Professional Documents
Culture Documents
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Table of Contents
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1
1.1
1.2
1.3
1.4
1.5
1.6
Introduction
The Organisation
Structure of the Finance Function
Objectives of the manual
Accounting framework
Update of this manual
Responsibility of User Staf
3
3
3
3
4
4
4
2
2.1
2.2
2.3
2.4
2.5
2.6
2.6.1
2.6.2
2.6.3
2.6.4
2.6.5
2.6.6
2.6.7
2.6.8
2.7
6
6
6
6
6
5
10
10
11
12
12
12
14
14
15
18
3
3.1
3.2
3.3
Budgeting
Responsibility for budget preparation
Budget cycle
Authorization and Approval Limits & Procedures
19
19
19
20
4
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7
4.2
4.2.1
4.2.2
4.2.3
22
22
22
22
23
23
23
23
23
24
24
25
25
5
6.1
6.2
6.3
6.4
6.5
Employee Records
Preparation of Payroll
Payment of Salaries
Payroll Controls
Statutory Returns
27
27
28
28
29
7
7.1
7.1.1
7.1.2
30
30
30
30
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7.1.3
7.1.4
30
30
8
8.1
8.2
8.3
8.4
8.4.1
8.5
Inventory Control
Introduction
Store Records
Issuing Procedures
Stock Control
Features
Physical Stock Taking Procedures
31
31
31
31
31
31
32
9
9.1
33
33
10
10.1
10.2
10.3
10.3.1
10.3.2
34
34
34
35
35
35
11
11.1
11.2
36
36
36
12
Chart of Accounts
38
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10 Introduction
1.2.3.
Reviews all vouchers and invoices for those checks which require his or her
signature.
Authorizes all inter fund transfers.
Reviews the payroll summary for the correct payee, hours worked and
check amount.
Manages the assets accounts.
1.2.5
Accountant(s)
Processes all receipts and disbursements.
With the finance manager, and with input from the CEO and Department
managers, develops the annual budget.
Prepares all financial reports, including requests for reimbursements.
1.3 Objectives
This document is designed as a guide to:
Ensure planning, organizing and directing detailed finance activities.
Describe the standard <company> accounting procedures and financial
management practices.
Serve as a reference material to be used by staf and other external
agencies like the auditors in understanding the system as a whole.
Use as a tool to train the accounting staf in the operation of the system.
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Deferred tax is measured at the tax rates that are expected to be applied to
the temporary diferences when they reverse, based on law that has been
enacted or substantively enacted by the reporting date.
Property, plant & equipment
Items of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset's carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the company
(<company>) and the cost can be measured reliably. All other repairs and
maintenance are charged to the income statement during the financial
period in which they are incurred.
An impairment loss is recognised if the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount of an asset is the greater
of its value in use and fair value less cost to sell. Impairment losses are
recognised in the Income Statement.
Depreciation is recognised in the income statement on a straight line basis
over the estimated useful lives of each part of an item of property, plant and
equipment. Land is not depreciated.
The current annual depreciation rates for each class of property, plant and
equipment are as follows:
Building
10%
Motor Vehicle
20%
Office Equipment
20%
Computer & Accessories
33.33%
Furniture, Fittings
20%
Depreciation methods, residual values and useful lives are reassessed at
each financial year. Gains and losses on disposal of property, plant and
equipment are included in the income statement.
Improvements to Leasehold Properties
Material improvement in lease hold properties are capitalized and
depreciated over the length of the lease term or the estimated life of the
improvements, whichever is lower.
Operating leases
Leases of assets under which the lessor efectively retains all the risks and
benefits of ownership are classified as operating leases. Rentals payable or
receivable under operating leases are recognized in the income statement
on a straight-line basis over the terms of relevant lease.
Impairment of non-financial assets
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Assets that have an indefinite useful life are not subject to amortization and
are tested annually for impairment and whenever changes in circumstance
indicate that the carrying amount may not be recoverable.
