accounting manual.docx

7/25/2019 accounting manual.docx

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Accounting Policies and Procedures Manual

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Table of Contents

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1 Introduction 31.1 The Organisation 31.2 Structure of the Finance Function 31.3 Objectives of the manual 31.4 Accounting frameor! 41." #$date of this manual 41.% &es$onsibilit' of #ser Sta( 4

2 The Accounting S'stem %2.1 )hat is it* %2.2 #nderl'ing assum$tions %2.3 Attributes of useful +nancial information %2.4 ,asis of -re$aration refuse %2." Accounting $olicies "2.% athering/ classif'ing 0 recording transactions 12.%.1 Filing s'stem 12.%.2 Transactions recording 112.%.3 lements of double entr' s'stem 122.%.4 &ecognition criteria 122.%." Structure of accounts 122.%.% Tool for recording 142.%. Source documents 142.%. Transactions and its accounting treatment 1"2. -resentation of +nancial statements 1

3 ,udgeting 153.1 &es$onsibilit' for budget $re$aration 153.2 ,udget c'cle 153.3 Authori6ation and A$$roval 7imits 0 -rocedures 2

4 eneral +nancial transactions 224.1 8ash 0 ,an! 224.1.1 &ecei$ts 224.1.2 -a'ments 224.1.3 -re$aration of 8he9ues 234.1.4 8he9ue Signatories 234.1." ,an! &econciliation Statement 234.1.% 8he9ue ,oo! &egister 234.1. 8ontrols and 8hec!s 234.2 -ett' 8ash 244.2.1 eneral -rocedures 244.2.2 -ett' 8ash 8ontrols and 8hec!s 2"4.2.3 -a'ments from -ett' 8ash 2"

"%.1 m$lo'ee &ecords 2%.2 -re$aration of -a'roll 2%.3 -a'ment of Salaries 2%.4 -a'roll 8ontrols 2%." Statutor' &eturns 25

7ocal -urchases and &ecording 3.1 -urchasing Function 3

.1.1 :uties of -urchasing O;cer 3.1.2 -urchase &e9uisition 3

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.1.3 7ocal -urchase Order ote = 3

Inventor' 8ontrol 31.1 Introduction 31.2 Store &ecords 31.3 Issuing -rocedures 31

.4 Stoc! 8ontrol 31.4.1 Features 31." -h'sical Stoc! Ta!ing -rocedures 32

5 Accounts &eceivable/ -re$a'ment and :e$osits 335.1 Introduction 33

1 8a$ital ?$enditure and Fi?ed Assets 341.1 Introduction 341.2 @anagement of Fi?ed Assets 341.3 Fi?ed Assets &egister 3"

1.3.1 &ecording Fi?ed Asset -urchases 3"1.3.2 :is$osal of Fi?ed Assets 3"

11 @anagement Information S'stem 3%11.1 Introduction 3%11.2 &e$orts 3%

12 8hart of Accounts 3

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10 Introduction

10.1The Organisationcom$an'B as incor$orated on A$ril 13/ 2 and commenced business on

A$ril 13/ 2. com$an'Bo$erates a sim$le management structure ith the

,oard of :irector at the A$e? folloed b' the 8hief ?ecutive O;cerC@anaging:irector/ the eneral @anager then the functional managers.

10.2Structure of the Finance FunctionThe Financial @anagement of


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@onitoring the +nancial $erformance of the institution and re$orting to the

,oard

&evieing the annual budget to be $resented to the ,oard

stablishing long/ medium and shortEterm o$erating and +nancial

objectives

Selecting the most viable $rojects for ca$ital e?$enditure and see!ing,oard a$$roval

nsuring com$liance in +nancial re$orting and timel' submission of re$orts

to the regulator

Together ith the @anagement sta( develo$ o$erational $lan to be

a$$roved b' the

,oard

&evies and a$$roves all +nancial re$orts to be $resented to the ,oard

&evies all vouchers and invoices for those chec!s hich re9uire his or her

signature.

A$$roves all reimbursements.

1.2.( Finance )anager

)ith the Accountant/ and in$ut from the 8O and O$erations manager/

develo$s the annual budget.

-re$aring +nancial re$orts to be submitted to the regulator timel'

&evies and a$$roves all +nancial re$orts.

&evies and a$$roves list of $ending chec! disbursements.

&evies all vouchers and invoices for those chec!s hich re9uire his or her

signature.

Authori6es all inter fund transfers.

&evies all ban! reconciliations.

&evies the $a'roll summar' for the correct $a'ee/ hours or!ed and

chec! amount.

@anages the assets accounts.

1.2.* +ccountant,s-

-rocesses all recei$ts and disbursements.

-rocesses the $a'roll/ including $a'roll ta? returns.

Submits re9uests for interfund transfers.

@aintains and reconciles the general ledger monthl'.

