accounting for 2

Accounting for Non-Accountants

(SO) Training manual

RATIONALE The continuous expansion of our company results in the growing complexity of its total operation. Consequently, we see the increasing volume and intricacy of the accounting work. This manual is designed to answer the training and development needs of the operations personnel. The purpose is to provide Non-Accountants with essential information on accounting policies, systems and procedures in order to safeguard company’s assets.

OBJECTIVE

It is expected that after this training, the participants would be able to:

• Learn the accounting policies, systems and procedures. • Instill the values of accountability in the performance of

their duties and responsibilities.

HOUSE RULES

• All sessions will start as exactly 8:00 – 12:00 for morning session and 1:00 – 6:00 for afternoon.

• Be on time, be present in all sessions and take an active role during the training. Questions, clarifications and suggestions are encouraged.

• Mobile phones are in discreet or in a silent mode during the sessions. Avoid unnecessary calls.

POLICIES AND PROCEDURES The store cashier is the authorized custodian of all funds. The amount of fund varies per store depending on its size and volume of transactions.

All disbursements must be approved by the store manager or approving officer before

release of payment.

Funds cannot be used to: • Make personal loans • Pay salary advances • Pay expenses and/or activities of employees with revolving funds and mobility

allowance • Encash personal checks • Pay expenses for caravan and other major sales activities • Pay incentives for redemptions and sale of pre-owned units • Pay meals for regional and area meetings, trainings/seminars

POLICIES AND PROCEDURES Funds must be reconciled and replenished daily.

The receipts and cash on hand, should, at all times, tally with the established

fund.

Issue official receipt for cash overages, while for shortages, these must be paid immediately.

The fund is subject to audit requires an approved ADB supported with Fund

Analysis. When returning or decreasing the fund, issue an official receipt for the whole

fund amount or the excess respectively. At the end of the day, all store funds and all accountable forms shall be kept

surely in the vault.

POLICIES AND PROCEDURES The vault combination shall be known only by the cashier, and the store manager or

officer-in-charge. The vault combination shall be changed when the cashier, manager or officer-in-charge

transfers, resigns, or retires. In case of stolen fund, forward to HO-Accounting Department, a memo with copy of

the police report to serve as support for the journal entry. No splitting of amount having the same transaction by issuing two or more PCVs. The vouchers and replenishments shall be in series. All imbursement documents like vouchers, receipts, registration fund disbursement

(RFD), Registration fund replenishment (RFR) and other attachments shall be properly filled-out and stamped “PAID” and “SCANNED”.

GUIDELINES ON PETTY CASH FUND MANAGEMENT Disbursement should not be more than P 3,000 per transaction. The petty cash voucher (PCV) shall be used to document the disbursement of cash. For reimbursement of meals during monthly store staff meeting; which includes sales staff, FSO

staff, or combine store staff meeting, the following are the requirements and support document:

• Budget meals shall be at P 100.00 per meal per head • Attendance sheet with signature of participants • minutes of the meetings

Meals during other types of meeting; not specified above, shall be on a per diem per meal

basis, based on entitlement per position.

GUIDELINES ON PETTY CASH FUND MANAGEMENT PCV shall be supported by original receipts. The credit officer shall countersign in the PCV for FSO transactions.

Supporting documents for payments to independent service provider (ISP) for a store with Technician:

• Daily Accomplishment Report approved by HO-P&S • Recap of accomplished jobs report approved by HO-P&S • Customer’s ledger

Supporting documents for payments to independent service provider (ISP) for a store without Technician:

• Recap of Accomplished Jobs Report approved by HO-P&S • Customer’s ledger

GUIDELINES ON PETTY CASH FUND MANAGEMENT

Purchase of items used as fixed asset should have the following supports: • Approved ADB

• Original Official Receipt

In case of customer’s refund, the following documents shall be attached: • Original Official Receipt & Deposit suspense JV entry (if refund of customer’s

deposit)

• Customer’s ledger (if refund of overpayment or sales return)

• Customer’s ledger and summary of registration expenses (if refund of credited MC transaction) The amount to be refunded to the customers should be net of registration expenses.


Electric, water, and telephone bills amounting to three thousand pesos ( P 3,000.00) and below can be taken from petty cash fund. • Log every payment made for electric, telephone, and water bills; may it be

paid through petty cash or request for payment.

• Attach official receipt (utility company), original billing statement, OR for personal calls, and photocopy of the logbook to the petty cash voucher (PCV).

For bidder’s bond, attach the following documents to the PCV: • Official receipt or acknowledgement receipt (Bids &awards committee) from

City Govt.

• Advances ledger of the store manager.

This is charged temporarily to the store manager’s advances account.


Payment for local purchase must have the following attachments: • Original Receiving Report (RR)

• Original Official Receipt (OR)

• Purchase Order (PO)

Attach contra JV entries to PCFRR for expenses due to other stores.

For payment of sales agent’s commission, attach a customer’s ledger and a manual computations showing sales commission and gross profit rate (GPR). For the sales commission to be approved, the gross profit rate should not be

lower that the set GPR per price list.

Commission should be built in to the price.


For employee’s benefits such as EBW- medicine and EBW-dental, attach either of the following documents to the PCV: • Statement of account from the hospital or clinic

• Original official receipt/s

PCV is subject to HRD approval

For any disapproved amount, this will be charged to the employee’s notes medical account.

GUIDELINES ON CASH ADVANCES FUND MANAGEMENT

A cash advance may be made prior to the prior to the expense under the following conditions: • Allowed to regular employees:

Without unliquidated advances

Without revolving fund

Without gas card

Without fixed allowance for meals, repairs, and gas.

• Extend for official activities/expenses authorized by the company.

• Taken from the store where the employee is based.

• Liquidation must be done after a day’s activity.

• Expense reports and Daily Activity Report (DAR) shall be attached to the CAV.

GUIDELINES ON MC FUND MANAGEMENT

Registration fund disbursement (RFD) and Registration Fund Replenishment (RFR) should be completely filled-out and should be with approval of the store manager.

Original copy of supports like BOR, ROD, PNP, and photocopy of LTO, OR and CR should be attached to the RFR.

RFR amount should tally with the supporting documents.

RFR Transactions should be posted in the customer’s ledger under “attachment”.

RFD transactions must be replenished regularly. At the end of the day, examine the issued RFD/s. Those without postings under the RFR column of

the RFD, means that the MC Clerk has not yet liquidated the RFD.

Issuance of RFD and RFR must be in numeral sequence.

There should be a separate file on paid RFR and replenished RFD for future references.

GUIDELINES ON WU FUND MANAGEMENT

Borrowing of funds from the store’s petty cash fund, MC fund, or CTFS collection is nit allowed.

Borrowing of funds from collection must be approved by the Chief Financial Officer (CFO) or AVP-Finance. Use the revised WU Daily Cash Disbursement Summary (DCDS). Refer sample

on the next slide.

Replenishment for dollar transaction should be based on WU system’s conversation rate for the day.

WU fund must be separated from all other store funds and it must be reconciled daily.

The documentary stamps shall tally with the tax reflected in the money transfer activity form.

Documentary stamp tax, paid in peso for dollar pay-out transaction, should be issued with Official receipt.

Dollar bills shall be properly handled i.e. do not staple and/or write on the bills; otherwise, dollar bills will not be accepted by the bank.

ONLINE/ATM FACILITY

Policies and Procedures This is to be used purely for the payment of funds namely: Petty cash,

Cash advances, Western Union, and MC Funds.

Using ATM card through Bancnet, Megalink, or Expressnet terminal.

The manager is the only one authorized to withdraw the funds.

The card should be kept by the Cashier in the store’s vault for safekeeping.

For security Bank, ATM withdrawal is up to Php 40,000.00 a day. However, withdrawal over the counter is allowed without limit. Withdrawal through other banks’ ATM machine is limited only from P20,000.00 to P40,000.00 a day.

As part of control, the cashier should maintain a logbook for every ATM transaction.

Policies and Procedures As soon as the manager receives the cash through ATM terminal, he or she should remit the following items to the cashier:

a.) cash

b.) transaction record slip

c.) ATM card

Bank charge per withdrawal is Php 10.00 for Bancnet and Php 12.00 for Megalink. • Attach transaction record slips as support to the PCV for the refund of bank charges for every

withdrawal of funds.

• The store manager/supervisor should not transact if the ATM machine cannot issue transaction record slip; otherwise bank charges will be charged to the manager.

In case of transfer, resignation, or retirement of the manager, the Payable Section shall be informed in writing 15 days before the implementation.

This is to adjust the changes in the payee’s name and information with regards manager’s profile on the online system.

PROCUREMENT

Policies

All purchases are centralized at EMCOR Head Office.

Only designated Head Office Officers approve the PO.

All purchases or deliveries of all items must be covered with PO.

All deliveries in excess of what had been issued with PO will be automatically returned by the store to the supplier.

Undelivered stocks after 30 days from the date of PO is considered cancelled.

Shipment of stocks after 30 days must be confirmed first by the supplier from the store before the actual delivery.

All purchases shall be made to accredited supplier only.

Procedures The purchase, Sales, and Inventory (PSI) Plan is a monthly report submitted by the store to Head Office-Procurement Section. It serves as a store’s request for ordering of stocks for their inventory requirement.

Store Level:

1.Prepare the PSI form every end of the month.

For consignment, prepare separate PSI form, indicate under remarks column “consignment only”.

Please refer to policy on consignment.

2. Fill-out the PSI form designed for appliance, motorcycle, furniture, and ATS. (see sample form on the next slide on “How to fill-out PSI”)

3. Seek approval of the store manager and the regional manager.

4. Forward the PSI form thru skype to the HO-S.O. on or before the cut-off date which is every 5th of the month.

Procedures Head Office level:

HO – SO

1.Receive and log the stores’ PSI.

2.Forward the PSI to HO-Procurement.

HO-Procurement

3. Review, analyse and approve PSI.

4. Prepare and process approval of Purchase Order (PO)

5. Forward the approval PO to HO-SO.

HO-SO

6. Scan and fax copy of PO to the Supplier and the store.

Procedures

Store level:

1.Receive copy of PO.

2.Receive stocks from Suppliers based on approval PO.

3.Issue Receiving Report (RR)

See policies and procedures on issuance of Receiving Report

(see pages 53-54)

PSI Form Each number below corresponds to the number found in the PSI form:

1.STORE LOCATION – name of the store

2.STORE MANAGER – name of the store manager

3.REQUISITION NUMBER – PSI number using the following code: Product line code – Month – Number series

e.g. PSI – Appliance for the month of August

AP-08-01

4.FOR THE MONTH OF – Particular month this plan is intended for

5.PRODUCT LINE – individual model of stocks on hand on spaces below the product line where they belong.

PSI Form 6. SALES PREVIOUS3 MOS. – last 3 month’s sales per model. Write separately from the regular sales opposite the product model abnormal high sales like institutional sales, government biddings, etc…

7. BUS. PLAN – current month sales plan

8. END INVENTORY – refers to Stock Status as of end of month.

9. BEG. INVENTORY – refers to Stock Status as of end of month.

10. PURCHASE PLAN THIS MONTH – formula

Sales plan xxxxxx

Less: Beginning invty. xxxxxx

Purchase plan xxxxxx

======

PSI Form

11. REMARKS – explanations for abnormally high sales plan (e.g. Mall sale, Caravan, Open House Sale and Computer Festival).

12. PREPARED BY – name and signature of the person who prepared the PSI plan form.

13. CHECKED BY – name and signature of the Store manager who checked the correctness of the PSI Plan.

14. FINAL PURCHASE PLAN APPROVED BY – Forward to regional manager for the checking and approval of the stock requested.

15. FORWARD TO H.O. – Procurement – for preparation and approval of purchase order (P.O.) by authorized officers in the HO.

Requisition ( Order as Required) When to use Requisition instead of PSI for stock requirement?

•Use requisition for Order as Required (OAR) stocks. OAR means unavailable stocks that are not regularly carried in the store’s inventory; usually high end and expensive products, but with ready buyer.

Procedure:

Store level:

1.Fill out requisition form.

2.Indicate in the remarks column, the OR number for 50% down payment (individual buyer) or PO number for government deals.

3.Attach photocopy of OR or PO.

4.Secure approval of the Store manager. The store manager shall review and analyse the requisition before affixing signature.

5.Send thru skype the requisition to HO-SO.

HO Level: HO-SO

1.Receive the requisition from the store.

HO-procurement

2. Review and analyze requisitions. Check availability of stocks from other stores for stock transfer.

3. Inform the store for any reduction or addition to the quantity of requested stocks.

4. Prepare and process approval of purchase order (PO).

5. Forward the approval PO to HO-SO.

HO-SO

6. Scan and fax copy of PO to the Supplier and the store.

INVENTORY

Policies All purchases or deliveries of all items shall be covered with PO and to be issued

with Receiving Report (RR) upon receipt of stocks.

All transfer of stocks to/from other stores shall be covered with requisition slip and to be issued with Transfer Invoice (TI).

All purchase returns shall be covered with Purchase Return Slips (PRS).

The standard or ideal level of inventory per month shall be based on 30 days’ sale.

The standard or ideal age of inventory shall be 30 days. For consignment, standard age is 60 days.

Consignment of stocks shall be covered with approved ADB.

A daily and monthly actual inventory count shall be done.

Verification and reconciliation of discrepancies between inventory stock status and physical count report must be done daily.

Good inventory management

1. Review stock aging regularly to monitor stocks movement; whether slow moving, fast moving or non-moving.

2. Order stocks which will be sufficient for the sales plan of the following month to avoid lost sales.

3. Avoid ordering stocks in small quantities because this will incur high cost acquisition.

4. Use first-in, first-out (FIFO) method in disposing stocks to avoid obsolescence.

5. Maintain cleanliness and upkeep of stocks.

Standard level of Inventory To compute for the number of days level of inventory:

In units

Formula: Inventory (as of)

_____________ x 30 Days = No. of days level

Sales (for the mo.)

In Peso Value

Formula: Inventory (as of)

_____________ x 30 Days = No. of days level

Cost (for the mo.)

Receipt of Stocks

Policies & Procedures All stocks received shall be covered with Receiving Report based on the following:

• Approved Purchase Order (PO)

• Actual units received

Receiving Reports are issued strictly at the time of transaction and all Receiving Reports; with complete attachments for payment, must be forwarded immediately to HO-Accounting.

The store is accountable for the forfeited supplier’s discount due to delayed issuance and submission of RR and its supporting documents.

Do not receive the damaged stocks. Indicate on the supplier’s invoice “damaged” to exclude them from payment.

Use net of discount as cost per unit in RR issuance.

RR shall also be issued to document receipt of promo and solicited items, and replacements for previously returned inventories.

The store manager/OIC shall sign the RR copies.

Transfer of Stocks

Policies & Procedures

Issue transfer invoice to document the following transactions:

Using computerized transfer invoice:

•All stocks to/from other stores with Requisition Slip.

Requisition Slip shall be approved by the Store Manager of both the requesting and transferring stores.

Issuance of TI without actual transfer of stocks is a deviation of the policy and which is subject to disciplinary action equivalent to “DISMISSAL”.

•Stocks for scrapping with approved ADB.

•Conversion of inventories to Fixed Assets with approved ADB.

Policies & Procedures Using manual transfer invoice:

•Sale of Fixed Assets with the following requirements: Board Resolution

Deed of Sale

Journal Voucher Entry

Do not issue Sales Invoice

•Transfer of fixed assets to other store with Journal Voucher Entry.

Return of Stocks

Policies & Procedures Purchase Return Slip (PRS) is issued to document the following:

•Defective items.

•Recalled stocks by the supplier with special arrangement from the management.

Issuance of PRS not following the above reasons for return is a deviation of the policy and which is subject to disciplinary action equivalent to “DISMISSAL”.

Some invalid reasons for issuance of PRS:

•“Overaged inventory with agreement between the supplier”

•“to reverse the previously issued RR due to wrong posting”

•“Per advise by the supplier”

•“No actual return unit”

Policies and Procedures PRS shall be completely filled-out including signatures of Store Manager/Store

Supervisor/OIC and supplier’s authorized representative.

Forward to HO-Accounting Department the pink copy of PRS together with the following attachments:

• Service Quality Report

• Waybill and Delivery Receipt (if sent thru forwarder)

• For Kawasaki Motorcycle not yet registered with LTO: 1. Technical Report with Recommendation to return signed by KMPC

authorized representative.

2. PNP Clearance

3. LTO Certification of Stock Report (CSR)

Policies and Procedures

• For Kawasaki Motorcycles already registered with LTO under the name of the buyer:

1. Technical Report with Recommendation to Return signed by KMPC authorized representative.

2. Original Copy of LTO Certificate of Registration

3. Latest Original copy of Official Receipt of registration/renewal (OR)

4. Original copies (at least 3 sets) Deed of Sale signed by the registered owner.

5. Photocopy of owner’s valid ID (Driver’s License, SSS/GSIS)

6. Residence Certificate/Cedula

7. Release of Chattel Mortgage (if CM is registered at the Registry of Deeds)

8. (For Corporate/Institutional – Secretary’s Certificate to Sell the motor vehicle)


All stocks covered with PRS are to be deducted from our payables to suppliers.

The store is accountable for the return of stocks denied by the supplier due to delayed submission of PRS and its supporting documents.

Return of Pre-Owned Unit

Transfer inventory booking of the unit from pre-owned to brand new inventory. •Adjust-out the pre-owned unit.

•Adjust-in the brand new unit using the original Receiving Report (RR) cost.

Issue Purchase Return Slip (PRS).

Best Bike Operation Policies and Procedures

For Best Bike Stores:

Only Honda Best Bike Stores are allowed to issue Receiving Report. • Issue one (01) Receiving Report per Delivery Acceptance (DA)

Every mailing schedule, send to HO-Accounting Department, Payable Section, the following documents for processing of payment:

• Original Receiving Report (RR)

• Delivery Acceptance (DA)

Best Bike Operation Policies and Procedures

For Non-Best Bike Stores:

Upon Receipt of stocks from Honda Phils. (Manila) thru the forwarder, fax immediately the Delivery Acceptance (DA) to the Best Bike Store.

For Best Bike Stores:

Upon receipt of DA from Non-Best Bike Store, immediately issue Receiving Report and Transfer Invoice.

Consignment Inventory


An approved ADB is required before any supplier is allowed to consign stocks in the store.

Standard age of consigned stocks is 60 days.

Return stocks after 60 Days to the supplier.

Issue another PO to consign stocks.

Receipt of Consigned Stocks Inventory Clerk

Upon receipt of stocks, receive and check the Supplier’s invoice or Delivery Receipt and keep these documents for future payment when consigned stocks are sold.

Purchase Order Number shall be indicated in the Supplier’s invoice or Delivery Receipt.

Verify PO number with store’s copy.

Stocks without PO shall not be accepted.

Compare the model and quantity of the units delivered against supplier’s invoice or delivery receipt and Purchase Order.

Issue Consignment Receiving Report (CRR) based on actual units received.

Manually assign a number series per CRR issuance. Print one (01) CRR copy using ordinary computer paper (form 1) for file and control purposes.

Upon Sale of Consigned Stocks

Inventory Clerk:

Convert consignment to brand new and use computerized Receiving Report pre-printed form.

Once changed to Brand New Status, proceed to issuance of sales invoice.

Write manually in the consignment Receiving Report (CRR), the Receiving Report (RR) Number, Emcor Sales Invoice Number, and date of sales as references.

Write the Receiving Report (RR) Number in the Supplier’s Invoice.

Upon Sale of Consigned Stocks

Submit a request for payment payable to supplier with the following attachments:

Original Receiving Report

Consignment Purchase Order (PO)

Supplier’s Invoice Attach only photocopy of supplier’s invoice in the receiving report for partial payment.

In case other EMCOR Store has a ready buyer

Convert consignment to brand new and use computerized Receiving Report pre-printed form.

Please refer user’s manual on “How to change consignment status to brand new”

Issue Transfer Invoice to requesting store.

If consigned stock is returned to supplier:

Inventory Clerk:

Issue a consignment Return Slip (CRS) upon return of consigned stock. Manually assign a number per CRS and print one (1) copy using ordinary computer paper (form 1).

Issue Delivery Receipt and have it approved by the manager or store supervisor.

Supplier’s authorized representative must affix his/her signature over printed name upon receipt of the stock/s.

If consigned stock is sold but was returned by the customer:

(Note: Supplier was not yet paid and the unit is not defective)

Issue a Credit Invoice.

Adjust-out the unit. • Auto-entry:

Shipments to/fr – Head Office xxx

Inventory – APP/MC/FUR/ATS xxx

Prepare Adjusting Journal Voucher entry to reverse the Receiving Report (RR) and the Shipments to/fr – Head Office:

1.Store Adjusting Entry:

AP-Trade xxx

Supplier

RR No.

Shipments to/fr – Head Office xxx

Due – Head Office xxx

2. Head Office Contra Entry:

Due – Store xxx

Input Vat – others xxx

Issue a consignment Receiving Report (CRR).

Warehousing of Inventories

Policies and Procedures All stocks should be stored in dry places and at room temperature.

Improper storage may lead to: • Poor performance

• Rapid deterioration

• Reduced Durability

• Company Losses

In piling of stocks, follow the instructions provided by the manufacturer found in the carton boxes.

•Below are common instructions or labels:

For products which come in other packaging materials like plastic cellophanes or foil, the same care and applicable piling instructions should be followed as those products in cartons.

RECEIVABLE


All sold-out items shall be covered with Sales invoice.

Delivery of units shall be made only after the down is paid. The store is accountable for the unpaid down or down balance of delivered

units.

Post dated checks and current dated checks can be accepted for down payment provided delivery of unit is made only after the check is cleared by the bank and is credited to our account.

Selling price, GPR, and finance rate used shall be based on the official Price list.

Sales invoice shall be approved by Store Manager and Credit Officer.


Store managers/Supervisors is allowed to give a maximum of P500 sales discount for motorcycle.

For more than P500, seek the approval of the EXECOM using Price

Approval Sheet Form.

For appliance, regardless of amount of the discount, shall seek the approval of the EXECOM using Price Approval Sheet Form.

Policies and Procedures Customer shall affix his/her signature in the Sales Invoice to affirm his/her actual receipt of the unit.

Computerized Sales Invoices shall be used to document all sales transactions in the store; which means automatic posting in the system.

Do not use manual sales invoice.

Manual issuance (e.g. typed or manually written) using computerized sales invoice is not allowed.

Manual Sales invoices shall be used only on sales transactions during caravan or off-site store activities.

Issuance of one sales invoice to document sale of unit and installation (in case of parts & service transaction)

To avoid double charging of VAT.

Sales Returns


Stocks for replacement and repair must be properly documented and reported to the Suppliers immediately.

Issue the regular charge invoice to document the sales return.

In case of refund, pay the customer through Petty Cash Fund or Request for Payment. See guidelines on “Refund to Customers”.

Only the store bookkeeper is allowed to book credit invoices.

Sales Book What to check before signing the Cash Sales Book and Sales Book?

If selling Price, Gross Profit Rate, and Finance Rate used are basedon the Price List.

If an approval sheet, duly signed by SO Authorized Officer, is attached to the Sales Book; in case of granting an MC discount of more than P500.

If the approved ADB is attached, in case of irregular pricing.

In case of sold pre-owned unit: • If Ex-owner’s name, FGRR no. and date are indicated.

• If the guidelines in the disposal of pre-owned units are followed. Refer guidelines on pages 154-162.

If forwarding of all receivable (RCV) transactions to General Ledger (GL) program is done daily.

Sales Book

What to check before signing the Cash Sales and Regular Sales Books?

If there are no missing series of sales invoices.

If promo items taken from inventory are booked.

If off-store sales transactions are booked within the period of activity.

If Debit Memo for under pricing is prepared, encoded and submitted to HO-Accounting Department.

If all sales returns are properly documented by using regular sales invoice “FOR CREDIT”.

Sales Promotions

Procedure on Handling Promo Helmets The preparation of requisition slip for promo helmets shall be done individually by the requesting store, regardless of store classification may it be a whole-goods or parts & service store.

Request of Helmets

Requesting Store

Prepare a requisition slip monthly based on sales plan per month.

Seek approval from the Store Manager/Supervisor and Regional Manager and let them affix their signatures on the requisition slip.

Send the requisition to Service-H.O. thru fax or Skype (scanned).

Service-H.O.

Receive the approved requisition slip.

Prepare and process approval of Purchase Order (PO) based on the approved requisition slips from stores.

Send the PO to the supplier thru fax. For local purchase, send the PO to the store.

Ask for a shipper’s waybill number and relay the information to the requesting stores thru fax or skype.

This is not applicable for local purchase.

Send the proceed PO and requisition slip to the requesting stores thru pouch.

Requesting Store

Receive helmets from the forwarder/local supplier.

Verify the quantity against PO.

Issue Receiving Report (RR) at cost. (Department: Service-40)

Transfer of Helmets

Transferring of promo helmets is allowed only in case of unavailability of stock in the store to be given to a sold out motorcycle and is subject to approval of the Store Manager of the transferring store.

Requesting Store

Prepare a requisition slip and indicate the customer’s name.

Seek approval from the Store Manager/Supervisor and let him/her sign on the requisition slip.

Send the approved requisition to the transferring store.

Transferring Store

Receive the approved requisition slip.

Issue Transfer Invoice (TI).

Prepare JV entries to charge the F&H cost per helmet.

Formula: Total F&H /Total number of helmets = F&H per helmet

E.g. Total F&H for 50 helmets is P1,250.00

P 1,250.00/50 = 25.00 per helmet

TI-0001 = 5 Helmets

F&H cost = 125.00

JV entry to book F&H cost for TI-0001:

Transferring Store:

Due-Store 125.00

S/E-AP 125.00

Freight & Handling

Contra Entry:

Requesting Store:

S/E-AP 125.00

Freight & Handling

Due-Store 125.00

Requesting Store

Receive helmets from the transferring store.

Verify the quantity against the requisition slip and TI.

Book the Transfer Invoice (Department: Service-04).

Click print. Print two (2) copies using the Form 1 paper.

Let the customer affix his/her signature on the print outs.

Encode in the customer ledger’s attachment (RCV Program).

Book contra JV Entry.

Giveaways Auto-Entry:

Due- Head Office xxx

Inventory – SS xxx

Contra JV entry:

Sales – MC xxx

Due – Head Office xxx

Attach one (1) copy of the print out to the contra JV entry.

Send the JV Entries to HO-Accounting.

Conduct actual count of promo helmets monthly, reconcile inventory and attach to the monthly inventory recon.

Print Giveaway Book semi-monthly (RCV>Printing/Report>Giveaway Book) and attach to Sales Book to be sent to HO-Accounting.

File the other print out for store file.

Zero Rated and Vat Exempt Sale Policies and Procedures

Items sold shall b e for office use and not for personal use.

Submit to HO-Accounting Department, the following documents: • Photocopy of issued Emcor sales invoice.

• BIR certification stating that our customer is a zero rated or is tax exempted company or institution.

• Purchase Order from the company or institution.

Stamp or type “VAT-exempt sale” or “zero rated sale” remarks in the invoice.

Credit Cards


Bank payment for credit card transactions requires Transaction and Settlement Slips. • Swipe the card, if machine is online.

Transaction and Settlement Slips will come out from the machine.

Make sure to press the Settlement button immediately for validation of every transaction.

• If offline Call the Bank for manually processed approval, stating the Cardholder’s name,

Cardholder’s number and the amount for approval, and then manually issue Transaction Slip and Settlement Slip.

Submit daily to the bank, manually processed Transaction Slips and Settlement Slips with the Bank’s acknowledgement.


Give the Transaction Slip, machine or manually processed, to the customer for signature.

Process the sales invoice and the gate pass.

Log every credit card transaction on a per credit card company.

Safe keep the merchant copy of the Transaction and Settlement Slips for reconciliation purposes.

Use specified bank terminal (e.g. BPI cards for BPI terminal only). However, stores with no available bank terminal shall advice the recipient store with terminal that a transaction takes place. The transaction shall be posted in the logbook.


Upon receipt of bank credit advice, prepare immediately JV Entry to take up payment for credit card transactions. • Official Receipt can only be issued for those customers who would demand

for receipt not for booking but for “memo purpose” entry only.

Coordinate with the HO-Cash Section for unpaid credit card transactions. • Submit to HO-Cash Section the Summary of Unpaid Credit Card transactions

per credit card company. Attach the copy of transaction slip and settlement slip for reconciliation purposes.

STORE LEVEL FLOW CHART – CREDIT CARD

Cashier

Receives Customer Card

Is machine online

Collection

Policies and procedures

All collection (Cash & Checks) shall be covered with Official Receipts (OR). The issuance is based on the actual amount received whether partial or full. In case of partial payment, refer the account to the Financed Sales

Representative, before accepting the payment.

Editing of encoded Field Official Receipts is done in Head Office EDP Department thru a Data Correction Slip to be submitted by the store.

Local, current and post dated checks can be accepted for payment of down, notes or cash purchases. In case of payment for down or cash purchases, delivery of unit is made only

after the check is cleared by the bank and is credited to our account.


All collections: either cash or checks, are to be deposited intact daily to the local depository bank.

For notes installments collected in the field, use Carbonless OR.

For notes installments collected in the office, use Pre-printed OR.

For down payments use Pre-printed OR and/or Regular OR.

For open accounts; use Pre-printed OR if collected in the office, or Regular OR if collected in the field.

For PDC payment, give the pink copy to the customer and attach the original copy to the DCCR.

At the end of each day, all un-deposited collections, store funds, and accountable forms shall be kept securely in the vault.

The vault combination shall be known only by the Cashier and the Store Manager.

2014/10/31


The vault ombination shall be changed when the cashier, manager/office-in-charge transfers, resigns or retires.

All deposits must be acknowledged by the authorized bank representative to confirm accountability.

If after the regular daily deposits, cash collections are still in bulk (more than P10,000.00), prepare separate deposit slips as late deposit to the bank.

2014/10/31

Policies and Procedures Give prompt payment rebate (PPR); as part of the stipulation on our

installment sales documents, if the payment is: Made on or before due date.

Made on the succeeding working day if the due date falls on a holiday.

Made either in the office or in the field.

PPR – AP/FUR 100.00 (Short term)

PPR – APP/FUR 75.00 (Long term )

Granting PPR on customer's payment made after due date or waiving late charges on delayed payments required approval from the Credit Officer.

• In the absence of CO, the following officers are authorized to approve: Store Manager, Sales Supervisor.


The authorized Officer who made the approval of the requested PPR or waived late charges shall countersign the remaining copies of the official receipt.

A corresponding penalty shall be given if payment is made after two working days grace period from due date. • Customers will be charged 2% interest per month using compounded

method.

2014/10/31


Give advance payment discount if: • Payment is made thirty (30) days or more before the fixed period and the

amount of the obligation has fallen due.

• With a term of 6 up to 36 months and the amount financed (LCP) of not less than Php 4,500.00.

