Accounting policies and procedures

Cuốn sách này bao gồm nhũng quy trình chủ yếu mà bất kì công ty lớn nào cũng phải quan tâm. Bạn có thể tìm thấy từ quy trình mua hàng đến quy trình bán hàng, quy trình thu tiền đến chi tiền, quản lý tài sản..Yếu tố quan trọng nhất của cuốn sách này là những quy trình được liệt kê chi tiết và giảng giải đầy đủ. Rất dễ để bạn thực hành và ứng dụng trong công việc quản lý tài chính của doanh nghiệp mình.”

Testimonials for ACCOUTING POLICIES & PROCEDURES MANUAL This book contains the core procedures that any large company must concerns You can find from a sales process to an inventory adjustment procedure I myself appreciate the Cash Control chapter very much It helps me in forecasting and controlling the cash flow More over Ms Mai Thi Thanh as the high experience employee of Vietnam National Petroleum Group has the proficiency knowledge in accounting Hope that you can find the helpful procedures in this book Foreword of Mr Tran Long An The head of Supervisory Committee - Vietnam National Petroleum Group,      Clear Procedures Detailed explanation Practical guide line 5W-1H structure Full aspect of the company process “This is the most reliable book on the Accounting Policies and Procedures It is very worth for your time of reading.” Ms Truong Thi Hanh CFO – KPMG Vietnam Co Ltd, “The most successful factor of this book is that its procedures are listed in details with many explanations It is very easy for you to practice and apply in your work.” Mr Vu Van Chien General Director – Petrolimex Asphalt Company Limited ACCOUTING POLICIES & PROCEDURES MANUAL By MBA Mai Thi Thanh Copyright © 2013 Mai Thi Thanh All right reserved Printed in Vietnam 1st version Published by Dat Thanh Tam Company Limited, Address: 179 Dong Den st, Ward 10, Tan Binh District, HCMC, Vietnam Phone: +84 945 250 250 – Tax code: 38119240 Contact: maithithanh75@yahoo.com ACCOUNTING POLICIES & PROCEDURES MANUAL TABLE OF CONTENTS CONTENT PAGE INTRODUCTION …………………………………………………………… …… SALES AND ACCOUNT RECEIVABLE ……………………………………… 1.1 PROCESS OVERVIEW AND POLICIES … …………………………… 1.2 SALES ORDER PROCESSING ………………………………………… 1.3 BILLING ………………………………………………………………… 1.4 PAYMENT PROCESSING ……………………………………………… 1.5 CREDIT CONTROL AND COLLECTION ……………………………… 6 11 15 23 28 PURCHASE AND ACCOUNTS PAYABLE …………………………………… 2.1 PROCESS OVERVIEW AND POLICIES ……………………………… 2.2 REQUEST AND ORDER GOODS/SERVICES ………………………… 2.3 RECEIVE AND RECOGNIZE GOODS/SERVICES …………………… 2.4 PAYMENT FOR PURCHASED GOODS/SERVICES ………………… 33 34 37 41 44 INVENTORY ……………………………………………………………………… 3.1 PROCESS OVERVIEW AND POLICIES ……………………………… 3.2 INVENTORY RECEIPT ………………………………………………… 3.3 INVENTORY ISSUANCE ……………………………………………… 3.4 STOCKTAKE AND INVENTORY ADJUSTMENT …………………… 47 48 50 55 58 CASH CONTROL ………………………………………………………………… 4.1 PROCESS OVERVIEW AND POLICIES ……………………………… 4.2 CASH COLLECTION …………………………………………………… 4.3 CASH DISBURSEMENT ………………………………………………… 4.4 BANK RECONCILIATION ……………………………………………… 62 63 64 67 70 FIXED ASSET …………………………………………………………………… 5.1 PROCESS OVERVIEW AND POLICIES ……………………………… 5.2 RECOGNITION AND RECORDING …………………………………… 5.3 PHYSICAL CONTROL ………………………………………………… 5.4 REPAIR AND MAINTENANCE ………………………………………… 71 72 74 77 79 ACCOUNTING POLICY AND PROCEDURE MANUAL | INTRODUCTION With the large geographical coverage and high-value turnover, it is vital that the company have a organisation-wide consistent, well-developed and diligent accounting system to manage, record and control its financial and accounting information timely, accurately and adequately As part of the accounting system, the accounting policy and procedure manual has been drafted The major objective of the accounting policy and procedure manual is to ensure:  The company management and staff have a comprehensive, accurate and complete set of accounting records  All the Company’s transactions are recorded promptly, clearly and accurately in the accounting records  All its accounting records are capable of providing all the financial information needed for statutory requirements and for Company and branch management purposes  The company has an effective accounting system that fits with its particular business situation/condition and provides reliable internal control measures  All of its accounting elements and transactions are in accordance with the Vietnamese Accounting System Standard as well as with its statuary accounting system The Accounting Policy and Procedure Manual is concentrated on addressing accounting information generated from The company’s major business processes: sales and distribution, inventory management, procurement process, fixed asset and cash management To this end, the manual is organized into and comprised of policies and procedures for the following accounting processes/subprocesses:      Sales and Accounts Receivable Cycle: sales order processing, billing, customer payment processing, credit control and collection Purchase and Accounts Payable Cycle: goods/services request and order, goods/services receipt and recognition, payment for purchased goods/services Inventory Cycle: inventory receipt, inventory issuance, stocktake and inventory adjustment Cash Cycle: cash receipt, cash disbursement, bank reconciliation Fixed Asset Cycle: fixed asset recording and recognition, fixed asset physical control, fixed asset repair and maintenance For each of the accounting process/subprocess, the policies and procedures detail its major transaction/recording activities They define major information/document/vouchers/forms arising out of or used in the process/subprocess Role and responsibility of each of participant in the process/subprocess are also identified While the accounting policy and procedure manual was being developed, several key accounting management decision such as accounting function centralization/decentralization to branches/location and the kinds of sales management software to be used have yet to be finalized by the company The constraints may, at some extent, restrict the applicability of the manual To overcome the uncertainty, the accounting policy and procedure manual has been drafted aiming to provide an adequate and general set of guidelines and standards for the company’s major accounting processes They facilitate further detailed development of policies and procedures for all The company’s accounting processes when the company management makes the key accounting decisions ACCOUNTING POLICY AND PROCEDURE