)ith the +nance manager/ and ith in$ut from the 8O and :e$artment

managers/ develo$s the annual budget.

-re$ares all +nancial re$orts/ including re9uests for reimbursements.

@anages the $ett' cash fund.

&econciles the ban! accounts.

&econciles the statement of credit card de$osits and service charges.

:ouble chec! all reimbursement re9uests against recei$ts $rovided.

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1.$ Obecti"es

This document is designed as a guide toD

nsure $lanning/ organi6ing and directing detailed +nance activities.

:escribe the standard com$an'B accounting $rocedures and +nancial

management $ractices.

Serve as a reference material to be used b' sta( and other e?ternalagencies li!e the auditors in understanding the s'stem as a hole.

#se as a tool to train the accounting sta( in the o$eration of the s'stem.

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1.( +ccounting frame/orThis manual has been $re$ared in reference to las/ standards and best $ractice

guideline for accounts $re$aration. These areD

8om$anies Act/ 15%3


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11 The +ccounting System

10.$5hat is it6This refers to the $rocedures/ $olicies/ standards and methods ado$ted in

gathering/ classif'ing/ recording/ $resenting and disclosing business events and

transactions. The accounting s'stem includes the formal records and original

source data.

10.(nderlying assumptions

Accrual basisD transactions and other events are recognised hen the'

occur


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:eferred ta? is measured at the ta? rates that are e?$ected to be a$$lied tothe tem$orar' di(erences hen the' reverse/ based on la that has beenenacted or substantivel' enacted b' the re$orting date.

!roperty8 plant : e;uipment

Items of $ro$ert'/ $lant and e9ui$ment are measured at cost lessaccumulated de$reciation and im$airment losses. 8ost includese?$enditures that are directl' attributable to the ac9uisition of the asset.Subse9uent costs are included in the assets carr'ing amount or recognisedas a se$arate asset/ as a$$ro$riate/ onl' hen it is $robable that futureeconomic bene+ts associated ith the item ill Ho to the com$an'


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Assets that have an inde+nite useful life are not subject to amorti6ation andare tested annuall' for im$airment and henever changes in circumstanceindicate that the carr'ing amount ma' not be recoverable.

Assets that are subject to amorti6ation are tested for im$airmentheneverevents or changesin circumstances indicate that the carr'ing amount ma'not be recoverable.

An im$airment loss is recogni6ed for the amount b' hich the assetscarr'ing amounts e?ceeds its recoverable amount. The recoverable amountis the higher of an assetMs fair value less cost to sell and value in use.

3ecognition of assets and liabilities

Assets are recogni6ed if it is $robable that future economic associated iththe asset ill Ho to the com$an' and the cost of fair value can bemeasured reliabl'.

7iabilities are recogni6ed if it is $robable that an outHo of resourcesembod'ing economic bene+ts ill result from the settlement of the $resentobligation and the amount at hich the settlement ill ta!e $lace can bereliabl' measured.

>erecognition of assets and liabilities

A +nancial asset is derecogni6ed here the contractual rights to receivecash Hos from the assets have been transferred or have e?$ired or hensubstantiall' all the ris!s and reards of onershi$ have $assed. All otherassets are derecogni6ed on dis$osal or hen no future economic bene+tsare e?$ected from their use.

A +nancial liabilit' is derecogni6ed hen the relevant obligation has eitherbeen discharged or cancelled or has e?$ired.

Foreign currency translation

Transactions in foreign currencies are initiall' recorded at the functionalcurrenc' rate ruling at the date of the transaction. @onetar' assets andliabilities denominated in foreign currencies are retranslated at thefunctional currenc' rate of e?change ruling at the balance sheet date.>onEmonetar' items that are measured in terms of historical cost in a

foreign currenc' are translated using the e?change rate as at the date of theinitial transaction and are not subse9uentl' restated.

>onEmonetar' items measured at fair value in a foreign currenc' aretranslated using the e?change rates at the date hen the fair value asdetermined. All foreign e?change di(erences are ta!en to the incomestatement/ e?ce$t hen it relates to items hen gains or losses arerecogni6ed directl' in e9uit'/ the gain or loss is then recogni6ed net of thee?change com$onent in e9uit'.

#orro/ings

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InterestEbearing ban! loans and overdrafts are initiall' recorded at the$roceeds received/ net of direct issue costs. Finance charges including$remiums $a'able on settlement or redem$tion and direct issue costs/ areaccounted for on an accrual basis in the income statement using thee(ective interest method and are added to the carr'ing amount of theinstrument to the e?tent that the' are not settled in the $eriod in hich the'arise.

oans and +d"ances

7oans and Advances are nonEderivative +nancial assets ith +?ed ordeterminable $a'ments that are not 9uoted in an active mar!et.

Cash and Cash %;ui"alents

8ash and cash e9uivalents com$rise cash at ban! and in hand and shortEterm de$osits ith an original maturit' of three months or less in thebalance sheet. For the $ur$ose of the cash Ho statement/ cash and cash

e9uivalents consists of cash and cash e9uivalents as de+ned above/ net ofoutstanding ban! overdrafts.

!ost #alance Sheet %"ents

vents subse9uent to the balance sheet date are reHected in the +nancialstatements onl' to the e?tent that the' relate to the 'ear underconsideration and the e(ect is material.

Stated capital

Ordinar' shares are classi+ed as e9uit' at cost of issue.

se of %stimates and ?udgement

The $re$aration of +nancial statements in conformit' ith IF&S re9uiresmanagement to ma!e judgement/ estimates and assum$tions that a(ectthe a$$lication of $olicies and re$orted amounts of assets/ liabilities/ incomeand e?$enses.

The estimates and the associated assum$tions are based on historicale?$erience and various other factors that are believed to be reasonableunder the circumstances/ the results of hich form the basis of ma!ing the

judgement about carr'ing values of assets and liabilities that are not readil'a$$arent from other sources. Actual results ma' di(er from these estimates.

!ro"isions

-rovisions are recogni6ed hen com$an'B has a $resent obligation


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The e?$enses relating to an' $rovision is $resented in the income statementnet of an' reimbursement. If the e(ect of the time value of mone' ismaterial/ $rovisions are determined b' discounting the e?$ected future cashHos at a $reEta? rate that reHects current mar!et assessment of the timevalue of mone' and/ hen a$$ro$riate/ the ris!s s$eci+c to the liabilities.)hen discounting is used the increase in the $rovision due to the $assage oftime is recogni6ed as the borroing cost.

Financial riss management

com$an'B +nancial instruments consist mainl' of de$osits ith ban!accounts/ +nancial instruments/ receivable/ $a'able and loans. :erivativeinstrument are not used b' the com$an' for hedging $ur$oses. com$an'Bdoes not s$eculate in the trading of derivative instrument or does it o$erateforeign contracts or +?ed interest sa$ agreements.

>e7ned Contribution !lans

#nder the >ational -ension Act/ ational Insurance TrustIT= for em$lo'ee $ensions under a :eferred ,ene+t -ension Scheme.com$an'B obligation is limited to the relevant contributions/ hich eresettled on due dates. The $ension liabilities and obligations/ hoever/ restith SS>IT

10.@Aathering8 classifying : recording transactionsTo ensure +nancial information $rovided to management is relevant and timel'/

care should be e?ercised in gathering/ classif'ing and recording accounting data.

1 Filing systemAn accounting data should be $ro$erl' +led hether in hard co$' or in acom$uter C machine readable. This ill guarantee the reliabilit' of +nancialinformation. :ocument should be +led according to the main categories/ sub Ecategories and on monthl' basis ithin the +nancial 'ear. Nard co$' documentsshould be $ro$erl' labelled and stored in a +le cabinet. 7abelling should be doneusing the monthC'ear and the main categories. The sub E categories ill be ithinthe main categor'.

?am$lesD

Salaries +le for the month of an 21% hich also contains -AP and SocialSecurit' Fund


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2 Transactions recording&ecording transactions includes documenting sales=/ and entering $urchases ouble=entry accounting

In recording transactions/ the doubleEentr' s'stem of accounting is observed.

That is for ever' credit entr'/ there must be a debit entr'. ntries are made in the

boo!s of accounts ominal ledger=.

An e?am$leD

com$an'B $urchases a Heet of motor vehicles orth NQ25/. $a'ing a

che9ue of NQ 1/ . and the balance b' a ban! loan.

The entries to record this transaction ill beD

A debit of NQ 25/ . to motor vehicle/ a sub categor' under $ro$ert'/

$lant 0 e9ui$ment hich is the main categor'.

A credit of NQ 1/ . to the ban! account for the initial $a'ment.

A credit of NQ 15/ . to the ban! loan account.

The above is journalised as follosD

:r. -ro$ert'/ $lant 0 e9ui$ment


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9uit' is the residual interest in the assets of the entit' after deducting all

its liabilities.

The elements of income statement are de+ned as follosD

Income is increases in economic bene+ts during the accounting $eriod in

the form of inHos or enhancements of assets or decreases of liabilities

that result in increases in e9uit'/ other than those relating to contributionsfrom e9uit' $artici$ants.

?$enses are decreases in economic bene+ts during the accounting $eriod

in the form of outHos or de$letions of assets or incurrences of liabilitiesthat result in decreases in e9uit'/ other than those relating to distributionsto e9uit' $artici$ants.

$ 3ecognition criteriaAn item that meets the de+nition of an element should be recognised ifD

It is $robable that an' future economic bene+t associated ith the item

ill Ho to or from the entit'G and

The item has a cost or value that can be measured ith reliabilit'.

( Structure of accounts

com$an'B structure of elements


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secondar' code 1


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A source document describes all the basic facts of the transaction such as theamount of the transaction to hich the transaction as made/ the $ur$ose of thetransaction/ and the date of the transactionNere are some e?am$les of common source documentsD 8he9ue 0 8ash $a'ment vouchers -ett' cash voucher cancelled che9ues ournal voucher invoices recei$t de$osit sli$ 9uotation 0 $urchase order ,an! statement oods received note oods des$atched note )a'bill Lisa ,oo!s 7og boo!s

The list above may not be exhaustive. Samples of some of the above documents

are attached.

1 Transactions and its accounting treatment

com$an'B is into general trading various goods and services. The income

sources of the 8om$an' are mainl' from sale of $roducts. >oticeable among the

e?$enses are interest e?$ense/ ages 0 salaries/ trans$ortation/ etc.

The accounting treatments of com$an'B transactions are tabled belo. -lease

note that the transactions described belo ma' not be e?haustive.

sCn 8ode Accounting treatment :escri$tion of transaction

1. %% :ebit 8ustomer account )ith the amount of sales

made to the customer2 8redi

t

Sales account

2. %2 :ebit ,an! account )ith the amount of mone'

received from the

customer for the sales

made

%% 8redi

t

8ustomer account

3 4 :ebit ?$enses )ith e?$enses incurred

and $aid for%2 8redi

t

,an!Ccash

4 4 :ebit ?$enses )ith e?$enses incurred

and not $aid for 8redi

t

Accruals C $a'ables

" 4 :ebit ?$enses )ith the $re$a'ment

$ortion being e?$ended% 8redi

t

-re$a'ments

% :ebit -rovision for )ith de$reciation charge

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de$reciation for the 'ear.

8redi

t

Accumulated

de$reciation

:ebit -rov. for bad 0 doubtful

debt


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ers on credit

8redi

t

,an!Ccash

41 :ebit Investment )ith the $urchase of

treasur' bills and other

investment

8redi

t

,an!Ccash

22 :ebit Investment )ith unearned discount on

treasur' bills or similar

investments

8redi

t

#nearned discount

23 :ebit ,an!Ccash )ith the amount redeemed

on maturit'8redi

t

Investment

24 :ebit Asset dis$osal aCc )ith the cost of -- being

dis$osed8redi

t

-ro$ert' $lant 0

e9ui$ment


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t

3" :ebit ,an!Ccash

8redi

t

Stated ca$ital

3% :ebit --Cother asset )ith other consideration

other than cash8redi

t

Stated ca$ital

3 :ebit Income sur$lus )ith ca$italising issue

8redi

t

Stated ca$ital

3 :ebit Income sur$lus )ith dividend $a'able

8redi

t

:ividend account

35 :ebit :ividend account )ith dividend $aid

8redi

t

,an! Ccash

10.D!resentation of 7nancial statements

The +nancial 'ear of com$an'B is 1st anuar' to 31st :ecember each 'ear.Annual +nancial statements at the end of each 'ear should be $re$ared for audit$ur$oses in accordance ith the accounting frameor! in e?istence.

A com$lete set of +nancial statements com$risesD

a statement of +nancial $osition as at the end of the $eriodG

a statement of com$rehensive income for the $eriodG

a statement of changes in e9uit' for the $eriodG

a statement of cash Hos for the $eriodG

notes/ com$rising a summar' of signi+cant accounting $olicies and other

e?$lanator' informationG and

a statement of +nancial $osition as at the beginning of the earliest

com$arative $eriod hen an entit' a$$lies an accounting $olic'retros$ectivel' or ma!es a retros$ective restatement of items in its +nancialstatements/ or hen it reclassi+es items in its +nancial statements.

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12 #udgeting

,udgeting is essential to the $lanning and $rudent managing of com$an'B

+nancial $erformance.

10.103esponsibility for budget preparationThe +nance 0 audit committee of the ,oard of :irectors has the res$onsibilit' of

initiating the $re$aration of the budget. The 8hief ?ecutive O;cer


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An' revie or changes in the limits must be a$$roved b' the ,oard of

:irectors.

All vouchers for $a'ment shouldD

be $ro$erl' signed/ authori6ed and a$$rovedGbear the a$$ro$riate accounts codeGbe arithmeticall' chec!ed as correctG

>ocumentation +uthorisation and +ppro"al

1. m$lo'ment of sta( All em$lo'ment of sta( ill be subjectto the a$$roval of the 8hief ?ecutive O;cer

2. Sta( -a'roll To be chec!ed and a$$roved b' the8hief ?ecutive O;cer and eneral@anager. 8he9ue signatories are alsoto a$$rove $a'roll and $a'ment

voucher before signing the che9ue.

4. Sta( salar'/ $romotions/ salar' To be authori6ed and a$$roved andrevieed and alloances b' the 8hief ?ecutive O;cer on theadvice of the :irectors.

". -urchase &e9uisition To beauthori6ed b' the eneral @anager ofthe 8om$an'

%. 8he9ue -a'ment Loucher This ill be raised onl' here thesu$$orting documentation has beenauthori6ed b' the a$$ro$riate o;cer.Final a$$roval for a che9ue to be raisedill be given b' the 8hief ?ecutiveO;cer.

. 8he9ues and other ,an! To be signed b' an' To


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1.8a$ital ?$enditure 8a$ital $rojects must be a$$roved b'the ,oard o of :irectors

11. :ebt )riteEo( @ust be a$$roved b' the eneral@anager/ Nead of Internal Audit and8hief ?ecutive O;cer.

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1$ Aeneral 7nancial transactions

,elo are the $rocedures ado$ted for b' com$an'BD

10.1$Cash : #an

1 3eceipts

These are mainl' recei$ts from sales


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$ !reparation of Che;ues All che9ues must be made $a'able to order and crossed Account -a'ee

Onl'C>ot >egotiable. If a che9ue is cancelled/ the stub of the cancelled che9ue must be crossed out

and the ord 8ancelled ritten on it. The che9ue number of the cancelled che9ue must be cut and sta$led to the

che9ue stub and the cancelled che9ue destro'ed.

( Che;ue SignatoriesAll che9ues must be signed b' to ame of su$$lier

- -a'ment voucher number

- 8he9ue number

- Amount on che9ue

9 Controls and Checs The monthl' balances in the cash boo!s must agree ith the cash control

account in the >ominal 7edger.

All $a'ments must be accom$anied b' $ro$erl' authori6ed documentation

All su$$orting documentation to an' $a'ment must be stam$ed -AI: orotherise cancelled to $revent double $a'ment/ hich could occur if thesame documentation is used to bac!Eu$ another che9ue.

After the release of the signed che9ue to the creditorCclaimant/ the du$licateco$' of the $a'ment voucher must be +led ith the relevant documentationseriall' for $ur$oses of recording and auditing.

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10.1(!etty Cash

In order that funds are readil' made available for the da'EtoEda' running costs/e.g. travelling e?$enses/ fuel/ etc. The Nead of +nance ill maintain a $ett' cashHoat. The Hoat ill be controlled through a $ett' cash boo!. The amount of Hoatill be authorised b' the 8O.

@ Aeneral !rocedures A +?ed Hoat must be determined $eriodicall' b' the 8hief ?ecutive

O;cer. A -ett' 8ash &eimbursement Statement summarising the Statement of

Accounts of the last amount re$lenished and stating the amount currentl're9uired shall be used.

All $a'ments from -ett' 8ash are made on the basis of an a$$roved $ett'

cash voucher. -ett' 8ash transactions are summari6ed monthl' and $osted into the

nominal ledger. The initial $ett' cash che9ue ill be debited to -ett' cash Float in the

nominal ledger. Subse9uent reimbursements are charged to their res$ective asset/

e?$enses or liabilit' accounts. The im$rest s'stem of $ett' cash $rovides a sim$le and e(ective control

over funds becauseGa. it $rovides an automatic and regular revie of the $ett' cash e?$enditure and

recordsGb. it $revents the $ett' cash custodian from arbitraril' increasing the

$ett' cash Hoat ithout $ro$er a$$roval.

!etty Cash Controls and Checs ver' $a'ment out of $ett' cash must be su$$orted b' a -ett' 8ash

Loucher


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On recei$t of the cash the claimant signs the voucher forms ac!noledging

recei$t of the mone' and the cashier stam$s the voucher as $aid.

If an advance $a'ment is made/ the cashier gives the claimant an Advances

Accountabilit' Form hich should be com$leted and returned to the

Accountant.

The $ur$ose of the Advances Accountabilit' Form is to ensure that amount

$aid b' the 8ashier before the $erformance of s$eci+c duties/ e.g. travelling

or before s$eci+c e?$enses are concerned receive $rior a$$roval b' the

Accountant and that these are accounted for ith a$$ro$riate recei$ts or

documents. An' unaccounted for advances should be $osted to the

claimantMs $ersonal account and deducted from hisCher salar' at the end of

the month. The format of the form ill be as follosD

:ate

>ame of sta( receiving the advance

-ur$ose

A$$roval authorit'

Signature of Accountant

Signature of recei$t

:ate Accounted for

&elated -ett' 8ash Loucher number

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1( !ayroll

This section describes the com$an'B accounting $rocedures relating to $a'roll

and sta( e?$enses.

The Accountant shouldD

8alculate salar'Cage $a'ments for each em$lo'eeG

-rovide information on the 8om$an'Ms liabilities for statutor' and othercontributionsG

@aintain u$ to date records of each em$lo'eeMs $a' detailsG

-roduce various statutor' month end returnsG

-roduce other re$orts of $ermanent sta( salar' details as hen re9uiredG

#$date the nominal ledger s'stem for the cost of labour em$lo'ed in

relation to $articular cost centres or de$artmentsG

-rovide details of deductions for sta( advances and sta( loans.

10.1*%mployee 3ecords For each $ermanent em$lo'ee/ there must be a +le hich ill containD

ngagementsCa$$ointment details8on+rmationSalar' and salar' revies7ocationCdivision of em$lo'ee

TerminationCdismissal andCor resignation details

All the above information/ as ell as changes/ must be noti+ed to theaccounts section.

An attendance register ill be maintained for recording attendance of sta(

and ill form the basis for $re$aring $a'roll.

10.1!reparation of !ayroll

@icrosoft ?cel a$$lication is used to $re$are the monthl' $a'roll. The

$a'roll should have the folloing entriesD

>ame of em$lo'ee:ate of ,irthSS>IT >umber,asic -a' for the monthAlloancesross $a' for monthSocial Securit' deductionsm$lo'ee income ta? deductions


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10.19!ayment of Salaries

Salar' $a'ment is e(ected b' crediting the res$ective ban! accounts of

em$lo'ees

10.1@!ayroll ControlsThe folloing controls should $revail over $a'roll.


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10.1DStatutory 3eturns

@onthl' returns and $a'ments are re9uired in res$ect ofD

Social Securit' 8ontributions


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1* ocal !urchases and 3ecording

10.20!urchasing FunctionAn u$EtoEdate record must be !e$t of su$$liers ith res$ect to 9ualit' and $rices.-lanning of $urchases is im$ortant to ensure that li9uid funds are notunnecessaril' tied u$.

1 >uties of !urchasing O'cerThe duties of the -rocurement O;cer ould include the folloingD

8hoosing the right su$$lier/ ho ill $rovide the right goods in terms of

9ualit'/ at the right time and at the loest ultimate cost to com$an'B 7td.

nsuring that/ as far as is $racticable/ all orders are delivered on time.

2 !urchase 3e;uisition)hen the store!ee$erC $roduct manager re9uires an item ill be raised in du$licate b' the receiving o;cer shoingD

Su$$lierMs name :ate received :eliver' >ote number Ruantit' and descri$tion of goods received Signature of receiver

The original of the &> ill be sent to the Accounts section/ hich ill enter the

stoc! account code a$$ro$riate to each item on the &>. The accounts sectionill $re$are a journal voucher for debiting stoc! account and crediting thesu$$lier.

.2 Field Tra"el Claim Form

Field Travel 8laim Form is the document of record of $er diem and all other

e?$enses incurred b' sta( during +eld tri$s.

This form shall be used in claiming for e?$enses incurred b' the sta( hile

on +eld tri$s or in accounting for monies advanced for travel e?$enses andan' other e?$enses.

This form is designed to collect information on the name of the traveller/

rate used/ and other travel e?$enses. Sta( ma!ing claim on travel or

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submitting returns on travel advances ill be re9uired to com$lete thisform.

All travel must be authori6ed b' the @anaging :irector/ Nead of the $articularde$artment andcounter signed b' the Finance manager on the +eld authori6ation form. >oclaims for reimbursements shall be honoured ithout these authori6ations.

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1 Tra"el ad"ances to Sta4

Travel e?$enses incurred b' sta( or an' other authori6ed $erson shall bereimbursed according to the regulations set out in the Numan &esource -oliciesand -rocedures @anual. A se$arate sta( debtor account shall be o$ened for eachadvance granted. An' advances not accounted for ithin to ee!s shall berecovered from the salar' of the em$lo'ee concerned ithout $rior reference to

the em$lo'ee.

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1 In"entory Control

10.21Introduction

The $ur$ose of this section is to describe the $rocedures and documentation tobe used in recording and controlling stoc!s.

The $rocedure ensuresD

that stoc! movement


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Stoc! records ma' not be o$ened for stationar' and other similar consumable

items hich are of lo value. &ecording their recei$ts and issues in a registerma' su;ce for the control of these items.

10.2*!hysical Stoc Taing !rocedures

-h'sical stoc! chec!s are aimed $rimaril' at verif'ing the correctness of stoc!

records and thereb' ensuring that the 9uantit' and value of stoc! shon inthe boo!s are accurate.

The eneral @anager has overall res$onsibilit' for $ro$er im$lementation of

all stoc! ta!ing and related accounting $rocedures.

Stoc! count and evaluation sheets should be used. These must sho

descri$tion and stoc! code/ $osition or location of item and unit of item


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@. !3OC%SSIA OF IGOIC%SOnl' authori6ed and a$$roved su$$lier invoices and credit notes ill be enteredinto the s'stem.

The Accountant should enter the folloing details in the invoice register.

:ate

Su$$lierMs Invoice number

Internal reference number

Su$$lierMs name


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been resolved the tic! in the dis$uted column in the invoice register should becrossed.

The Accountant should revie the invoice register on a monthl' basis to ensurethe dis$uted invoices are being resolved on a timel' basis.

@.2 Coding of in"oiceThe Accountant is res$onsible for coding to the a$$ro$riate $urchase ledger

account and general ledger account b' reference to the su$$lier listing and chartaccounts.

In res$ect of each invoice to be $assed for $rocessing/ he should com$lete thefolloing details and rite u$ the $urchase journal


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The maintenance of the su$$lier +le is the res$onsibilit' of the Accountant. Ne orshe must ensure that all changes to the +le are made in line ith these$rocedures.

The Accountant ill initiate/ chec! and verif' the changes. The +nance

manager ill authori6e the changes. The +nance manager is res$onsiblefor authori6ing the changes.

An' changes to the su$$lierMs +le/ hether an insertion/ an addition or a

deletion must be entered as an u$date +le in the $urchase ledger.

The in$ut form shall be numbered se9uentiall' and once com$leted b' the

accountant is $assed to the Finance manager for veri+cation and further tothe 8O for a$$roval and returned to the accountant for $rocessing. Afterthe in$ut/ the forms should be +led se9uentiall'.

At the monthEend/ the Accountant shall revie the su$$lier u$date +le and

ensure that all changes have been $ro$erl' authori6ed/ $osted andarranged in the re9uired se9uence.

At the end of each accounting $eriod to +nali6ing the trial balance/ the

Finance manager shall conduct a revie of the $urchasing journal andidentif' an' goodsCservices/ hich have not been invoiced. NeC She illma!e an accrual for all such e?$enses b' a' of journal voucher.

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10 Capital %&penditure and Fi&ed +ssets

10.2Introduction

All e?$enditure incurred for the ac9uisition of assets hose life e?$ectanc' isover one 'ear shall be termed ca$ital. The assets thus $urchased are +?ed innature and must be di(erentiated from current assets/ hich are normall'

consumed in the $roduction $rocess or service deliver' during the 'ear.

The ,oard of :irectors of com$an'B 7td or 8hief ?ecutive O;cer and Finance@anager must a$$rove all ca$ital e?$enditure. )here an asset is constructedover a $eriod of time/ the cost of constructing the asset is accumulated $endingcom$letion hen it could be transferred to the a$$ro$riate +?ed assets records.

In a$$roving an' ca$ital e?$enditure $ro$osal the ,oard or 8hief ?ecutiveO;cer and Finance @anager ma' consider the folloingD

8a$ital outla' involved.

Availabilit' of funds for the $ro$osal. Financial/ economic/ or other justi+cation of the $roject.

@ethod of ac9uisition or $urchase.

10.29)anagement of Fi&ed +ssetsFi?ed assets must be managed b' the Accountant and he shall underta!e the

folloingD

Anal'se and $rocess ca$ital e?$enditure documentsG

-re$are $a'ment vouchersG

-re$are record cards for nel' ac9uired assetsG 8alculate de$reciation $rovisionG

-re$are detailed 9uarterl' re$orts.

The re$orts should indicate the folloingD

The cumulative value of each categor' of assets at the end of each 9uarterG

The cumulative de$reciation of each categor' of assets as the end of each

9uarterG

An' additions or dis$osals to or from each categor' of assets during the

9uarterG

The >et ,oo! Lalue ,L= of each categor' of assets as at the end of each

9uarterG

Summar' of maintenance or re$air costs incurred on each categor' of

assets during the 9uarter.

10.2@Fi&ed +ssets 3egister

The maintenance of the Fi?ed Assets &egister shall be the res$onsibilit' of theAccountant.

A +?ed assets register must be maintained in hich $articulars of all assetsac9uired shall be recorded. The folloing information about the assets


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su$$lierMs name and address :ate $urchasedCac9uired $urchase $rice model andCor serial number


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19 )anagement Information System

10.2DIntroductionThis section outlines the $rinci$al re$orts to be issued on a regular basis to the

,O:/ 8hairman and 8hief ?ecutive O;cer.

The information ill enable management to control the activities of com$an'B

7td and ill also serve as a data ban! for the $ur$ose of setting the future $lans

of the 8om$an'.

For the information to be useful/ it must be timel'. All monthl' re$orts should be

issued b' the 1th da' of the folloing month. The re$ort must highlight

signi+cant or material occurrences during the month.

The folloing are the management information re$orts that must be sent to the

8hief ?ecutive O;cer.

10.$03eports

10.$0.1.1.1 )onthly

)ee!l' Income &e$ort

@onthl' Income statement &e$ort

@onthl' 8ash Flo &e$ort

@onthl' Trial ,alance

10.$0.1.1.2 Huarterly

Huarterly Capital %&penditure 3eportD Summari6es the amount authori6edand e?$ended on ca$ital asset ac9uisitions during the 9uarter and 'earEtoEdate.