• Customers can avail of these discounts per OR: 5% - For one month advance payment

7% - for two or more months

• Payment is made either in the office or in the field.

2014/10/31

Policies and Procedures All collections in a form of check shall be issued under the name of

Emcor, Inc. • Third Party Check is not acceptable since payee is not Axermatic International.

• Pay to CASH is not acceptable because it is payable to the bearer, and the bank may pay to the person presenting the check for payment without the drawer’s endorsement.

Local checks drawn on local bank where they are issued have three (3) banking days clearing period.

Regional or out of town checks drawn on banks in areas covered by the Central Bank regional clearing have seven (7) banking days clearing period.

Out-of-Town checks drawn on banks in areas NOT covered by the Central Bank regional clearing have one (1) month clearing period and are subject to bank charges by both the drawer and the depository bank. 2014/10/31

HOW TO DETECT A COUNTERFEIT MONEY:

Counterfeit Money – is money made in imitation of the real one with the intention to deceive.

There are various checkpoints in detecting fake money. To be able to do this, familiarize yourself first about the different characteristics of the following features:

FAKE MONEY

Genuine coins show an even flow metallic grains. The details are of high relief, that they can be readily felt, distinctly by the fingers.

Counterfeit coins feel greasy and appear slimy. The details are worn out, not sharp and prominent as in the genuine. 2014/10/31

FAKE BILL FEATURES GENUINE FAKE

PAPER - can feel the main parts generally smooth.

PORTRAIT - appears life-like appears dead.

WATERMARK - it is underneath the This is imitated by

security lace work printing white ink.

METALLIC - A special thread placed by means of printing

vertically on the bill. A vertical line or just

an insertion of twine thread.

VIGNETTE - fine, distinct & sharp poorly printed 2014/10/31

FAKE BILL FEATURES GENUINE FAKE

COLORED FIBERS - Scattered at random it can’t be picked off

& can be readily pick-off. & can be erased.

COLOR OF EACH - have a polychrome lacks vividness.

DENOMINATION background.

SERIAL NUMBER - are clearly printed & poorly printed & not

uniform in style. Uniform in style.

CLEANESS OF - different printed in general, bill looks

PRINT feature. It is perfect, like a “second hand”

clean & sharp. 2014/10/31

On-line Payment

2014/10/31

Policies and Procedures When accepting on-line payment from the customer:

• Secure a proof of payment like copy of validated deposit slip named under Axermatic Internaional Corp.

• Verify customer’s account to which the payment is intended to.

• Check if payment is already credited to our bank account through passbook or anytime bank statement.

• If credited, issue official receipt. Attach a photocopy of passbook or anytime bank statement.

Use of employee’s personal ATM account as depository account for customer’s payment is a deviation to our company’s policy. Payment shall be made thru Axermatic International Corp depository account.

2014/10/31

Daily Cash Collection Report

2014/10/31

Daily Cash Collection Report (DCCR) What to check before signing the DCCR?

If DCCR is prepared daily.

If the series of all issued Official Receipts and Cash Invoices are in numerical sequence.

If the series of all issued Official Receipts and Cash Invoices are in numerical sequence.

If the series and amount of manually issued official receipts and cash invoices are accurately booked.

2014/10/31

Daily Cash Collection Report (DCCR) If the collection per actual count tallies with the DCCR amount and

the deposit slips.

If daily deposits are credited on the passbook on the same day or on the next banking day.

For cancelled Official Receipts: • For ORs not yet booked, check if complete set of official receipt is attached to

the DCCR.

• For ORs already booked, check the following: If reversal JV entry is prepared with Original OR copy as support.

If the accounting and cashier copies of Official Receipt are attached to the DCCR.

• Check if a memo explaining the reason of the cancellation is submitted to the Store Manager.

2014/10/31

Customer's Deposit Account


Payments shall be taken as customer's deposit if: Unit is still ordered.

Unit is already available but the customer is still undecided.

There shall be a monthly review of customer's deposit schedule to check if deposits are regulary applied or refunded.

If customer's name in the Official Receipt differs from that of the invoice, there should be a memo to be issued by the Store Manager to Accounting Dept for proper application.

Postdated Checks (PDC) Frequently Asked Questions

1. What to do if a PDC is received? Issue O.R for every PDC received. Issue OR pink copy to the

customer and attach original OR copy to the DCCR. Write the required references at the back of the PDC, like:

Customer's name OR number and OR date Invoice number Bank's account number Stamped "FOR DEPOSIT".AXERMATIC INTERNATIONAL CORP.

Segregate checks. These should be filed and arranged chronologically based on due dates and according to product line (AP/FURN/).

2.What to do if a PDC falls due? Deposit PDC on its due date.

Postdated Checks (PDC) Frequent Asked Questions

3. What to do in case a customer asks to hold the postdated check?

Secure a written request from the customer subject for

STORE MANAGERS approval.

4. What to do in case a PDC will be replaced with cash?

Issue an official receipt and prepare Journal Voucher entry to

reverse the previous PDC entry.

5. Are postdated checks accepted for downpayment?

Yes, provided delivery of unit is made only after all the following conditions are met:

The check is deposited cleared by the bank credited to our account.

Postdated Checks (PDC) Frequent Asked Questions

6. Do we allow another PDC as replacement to the originally issued PDC?

Yes, provided that the due date, account name, and the amount of the newly issued PDC are the same with that of the original PDC.

Always refer to the Credit Officer before accepting the replacement check.

Returned Checks


Cashier shall prepare three (3) copies of debit memo upon receipt of the bank debit advice for any returned check. DM is distributed as follows:

original (without JV entry) Customer's copy* Duplicate (with entry) Accounting copy Triplicate (with entry) Cashier's copy

*The FSR gives to the customer his/her copy of the debit memo.

Release bounced check once replacement is received. Issue another official receipt upon receipt of the replacement; whether it is a cash or a check. If multiple checks (PDC), released bounced checks only when

replacement is cleared. These are our supporting documents in case of any legal proceedings.

Acceleration

TWO TYPES OF ACCELERATION:

1. Long term to Cash/Short term

2. Long term to Long term

A. Long Term to Cash (Brand new and Pre-owned units)

Steps:

1. Print the customer's ledger.

2. Compute the acceleration discount using this formula:

CP*/Appraisal Value** xxx.xx

Add: Miscellaneous Charges *** + xxx.xx

Less: Down paid - xxx.xx

Amount to be financed xxx.xx

Multiply by:

(****FI rate x new term + 100) xx % Total xxx.xx

Add: Availed PPR xxx.xx

New PN Value xxx.xx

Less: Notes payments xxx.xx

Total

Add: Availed APD xxx.xx

NET DUE P __________xxx.xx

*CP (cash price): as basis in computing acceleration of long term to short term or cash for brand new units. Refer price list at the time of sale.

In case the Cash Price is lower at the time of acceleration, do not use the current Cash Price to avoid charges.

Cash Price APP = SRP Cash Price ATS = (RR cost + VAT +Freight)/Trading mark-up Cash Price MC = (RR cost + VAT) / Trading mark-up + Misc. Charges Note: MC RR cost is inclusive of freight Cash Price FUR = RR cost + VAT / Trading mark-up

**Appraisal Value: as basis in computing acceleration of Long Term to short term of pre-owned units.

*** Misc. Charges:

a. Actual Expenses incurred less Misc. Charges for cash transaction (1,700)

b. P2,000.00 based on the memo for short term price list

****Finance Rate is based on short term pricel

FUR/APP 3%

After the acceleration computation, Axermatic International Corp will do the following documentations:

1. Issue Credit Invoice.

2. Issue Sales Invoice ( Open account ) equal to the total amount paid by the customer.

Total Invoice Price = Down Payment + Notes Payment net of availed PPR - Availed APD + Acceleration payment.

Issue Official Receipt on the net due based on the acceleration computation.

Apply payments to the new sales invoice.

Acceleration Computation ILLUSTRATION OPTION 1:

CASH PRICE 61,800.00

ADD: MISC. CHARGES 2,000.00

LESS:

DOWN PAYMENT 4,500.00

NOTES PAYMENT 0 4,500.00

TOTAL 59,300.00

ADD:

AVAILED APD 0

AVAILED PPR 0 0

NET DUE P 59,300.00

Acceleration Computation ILLUSTRATION OPTION 2:”


ADD: MISC. CHARGES 194.00

LESS:

DOWN PAYMENT 4,500.00

NOTES PAYMENT ______0 __4,500.00

TOTAL 57, 494.00

ADD:

AVAILED APD 0

AVAILED PPR _______0 _________0

NET DUE P __57, 494.00

Total Invoice Price = Down Payment + Notes Payment (net of availed PPR) – Availed APD + Acceleration payment

•Option 1 63,800 = 4,500 + 59,300

•Option 2 61,994 = 4,500 + 57,494

ACCELERATION COMPUTATION (36 to 4 mos.)

ILLUSTRATION:

Option 1


ADD: MISC. CHARGES 64.00

LESS: DOWN (12,500.00)

AMOUNT TO BE FINANCED 71,564.00

MULTIPLIED BY:

(5% x 4 + 100%) 120%

TOTAL 85,877.00

ADD: AVAILED PPR 1,200.00

PN VALUE 87,077.00

LESS: NOTES PAYMENTS (16,932.00)

TOTAL 70,154.00

ADD: AVAILED APD 848.00

NET DUE P 70,993.00

Total Invoice Price = Down Payment + Notes Payment net of availed PPR – Availed APD + Acceleration payment

Option 1 98,377 = 12,500 + (16,932 – 1200) – 848 + 70,993

ACCELERATION COMPUTATION (36 to 4 mos.)

ILLUSTRATION:

Option 2



LESS: DOWN (12,500.00)


MULTIPLIED BY:

(5% x 4 + 100%) _____120%

TOTAL 88,200.00


PN VALUE 89,400.00


TOTAL 72,468.00

ADD: AVAILED APD ___848.00

NET DUE P 73,316.00

Total Invoice Price = Down Payment + Notes Payment net of availed PPR – Availed APD + Acceleration Payment

Option 2 100,700 = 12, 500 + (16,932 – 1200) – 848 + 73,316

Long Term to Long Term (Brand new and Pre-owned units)

*LCP (Least Cash Price): as basis in computing acceleration of long term to long term for brand new units. Refer price list at the time of sale.

**Appraisal Value: as basis in computing acceleration of Long term to long term of pre-owned units.

***Misc. Charges:

a. Emcor – P 3,500.00

b. CTFSI – P 2,000.00

c. Pre-Owned Unit – P 4,000.00

****Finance Rate is based on the pricelist upon sale.

HOW TO RE-COMPUTE THE FINANCE RATE PER MONTH

Computations should be based on the data upon sale

1.Compute the PN Value net of PPR

PN VALUE 128,700.00

LESS: TOTAL PPR (300 x 36 mos.) ( 10,800.00)

PN VALUE NET OF PPR 117,900.00

2. Compute the amount to be financed

LCP 69,553.00


LESS: DOWN (4,500.00)


HOW TO RE-COMPUTE THE FINANCE RATE PER MONTH

3. FI rate computation

PN VALUE NET OF PPR 117,900.00

LESS: AMOUNT TO BE FINANCED _(68,553.00)

UNEARNED FINANCE INCOME 49,347.00

DIVIDED BY: AMOUNT TO BE FINANCED 68,553.00

TOTAL FI RATE .7198

DIVIDED BY: ORIG. TERM 36

FI RATE PER MONTH 2%

Fi rate = PN Value Net of PPR – Amount to be financed / Amount to be Financed

Orig. Term

2% = (177,900 – 68,553

36

ACCELERATION DATE – October 2, 2010 (36 TO 12 MONTHS)

ILLUSTRATION:

LCP 69,553.00


LESS: DOWN (4,500.00)


MULTIPLIED BY:

(2% x 12 + 100%) 124%

TOTAL 85,005.72


PN VALUE 88,305.72


TOTAL 38,139.39

ADD: AVAILED APD 2,102.00

NET DUE P 40,241.39

Restructuring of Accounts Writing-Off of Accounts


Shall be covered with approved Authority to Do Business (ADB).

Upon receipt of the approved ADB, prepare Journal Voucher entry with customer's old and new ledgers as supporting documents.

FORMULA: Outstanding Balance P24,325.00 Multiply by: (new term-rem. mos. x FI rate + 100%)

(13 mos - 5 mos. X 2.5 % + 100%) 120%

NEW PIN: P29,190.00 Divided by term 13 New monthly P2,245.38 round-off 2,246.00 Payment of at least 50% of the Pronote is required before

resturcturing an account.

A. If accelerated within the maturity period of the original transaction

36 to 32 mos. (May 25, 2007 to Dec. 25, 2009)

PPR = P 100/mo.

Misc = 3,000.00

Availed PPR = P600

FI rate = PN Value Net of PPR - Amount to be financed / Amount to be financed

Orig. Term

2.20% = (101,700 - 56,359) / 56,359

36

Computation: LCP 61,859.00

Misc. Charges 3,000.00

Less: DOWN PAYMENT (8,500.00)

Amount Finance 56,359.00

Multiply by: (2.20% x 32 mos) 170.40%

Total 96,035.74

ADD: Availed PPR 600.00

PN Value 96,635.74

Less: Notes Payment (80,975.00)

Total 15,660.74

Add: Availed APD 0.00

NET DUE (On or before Dec. 25, 2009) 15,660.74

B. If accelerated after the maturity period of the original transaction

Restructured Date: Dec. 25,2009

12 to 7 mos. (Dec. 25, 2010 - June 25, 2010)

Total Amount Paid: P 13,476.00

Outstanding balance 24,325.00

Multiply by: (2.5 % x 7 mos) 117.50%

(Recompute based on restructuring proposal)

NEW PN (On or before June 25, 2010) 28,581.88

Less: 6 mos payment (P2,246 x 6) (13,476.00)

NET DUE (On or before June 25, 2010) 15, 105.88

Deposited Units

Policies and Procedures The Financed Sales Representative (FSR) upon pull-out of the unit,

shall issue Voluntary Deposit Slip (VDS) with the customer's signature.

The pink copy of the VDS shall be signed by the Store Manager and Credit Officer before the VDS is recorded and filed.

In case of in lieu unit, the FSR shall indicate an additional remarks in the VDS. e.g. "In lieu of _________ model _________" or "In replacement of model _________".

The unit indicated in the VDS shall be the same unit actually pulled out.

The standard age of deposited units is 30 days.

Monthly, an actual count is performed by both the inventory clerk and the Credit Officer. The actual count report will be submitted to the store bookkeeper for comparison with the books.

Policies and Procedures The aging of the past due amount is suspended only from the month the unit is deposited and automatically resumes two

months after; neither redeemed nor foreclosed.

E.g

a. Due date pf the account is every 20th of the month. VDS was issued on 5/19/2010, but there was already 2 months delayed (March and April) at P1,000.00 per month, the aging will only stop at May.

As of May 31,2010 aging:

Current 30Days 60Days 90days&over

Account Bal. (June) (May) (April) (March)

Pxxxx.xx - - 1,000.00 1,000.00

b. Two months after the deposit, the unit is neither redeemed nor foreclosed, aging will automatically resume in the month of July.

As of July 31, 2010 aging:

Current 30Days 60Days 90Days&over

Account Bal. (August) (July) (June) (May)

1,000.00 1,000.00 1,000.00 1,000.00

Guidelines on “In-Lieu” Units The company reserves its right in filing a case against the customer who refuses to

deposit the mortgaged or leased unit. Therefore, getting “in-lieu” item from the said customer just to close his balance is not an option, although in some cases, “in-lieu” units are accepted with the following qualifications:

Qualifications to get “in-lieu” units:

The following shall be the basis in pulling-out in-lieu items:

a. When the unit is already missing and the customer refused to pay the balance.

b. When the customer wants to surrender the mortgage or leased unit which is ready non-serviceable or totally damaged brought about by his/her misuse or negligence.

