ACCOUNTING MANUAL

FOR

CONVIEW

JULY 2010

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Internal Control Generally

Objectives:-

To carry on the business in an orderly and efficient manner, to ensure

adherence to management policies, safeguard its assets and secure the
accuracy and reliability of the records.

Measures

An appropriate and integrated system of accounts and records

Internal controls over those accounts and records

Financial supervision and control by management, including budgetary

control, management accounts reports and interim accounts

Safeguarding, training allocating to specific duties staff who are capable of

fulfilling their responsibilities, rotation of duties and cover for absences

PURCHASE ORDERS AND ORDERING

OBJECTIVES:-
To ensure that goods and services are only ordered in the quantity, of
quality and at the best terms available after appropriate requisition and
approval.

To ensure that goods and services are checked against authorised orders
and receipt of the subject matter in good condition.

To ensure that all goods and services received are properly recorded in the
books.

POLICY STATEMENT

A purchase order is a request for supply of goods or services. An order,

when properly completed and authorised is an official document creating a
liability, which the company is obliged to settle.
Purchase orders serve as the company’s official order to acquire goods

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from suppliers.
Unused order books should be kept in a secure location as security
documents
A register of issues is maintained, and is signed by the recipient when
receiving a new order book. The purchasing function is decentralized at
each business unit.

PROCEDURE
1. The Accountant/Administrator issues the orders, for all purchases. The
Accountant or Administrator initiates an order after receiving a
purchase requisition (could be a verbal request upon discussion)
2. A minimum of three quotations are sourced by the Accountant or
Administrator and the one offering the best advantage on
price,favourable terms and quality is accepted.
3. When raising an order, designated signatures are required to sign on
behalf of the company.
4. A pre numbered order is raised detailing:-
- Name of supplier
- Date
- Quantity ordered
- Description
- Price
- Discounts if any
5. Original copy of the order is furnished to the supplier, while the
accounts copy is forwarded to accounts for marrying with invoice.

APPROVAL OF INVOICE AND PREPARATION FOR PAYMENT

POLICY STATEMENT
To outline procedure for authorizing and preparing invoice for payment.
1. On receipt of an invoice from supplier, Accounts will
marry the order to the invoice
check invoice against order and that price quoted
and quantity ordered and received agrees and that the invoice
casts.
2. A payment voucher is then prepared and the invoice and all the
relevant documents are attached and then processed for payment.

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PAYMENT VOUCHER
1. Purpose
a. Provide the means for the request and authorisation of all
payments by cash, cheque/transfer.
b. Furnish documentary proof of expenditure.
c. Serve as record of expenditure.

2. Preparation and use

A requisition or voucher is raised and depending on the type
of transaction will be supported by an invoice and/or
statement with reconciliation, or invoice, order, all properly
authorized. Quotation/profoma invoice and order should be
attached to requisition for COD purchases.
a. A requisition should be endorsed with the following:
- Payee’s name and address.
- Description of expenditure
- Amount
- Tick method of payment
- Cheque number if applicable
- Date
- Signature of person authorising the voucher, usually
the Accountant or Administrator.

b. The documents in support of payment must be attached to the

Voucher.

c. A cheque is drawn and signed by authorized signatories then

returned to Accounts for dispatching and processing in the
computer before filing of the voucher and documents in cheque
number order by month. If it’s a transfer payment, filing is done
using the date sequence in the Rtgs file.

PETTY CASH PAYMENTS AND ADMINISTRATION

POLICY STATEMENT
Petty Cash payments are maintained on an imprest system.
A petty cash float maximum is set and reviewed from time to time.
Maximum limits for cash withdrawal should be set and reviewed regularly.

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Petty cash must be administered separately from any other source of cash.
Receipts from debtors must never be substituted into petty cash, except by
the express authority of the MD or Accountant.
Petty cash must not be used to purchase items which would normally
fall under the procedures of voucher requisitions. Such items include
stationery, fuel, electricity & water, telephones, maintenance & repairs etc.
Should it be that for cost effective reasons it is cheaper to maintain
these through petty cash, dispensation must be sought from the
Accountant or MD
PROCEDURE
1. Cash requisition may emanate from any department, and must be
authorized by the Accountant, or Head of company.
2. The voucher is submitted to the Accounts clerk who ensures that
a reason for the withdrawal is clear and cashes out the required amount.
Amount received must be acknowledged by signature of recipient in the
Cash book (petty).
3. At reimbursement of petty cash, a summary of all expenses is
drawn, showing recipient of cash, date, amount and allocation.
4. A top up cheque or cash withdrawal from the bank for the total amount
paid out is drawn and processed.

NOTE:
• Petty cash must always be secured in a cash box or safe
• Spare keys must be lodged with the head of Unit/company
• Random checks must be conducted by a senior person
• Petty cash float must be reasonably sufficient to allow top up
twice or thrice weekly
• Cash box must be locked up in a safe or secure location
at the close of business daily.

RECEIPTS
POLICY STATEMENT
Receipts must either be by cash or RTGs or exceptionally by cheque.
Any bounced cheque to be followed up by person recommending
for approval. No goods are to be released until proof of
payment is obtained and the funds have cleared in our account.

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PAYMENT AND RECEIPTS BY RTGs
All our quotations must have our account details so that the client can then
make a transfer into our account. All transfer confirmations must be checked
the following:
• That it has been accepted by the bank before cut off time.
• The value date.
• That our account details are correct.
• Receipt confirmation stamp by the bank.

The Accountant or Administrator must, the following morning, check with

the bank that the funds have cleared in our account. If not get the reference
number from the client and give it to the bank to track the transfer.
Once cleared, give the buyer his/her goods; make onward payments to
concerned stakeholders.

PAYMENT BY CHEQUE
Cheques must as much as possible contain backup information to safeguard
the company from losses incurred through fraudulent means.

NOTE: When payment is made by cheque goods are not to be released until
the cheque clears with the bank.
1. PERSONAL CHEQUES
1.1 Details Required
If a customer is approved to pay for services by cheque they
should be asked to produce a valid bankcard, and the following
details should be scrutinised: -
- Card number
- Maximum credit limit
- Expiry date
- Signature on card against the one on the cheque
- Names on both card and cheque
- Amount in words and figures on the cheque
- Date of cheque
- Any alteration must be endorsed by the authorised
signatory
- Address
- Telephone number
1.2 Processing of Personal Cheque

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 - Ensure cheque card bears the same bank logo as the
cheque
- Ensure that cheque and card are from a local
registered bank.
- Ensure card has not expired or is not about to expire
- Cheque must be drawn and signed by drawer in the
presence of person accepting it
- Signature on cheque should agree with signature
shown on the card
- Amount on cheque drawn should not exceed that on
card.
- If it exceeds, then the writer must be requested to
write several cheques within the limit of the card.

1.3 Endorsement
Every cheque drawn in favor of the company must be duly
endorsed (by the customer) at the back with the following
details: -
- Name of drawer
- Address of drawer
- Telephone both business and home if applicable
- Bank card number, expiry date, maximum limit,
physical address and national identity
- ID number (check that the name on the ID agrees
with the one on the cheque)

1.4 Encashment of cheques

Under no circumstances should personal cheques and third party
cheques be cashed against company funds, except by express
authority from the MD.
1.5 Bank Cheques
Bank cheques must be treated with extra caution, due to the
proliferation of fake bank cheques always in circulation.

When presented with a bank cheque, proceed to phone the bank

and verify the authenticity of such cheque. If authorized, then
proceed to process the transaction. If not authorised, advise the
Accountant and Head of company, for further action, without
returning the cheque to the payer.

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2. COMPANY CHEQUES
If a company cheque is accepted special attention should be paid to the
details on the cheque i.e. date, amount in words and figures and usually
two signatures.

For companies not well known, please insist on cash, RTGs or bank
cheque, which must be confirmed with the bank before authorizing
release of goods.

COLLECTION OF DEBTORS

POLICY STATEMENT
The Finance Department of the company is charged with the overall
responsibility for debt collection. (i.e. if there is a debtors system)

PROCEDURE
1. An Aged Analysis schedule is produced every month end showing the
status of accounts.
2. Distribution of the main Age Analysis schedule is to the Managing
Director, Group Accountant and the Sales Manager.
3. It is the responsibility of the Group Accountant to coordinate all units
and departments or individuals in collection efforts.
4. Invoices which are recommended for write-off are as follows: -
a. An overdue status of one year or more
b. Irreconcilable dispute
c. Failure to locate debtor
5. A write off proposal must be initiated by the Accounts Clerk to the
Group Accountant and MD for approval. The MD will then authorize.
Justification of write off must be included.
6. After all required signatures have been secured, the write off proposal
is forwarded to the Accounts clerk for action to write-off against the
provision for bad debts if applicable.

CREDIT CONTROL
The Group Accountant or Accounts clerk should collect all outstanding
monies, which appear, on the debtors’ ledger.
He is also responsible for processing new accounts.
a. Amounts in 30 days

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 - Phone, write and visit the customer to remind them of
their indebtedness. Establish if there are any queries,
which may result in non-payment, and such queries
should be resolved immediately with relevant
departments.
b. Amount in 60 days
- Write a second reminder if there was no response to
the first one, and intensify visits to debtor.
-
c. Amounts in 90 days and over
- Send final demands for all amounts.
PROCESSING OF DEBTORS INVOICES
INVOICES
1. From the Sales offices and operations departments invoices are sent to
the accounts clerk.
2. Accounts clerk processes the invoices into the computer in sequence
and update the Debtors’ Ledger
3. RECEIPTING
POLICY STATEMENT

All monies received must be acknowledged by a receipt and banked on the

same or following day. Receipts banked on a particular date must be agreed
to the deposit slips of the same date and separated into cash or cheque
deposits.

1. DEBTORS
a. All receipts must be issued from the debtors receipt book provided
for this purpose.
b. Where no details are enclosed with cheques received, all relevant
details of the cheque must be entered on the receipt, viz. drawer of
the cheque and date received, which might assist in allocating the
payment to the correct account.
c. Where an account is paid by a third party, the cheque must be
endorsed with the name of the account to be credited as well as the
receipt number so that in the event of the cheque being returned
unpaid by the bank, all relevant details are readily available.
d. Postdated cheques are not to be receipted until due for banking.
e. Where a cheque is received from a company and covers the
payment of a number of their accounts, it is not necessary to issue

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 a receipt for each account, but only one receipt for the total of the
cheque with details of the accounts to be credited, attached.
2. GENERAL RECEIPTS
a. Monies received for anything outside the scope of the company’s
services for which an invoice has not been issued must be
receipted separately from those monies received from debtors and
banked.
b. Such monies may come from the sale of assets, refunds of
Insurance etc.
c. When coding such receipts the principle to apply is to credit the
account to which the debit was originally allocated.
BANKING
POLICY STATEMENT
All monies received are to be deposited into the bank daily into the current
account applicable for each branch. The amounts banked, will be the daily
totals of the receipts issued, i.e. cheques and cash received. Bank deposits
must be balanced to the relevant receipts before banking.
PROCEDURE
a. CHEQUES

1. In preparing for banking, Accounts clerk must add cheques and

cash which must balance to the receipts issued for the day.
2. Cheques reconciled to the day’s receipts are banked on a separate
deposit slip supplied by the bank to be prepared in triplicate for
each deposit and distributed
as follows:-
- Original copy remains at the bank
- Fast bank stamped copy remains in the book
3. Drawer’s name is entered individually for each cheque against the
respective amount, on the deposit slip.
b. CASH
4. Cash Banking is done on a separate bank deposit slip stating
Company name and account in the appropriate space and the total
amount by denomination. Copies of deposits are treated as in 2
above.
5. Total deposit slips must agree to total cash receipts.
6. Checking and verification of deposits against receipts and cheques
or cash is done prior to banking, by the Accountant/Accounts
clerk. For units, it is advisable for the Manager to conduct
daily checks on banking.

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c. BANK DRAFTS
Foreign currency drafts when received are receipted and endorsed, then
submitted to the bank for banking.(if applicable).
d TRANSFERS
1. Transfer of funds is usually between SBUs and Head Office
or from Commercial Bank to short term deposits accounts and will
be made with authority from the MD or CEO
Two transfer methods can be used.
a. RTGs transfer which is effected by the bank.
b. Cheque drawn from the cheque book of the transferring
Unit.
c. Surplus funds may also be transferred from the current
account, into the call account in order to generate interest.
d. Accountant issues an instruction to the bank and confirms by
letter signed by signatories.
e. Monies on call account can be called with approval of the
MD or CEO.
f. Surplus funds may also be transferred into Treasury Bills,
unit trusts or Short Term deposits when not required
immediately, at the most available competitive rates.
g. A cheque is drawn to the institution offering the best rates,
for a stipulated period.

BANK RECONCILIATION
1. Bank Reconciliation must be carried out monthly as at close of
business.
Accounts clerk/Group Accountant obtains bank statement, which
covers an operating month and reconciles to the cashbook.
2. On receipt of bank statement, direct debits and credits including bank
charges, which have not been posted into the cashbook, are now posted
against the cashbook totals transacted during the month.
3. All direct debits and credits emanating from the bank statement must be
investigated and verified with the bank then entered in the cash book.
4. Cheques drawn in the cashbook might not have been presented to the
bank. A list of unpresented cheques is drawn in support of the
reconciling figure.
5. When process 3, 4 and 5 are completed the cashbook and the bank
balance are now in agreement and statement reconciliation is drawn to
show this effect.
6. The cash book reconciliation is drawn in the format outlined below:-

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 Cashbook Balance xxx

Add: Unpresented Cheques xx

Less: Deposits not on bank statement xx

Balance Per Bank Statement xxxxxx

The other way round is also acceptable.
7. When completed, the Accounts clerk signs and the accountant checks
the accuracy of the reconciliation and verifies authenticity by signing
the reconciliation. All reconciliations should be filed together with
bank statements related to the same period.
CHEQUES UNPAID

POLICY STATEMENT
All unpaid cheques received from the bank are handled by the Group
Accountant.
Upon receipt of such cheques they are recorded in an “Unpaid cheques”
register.
The drawer of the cheque is contacted and asked to pay cash plus penalty
(100% cheque value).
a. Bona Fides Precaution
Unless it can reasonably be expected that the debtor will react as
required, cheques should be retained until payment has been secured.
b. “Refer to Drawer” Cheques
i. Where it is possible to contact the debtor by telephone, locally to
arrange payment of the cheque this should be done.
Where telephonic contact is not possible, a letter should be
mailed to the debtor. (see Annexure of standard letter below)
ii. On all returned cheques, bank charges should be recovered from
the customer in addition to the R/D amount.
c. “Payment Stopped” Cheques
The following procedure applies:-
i. Where telephonic contact is possible locally, obtain reason for
stopping of payment and endeavor to rectify.
ii. If (i) is not possible the debtor should be written to, requesting
the reasons for the cheque being stopped.
iii. Should the matter be settled and the cheque authorised for
payment the procedure for receipting and banking can then be
carried out.

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 iv. If a reply is received and the payment is the subject of a dispute
with the result that the cheque cannot be deposited, then the
cheque with all relevant details must be handed over to the
Accountant for further action.
d. “Account Closed” Cheques
In all such cases the cheque must be forwarded to the Group
Accountant for immediate action.

e. “Irregularly Drawn” Cheques

In all cases of irregularities, faults and omissions, these should be dealt
with immediately, advising what is required so that the cheque can be
receipted and banked in the normal way with a minimum of delay.
If it is possible, the debtor can be requested to come to the offices and
regularize the cheque, or alternatively, the accounts clerk may deliver
the cheque for regularization without any further delays.