Statement of Comprehensi"e Incomefor the 9uarter and 'earEtoEdate


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1@ Chart of +ccounts

+ccounts code +ccounts description

2 Sales

21 3ice

21.1 Obaatan$a

21.2 Other brands

22 Tomatoes

22.1 TA@ TA@

22.2 ino

23 Oil

23.1 Obaatan$a oil

23.2 ino

24 >rins2" #eauty and Sanitary !roducts

4 %&penses

41 #orro/ing Cost

41 Sta4 Cost

41.1 Salaries 0 ages

41.2 m$lo'ers SSF contribution

41.3 Alloance

41.4 Overtime cost

41." ,onuses41.% 8anteen e?$enses

42 Ao"ernance %&penses

42.1 :irectors remuneration

42.2 :irectors fees

42.3 ,O: meeting e?$enses

42.4 A@ e?$enses

43 Communication %&penses

43.1 Tele$hone 0 fa?

43.2 Internet 0 other bandidth charges43.3 -ostage 0 deliver'

44 Stationery : printing

44.1 O;ce stationer'

44.2 Others

4" Gehicle 3unning Cost

4".1 Fuel 0 lubrication cost

4".2 &oadorth'/ tolls etc.

4".4 others

4% Aenerator 3unning Cost

4%.1 Fuel 0 lubrication cost

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4 Insurance %&penses

4.1 Lehicles

4.2 ,urglar'

4.3 ,uilding

4 3epairs : )aintenance

4.1 Lehicles

4.2 8om$uters 0 data handling e9ui$ment

4.3 Furniture 0 +ttings

4.4 -lant 0 @achiner'

4." ,uilding

45 tilities

45.1 lectricit'

45.2 )ater

41 Cleaning and Sanitation

411 3ent

412 !rofessional %&penses

412.1 Audit Fees

412.2 7egal Fees

412.3 8onsultanc' services

413 Tra"elling %&penses

413.1 Notel 0 accommodation e?$enses

413.2 Trans$ortation


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42 #an Charges

42.1 T ,an! hana 7imited

42.2 #,A hana 7imited

42.3 Others

421 +mortiEation of Intangible +ssets

422 >epreciation of !roperty8 !lant : %;uipment

422.1 :e$reciation for buildings

422.2 :e$reciation for leasehold im$rovements

422.3 :e$reciation for vehicles

422.4 :e$reciation for furniture 0 +ttings

422." :e$reciation for com$uters 0 data handling e9ui$ment

422.% :e$reciation for $lant 0 @achiner'

423 Corporate ta&es

423.1 Income ta? $rovision

423.2 :eferred ta?

+ssets

%1 Cash on Jand

%1.1 -ett' cash J 8edi

%1.2 8he9ues in Transit

%2 #an #alances

%2.1 T ,an! hana 7imited

%2.2 #,A hana 7imited

%2.3 Others

%3 Short Term In"estment%3.1 Time de$osit

%3.2 Treasur' bills

%3.3 1 'ear note

%4 Other In"estment

%4.1 &elated -arties

%" oans : +d"ances

%% 3ecei"ables

%%.1 Sales &eceivables

% !repayments and Other 3ecei"ables%.1 -re$aid Insurance

%.2 -re$aid &ent

%.3 -re$aid 8ommunication

%.4 Other -re$a'ments

% Other +ssets

%.1 Assets Neld for &esale

%.2 :eferred ta?

%2 !roperty8 !lant and %;uipment

%21 7and

%22 ,uildings

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%23 7easehold im$rovements

%24 @otor vehicles

%2" Furniture and +?ture

%2% 8om$uter 0 data handling e9ui$ment

%2 -lant 0 e9ui$ment

%2 +ccumulated +mortiEation

%2.1 Amorti6ation e?$ense for startEu$ costs

%2.2 Other intangible assets

%25 +ccumulated >epreciation

%25.1 :e$reciation for buildings

%25.2 :e$reciation for leasehold im$rovements

%25.3 :e$reciation for vehicles

%25.4 :e$reciation for furniture 0 +ttings

%25." :e$reciation for com$uters 0 data handling e9ui$ment

%25.% :e$reciation for $lant 0 e9ui$ment

iabilities

1 Short Term #orro/ings

1.1 ,an! loan

1.2 Other loans

2 ong Term #orro/ings

2.1 ,an! loan

2.2 Other loans

21 +ccounts !ayable : +ccrued %&penses

21.1 Interest $a'able21.2 7egal fees

21.3 ?ternal audit fees

21.4 Other ?$enses

22 !ro"isions

22.1 -rovision for bad 0 doubtful debt

22.2 -rovision for A@ e?$enses

22.3 8or$orate ta?

22.4 Other $rovisions

%;uityKShareholders Fund5 Stated Capital

5.1 Issued shares

51 Surpluses : 3eser"es

51.1 Income sur$lusCretained earnings

51.2 8a$ital sur$lusCrevaluation reserve

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