Guidance on “In-Lieu” Units

Procedures

1. FSR shall coordinate with the Credit Officer before getting any in-lieu items.

2. The Credit Officer together with the mechanic/technician shall conduct preliminary appraisal on the unit and to ascertain its good condition before taking it out from the customer’s residence or establishment. The appraisal shall be made final by the appraising team members (Store Manager, CO, and Mechanic/Technician)

3. In case that the in-lieu unit is other that motorcycles, appliance and ATS products, the appraising team shall seek help from competent appraiser outside.

E.g. four-wheel vehicle- a certified car mechanic in the local shops.

Guidance on “In-Lieu” Units

4. The appraising team shall ensure that the market value of in-lieu item will offset the Promissory Note (PN) balance.

5. If the initial appraised value of prospective in-lieu items could not compensate the account balance, then proceed to litigate the account or to other remedial action. ADB is required on in-lieu units that cannot compensate the account balance.

6. Outdated ATS or electronic products shall not be accepted as in-lieu units.

7. Highly perishable farm harvests shall be accepted only when there are direct buyers.

Redemption of Deposited Units


Redemption period is 30 days from VTS Date.

Redemption of deposited units required a settlement or payment of the past due installments and penalties.

The Financed Sales Representative (FSR), upon release of the unit to the customer, shall issue a Redemption Receipt (RDR) with the customer’s signature.

The Store Manager and Credit Officer shall approve the Redemption Receipt.

Procedures for Deposited Units Pulled Out by Other Stores

I. UPON PULL-OUT OF UNIT

Situation: Juan dela Cruz bought one unit of FJ-110 in Store A. The unit is deposited in Store B.

Store B

1. Pull-out or receive unit from customer.

2. Prepare voluntary deposit. Distribute the copies accordingly. The pink copy of the VDS shall be signed by the Store Manager and Credit Officer.

3. Immediately accomplish the inspection report for the pulled-out unit.

4. Prepare an Appraisal Report. Refer to “Guidelines on Pre-Owned Units”.

5. Send a copy of VDS to Store A thru Skype, fax or spark system.

6. Clean, tag and safe keep the unit.

7. Send a redemption notice to the customer before the expiration of the 30-day period.

Store A

8. Encode the VDS.

9. File the VDS Copy.

II. UPON REDEMPTION

Store B

1. Collect the amount in arrears; past due installments and penalties. 2. Issue Official Receipt. 3. Prepare a contra JV entry on payments to be sent to Store A reflecting the OR# and

the date reference. 4. Prepare and approve the Redemption Receipt (RDR).

The RDR shall be signed by the Store Manager, the Credit Officer and the customer.

5. Release the unit after the issuance of Official Receipt and Redemption Receipt. 6. Send a copy of Redemption Receipt to Store A thru Skype, fax or Spark system.

Store A

7. Encode the Redemption Receipt. 8. Encode the contra entry to update the account of the customer.

III. UPON FORECLOSURE

Store A

1. Prepare a Foreclosure Goods Receiving Report (FGRR) immediately after failure of the customer to redeem his unit.

2. Encode the FGRR.

3. Prepare Transfer Invoice to Store B for the transfer of inventory.

4. Send all set of documents to Store B, such as: OR, CR, key, assumption of Mortgage and Deed of Assignment.

5. Forward the FGRR and other required attachments to HO-Accounting Department. – Refer to “Policies and Procedures on Pre-Owned Units”.

PRE-OWNED UNITS


Inventory Foreclosed Goods Receiving Report (FGRR) shall be issued to document

foreclosed units. FGRR shall be booked upon receipt of the following requirements:

• Original and accounting copies of the FGRR • Endorsement Letter • Report on Repossessed • Voluntary Deposit Slip (VDS) • Notice Redemption

The model and quantity per FGRR shall be based from VDS. Issuance of FGRR must be at least 30 days from VDS date.


Inventory

Encoding of FGRR shall be done by the Store Manager. • Cut-off of encoding of FGRR is every 25th of the month.

Monthly, an actual count is performed by both inventory clerk and Credit Officer. The actual count report will be submitted to the store bookkeeper for comparison with the books. • Missing unit will be charged to FSO personnel.

Standard age is 30 days.

There shall be a zero percent (0%) inventory on 90 days and over.


Sales

All pre-owned units shall be displayed and merchandized in the showroom.

All pre-owned units shall be disposed in a “first come, first served basis”. There shall be no reservation.

The appraisal value shall be used as LCP in the computation for the sale on installment basis.

Delivery of unit shall be made only after the down is paid.

Reduced/discounted pre-owned units shall be sold on CASH basis.

Sale on reduced/discounted price shall not be entitled to an incentive.

The appraiser or member of the appraisal team shall not be the buyer of the pre-owned unit.

Guidelines on Pre-Owned Units

AP/MC/FUR UNITS 1. Class “A”

Appraised value is from 60% to 70%vs. Brand New Cash Price (BNCP) A1 condition/running/functional , with minimal or no damage Doesn’t require repair, for sale “as is where is”

2. Class “B” Appraised value is from 31% to 59% vs. BNCP If repaired, unit shall be re-appraised as class “A”.

• Before disposing the unit, the new appraisal shall be submitted to the bookkeeper.

3. Class “C” Appraised value is 30% and below vs. BNCP or with no value at all If the appraisal of the unit has no value, the account balance shall be written-off rather than foreclosed. Either for foreclosure or for write-off, an approved ADB is a pre-requisite for recording units under this

classification.

Classification of Pre-owned Units

ATS UNITS 1. Class “A” (Current Model/Specs)

Appraised value shall not be lower than 70% vs. SRP/CP

A1 condition/running/functional, with minimal or no damage

For sale “as is where is”

2. Class “A” (Phase Out/Obsolete) Appraisal shall not be based at market value

A1 condition/running/functional, with minimal or no damage

Inspection Report must have attached specs of current model for comparison to justify appraisal value

For sale “as is where is”

3. Class “B” (Current Model/Specs) Requires repair

Appraisal is equal or lower than 70% vs. BNCP

Guidelines on Pre-Owned Units

ATS Units

4. Class “B” (Phase Out/Obsolete)

Requires repair

Appraisal is equal or lower than 50% vs. BNCP

5. Class “C”

Appraised value is 30% and below vs. BNCP or with no value at all

Shall be supported with approved ADB before encoding of foreclosure

If the appraisal of the unit has no value, the account balance shall be written-off rather than foreclosed

Policies & Procedures in Handling Pre-Owned Units

with CTFSI

CTFSI

Issue and encode Deed of Sale (DOS) to document the transfer pre-owned inventory from CTFSI to

Issue the DOS under the name of the customer /buyer, for “registration purposes”.

EMCOR

Issue Receiving Report using CTFSI as “supplier”. The amount is based on the selling price indicated in the CTFSI Statement of Foreclosure.

Prepare Request for Payment (RFP) payable to CTFSI. Attach the Receiving Report and the Deed of Sale (issued by CTFSI)

EMCOR

If sold on Installment (6 mos. & above accounts):

Issue sales invoice to CTFSI.

Accomplish CTFSI Contract of Lease with Option to Buy and other required installment documents.

CTFSI

Make Request for Payment to EMCOR. Attach the ff: - Statement of Account and

- Transmittal with complete set of installment documents.

If sold on cash: Issue sales invoice to customer.

PAYABLES

Supplier’s Subsidy Claim

Prepare and encode Debit Memo (DM) upon receipt of the approved letter from the supplier.

Forward immediately the DM and supports (approved letter from the supplier) to HO-Accounting Department for offsetting with our payables to the supplier.