Cheques Lost in Transit

Cheques lost in transit must be reported immediately to the Group
Accountant who will obtain a further cheque from the Drawer in
replacement.
Note – Items (d), (e and (f) are specific procedure and are subjective to
the overall procedure in this paragraph.
Annexure of standard letter
Dear Sir/Madam,
RE: ACCOUNT
Your cheque No……………………….. drawn on ………………….for the
sum of $ ……………. has been returned by ……………………………
Bank ………………………… marked “Refer to Drawer” and as
consequence our receipt No. …………………….. issued at ……………….
on ………………… is hereby cancelled and this amount has been debited to
your account together with administration charge of $…………..
Yours faithfully
Group Accountant

CASH MANAGEMENT

POLICY STATEMENT

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It is company policy to develop sufficient internal and external sources of
funds to take advantage of business opportunities, as well as to maintain a
satisfactory level of liquid assets. The development of such sources
provides the means for more effective business decisions. It is company
policy not to accumulate unproductive surplus cash. Short term funding is
generated internally from the company’s operations or from outside. The use
of internally generated funds for short term needs will be the preferred
methods of funding.

Those funds, which are required for one year or longer, are considered and
classified as “Long-term Funds” by the company. Approval for committing
the company to such borrowing is required from the Board of Directors and
the Chief Executive Officer.

The company will not use institutional funds for short-term purposes
unless it is unable to generate cash internally from operations.
When it is necessary to get short-term funding from external sources,
Refer to the CEO or MD.

PROCEDURE
1. The Accounts clerk or Group Accountant of each company prepares a
Weekly cash flow schedule(a.k.a. Position)
which shows the cashbook balances and bank balances.
Bank statements are obtained from the internet through the integrator
system.
2. The cash flow schedule helps control outflows against inflows and
management is kept informed of the current cash position.
3. The schedule is produced every Monday projecting the current week.
4. The schedule is distributed to the MD and the Chief Executive officer.
5. If long-term funding is required the Group Accountant with the
authority of the Managing Director will prepare the necessary proposal
for the need of funding. This could mean liquidating forex reserves.

STOCK MANAGEMENT
POLICY STATEMENT
Stock management involves control and maintenance of inventories to
protect profit margins. The Finance Department is responsible for providing
support services to all departments involved in stock management, and to
ensure that controls are upheld at all times.

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PROCEDURE
1. When stationery is received into the company, the PA records all the
items into the stationery register and kitchen groceries register
immediately on receipt of goods as acknowledgement that goods
have been received.

2. Stationery stocks of a security nature are kept in the custody of the

accounts department, and administered by maintenance of a register
which is a history sheet, and is signed by the recipient when receiving
stocks. Documentary stocks must be issued in sequential order.

3. All security documents are registered numerically and individually in

order to facilitate the sequential issuing and control. Such documents
include: -
- Invoice books
- order books
- receipt books
4. Re order levels of security documents are monitored by the Accounts
clerk and orders are authorized by the Accountant to replenish when
necessary.

ANNUAL FINANCIAL BUDGETS

POLICY STATEMENT
Each company of the group is required to prepare and submit an “Annual
Financial Budget” for approval. The budget is drawn by the Accountant, in
conjunction with the General Manager of the SBU. The head of Company
budgets for the revenue and the cost budget is completed in conjunction with
accounts dept. Budgets are submitted to the Group Accountant for review
and subsequent approval and ratification by the board.
If approved, the heads of companies will be responsible for taking the
necessary actions to meet the plan. Quarterly, budgets are reviewed with
more current assumptions.

PROCEDURE
At the end of each month, the accounts department draws accounts
which show comparisons of actual results versus budget.
1. An explanation of all major variances is done and circulated
to all recipients of monthly management accounts.

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2. Recommendations for any required corrective action should be
prepared by the operating company and forwarded to the HQ.
3. If subsequent actions fail to correct the budget variances beyond the
company’s expectations, the Managing Director must be notified.
4. All budgets submitted must be measurable, reasonable and reflect the
current economic situation based on realistic assumptions.
5. In the case of capital budgets, all proposed acquisitions are discussed
with the Managing Director and CEO.

MANAGEMENT ACCOUNTS
POLICY STATEMENT
Profit & Loss statement will be issued on a monthly basis and distributed to
heads of companies by the 7th working day of each month. Accountants of
respective SBUs are responsible for the analysis of the accounts while the
respective Heads of companies are accountable for the control. Company
policy requires that significant variances in actual costs from approved
budget be reported and explained.

PROCEDURE
The Finance Department is responsible for ensuring that monthly profit &
loss statements are prepared for each operating company of the group.
1. A set of accounts is drawn on a prescribed format and submitted to HQ
by the 7th working day of each month. These accounts detail the
balance sheet, profit and loss, commentary notes and supporting
schedules.
2. The profit and loss statement will compare the current month’s
performance with the budget and last year, and the cumulative
performance with the budget and prior year.
3. Alongside the month and cumulative comparisons will be the
percentage variances against the budgets. Analysis of percentage
changes will indicate areas needing attention.
4. The comparison is also a tool for management to assess performance.
5. The Accountant is responsible for producing the profit & loss which is
discussed with the Head of company before submission to HQ.
6. A consolidation of all companies is carried out by the Group Accountant
for distribution to various parties.

EXPENSE ACCOUNT CLASSIFICATION

POLICY STATEMENT

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All personnel responsible for budgeting and allocating expenses will do so
using account classifications, which are issued by the Group Accountant.
Any revisions to the classifications should be in consultation with HQ as
varying classifications tend to disrupt the consolidation process.

Items charged to expense accounts are classified below:

Accountancy and Audit Fees - Includes charges for professional

services rendered by independent accountants or auditors for
auditing accounts, tax advice, rendering reports and other
accounting services.
Bad debts written off - Includes charges of bad debts that are
unrecoverable and have previously been set aside in a bad
debts provision account.
Cost of sales – Includes all costs paid to airlines or other travel agencies.

Directors fees - Includes fees paid to the directors in respect of board

meeting attendance.

Depreciation - Includes the depreciation expense for equipment,

furniture & fittings, computers and vehicles and
buildings if being depreciated.

Electricity & Water - Includes electricity & water charges levied by the
relevant authority.

Insurance General - Includes charges for insurance premiums covering

buildings, motor vehicles and all other
assets.

Advertising - Includes charges for advertising in the press, on

television, in directories, calendars, diaries, brochures,
christmas gifts, prizes for sponsored sports and
tournaments or any other form of advertising such as
launching costs and complimentary clothing such as T-
shirts and caps.

Bank Charges - Shall be charged with all bank charges including fees in
respect of establishing loans and draw down fees.

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Donations - Includes expenses in respect of payments made to third
parties as donations to individuals, organizations or
sporting organisations.

Legal fees - Includes charges for legal fees and services in

connection with corporate business and the
collection of bad debts and related charges thereto.

Office machinery repairs & maintenance. - Includes the cost of

service contracts on office equipment, i.e. computers,calculators,and
and repair costs to these and other equipment or office furniture, and
lease hire charges for equipment other than telephonic equipment and
switchboards.

Maintenance General - Includes charges in respect of building

maintenance, tarmac, roofs and durawall
repairs or enhancement, together with
materials, renovations to offices, all electrical
fittings and repairs, and tiling of offices.

Motor vehicles - Fuels & Oils -Is charged with fuel and oil expended on
vehicles.

Motor vehicles - Repairs & maintenance - Is charged with repairs &

maintenance of vehicles

Printing and Stationery - Includes all charges in respect of stationery

purchases, postage, parcels, office accessories
such as staplers, pocket calculators, punchs,
Rates - Includes rates as levied by the municipality on land,
buildings & improvements.

Rent - Includes all rentals.

Security - Includes the cost of hiring security guards at company

premises and electric fence.

Salaries - Includes all salaries paid to staff and management.

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 Pension - Charged with the company’s pension contribution

Medical Aid - Charged with the company’s contribution of medical aid.

Leave Pay -Charged with the value equivalent of outstanding leave

days.

Exchange Difference - Includes the variation (debits or credits) caused

by the conversion of one currency into another.

Teas & cleaning - Includes kitchen groceries, detergents &lunches.

Training - Includes the cost of tuition paid in respect of training

employees, i.e. strategic and operational seminars,
external and internal training costs, conference hall hire charges,
meals at seminars, accommodation at seminars and refunds on
approved courses undertaken by employees.

Travel Local
Charged with costs incurred in respect of visits to local
Units and subsidiaries within a country, and all costs
related to marketing and operations visits, by
management. Such costs would include hotel
accommodation, lunches, flight tickets, car hire charge
and travel allowances etc.

Foreign Travel
Charged with all costs incurred in respect of travel outside
the country i.e. airfares, hotel accommodation, travel
allowances, hire of car etc if applicable.

PROVISIONS

POLICY STATEMENT
On a continuous basis, the Finance Department is required to review
expenses and make provisions for contingencies, which are identified and
foreseeable.

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POLICY & PROCEDURE
1. Bonus Provision
The company pays a bonus once a year, December, based on the
company’s performance. This is to the discretion of management.
- Bonus provisions are calculated at equivalent gross
salary bill and provided for monthly.
- When a payment is made, it is paid out of the
provision in the balance sheet, and not from the P/L.
2. Leave Pay Provision
Employees of the company are entitled to 22 working days per annum
but accumulated on a monthly basis. It is not a company policy to pay
cash in lieu of leave except under exceptional circumstances, or when
an employee leaves the company. Outstanding leave days are
converted into value equivalent at the end of each month.
3. Audit Fees Provision
- Includes provisions for charges relating to external
audit of the books, held, at least once a year, for the
holding company and all its subsidiaries. An
estimated percentage is applied on the current’s years
actual fees charged or the auditors are requested to
provide estimation.

Based on the estimation, a provision is raised based

on equal monthly amounts.

4. Other Provisions
From time to time there is need to accrue expenses during a period of
accounting. Provisions are raised and reversed when the actual invoice
is paid or received.

5. In all cases, the Accountant must verify all calculations before

authorising the journals for processing.

SALARIES.

POLICY STATEMENT
Salaries are paid on or before the 25th monthly, except where the 25th falls
on a weekend, in which case salaries will be paid on the Friday preceding
the 25th.

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PROCEDURE
1. A personal file is opened for each employee on commencement of
employment. Such a file contains all the personal details including
remuneration.
2. When processing salaries, all information required by the computerised
payroll is obtained from the personal file. Several reports are generated
at the end of each month.
3. At the completion of each run, the Accountant must submit the
payslips, summarised payroll, bank schedule and source document to
the Managing Director or CEO for checking, verification and
authorization.
4. Disks are submitted together with Processing Data Advice 4 days
before payday to the respective banks.
5. The Group Accountant has to facilitate opening of bank accounts for
new employees who do not have accounts.
6. On cessation of employment, the employee is deleted from the master
file in the computer.

GOVERNMENT TAXES

POLICY STATEMENT
The company is obliged to pay to Government a percentage of profit as
taxation, on estimated current year’s profits, at designated Quarterly
Payment Dates (QPD). The company is also obliged to pay (PAYE) Pay as
You Earn withheld from employees and VAT withheld on sales
(commissions).

