Actg Guide

FINANCE MANUAL
POLICIES AND PROCEDURES

VEPCO Group Distribution Corp.
Fuel Distribution
TABLE OF CONTENTS
Introduction
Division of Responsibilities
Basic Accounting Principles
VCFP0001: Customer Accreditation and Management
VCFP0002: Sales Order Processing and Approval
VCFP0003: Billing and Collection
VCFP0004: Receipts and Deposits
VCFP0005: Bounced Check
VCFP0006: Delinquent, Legal and Other Accounts
VCFP0007: Procurement of Non-inventory Items
VCFP0008: Procurement of Fuel Inventory
VCFP0009: Disbursements Request for Payment
VCFP0010: Disbursements Purchase Requisition
VCFP0011: Accounts Payable Fuel Purchases
VCFP0012: Payment Voucher Preparation and Release
VCFP0013: Payment Remittance
VCFP0014: Employee Cash Advances
VCFP0015: Petty Cash Fund
VCFP0016: Cashier Fund
VCFP0017: Employee Revolving Cash Fund
VCFP0018: Bank Reconciliation
VCFP0019: Accountable Forms
VCFP0020: Request for Adjustment
VCFP0021: Fixed Assets
VCFP0022: Expense Recognition
VCFP0023: Payroll
VCFP0024: Chart of Accounts
VCFP0025: Filing and Records Management
VCFP0026: Annual Business and Budget Plan
VCFP0027: Month-end Accounting Procedures

VCFP0028: Financial Reports and Analysis
VCFP0029: Maintenance of Finance Policy Manual
Glossary of Chart of Accounts
Appendices: Forms and Templates
INTRODUCTION
This manual has been prepared to document the internal finance and accounting policies
and procedures of VEPCO GROUP DISTRIBUTION CORP. Fuel Distribution.
Its purpose is to ensure that company assets are safeguarded and finances are properly
managed. Compliance of the set policies and procedures will give a clear picture of the
companys financial status based on the accurate financial statements that will be
generated.
All personnel, guided by the companys core values, with a role in the management of
daily finance and accounting operations are expected to uphold the policies in this
manual. It is the intention of the company that this manual will serve as our commitment
to proper and accurate financial management and reporting.
DIVISION OF RESPONSIBILITIES
The following are the list of personnel with the designated finance and accounting general roles and
responsibilities:
Chief Finance Officer:

1.
2.
3.
4.
5.
6.
Formulates the overall finance department direction

Develops financial strategies
Reviews and approves all investments and fund management proposals
Reviews and approves the overall capital request and annual budget
Reviews and approves all check payments and fund transfers
Reviews and approves all financial reports
Assistant Vice President Finance:

1.
2.
3.
4.
5.
6.
Assist the CFO in formulating the overall direction of the finance department
Assist the CFO in developing financial strategies
Oversee the financial operations of the company and the issuance of financial information
With the CFO, reviews and approves all financial reports
Monitors and manages overall budget implementation
Reviews and approves request for payments and payment vouchers prior approval by the CFO
Executive Assistant
1.
2.
3.
4.
Receives and reviews all incoming documents for approval by the Executive
Processes all application for bank credit facilities
Assists the Executive on the monitoring of policies and KPI compliance
Conduct finance researches as may be required by the Executive
Accounting Manager
1.
2.
3.
4.
5.
6.
Manages the overall accounting operations receipts, disbursements, payroll, etc.

Prepares all financial reports
Maintains the accounting information system and ensures accurate recording of transactions
Ensures compliance to month-end and year-end closing procedures
Approves posting of journal entries and payment transactions in the system.
Conducts bank reconciliation.
Accounting Supervisor
1.
2.
3.
4.
Monitors processing of payroll, accounts payable and disbursements

Reviews encoded disbursements
Supervises accounting staff on their daily accounting transactions
Reviews accounts payable and receivable reports
Treasury Supervisor
1.
2.
3.
4.
Monitors banking transactions

Supervises staff in the cashiers fund and petty cash fund management
Monitors release of cash and check payments
Conduct daily cash count
Accounting Staff
1. Processes and records payroll, accounts payable and other disbursements
2. Prepares accounts payable and unliquidated cash advances report
Accounting Receiving Staff
1. Receives and reviews all request for payments and routes for processing and approval
2. Monitors all paid vouchers and follows through receipts and liquidation prior filing
Credit and Collection Staff
1.
2.
3.
4.
5.
Processes all credit line application of customers

Monitors daily credit standing of customers
Processes approval of daily sales order
Monitors collection and reconciles accounts receivable
Prepares accounts receivable reports
Treasury Staff
1.
2.
3.
4.
Processes banking transactions

Safekeep PDCs
Monitor daily cash balances including inflows and outflows
Records incoming payments
Cashier
1. Releases check and cash payments
2. Processes petty cash and cashiers fund requests
3. Monitors replenishment of funds
BASIC ACCOUNTING PRINCIPLES
Accounting principles are rules and guidelines that govern how a company must measure, process, and
communicate financial information. These ensures that consistent accounting procedures are followed in
recording the events created by business transactions and in preparing financial statements.
1. Business Entity Concept

A business is considered a separate entity from the owner(s) and should be treated separately. Any
personal transactions of its owner should not be recorded in the business accounting book, vice versa.
Unless the owners personal transaction involves adding and/or withdrawing resources from the
business.
2. Going Concern
It assumes that an entity will continue to operate indefinitely. In this basis, assets are recorded based on
their original cost and not on market value. Assets are assumed to be used for an indefinite period of
time and not intended to be sold immediately.
3. Monetary Unit
The business financial transactions recorded and reported should be in monetary unit, which is
Philippine Peso. Thus, any non-financial or non-monetary information that cannot be measured in a
monetary unit are not recorded in the accounting books, but instead, a memorandum will be used.
4. Historical Cost
All business resources acquired should be valued and recorded based on the actual cash equivalent or
original cost of acquisition, not the prevailing market value or future value. Exception to the rule is
when the business is in the process of closure and liquidation.
5. Matching
This principle requires that revenue recorded, in a given accounting period, should have an equivalent
expense recorded, in order to show the true profit of the business.
6. Time Period Accounting Concept
This principle entails a business to complete the whole accounting process of a business over a specific
operating time period. It may be monthly, quarterly or annually. For annual accounting period, it may
follow a Calendar or Fiscal Year.
7. Conservatism
This principle states that given two options in the valuation of business transactions, the amount
recorded will be the one that will result in least favorable outcome for the business in the current period
minimize any overstatement of assets and income and understatement of liabilities.
8. Consistency
This principle ensures consistency in the accounting procedures used by the business entity from one
accounting period to the next. It allows fair comparison of financial information between two accounting
periods.
9. Materiality
Ideally, business transactions that may affect the decision of a user of financial information are
considered important or material, thus, must be reported properly. This principle allows errors or
violations of accounting valuation involving immaterial and small amount of recorded business
transaction.
10. Objectivity
This principle requires recorded business transactions should have some form of impartial supporting
evidence or documentation. Also, it entails that bookkeeping and financial recording should be
performed with independence, thats free of bias and prejudice.
11. Accrual
This principle requires that revenue should be recorded in the period it is earned, regardless of the time
the cash is received. The same is true for expense. Expense should be recognized and recorded at the
time it is incurred, regardless of the time that cash is paid.
12. Full Disclosure Principle
This principle requires that the financial statements of a business should be complete and should report
sufficient economic information relating to the business entity to make the statements understandable.
VEPCO GROUP DISTRIBUTION CORP.

POLICIES AND PROCEDURES MANUAL
FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 1
of 5
DATE:
APRIL 1,
2015
General Policy and Procedure Overview

Accreditation of customers and extension of credit facilities shall undergo the standard procedure on the
submission of required documents and shall be subject to processing and approval by Credit and
Collection Division.
Customers shall be on Cash basis payment first prior delivery until all documents are submitted and
requested credit facilities are approved.
Purpose
To ensure that customers are legit and have the capacity to pay requested line for credit purchases.
Scope
This policy applies to all new customers applying for credit line and term.
Department Responsible
Credit and Collection Division
Sales Department
Legal and Compliance Department
Definition of Terms
a. Credit Line also known as credit limit, is the amount within which customer is free, at any
given time, to purchase goods from the company on credit.
b. Credit Term refers to the period of time (number of days) commencing from the invoice date
that a customer shall pay the company for the said invoice.
Example: Php2,000,000.00/30 days where: Php2,000,000.00 is the credit limit
30 days is the credit term

FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 2
of 5
DATE:
APRIL 1,
2015
Detailed Policies and Procedures

I.
Submission of Required Documents
For new customers the following shall be submitted:

Business Application Form (BAF) shall be fully accomplished and duly certified by the
owner, spouse (if applicable), and/or authorized representative. The BAF shall also
incorporate endorsements from Sales.
Vital attachments as listed on the CAF:
For Single Proprietorship:
a. Photocopies of two (2) valid primary IDs of the owner and spouse (if applicable)
b. Copy of Department of Trade and Industry (DTI) Certificate of
Registration of
Business Name
c. Copy of Current Mayors Permit Certificate and/or its Official Receipt
d. BIR Certificate of Registration
For Corporation/Partnership/Cooperative
a. Securities and Exchange Commission/Cooperative Development Authority
Certificate of Registration
b. Articles of Incorporation/Partnership and Constitution and By-laws
c. Board Resolution or Secretarys Certificate identifying authorized representative
d. Copy of Department of Trade and Industry (DTI) Certificate of
Registration of
Business Name
e. Copy of Current Mayors Permit Certificate and/or its Official Receipt
f. BIR Certificate of Registration
g. Photocopies of two (2) valid IDs of the authorized representative
Additional requirement as initiated by CCD

Bank Inquiry Report with the following required data of the customer:
a. Paying Habit
b. Number of incidence of bounced check
c. Average Daily Balance

FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 3
of 5
DATE:
APRIL 1,
2015
Credit and Collection Division shall keep an up-to-date record of the companys customers by
maintaining:
a. Customer masterdata under the current system
b. Customer 201 file
II.
Credit Line and Credit Term
Credit line may be unsecured or secured:

The unsecured credit limit shall generally be based on the volume requirement or
projections as endorsed by Sales.
The secured credit limit shall be based on the collateral amount and its effectivity shall be
co-terminus with the securitys expiry date.
The following shall be the basis to classify whether the requested limit is secured or unsecured:
Type of Customer
Small
Medium
Big
III.
Credit Limit
Php700,000
Php700,001 to Php2M
Beyond 2M
Classification
Unsecured
50% secured 50% unsecured
100% secured
Reckoning of due date shall be based on the straight term method of approved term from the
invoice date. Invoice date shall be equal to the delivery date.
Collateral
Following are the acceptable forms of collateral:

Irrevocable Standby Domestic Letter of Credit (ISDLC) a payment commitment opened
by the issuing bank based on the application of the applicant where a payment will be made
by presenting the documents under the ISDLC.
a. Terms must allow partial negotiation
b. Terms must always be drawn at sight
c. Shall be accompanied by sight draft pre-signed by the customer (if applicable)
d. Shall be subject to confirmation from Issuer Banks Head Office

FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 4
of 5
DATE:
APRIL 1,
2015
Cash Bond an arrangement wherein a party gives to another an amount of money to

secure the fulfillment of an obligation.
a. Shall be subject to interest based on time deposit
b. Should be covered by validated official receipt
c. Accompanied by notarized Cash Bond Agreement
Surety Bond is a promise by a surety or a guarantor to pay one party (obligee) a certain
amount if the principal fails to meet an obligation.
Chattel Mortgage a loan arrangement in which an item of movable personal property is
used as security for the loan.
Real Estate Mortgage a debt instrument secured by the collateral of specified real estate
property.
Anticresis a contract between debtor and creditor by which the former yields to the latter
the fruits of a farm until the debt is paid.
Factoring Agreement agreement in which a business sells its accounts receivable as
payment for its financial obligations.
Custodianship of collateral shall be at the Legal and Compliance Department but Credit and
Collection Division shall also maintain:
Back-up files and/or photocopies of the collateral package
Summary control listing of customers posted collateral and related information (customer
name/no., credit line, collateral type, collateral amount, date of issuance, confirmation,
expiration)
Renewal of Collateral
For existing secured facilities, non-submission of renewal/extension of expiring collateral
shall render the credit line inoperative, thirty (30) days prior DLC expiry date.
Requirements for collateral replacement and/or renewal shall be similar to the acceptance
of the new collateral.

FINANCE POLICY
MANUAL
CUSTOMER
ACCREDITATION AND
MANAGEMENT
REF.
NUM.
VCFP0001
PAGE 5
of 5
DATE:
APRIL 1,
2015
Discharge of Collateral
Generally, no collateral shall be discharged/released to customers with outstanding
accountabilities unless an equivalent acceptable replacement is received or until the
outstanding obligation has been fully settled. CCD shall prepare a memo for Release of
Collateral to be routed to different companies or business units as clearance.
Calling of Collateral or Foreclosure

As a general rule, collateral shall only be called or foreclosed in case of:
a. Customers default/breach of contract, or
b. After exhausting all normal collection efforts
Requirement
a. Certification of Default signed by the CFO
b. Statement of Account
c. Original Copy of the Collateral document
d. Copy of unpaid invoices or delivery receipts
IV.
Reinstatement or Re-activation of Account
Customer that has a bad credit standing shall be F-rated and therefore all sales order approval
and deliveries are suspended.
Customer shall be tagged as F-rated for the following reasons:

Any instance of bounced check
Long overdue account beyond 30 days overdue and no specific payment commitment
Customer shall be tagged as inactive if no purchases for the last 6 months.
Credit and Collection shall issue a memo informing Sales on the tagging of customer as Frated or In-active.
For the reinstatement of account, Sales shall issue a memo requesting to lift F-rating of a
specific account. For the re-activation of account, Sales shall issue a memo for the account to
be re-tagged as active.
Reinstatement and Re-activation Memo shall be endorsed by Sales and subject for approval by
the AVP-Finance and Chief Finance Officer.

FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 1
of 4
DATE:
APRIL 1,
2015

All Sales Order shall be subject for approval by Credit and Collection based on the set Credit Approval
Matrix and shall be based on the credit standing of the account at the time of the submission of order.
Purpose
To provide the standard procedure for sales orders and ensure that all invoiced orders were approved based
on standards and were properly recorded and documented.
Scope
This policy applies to all sales transactions including related companies
Sales and Logistics Department
Dispatch
Definition of Terms
a. Sales Order - a document that authorizes sale of the specified item(s), issued after receipt of
customer's order.
b. Delivery Receipt a document signed by the receiver of a delivery to indicate that the items were
actually received.
c. Invoice a document submitted to a customer, identifying a transaction for which the customer
owes payment to the issuer.

FINANCE POLICY
MANUAL
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 2
of 4
DATE:
APRIL 1,
2015

I.
Receipt of Order
Customer Sales Officer receives customer orders via text message or phone call. Upon
confirmation of booking, order shall be encoded immediately in SAP.
For manually booked orders beyond cut-off time, corresponding system entry shall be made
the following business day. The same shall be done in case of bookings during non-working
days or holidays.
Sales Orders encoded shall be subject to Manual Approval.

Manual Approval sales order shall pass through the regular processing of order by Credit
and Collection before it will be finally approved in the system.
II.
Credit Evaluation and Approval
Upon receipt of notification of sales order for approval, if there are credit issues, Credit and
Collection in-charge prints a copy of the sales order and indicates his or her inquiries, Sales
shall write their justification and commitment on the same document. Credit either approves
or disapproves order based on authority or shall forward the document to the final approver.
Credit and Collection evaluates customers credit standing and approves or disapproves
forwarded sales orders from Sales. All credit extension beyond the approved credit line and
term and other hanging balances such as, but not limited to, underpayments, EWT, etc., shall
be monitored and should have specific commitment as to resolution.
Sales Order shall be processed and approved as per approved agreed cut-off with Sales and
Logistics. However, sales order received beyond cut-off will still be accommodated by CCD
for special cases as requested by Management e.g., during month end.
Processing lead time for Sales Order shall be within 30 minutes from receipt of notification
from Sales. Sales Order with credit problems shall be approved depending on the feedback
provided by Sales.

FINANCE POLICY
MANUAL
III.
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 3
of 4
DATE:
APRIL 1,
2015
Delivery
Logistics in-charge receives notification of approved Sales Order and creates Delivery
Receipt in the system with the following additional entries:
Driver Name
Tanker Plate Number
Purchase Order Number (to Supplier)
Sales Order Number (by Supplier)
Logistics shall print the delivery receipt for filing and prepares Authority to Load to be
forwarded to the supplier. Delivery details shall also be sent to delivery in-charge through
message to facilitate delivery.
Drivers shall ensure to accomplish the following upon delivery of items:

Affix his signature in the Delivery Receipt under Delivered By
Secure signature of the customers authorized representative under Received By
IV.
Drivers shall forward the signed copies of Delivery Receipts to Dispatch in-charge which
shall forward the same to their main office. Operations Manager of the dispatching company
shall be responsible in monitoring the immediate remittance of Delivery Receipts every week
at their main office which shall in turn be forwarded to VEPCO main office.
Invoicing
Within 48 hours from sales order approval, Credit and Collection shall generate the invoice
in the system, unless with prior notification on changes of deliveries or sales order.
On a regular basis, upon receipt of delivery receipts, Credit and Collection shall generate
Sales Report for reconciliation with the delivery receipts. Any noted discrepancies shall be
forwarded to Sales and Logistics for settlement and if an adjustment is necessary, Sales and
Logistics shall prepare the Request for Adjustment.

FINANCE POLICY
MANUAL
V.
SALES ORDER
PROCESSING AND
APPROVAL
REF.
NUM.
VCFP0002
PAGE 4
of 4
DATE:
APRIL 1,
2015
Invoice Adjustment or Cancellation
Invoiced Sales Order shall be cancelled in cases of:

Diverted deliveries
Wrong encoding (customer, price etc.)
Request for Adjustment shall be prepared by Sales and Logistics in-charge for approval by
his or her immediate superior and shall be submitted for processing by Credit and Collection
together with the corrected Sales Order.