MANUAL | SALES AND ACCOUNTS RECEIVABLE ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Process Overview and Policies OVERVIEW OF THE PROCESS Process Definition Sales and Accounts Receivable cycle starts when customers place an order to the point where goods are delivered to customers and when customer payment is received Sub-processes The Sales and Accounts Receivable Cycle is comprised of sub-processes:  Sales Order Processing Sub-process  Billing Sub-process  Payment Processing Sub-process  Credit Control and Collection Sub-process Participants Major entities involved in the process:  Marketing department of head office, sales and marketing department in all branchs (all of them are referred to as the sales department)  Distribution department in the head office and in branches: all of them would be referred as distribution department  Warehouses and terminals  Sales accountants: sales accountants may belong to sale and marketing departments or join the finance and administration departments PROCESS POLICIES Credit Limit and Credit Term  No credit sales is populated by the company Sales Recognition A sales is recognized when:  In sales, customers are usually required to pay a portion of contract value in advance (advance payment) The remaining amounts would be paid after receipt of goods How the contract value is paid is usually subject to negotiation between sales staff and customers  Any credit sales should be approved by the sales and marketing manager or higher positions and within the credit limit and credit term as stipulated in the credit policy applied to the customer  Products are actually delivered to customers (in case customer arranges transport for themselves) or to transportation carriers (in case the company arranges transportation) and  Customers or transportation carriers and warehouses/terminals confirm the actual receipt of goods by signing and confirming the quantity of goods delivered on respective delivery notes and delivery slips Delivery Notes Issuing  All delivery notes should be pre-numbered in sequential order The sequence should also be logged in record book and the series of sequence number of both used and unused accountable forms should be reviewed regularly to detect mistakes, errors or misuse of documents Delivery notes should only be approval and signed off when ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Process Overview and Policies actual goods have been issued based on the shipping order and Goods Issue Notes Delivery notes should only be dated based on the date of actual delivery of goods and be signed by the driver upon receiving of goods In no circumstances, the delivery notes are approved in advance Any erroneous delivery notes must be accounted for and filed appropriately Invoice Issuing  Invoice should be issued by the sales accountant upon receipt of the confirmed delivery notes from warehouses/terminals  Total value of the invoice equals the value of the goods actually delivered to customers/transportation carriers under a delivery note  Invoice values should have references to respective sales orders and be clearly broken down into actual goods value, transportation cost and VAT tax  Invoices should be issued within days of delivery Reconciliation and Reporting Each branch and marketing department should reconcile and make the following reports at the end of each month:  Sales reports including goods in value and volume as ordered by customers, as actually delivered and as outstanding  Credit reports containing information on customers payment and outstanding payment Approval  All sales order, transportation orders and customer credit should be approved and signed by the branch manager or head office marketing department managers  Delivery notes should be approved and signed by sales and marketing manager ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Sub-process: Sales Order Processing ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Sub-process: Sales Order Processing OBJECTIVES  To accurately, timely and completely record sales order information from customers  To accurately, timely and completely issue delivery documents and arrange delivery of goods to customers  To accurately, timely and completely record volume and value of goods to be paid by and delivered to customers PROCEDURE Inform sales order  Who: Customers  What: Customers order  How: Customers make sales orders by two ways: either by making call or fill in purchase order form and send to the company by fax In submitting sales order, customers are required to notify their identity code, the volume to be purchased, number of loads, delivery time and place for each load and payment detail If customers arrange their own means of transportation, they must also advise of transport means details (truck or ships) The details must include truck plate number/ship identification, drivers/captain identity (name, license number, etc…)  Why: To define correct and sufficient details for the company’s sales & marketing staff to prepare a sales order Check customer data  Who: Sales or marketing staff of Head Office or of branchs  What: Check customer’s identity and their order/delivery status  When: Immediately after the receipt of a customer’s orders by call or fax  How: For sales, check customer’s current sales order and/or goods receipt status If this is new sales order, go to activity 3; if not, inform the customer of which quantity/delivery of cement under existing sales orders he/she has not received and reconcile the volume for new sales order For customers: check clinker contract numbers and outstanding deliveries of the contract Notify the customer of the applicable price for the order  Why: To confirm the validity of the person/entity making the order and achieve reconciliation of sales volume/delivery under the existing sales orders/clinker contracts Record order information ACCOUNTING POLICY AND PROCEDURE MANUAL | 10 ... of sales order status and execution ACCOUNTING POLICY AND PROCEDURE MANUAL | 15 ACCOUNTING POLICY AND PROCEDURE MANUAL | 16 ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE... SALES AND ACCOUNTS RECEIVABLE ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Process Overview and Policies OVERVIEW OF THE PROCESS... Delivery notes should be approved and signed by sales and marketing manager ACCOUNTING POLICY AND PROCEDURE MANUAL | ACCOUNTING POLICIES & PROCEDURES PROCESS: SALES AND ACCOUNTS RECEIVABLE Sub-process: