QB SYSTEM POLICIES & PROCEDURES ON WAREHOUSING, SALES, RECEIVABLES & COLLECTIONS VIA FS GENERATION

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Policy Title Policy No. FIN-001 Department/s Effective Date January 01, 2017 Prepared by Signature Release of Goods from Warehouse, Creation of Invoice & Collection, Bank Deposit, Sales Report Generation and Financial Statement Report & Presentation Warehouse - Field Sales - Cashiering - Logistics - Finance/Accounting - Audit Rex D. Espiritu, CPA, Consultant RDE ERP SUCCESSFUL QUICKBOOKS ACCTG SYSTEM & DESIGN CONSULTANCY SERVICES P.O. Box 31836 ZIP Code 31952 1st Street King Fahad & Mansour Street North Al Khobar, KSA 1. PURPOSE 1. The Warehouse Department is responsible for the following: 1.1.1 The efficient release of goods from stockroom to ensure the goals of the establishment is met. 2. The Field Sales Department is responsible for the following: 1.2.1 Through preparation of Delivery Note, release of goods from warehouse must be in accordance with the policy on cut-off timing and day. 1.2.2 The sale of goods to achieve its target level and/or budgeted sales and collection of payment from customers. 1.2.3 To bring back the returned items from customer to Warehouse and marked “RETURNED ITEMS - DEFECTIVE”. And to coordinate with the Purchasing Department to return or exchange the defective goods to the supplier/s. 1.2.4 To bring back/return the items for the reason of Sale Cancellation. 3. The Cashiering Department (Showroom Branch) is responsible for the following: 1.3.1 Acknowledge receipt of Delivery Note by checking the code number of items and quantity of the released goods from Warehouse. 1.3.2 Encode all delivered goods in the QB system thru the creation of Delivery Receipt. 1.3.3 Maintain Customer Center in the QB System per Individual Customer Details and contact numbers 1.3.4 Creation of Cash/Credit Invoices per Individual customer 1.3.4.1 Name of Customer 1.3.4.2 Item Name 1.3.4.3 Item Code 1.3.4.4 Quantity 1.3.4.5 Selling Price 1.3.4.6 Total Amount

Transcript of QB SYSTEM POLICIES & PROCEDURES ON WAREHOUSING, SALES, RECEIVABLES & COLLECTIONS VIA FS GENERATION

Policy Title Policy No. FIN-001

Department/s Effective

Date

January 01, 2017

Prepared by Signature

Release of Goods from Warehouse, Creation of

Invoice & Collection, Bank Deposit, Sales Report

Generation and Financial Statement Report &

Presentation

Warehouse - Field Sales - Cashiering - Logistics -

Finance/Accounting - Audit

Rex D. Espiritu, CPA, Consultant

RDE ERP SUCCESSFUL QUICKBOOKS ACCTG SYSTEM & DESIGN

CONSULTANCY SERVICESP.O. Box 31836 ZIP Code 31952

1st Street King Fahad & Mansour Street

North Al Khobar, KSA

1. PURPOSE

1. The Warehouse Department is responsible for the following:

1.1.1 The efficient release of goods from stockroom to ensure the goals of the

establishment is met.

2. The Field Sales Department is responsible for the following:

1.2.1 Through preparation of Delivery Note, release of goods from warehouse must be

in accordance with the policy on cut-off timing and day.

1.2.2 The sale of goods to achieve its target level and/or budgeted sales and

collection of payment from customers.

1.2.3 To bring back the returned items from customer to Warehouse and marked

“RETURNED ITEMS - DEFECTIVE”. And to coordinate with the Purchasing

Department to return or exchange the defective goods to the supplier/s.

1.2.4 To bring back/return the items for the reason of Sale Cancellation.

3. The Cashiering Department (Showroom Branch) is responsible for the following:

1.3.1 Acknowledge receipt of Delivery Note by checking the code number of items

and quantity of the released goods from Warehouse.

1.3.2 Encode all delivered goods in the QB system thru the creation of Delivery

Receipt.