FINANCE POLICY
BILLING AND COLLECTION
MANUAL
REF.
NUM.
VCFP0003
PAGE 1
of 4
DATE:
APRIL 1,
2015

All deliveries shall be billed to customers on a periodic basis and payment shall be monitored within the
approved credit term. Sales Representative shall be responsible in collecting payment from customer.
Purpose
The purpose of this policy is to provide guidelines to assure reasonable collection of accounts from all
available sources. To ensure that all invoices are billed and collected within the set credit term,
accompanied by proper documentation to ensure that all invoices have valid attachments to support proof
of delivery.
Scope
This policy applies to all VEPCO Group Distribution invoices including related companies.
Sales Department
Definition of Terms
a. Billing Statement or Statement of Account A bill for goods that collects several invoices from a
given period, into one document. This is presented to the customer, who is then responsible to pay
for all goods listed on it.
b. Collection Notice or Dunning Letter or Demand Letter is a notification sent to a customer, stating
that the customer is overdue in paying an accounts receivable to the sender; typically a progression
from polite reminders to more strident demands for payment, if the customer continues to be nonresponsive in paying.
c. Collection Receipt a pre-numbered document issued to a customer as a proof of payment for the
purchases of goods.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0003
PAGE 2
of 4
DATE:
APRIL 1,
2015
d. Charge Invoice a commercial document issued by a seller to a buyer, relating to a sale transaction
and indicating the products, quantities and agreed prices in exchange of goods for a promise of
future payment.
e. Acknowledgment Receipt documents or acknowledges the receipt of payment specifying the
amount, check number and payor.
I.
Billing
On a periodic basis (weekly or monthly), Credit and Collection shall issue a billing statement
to customers with the attached photocopies of delivery receipts and charge invoices.
Credit and Collection shall ensure the immediate remittance of billing statements with the
accurate name of addressee indicated. Follow through shall be made to check if statements
were received.
II.
Collection
Daily monitoring of collection shall be made by Credit and Collection in coordination with
Sales and other Collection in-charge. CCD shall ensure that all payments should be deposited
or made on or before due date. Non-compliance shall be immediately addressed to Sales for
immediate action.
Reckoning date to determine the term maturity shall commence from the invoice date. Invoice
date shall be the same with the delivery date which pertains to the actual date of withdrawal of
stocks for delivery.
Credit and collection initializes any collection efforts that may be required, including phone
calls, reminder notices, etc, which will be directed to Sales. In the event that a customer
disputes a charge, Sales Department in coordination with Credit and Collection will be
responsible for resolving the disputed items.
Collection of accounts shall be acknowledged through the preparation of Daily Collection

Report by Sales. The original Collection Receipt shall be sent by mail to the customer upon
clearance of payment.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0003
III.
of 4
DATE:
APRIL 1,
2015
Sales shall be responsible in the issuance of Collection Receipts and shall indicate the required
collection details, which shall include, but not limited to the following:
PAGE 3
Date of Collection (Official Receipt Date)

Complete Customer Name and code
Complete mailing address of the customer
Details of payment application (invoice no., date, amount)
Details of deduction applied to invoice (EWT, Fuel Expenses, etc.)
TIN
Form of Payment and details (bank/branch, check no., check date)
Amount
Sales shall be responsible in mailing the original Collection Receipts to customers.

Form or Mode of Payment
As a general rule, the acceptable modes of payment are as follows:
1. Currency/Bounced Proof Bank Instrument (Managers check/Cashiers Check)

2. Personal/Company Checks, provided:
Issuer is the customer himself or the duly designated bank signatory/ies of a Corporation,
Cooperative, or Partnership.
Cleared locally
Drawn from Universal Banks
3. Fund Transfers
4. Online Payments
5. Debit or Credit Card
In general, payments through cash shall be considered unacceptable and should not be received
by any company employee. In special cases, Sales representative shall be the one authorized
to receive cash payments for immediate deposit on accredited banks or remittance to Cashier
main office.
Checks shall be payable to VEPCO Group Distribution Corp.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0003
IV.
PAGE 4
of 4
DATE:
APRIL 1,
2015
Collection Notices
Collection Notices or Dunning Letter shall be issued to customers with overdue account as
follows:
1st Notice 7 days overdue
2nd Notice 15 days overdue
Final Notice 30 days overdue
The first and second notices (2 copies) shall be issued by CCD which shall be forwarded to
Sales, which in turn shall forward the same to the customer. Sales shall ensure that one copy
of the notice will be returned to CCD with signature of the customer confirming the receipt.
The aforementioned guideline shall in no way prevent the concerned groups (Credit and
Collection or Sales) from endorsing the account earlier to Legal and Compliance Department,
when, upon their discretion, the account shall be deemed more effectively handled/settled
through legal means.
The final collection notice may be served earlier or later depending primarily on
recommendation from Sales, especially if terms of settlement are being negotiated with the
account. Final notice shall be already served by the Legal and Compliance Department. CCD
shall forward copies of the First and Second Collection Notices to LCD as reference for the
issuance of the Final Collection Notice.

FINANCE POLICY
MANUAL
RECEIPTS AND DEPOSITS
REF.
NUM.
VCFP0004
PAGE 1
of 3
DATE:
APRIL 1,
2015

All dated check or cash collections shall be remitted either to Sales Department at Main Office Cagayan
de Oro or deposited to the account of the company at designated banks on the same day the collection was
made or at the latest, on the following banking day. Electronic fund transfers made by customers shall be
monitored by Sales and verified by Treasury Division. Postdated check (PDC) collections shall be turned
over to Treasury Division for safekeeping until maturity date.
Purpose
To ensure proper remittance of all collected payments and monitoring of deposits. In addition, a consistent
process of documenting receipts and deposits is an important internal control practice to ensure the
security of assets and the accuracy of revenues.
Scope
This policy applies to all customer payments including related companies.
Treasury Division
Sales Department
Definition of Terms
a. Post-dated Check is a check on which the issuer has stated a date later than the current date and
can be encashed or deposited on that maturity date only.
b. Dated Check check readily available for deposit.
c. Maturity Date date on which a check becomes due for settlement.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0004
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
Remittance
The following shall be the designated centers for remittance of payments which shall in turn
be forwarded to main office or deposited to accredited banks. All remittances and deposits
shall be monitored by Sales.
RTS Tibungco Garage
Velox Gas Stations
Centro Supersales Inc.
Designated centers should maintain a monitoring of all received checks and should prepare a
transmittal form upon remittance of checks to the main office. All transmittal shall be received
by the Accounting (Receiving) Staff and will be forwarded to assigned Sales representative.
On a daily basis, upon receipt of payment, Sales shall immediately prepare a daily collection
report indicating the customer name, bank/branch, check number, amount, invoice number and
invoice date. For electronic fund transfers or deposits made outside Cagayan de Oro, the same
shall be verified and updated in the Daily Collection Report with the attached validated fund
transfer or deposit slip.
Daily Collection report together with the attached payments shall be forwarded to Treasury
Department which shall do the following:
Dated Checks prepare immediately deposit slips and facilitate immediate deposit within
8 banking hours from receipt
Post-dated Checks update record, prepare deposit slip and file in a vault for safekeeping.
Regular monitoring should be made to ensure deposit on maturity date.
Electronic Fund Transfers confirm credit of the fund transfer made and update record.
A copy of the daily collection report shall also be forwarded by Sales to Credit and Collection
for monitoring purposes.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0004
II.
PAGE 3
of 3
DATE:
APRIL 1,
2015
Deposits
Only authorized company employee shall be allowed to make deposits as initiated by Treasury
or in cases of out of town payments, by Sales.
Treasury should maintain a monitoring of all checkpayments for deposit and shall ensure the
remittance of validated deposits slips immediately after deposit.
Validated deposit slips remitted should be reconciled with the monitoring of checks for deposit.
III.
Recording
All confirmed deposits or payments shall be posted and applied in the system within 8 working
hours from deposit date. Below details should be reflected in the system:
Document Date Received Date of Payment

Posting Date Deposit Date
Due Date Check Date
Amount Check or Payment Amount
Check Details Bank/Branch, Check Number
Customer Name to which payment shall be applied
It is the responsibility of Treasury Division to ensure the accuracy of all posted payments based
on the daily collection report submitted by Sales. Upon completion of application, Treasury
shall stamped the daily collection report as posted.

FINANCE POLICY
MANUAL
BOUNCED CHECK
REF.
NUM.
VCFP0005
PAGE 1
of 3
DATE:
APRIL 1,
2015

A bounced check incidence shall cause immediate suspension of deliveries and non-processing of sales
order until the returned check is redeemed and resulting penalties settled.
The same policy shall be applicable for held checks.
Purpose
To establish the standard procedure on incidents of bounced and held check and the corresponding
penalties.
Scope
This policy applies to all customers and shall include incidents of holding of checks by customers.
Treasury Division
Sales Department
Definition of Terms
a. Bounced Check a check returned by the bank due to insufficient funds or closed account.
b. Held Check check put on hold for deposit by customer due to insufficient funds.
c. F-rated Customer tagging of a customer with a record of bounced check
d. Notice of Dishonor a letter sent to the customer notifying the incident of bounced check;
indicated in the notice is the demand to replace payment including applicable charges.

FINANCE POLICY
MANUAL
REF.
NUM.
BOUNCED CHECK
VCFP0005
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
Notification on Bounced Check or Holding of Check
Upon receipt of advice from Bank regarding the bounced check, Treasury Division shall
immediately prepare a Bounced Check Advice. Bounced check advice will be submitted for
approval by the Accounting Manager and shall be forwarded to Legal and Compliance
Department for the preparation of Notice of Dishonor. Notice of Dishonor shall be forwarded
to Sales, which shall in turn forward the same to the customer for immediate payment.
Treasury shall also prepare a Request for Adjustment to be forwarded to Accounting who will
prepare the necessary adjusting entry to reverse payment.
No Holding of Checks policy shall be implemented. Checks received will be deposited on

maturity date otherwise an advice from customer is received prior maturity date.
All holding of checks shall be directly coordinated by customers to Sales. Sales in the form of
an email shall advise Treasury Division and Credit and Collection regarding the holding of
check. Below details shall be emailed:
Customer Name
Check details put on hold Bank, Check Number, Amount
II.
Upon receipt of advice from Sales regarding the holding of check, Treasury Division shall hold
the deposit of the check. Credit and Collection shall issue Notice of Held Check to Sales which
shall in turn forward the same to the customer. Applicable penalties and charges will be
indicated in the Notice. Advice to deposit the check already will also be coursed through email
by Sales, otherwise shall be replaced with other mode of payment.
Penalties and Charges
For bounced check, customer shall shoulder bank charges and shall pay a 12% p.a interest and
shall be computed based on the days arrears (from date of bounced check).
For holding of check, customer shall pay a 12% interest p.a and shall be computed based on
the days arrears (from due date based on customers credit term).
III.
Replacement of Bounced Check or Check on Hold
Replacement for Bounced Check/Check on Hold should be made through fund transfer or
direct deposit from customer. If customer shall insist to pay through check, interest shall apply
until check payment is deposited and cleared.

FINANCE POLICY
MANUAL
BOUNCED CHECK
REF.
NUM.
VCFP0005
PAGE 3
of 3
DATE:
APRIL 1,
2015
The bounced check or held check shall not be returned to the customer until a replacement is
received.
Unredeemed/outstanding returned checks shall remain in the custody of Treasury Division.
IV.
F-rating of Customers
The credit facilities of F-rated customers shall be rendered inoperative and no releases shall be
allowed until the account is reinstated by the AVP Finance and CFO. A formal letter of
recommendation shall be submitted by Sales for approval by the AVP-Finance and CFO to
reinstate the credit facilities of the F-rated customer.
Subsequent bounced check offense by customers previously f-rated and whose credit facilities
were reinstated, shall automatically
render the reinstated credit line/term inoperative.
Credit and Collection division shall monitor the bounced check offenses and redemption
details of its customers by maintaining control records.
A report on bounced checks incidences and their updated status shall be prepared by CCD on
a monthly basis.
V.
Non-replacement of Bounced Check
In cases wherein the customer failed to replace the bounced check as required in the Notice of
Dishonor, the policy on the issuance of Collection Notices shall apply.

FINANCE POLICY
MANUAL
DELINQUENT, LEGAL AND

OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 1
of 5
DATE:
APRIL 1,
2015

All outstanding accounts receivable shall be collected and in case of balances shall be reconciled
immediately and collected or adjusted as the case may be.
Purpose
To ensure proper management of companys accounts receivables.
Scope
This policy applies to all outstanding accounts receivable including that of the related companies.
Sales Department
Accounting Division
Definition of Terms
a. Accounts Receivable a legally enforceable claim for payment from a business to its
customer for goods supplied in execution of the customers order.

I.
Reconciliation and Application
On a daily basis, Credit and Collection shall check all customer outstanding balances for
follow through of collection with Sales. Hanging Balances after application of payment shall
be followed through with Sales for reconciliation and immediate collection or adjustment.
In cases of adjustments, the standard procedure on Request for Adjustments shall apply.

FINANCE POLICY
MANUAL

OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 2
of 5
DATE:
APRIL 1,
2015
On a regular basis as agreed with Sales, Credit and Collection shall provide report on the
updated customer balances for collection.
Follow through of collection with Sales should be properly documented by Credit and
Collection in a monitoring as basis for succeeding follow ups.
II.
Delinquent Accounts
An account is considered delinquent when it incurred 60 days overdue.
CCD shall monitor delinquent accounts and shall prepare a Monthly Delinquent Account
Report, showing the details of the invoices and the updated status.
III.
Legal Accounts
Accounts shall be endorsed to Legal and Compliance Department for the issuance of Final
Notice of Collection or as initiated by Sales or CCD, as the case may be, after all means of
collection have been exhausted.
Relevant information on the status (age) of the account, current financial, and/or operational
condition of the customers business are some of the considerations in endorsing the account
to Legal.
No further deliveries shall be allowed to accounts already endorsed for legal action.
LCD shall furnish CCD the Monthly Development report development of each case under
Legal.
Credit and Collection Department shall, in turn incorporate these updates in the Monthly
Delinquent and Legal Accounts Reports for submission to Management.

FINANCE POLICY
MANUAL
REF.
NUM.

OTHER ACCOUNTS
VCFP0006
IV.
PAGE 3
of 5
DATE:
APRIL 1,
2015
Other Accounts
Any discrepancy noted between the payment of customer and the invoice amount is
considered as other account.
Invoice Amount
Customers Payment
Other Accounts
V.
Php
Php
100,000.00
95,000.00
5,000.00
Nature of Other Accounts
Expanded Withholding Tax 1% tax withheld by a VAT entity belonging to Top 10,000
corporations from their supplier of goods and services
CCD shall ensure that the customer is a withholding agent by requiring them to submit
a certification from the BIR stating that they are belonging to the Top 10,000
corporations and is authorized as a withholding agent.
All EWT withheld by the customer shall be covered by an EWT certificate to be
submitted every 10th day of the following month or 10th day following each quarter
depending on the accounts schedule of remittance to BIR
The certificate shall include the following information:
o
o
o
o
o
Payer and Payees name

Payer and Payees TIN
Amount Withheld
Signature of authorized representative
Position of the authorized representative
CCD Shall reconcile EWT certificate issued by the account vs. the deductions made
from payment
In case certificate issued does not tally with the deductions, CCD shall immediately
issue discrepancy notice to Sales which in turn shall forward to account for settlement.
The certificate shall be returned together with the discrepancy notice.

FINANCE POLICY
MANUAL

OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 4
of 5
DATE:
APRIL 1,
2015
If reconciled already, a request for adjustment will be prepared by CCD and shall
forward the same once approved to Accounting Division for preparation of adjusting
entry. A copy of the certificate shall also be forwarded by Accounting to Legal and
Compliance Department for BIR filing.
Special discounts discount extended to selected trade partners as a subsidy or incentive for
achieving targeted sales
CCD shall secure approved memo from Sales on the special discount given to the
customer. Memo should be approved by the Chief Finance Officer.
CCD shall ensure that the rate or amount specified in the memo is the same as the
customers computation.
CCD shall prepare a request for adjustment upon reconciliation and shall forward the
same to Accounting once approved together with the memo from Sales for preparation
of adjusting entry.
CCD shall issue a discrepancy notice to the customer through Sales in case of variance
noted.
Underpayment any discrepancy noted between invoice amount and customer payment
which is not identified or recognized by Sales.
CCD shall issue a discrepancy notice to the customer through Sales and shall be paid
by the customer immediately.
Charged to Salesman or Driver any deduction arising from the negligence of trucker or
salesman.
If deduction is charged to Driver, Delivery Discrepancy Report (DDR) will be
submitted by Logistics which states the charging of amount to the specific driver and
corresponding details of delivery.
If deduction is charged to Salesman, Salary Deduction Authority (SDA) signed by the
Salesman and approved by his Sales Manager shall be submitted.
CCD shall prepare request for adjustment upon receipt of required documents for
submission to Accounting Division for preparation of adjusting entry.

FINANCE POLICY
MANUAL

OTHER ACCOUNTS
REF.
NUM.
VCFP0006
PAGE 5
of 5
DATE:
APRIL 1,
2015
Fuel Expense are deductions made from fuel expenses of tankers to the customers station.
A copy of the receipt must be submitted by the customer for verification by CCD as
to the plate number and driver assigned.
Upon reconciliation, request for adjustment will be submitted to Accounting for
preparation of adjusting entry.

FINANCE POLICY
MANUAL
PROCUREMENT OF NONINVENTORY ITEMS
REF.
NUM.
VCFP0007
PAGE 1
of 4
DATE:
APRIL 1,
2015

The company's Purchasing department will use good purchasing methods to optimize price savings,
quality or value of products, and vendor working relationships and assure proper inventory control and
inspections, in accordance with company, regulatory, and customer requirements.
Purpose
To provide procedures for procurement methods and completion of related documents prior payment
processing.
Scope
This policy applies to purchases of non-inventory items.
Purchasing Department
Definition of Terms
a. Procurement - The activity of acquiring goods or services to accomplish the goals of an
organization.
b. Non-inventory Items - is a type of product that is purchased or sold but whose quantity is not
tracked. This type of items are purchased for company use or custom product purchased for
projects.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0007
PAGE 2
of 4
DATE:
APRIL 1,
2015
Detailed Policies and Procedures on Procurement of Non-inventory items
I.
Order Determination and Requisition
The following non-inventory requests necessitate Purchase Request form and corresponding
Purchase Order:
The requesting individual or department must fill up the pre-numbered (series per department)
Purchase Requisition form (PR) with the following needed information:
Equipment
Office supplies
Uniforms
Construction/ repair tools
Repairs and maintenance (e.g. for service vehicles)
Materials for station operations (e.g. calibration bucket and dipstick)
Requestors name and contact number

Date prepared
Date needed
Cost Center
Recommended supplier (based on canvass)
Terms
Purpose
Complete description with part or model numbers if available
Quantity
UOM
Price
Any supporting documentation should be attached to Purchase Requisition form such as

quotations and contracts.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0007
II.
PAGE 3
of 4
DATE:
APRIL 1,
2015
The requesting individual or the Purchaser will perform canvass on three suppliers, at a minimum,
for the needed item/s and ask for copy of the suppliers quotations. The terms, supplier, pricing,
quantity breaks, etc. must be analyzed accordingly in the company's best interest. The Purchase
Requisition form with the attached quotations will be submitted for recommending approval to
his/her immediate head and to the CFO for final approval. Once approved, the request will be
forwarded to the Purchaser for Purchase Order (PO) creation in the system. *Note: There is no
need to perform canvass if the company has already established preferred suppliers which have
been proven to be giving the best price and best terms. But still, the quotation of the preferred
supplier must be attached to the Purchase Requisition form.
Order Placement
Purchaser ensures that the details in the request are completely and correctly filled up, with
signature of the needed approvals and attached with the appropriate quotation/s.
In cases when the chosen supplier is not yet registered in the system, the Purchaser fills up
the Vendor Set-up Form and forwards to the Accounting Supervisor for system creation.
(Note: All suppliers/payees must have individual vendor card in the system.)
The Purchaser will create PO in the system based on the approved request and print the PO in
2 copies- supplier copy and advanced accounting copy. The Purchaser will note the PO
number in the lower portion of the PR. Purchaser will then forward the PR with the attached
quotations and the printed POs to the AVP- Finance for the required signature.
Once approved, the Purchaser will give the supplier copy of PO to the supplier or the requesting
individual who will in turn give it to the supplier (whichever is applicable). The accounting copy,
together with the PR and quotation, will be forwarded to the Accounting (Receiving) Staff,
awaiting receipt of corresponding supplier copy of PO and supplier invoice in the future.
The Purchaser may also fax or e-mail the order.
The Purchaser will follow-up on shipping, delivery, expediting and partial shipments of
ordered items to assist inventory with consistent customer demands and other departments'
operational requirements.
The Purchaser may either follow up by phone (which requires adequate notes of the
conversation) or use a Purchase Order Follow-up to verify, trace, or expedite orders.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0007
III.
PAGE 4
of 4
DATE:
APRIL 1,
2015
Receiving
Upon delivery of the items ordered, the supplier must be able to present his/her copy of the PO
with the corresponding invoice or delivery receipt. The supplier must not retain the original PO
once served to avoid re using PO. Without the original PO, the Receiving Personnel must not
receive the delivery. When the documents are already checked as correct and complete, the
Receiving Personnel will inspect, count the items and match the items delivered with the items in
the PO. Items received should be according to the PO description and quantity.
In cases wherein the supplier failed to present the required PO copy, the Purchaser can also
provide the company receiver copy of the PO as basis to receive orders. Still, supplier has to
forward the original suppliers copy of PO as part of the companys payment requirement.
Note:
IV.
If there is over delivery, where the quantity of items is higher than PO or there are items
delivered not included in the PO, such excess items shall be coordinated with the
Purchaser for approval by CFO whether to accept or reject the items.
In case items are rejected, the corresponding supplier DR or Invoice shall be corrected
accordingly and signed by the supplier or the delivery agent.
Receiving Personnel shall promptly conduct a visual examination of all orders. If an order has
apparent damage, it is rejected.
Once the matching and examination is finished, the Receiving Personnel signs the supplier
invoice to acknowledge receipt of goods. The PO and the supplier invoice will be sent to the
Purchaser. Any count discrepancies will be noted on the PO and supplier Invoice.
Recording and Matching
Once the PO and supplier Invoice are received from the Receiving Personnel, Purchaser will
then check that what was ordered was actually received and is priced according to the PO. For
any price variance, Purchaser will inform supplier but still PO price is followed for payment.
For any noted quantity discrepancies, Purchaser will follow up with the supplier to resolve
them. Once settled, the PO and the supplier Invoice will be forwarded to Accounting
(Receiving) Staff.
For the over delivery, purchase requisition and purchase order shall be completed for the
additional stocks received and shall be submitted to the Accounting (Receiving Staff).

FINANCE POLICY
MANUAL
REF.
NUM.
PROCUREMENT OF FUEL
INVENTORY
VCFP0008
PAGE 1
of 3
DATE:
APRIL 1,
2015

The company's Purchasing department will use good purchasing methods to optimize price savings,
quality or value of products, and vendor working relationships and assure proper inventory control and
inspections, in accordance with company, regulatory, and customer requirements.
Purpose
To provide procedures for procurement methods and completion of related documents prior payment
processing.
Scope
This policy applies to purchases of fuel inventory.
Purchasing Department
Definition of Terms
a. Purchase the cost of buying inventory during a period for the purpose of sale in the ordinary
course of the business.
b. Inventory Items Inventories are assets:
(1.) held for sale in the ordinary course of business;
(2.) in the process of production for such sale; or
(3.) in the form of materials or supplies to be consumed in the production process or in
the rendering of services.

FINANCE POLICY
MANUAL
PROCUREMENT OF FUEL
INVENTORY
REF.
NUM.
VCFP0008
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
Order Determination and Requisition
II.
Logistics Manager will prepare a manual purchase requisition slip and shall forward it to
General Manager for approval. General Manager will run-through request, consider received
orders and indicate allowed purchase and approval. Quantity requirement will be compared
to vendor pricing schedules.
Order Placement
Purchase Order should contain all applicable information, and be authorized by the
appropriate party or parties.
General Manager shall prepare in duplicate copy Purchase Orders for all items orders. For
inventory items, preprinted/prenumbered Purchase Orders shall be prepared manually and a
copy shall be sent to supplier thru email by Logistics Manager. Logistics Manager will be
responsible to follow-through orders and ask for suppliers copy of Sales Order to ensure
accepted orders.
Logistic Manager will follow-up on shipping, delivery, expediting and partial shipments of
ordered items to assist inventory with consistent customer demands and other departments'
operational requirements.
Logistic Manager may either follow up by phone (which requires adequate notes of the
conversation) or use a Purchase Order Follow-up to verify, trace, or expedite orders.
III.
Recording and Matching
Once purchase of inventory items is confirmed thru receipt of Suppliers Sales Order,
Logistics Manager will print received document and immediately record PO in the system.

FINANCE POLICY
MANUAL
PROCUREMENT OF FUEL
INVENTORY
REF.
NUM.
VCFP0008
PAGE 3
of 3
DATE:
APRIL 1,
2015
Logistic Manager will indicate system PO number on preprinted Purchase Order and stamp it
POSTED accordingly after recording.
Receiving will then be furnished with the Suppliers Sales Order and a copy of posted
purchase order. Purchasing copy of PO will be filed by series.
IV.
Receiving
Receiving Report shall be generated immediately upon approval of Purchase Order by the
Supplier and once received by the driver/delivery man.
The Logistics Manager should record receipt of items in the system and print 2 copies of
receiving report(RR) , indicating the supplier or vendors name, the PO number, Delivery
receipt number and the invoice number, the date of receipt, the description and quantity of the
items. The receiving report must be signed by the Logistic Manager as authorized personnel
to input Goods Receipt Purchase Order (GRPO) in the system.
A copy of purchase order, Goods Receipt Purchase Order in the system, delivery receipt and
supplier invoice should be sent by Logistics to Accounts Payable department to process
payment.
A copy of the receiving report is to be retaining for filing by logistics.

FINANCE POLICY
MANUAL
DISBURSEMENTS REQUEST FOR PAYMENT
REF.
NUM.
VCFP0009
PAGE 1
of 5
DATE:
APRIL 1,
2015

Disbursements shall be documented by a standard Request for Payment form as basis by Accounting to
process payment. This will only cover expenses indicated in this policy.
Proper internal control will be followed to ensure that only valid and authorized payables are recorded
and paid. Accounting procedures will be implemented to ensure the accuracy of amounts, coding of
general ledger accounts and appropriate timing of payments.
Purpose
To explain the procedures for documenting, recording and processing of Request for Payments.
Scope
This policy applies to all disbursements subject to Request for Payment.
Accounting Division
Definition of Terms
a. Request for Payment - This form is used to request payment to a company or individual
when a purchase order is not required. This will serve as the basis of Finance to process
payment together with the required attachments.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0009
PAGE 2
of 5
DATE:
APRIL 1,
2015

I.
Documentation
The following transactions/expenses do not necessitate Purchase Orders and thus need the
Request for Payment (RFP) form from the requesting individual:
Construction/renovation works
Communication expenses
Fuel and transportation expenses
Postage expenses
Registration expenses
Taxes and licenses
Trucking expenses
SSS, Philheath and Pag-ibig contributions
Employee benefits
Entertainment and representation expenses
Meal and snack allowances
Professional fee
Notarial expenses
Salaries expense
Travel expenses
Utilities expense
Security expense
Rent expense
Donations and contributions
Bank service charges
DSLC charges
Insurance expense
Interest expense

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0009
PAGE 3
of 5
DATE:
APRIL 1,
2015
The RFP form must be filled up completely with the following needed information:
Date prepared
Date required
Payee
Total amount
Mode of payment if in check/cash/fund transfer
Details of the transaction
Requesting individuals name, signature and contact number
RFP must be attached with the proper documents. To complete the form, the requesting individual
must secure the recommending approval of the immediate head.
Below are the transactions with RFP and their appropriate attachments which must be forwarded
to the Accounting Department for processing:
Expenses
o Request for Payment
o SOA/Billing
o Confirmed Delivery Receipts/Drivers Report (additional for Trucking)
o Charge Invoices (for fuel expense)
o Contract (for Rent) or confirmation from Legal regarding the completion of
contract
o Appropriate form from the Government Office (for Taxes)
Construction/Renovation works
o Notice to Proceed (upon down payment)
o Contract/Written Agreement (upon down payment)
o SOA/Billing (from 1st 2nd billing)
o Acknowledgment/Certification from Engineer on the progress of work
o Certificate of Acceptance (final billing) shall be required for contractor final
progress billing only
Payroll/ Other Government-mandated benefits
o Summary Report from HR Department

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0009
Fund
o
o
o
o
PAGE 4
of 5
DATE:
APRIL 1,
2015
Request for Payment

Petty Cash Fund (Expense Report, Petty Cash Vouchers and receipts)
Revolving Fund (Expense Report, Cash Vouchers and receipts)
Weekly Itinerary/Activity Report, Fuel Monitoring Card (additional for Sales
replenishment of revolving fund)
Employee Development (Training, Seminars, other company activities

o Activity Form
Reimbursements
o Expense Report
o Receipts
Cash Advances
o Cash Advance Form
Once the accounts payable department has all of the above documents, the following steps will be
performed to ensure proper authorization, validity of transaction, and accuracy of amounts.
Accounting (Receiving) staff ensures that all the data fields in the RFP must be completely
and correctly filled up, with signature of the recommending approval and attached with the
appropriate documentation.
Incomplete forms and those lacking the required documentation and signature will not be
received by the Accounting (Receiving) Staff.
If the documents are already complete and correct, Accounting (Receiving) Staff notes the
date and time of receipt on the lower part of the RFP and indicates the cost center of the
said request. For monitoring purposes, Accounting (Receiving) Staff makes excel
monitoring and logs all received requests. The control number generated from this
monitoring will also be noted on the RFP. The form and its attachments will then be
forwarded to the AVP- Finance for final approval.

FINANCE POLICY
MANUAL
REF.
NUM.
VCFP0009
PAGE 5
of 5
DATE:
APRIL 1,
2015
AVP- Finance evaluates the nature of the request and checks the amounts on the
SOA/billing/contract and other required attachments prior approval.
Once approved, Accounting (Receiving) Staff updates the status of the RFP in the excel
monitoring and forwards the documents to the AP Analyst.
II. Recording
AP Analyst will record the transaction by creating Journal Voucher Entry (JVE) in the system.
Once created, Vendor number and JVE number are filled in on the lower portion of the RFP. The
RFP with the appropriate attachments will then be forwarded to the Accounting Supervisor for
checking.
Accounting Supervisor reviews the completeness of the form, attachments and needed approvals,
and checks the accuracy of cost center and GL account/s used. Once reviewed, this will be
forwarded to the Accounting Manager for final approval and posting of the entry in the system.
The approved documents will be forwarded back to the AP Analyst.
These will be temporarily filed alphabetically by supplier name in the unpaid invoice files to await
payment.
III. Payment of Accounts Payable
AP Analyst selects outstanding payables for payment according to their terms. Accounts payable
should normally be paid within two days before their due dates unless otherwise determined by
the Accounting Manager.
Any debit balances (amounts owed to the company) should be applied to credit amounts when
determining payment.
AP Analyst will create an outgoing payment and send it via the system for approval to the
Accounting Manager. The Accounting Manager checks the correctness of the applied payments.
Once approved by the Accounting Manager, AP Analyst forwards the documents to the Treasury
Staff.

FINANCE POLICY
MANUAL
DISBURSEMENTS
PURCHASE REQUISITION
REF.
NUM.
VCFP0010
PAGE 1
of 3
DATE:
APRIL 1,
2015

Purchase of office equipments, furnitures and fixtures and other non-inventory items shall be subject to
Purchase Requisition. Proper internal control will be followed to ensure that only valid and authorized
purchases are recorded and paid. Accounting procedures will be implemented to ensure the accuracy of
amounts, coding of general ledger accounts and appropriate timing of payments.
Purpose
To explain the procedures for payment processing of purchase requests.
Scope
This policy applies to all disbursements subject to Purchase Requisition.
Accounting Department
Definition of Terms
a. Non-inventory Items - is a type of product that is purchased or sold but whose quantity is not
tracked. This type of items are purchased for company use or custom product purchased for
Projects.

I.
Documentation
The Accounting (Receiving) Staff will match the supplier copy of the PO and supplier invoice
received from the Purchaser against the advanced accounting copy of the PO and attached PR and
quotations. Once matched, the documents are forwarded to the AP Analyst, attached in the
following order:
Supplier Invoice
Purchase Order(2 copies)

FINANCE POLICY
MANUAL
DISBURSEMENTS PURCHASE REQUISITION
REF.
NUM.
VCFP0010
PAGE 2
of 3
DATE:
APRIL 1,
2015
Purchase Requisition form

Quotation
Canvass forms (if required)
For monitoring purposes, Accounting (Receiving) Staff makes excel monitoring and logs the PO
numbers of the transactions forwarded to AP Analyst.
The following steps will be performed by the AP Analyst to ensure proper authorization, validity
of purchase, receipt of purchased items or services, and accuracy of amounts.
AP Analyst checks the completeness and correctness of the documents forwarded for
processing.
AP Analyst reconciles the supplier Invoice with the PO.
Calculations on the invoice will be recomputed such as quantities received multiplied by
unit price and totals.
II. Recording
AP Analyst will post the system Receiving Report (RR) based on the goods acknowledged as
received in the supplier invoice by the receiving personnel and consequently post the
corresponding AP Invoice.
The RR and AP Invoice will be printed and attached on top of the assembled documents. These
will be forwarded to the Accounting Supervisor for review of the attachments, the accuracy of cost
center and GL account/s used. Once reviewed, the Accounting Supervisor
affixes signature on the AP Invoice. The documents will be forwarded for final approval to the
Accounting Manager.
III.
Payment of Accounts Payable
AP Analyst will create an outgoing payment. Any debit balances (amounts owed to the company)
should be applied to credit amounts. The outgoing payment will be sent via the system for approval
to the Accounting Manager. The Accounting Manager checks the correctness of the applied
payments.
Once approved by the Accounting Manager, AP Analyst forwards the documents to the Treasury
Staff.

FINANCE POLICY
MANUAL
DISBURSEMENTS PURCHASE REQUISITION
REF.
NUM.
VCFP0010
IV.
PAGE 3
of 3
DATE:
APRIL 1,
2015
Purchase Requisition with Request for Initial Downpayment or Full Payment
For purchase requests with initial downpayment, once the purchase requisition and purchase order
is approved, this will be immediately forwarded by the Accounting (Receiving) Staff to the AP
Analyst for processing.
A/P downpayment or Advances to Suppliers or Advances to Employee (whichever is applicable)

shall be entered. The A/P downpayment voucher or journal voucher will be forwarded to the
Accounting Supervisor for review and to the Accounting Manager for posting. The same shall be
forwarded to the Treasury staff for check processing.
For cash purchases or full payment, Advances to Suppliers or Advances to Employee shall be
entered.
Upon completion of purchase and payment, the Suppliers invoice, official receipt and copy of
Purchase Order will be collected by the Accounting (Receiving) Staff for the standard
documentation process.
Upon receipt by the AP Analyst of the complete documents, a Receiving Report and AP Invoice
or Journal Voucher (to close Advances to Supplier/Employee) will be generated for recording
purposes and the printed copies shall be attached to complete the documentation. Documents will
be stamped Paid (if full payment was made) in order to avoid double payment of the transaction.
If initial downpayment was made, balance shall be processed based on the generated AP invoice
and will go through the standard process of review and approval.

FINANCE POLICY
MANUAL
ACCOUNTS PAYABLE
FUEL PURCHASES
REF.
NUM.
VCFP0011
PAGE 1
of 3
DATE:
APRIL 1,
2015

Proper internal control will be followed to ensure that only valid and authorized payables are recorded
and paid. Accounting procedures will be implemented to ensure the accuracy of amounts, coding of
general ledger accounts and appropriate timing of payments.
Purpose
To explain the procedures for documenting, recording and issuing payments for accounts payable
transactions for fuel purchases.
Scope
This policy applies to accounts payable for fuel purchases.
Definition of Terms
a. Accounts Payable - This current liability account will show the amount a company owes for
items purchased on credit. This account is often referred to as trade payables (as opposed to
notes payable, interest payable, etc.)

I.
Documentation
The following documents shall be forwarded to Accounting Division by Logistics for the
processing of Accounts Payable
Acquisitions
o Purchase Requisition (if applicable)
o Purchase Order (PO)

FINANCE POLICY
MANUAL
ACCOUNTS PAYABLE
FUEL PURCHASES
REF.
NUM.
VCFP0011
PAGE 2
of 3
DATE:
APRIL 1,
2015
o Suppliers SO
o Goods Receipt Purchase Order (GRPO) , Receiving Report
o Suppliers Invoice/Statement of Accounts (SOA)
Once the accounts payable analyst has all of the above documents, the following steps will be
performed to ensure proper authorization, validity of purchase, receipt of purchased items and
accuracy of amounts.
The supplier invoice will be stapled on top of the packing slip/suppliers SO and receiving
report followed by the purchase order and purchase requisition.
The purchase order should be evaluated for proper authorization and the nature of the
purchase and pricing as shown on the invoice reviewed for validity.
The quantities shown shipped or delivered on the invoice will be compared to the packing
slip and/or receiving reports. Any discrepancies must be followed-up and resolved prior
to commencing with the voucher process.
Calculations on the invoice will be recomputed such as quantities received multiplied by
unit price and totals.
II. Recording
Once the accounts payable voucher package has been properly assembled and reviewed, the
voucher package will then be posted through an A/P Voucher entry. Accounts Payable Voucher
will then be printed and routed for review and validation to the accounting supervisor. Accounting
supervisor shall also review the accuracy of GL accounts used.
The voucher package will then be temporarily filed alphabetically by vendor name in the unpaid
invoice files to await payment.
III. Payment of Accounts Payable
Accounts payable vouchers will be selected for payment according to their terms of payment.
Accounts payable should normally be paid within two days before their due dates unless otherwise
determined by the General Manager.

FINANCE POLICY
MANUAL
REF.
NUM.
ACCOUNTS PAYABLE
FUEL PURCHASES
VCFP0011
PAGE 3
of 3
DATE:
APRIL 1,
2015
Any debit balances (amounts owed to the company) should be applied to credit amounts when
determining payment.
A payment voucher will be sent for approval in the system to the Accounting Manager or his
alternate.
Once above conditions are met, AP Analyst prints the vouchers and check or fund transfer slip.
Payment Vouchers shall be printed in 3 copies and shall be filed as follows:
CHECK COPY
HOW PROCESSED
Original
Mailed to the suppliers along with any necessary payment

stubs.
1st copy
Attached to the voucher package and filed alphabetically

in the paid supplier files.
2nd copy
Filed sequentially in check register folders.
After the checks or fund transfer slip are printed, they will be submitted together with the voucher
package to the CFO for signing.
Signed payment vouchers and checks or fund transfer slip shall be forwarded to Treasury Division
for release or transfer of payment. Once checks are released, voucher package and original
documents shall be perforated to avoid double payment and document reuse. Vouchers shall be
forwarded back to Accounting for filing and follow through of official receipts.
IV. Accounts Payable Aging Report
On a monthly basis, Accounts Payable analyst shall generate an aged trial balance of vendors'
accounts with individual invoice information and days outstanding.
The aging report contains the individual invoices coming to a total balance due to each vendor
along with an age category (30, 60, 90, >120 days). The aging report shall regularly be analysed
overdue identified and addressed immediately.
Timely identification of potential problems and remedial action is the key to successful accounts
payable management and good vendor relationship.

FINANCE POLICY
MANUAL
PAYMENT VOUCHER
PREPARATION AND
RELEASE
REF.
NUM.
PAGE 1
VCFP0012
of 4
DATE:
APRIL 1,
2015

Payment vouchers shall be prepared upon completion of required approval and recording. Approved
vouchers shall be released only to the Payee or its authorized representative. Appropriate internal control
shall be followed to ensure the monitoring of released and unreleased payment vouchers.
Purpose
To explain the procedures for the preparation and release of payment vouchers.
Scope
This policy applies to all disbursements paid through check, cash, and electronic fund transfers.
Treasury Division
Accounting Division
Definition of Terms
a. Payment Voucher a document which can be used as proof that a monetary transaction has
occurred between two parties. In business, it acts as a receipt for a check or cash transaction or
indicates that an invoice or disbursement has been approved for payment.
b. Check or Cheque a written, dated and signed instrument that contains an unconditional order
from the drawer that directs a bank to pay a definite sum of money to a payee; a bill of exchange
where the drawee is a bank.
c. Cash legal tender, money or its equivalent use as payment for goods and services.
d. Electronic Fund Transfer is the electronic exchange, transfer of money from one account to
another through computer-based system. The term covers cardholder-initiated transactions using
a payment card, direct deposit payment initiated by the payer, direct debit payments, and electronic
bill payment in online banking.

FINANCE POLICY
MANUAL
PAYMENT VOUCHER
PREPARATION AND
RELEASE
REF.
NUM.
VCFP0012
PAGE 2
of 4
DATE:
APRIL 1,
2015

I. Check Preparation
Upon approval and posting by the Accounting Manager of the outgoing payment, AP analyst
forwards the approved RFP or AP invoice to the treasury staff. The treasury staff then prints
the payment vouchers and checks. Payment vouchers shall be printed in 3 copies.
Check Copy
How to Process
Original
Given to the Payee or its authorized representative upon

receipt of check payment or fund transfer.
1st copy
Attached to the accounts payable or disbursement

package and filed alphabetically in the paid supplier
files together with the official receipts, validated deposit
slips and other attachments.
Filed sequentially in payment voucher register folders.
2nd copy
II.
The voucher package (the printed payment voucher and the attachments) and the attached
printed check will be submitted for review to the Treasury Supervisor. The Treasury
Supervisor will make a 3-way matching of the documents: ensure that the payee name and
amount in the attached check matches with the details in the payment voucher and matches
with the vendor name and total amount in the supporting documents. After reviewing, the
voucher package will be forwarded to the AVP- Finance for signing of the payment voucher.
The signed voucher package will then be forwarded to the Chief Finance Officer for check
signing.
Safekeeping of Checks and Release of Payment
Treasury division maintains custody of issued checks and ensures proper safekeeping.
Once the checks and payment vouchers are signed, the treasury staff records in a logbook,
the following details - the check number, check date, payee, check amount, payment
voucher number, remarks, and recipients signature. The record will be in check number
series. This logbook serves as a monitoring on the part of the treasury staff to ensure
completeness of the Checks. This will also be used to monitor the status of the checks if
they have been released or not.

FINANCE POLICY
MANUAL
III.
PAYMENT VOUCHER
PREPARATION AND
RELEASE
REF.
NUM.
VCFP0012
PAGE 3
of 4
DATE:
APRIL 1,
2015
Release of payment shall be made to payee or authorized representative(s) only. The payee
will present his or her ID upon collection of payment. In cases wherein the recipient is the
authorized representative, the following shall be presented: authorization letter from the
payee, photocopy of payees valid ID, authorized representatives ID. Official receipt shall
also be given at the time of receipt of check payment.
Authorization letter, photocopy of payees ID and official receipt will then be attached to
the payment voucher.
Check shall then be released to the supplier upon validation of signatures. The recipient
shall be asked to sign both the payment voucher and the logbook upon receipt of payment
to acknowledge receipt thereof.
Paid payment voucher package shall be given back to the Accounting (Receiving) staff for
follow up of official receipts not attached. The package will then be forwarded to the AP
Analyst for filing. AP Analyst to stamp the payment vouchers as PAID and all attached
documents perforated to avoid reuse.
For checks not released at the end of the working day, they should be kept safe inside a
secured vault. The treasury staff must ensure that the number of checks not released must
also equal the number of Checks not signed in the logbook.
Electronic Fund Transfer
Required documentation for all transfers is the same as for cash/check disbursements. A
logbook for all electronic fund transfers shall also be maintained which is recorded per
fund transfer date.
For bank direct deposit of payments, a withdrawal slip or fund transfer form shall be
accomplished by the treasury staff.
For online banking, the authorized maker shall initiate the payment immediately. Once
payment is confirmed, copy of email notification shall be forwarded to treasury for the
preparation of request for adjustment. The request details the accounts and the purpose of
the transfer. This will be prepared by the treasury staff and approved by the treasury
supervisor upon verification of payment with the bank or in the passbook.

FINANCE POLICY
MANUAL
IV.
PAYMENT VOUCHER
PREPARATION AND
RELEASE
REF.
NUM.
VCFP0012
PAGE 4
of 4
DATE:
APRIL 1,
2015
The request for adjustment will be forwarded to accounting for the preparation and posting
of journal entry.
For payments that shall be coursed through company messenger or employee which shall
be assigned to process the transfer or deposit, Treasury shall ensure validated deposit/fund
transfer slips are submitted prior forwarding to Accounting (Receiving).
Manual Checks
Preparation of manual checks shall be allowed in cases of the following:

Automatic check printing not yet available in the accounting computer system
The accounting computer system experienced errors in check printing
Wherein there are errors encountered in the accounting computer system, only urgent check
payments shall be processed manually if still not resolved within 24 working hours. If still
not resolved after 24 working hours, manual check preparation shall be made upon approval
by the Chief Finance Officer.
A report for all manual checks shall be prepared by Treasury for documentation purposes.

FINANCE POLICY
MANUAL
REF.
NUM.
PAYMENT REMITTANCE
VCFP0013
PAGE 1
of 2
DATE:
APRIL 1,
2015

The company shall pay its disbursements through check, electronic fund transfer, or cash. Upon settlement
of payment, an official or acknowledgment receipt (whichever is applicable) should be given in return as
proof of the transaction. The official or acknowledgment receipt must be given to Accounting on the day
of payment or on the next working day from receipt of payment by the intended payee.
Purpose
To ensure standard documentation on the remittance of payments and provide assurance on the receipt of
payment by the intended payee.
Scope
This policy applies to all payment remittances of the company.
Company Messenger or Employee assigned to remit payment
Definition of Terms
a. Payment remittance the act of sending money as payment for something; remittance can be
made through mail, fund transfer, courier, or company employee.
b. Receipt acknowledgment in writing that something of value or cash, has been placed into
an individuals possession; written confirmation of payment rendered.

FINANCE POLICY
MANUAL
PAYMENT REMITTANCE
REF.
NUM.
VCFP0013
PAGE 2
of 2
DATE:
APRIL 1,
2015

I.
General Guidelines
It shall be the responsibility of Accounting to ensure all payment remittances to suppliers,

contractors and other intended payees for business transactions are documented by an official
or acknowledgement receipt to confirm receipt of payment and clearing of payment
transaction.
Company employees or other departments tasked to receive payment for remittance to

intended payees are also responsible to receive the official or acknowledgment receipt in
return and forward the same to Accounting.
Official or acknowledgment receipt must be forwarded immediately upon receipt of payment

or latest, on the next working day from receipt. Accounting should fast track the immediate
submission of receipts to ensure closure of transactions.
To ensure the compliance of the above requirements, Accounting Supervisor and Accounting
Manager shall do a regular monitoring on the status of filing of payment vouchers. A weekly
disbursement report shall be generated for Accounting to verify with the actual payment
vouchers if the receipts were already attached.
Any lacking attachments should be immediately resolved and accountable person should be
notified through a written notice.
II.
Forms of Payment Remittances
Electronic Fund Transfers when payments are directly deposited or transferred to payees
account, the validated payment slip or payment confirmation from bank should be filed. In
addition Accounting should immediately coordinate with the supplier or payee to confirm
receipt of the payment through the issuance of official or acknowledgment receipt.
Mail or Courier when checkpayments or cash payments are made through mail or couriers,
validated remittance form or waybill receipt should be filed. Accounting shall monitor the
remittance. Upon actual receipt by the payee, Accounting shall immediately ask of the receipt.
Through company messenger or employee when payments are coursed through company
employees, the employee should not release payment to the intended payee without the
receipt. The receipt shall then be immediately forwarded to Accounting. When the employee
is out based, receipt should be forwarded immediately either through mail or through other
employees bound to main office or other faster means of remittance.

FINANCE POLICY
MANUAL
EMPLOYEE CASH
ADVANCES
REF.
NUM.
VCFP0014
PAGE 1
of 4
DATE:
MARCH 1,
2015

Cash advances in reasonable amounts may be obtained from the company to defray out of pocket cash
expenses incurred by regular employees or officers for company business purposes.
Purpose
To provide standard procedure in the accounting of cash advances and ensure proper liquidation.
Scope
This procedure applies to all request for advances for official business transactions given to company
employees or officers.
Payroll Department
Definition of Terms
a. Cash Advance - represents a cash payment made by the company for the business expenses that
are anticipated to be incurred by the employee or officer on behalf of the company; and the
employee is obligated to prove business expenses to the company.
Examples of Cash Advances are the following:
Travel advances
Advances for meals and entertainment
Advances for repairs and maintenance
Advances for processing of permits and licenses
Trainings, seminars and other company activity advances

FINANCE POLICY
MANUAL
EMPLOYEE CASH
ADVANCES
REF.
NUM.
PAGE 2
VCFP0014
of 4
DATE:
APRIL 1,
2015

I.
Documentation
The following forms shall be used in requesting for cash advances:
Request for Payment or Petty Cash Voucher

Cash Advance Form (three copies)
Other pertinent documents that may be attached
In the Cash Advance Form, below details shall be completely filled out:
Name of Payee
Position
Date Prepared
Company, Department and Cost Center
Amount
Date Needed
Purpose
Advances shall be recommended for approval by the immediate superior and approved by the
Chief Finance Officer. Self-approval of an advance is not permitted. Approving Officers shall not
approve cash advance request unless all previous advances have been cleared. Exceptions shall
be properly justified.
A salary deduction authorization shall be completed also both by the requesting individual and his
or her immediate superior. The requesting individual shall indicate his or her timeline of
liquidation which shall not be more than one month from date of receipt of cash advance.
The salary deduction authorization shall stipulate that in the event of non-liquidation from the
specified timeline, Payroll Department shall be authorized to deduct the amount of cash advance
from the employees payroll.
The immediate superior shall also sign in the authorization, giving assurance on the compliance of
the required liquidation and in case of default, he or she shall be administratively liable.

FINANCE POLICY
MANUAL
EMPLOYEE CASH
ADVANCES
REF.
NUM.
VCFP0014
II.
DATE:
PAGE 3
of 4
APRIL 1,
2015
Recording
The processing of the request shall undergo the same procedure as to the Request for Payment or
Petty Cash (whichever is applicable). For request for payment process, AP Analyst shall record
the transaction as Advances to Employee. If taken from the petty cash fund, no replenishment
for petty cash fund shall be made if unliquidated.
Upon completion of the accounting and check or cash release process, one copy of the Cash
Advance form shall be given to the requesting party, the second copy shall be retained in the
payment or petty cash voucher awaiting liquidation and the last one shall be filed in a separate
folder by the Accounting (Receiving) Staff for monitoring of liquidation.
III.
Liquidation of Cash Advance
On or before the set timeline, the requesting party shall submit to the Accounting (Receiving) Staff
the original copies of the receipts, the expense report form, his or her copy of the cash advance
form for liquidation and validated deposit slip for the excess fund. Employee shall endeavor to
provide official receipts or invoices of significant value showing the name of the company.
Unreceipted receipts shall be of reasonable amounts.
If there is excess fund, such shall be deposited already by the requesting individual to the
companys bank account, in which validated deposit slip shall be submitted together with the
liquidation.
Upon receipt of the Accounting (Receiving) Staff of the liquidation report, the 3 copies of the Cash
Advance form shall be signed under received by and will be forwarded immediately to AP
Analyst for entry in the system. Below are the documents to be forwarded:
Payment voucher with the attached cash advance form

Liquidation report (Expense report, receipts and copy of cash advance form)
Cash Advance form per separate folder
Validated deposit slip (Excess fund)
The AP Analyst, upon review of the completion of required liquidation, shall prepare a journal
voucher to close the Advances to Employee account. Together with the other documents, these
shall be forwarded to the Accounting Supervisor for review and to the Accounting Manager for
posting. The Accounting Manager shall also sign in the three copies of Cash Advance Form to
certify closure of transaction. The requesting individuals copy of the Cash Advance form shall
then be returned to him or her for filing.

FINANCE POLICY
MANUAL
EMPLOYEE CASH
ADVANCES
REF.
NUM.
VCFP0014
IV.
PAGE 4
of 4
DATE:
APRIL 1,
2015
Non-liquidation of Cash Advance
In the event of non-liquidation or lacking liquidation, Accounting (Receiving) Staff shall

immediately inform the Accounting Manager. The Accounting Manager shall prepare a Notice
letter to the requesting individual informing him or her of the non-compliance of the required
liquidation. Included in the notice will be the 7 days allowance to be given for the requesting
individual to liquidate the cash advance. Corresponding interest shall also be computed and
included in the notice. If liquidation will not be received within the specified allowance period,
the Accounting copies (2) of the Cash Advance forms shall be forwarded to Payroll department
for salary deduction.
Any unreturned excess or unliquidated cash advance shall be assessed with the present interest rate
being incurred by the company. Interest shall be calculated the day after the set timeline of
liquidation up to the last day of the allowance period.
In cases of salary deduction, the standard accounting process on the closure of liquidation will start
upon receipt by the Accounting (Receiving) Staff on the Cash Advance forms signed by the Payroll
Department confirming the deduction of unliquidated advance in the employees salary.
In case liquidation was made but beyond the allowance period already, and such was already
deducted in the employees payroll, refund shall be made through Request for Payment.
V.
Request for Extension
If there are uncontrolled circumstances, wherein the employee could not liquidate the advance on
the set timeline, he or she shall seek for consideration approval from the Chief Finance Officer
through email or a written notice 2-3 days before the set timeline. Upon approval, Accounting
shall note the new deadline and shall monitor liquidation. No more extension shall be allowed
after.

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
PAGE 1
of 6
DATE:
APRIL 1,
2015

A Petty Cash Fund shall be established to improve the efficiency of the company operations. This fund
shall be available for minor business expenditures. Release of petty cash shall only be allowed for preapproved requests. Reimbursements or releases without prior approval shall not be allowed.
Purpose
To prescribe the policies and procedures relating to the establishment, administration and discontinuance
of petty cash funds.
Scope
This policy shall apply to all authorized expenditures for Petty Cash.
Treasury Department
Definition of Terms
a. Petty Cash - A small fund of cash kept on hand for purchases or reimbursements too small to be
worth submitting to the more rigorous purchase and reimbursement procedures of a company or
institution.
b. Petty Cash Custodian the employee in a department who has been authorized to make payments
from a petty cash fund and who is directly responsible for the administration of the fund.

I.
Security of Petty Cash Funds
Department heads are responsible for the proper safeguarding of petty cash monies entrusted to
their departments. Cash and receipts for unreimbursed expenditures must be kept in a locked

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
PAGE 2
of 6
DATE:
APRIL 1,
2015
container such as fire-proof cabinet, safe, or other suitable device to which unauthorized access is
difficult.
II.
The petty cash custodian is personally responsible for the cash which was specifically issued to
him or her.
Establishment of Petty Cash Fund
A petty cash fund may be established in a department to improve the efficiency of departmental
operations. These funds are available for minor business expenditures when it would be otherwise
impractical to undergo usual processing of payment.
These funds are subject to periodic audits. Recurring audit findings may result in the petty cash
fund being revoked.
The custodian is responsible for ensuring the cash on hand and receipts equal the authorized
amount of the fund at all times. Petty cash funds must be kept separate from cashiers funds, cash
drawers, personal funds, and any other collected revenue.
Petty cash may be used for authorized expenditures up to Php5,000 per transaction which shall
cover but not limited to the following:
Business meals and snacks

Local transportation expenses
Postage expense
Notarial expenses
Communication and Utilities expense
Labor expenses
Donations and contributions
Fuel and oil expenses
Licenses and permits
Repairs and maintenance
Cash advances
Subscriptions
Other similar business related expenses
Employee personal cash advances

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
III.
of 6
DATE:
APRIL 1,
2015
Petty Cash shall not be used for the following:
PAGE 3
Expenses or reimbursements beyond the allowable amount

Regular employee salary
Personal loans
Personal expenses
For expenses or reimbursements without approved Petty Cash voucher
For the release of petty cash fund, the department head submits a memorandum justifying the need
for a petty cash fund and the designated fund custodian. This should indicate the identification
number and signature of the custodian. The memorandum shall be attached to the Request for
Payment payable to the designated fund custodian in the amount requested.
Approval and Release of Petty Cash
The requesting party approaches the petty cash custodian for the request. The custodian shall
indicate the request in the petty cash voucher with the name of the requesting party or payee. The
same shall be forwarded by the petty cash custodian to the AVP-Finance for approval. Approval
by the AVP Finance through call or message shall be allowed but the petty cash voucher
should still be signed after.
Petty cash custodian shall release the requested amount of cash based on the approved petty cash
voucher. A petty cash monitoring shall be maintained to monitor liquidation of released cash.
The monitoring shall indicate the date, recipient, purpose, amount released which shall also be
signed by the recipient upon cash release.
After the expense has been incurred, the official or acknowledgment receipt shall be submitted to
the petty cash custodian.
If the requesting party is out of the office and opts to use personal money and have it reimbursed.
He shall coordinate with the custodian for the approval and the same process shall apply, but the
signing under the recipient portion will be made upon reimbursement. Reimbursement shall only
be made upon receipt of official or acknowledgment receipt.

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
IV.
PAGE 4
of 6
DATE:
APRIL 1,
2015
Replenishment of Petty Cash
The petty cash custodian shall submit to Accounting every week request for payment for the
replenishment of petty cash. The following shall be attached to the request:
Petty Cash Report (beginning balance, expenses for replenishment, expenses for
liquidation, ending balance or cash on hand)
Approved petty cash vouchers and official or acknowledgment receipts
The request for payment shall be reviewed by the treasury supervisor and shall ensure the
following:
All petty cash vouchers have been signed approved by the AVP-Finance and
confirmed received by the requesting party or payee.
Only expenses with complete receipts are to be requested for replenishment.
Unliquidated expenses will not be honored.
Cash on hand reflected in the petty cash report tallies with the actual cash on hand.
Treasury shall ensure the completion of required receipts within 16 working hours from release
of cash. For those cash advances, the policy on cash advances shall apply and treasury shall
monitor liquidation on the specified timeline.
V. Cash Count Function
At least monthly, Accounting Manager or alternate shall conduct a surprise audit to verify that the
accuracy of the petty cash on hand and supporting vouchers and reports.
AVP - Finance shall prepare a memo to advise petty cash custodian on the cash count indicating
the employee designated to do the count, with copy to custodians immediate superior.
Conduct cash count preferably in the morning, before the start of regular transactions. Present the
memo to the custodian on the day of the count to support or authorize the activity. Include count
of other cash funds.
Using the cash count form, indicate the following:

Name of department and type of fund (e.g. petty cash fund, cashiers fund, etc.). Use
separate count sheet for each type of fund.

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
PAGE 5
of 6
DATE:
APRIL 1,
2015
Date of count.
Quantities, in bundles and loose form, of the counted bills and coins. Perform
mathematical computation to arrive at the total amount per denomination and total cash.
Determine any discrepancy by comparing the total cash and cash items against the fund
balance per monitoring. If there is a material difference, verify with the custodian for
reconciliation and communicate with the treasury supervisor to report a material
variance.
Indicate name and sign on the reviewer signature. Require custodian to fill-out and sign
on the custodian acknowledgment portion.
If warranted, indicate any cash control procedure not being followed.
Photocopy the accomplished cash count form and route to custodian and immediate head. File the
original form to document the count made.
VI. Transferring Petty Cash Fund Custodianship
The department head is responsible for reporting any changes in the petty cash custodian to the
Chief Finance Officer. The department head prepares a memo justifying the replacement for
approval by the CFO. The new custodians identification number, name and signature is indicated
in the memo.
When a new custodian is to take charge of a petty cash fund, the former custodian replenishes the
fund so that the fund has the established amount of cash on hand.
Accounting will not reimburse a petty cash custodian unless the name is on file as the current
custodian.
VII. Increasing/Decreasing/Closing Petty Cash Funds
When additional petty cash funds are needed, the department head prepares a memorandum for
approval by the Chief Finance Officer justifying the increase and have it attached to the Request
for Payment payable to the fund custodian in the amount of the requested increase.
A petty cash fund should be reduced if the amount of the fund exceeds the actual needs of the
department. The amount which is no longer needed should be deposited at the Treasurys office to
facilitate deposit of the excess to the companys bank account, this should be remitted together
with the approved memorandum on the decrease of fund. Upon deposit, Treasury shall forward

FINANCE POLICY
MANUAL
PETTY CASH FUND
REF.
NUM.
VCFP0015
PAGE 6
of 6
DATE:
APRIL 1,
2015
A Request for Adjustment with the attached validated deposit slip and memorandum to Accounting
for the adjusting entry to made under the Petty Cash account.
When a petty cash is no longer needed, the fund custodian should replenish the fund to the
authorized amount. This amount must then be returned to the Treasurys office to facilitate deposit
and preparation of request for adjustment on the closing of petty cash account. An approved
memorandum shall also be required to facilitate the process.
Petty cash funds must never be deposited into a revenue account code.

FINANCE POLICY
MANUAL
CASHIER FUND
REF.
NUM.
VCFP0016
PAGE 1
of 4
DATE:
APRIL 1,
2015

A Cashiers fund shall be maintained by the company to cover cash releases for disbursements.
Purpose
To define and establish the Companys Cashiers revolving fund procedures.
Scope
This procedure applies to Cashiers Fund maintained at the Main Office.
Treasury Department
Definition of Terms
a. Cashier an employee who handles the financial transactions of the company, in charge of paying
and receiving money.
b. Revolving Fund account established and remains available to finance a continuing cycle of
operations because the organization replenishes the fund by repaying money used from the
account.

I.
General Guidelines
Company cashier revolving fund is to be maintained on fluctuating basis and must be kept separate
from other cash funds, collections, etc. Any request for additional fund, even if for temporary use
only, shall be duly approved by the Chief Finance Officer or his authorized personnel through a
memorandum.

FINANCE POLICY
MANUAL
CASHIER REVOLVING
FUND
REF.
NUM.
VCFP0016
PAGE 2
of 4
DATE:
APRIL 1,
2015
All disbursements from the fund shall be covered by approved payment vouchers and cash
withdrawal slip. The maximum limit of disbursement from the fund shall be P 20,000 per voucher
and all payments over the maximum set amount shall be covered by check voucher disbursements.
On a case to case basis, payments over the maximum limit may be made from the revolving fund
with the approval of the Chief Finance Officer or his designate to be indicated in the request for
payment.
The following are the allowed disbursements to be taken from the Cashiers fund:
Employee cash salaries

Employee revolving fund replenishment
Communication and Utilities Expenses
Permits and licenses
Other similar business related expenses
Even with allowed disbursements or those expenses not indicated therein, payments through
cashier shall still be subject to the AVP Finance or Chief Finance Officer discretion whether to
proceed during payment processing considering materiality and risks involved.
This revolving fund must be securely maintained in a manner so as to be accessible only to the
duly authorized fund custodian. During non-business hours, the fund is to be kept in a locked metal
file cabinet or safe accessible only to authorized custodian and management personnel.
The fund shall be replenished with the condition that substantially 80% of the fund is exhausted.
On a periodic basis, the accounting department shall conduct a surprise audit verifying that the
total of cash and any outstanding payment voucher or official receipts equals the amount of the
cashier fund and that proper procedures are being observed. Frequency of cash count can be
quarterly or semi-annually, depending on the amount of fund and the degree of risk inherent in the
control procedures.
II. Company Cashier Functions
Prepare a schedule or logbook for all disbursements and shall indicate the following:
Date
Cash Withdrawal Slip Number
Payment Voucher Number
Recipient and Signature
Amount
Remarks

FINANCE POLICY
MANUAL
CASHIER REVOLVING
FUND
REF.
NUM.
VCFP0016
PAGE 3
of 4
DATE:
APRIL 1,
2015
Before releasing the cash, request for the claimants identification (ID) card and have the payee
sign on Recipient portion of the payment voucher and in the logbook. In cases where the person
claiming the payment is other than the payee himself, require for a Letter of Authorization with
both IDs of the payee (photocopy) and representative. Official receipt must also be given.
Compare the signature of the payee or his authorized representative on the payment voucher
against the ID card and question any difference noted. If there is a significant difference in
signature, no payment shall be effected.
Once identification of the recipient is confirmed and validated, pay the corresponding amount
based on accomplished and duly authorized or approved payment vouchers and give the original
copy of payment voucher and cash withdrawal slip. Remind the recipient to count the cash received
before leaving the premises.
Authorization letter, photocopy of payees ID and official receipt shall be attached to the payment
voucher.
Paid payment voucher package shall be given back to the Accounting (Receiving) staff for follow
up of official receipts not attached. The package will then be forwarded to the AP Analyst for
filing (per supplier files and per payment voucher register file). Upon checking of the
completeness of official receipts, AP Analyst shall be responsible to stamp the payment voucher
as PAID and its supporting documents perforated to avoid reuse.
For payment vouchers not released at the end of the working day, they should be filed awaiting
release. The treasury staff must ensure that the number of payment vouchers not released must
also equal the number of items not signed in the logbook.
At the end of each day or at established frequency, prepare a Cash Report in duplicate, indicating
the following information:
Cash balance at the beginning of the day
Replenishment received or in transit
Payment voucher numbers and amount paid
Cash balance at the end of the day
The Cash Report shall be submitted to the treasury supervisor at the end of each day and will have
this verified with the actual cash balance.
When the fund is 80% exhausted, a Request for Payment will be prepared for the replenishment
of released funds.

FINANCE POLICY
MANUAL
CASHIER REVOLVING
FUND
REF.
NUM.
VCFP0016
PAGE 4
of 4
DATE:
APRIL 1,
2015
After the reimbursement and replenishment check have been processed, process the delivery of
cash either through banks armored car or company messenger.
III. Cash Count Function
At least monthly, AVP - Finance or his alternate shall conduct a surprise audit to verify that the
total of cash and its covering cash vouchers still in custody is equal to the amount of the revolving
fund. AVP - Finance shall prepare a memo to advise Cashier on the cash count indicating the
employee designated to do the count, with copy to Cashiers immediate superior.
Conduct cash count preferably in the morning, before the start of regular cashiering functions.
Present the memo to the Cashier on the day of the count to support or authorize the activity.
Include count of other cash collections or cash funds.
Using the cash count form, indicate the following:

Name of department and type of fund (e.g. revolving fund, cash collections, etc.). Use
separate count sheet for each type of fund.
Date of count.
Quantities, in bundles and loose form, of the counted bills and coins. Perform
mathematical computation to arrive at the total amount per denomination and total cash.
Determine any discrepancy by comparing the total cash and cash items against the
revolving fund balance per books. If there is a material difference, verify with the
custodian for reconciliation and communicate with the immediate head or the
Accounting supervisor to report a material variance.
Indicate name and sign on the Reviewer Signature block. Require cashier to fill-out
and sign on the custodian acknowledgment portion.
If warranted, indicate any cash control procedure not being followed. Photocopy the accomplished
cash count form and route to Cashier and immediate head. File the original form to document the
count made.

FINANCE POLICY
MANUAL
EMPLOYEE REVOLVING
CASH FUND
REF.
NUM.
VCFP0017
PAGE 1
of 3
DATE:
APRIL 1,
2015

A revolving cash fund shall be issued to company employees to cover travel expenses incurred while
performing official duties outside their current work base, such as lodging, meal allowance and
transportation. Employee shall regularly liquidate expenses prior replenishment of the revolving cash
fund.
Purpose
To provide standard procedure in the accounting of revolving cash fund and ensure proper liquidation.
Scope
This policy applies to VEPCO revolving cash fund and other travel allowances issued to company
employees.
Sales Department
Definition of Terms
a. Revolving Fund account established to finance a continuing cycle of operations through
amounts received; a fund set up for specified purposes with the provision that repayments to
the fund may be used again for these purposes.
b. Travel Expense costs associated with traveling for the purpose of conducting businessrelated activities.

FINANCE POLICY
MANUAL
EMPLOYEE REVOLVING
CASH FUND
REF.
NUM.
VCFP0017
DATE:
PAGE 2
APRIL 1,
2015
of 3

I.
General Guidelines
Employees with assigned company business outside of their home or work base shall be issued a
revolving cash fund to cover travel expenses. Issuance shall be subject to the approval of the
Chief Finance Officer through a memo. Approved memo shall be attached to the Request for
Payment for processing of the release of fund.
The revolving cash fund shall be used solely for business purposes. The employee must use the
fund within the specifications of the company so as not to use them for expenses that are lavish
and extravagant in nature.
The revolving cash fund shall not be considered as an additional income of an employee nor
something the employee is entitled if he did not incur an actual expense.
II. Use of Revolving Cash Fund
The revolving cash fund shall be used for the following travel and business expenses:
Lodging
Meals
Fuel and Transportation
Printing and Reproduction expenses
Minor Repairs and Maintenance
Representation expense
Below are the limits of meals and lodging allowance for the travelling personnel:
Type
Breakfast
Lunch
Dinner
Lodging
RDOS/Rank&File/
Supervisor
Php 80.00
100.00
100.00
600.00
RDSM/Managers
Php100.00
110.00
120.00
800.00
Senior Managers
Php
110.00
120.00
130.00
1,200.00
Requisites for claiming meals:

Breakfast may be claimed when employee is required to depart from his current work base
before 6:00am.

FINANCE POLICY
MANUAL
EMPLOYEE REVOLVING
CASH FUND
REF.
NUM.
VCFP0017
PAGE 3
of 3
DATE:
APRIL 1,
2015
Lunch may be claimed when an employee is required to depart from his current base no later
than 10:00am and to return to his current work base no earlier that 1:00pm.
Dinner may be claimed when an employee is required to continue working outside his current
base beyond 8:00pm after rendering regular hours.
III.
Lodging and meal allowance are not allowed if the personnel travels to a location which is in
close proximity (within 30 kilometer radius) from or to his current residence and/or work base.
Liquidation of Revolving Cash Fund
Liquidation of fund shall be made weekly. A request for payment shall be made for the
replenishment of fund with the following attachments:
Expense report summarizes the expenses of the employee for a period indicating the date
of expense, type, amount and other relevant details.
Weekly activity report details the specific activities of the employee for the period related
to the expenses incurred.
Weekly itinerary report details the planned activities and area of travel of the employee for
the succeeding week.
Fuel Card specifies the odometer (distance traveled) and fuel expenses of the employee.
Attachments/Receipts supporting receipts for the expenses incurred.
IV.
Liquidation of expenses must be supported with ORIGINAL official receipts (OR) except for
meals. Replenishment of expenses shall be based on the actual expense incurred or the maximum
limit or budget whichever is lower.
Cancellation of Revolving Cash Fund
Cancellation of revolving cash fund shall be subject to cancellation when the employee is no
longer assigned on duties outside his work base; upon employment termination; or upon the
discretion of the Chief Finance Officer. A memo shall be signed by the CFO to document the
cancellation of the fund.
Upon receipt of the approved memo by the employee, he shall immediately liquidate all
consumed funds and return the excess to Accounting for recording. The employee shall be given
1 week to liquidate and return excess funds from receipt date of the memo.
Accounting shall process the corresponding journal entry upon completion of the above
requirements.

FINANCE POLICY
MANUAL
BANK RECONCILIATION
REF.
NUM.
PAGE 1
VCFP0018
of 3
DATE:
APRIL 1,
2015

Errors or omissions can be made to the cash records due to the many cash transactions that occur.
Therefore, it is necessary to prove periodically the balance shown in the general ledger. Cash on deposit
with a bank is not available for count and is therefore proved through the preparation of a reconciliation
of the company's record of cash in the bank and the bank's record of the company's cash that is on deposit.
Purpose
To outline the procedures for preparation of a monthly bank reconciliation and record keeping of any
adjustments.
Scope
This policy statement applies to all bank accounts maintained by the company.
Accounting Division
Definition of Terms
a. Bank reconciliation analysis and adjustment of differences between the cash balance shown on a
bank statement, and the amount shown in the companys own records. This matching process involves
making allowances for checks issued but not yet presented, and for checks deposited but not yet
cleared or credited. And if discrepancies persist, finding the cause and bringing the records into
agreement.
b. Bank balance balance per bank or balance per bank statement referring to the ending balance
appearing on a bank statement.
c. Book balance balance per books, the amount shown in the company records.

FINANCE POLICY
MANUAL
BANK RECONCILIATION
REF.
NUM.
VCFP0018
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
Reconciliation Format
The company's format for monthly bank reconciliations, Reconciliation of Bank and Book
Balances to Corrected Balance, is composed of two sections distinct sections:
One section begins with the balance as shown on the bank statement and works to a corrected
balance. That is the balance the bank statement would show if all transactions were recorded
by the bank (e.g. outstanding checks, deposits in transit, etc.).
The second section starts with the balance shown by the Company records and also works to
a corrected balance, the balance that shall be shown in the company's records after all
transactions are properly recorded (e.g. bank charges, interest).
Example:
Section 1
Balance per Bank Statement as of 12.31.14
Php10,000.00
Adjustments:
Section 2
Deposits in transit
1,000.00
Outstanding checks
(1,500.00)
Adjusted/Corrected Balance per Bank
Php 9,500.00
Balance per Books as of 12.31.14
Php 9,420.00
Adjustments:
(20.00)
Interest earned
100.00
Adjusted/Corrected Balance per Books
Php 9,500.00
II. Preparation and Reconciliation of Items

Upon receipt of the monthly bank statement including cleared checks, deposit slips, and any other
transaction notifications, the monthly bank reconciliation shall be prepared by the Accounting
Manager or Supervisor in the system.

FINANCE POLICY
MANUAL
BANK RECONCILIATION
REF.
NUM.
VCFP0018
DATE:
PAGE 3
of 3
APRIL 1,
2015
The first section of the monthly reconciliation shall be started with the ending balance per the bank
statement.
Next, any deposits in transit that were made by the Company but were not yet recorded by the
bank shall be listed and added to the bank balance.
Next, any checks that were written on the account prior to month-end but which have not yet
cleared the bank shall be listed and deducted from the bank balance.
From these steps, the "corrected" ending balance shall be derived for the first section.
The second section of the monthly reconciliation shall be started with the ending balance per the
company's books.
Next, any interest or any other bank credit items shall be listed and added to the balance.
Next, any bank charges, transfer fees, etc. shall be listed and deducted from the balance.
From these steps, the "corrected" ending balance shall be derived for the second section and shall
equal the "corrected" balance for the first section.
Any discrepancies between these two balances shall require research by the treasury staff to
determine the cause, such as recording errors, omissions, mis-postings, etc. This can also include
recalculation of the bank statement for any possible errors made by the bank.
III. Adjustments and Journal Entry
Any book reconciling items such as interest, bank charges and any recording errors shall be
summarized and drafted in journal entry form for recording to the general ledger. Further, any
outstanding checks over six months old (stale checks) shall be reviewed for disposition including
write-off by journal entry.
Adjustments shall be made through the preparation of Request for Adjustment by the Accounting
staff for review and approval by his or her supervisor. The request shall then be processed through
preparation and posting of journal entry.

FINANCE POLICY
MANUAL
ACCOUNTABLE FORMS
REF.
NUM.
VCFP0019
PAGE 1
of 3
DATE:
APRIL 1,
2015

Accountable forms require security consistent with their potential value or negotiability. The degree of
control involved in safeguarding and handling an accountable form should be dependent on the scope
for its misuse and the possible financial consequences, but with due regard to administrative costs.
An appointed custodian will ensure that all accountable forms are kept in a secure place at all times,
preferably in a locked fireproof cabinets or safe in a locked office.
Purpose
These procedures outline the correct treatment of the Companys accountable forms.
Scope
These procedures apply to all areas of the Company that use accountable forms of any kind.
Definition of Terms
a. Accountable form - a document that acknowledges the receipt of money or issued for value
that uses a sequential number or is a pre-numbered form (e.g. Company receipts, cheques,
invoices, and purchase orders).
b. Stocktake also known as inventory checking, physical verification of the quantities and
conditions of items held in an inventory or warehouse or stockroom. This may be done to
provide an audit of existing stock valuation.

FINANCE POLICY
MANUAL
REF.
NUM.
ACCOUNTABLE FORMS
VCFP0019
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
Register of Accountable Forms
For all types of accountable forms, the staff responsible for those accountable forms should
maintain a register. These registers will record the following information in respect of each
type of accountable form:
All entries in the register are to be signed and dated by the assigned staff. In respect of
issues:
II.
III.
date of receipt;
quantity received;
serial numbers of the forms
its nature (the type of accountable form);
date of issue;
quantity issued;
serial numbers of the forms issued
signature of the officer receiving the forms.
Acquisition of Accountable Forms
The LCD manager of the company is responsible for maintaining bulk stocks of forms
commensurate with usage patterns and economic order quantities. On receipt of bulk stocks
from the printer or supplier, the LCD manager is to check that the quantity and serial numbers
of forms received are in agreement with the information provided by the printer or supplier;
particulars are then entered in the accountable forms register.
Each department heads shall be responsible in the processing of request for the needed
accountable forms. Request shall be made 2- 3 months prior required date.
Control and Issue of Accountable Forms
Accountable forms need to be individually identified and accounted for wherever possible
by LCD. Bulk stocks of accountable forms are to be maintained in secure storage under the
control of designated staff.

FINANCE POLICY
MANUAL
ACCOUNTABLE FORMS
REF.
NUM.
VCFP0019
IV.
APRIL 1,
2015
Those to whom working stocks of accountable forms are issued are responsible for their
safekeeping. During working hours the forms should not be left in such manner that they are
accessible by persons passing through unsupervised areas. Outside normal working hours
the forms should be locked in secure storage.
Issues of accountable forms from the bulk stocks are to be recorded in the accountable forms
register by LCD . Those to whom the forms are issued are to check the serial numbers of the
forms before signing the register as acknowledgement of receipt.
Stocktake of Accountable Forms

At least once per annum or on random occasions the Audit is to arrange a stocktake of the
bulk stocks of forms held by the custodian. The stocktake process is to include a sample
check from the issue entries in the register against working stocks held by users. The
completion of the stocktake is to be evidenced by a suitable notation by Audit who performed
the stocktake in each section of the register.
Losses or Deficiencies of Accountable Forms
VI.
of 3
DATE:
V.
PAGE 3
Full details of losses or deficiencies of accountable forms are to be reported to LCD by the
officer or staff as soon as the loss or deficiency is detected.
Obsolete, Damaged or Spoilt Accountable Forms
Where stocks of accountable forms are considered to be obsolete, damaged or spoiled, the
approval of the CFO of the company is to be obtained for their destruction.
A statement of destruction is to be prepared or obtained for filing in the organizational units

records and must provide for the following:
the particulars of those forms are set forth on a statement;
the CFO gives written approval for the destruction of those forms;
destruction of those forms is performed by or witnessed by two authorized
representative in the presence of each other and both officers certify to this effect on
that statement;
the statement is preserved and filed.

FINANCE POLICY
MANUAL
REQUEST FOR
ADJUSTMENT
REF.
NUM.
VCFP0020
PAGE 1
of 3
DATE:
APRIL 1,
2015

All adjustments/modifications made to company records shall be subject to a request for approval and
posting by the Accounting Manager.
Purpose
To ensure all entries made to company records are properly authorized and valid.
Scope
This procedure applies to all request for adjustments to be made in the system record.
Definition of Terms
a. Adjustment in accounting terms, increase or decrease to an account resulting from an adjusting
journal entry; changing an account balance because of some happening or event.
b. Request for Adjustment documents approval of all adjusting entries to be made in the system
records.

I.
Entries requiring Request for Adjustments
Prior period adjustments

Correction of an error in the financial statements that were reported for a prior period
which may be caused by mathematical mistakes, mistakes in the application of
accounting principles or the misuse of facts that existed at the time the financial
statements were prepared.

FINANCE POLICY
MANUAL
REQUEST FOR
ADJUSTMENT
REF.
NUM.
VCFP0020
PAGE 2
of 3
DATE:
APRIL 1,
2015
Should account for a prior period adjustment by restating the prior period financial
statements by adjusting the carrying amounts of the impacted accounts as of the first
accounting period presented, with an offset to the beginning retained earnings
balance in that same accounting period
Data Entry Errors

These errors occur when the information contained within financial documents is
incorrectly entered into financial databases. Transposition errors occur when
numbers are inadvertently reversed, as when 27 is recorded as 72. Original entry
errors occur when data are simply entered incorrectly as when a 9 is entered as 2.
Accruals/Deferrals
Accruals nothing has been entered in the accounting records for certain expenses
and/or revenues, but those expenses and/or revenues did occur and must be included
in the current periods income statement and balance sheet; expenses incurred but
not yet paid; revenues earned but payment not yet received.
Deferrals something has already been entered in the accounting records, but the
amount needs to be divided up between two or more accounting periods.
Credit/Debit Memos
Credit Memo a document issued by the seller of goods or services, reducing the
amount that the buyer owes to the seller under the terms of an earlier invoice. A
credit memo may be issued because the buyer returned goods to the seller, or there
is a pricing dispute, a marketing allowance or incorrect billing thus the whole invoice
will have to be cancelled through a credit memo.
Debit Memo a document used for incremental billing, when the amount billed on
the original invoice was too low; for internal offset, if there is a small credit balance
remaining in a customers account which allows accounting to clear out the balance
in the account; for bank transactions, when the bank charges the company a fee to
its bank statement, thereby reducing the balance in the companys account.

FINANCE POLICY
MANUAL
REQUEST FOR
ADJUSTMENT
REF.
NUM.
VCFP0020
PAGE 3
of 3
DATE:
APRIL 1,
2015
II. Recording and documentation
Request for adjustment shall be filled-out as to the following details:
Date Adjusted
Details of the items for adjustment
Details of the requested adjustment
Justification or reason for adjustment
Name and signature of requesting personnel under Prepared by
Name and signature of the immediate head under Approved by
Accounting staff upon receipt of the duly approved Request for Adjustment shall record the
adjustment in the system and shall print the corresponding journal voucher and attach it to
the Request for Adjustment Form. The accounting staff shall sign under the Prepared by
portion of the journal voucher. The journal voucher shall be reviewed by the accounting
supervisor and will indicate his or her signature under Reviewed by portion. The same
shall be forwarded to the accounting manager for approval and posting of journal entry.
Once posted, the accounting manager shall print the journal entry form and shall indicate
his or her signature in both journal voucher and journal entry form.
In cases of credit memo, upon receipt of the approved request for adjustment, a credit memo
will be generated by the accounting staff. The accounting staff prints the credit memo for
review by the accounting supervisor and forwards the same to the accounting manager for
approval.
All Request for Adjustments and printed Journal Entries shall be filed in series by the
accounting manager for easier tracking.

FINANCE POLICY
MANUAL
REF.
NUM.
FIXED ASSETS
VCFP0021
PAGE 1
of 5
DATE:
APRIL 1,
2015

Proper control procedures will be followed for all fixed asset acquisitions, transfers and dispositions in
order to provide internal control of capital equipment and to assist in reporting. Department managers are
responsible and accountable for furniture, equipment, machinery and any other fixed assets in their
departments and will maintain some type of control over fixed assets. Accounting will assist and evaluate
any department's fixed asset control procedures.
Purpose
To outline the procedures for acquiring, disposing and maintaining control of fixed assets.
Scope
This procedure applies to all fixed assets owned by the company.
Accounting Division
Definition of Terms
a. Fixed assets - Acquired tangible assets which have long term economic benefit to the company
and are depreciated based on estimated useful lives.

I.
Acquisitions
The procurement process for fixed assets starts with completing the Purchase Requisition Form.
Prior to PO creation in the system, the approved PRF will be forwarded first to the Accounting
Supervisor for Fixed Asset card creation (set up FA code and FA name, other details to be
updated once the asset is received). The Purchaser can then start with the PO. The rest of the
process is the same with other non- inventory purchases.

FINANCE POLICY
MANUAL
FIXED ASSETS
REF.
NUM.
VCFP0021
PAGE 2
of 5
DATE:
APRIL 1,
2015
Upon receipt of the fixed asset, an additional document is required other than the Receiving Report.
The FIXED ASSET ACCOUNTABILITY RECEIPT (FAAR) will be used to document the
issuance of fixed assets (e.g. laptops and vehicles) to assigned employees and to document the
acknowledgement of accountability of Department Heads for fixed assets which are not issued to
particular employees (e.g. Velox stations underground tanks and office printer). Thus all fixed
assets owned by the Company must be issued with FAAR. The method of receiving the fixed asset,
either through purchase or from transfer, must be indicated. Once the details have been filled up,
this form must be noted by the assignees Department Head and forwarded to the AP Analyst for
tagging of accountabilities in the system.
II. Fixed Asset Capitalization
The general capitalization policy is to capitalize fixed assets if the cost is 10,000 or more. Any
repairs or improvements made on the asset will be capitalized if these expenditures will extend the
assets useful life.
Land - All land purchases, regardless of cost, are capitalized. When land is acquired with a
building, an allocation should be made for each individually using appraised value of both land
and structure. This ratio should be applied to the purchase price to determine the capitalized
amount.
Amount to be Capitalized - The cost values to be capitalized for a fixed asset are outlined below:
The suppliers invoice price for the item less any discounts. (In the case of donated items, an
appraisal of the items current value should be used in lieu of an actual invoice price.)
Original incoming transportation incurred on shipments from external suppliers and handling
costs. For depreciation purposes, all charges of this nature should be recorded as having been
incurred at the same time as the related fixed asset being purchased.
The cost of site preparation if any, assembly, installation, related professional fees, etc., relating
to the capitalized item.

FINANCE POLICY
MANUAL
FIXED ASSETS
REF.
NUM.
VCFP0021
PAGE 3
of 5
DATE:
APRIL 1,
2015
III. Fixed Asset Codes
Upon fixed asset acquisition, a FIXED ASSET TAG will be attached to the property in a visible
and convenient location that is easily accessible for inventory purposes. The Department Head is
responsible for ensuring that the tag has been attached to the property and that the required details
are filled up completely.
The FA Tag code shall be 15 digit alphanumeric (XXX-XXXXXX-XX-XXXX) assigned by

Accounting. The first 3 indicate the Company name. The next 6 digits indicate the month and year
of purchase. The next 2 digits indicate the FA classification. The last 4 digits indicate the asset
number. For example, an Office Equipment used by Velox purchased on January 1, 2015 will have
the following FA tag code: VLX-012015-OE-0001.
Accounting will maintain a detailed listing of each fixed asset along with depreciation records
which will include the FA tag code, description, asset classification, serial number, date
acquired, supplier, cost, department, location, warranty period if applicable, assigned
employee, depreciation method/life, accumulated depreciation, and net book value.
IV. Sale/Dispositions/Transfers
A pre-numbered FIXED ASSET DIPOSAL form (FAD) must be prepared prior to the sale or
disposal of fixed assets, with recommending approval of the appropriate Department Head. The
age of the fixed asset and its net book value will be filled up by the AP Analyst. Once the details
are complete, the forms will be submitted for final approval to the CFO.
Upon approval, the FA tags will be removed. After completion of the sale, the FA tags will be
attached to the FAD, and submitted to the AP Analyst for system entry. The assets cost and
accumulated depreciation must be removed from the accounts, with any resulting gain or loss to
be recorded as gain (loss) on sale of assets.
Note: Accounting must monitor the series of FAD to ensure that this will be forwarded to them
after disposal.
Transfers of fixed assets will be reported to Accounting by filling up two forms- the FIXED
ASSET TRANSFER form (TAF) and new FAAR. The TAF must indicate if the transfer is from
one department/employee/location to another. For departmental and location transfers, the TAF
will be filled up by the Department Head to whom the fixed asset was assigned originally.

FINANCE POLICY
MANUAL
FIXED ASSETS
REF.
NUM.
VCFP0021
PAGE 4
of 5
DATE:
APRIL 1,
2015
For employee transfers, the original assignee will fill up the TAF. This form will be signed by
both parties. On the other hand, the new FAAR will be filled up by the receiving Department
Head/assigned employee.
Whenever a change in Department Head occurs, all fixed assets should be accounted for by the
outgoing Department Head. The incoming Department Head will accept the responsibility and
accountability of the departmental fixed assets upon assuming the position. Accounting can assist
with this if requested.
Any fixed asset that is missing or has been stolen must be reported immediately in writing to the
Department Head and Accounting, using the INCIDENT REPORT form. The FA tag code,
description, serial number, and other information about the lost item should be included in the
report. The assignee will be charged according to the net book value of the asset/s if deemed
necessary after investigation.
V. Depreciation
Other than land, all fixed assets are systematically depreciated over their useful lives in a manner
which reflects the consumption of the service potential embodied in those assets.
Depreciation is recognized on a straight-line basis. Asset types and most common useful lives are
shown below:
Type
Fixed
Fixed
Fixed
Fixed
Fixed
Description
Land
Land Improvements*
Buildings
Building Improvements
Leasehold Improvements
Fixed
Movable
Movable
Movable
Movable
Movable
Movable
Construction in Progress
Communication Equipment
Furniture and Fixture
Office and Computer Equipment
Operation Equipment
Service Vehicle
Software
Useful Life (Years)

N/A
5
15
15
The shorter of the improvements
useful life or the lease term
N/A
3
3
3
10
5
3
*not applicable to improvements made on land owned by the company

FINANCE POLICY
MANUAL
FIXED ASSETS
REF.
NUM.
VCFP0021
PAGE 5
of 5
DATE:
APRIL 1,
2015
Fixed assets purchased on the period 1-15 shall be depreciated at the month of purchase, while
those purchased on the period 16-31 shall commence on the following month.
VI. Other Controls
An annual count and ocular inspection of fixed assets shall be made by the companys auditors.
The Accounting Supervisor will provide the list of fixed assets prior to the scheduled count.
Variance between the actual count and system balance will be charged to the assignees, based on
net book value of the item/s and the system records will be adjusted as necessary.
The fixed asset issued to employees shall be returned by them to the company upon resignation.
The Accounting Supervisor must not sign on the resigning employees clearance unless the fixed
asset is turned over.

FINANCE POLICY
MANUAL
EXPENSE RECOGNITION
REF.
NUM.
VCFP0022
PAGE 1
of 4
DATE:
APRIL 1,
2015

The company reports its expenses on the accrual basis, meaning when the expenses are incurred, not
necessarily when they are paid. Expenses are generally incurred when the company receives goods or
services.
Purpose
To ensure adherence with Generally Accepted Accounting Principles (GAAP) and other regulatory
requirements, to promote consistent accounting treatment across the company, and to ensure the operating
results are not understated as a result of unrecorded expenses.
Scope
This policy applies to all recurring expenses of the company.
Definition of Terms
a. Accrual Accounting an accounting method that measures the performance and position of a
company by recognizing economic events regardless of when cash transactions occur.
b. Accrued Expense is expense which has been incurred but not yet paid; an accounting
expense recognized in the books before it is paid for; it is a liability and usually current.
c. Prepaid Expense is expense paid in advance but which has not yet been incurred; a type pf
asset that arises on a balance sheet as a result of business making payments for goods and
services to be received in the near future; initially recorded as asset but value is expensed over
time as the benefit is received onto the income statement.

FINANCE POLICY
MANUAL
EXPENSE RECOGNITION
REF.
NUM.
PAGE 2
VCFP0022
of 4
DATE:
APRIL 1,
2015

I.
II.
Understanding Accrual Accounting
Accrual accounting rules require the company to record expenses when they are incurred,
meaning when the goods are received or the services are provided, whether or not an
invoice has been received or payment has been made.
Accrued expense must be recognized in the accounting period in which it occurs rather
than in the following period in which it will be paid. The amount to be accrued shall equal
the average amount for the past six months.
Prepaid expense must not be shown as expense in the accounting period in which it is paid
but instead it must be presented as such in the subsequent accounting periods in which the
services in respect of the prepaid expense have been performed.
Expenses for Accrual and Deferral
The following are the company recurring expenses to be accrued:
Utilities expense (electricity and water)

Communication expense (internet and phone)
Security expenses
SSS, Philhealth and Pag-ibig contribution expense
Salaries expense
Interest expense
The following are the company expenses to be deferred:

Insurance expense
Rent expense
Other expenses not included in the list and shall be identified in the future as recurring
expenses shall be referred to Accounting Manager for approval to be subject to accrual
accounting.

FINANCE POLICY
MANUAL
EXPENSE RECOGNITION
REF.
NUM.
VCFP0022
III.
PAGE 3
of 4
DATE:
APRIL 1,
2015
Recording and Documentation
Accrued Expenses
Prior to closing of each accounting period every month, Accounts Payable analyst shall
prepare journal vouchers for all recurring expenses with no received invoices or billing
statement to date. Journal vouchers shall be forwarded to the Accounting Supervisor
for review and to Accounting Manager for approval.
An expense will be debited to record the accrued expense and a corresponding payable
must be created to account for the credit side of the transaction. The accounting entry
to record accrued expense will therefore be as follows:
Debit
Credit
Expense (Income Statement)

Accrued Expense Payable (Balance Sheet)
The AP Analyst will temporarily file the approved Journal vouchers awaiting the RFP
and corresponding billing/SOA. Once the AP voucher package is already complete and
ready for payment, the appropriate outgoing payment entry will be made and forwarded
to Treasury department for check and payment voucher printing.
Prepaid Expenses
Upon receipt of request for payment for processing, AP analyst shall recognize asset in
respect to the expense that has been paid in advance:
Debit
Credit
Prepaid Expense (Asset)

Cash
Accounting shall ensure that all expenses incurred for the month shall be accounted prior
closing of accounting period and preparation of financial statements. Accounting shall keep
a monitoring of all recurring expenses for accrual.
For prepaid expenses, Accounting shall keep track of all expenses subject for deferral and
shall ensure covering periods are properly identified upon request of payment.

FINANCE POLICY
MANUAL
IV.
EXPENSE RECOGNITION
REF.
NUM.
VCFP0022
PAGE 4
of 4
DATE:
APRIL 1,
2015
Adjustment of Entries
Accrued Expenses
At the time of payment of the expense, the adjusting entry shall be made upon encoding
and processing of payment.
In cases where the actual expense is greater than the accrued expense, below entry shall
be entered:
Debit
Credit
Credit
Accrued Expense Payable

Cash
Expense
If the actual expense is lesser than the accrued expense, below entry shall be entered:
Debit
Debit
Credit
Expense
Accrued Expense Payable
Cash
In cases when the expense did not actually incur during the month when it was accrued,
a reversal entry must be made at the beginning of the next month to correct the
erroneous accrual. This shall be subject to the request for adjustment processing.
Above entries shall be applicable only to adjustments within the accounting period.
Adjustments to be made on the next accounting period will be subject to prior period
adjustment which will be adjusted to Retained Earnings.
Prepaid Expense
The prepaid expense will be recognized as expense in the next accounting period to
which the expense relates in which the AP analyst shall prepare the necessary journal
voucher for approval:
Debit
Credit
Expense (Income Statement)

Prepaid Expense (Balance Sheet)
Accounting manager shall ensure the proper accounting of entries prior approval and
posting.

FINANCE POLICY
MANUAL
PAYROLL
REF.
NUM.
VCFP0023
PAGE 1
of 2
DATE:
APRIL 1,
2015

Employees should receive prompt and accurate payment for their time and attendance. Thus, processing
and maintaining accurate payroll records is an extremely important function requiring strict controls and
management.
Purpose
To ensure timely and accurate processing of company payroll.
Scope
This policy applies to all company payroll.
Accounting Division
Human Resources Department
Definition of Terms
a. Payroll the sum total of all compensation that a business must pay to its employees for a set
period of time or on a given date; can also refer to the list of employees of a business and the
amount of compensation that is due to each of them.

FINANCE POLICY
MANUAL
PAYROLL
REF.
NUM.
VCFP0023
PAGE 2
of 2
DATE:
APRIL 1,
2015

I.
Payroll Preparation and Timekeeping
The payroll shall be processed every 16th and 1st of the month covering the periods 1-15th and
16-31st. Release of payroll shall be every 5th and 20th of the month.
Timekeeping records shall be entered in the payroll system by Human Resources staff for
review by his or her immediate superior. All mandatory benefits and employee salary
deductions shall be incorporated to arrive at the computation of payroll.
The payroll summary shall then be forwarded to the Accounting Manager for the review of
computation and preparation of necessary journal entry in the system. Once recorded and
signed by the Accounting Manager, the payroll summary shall be forwarded to the Chief
Operating Officer for the approval in the payroll system.
The payroll system provides for a real-time processing of payroll wherein upon approval,
bank immediately processes the payroll for release of salaries to employees bank accounts.
II. Manual Payroll
It shall be the responsibility of Human Resources to ensure that all employees are enrolled in
the companys automated payroll system. In cases of newly hired employees or those whose
ATM cards have been lost and are still for processing, the company shall allow manual
processing of payroll.
Human Resources timekeeping in-charge shall manually compute the payroll and shall
prepare a Request for Payment subject to recommending approval of the Human Resource
Manager. HR department shall keep track of all employees under manual payroll and shall
provide the Accounting Manager the list of employees as reference.
Request for Payment shall be forwarded to Accounting division for processing and approval.
Upon approval of payment voucher, payroll release shall be coursed through the Treasury
division.

FINANCE POLICY
MANUAL
CHART OF ACCOUNTS
REF.
NUM.
VCFP0024
PAGE 1
of 3
DATE:
APRIL 1,
2015

To facilitate the record keeping process for accounting, all ledger accounts will be assigned a descriptive
account title and account number.
Purpose
To provide the method for assignment and maintenance of the company's chart of accounts.
Scope
This procedure applies to all ledger accounts used in the accounting division.
Accounting Division
Definition of Terms
a. Chart of Accounts a listing of all account titles and numbers being used by an organization.

I.
Design of Accounts
Accounts will have titles and numbers that indicate specific ledger accounts, such as Cash in Bank,
Furniture, Accounts Payable-Trade, etc.
Accounts will be arranged in the same sequence in which they appear in the financial statements;
that is, asset accounts should be numbered first, followed by liability accounts, owner's equity
accounts, revenue accounts and expense accounts, as follows:

FINANCE POLICY
MANUAL
REF.
NUM.
CHART OF ACCOUNTS
VCFP0024
ACCOUNT
NUMBER
PAGE 2
of 3
DATE:
APRIL 1,
2015
ACCOUNT NAME
10000-XX
Asset Accounts
20000-XX
Liability Accounts
30000-XX
Equity Accounts
40000-XX
Sales or Revenue Accounts
50000-XX
Cost of Sales Accounts
60000-XX
Expense Accounts
70000-XX
Non-Operating
Income
Expenses
and
A subdivision among the balance sheet accounts will also be designated by short term to long term,
(i.e., current assets will precede long term assets and current debt will precede long-term debt).
Accounts will be numbered using a seven- digit sequence. In an account number, the location and
the value of each digit have a specific meaning. Below is a general description of the meaning of
the numbers in the company's chart of accounts.
_XXXX-XX - The first digit in each account number indicates the major classification of the
account in the general ledger and the value of the digit indicates whether it is an asset, liability,
owners equity, department or other kind of account. For example, the number 10000-00
indicates asset account.
X__XX-XX- The second and third digit indicates a sub-classification of a major account and
the value of the digit indicates a specific sub-classification. For example, the account number
111-0000 indicates Cash Accounts.
XXX__-XX - The fourth and fifth digit indicates a further sub-classification of each major
account classification and the value of the digit indicates the specific sub-classification. For
example, account number 1110-200 indicates the Checks Clearing account and number 1110300 indicates the Cash in Bank account.

FINANCE POLICY
MANUAL
CHART OF ACCOUNTS
REF.
NUM.
VCFP0024
PAGE 3
of 3
DATE:
APRIL 1,
2015
XXXX-__ - The last 2 digits indicate area/ branch code. For example, account number 1110102 indicates Petty Cash Fund-Davao.
II. Description and Definition of Accounts
Each account will be given a short title description that is brief but will allow the reader to quickly
ascertain the purpose of the account.
For training and to ensure consistent transaction coding as well as help other non-accounting
managers understand why something is recorded as it is, each account should be defined.
Definitions should be concise and meaningful. One or two sentences of definition are usually
sufficient. The definition tells the user what can be recorded or what may not be recorded in a
specific numbered account.

FINANCE POLICY
MANUAL
FILING AND RECORDS

MANAGEMENT
REF.
NUM.
VCFP0025
PAGE 1
of 3
DATE:
APRIL 1,
2015

Finance and Accounting department has the obligation to maintain records in its custody in good order
and condition. Records should be filed in a way convenient for the users to locate them. A proper
monitoring should be kept to identify records still for filing or for disposal already.
Purpose
To establish standard procedures for the implementation and maintenance of an appropriate records
management system.
Scope
Considering there are different forms of records, this policy applies only to paper-based records under the
custodianship of Finance Department.
Finance Department
Definition of Terms
a. Record information created, received, and maintained as evidence and information by an
organization or person in the transaction of business. It provides proof of a specific business
activity and is not restricted by physical format, or storage medium and include records on paper,
single digital files and records created and managed in structured database systems.
b. Records management a discipline of controlling and governing what are considered to be
important records of an organization throughout the records life cycle, which includes from the
time such records are conceived through to their eventual disposal. This work includes identifying,
classifying, prioritizing, storing, securing, archiving, preserving, retrieving, tracking and
destroying records.

FINANCE POLICY
MANUAL
FILING AND RECORDS

MANAGEMENT
REF.
NUM.
VCFP0025
PAGE 2
of 3
DATE:
APRIL 1,
2015

I.
General Guidelines
A directory of records should be maintained as monitoring of the existing records filed.

It shall contain the classification of documents filed, their corresponding file names, date
of coverage and control numbers. Other relevant information shall be added.
A separate logbook to record the retrieval of documents for use by other departments or
officers should be also maintained. The date of retrieval and return should be indicated
and signed by the requestor.
Finance and Accounting assigned as records custodian shall ensure to do the following:
Maintain the index and retrieval system of files through a directory of records
Secure standard file folders to be used in filing.
Produce file folder labels through the directory of records indicating the classification
to which files belong.
File incoming documents into the secured cabinet or vault based on classification and
assigned control numbers.
Process a regular purge of active records to destroy those no longer needed and transfer
to stockroom those no longer needed in the office.
Assist other office staff with proper security levels to identify and retrieve the active
records.
A file system arrangement should be maintained either alphabetic, numeric, alphanumeric

and chronological. When arranging files within each classification, a filing option
arrangement should be chosen that best serves its retrieval needs.
Each file should be properly labeled or in color coding arrangements. The file should
contain its file name, date of coverage of the files, classification or control number and
the transfer date. Such details should also be indicated in the directory of records.
Files should be transferred to the stockroom 2 years from date of coverage. The same shall
be scheduled for disposal after 5 years from date of coverage.

FINANCE POLICY
MANUAL
FILING AND RECORDS

MANAGEMENT
REF.
NUM.
VCFP0025
II.
PAGE 3
of 3
DATE:
APRIL 1,
2015
Finance documents for filing
The following are the documents for filing and safekeeping by the different divisions of
the Finance department:
Accounting division
Payment Vouchers per supplier folder and per series register folder
Request for Adjustment per series register folder
Bank Reconciliation report and Bank Statement
Credit and Collection division
Sales Order + Delivery Receipt + Sales Invoice + Provisional Receipt per

customer folder
Manual Delivery Receipt + Daily Sales Report per customer folder
Customer 201 File per customer folder
Treasury division
Validated deposit slips per month
Finance and Corporate Planning division
Financial Reports and Analysis per month and per company folder

FINANCE POLICY
MANUAL
ANNUAL BUSINESS PLAN

AND BUDGETING PROCESS
REF.
NUM.
VCFP0026
PAGE 1
of 4
DATE:
APRIL 1,
2015

The Management together with the department heads should adopt an Annual Business and Budget Plan.
The Management is responsible for ensuring the preparation, approval, implementation and monitoring
of the organizations strategic plans, operating and capital plans, operations forecasts and budget.
Purpose
A responsive and integrated planning process must be developed, maintained and implemented to assist
the company in fulfilling its vision, mission and values and achieving its strategic agenda in the most
effective manner. Also, to provide a basic model of how the entity will perform financially and
operationally in a specific period of time.
Scope
This procedure applies to all departments of the company who shall be required to submit their proposed
business and budget plan.
Finance Department
Management
All Department Heads
Definition of Terms
a. Business Plan a written document that describes in detail how a new business is going to achieve
its goals. A business plan will lay out a written plan from a marketing, financial and operational
viewpoint
b. Budget Plan a quantitative expression of a plan for a defined period of time. It may include
planned sales volume and revenue, resource quantities, costs and expenses, assets, liabilities and
cash flows. It expresses business plans of business units, organizations, activities or events in
measurable terms.

FINANCE POLICY
MANUAL

REF.
NUM.
VCFP0026
PAGE 2
of 4
DATE:
APRIL 1,
2015

I.
Annual Budget Plan
The annual business planning and budgeting process begins every 6th month of the year. This
will allow 5-6 months of results to be used in the planning. The Accounting Manager and AVPFinance shall prepare a budget request spreadsheet to be completed by each department or
division. Each department or division receives report on the current years expenditures for
their department. The proposed budget will be submitted to Finance at the end of the 6th month
for initial consolidation and review.
Finance compiles the data from all the budget requests. The AVP-Finance estimates projected
funds based on the projected income to determine total fund availability. Fund availability is
compared to the funds requested to determine the level of budget enhancement possible.
Budget meetings are conducted by the Management to discuss budget requests as it compares
to the institutions revenue projection for the following year. Budget hearings are held for each
individual who submitted a budget to provide an opportunity for those individuals to make a
case or provide justification for items requested in their budget. Adjustments are made to the
budget requests so the total request aligns with estimated revenues. The budget originator is
conferred with on any major adjustments.
II.
Annual Business Plan
During the 6th month, the department or company head shall also evaluate their operational
objectives and needs for the next fiscal year and submit to the Senior Vice-President in charge
of the department their Annual Business Plan. This will address the activities or projects the
department intends to undertake in ensuring to achieve its objectives and the key performance
indicators that the entity will use to assess its performance against its objectives.
The proposed business plan shall also be presented together with the scheduled budget
meeting. Management will make their initial comments for each head to finalize their proposal
prior the scheduled strategic planning.
After the budget and business plan meetings are concluded, a strategic planning schedule will
be set for the Management to finalize the overall company business and budget plan. This will
be scheduled on the 7th month of the year.

FINANCE POLICY
MANUAL

REF.
NUM.
VCFP0026
III.
PAGE 3
of 4
DATE:
APRIL 1,
2015
Strategic Planning
During the strategic planning, the Management will follow a 3 step process to come up with
the final budget and business plan. The discussion will be based already on the corrected
budget or business plans that were initially discussed for a smooth flow of discussion. Below
process shall be followed:
1. Semi-annual Budget Review The Management shall review each companys current year
performance by looking into the financial reports of the company for the past 6 months.
Finance department will prepare below data for review and discussion:
a.
b.
c.
d.
e.
Financial Statements for the Six Months ended (current year)

Performance Variance Analysis (Actual vs. Budgeted FS)
Sales Graph per Region and Top 10 customers
Cost Volume Profit Analysis
Forecasted Financial Statements for the current year
2. Presentation of Project or Business Proposal The business or project proposals that were
presented by the department heads will be reviewed again for finalization and approval by
Management. Data needed are as follows:
a. Project or Business Plan per department
3. Goal Setting and Budgeting Based on the proposed business plan, Management will
finalize the company goals for the next calendar year. Any additional plans will be decided
on by the majority. Upon finalization of goals, such will be aligned to the companys
budget to come-up with the final budget for each department and the overall company
budgeted financial statements. Data needed will be as follows:
a.
b.
c.
d.
Budget for each department

Budgeted Financial Statements
Company Leverage Report (loan exposure)
Funds Availability (Real property appraisal and loan availability)
Once the process is completed and finalized, the Management shall approved the documented
Annual Business and Budget Plan.

FINANCE POLICY
MANUAL

REF.
NUM.
VCFP0026
IV.
PAGE 4
of 4
DATE:
APRIL 1,
2015
Reporting
At the close of each month, the Accounting Manager submits to AVP-Finance the companys
expense report distributed to each department or cost center accountable for the various budget
areas. The AVP-Finance shall check the expense report versus the approved budget of each
department and forwards the analysis to each department head to assist them in their
expenditure analysis during the period, helping them determine whether their departments are
remaining within the constraints of their applicable budget.
On a monthly basis, each department reviews its departmental operational objectives and
documents the success with which the department was able to reach its stated objectives, along
with the updates or modifications made for those objectives not successfully completed. This
report will be presented to Management on the scheduled quarterly business review together
with Finance presentation on the financial performance of the company.

FINANCE POLICY
MANUAL
MONTH-END ACCOUNTING
PROCEDURES
REF.
NUM.
VCFP0027
DATE:
PAGE 1
of 4
APRIL 1,
2015

Month-end accounting procedures should be done to ensure that mistakes are identified and corrected to
provide an accurate picture of the companys finances.
Purpose
To ensure that the companys financial records are balanced before the start of a new month.
Scope
This policy applies to companies whether it uses a computerized or manual accounting system.
Accounting Division
Definition of Terms
a. Month-end close tasks required to ensure that all of a business financial records for the month
are balanced.
b. General Ledger the master set of accounts that summarize all transactions occurring in an entity;
a chronological accounting record a business uses to keep track of financial transactions. Also
known as the trial balance, a report run at the end of the accounting period, listing the ending
balance in each account. The report is primarily used to ensure the total of all debits equals the
total of all credits.
c. Subsidiary Ledger supporting ledger such as sales ledger, purchases ledger etc. that provides
more detailed information about individual accounts to support the general ledger account.

FINANCE POLICY
MANUAL
PROCEDURES
REF.
NUM.
VCFP0027
PAGE 2
of 4
DATE:
APRIL 1,
2015

I.
Accounting Cycle Completion
Accounting should ensure the completion of the cycle from the entering of transactions,
controlling the transactions through the accounting cycle, closing the books at the end of each
month and then starting the entire cycle again for the next month. Accounting books should be
closed every 5th working day of the month.
Accounting should ensure that all transactions for the month are accounted to provide an accurate
picture of the companys financial status. A regular documented routine should be followed each
month prior closing of the books so as not to encounter unrecorded transactions. This will also
aid Accounting in preparing for audit.
Below data illustrates the accounting workflow that should be followed:
Transactions
Closing the
Books
Journal
Entries
Financial
Statements
Posting
Adjusting
Journal
Entries
Trial Balance
Worksheet
Transactions financial transaction start the process. Transactions include the sale of
products, purchase of inventory or other supplies for business activities, or any financial
activity that involves the inflow and outflow of company resources.

FINANCE POLICY
MANUAL
PROCEDURES
REF.
NUM.
VCFP0027
PAGE 3
of 4
DATE:
APRIL 1,
2015
Journal Entries - The transaction is listed in the appropriate journal, maintaining the journals
chronological order of transactions. The journal is also known as the book of original entry
and is the first place a transaction is listed.
Posting - The transactions are posted to the account that it impacts. These accounts are part
of the General Ledger, where you can find a summary of all the businesss accounts.
Trial Balance - At the end of the accounting period (which may be a month, quarter, or year
depending on a businesss practices), a trial balance will be calculated manually or run in the
system whichever is applicable.
Worksheet If a trial balance shows that the books arent in balance, errors are should be
identified to make corrections called adjustments, which are tracked on a worksheet.
Adjusting Journal Entries Corrections made as a result of unbalanced trial balance.
Financial Statements Based on the corrected balances, balance sheet and income statement
will be prepared.
Closing the Books Books for the revenue and expense accounts will be closed to begin the
entire cycle with zero balances.
II.
Standard Procedures
Within 5 working days at the end of each month, Accounting Manager shall follow below steps
to ensure accuracy of financial reports and completion of month-end procedures:
Print or extract the trial balance and examine it for any obvious errors. Check each account
in the general ledger and correct any transactions that have been posted to the wrong account
by making annotated journal entries.
Post month-end adjustments for depreciation, prepayments and accruals.
Conduct bank reconciliation. Post transactions from the bank statement that do not appear in
the general ledger bank account, such as bank interest and charges and loan payments.
Reconcile the bank statement to the book balance for outstanding deposits or unpresented
checks.

FINANCE POLICY
MANUAL
PROCEDURES
REF.
NUM.
VCFP0027
PAGE 4
of 4
DATE:
APRIL 1,
2015
Count the amount in the petty cash and cashiers fund and reconcile it with the balance on the
petty cash or cashiers fund account. Post any outstanding entries from the petty cash or
cashiers fund book to the general ledger.
Reconcile accounts receivable and accounts payable by listing individual balances and
checking that they agree with the balances on the debtor and creditor accounts.
Print out or extract a new trial balance report, check it and make any further adjustments
needed.
Complete the month-end procedures by closing all income statement accounts to the income
summary account and carrying the balances forward to the new month. Post the balance on
the income summary account to the owner's capital account -- or to the retained earnings
account for a corporation. Finally, produce the monthly financial statements.

FINANCE POLICY
MANUAL
FINANCIAL REPORTS AND

ANALYSIS
REF.
NUM.
VCFP0028
PAGE 1
of 7
DATE:
APRIL 1,
2015

Monthly, quarterly, and annual financial reports and analysis shall be submitted to Management to present
the current financial status of the company.
Purpose
The management reporting requirement is designed to provide management with information necessary
for the efficient administration of the Companys operation. The requirements specifies among others,
the reports to be prepared, frequency of submission, reporting deadline, responsibility for their
preparation, and the distribution of the copies of the report.
Scope
This policy applies to all companies and all financial related transactions.
Finance Department
Definition of Terms
a. Financial Statements are a collection of reports about an organizations financial results,
financial condition and cash flows. They are useful for the following reasons:
To determine the ability of a business to generate cash, and the sources and uses of that
cash.
To determine whether a business has the capability to pay back its debts.
To track financial results on a trend line to spot any looming profitability issues
To derive financial ratios from the statements that can indicate the condition of the
business
To investigate the details of certain business transactions, as outlined in the disclosures
that accompany the statements

FINANCE POLICY
MANUAL
REF.
NUM.

ANALYSIS
VCFP0028
PAGE 2
of 7
DATE:
APRIL 1,
2015

I.
Reports
The standard contents of a set of financial statements are the following:

Statement of Financial Position (Balance Sheet) shows the entitys assets, liabilities, and
stockholders equity as of the report date.
Statement of Financial Operation (Income Statement) shows the results of the entitys
operations and financial activities for the reporting period. It includes revenues, expenses,
gains and losses.
Statement of Cash Flows reflects the inflow of revenue versus the outflow of expenses
resulting from operating, investing and financing activities during a specific time period.
Supplementary Notes to Financial Statements includes explanations of various
activities, additional detail on some accounts, and other items as mandated by the
applicable accounting framework.
The companys accounting manager shall be responsible in the preparation of the Financial
Statements.
Below additional reports shall also be submitted by each department to Finance in support to
the analysis and reporting of the companys overall financial performance:
Accounting Division
Schedule of Expenses per Cost Center
Accounts Payable Aging and Movement Report
Treasury Division
Bank Reconciliation Report
Bounced Check Report
Accounts Receivable Aging and Movement Report
Delinquent, Legal, Other Accounts and Unapplied Credits Status Report
Credit Highlights and Performance
Audit Department
Audit Findings and Recommendation

FINANCE POLICY
MANUAL

ANALYSIS
REF.
NUM.
VCFP0028
II.
PAGE 3
of 7
DATE:
APRIL 1,
2015
Consolidation and Analysis
Finance shall review and consolidate all submitted reports and shall prepare the following
analysis:
Horizontal Analysis comparison of historical financial information over a series of
reporting periods, or of the ratios derived from the financial information. The intent is to
see if any numbers are unusually high or low in comparison to the information for
bracketing periods, which may then trigger a detailed investigation of the reason for the
difference. In horizontal analysis, the balance of the accounts of the prior period is
subtracted from the current period. This would result to a change, either a growth or
reduction. The percentage of changes is computed as follows:
Percentage of Change = Amount of growth or reduction or change
Amount in the prior period
x 100
Vertical Analysis the proportional analysis of the financial statements that shows each
item on a statement as a percentage of a base figure within the statement. In a balance
sheet, the total of assets and the total of liabilities and stockholders equity are generally
used as base figures. All individual assets (or groups of assets if condensed form balance
sheet is used) are shown as a percentage of total assets. The current liabilities, long term
debts and equities are shown as a percentage of the total liabilities and stockholders
equity. In an income statement, sales figure is generally used as the base and all other
components of income statement like cost of sales, gross profit, operating expenses,
income tax, and net income etc. are shown as a percentage of sales.
Performance Variance Analysis a budgetary tool of evaluation of performance by
computing the variances between budgeted amount and the actual amount incurred
sold/sold. It highlights the causes of the variation during a period compared to the budget.
Cost Volume Profit Analysis shows the effect of sales volume and product costs on the
operating profit of the business. It deals with how operating profit is affected by changes
in variable costs, fixed costs, selling price per unit and the sales mix of two or more
different products.
Financial Ratio Analysis compares relationships between financial statement accounts
to identify the strengths and weaknesses of a company. It explains the companys status
in terms of the following:

FINANCE POLICY
MANUAL
REF.
NUM.
FINANCIAL REPORTS
VCFP0028
PAGE 4
of 7
DATE:
APRIL 1,
2015
Liquidity pertains to the firms ability to pay any immediate and incoming cash
disbursements. It shows the cash levels of a company and the ability to turn other
assets into cash to pay off liabilities and other current obligations.
Asset utilization or Efficiency measures the liquidity of assets namely accounts
receivable, inventory and long-term assets. It also measures how efficient
management uses the assets, on how will it take the company to collect cash from
customer or to convert inventory into sales.
Debt Utilization (Leverage) estimates the overall debt status of the firm in light
of its asset base and earning power. It measures the degree of company financing
in terms of borrowings and investment or equity. It also identifies going concern
issues and a firms ability to pay its bills in the long term.
Profitability this measures the firms capacity to earn sufficient return on sales,
total assets and investment. It focuses on how well companies can achieve profits
from its operations.
Below are the financial ratios, formulas and analysis:

Liquidity Ratios
Financial Ratio
Current Ratio
Quick Ratio Or Acid

Test Ratio
Formula
Current Assets
divided by Current
Liabilities
Cash + Cash
Equivalents +Shortterm Investments +
Current Receivables
divided by Current
Liabilities
Or
Total Current Assets
Inventory Prepaid
Expenses divided by
Current Liabilities
Analysis
A higher current ratio is always more
favorable than a lower current ratio
because it shows the company can more
easily make current debt payments.
Higher quick ratios are more favorable

because it shows there are more quick
assets than current liabilities. A quick
ratio of 1 indicates that the company
could pay off its liabilities without selling
any long-term assets.

