ACTG 6570 IFRS Implementation Virginia Tech As of June 30, 2009.
Actg Guide
Transcript of 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
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
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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
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 3
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 5
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General Policy and Procedure Overview
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
Department Responsible
Sales and Logistics Department
Credit and Collection Division
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 1
of 4
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Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 2
of 4
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 3
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 4
of 4
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General Policy and Procedure Overview
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.
Department Responsible
Credit and Collection Division
Sales Department
Legal and Compliance 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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BILLING AND COLLECTION
REF.
NUM.
VCFP0003
PAGE 1
of 4
DATE:
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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.
Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BILLING AND COLLECTION
REF.
NUM.
VCFP0003
PAGE 2
of 4
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BILLING AND COLLECTION
REF.
NUM.
VCFP0003
PAGE 3
of 4
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BILLING AND COLLECTION
REF.
NUM.
VCFP0003
PAGE 4
of 4
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General Policy and Procedure Overview
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.
Department Responsible
Credit and Collection Division
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL RECEIPTS AND DEPOSITS
REF.
NUM.
VCFP0004
PAGE 1
of 3
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Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL RECEIPTS AND DEPOSITS
REF.
NUM.
VCFP0004
PAGE 2
of 3
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL RECEIPTS AND DEPOSITS
REF.
NUM.
VCFP0004
PAGE 3
of 3
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
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General Policy and Procedure Overview
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.
Department Responsible
Credit and Collection Division
Treasury Division
Sales Department
Legal and Compliance 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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BOUNCED CHECK
REF.
NUM.
VCFP0005
PAGE 1
of 3
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
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Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BOUNCED CHECK
REF.
NUM.
VCFP0005
PAGE 2
of 3
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL BOUNCED CHECK
REF.
NUM.
VCFP0005
PAGE 3
of 3
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
28/124
General Policy and Procedure Overview
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.
Department Responsible
Sales Department
Credit and Collection Division
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.
Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL DELINQUENT, LEGAL AND
OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 1
of 5
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DELINQUENT, LEGAL AND
OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 2
of 5
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DELINQUENT, LEGAL AND
OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 3
of 5
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DELINQUENT, LEGAL AND
OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 4
of 5
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DELINQUENT, LEGAL AND
OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 5
of 5
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
33/124
General Policy and Procedure Overview
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.
Department Responsible
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
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
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF NON-
INVENTORY ITEMS
REF.
NUM.
VCFP0007
PAGE 2
of 4
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF NON-
INVENTORY ITEMS
REF.
NUM.
VCFP0007
PAGE 3
of 4
DATE:
APRIL 1,
2015
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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).
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF NON-
INVENTORY ITEMS
REF.
NUM.
VCFP0007
PAGE 4
of 4
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
37/124
General Policy and Procedure Overview
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.
Department Responsible
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF FUEL
INVENTORY
REF.
NUM.
VCFP0008
PAGE 1
of 3
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
38/124
Detailed Policies and Procedures
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF FUEL
INVENTORY
REF.
NUM.
VCFP0008
PAGE 2
of 3
DATE:
APRIL 1,
2015
-
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
PROCUREMENT OF FUEL
INVENTORY
REF.
NUM.
VCFP0008
PAGE 3
of 3
DATE:
APRIL 1,
2015
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8/18/2019 Actg Guide
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General Policy and Procedure Overview
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.
Department Responsible
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 1
of 5
DATE:
APRIL 1,
2015
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Detailed Policies and Procedures
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
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 2
of 5
DATE:
APRIL 1,
2015
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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 Request for Payment
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 Request for Payment
o Summary Report from HR Department
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 3
of 5
DATE:
APRIL 1,
2015
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Fund
o Request for Payment
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 Request for Payment
o Activity Form
Reimbursements
o Request for Payment
o Expense Report
o Receipts
Cash Advances
o Request for Payment
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 4
of 5
DATE:
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 5
of 5
DATE:
APRIL 1,
2015
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General Policy and Procedure Overview
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.
Department Responsible
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.
Detailed Policies and Procedures
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)
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS –
PURCHASE REQUISITION
REF.
NUM.
VCFP0010
PAGE 1
of 3
DATE:
APRIL 1,
2015
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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.
III. Payment of Accounts Payable
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
PURCHASE REQUISITION
REF.
NUM.
VCFP0010
PAGE 2
of 3
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
DISBURSEMENTS -
PURCHASE REQUISITION
REF.
NUM.
VCFP0010
PAGE 3
of 3
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
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General Policy and Procedure Overview
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.
Department Responsible
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.)
Detailed Policies and Procedures
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)
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
ACCOUNTS PAYABLE –
FUEL PURCHASES
REF.
NUM.
VCFP0011
PAGE 1
of 3
DATE:
APRIL 1,
2015
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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.
III. Payment of Accounts Payable
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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
ACCOUNTS PAYABLE –
FUEL PURCHASES
REF.
NUM.
VCFP0011
PAGE 2
of 3
DATE:
APRIL 1,
2015
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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.
VEPCO GROUP DISTRIBUTION CORP.
POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
ACCOUNTS PAYABLE –
FUEL PURCHASES
REF.
NUM.
VCFP0011
PAGE 3
of 3
DATE:
APRIL 1,
2015
-
8/18/2019 Actg Guide
51/124
General Policy and Procedure Overview
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.
Department Responsible
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