.2 Retrieve sales invoice, delivery receipt and purchase order due for payment.

6.8.3 Prepare summary of checks for approval and signature.

6.8.4 Prepare and accomplish the check voucher and checks.

6.8.4.1 Check for revolving fund must be issued in the name of the bearer.

6.8.4.2 Check for suppliers must ne issued in the name of the company/ payee and not pay to cash or creditor.

6.8.4.3 Checks shall be stamped for deposit only in favor of intended payees.

6.8.4.4 Checks for release and unused check booklets must be kept in a place accessible only to the authorized person.

6.8.5 Determine the balance for sufficiency of funds for payment of checks. Proceed to fund transfer.

6.8.6 Review the summary of checks, check vouchers, check, purchase order, delivery receipt and sales invoice. Otherwise, perform the necessary corrections.

6.8.7 Hand all the documents to the President for signature.

6.8.8 Review if all checks are properly signed by the President.

6.8.9 Get the check for issuance from the storage place.

6.8.10 Require identification card & company ID of supplier’s representative for verification.

6.8.11 Sign & acknowledge receipt of check on the check voucher.

6.8.12 Acknowledge the receipt of the Official Receipt and attach to the check voucher.

6.8.13 Stamp “PAID” on the check voucher and supporting documents.

6.8.14 Record in book of suppliers the details of payment.

6.8.15 Record details in the accounting software all unreleased checks, release check, filed documents including date, name of supplier, debit & credit amount, CV number and particulars.

6.8.16 Separate check voucher with official receipt to other documents.

6.8.17 Store sales invoice, delivery receipt, receiving report to its place for file.

6.8.18 File the check voucher and official receipt. File the sales invoice, delivery receipt, and purchase

- do –

- do –

- do –

Sr. Acctg. Officer & Acctg. Officer

- do –

- do –

Acctg. Officer

- do -

Supplier

Acctg. Officer

Acctg. Officer

Sr. Acctg. Officer

- do -

Acctg. Officer

- do -

- do -

Check Voucher Check Summary of Checks

Collection dates shall be at the end of the month but if the said date fall on Sunday it shall be released every Thursday and Friday from 1:00 PM to 5:00 PM. With the exception of unavoidable delayed payment, which shall be served by accounting section on demand/ request by suppliers. Except in remote cases where the signatories will be out for important reasons, reasonable number of check will be sign in advance to serve the purpose of disbursement.

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

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order per supplier.

6.9 COLLECTION

6.9.1 Print copy of bank statement to check from the bank regarding payment of the customer via telegraphic transfer.

6.9.2 Check statement of account and debit/ credit notes if tally with the remittance of the customer to the bank.

6.9.3 If tally proceed to issuance of official receipt and stamping of “PAID” to the statement of account.

6.9.4 If there is discrepancy, coordinate to the customer for details to check the differences. Otherwise, inform the customer no payment was received and coordinate details.

6.9.5 Prepare the cash receipts journal.6.9.6 Record the details of cash receipts journal in the

accounting system.

6.10 BANK RECONCILIATION

6.10.1 Print copy of bank statement for one month period.

6.10.2 Prepare and obtain the following documents and record:a. Prior month’s bank reconciliation and its

schedule lists.b. Register book containing issued checks,

transfer, interest and charges, remittance and deposits.

6.10.3 Check the bank statement details for reconciliation to the register book to get the outstanding checks, deposit in transit, unrecorded bank charges and any errors.

6.10.4 Establish tracking measures and/ or timeliness to solve the discrepancies. Discrepancies in the results of the bank reconciliation must be addressed by the Accounting Dept. promptly and

Acctg. Officer

Sr. Acctg. Officer

- do -

- do -

- do –- do –

Acctg. Officer

Sr. Accounting Officer

- do -

- do -

Sales Invoice Delivery Receipt Credit & Debit Notes Statement of Account Official Receipts Bank Statement Sales Journal Cash Receipts Journal Terms of payments are

30days, 60days and 120 days. Any payment discrepancy must be supported by debit note and credit note. Payments for all types of service shall be conducted via bank transactions (telegraphic transfer) only. The official receipt shall be issued to the customer only after payment has been credited and confirmed by the company’s bank account. Statement of Account shall be submitted to the Accounting Section on or before 7th day of the following month.

Bank Statement Check booklets Register Book Deposit slip Withdrawal slip Fund Transfer Confirmation Bank Book

Bank reconciliation module of the system shall be updated immediately to reflect bank transactions and status of disbursed checks. Bank reconciliation for BPI US$, JPYen and Peso Account & BTM US $, JPYen and Peso Account should be updated for one month period.

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



before the next reconciliation.6.10.5 Prepares bank reconciliation schedules.6.10.6 Prepares journal voucher for transfer, interest,

bank charges, deposits and any transactions still unrecorded.

6.10.7 Encoding of the journal voucher to the accounting system.

6.11 SCRAP FUND MANAGEMENT

6.11.1 Obtain copy of gate pass for scrap from security guard.

6.11.2 Prepares statement of account in details per gate pass copy.

6.11.3 Monitor payment of scraps which is one week after disposal of scrap materials.

6.11.4 Receipt of payments in forms of check or cash.6.11.5 Issuance of official receipt.6.11.6 Deposit of checks or cash to the bank.6.11.7 Obtain copy of statement of account, check copy

and deposit slip.6.11.8 Prepares the journal voucher.6.11.9 Record in the accounting system.

6.12 RECORDING AND ACCOUNTING OF FIXED ASSET

6.12.1 Upon confirmation of the receipt of the property/ equipment, secure copies of pertinent document such as sales invoice and delivery receipt to determine capitalize cost. Give copy of sales invoice and delivery receipt to the accounting section.

6.12.1.1 Fixed assets acquired shall be under the lawful ownership of the Company. No assets shall be under the name of any department, employer or employee regardless of the source of fund used to acquire the fixed asset.

6.12.1.2 Fixed Assets shall be used only for official business. No employee of the company shall use fixed assets for exclusive personal benefit.

6.12.2 Assigned a property asset tag. Attach the tag on the new equipment/ device.

6.12.3 Determine the life span of fixed assets through authorized personnel.

6.12.3.1 Building 20 years

- do -- do –

- do -

Acctg. Officer

- do –

- do -

- do -- do -- do -

Sr. Accounting Officer- do -- do –

Purchasing Staff

- do -

Sr. Acctg. Officer

Gate Pass Statement of Account Official Receipts Deposit Slip Accounting staff is not

authorized to sign the gate pass of scrap materials for disposal for check and balance control purposes.

Journal Voucher Property Asset Tag

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



Building Improvements 3-10 yearsMachinery & Eqpt. 5-10 yearsTransportation 5 yearsSmall Tools & Eqpt. 3 yearsOffice & Factory Fur.& Fix 3-5 yearsOffice & Factory Eqpt 3-5 years

6.12.3.2 Fixed assets with estimated life of more than three years and above whether purchased by the company or donated shall be recorded into the fixed asset ledger and depreciated.

6.12.4 Record the details of the property/ equipment in the fixed asset ledger with details such as acquisition date, description of the asset, acquisition cost, estimated useful life of the asset, property/ tag number assigned and location/ assignee.

6.12.5 Prepare the Fixed Asset Turnover Receipt (FATR) document with all pertinent details and description of the item. Release the equipment/ device to the designated user or assignee.

6.12.6 Sign the FATR to acknowledge the receipt and accountability of the item.

6.12.7 Provide one copy of the signed FATR to the assignee and retain the other copy in the fixed asset file.

6.12.8 Update/ generate the lapsing schedule with the following information: monthly depreciation, accumulated depreciation and net book value.

6.12.9 Prepare and accomplish the journal voucher based on the lapsing schedule to record depreciation expense.

6.12.10 Record in the accounting system.

6.13 MOVEMENT/ TRANSFERS OF FIXED ASSETS

6.13.1 Inform accounting staff of the plan to move or transfer an asset to another location or assignee.

6.13.2 Accomplish the Fixed Asset Movement Form. Reflect the necessary information regarding the transfer and the change in the accountability.

6.13.3 Give signed form to the Accounting staff.6.13.4 Accomplish the Fixed Asset Turnover Receipt for

the new assignee.6.13.5 Record the movement/ transfer.

Purchasing Staff

Sr. Acctg. Officer

Section Staff

Sr. Acctg. Officer

Sr. Acctg. Officer

- do –

- do –

Concerned Staff

- do -

Concerned Staff- do -

Sr. Acctg. Officer & Pur. Staff

Fixed Asset Turnover Receipt

Fixed Asset Movement Form

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



6.14 INVENTORY AND ASSET MANAGEMENT

6.14.1 Generate the fixed asset listing as per ledger prior to the scheduled asset inventory taking. The list to be generated should be updated for any retirement/ disposals and new acquisition.

6.14.2 Send out memorandum regarding schedule of fixed asset count and to require assignees or accountable parties to prepare the assets under their care for the count.

6.14.3 Furnish inventory list of assets assigned to each department to prepare them for the count.

6.14.4 Conduct a physical inspection/ validation count of the assets listed. The condition of the asset, as may be observed and reported by the assignee, should be noted on the count sheet. Witness to sign off on the count sheet.

6.14.5 Recommend and sign off on any adjustment to be made /authorized to take up the results of the inventory count.

6.14.6 File the pertinent document.6.14.7 Prepares journal voucher.6.14.8 Record in the accounting system.

6.15 RETIREMENT OF ASSETS

6.15.1 Prepare a list of the assets approaching full depreciation within the year.

6.15.2 Submit recommendation to dispose the unserviceable asset, citing the justification and other pertinent information that will facilitate the decision making.

6.15.3 Reflect the status of the particular fixed asset in the book of accounts: Acquisition Cost, Accumulated Depreciation, Net Book Value, and other pertinent data.

6.15.4 Approve the disposal by signing off the recommendation.

6.15.5 Give instructions for the disposal.6.15.6 Submit report to accounting on the status of the

asset after disposal.6.15.7 Generate a journal voucher for the retirement/

disposal.6.15.8 Record the journal voucher in the accounting

system and file the pertinent documents.

6.16 FINANCIAL STATEMENT PREPARATION

6.16.1 Encoding of petty cash voucher to the accounting system.

Sr. Accounting Officer

HR Officer & Purchasing Staff

- do -

- do -

- do -

- do -Sr. Acctg. Officer

- do -

Sr. Acctg. Officer

- do -

- do -

Admin. Mgr, Prod. Mgr., President

Sr. Acctg. Officer

- do –

Sr. Acctg. Officer

- do –

Depreciation of fixed asset follows the straight line method over the useful life of the assets. Provision for depreciation shall be recorded monthly. All assets acquired during the month will be depreciated on the following month in accordance with the following formula.

Acquisition CostDepreciation = ---------------------- Estimated Useful Life

Petty Cash Voucher

Check Voucher

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



6.16.2 Encoding of check voucher to the accounting system.

6.16.3 Updating of check register book for BTM US Dollar, BTM JPY, BTM Peso, BPI US Dollar and BPI Peso.

6.16.4 Printing of bank statement for all accounts.6.16.5 Preparation of bank reconciliation.6.16.6 Encoding check voucher receiving.6.16.7 Journalizing of transactions reflected in bank

accounts.6.16.8 Preparation of journal voucher of the following

items:

a. Royaltyb. Insurancec. Fringe benefitsd. Salaries and wages of President and Vice-

Presidente. Interest incomef. SSS, PHIC, HDMF, 13th month payg. Trucking charges billed to customers

6.16.9 Preparation of journal voucher for restatement of the following items:

a. Cash in bankb. Accounts payable trade and othersc. Accounts receivable trade and othersd. Advances from parent companye. Loan/notes receivable trade

6.16.10 Preparation of journal voucher for lapsing schedule of fixed assets.

6.16.11 Preparation of journal voucher of unused direct materials, unused indirect materials and office supplies.

6.16.12 Preparation of journal voucher of accounts payable trade and others.

6.16.13 Preparation of journal voucher of accrued expenses.

6.16.14 Preparation of journal voucher for withholding tax of AP trade, AP others and accrued expenses.

6.16.15 Preparation of journal voucher of sales.6.16.16 Preparation of journal vouchers for any

adjustments.6.16.17 Preparation of necessary account schedules.6.16.18 Preparation of trial balance for the month.6.16.19 Preparation of balance sheet.6.16.20 Preparation of income statement.6.16.21 Submission to admin manager and president

Acctg. Officer

- do -Sr. Acctg. Officer

- do -- do –

Acctg. Officer & Sr. Acctg. Officer

- do -

Sr. Acctg. Officer

Acctg. Officer & Sr. Acctg. Officer

- do -

- do –

- do –

Sr. Acctg. Officer- do –

- do –- do –- do –- do –- do –

Bank statement Check Voucher Receiving Journal Voucher

Preparation of Financial Statement for Peso Account & US Dollar Account with same process.

Preparation of Financial Statement for Screw Line Account due to Income Tax Holiday with same process.

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



6.17 BUDGET ALLOCATION

6.17.1 Sales Budget. Budgeted total sales for each product is the sales price multiplied by the expected number of units sold.

6.17.2 Cost of Processing Budget. This schedule determines cost of processing for the budgeted income statement such as factory supplies to be used on expected number of units to be sold. Computation of freight, handling, delivery, brokerage and forwarding fees are to be based on expected imported materials. Salaries and wages (administration and production) needed to produce the expected number of units. Employees’ benefits and other benefits such as SSS and Pag-ibig contributions fluctuate with labor. Land rental is the same each month (fixed). Diesel oil used to be computed by Purchasing Staff.

6.17.3 Preparing the Financial Budget. This includes the cash budget, the budgeted balance sheet, and the budgeted statement cash flow. The cash budget or statement of budgeted cash receipts and disbursements, details how the business expects to go from the beginning cash balance.

6.17.3.1 In preparing the cash budget, first determine the cash available; beginning cash balance plus collections then subtract total cash disbursement to find the ending cash balance before financing.

6.17.3.2 The next step is to complete the budgeted balance sheets by projecting each asset, liability and owner’s equity account based on the plans in the previous schedule.

6.17.3.3 The final step is completing the budgeted statement of cash flows. Use the information from the schedule of cash collections and disbursements, the cash budget, and the beginning balance of cash to project cash flows from operating, investing & financing activities.

6.17.4 After preparing the budgets and discovered that, the expected income falls short of the target. The management has more time to plan how to increase revenues or cut expenses. It sets realistic goal by requiring them to plan specific actions to meet these goals. Planning is essential

PPC Asst. Mgr & Sales Staff

Admin. Mgr , Operations Mgr.,

Purchasing Staff & Acctg. Officer

Sr. Acctg. Officer

Admin. Mgr. & Sr. Acctg. Officer

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



to coordinate and control activities.6.17.5 Managers evaluate department or activity by

comparing its actual result with either its budget or its past performance.

6.17.6 Evaluate the plan. Look at the expected outcome. Will the plan enable the business to meet its financial responsibilities to its owners, lenders, employees, suppliers & customer.

- do-

-do -

VI. Appendix

7.1 Cash Voucher Receiving

7.2 Petty Cash Voucher

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



7.3 Cash Advance Slip

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



7.4 Liquidation Form

7.5 Check Voucher

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



7.6 Official Receipt

7.7 Journal Voucher

7.8 Fixed Asset Inventory Tag

Classification:

Title:

LEVEL 2




KAP-IACP-035-0

1



7.9 Employees Benefits Voucher

7.10 Timesheet

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