Assets that are subject to amortization are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may
not be recoverable.
An impairment loss is recognized for the amount by which the assets
carrying amounts exceeds its recoverable amount. The recoverable amount
is the higher of an assets fair value less cost to sell and value in use.
Recognition of assets and liabilities
Assets are recognized if it is probable that future economic associated with
the asset will flow to the company and the cost of fair value can be
measured reliably.
Liabilities are recognized if it is probable that an outflow of resources
embodying economic benefits will result from the settlement of the present
obligation and the amount at which the settlement will take place can be
reliably measured.
Derecognition of assets and liabilities
A financial asset is derecognized where the contractual rights to receive
cash flows from the assets have been transferred or have expired or when
substantially all the risks and rewards of ownership have passed. All other
assets are derecognized on disposal or when no future economic benefits
are expected from their use.
A financial liability is derecognized when the relevant obligation has either
been discharged or cancelled or has expired.
Foreign currency translation
Transactions in foreign currencies are initially recorded at the functional
currency rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the
functional currency rate of exchange ruling at the balance sheet date.
Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate as at the date of the
initial transaction and are not subsequently restated.
Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. All foreign exchange diferences are taken to the income
statement, except when it relates to items when gains or losses are
recognized directly in equity, the gain or loss is then recognized net of the
exchange component in equity.
Borrowings
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2
Transactions recording
Recording transactions includes documenting sales), and entering purchases (in
the account payable account based on the supporting documents) and accruing /
paying for authorised expenditures.
Categorizing transactions means grouping the transactions under appropriate
heading. An example is where interest earned is analysed into interest on loans
and interest earned on investment and property, plant & equipment have been
grouped into say motor vehicles, plant and machinery etc.
Transactions are summarised after they have been recorded and categorised.
Summary means summing up each category or condensing the categories to
facilitate easy reporting or to fulfil the reporting requirements.
1
Double-entry accounting
In recording transactions, the double-entry system of accounting is observed.
That is for every credit entry, there must be a debit entry. Entries are made in the
books of accounts (Nominal ledger).
An example:
<company> purchases a fleet of motor vehicles worth GH290,000.00 paying a
cheque of GH 100, 000.00 and the balance by a bank loan.
The entries to record this transaction will be:
A debit of GH 290, 000.00 to motor vehicle, a sub category under property,
plant & equipment which is the main category.
A credit of GH 100, 000.00 to the bank account for the initial payment.
A credit of GH 190, 000.00 to the bank loan account.
The above is journalised as follows:
Dr. Property, plant & equipment (motor vehicle)
290,000
Cr. Bank
100,000
190,000
The entries balance because the GH290,000,000 debit is equal to the sum of
the two credits.
A liability is a present obligation of the entity arising from past events, the
settlement of which is expected to result in an outflow from the entity of
resources embodying economic benefits.
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Equity is the residual interest in the assets of the entity after deducting all
its liabilities.
3
Recognition criteria
An item that meets the definition of an element should be recognised if:
It is probable that any future economic benefit associated with the item
will flow to or from the entity; and
The item has a cost or value that can be measured with reliability.
4
Structure of accounts
<company> structure of elements (accounts type) in the financial position and
the income statement are as below in the books of accounts / ledgers.
Primary code
Element
2000
4000
6000
8000
9000
accounts type
Income
Expenses
Assets
Liability
Equity
Type of accounts
balance
Credit
Debit
Debit
Credit
Credit
1
Income
<company> income is mainly income from the sales (of various products) to its
customers. It is assigned primary code 2000. Main categories of income sources
are assigned secondary codes ranging from 001 999, to be part of the primary
code. Sub-categories are assigned tertiary codes from .1 - .999. For example, sale
of obaatanpa Rice is assigned 2005.1 (i.e. primary code 2000(sales) plus
secondary code 005(rice product code) then a tertiary code of .1 (obaatanpa
rice)) etc.
2
Expenditure
There are various expenditure categories of <company> with a primary code of
4000. Noticeable among them are communication, salaries & wages, rent and
depreciation. Main categories of expenditure are assigned secondary codes
ranging from 001 999, to be part of the primary code. Sub-categories are
assigned tertiary codes from .1 - .999. For example, communication expense on
marketers is assigned 4001.1 (i.e. primary code 4000(Expenditure) plus
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A source document describes all the basic facts of the transaction such as the
amount of the transaction to which the transaction was made, the purpose of the
transaction, and the date of the transaction
Here are some examples of common source documents:
cancelled cheques
Journal voucher
invoices
receipt
deposit slip
Bank statement
Waybill
Visa Books
Log books
The list above may not be exhaustive. Samples of some of the above documents
are attached.
<company> is into general trading various goods and services. The income
sources of the Company are mainly from sale of products. Noticeable among the
expenses are interest expense, wages & salaries, transportation, etc.
The accounting treatments of <company> transactions are tabled below. Please
note that the transactions described below may not be exhaustive.
s/n
1.
2.
Code
6006
2000
Accounting treatment
Debit Customer account
Credi Sales account
6002
6006
t
Debit
Credi
Description of transaction
With the amount of sales
made to the customer
Bank account
Customer account
t
3
customer
from
for
the
made
With expenses
4000
6002
Debit
Credi
Expenses
Bank/cash
4000
8000
t
Debit
Credi
Expenses
Accruals / payables
With
4000
6007
t
Debit
Credi
Expenses
Prepayments
With
t
Debit
Provision
the
sales
incurred
incurred
prepayment
11
12
13
14
15
16
17
18
Credi
depreciation
Accumulated
t
Debit
depreciation
Prov. for bad & doubtful
Credi
debt (I.S)
Prov. for bad & doubtful
t
Debit
debt (F.P)
Prov. for bad & doubtful
Credi
debt (F.P)
Prov. for bad & doubtful
t
Debit
Credi
debt (I.S.)
Provisions (I.S)
Provisions (F.P)
t
Debit
Credi
With
t
Debit
Credi
Corporate tax
Bank/cash
t
Debit
Property
Credi
equipment
Bank/cash
t
Debit
Property
equipment
Suppliers/payables
acquired
Credi
t
Debit
Credi
Inventory
Bank/cash
t
Debit
Inventory
Credi
stationery)
Suppliers
t
Debit
Credi
With
plant
20
tax
provision made
&
that
has
been
paid for.
plant
&
has
been
paid for.
t
19
Debit
Credi
Prepayments
Bank/cash
t
Debit
Accruals/payables/suppli
stationery)
(say
consumed
made
41
on credit
Credi
ers
Bank/cash
t
Debit
Credi
Investment
Bank/cash
With
treasury
t
22
Debit
Credi
purchase
bills
and
of
other
investment
With unearned discount on
Investment
Unearned discount
treasury
t
23
the
bills
or
similar
investments
With the amount redeemed
Debit
Credi
Bank/cash
Investment
t
Debit
Credi
t
Debit
equipment (PPE)
Accumulated
Credi
depreciation
Asset disposal a/c
t
Debit
Credi
Bank/cash
Asset disposal a/c
31
t
Debit
Credi
32
t
Debit
Credi
Income statement
Asset disposal a/c
t
Debit
Debit
Credi
With
t
Credi
S.S.F.
t
Credi
Other deductions
t
Credi
Salary control
t
Debit
Debit
Debit
Debit
Credi
P.A.Y.E.
S.S.F.
Other deductions
Salary control
Bank / cash
24
25
60
33
34
on maturity
With the cost of PPE being
&
disposed
With
the
accumulated
being disposed
on disposal
salaries,
overtime
and
wages,
payroll
accruals
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35
t
Debit
Credi
Bank/cash
Stated capital
36
t
Debit
Credi
PPE/other asset
Stated capital
With
37
t
Debit
Credi
Income surplus
Stated capital
38
t
Debit
Credi
Income surplus
Dividend account
39
t
Debit
Credi
Dividend account
Bank /cash
other
consideration
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12 Budgeting
Budgeting is essential to the planning and prudent managing of <company>
financial performance.
10.10Responsibility for budget preparation
The finance & audit committee of the Board of Directors has the responsibility of
initiating the preparation of the budget. The Chief Executive Officer (CEO) has
overall responsibility for the preparation and co-ordination of the budget. This
responsibility should be carried out on his behalf by the Finance Manager.
The Co-ordinating role should involve the issue of guidelines and directives and
consolidation of the budget submitted by various departments
10.11Budget cycle
The budget cycle for <company> commences at the beginning of the first
quarter of every financial year. The cycle ends at the end of the fourth quarter of
the following financial year. Every year the Finance Manager should issue a
timetable at the commencement of the budget cycle which should include a
review of the actual performance of twelve months within the financial year.
The Budget Time Table will show amongst other things, the main budgeting tasks,
the responsibilities of persons involved and the possible time allowed.
At the start of the annual budgetary process, the BOD and management should
hold a meeting to set out the targets and assumptions and guidelines for the
preparation of the budget.
The Finance Manager should consolidate departments budget for discussion by
Management. Management may request for amendments considered necessary.
The Finance Manager should finalise the draft budget for consideration and
approval by the finance & audit committee. The Committee should meet to
review and may request amendments before final approval by the BOD.
On approval for implementation, management should on monthly basis review
their performance with the budget to identify areas of improvement.
The Accountant has the overall responsibility for ensuring that the various
authority limits are enforced.
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Documentation
1. Employment of staf
to the
2.
Staf Payroll
the
Board of Directors.
8. Petty Cash
10.Capital Expenditure
the
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Payments to Suppliers
Payment voucher (PV) is the main document for processing payment.
All PVs shall be authorised & approved before payments can be made.
The PV shall have the details of the payee, purpose, date, cheque number,
amount, account number, accounts code, prepared by, certified by and
approved by etc.
Supporting documents must be attached to the PV for approval by the
responsible official.
Processing of payment can only commence after approval such transactions
Appropriate taxes should be deducted whiles processing payments.
All payments to suppliers must be by crossed cheques, made payable to the
supplier named on the invoice/payment voucher.
Postings into the Payments Cash Book are made through the Payment
Vouchers
Payment of Wages and Salaries
Payment of salaries to staf with bank accounts is efected by issuing a cheque
payable to the bank for the total amount to be credited to the individual staf
accounts.
Statutory deductions must be paid to the various regulatory bodies on due
dates.
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Preparation of Cheques
All cheques must be made payable to order and crossed Account Payee
Only/Not Negotiable.
If a cheque is cancelled, the stub of the cancelled cheque must be crossed out
and the word Cancelled written on it.
The cheque number of the cancelled cheque must be cut and stapled to the
cheque stub and the cancelled cheque destroyed.
4
Cheque Signatories
All cheques must be signed by two (2) signatories of whom the Chief Executive
Officer of <company> Ltd should be the principal signatory. The list of signatories
will be determined from time to time by the Board of Directors.
5
Bank Reconciliation Statement
A bank reconciliation statement must be prepared monthly for all the bank
accounts within five working days of the close of the period. This statement must
be prepared by an officer other than the Accountant who will forward this to the
Head of Internal Audit and Chief Executive Officer for approval.
Lodgements into bank accounts not credited by the bank (uncredited cheques)
and unpresented cheques for over one month must be investigated. A list of
unpresented cheques should be made from bank reconciliations to enable the
identification of stale cheques for reverse entries to be passed. Copies of all
monthly bank reconciliation statements must be kept on file.
6
Cheque Book Register
The Cashier should maintain a cheque register which records all cheques sent out
to suppliers. The following details should be found in the register
- Date on cheque
- Name of supplier
- Payment voucher number
- Cheque number
- Amount on cheque
7
After the release of the signed cheque to the creditor/claimant, the duplicate
copy of the payment voucher must be filed with the relevant documentation
serially for purposes of recording and auditing.
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10.14Petty Cash
In order that funds are readily made available for the day-to-day running costs,
e.g. travelling expenses, fuel, etc. The Head of finance will maintain a petty cash
float. The float will be controlled through a petty cash book. The amount of float
will be authorised by the CEO.
8
a.
General Procedures
A fixed float must be determined periodically by the Chief Executive
Officer.
A Petty Cash Reimbursement Statement summarising the Statement of
Accounts of the last amount replenished and stating the amount currently
required shall be used.
All payments from Petty Cash are made on the basis of an approved petty
cash voucher.
Petty Cash transactions are summarized monthly and posted into the
nominal ledger.
The initial petty cash cheque will be debited to Petty cash Float in the
nominal ledger.
Subsequent reimbursements are charged to their respective asset,
expenses or liability accounts.
The imprest system of petty cash provides a simple and efective control
over funds because;
it provides an automatic and regular review of the petty cash expenditure and
records;
b. it prevents the petty cash custodian from arbitrarily increasing the
petty cash float without proper approval.
9
Payments from Petty Cash
The procedure for payment from petty cash expenses is similar to that of the
main cash payments. They are as follows:
A claim for petty cash payment is made by the claimant on a petty cash
voucher. The voucher must indicate whether the claim is for services
rendered or an entitlement for services due or an advance for a service to
be rendered.
If approved, the voucher passes onto the Account officer who records all
advances for services due in a REGISTER OF ADVANCES before authorising
the authorising the payment of the claim.
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On receipt of the cash the claimant signs the voucher forms acknowledging
receipt of the money and the cashier stamps the voucher as paid.
If an advance payment is made, the cashier gives the claimant an Advances
Accountability Form which should be completed and returned to the
Accountant.
The purpose of the Advances Accountability Form is to ensure that amount
paid by the Cashier before the performance of specific duties, e.g. travelling
or before specific expenses are concerned receive prior approval by the
Accountant and that these are accounted for with appropriate receipts or
documents. Any unaccounted for advances should be posted to the
claimants personal account and deducted from his/her salary at the end of
the month. The format of the form will be as follows:
Date
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14 Payroll
This section describes the <company> accounting procedures relating to payroll
and staf expenses.
The Accountant should:
Calculate salary/wage payments for each employee;
Provide information on the Companys liabilities for statutory and other
contributions;
Maintain up to date records of each employees pay details;
10.15Employee Records
For each permanent employee, there must be a file which will contain:
Engagements/appointment details
Confirmation
Salary and salary reviews
Location/division of employee
Termination/dismissal and/or resignation details
10.16Preparation of Payroll
Microsoft Excel application is used to prepare the monthly payroll. The
payroll should have the following entries:
Name of employee
Date of Birth
SSNIT Number
Basic Pay for the month
Allowances
Gross pay for month
Social Security deductions
Employee income tax deductions (PAYE)
Loan repayments and other deductions
Welfare dues
Net pay
Social security (Employer contribution)
Signature column
The payroll should be totalled and cross-cast and then approved by the
General Manager and Chief Executive Officer before the payroll cheque is
prepared.
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10.17Payment of Salaries
Salary payment is efected by crediting the respective bank accounts of
employees
10.18Payroll Controls
The following controls should prevail over payroll.
(a) Physical
Salary advice forms must be
locked away when not being used.
(b) Authorisation
Salary Advances must be
recommended by CEO who will
refer this to the Finance Manage
Payment of salary should not be
made to third parties, unless
written authority from the payee is
given.
(c)
Payroll Reconciliation
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10.19Statutory Returns
Monthly returns and payments are required in respect of:
Social Security Contributions (Employer and Employee)
P A Y E deductions
Welfare dues
5.6 Salary Advances to staf
Staf advances shall be given upon request in accordance with regulations
stipulated in the personnel policies and procedures manual (by complete, signed
and authorized Staf Advance Authorization form, SAAF). An Advances ledger
account should be opened and reconciled at every end month. However, all
advances should be approved subject to the availability of funds.
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Choosing the right supplier, who will provide the right goods in terms of
quality, at the right time and at the lowest ultimate cost to <company> Ltd.
Ensuring that, as far as is practicable, all orders are delivered on time.
2
Purchase Requisition
When the storekeeper/ product manager requires an item(s) he/she raises a
Purchase Requisition and obtains the appropriate authorization from the General
Manager of <company> Ltd.
The Purchase Requisition is prepared in duplicate, with the original being passed
on to the procurement for purchasing.
3
Local Purchase Order (LPO)
All purchases must be covered by a Local Purchase Order (LPO) which should
indicate the quantity and value of goods purchased.
The Purchase order is prepared in four, with one to the supplier, one to the
Accounts, one for the warehouse and one for the product manager
4
Goods Received Note (GRN)
When goods are received, the accompanying delivery note must be checked
against the LPO by the receiving officer; and the date of receipt noted on the LPO.
A GRN will be raised in duplicate by the receiving officer showing:
Suppliers name
Date received
Delivery Note number
Quantity and description of goods received
Signature of receiver
The original of the GRN will be sent to the Accounts section, which will enter the
stock account code appropriate to each item on the GRN. The accounts section
will prepare a journal voucher for debiting stock account and crediting the
supplier.
6.2
Field Travel Claim Form
Field Travel Claim Form is the document of record of per diem and all other
expenses incurred by staf during field trips.
This form shall be used in claiming for expenses incurred by the staf while
on field trips or in accounting for monies advanced for travel expenses and
any other expenses.
This form is designed to collect information on the name of the traveller,
rate used, and other travel expenses. Staf making claim on travel or
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16 Inventory Control
10.21Introduction
The purpose of this section is to describe the procedures and documentation to
be used in recording and controlling stocks.
The procedure ensures:
10.22Store Records
Records of physical stock will be maintained on Tally/Bin Cards kept by the
storekeeper. There must be a tally/Bin card for each item of stock and must show
the date for each receipt or issue and the balance. The accounts section will also
maintain stock records for valuation purposes.
10.23Issuing Procedures
Issues from stores to branches should be backed by a Stores Requisition which
must be approved by the Store Manager. Copies of approved stores requisitions
must be sent to the accounts office for valuation and entries into the stock
ledgers.
10.24Stock Control
1
Features
The principal features of stock control are:
Goods received into store on basis of goods received notes and issued on the
basis of stores requisition notes.
Bin/tally cards and accounting records to show the balance in stocks after
each stock transaction.
Stock records may not be opened for stationary and other similar consumable
items which are of low value. Recording their receipts and issues in a register
may suffice for the control of these items.
10.25Physical Stock Taking Procedures
Physical stock checks are aimed primarily at verifying the correctness of stock
records and thereby ensuring that the quantity and value of stock shown in
the books are accurate.
Stock count and evaluation sheets should be used. These must show
description and stock code, position or location of item and unit of item (e.g.
pieces, kg., etc.).
The stock checker counts the items and records the quantity physically
counted. He/she then records the balance on the bin/tally cards and also on
the stock count sheet.
Where both physical quantities counted and the bin/tally card balances agree,
the checker must sign the bin/tally card.
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8.
PROCESSING OF INVOICES
Only authorized and approved supplier invoices and credit notes will be entered
into the system.
The Accountant should enter the following details in the invoice register.