1.3.3 Maintain Customer Center in the QB System per Individual Customer Details and

contact numbers

1.3.4 Creation of Cash/Credit Invoices per Individual customer

1.3.4.1 Name of Customer

1.3.4.2 Item Name

1.3.4.3 Item Code

1.3.4.4 Quantity

1.3.4.5 Selling Price

1.3.4.6 Total Amount

1.3.5 Encode cash collections per individual customer in the QB system thru Receive

Payment Module.

1.3.6 Receive & count cash collections and deposit immediately on the following

bank business day and forward the Bank Deposit copy to the Accounting

Department for Bank Reconciliation purpose.

4. The Procurement Department is responsible for the following:

1.4.1 Based from the PO & Supplier’s Invoice, the creation of new Item in the QB

System – Item Name, Item Code, Cost and Selling price before Delivery of goods

to Warehouse, Branch No. 1.

1.4.2 Adding back the quantity of returned items from customers thru encoding the

Inventory Quantity Adjustment in QB system as per Delivery Note with Returned

Items.

5. The Finance/Accounting Department is responsible for the following:

1.5.1 Checking individual customer’s printed Cash/Credit Invoice on the following

details:

1.5.1.1 Name of the Customer

1.5.1.2 Item Name

1.5.1.3 Quantity

1.5.1.4 Selling Price against Standard Price List Hard Copy

1.5.1.5 Total Amount of the Invoice

1.5.2 Checking of total quantity in the Delivery Receipt against total quantity of all

Cash/Credit Invoices. Account the difference and prepare adjusting Journal

Voucher (if there’s difference between Total Quantity per Delivery Receipt

against Total Quantity per various Cash/Credit Invoices covered by that specific

Delivery Receipt).

1.5.3 Preparation of adjusting Journal Voucher to reclassify Un-deposited Accounts to

Cash on Hand – Showroom

1.5.4 Preparation of Bank Reconciliation and verify if all deposited amounts are

credited already in FMT’s depository bank account.

1.5.5 Preparation of adjusting Journal Voucher to record deposit to FMT depository

account per bank deposit copy submitted by Cashiering Department,

Showroom.

1.5.6 Print computer-generated Statement of Account per Individual Customer and

advise Field Salesman to follow-up overdue or long-overdue accounts.

1.5.7 Control customer’s account and print the Aging of Receivables for

management decision making on sales performance & efficient collection or

receivables.

1.5.8 Filing of documents in an orderly manner.

6. The Audit Department is responsible for the following:

1.6.1 Conduct surprise Cash Count at the Branch

1.6.2 Perform audit examination

1.6.3 Prepare audit findings and issue recommendation

1.6.4 Submission of audit report to the Owner/General Manager for his final decision

2. POLICIES & PROCEDURAL QUICKBOOKS SYSTEM FLOW – RELEASE OF ITEMS FROM WAREHOUSE

1. Warehouse Department – Branch No. 1

2.1.1 The department is open daily and release of goods in two (2) shifts that must be

strictly followed by the Field Salesman:

9:00 AM – 12:00 AM

4:00 PM – 07:00 PM

2.1.2 Receive Delivery Note from Field Salesman indicating the Code Number, Item

Name and Quantity.

2.1.3 Count the items/goods to match with the Delivery Note before releasing these

items from the Branch.

2.1.4 The Delivery Note must indicate the date of release and must be signed by both

the Field Salesman and personnel-in-charge at the warehouse.

2.1.5 File duplicate copy of Delivery Note

2. Cashiering Department – Branch No. 1 Showroom

2.2.1 The Sales Executive must record immediately in the QB system upon release of

goods.

2.2.2 Go to QuickBooks Home Page

2.2.3 Click Estimates and enter all the following details in accordance with the

Delivery Note prepared by the Field Salesman:

Customer Job

Template – Choose FMT Delivery Receipt

Date of Delivery

DR Number – Start DR16-0001

Enter the Item Name. QB system will automatically record the Item Code,

therefore, no need to record it. If changed by the processor, he will be

subjected to Audit examination and will be charged for the Violation of

Accounting Policy of Intentional Manipulation of Records that will lead to

incorrect accounting records.

Enter the Quantity. QB system will also automatically record the Sales Price, if

changed, he will also be subjected for audit examination and answerable for

the commission of errors whether be intentional or not.

Double-check if all details are entered, then Save and Close

2.2.4 Print the Delivery Receipt and attach the Original Delivery Note prepared by

Field Salesman. Then, submit the printed Delivery Receipt along with the Original

DN to the Finance Department, Head Office for checking and review purpose.

2.2.5 Retain duplicate copies of Delivery Note for filing and reference.

3. POLICIES & PROCEDURAL QUICKBOOKS SYSTEM FLOW – CREATE INVOICE AND RECEIVE

PAYMENTS FROM CUSTOMERS (FIELD SALES)

1. FIELD SALESMAN DEPARTMENT

3.1.1 Issue original manually prepared Cash/Credit Invoice to the customer upon

sale/delivery of goods to the customer.

3.1.2 Receive payment from customer and issue original Receipt Voucher.

3.1.3 Remit cash collections and submission of 2nd copy of Receipt Vouchers

attached the 2nd copies of Cash/Credit Invoices to the Cashiering Department,

Branch No. 1 Showroom.

2. CASHIERING DEPARTMENT – BRANCH NO. 1 SHOWROOM

3.2.1 Receive & count money and tally with the total collections per individual

Receipt Vouchers (2nd Copy) with attached 2nd copy of Cash/Credit Invoice and

deposit the money to the bank.

3.2.2 Deposit all collections and get Bank Deposit Copy and forward to Accounting

Department to record in the QB system through Journal Voucher preparation.

3.2.3 Maintain individual customer accounts in the QB system thru the following system

procedures:

3.2.3.1 Go to Home page and click Customer Icon, and then click Customer

Center (highlighted in color green).

3.2.3.2 Click New Customer & Job

3.2.3.3 Enter the following details:

3.2.3.3.1 ADDRESS INFO

Company Name

Full Name of Contact Person: Mr. First Name, MI. & Last Name

Main Phone

Work Phone

Mobile No.

FAX

Main E-mail

CC E-mail

Website

Address Details & Shipping Details

3.2.3.4 PAYMENT SETTINGS

Account No.

Payment Terms

Preferred Delivery Method

Preferred Payment Method

Credit Card Info – N/A

3.2.3.5 Additional Info

Customer Type – Retail

Rep – Choose Sales Representative

3.2.4 Go to Home Page and click Create Invoices Module in QB system in reference

to the manually prepared Cash/Credit Invoice per individual customer by the

Field Salesman

3.2.5 Fill out the following details in the boxes of FMT Cash/Credit Invoice through QB

system:

3.2.5.1 Customer Job Box – Select from the Customer Name List

3.2.5.2 Account Box - Trade & Receivable

3.2.5.3 Template Box – FMT Cash/Credit Invoice

3.2.5.4 Invoice No. Box – CI16-0001

3.2.5.5 Terms – Cash or Cash after Bill Date

3.2.5.6 Cash/Credit Inv Ref – Number of Manual Invoice from the Field

Salesman

3.2.5.7 Based from the Manual Invoice, enter all Item Names, Quantity and Unit

Price. The QB system will automatically give the Item Code, therefore,

no need to change it. Once changed by the Invoice processor, he will

be subjected to Audit Examination and liable for the changes he made.

3.2.5.8 Customer Message Box – Type the total amount in words

3.2.5.9 Save and Close.

3.2.6 Enter in the QB system, the cash collections either “Cash” basis or “Partial

Payment” basis thru the following procedures:

3.2.6.1 Go to Home Page and click “Receive Payments” Module

3.2.6.2 Under “Partial Payment” basis (for example, Customer A paid SAR 100),

fill-out the following details in the boxes of Customer Payment Module:

Received From Box – Name of the Customer

Payment Amount Box – SAR 100.00

Date Box – Date of Payment per Receipt Voucher issued by Field

Salesman

Reference Box – CP16-0001 (CP means Customer Payment)

A/R Account Box – Trade Receivable

Click Cash Box

Put “check mark” in the Invoice No. that the payment is being applied

for. The system will automatically apply the amount of SAR 100.00 to

the invoice. It will also show the Underpayment or the Remaining

Balance at the left side bottom portion of the Customer Payment.

Save and Close.

After applying the partial payment of SAR 100.00. Print the Cash/Credit

Invoice and it will show the Remaining Balance of SAR 296.20.

Attached only the Receipt Voucher from the Field Salesman because

Original Invoice is not issued since it is not fully paid. The following QB

System procedures for Printing the Invoice must be followed:

Go to Home Page and click Print Icon

Click Preview and Print

3.2.6.3 Under “Cash or Full Payment” basis, the same procedures shall be

followed except for the amount of payment. The total amount of invoice

shall be filled-out as follows:

Payment Amount Box – SAR 396.20 (Total Amount of Invoice).

Put “check mark” in the Invoice No. that the payment is being applied

for. The system will automatically apply the amount of SAR 100.00 to

the invoice. It will now anymore show the Underpayment or the

Remaining Balance at the left side bottom portion of the Customer

Payment because it is fully paid.

Save and Close.

3.2.6.4 Go to Home Page and Look for the fully paid Invoice to be printed, Click

Print Icon

3.2.6.5 Click Preview and Print

3.2.6.6 Attach the 2nd copy of all Receipt Vouchers together with the 2nd copy

of Cash/Credit Invoice (manually prepared by the Field Salesman).

3.2.6.7 All collections from the Field Salesman must be deposited on the

following bank business day. If collection falls on Thursday, it must be

deposited on the following week, Sunday.

3.2.6.8 Get from bank the received copy of the deposit slip and temporarily

file at the showroom.

3.2.6.9 Computed-generated Cash/Credit Invoice must be signed by the

Cashiering Officer at the Showroom, Branch No. 1.

3.2.6.10 Submit all documents (computer-generated Cash/Credit Invoices,

Receipt Vouchers & all manually prepared Cash/Credit Invoices by the

Field Salesman) to the Accountant, Finance Department, Head Office

for checking purposes.

3.2.6.11 Submit also the copy of the Cash Deposit Slip to Accounting

Department.

3. ACCOUNTING, FINANCE DEPARTMENT – HEAD OFFICE

3.3.1 The Accountant must check the following details in all customer’s printed

Cash/Credit Invoices:

3.3.1.1 Name of the Customer

3.3.1.2 Item Name

3.3.1.3 Quantity

3.3.1.4 Selling Price against Standard Price List Hard Copy

3.3.1.5 Total Amount of the Invoice

3.3.2 The Accountant must tally the total quantity in the Delivery Receipt against total

quantity of all Cash/Credit Invoices. He must calculate the difference and

prepare adjusting Journal Voucher (if there’s difference between Total Quantity

per Delivery Receipt against Total Quantity per various Cash/Credit Invoices

covered by that specific Delivery Receipt).

3.3.3 The Accountant must prepare adjusting Journal Voucher in the QB system to

reclassify Un-deposited Accounts to Cash on Hand – Showroom by the following

system procedures:

3.3.3.1 Go to Home Page and click Reports

3.3.3.2 Click Company & Financial

3.3.3.3 Click Balance Sheet Standard

3.3.3.4 The screen will show the Balance Sheet as of given date and double-

click the amount of Un-Deposited Funds to be re-classify from Un-

deposited Funds to Cash on Hand – SR Sales.

3.3.3.5 After double-clicking the total amount (SAR 8,185.20) of Un-deposited

Funds, the QB system will display the details (Transactions by Account) of

the Un-deposited Funds as shown herein below:

3.3.3.6 The Accountant must print the report of Undeposited Funds to be

attached in the Journal Voucher.

3.3.3.7 In reference to the details (par. 3.3.3.5), the Accountant must prepare

adjusting Journal Voucher for the re-classification stated in par. 3.3.3.4 by

the following QB system procedures:

Go to Home Page

Click Company Icon

Click “Make General Journal Entries”

After clicking “Make General Journal Entries”, QB system screen will

display as follows by filling out all the details in the boxes of the

Journal Voucher:

Date box – The date of the last amount of Un-deposited Funds

Entry No. Box – JV16-0001

Account to be debited – Cash on Hand-SR Sales

Amount to be debited – SAR 8185.20

Account to be credited – Undeposited Funds

Amount to be credited – SAR 8185.20

Memo – Total Cash Collections from Field Salesman

Name – ABU FATIMA

Save and Close

Print the Journal Voucher through the following QB system

procedures

Go again to Home Page and click Make General Journal

Entries

Scroll up to find the JV-0001 to be printed

Click Print Icon, choose the printer and click Print

After clicking the Print, the QB System screen will display

the following:

Print the computer-generated Journal Voucher and

attached the Report on Undeposited Funds.

File the Journal Voucher according to the pre-numbering,

by date and month.

3.3.4 The Accountant must get the bank statement (FMT depository account) and

should prepare Bank Reconciliation by reconciling the Bank Ending Balance as

of Month-end against Ending Bank Balance per QB Report as shown in the

Balance.

3.3.5 The Accountant must verify if all deposited amounts (copy of Bank Deposit Slips)

are credited already in FMT’s depository bank account and should prepare

Journal Voucher to record the bank credits (cash deposits) through the following

QB system procedures:

3.3.5.1 Go to Home Page and click Company

3.3.5.2 Click Make General Journal Entries

3.3.5.3 After clicking “Make General Journal Entries”, the QB system screen will

display the following and the Accountant must perform the following

system procedures (For example, November 28, 2016 cash deposit):

Date box – The date of the last amount of Un-deposited Funds

Entry No. Box – 4

Account to be debited – Bank Account CA NO.XXXX

Amount to be debited – SAR1,650.00

Account to be debited – Bank Account CA NO.XXXX

Amount to be debited – SAR 1,863.00

Account to be credited – Cash on Hand – SR Sales

Amount to be credited – SAR 1,650.00

Account to be credited – Cash on Hand – SR Sales

Amount to be credited – SAR 1,863.00

Memo – Total Cash Collection & Deposits

Name – ABU FATIMA

Save and Close

Print the Journal Voucher and attach the bank deposit slips

File the Journal Voucher according to JV Number, Date and

Month.

3.3.5.4 To check if the journal voucher has been recorded, the Accountant must

perform the following QB system procedures:

Go to Home page and click “Reports” Icon

Click Company & Financial

Click Balance Sheet Standard

3.3.5.5 After clicking the Balance Sheet Standard, QB system screen will display

the Balance Sheet, and click the amount of the Cash in Bank Balance.

Then it will show the amounts deposited in the Bank.

3.3.6 To control the individual customer account, the Accountant must print

computer-generated Statement of Account (SOA) per Individual Customer

through the following QB system procedures:

3.3.6.1 Go to Home Page

3.3.6.2 Click Customers Icon

3.3.6.3 Click Create Estimates

3.3.6.4 After clicking Create Estimates, the Accountant must fill out all the boxes

in QB system the following details:

A/R Account – Trade Receivables

Statement Date – 12/25/2016

Statement Period From _____________ to ___________________

Select Customer – Customer A (For Example)

Create One Statement – Per Customer

Check box – Show invoice item details on statements

Click Preview

3.3.6.5 After clicking Preview, the Accountant must print/save as PDF and send

directly to customers thru e-mail to follow-up collections.

3.3.7 The Accountant must also advise Field Salesman to follow-up overdue or long-

overdue accounts to further increase his cash collections.

3.3.8 The Accountant must control customer’s account and print the Aging of

Receivables for management decision making as to sales performance of Field

Salesman and efficient collections by him. He must perform the following QB

System procedures to print computer-generated reports on Aging of

Receivables as follows (For Example Customer A has outstanding balance of SAR

296.20 as presented before in the STATEMENT OF ACCOUNT):

3.3.8.1 Go to Home page

3.3.8.2 Click Customer & Receivables

3.3.8.3 Click A/R Aging Summary

3.3.8.4 After clicking A/R Aging Summary, QB System screen will display the

Report as follows:

3.3.9 There are lots of good reports on KEY PERFORMACE INDICATORS (KPIs) that will

help the management in decision-making, control purposes and evaluation to

generate more income as follows:

3.3.9.1 Sales by Customer Summary – to determine which customer has large

sales and which products they are always buying. Determine the causes

why there are some customers not buying more products from us.

3.3.9.2 Sales by Item Summary – to determine which are the most saleable

products and ascertain Re-Order Point level for the prevention of stock

shortages and further continue delivering the goods at the proper time.

3.3.9.3 Sales Graph by line of product/department – to encourage the

department to have more sales revenue over targeted sales level.

3.3.9.4 Item Profitability – to determine which products have high Gross Profit

Rate and to ascertain the Re-Order Point Level for the prevention of

running out of stock of goods.

3.3.10 The Accountant must print and present accurate & reliable QB computer-

generated Income Statement showing the following:

3.3.10.1 Sales of Electronic Products

3.3.10.2 Sales of Electrical Products

3.3.10.3 Sales of Pharma Products & Others (NGHA & Others)

3.3.10.4 Cost of Sales

3.3.10.5 Gross Profit

3.3.10.6 Selling Expenses

3.3.10.7 Administrative Expense

3.3.10.8 Net Income (Loss) as of month-end/year-end

3.3.11 The Accountant must submit also to the Owner of FMT a fairly presented,

complete and reliable Balance Sheet with the following details:

3.3.11.1 Cash and cash equivalents

3.3.11.2 Trade Receivables & others

3.3.11.3 Inventories by Product Line

3.3.11.4 Fixed Assets

3.3.11.5 Trade Payables & others

3.3.11.6 Owner’s Equity

3.3.11.7 The Account must be the custodian of all documents’ hard copies and filing in an

orderly manner.

4. POLICIES & PROCEDURES ON TRANSFER OF GOODS FROM WAREHOUSE TO SHOWROOM

1. FIELD SALES DEPARTMENT

4.1.1 Delivery Note must be prepared by the Field Salesman for all the goods

transferred from warehouse to showroom showing the item code number, item

name and total quantity

4.1.2 The Delivery Note must bear the date of transfer and sign by both the Field

Salesman and the authorized personnel at the Showroom

2. SHOWROOM, BRANCH NO. 1

4.2.1 The personnel in charge must receive the goods together with the original

Delivery Note

4.2.2 Count the goods properly and acknowledge them. Give the original Delivery

Note to the Inventory Officer in charge for the Adjustment of Quantity

3. INVENTORY OFFICER – The Inventory Officer is responsible for the following:

4.3.1 Receive the original Delivery Note regarding the goods transferred from

warehouse to showroom

4.3.2 Through the QB system, record the transfer of goods through quantity

adjustment – reduce quantity in warehouse and add quantity in showroom

through the following:

4.3.2.1 Go to Home Page

4.3.2.2 Click Vendor Icon (highlighted in green color)

4.3.2.3 Click Inventory Activities

4.3.2.4 Click Adjust Quantity/Value on Hand

4.3.2.5 At its proper warehouse item code number, decrease the warehouse

goods (Electrical Supply Inventory) at its new quantity on hand by

encoding the following:

4.3.2.5.1 Date

4.3.2.5.2 Adjustment Account – Electrical Supply Inventory

4.3.2.5.3 New Quantity on Hand = Old Quantity minus the Quantity

released

4.3.2.5.4 Print screen and print the quantity adjustment and attach the

Delivery Note to prove adjustment has been made and submit

to the Auditing Department.

4.3.2.6 Increase showroom goods (Electronic Products Inventory) into its

corresponding code number. Encode the following in QB system

4.3.2.6.1 Date

4.3.2.6.2 Adjustment Account – Electronic Products Inventory

4.3.2.6.3 New Quantity on Hand = Old Quantity minus the Quantity

released

4.3.2.6.4 Print screen and print the quantity adjustment and attach the

Delivery Note to prove adjustment has been made and submit

to the Auditing Department.