FINANCE POLICY
MANUAL
FINANCIAL REPORTS
REF.
NUM.
VCFP0028
PAGE 5
of 7
DATE:
APRIL 1,
2015
Efficiency or Activity Ratios

Financial Ratio
Accounts Receivable
Turnover
Inventory Turnover
Asset Turnover
Formula
Net Credit Sales
divided by Average
Accounts Receivable
Cost of Goods Sold
divided by Average
Inventory
Net Sales divided by
Average Total Assets
Analysis
Higher ratio means that the company is
collecting its receivables more frequently
throughout the year.
Higher turnover shows the company can
effectively sell the inventory it buys.
High turnover means that there is fast
sales generation and low turnover means
that there is too high investment in assets.
Leverage or Solvency Ratios

Financial Ratio
Formula
Debt to Equity Ratio
Total Liabilities
divided by Total
Equity
Debt Ratio
Equity Ratio
Total Liabilities
divided by Total
Assets
Total Equity divided
by Total Assets
Analysis
A lower ratio usually implies a more
financially stable business. A higher ratio
are considered more risky to creditors and
investors. Unlike equity financing, debt
must be repaid to the lender, Since debt
financing also requires debt servicing or
regular interest payments, debt can be a
far more expensive form of financing.
A lower debt ratio usually implies a more
stable business with the potential of
longevity.
A higher ratio is favorable. Higher
investment levels by shareholders shows
that the company is worth investing. It
also shows potential creditors that the
company is more sustainable and less
risky to lend future loans.

FINANCE POLICY
MANUAL
FINANCIAL REPORTS
REF.
NUM.
VCFP0028
PAGE 6
of 7
DATE:
APRIL 1,
2015
Profitability Ratios
Financial Ratio
Gross Profit Ratio
Profit Margin
Return on Assets
Return on Equity
Return on Investment
Formula
Gross Profit divided
by Net Sales
Net Income divided
by Net Sales
Net Income divided
by Average Total
Assets
Net Income divided
by Equity
Net Income divided
by Total Investment
Analysis
Higher ratio means the company is selling
its inventory at a higher profit percentage.
This gauges the profitability of the
company after including all revenues and
deducting all costs, expenses and taxes.
Higher ratio shows that assets are
effectively managed to produce greater
amounts of income.
A higher return indicates the company is
using its investors' funds effectively.
A higher return means the investment
gains compare favorably to investment
cost.
Evaluation on the favorability of the ratios in general must still be based on the company requirements or
desired rates. This has to be properly computed in order to provide accurate information that will aid in
evaluating the effectiveness of the business, and in decision making.
III.
Management Reporting
On a monthly basis, Finance shall present and discuss the Financial Report Analysis to
Management. The standard content of the presentation or analysis will be as follows:
An overview of the business and updates on it policies and procedures both operational
and financial to provide an understanding of the business and how the environment in
which it operates affect its financial statements.
Information about the companys objectives for the users to understand the companys
priorities and to identify the resources that must be managed to achieve its objectives.
Analysis of the financial statements which shall include:
Description of significant events, trends, conditions, and factors that affected the
financial statements.

FINANCE POLICY
MANUAL
FINANCIAL REPORTS
REF.
NUM.
VCFP0028
PAGE 7
of 7
DATE:
APRIL 1,
2015
Analyses of variances and trends for significant items that will enhance the users
understanding on the companys current financial position and performance and
its changes over a period of time.
Information about company risks and uncertainties and its impact in the current period as
well as expected outcomes.
Risk opportunities and the strategies for mitigating risks and capitalizing on the
opportunities.
During the discussion, management will address those specific issues and concerns that
affected the financial statements. Action plans will be decided on for implementation and
follow through by the department or company heads to ensure improvement on the next
financial reports analysis.
Finance shall ensure accuracy of the financial statements and its analyses to provide useful
information to users for their decision making.

FINANCE POLICY
MANUAL
MAINTENANCE OF
FINANCE POLICY MANUAL
REF.
NUM.
VCFP0029
PAGE 1
of 2
DATE:
APRIL 1,
2015

The Finance policy manual is critical to the execution of the finance department functions thus a regular
review shall be made to ensure that the manual is updated and reflects the companys policies and
procedures.
Purpose
To ensure proper maintenance of the manual.
Scope
This policy applies to the approved Finance Policy Manual for VEPCO Group Distribution Corp.
Finance Department
Definition of Terms
a. Policy Manual a formalized document that presents a broad overview of standard policies
and procedures for an organization.
b. Policies a set of rules, principles and guidelines formulated or adopted by an organization to
reach its goals.
c. Procedures are the specific methods employed to express policies in action in day to day
operations of the organization.
I.
General Guidelines
The managers and supervisors of each division are responsible for maintaining the manual. All
proposed changes must be approved by the AVP-Finance and Chief Finance Officer.
The policies and procedures will be dated with the date of each approved revision.

FINANCE POLICY
MANUAL
MAINTENANCE OF
FINANCE POLICY MANUAL
REF.
NUM.
VCFP0029
II.
PAGE 2
of 2
DATE:
APRIL 1,
2015
Procedures
Each year the Managers of each division of the Finance Department will review the manual
and formulate proposed changes. The update will be done every October of each year to
incorporate the changes to be made in relation to the management plans for the next year.
All changes must be approved in writing by the AVP-Finance and Chief Finance Officer. If
there are no proposed changes, a memo to that effect must be approved by the AVP-Finance
and Chief Finance Officer.
Whenever changes to the procedures are made, a review of the manual will be made by the
managers to determine if a revision is required. If theres a need for a major revision, a
memorandum approved by the AVP-Finance and CFO shall be issued detailing the changes.
The memo shall indicate the reference number of the policy as written in the manual. Any
minor revisions to the manual which are not reflected in the manual immediately should be
kept on file to incorporate into the formal annual update.
The revised manual will be distributed to the finance division managers, AVP Finance, and
Chief Finance Officer.
GLOSSARY FOR CHART OF ACCOUNTS
ASSET ACCOUNTS
1110101
Petty Cash Fund

Sum of money set aside to defray minor expenses for which the issuance of a formal voucher
and check would be impracticable and time-consuming.
1110102
Revolving Fund
Sum of money used as a travel fund especially for the sales team, subject to liquidation
according to the companys policy.
1110103
Cashier Fund
Fund established and remains available to finance a continuing cycle of operations because
the company replenishes the fund by repaying money used from the account.
1110201
Checks Clearing Account

Temporary account for received checks that are to be transferred subsequently to the
companys bank accounts once cleared.
1110300
Cash in Bank
Sum of the companys coins, currency and other unrestricted liquid funds deposited in the
bank.
1110400
Cash Bond
Amount given to suppliers as collateral to guarantee purchases.
1120101
Accounts Receivable Trade

The amount due for payment to the company from customers or trade creditors resulting from
sales of merchandise and services which are expected to be collected within the credit terms
set not exceeding 12 months.
1120102
Accounts Receivable Related Company

The amount due for payment to the company from a related or sister company resulting from
sales of merchandise or services which are expected to be collected within the credit terms set
not exceeding 12 months.
1120103
Accounts Receivable Nontrade

The amount due for payment to the company other than its usual customer invoices for
merchandise sold or services performed which are expected to be collected within 12 months.
1120201
Input Tax Goods

Input taxes (VAT) arising from purchase of goods.
1120202
Input Tax Services

Input taxes (VAT) arising from services rendered to the company
1120203
Creditable Withholding Tax EWT

Taxes withheld by the payor which is prescribed on certain income payments and is creditable
against the income tax due for the taxable quarter or year in which the particular income was
earned.
1120303
Due from Related Companies

Duly approved advances to related company operations subject to liquidation in accordance
with company policy.
1120304
Employee Advances
Duly approved cash advances for official business to employees subject to liquidation in
accordance with company policy.
1120305
Employee Charges
Amount charged to employees due to reasons which include but not limited to inventory
shortages, cash shortages, property damages and property theft.
1120306
Subscription Receivable
Includes the amount still to be collected from the investor before the company will issue the
shares.
1130100
Fuel Inventory
Fuel held by the company for sale in the ordinary course of business.
1210101
Accounting Software
Cost of accounting software used by the company.
1210102
Communication Equipment
Cost of communication equipment (mobile phones, telephones, etc.) owned by the company.
1210103
Land
The acquisition cost of the land used for the companys main operations plus all incidental
costs such as title, taxes, surveying fees, legal fees, restoration cost, and other costs.
1210104
Land Improvements
The cost of depreciable improvements after land acquisition (i.e. fencing, water system,
drainage system, sidewalks, pavements) that is subject to depreciation over their useful lives.
1210105
Office and Computer Equipment

Office equipment used in the companys ordinary course of business such as but not limited
to computers, printers and xerox machines including incidental expenses incurred in acquiring
them up to the time they are received and ready for use.
1210106
Building
The cost of building owned by the company including incidental expenses incurred in
acquiring or constructing them.
1210107
Building Improvements
The cost for the betterment of the building which extended its useful life or increase its value
or both.
1210108
Furniture and Fixtures

The cost of movable (furniture), immovable (fixtures) properties and office/production/store
equipment used in the companys ordinary course of business such as but not limited to desks,
chairs, cabinets including incidental expenses incurred in acquiring them, up to the time they
are received and ready for use.
1210109
Service Vehicle
Cost of service vehicle which are owned by the company such as pick-ups, vans, motorcycles
and other vehicles used by company officers and employees.
1210110
Construction in Progress
The cost of constructing long-term asset. Once the asset is completed and placed into service,
this account will be credited for the accumulated costs of the asset and will be debited to the
appropriate PPE.
LIABILITY ACCOUNTS
2110101
Accounts Payable Trade

Amount of obligations or indebtedness to suppliers for purchase of inventory or services and
other goods intended for sale.
2110102
Accounts Payable Related Company

Amount of obligations or indebtedness to related company for purchase of inventory or
services and other goods intended for sale.
2110103
Accounts Payable Nontrade

Amount of obligations or indebtedness not related directly to the companys primary
operations.
2110201
Output Tax Goods

Taxes (VAT) resulting from sale of goods.
2110202
Output Tax Services

Taxes (VAT) resulting from services rendered.
2110203
VAT Payable
Monthly and quarterly compute amount, as a portion of the sales price of a taxable item or
service charged to the consumer, payable to the taxation authority.
2110204
Withholding Tax Payable

All taxes withheld as prescribed by law, payable to the Bureau of Internal Revenue (BIR) at
the end of the accounting or reporting period.
2120101
Short-term Bank Loan Payable

The indebtedness of the company to banking institutions payable within one year.
2130100
Statutory Payables
This includes amounts withheld by the company from employee compensation representing
their premium contributions and payment of loans to SSS, Philhealth or Pag-ibig and amounts
payable by the company for employers contributions.
2210101
Long-term Bank Loan Payable

The indebtedness of the company to bank institutions payable beyond one year.
EQUITY ACCOUNTS
3110100
Capital Stock
Portion of the paid in capital representing the total par or stated value of the shares of stocks
issued.
3110200
Addition Paid in Capital

Excess amount of issued stocks over its par value.
3110300
Subscribed Capital Stock

Amount representing the total par or stated value of the shares of stocks subscribed.
3210100
Retained Earnings
Represent the cumulative balance of periodic earnings, dividend distributions, prior period
errors and other capital adjustments.
3210200
Current Earnings
Represent the cumulative earnings for the current period.
REVENUE AND COST OF SALES ACCOUNTS
4110100
Sales Revenue
Amount of goods sold whether in cash or on account, at invoice price.
4110201
Sales Returns and Allowances

Contra-revenue account and thus a deduction from the revenue due to returns resulting from
damage, defects or errors in the kind or quality of goods delivered or sold to customers.
4110202
Sales Discounts
Contra-revenue account and thus a deduction from the revenue due to discounts allowed by
the company.
5110100
Cost of Sales
Costs that are directly related to the sale of goods or services.
EXPENSE ACCOUNTS
6110100
Communication Expense
Amount incurred for transmission of messages such as mobile phone, telephone, internet and
all other means of communication.
6110200
Depreciation Expense
Amount provided for wear and tear of property, plant and equipment.
6110300
Freight Charges
Amount of transportation cost associated with the delivery of goods other than to customers.
6110400
Fuel and Transportation Expense

Amount incurred for transportation and fuel expenses. Includes amount incurred or parking
and toll fees.
6110500
Marketing and Promotions Expense

Amount incurred for the marketing and promotion of companys products to be sold.
6110600
Postage Expense
Amount paid for mailing items.
6110700
Registration Expense
Amount incurred for registration fees due to government entities both national and local.
6110800
Tax Expense
Amount incurred for tax penalties, surcharges, documentary stamp tax, or income tax due to
government.
6110900
Trucking Expense
Expense for the delivery of products to customers.
6120100
Contribution Expense
Contributions to government agencies.
6120200
Employee Benefits
Benefits given to employees other than salaries and wages such as but not limited to 13th
month pay, bonus, allowances and other fringe benefits except SSS, Philhealth and HDMF.
6120300
Employee Development
Amount incurred for officers, directors and employees for attending training and seminars,
christmas party, sports fest including related expenses.
6120401
Entertainment and Representation Expense

Amount incurred related to accommodating visitors and guests on official business.
6120402
Meal and Snack Allowances

Amount incurred for food for employees during meetings or other activities chargeable to the
company.
6120501
Office Supplies Expense

Amount incurred for office and various supplies used for operations.
6120502
Printing and Reproduction Expense

Amount incurred for printing and producing/reproducing company documents.
6120601
Professional Fee
Amount incurred for professional services rendered, legal fees paid, and retainers fee for the
professional services engaged in, including any related expenses.
6120602
Notarial Fee
Amount incurred for notarial services, including any related expenses.
6120700
Repairs and Maintenance

Amount incurred in the repair and maintenance of service vehicles of employees and
management, stations, office and computer equipment and operation equipment.
6120800
Salaries Expense
Amount incurred for services rendered by regular employees including overtime and holiday
pay.
6120900
Travel Expense
Amount incurred related to travel such as but not limited to hotel accommodation, fare, fuel,
meals, etc.
6121000
Utilities Expense
Amount incurred for electric and water consumption during business operations.
6121100
Other Administrative Expense

Amount incurred for security services, medicine expenses for employees, rent, SOP and
uniform expenses.
7110100
Donations and Contributions

Amount incurred for donations, solicitations and contributions to charitable institutions.
NON-OPERATING EXPENSE OR INCOME

7110200
Other Expense
Amount incurred for bank service charges, DSLC charges, insurance, interest and other
company miscellaneous expenses.
7210100
Other Income
Income of the company related to the Gain (Loss) on Sale of Assets, interest earned on lending
or bank deposits and income from activities other than normal business operations.

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FINANCE MANUAL

POLICIES AND PROCEDURES

VCFP0027: Month-end Accounting Procedures

Chief Finance Officer:

Formulates the overall finance department direction

Assistant Vice President Finance:

Manages the overall accounting operations receipts, disbursements, payroll, etc.

Monitors processing of payroll, accounts payable and disbursements

Monitors banking transactions

Processes all credit line application of customers

Processes banking transactions

BASIC ACCOUNTING PRINCIPLES

1. Business Entity Concept

VEPCO GROUP DISTRIBUTION CORP.

General Policy and Procedure Overview

VEPCO GROUP DISTRIBUTION CORP.

Detailed Policies and Procedures

Submission of Required Documents

For new customers the following shall be submitted:

Additional requirement as initiated by CCD

VEPCO GROUP DISTRIBUTION CORP.

Credit Line and Credit Term

Credit line may be unsecured or secured:

Following are the acceptable forms of collateral:

VEPCO GROUP DISTRIBUTION CORP.

Cash Bond an arrangement wherein a party gives to another an amount of money to

VEPCO GROUP DISTRIBUTION CORP.

Calling of Collateral or Foreclosure

Reinstatement or Re-activation of Account

Customer shall be tagged as F-rated for the following reasons:

Customer shall be tagged as inactive if no purchases for the last 6 months.

VEPCO GROUP DISTRIBUTION CORP.

General Policy and Procedure Overview

VEPCO GROUP DISTRIBUTION CORP.

Detailed Policies and Procedures

Sales Orders encoded shall be subject to Manual Approval.

Credit Evaluation and Approval

VEPCO GROUP DISTRIBUTION CORP.

Drivers shall ensure to accomplish the following upon delivery of items:

VEPCO GROUP DISTRIBUTION CORP.

Invoice Adjustment or Cancellation

Invoiced Sales Order shall be cancelled in cases of:

VEPCO GROUP DISTRIBUTION CORP.

General Policy and Procedure Overview

VEPCO GROUP DISTRIBUTION CORP.

Collection of accounts shall be acknowledged through the preparation of Daily Collection

VEPCO GROUP DISTRIBUTION CORP.

Date of Collection (Official Receipt Date)

Sales shall be responsible in mailing the original Collection Receipts to customers.

As a general rule, the acceptable modes of payment are as follows:

1. Currency/Bounced Proof Bank Instrument (Managers check/Cashiers Check)

Checks shall be payable to VEPCO Group Distribution Corp.

VEPCO GROUP DISTRIBUTION CORP.

VEPCO GROUP DISTRIBUTION CORP.

RECEIPTS AND DEPOSITS

General Policy and Procedure Overview

VEPCO GROUP DISTRIBUTION CORP.

RECEIPTS AND DEPOSITS

Detailed Policies and Procedures

VEPCO GROUP DISTRIBUTION CORP.

RECEIPTS AND DEPOSITS

Document Date Received Date of Payment

VEPCO GROUP DISTRIBUTION CORP.

General Policy and Procedure Overview