Date
Suppliers Invoice number
Internal reference number
Suppliers name (by reference to supplier listing)
Gross value of the invoice
Discount allowed
Net value of the invoice
Stamp the invoice detail and complete the details on the stamp. In the event that
an invoice is received from a new supplier whose details have not been credited
on the system, the Accountant should complete the purchases supplier update
form. Before any invoice is processed it is the duty of the Accountant to do the
following:
Match the invoice with a copy of the official purchase order invoice and
delivery note.
Match the invoice with goods or services delivery note
Note the order number and delivery note number on the details stamp
Match the invoice with goods received note (GRN)
Check the invoice calculations, extensions, cross casts and initial the
details stamp evidence of having performed this check
If there is any discrepancy in the first 4 points above him/her should
process as outlined in 9.1 below.
In the cases where an invoice is in part payment of a larger order, the accountant
must note the details of the invoice on his copy of the LPO for future reference
when receiving further invoices for the same order. In addition he/she must write
on the invoices in red ink part payment.
8.1 Dispute Invoice
An invoice is regarded in dispute when any of the checks described above
result in discrepancies e.g.
An invoice price difers from the order price
An invoice has been incorrectly extended
As soon as the invoice is regarded as disputed the disputed column in the
invoice register should be ticked and the invoice filled temporarily in a disputed
invoice file.
It is in the responsibility of the accountant to investigate disputed invoices by
liaising with the supplier and the finance manager. Once a disputed invoice has
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been resolved the tick in the disputed column in the invoice register should be
crossed.
The Accountant should review the invoice register on a monthly basis to ensure
the disputed invoices are being resolved on a timely basis.
8.2 Coding of invoice
The Accountant is responsible for coding to the appropriate purchase ledger
account and general ledger account by reference to the supplier listing and chart
accounts.
In respect of each invoice to be passed for processing, he should complete the
following details and write up the purchase journal (PJ) giving the journal a
specific sequential number.
The supplier code
The general ledger code
Check that the totals of the LPO correspond to the total gross value of the
invoice.
In the event of the Accountant being unable to allocate a general ledger code to
an invoice, he shall refer the invoice to the Finance manager for coding.
A supplier account shall be posted immediately with the invoice
8.3 Checking Output
The input of all invoices is checked for completeness and accuracy. The
purchase journal report will be generated and this will enable these checks
to be carried out.
The Accountant must check the invoices posted against the Purchase
Journal Report and ensure that the general ledger allocations and other
invoice details are correct. Where the accountant identifies that an error
has been made, the error on the listing should be circled and the correction
initiated and initialled.
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Page 41 of 46
Monthly
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18 Chart of Accounts
Account
s code
Accounts description
2000
2001
2001.1
2001.2
2002
2002.1
2002.2
2003
2003.1
2003.2
2004
2005
Sales
Rice
4000
4010
4001
4001.1
4001.2
4001.3
4001.4
4001.5
4001.6
4002
4002.1
4002.2
4002.3
4002.4
4003
4003.1
4003.2
4003.3
4004
4004.1
4004.2
4005
4005.1
4005.2
4005.4
4006
4006.1
Expenses
Borrowing Cost
Staf Cost
Salaries & wages
Employer's SSF contribution
Allowance
Overtime cost
Bonuses
Canteen expenses
Governance Expenses
Directors remuneration
Directors fees
BOD meeting expenses
AGM expenses
Communication Expenses
Telephone & fax
Internet & other bandwidth charges
Postage & delivery
Stationery & printing
Office stationery
Others
Vehicle Running Cost
Fuel & lubrication cost
Roadworthy, tolls etc.