Supplier’s Subsidy accounts (Open account) still unpaid for 60 days from Debit Memo date of issuance are subject for reversal which would affect store profitability

Below are common reasons of denied claims: • Without supplier’s confirmation letter attached to the DM. (mostly verbal approval only) • Supplier’s Representative confirmation still subject for final approval.

EXPENSE ACCOUNT AND SUBSIDIARIES

INPUT OUTPUT

Expense Report

Petty Cash Voucher

Cash Advance Voucher Expenses Cash Voucher

Journal Voucher

Expense Report

What to check?

If amount tallies with the attached original official receipts and other documents.

If expenses are official.

If date of liquidation is current or within 60 days from date of advances.

If advances of staff are monitored monthly.

If booking of expenses are properly charged.

Reconciliation and Reports Deadlines

Reconciliation

What to check?

If reconciliations of accounts are accomplished timely and accurately by the Store Bookkeeper.

If all reconciliations are reviewed and alayzed by the Store Manager.

If reconciliation are submitted promptly to HO-Accounting Department based on the set deadlines.

Reconciliations and Reports

DEADLINES FOR: Last Encoding of JV - 3rd Day of the month Fixed Assets Count - Every Quarter Recon: Accountable Forms - 3rd Day of the month Bank (CTFSI) - 8th Day of the month Bank (EMCOR) - 10th Day of the month Receivable - 15th Day of the month Inventory - 15th Day of the month Advances - 15th Day of the month Customer’s Deposit - 15th Day of the month Deposit Suspense - 15th Day of the month Postdated Checks - 15th Day of the month Losses on Foreclosure - 15th Day of the month Provision For contingencies - 15th Day of the month Accounts Payable (CTFS) - 15th Day of the month

GUIDELINES ON “IN-LIEU”

GUIDLEINSS

REDEMPTION OF DEP UNITS

POL AND PROCED.

ACCOUNTABLE FORMS MANAGEMENT/STORE FILING

SYSTEM

Accountable Forms Classifications A. BIR Forms

Official Receipts

B. Non-BIR Forms Petty Cash Vouchers (PCV)

Cash Advance Vouchers (CAV)

Purchase Orders (PO)

Receiving Reports (RR)

Transfer Invoices (TI)

Delivery Receipts (DR)

Voluntary Deposit Slips (VDS)

Redemption Receipts (RDR)

Foreclosed Goods Receiving Report (FGRR)

Registration Fund Disbursements (RFD)

Sales Invoice

Service Call Reports (SCR)

Purchase Return Slip

Accountable Forms

What to Check? If ordering of accountable forms is based on the 2-month minimum

store stock level supply. If the serial numbers of any accountable forms received ar verified

against confirmation slip. If the confirmation slip is signed and returned to the HO Accountable

Forms Officer. If all receipts and issuances of accountable forms are recorded in the

Accountable Forms Register. If a monthly recon (comparison of AF register Codes F1 to F7 against

actual count) of Accountable Forms is submitted to HO Accounting every 3rd working day of the month.

Accountable Forms

What to Check? If all released accountable forms, with or without issuances, are

returned to the cashier every end of the day for safekeeping in the vault. If accountable forms are properly kept and stored in the vault. If accountable forms are issued in numerical and chronological series

using the First-in, First-Out Method (FIFO). If audit of all used and unused accountable documents in conducted

daily. If issuance has no alteration. If there is, Check if a confirmation of

account is conducted.

Accountable Forms

What to Check?

If all the copies of cancelled documents are filed intact.

If customer's signature, date and time are reflected in the accounting copy of issued Official Receipt.

If a memo explaining the reason of the cancellation of Official Receipt is submitted to the Accounting Manager.

If fully used stubs; referring to OR stubs with four copies, are returned to HO-Accounting Department every mailing schedule.

If deficiencies; such as stub has missing series/copy, different stubs with same serial numbers, same serial numbers within the stub, are returned with memo addressed to HO-Accounting Department.

If damaged or spoilt (e.g. torn, soaked) and obsolete accountable forms are covered with memo approved by HO-Accounting Department to dispose through shredding.

Accountable Forms

What to check?

If the following procedures are followed in case of any lost series or stub: Immediately report any lost stub or series to the Store Manager.

Secure notarized Affidavit of Loss as executed by the holder, which includes publication at least five times in a local newspaper. All the expenses are charged to the holder.

Prepare a memo addressed to Store Manager and Accounting Department, copy furnished FSO and Audit departments.

Post the list of missing OR series for one year at Cashier's booth.

If accounting documents are accounted and filed daily.

If store files of accounting documents are disposed by shredding every 3 years.

Audit of Accountable Forms

PROCEDURES

CASHIER 1. Gather all issued accountable forms for the day.

2. Account the series of all issued Official Receipts and Cash Sales Invoices.

3. Log in the issuances and Returns Logbook (detailed). Refer sample format.

4.Print the computerized audit of accountable forms daily. Refer sample format.

5.Compare and attach to the logbook.

6.Submit logbook and computerized audit of accountable forms daily to the bookkeeper for review.

BOOKKEEPER

7. Review cashier's logbook and computerized audit of official receipts and cash sales invoices daily.

8. Audit all issued accountable forms.

9. Report to the Store Manager and Credit Officer any noted irregularity for appropriate action.

10. Submit twice a month to the HO-Accounting both logbook and computerized audit of accountable forms.

FINANCED SALES REPRESENTATIVE

11. Forward to the Credit Officer (CO) all field collections for checking and validation. After every audit, CO will sign at the back portion of the official receipt as guide for the

next audit.

12. Endorse all the field collections to the cashier.

13. For early trips, there shall be an approved itinerary by the CO before release of OR stub to the FSR.

sample format 1

sampe format 2

sample format 3

sample format 4

sample format 5

Sample form 6

PROJECTED TRADING INCOME Formula and Computation

Formula and Computation

Constants:

1. Gross Sales • Formula: Gross sales = Net sales x 112% vat

2. Vat Computation • Formula: Vat = (Gross sales / 1.12) – Gross sales

or

Vat = Gross sales / 9.3333

3. Cost • Formula: Cost = Net sales x (100% net sales – GP rate)

Formula and Computations

4. Net Sales: will be the base or is equivalent to 100% a. If the data are GP rate and projected expenses at breakeven.

• Formula: Net sales = Projected expenses / GP rate (%)

b. If the data provided are GP rate, projected expenses and percent (%) of projected income against net sales. • Formula: Net sales = Projected expenses / (GP rate - % of projected income against net

sales)

c. If the data provided are GP rate, projected expenses and projected income in peso value. • Formula: Net sales = (Projected expenses + projected income in peso value) / GP rate

(%)

Formula and Computations d. If the data provided are Gross sales, GP rate, and projected expenses.

Formula:

Gross Sales xxx

Less: Vat (Gross Sales/9.3333) xxx

Net Sales xxx

Less: Cost of Sales (100% - GPR) xxx

Gross Profit xxx

Less: Expenses xxx

Projected Income xxx

SAMPLE 1. How much is the break-even sales?

Expenses P20,000.00

GP Rate 15%

Estimated Income:

Break-even sales 149,333

Less: Vat 16,000

Net Sales 133,333

Less: Cost of Sales 113,333

Gross Profit 20,000

(15% of Net Sales)

Less: Expenses 20,000

Projected net income/loss 0.00

ANSWER COMPUTATIONS:

1. Net Sales = Expenses / GP rate

= 20,000 / 15%

= 133,333.

2. Gross Sales = Net Sales x 112% vat

= 133,333 x 112%

= 149,333.

3. Vat = (Gross sales / 9.3333

= 149,333 / 9.3333

= 16,000

4. Cost of Sales = Net Sales x (100% - 15% GP rate)

= 133,333 x 85%

= 113,333

FINANCIAL STATEMENTS ANALYSIS

accounting for 2

Documents