others
Generator Running Cost
Fuel & lubrication cost
Obaatanpa
Other brands
Tomatoes
TAM TAM
Gino
Oil
Obaatanpa oil
Gino
Drinks
Beauty and Sanitary Products
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4007
4007.1
4007.2
4007.3
4008
4008.1
4008.2
4008.3
4008.4
4008.5
4009
4009.1
4009.2
4010
4011
4012
4012.1
4012.2
4012.3
4013
4013.1
4013.2
4013.4
4013.5
4014
4014.1
4014.2
4015
4015.1
4015.2
4015.3
4015.4
4016
4016.1
4016.2
4016.3
4017
4017.1
4017.2
4017.3
4018
4018.1
4018.2
4019
4019.1
Insurance Expenses
Vehicles
Burglary
Building
Repairs & Maintenance
Vehicles
Computers & data handling equipment
Furniture & fittings
Plant & Machinery
Building
Utilities
Electricity
Water
Cleaning and Sanitation
Rent
Professional Expenses
Audit Fees
Legal Fees
Consultancy services
Travelling Expenses
Hotel & accommodation expenses
Transportation (airfares etc.)
Meals, per diem & incidental travel cost
Others
Business Licensing & Registration
GRA annual registration fees
AMA business operating permit
Promotional Expenses
Advertising Expenses
Publicity and Promotion
Published Materials
Other Promotional Expenses
Provision for Doubtful & Bad Debt
Bad debt
Increase in provision
Decrease in provision
Training Expenses
Course fees
Travelling expenses
Per diem/accommodation/etc.
Exchange Diference
Loss on forex
Gain on forex
Other Expenses
Entertainment
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4020
4020.1
4020.2
4020.3
4021
4022
4022.1
4022.2
4022.3
4022.4
4022.5
4022.6
4023
4023.1
4023.2
6001
6001.1
6001.2
6002
6002.1
6002.2
6002.3
6003
6003.1
6003.2
6003.3
6004
6004.1
6005
6006
6006.1
6007
6007.1
6007.2
6007.3
6007.4
6008
6008.1
6008.2
6200
6201
6202
Bank Charges
GT Bank Ghana Limited
UBA Ghana Limited
Others
Amortization of Intangible Assets
Depreciation of Property, Plant & Equipment
Depreciation for buildings
Depreciation for leasehold improvements
Depreciation for vehicles
Depreciation for furniture & fittings
Depreciation for computers & data handling equipment
Depreciation for plant & Machinery
Corporate taxes
Income tax provision
Deferred tax
Assets
Cash on Hand
Petty cash Cedi
Cheques in Transit
Bank Balances
GT Bank Ghana Limited
UBA Ghana Limited
Others
Short Term Investment
Time deposit
Treasury bills
1 year note
Other Investment
Related Parties
Loans & Advances
Receivables
Sales Receivables
Prepayments and Other Receivables
Prepaid Insurance
Prepaid Rent
Prepaid Communication
Other Prepayments
Other Assets
Assets Held for Resale
Deferred tax
Property, Plant and Equipment
Land
Buildings
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6203
6204
6205
6206
6207
6208
6208.1
6208.2
6209
6209.1
6209.2
6209.3
6209.4
6209.5
6209.6
Leasehold improvements
Motor vehicles
Furniture and fixture
Computer & data handling equipment
Plant & equipment
Accumulated Amortization
Amortization expense for start-up costs
Other intangible assets
Accumulated Depreciation
Depreciation for buildings
Depreciation for leasehold improvements
Depreciation for vehicles
Depreciation for furniture & fittings
Depreciation for computers & data handling equipment
Depreciation for plant & equipment
8001
8001.1
8001.2
8200
8200.1
8200.2
8201
8201.1
8201.2
8201.3
8201.4
8202
8202.1
8202.2
8202.3
8202.4
Liabilities
Short Term Borrowings
Bank loan
Other loans
Long Term Borrowings
Bank loan
Other loans
Accounts Payable & Accrued Expenses
Interest payable
Legal fees
External audit fees
Other Expenses
Provisions
Provision for bad & doubtful debt
Provision for AGM expenses
Corporate tax
Other provisions
9000
9000.1
9001
9001.1
9001.2
Equity/Shareholders Fund
Stated Capital
Issued shares
Surpluses & Reserves
Income surplus/retained earnings
Capital surplus/revaluation reserve
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