PROCEDURE
1. Estimated income tax, based on monthly accounts, is provided for
monthly and paid on a quarterly basis.
2. As and when the QPD (quarterly payment due) falls due, the relevant
tax percentage payment is paid to Zimra as an Rtgs using Special Zimra
transfer forms available from the bank.
3. At the close of the annual financial year, a tax computation is drawn
and agreed with the auditors, to determine the correct company tax
payable.

4. At this stage the accumulated monthly provision will be adjusted to

reflect the computed tax amount into the balance sheet.

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5. The relevant tax return form is completed and together with the
computation and statutory accounts, submitted to the tax authorities.

6. As and when the QPD falls due, the relevant tax percentage payment is
lodged with the tax department. The dates for QPDs and percentages
are as follows : 25 march – 10%
25 June - 25%
25 Sept – 30%
25 Dec – 35%
7. PAYE is deducted monthly and must be submitted on the 15th of the
month following the month of recovery. Late payments attract
penalties and interest.

8. VAT is levied on sales transactions and must be submitted by the

period allocated by the Tax Authorities stipulated date following the
months of recovery. Late payments attract interest and penalties.

9. Should the company foresee a situation where payments cannot be

Genuinely submitted, a letter must be submitted to the Tax
Commissioner, giving reasons for the delay and requesting for an
extension.

ACQUISITION OF ASSETS

POLICY STATEMENT
A Capital Expenditure proposal should be submitted to the Managing
Director /Chief Executive Officer for approval.

A Fixed Assets register must be maintained to record all assets.

PROCEDURE

FIXED ASSETS
1. On establishing that an asset is required, approval to purchase will

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 be sought from the Managing Director in consultation with the
Chief Executive Officer. Three quotations will be obtained from
different suppliers and compared for competitiveness on quality,
price and payment terms.
2. The Accounts Clerk/Group Accountant will then raise a purchase
order in favor of the preferred supplier.
3. Goods are accepted if in good condition and rejected if not.

FIXED ASSET REGISTER AND MAINTENANCE

1. On receipt of invoice for purchase of an asset, the Accounts clerk

will in the month of purchase record the information outlined
below, in the asset register:-
- Date of Purchase
- Description
- Cost
- Depreciation Rate
- Depreciation – Monthly
- Depreciation – Accumulated
- Net Book Value

2. Fixed Asset categories which must be reflected in the register are:-

- Motor vehicles
- Furniture and fittings
- Land & Buildings
- Computer & Equipment

3. From the month of purchase, reducing balance depreciation will be

charged to the nominal ledger and credited to the individual asset
accounts on a cumulative basis to reflect monthly book values.

4. Depreciation on assets is applicable as follows:-

Motor Vehicles 20%

Furniture and Fittings 10%
Land & buildings 5%
Computers Equipment 25%

5. When assets are fully depreciated, they will remain in the books as

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 memorandum items with a value of $1 for ease of physical
accounting.

6. Disposal of assets will be conducted according to the Company’s

disposal procedure. When an asset is disposed of, the cost and
accumulated depreciation must be written out of the Asset
Register, recording date of disposal and amount realized.

7. Proceeds of sale must be credited to the Profit and Loss account.

8. Physical counts must be conducted once a year and checked to the

Asset Register by the Accounts clerk. Any discrepancies must be
investigated and accounted for.

DISPOSAL & TRANSFER OF ASSETS – WRITING OFF

REDUNDANT AND UNSERVICEABLE ASSETS
POLICY STATEMENT

To ensure write off of assets is properly controlled, recorded and processed.

1. SBU heads identify assets or stocks that have become

obsolete, redundant or unserviceable.

2. Compiles a list of such assets or stocks and in the case of vehicles,

indicates the fleet and registration numbers submits a request seeking
authority to dispose from the MD or CEO.

3. Once approved, disposal takes place through the auction or other

approved means.

4. Transfer of assets between companies is initiated by the General

Manager and referred to the Chief Executive Officer for approval.

5. When transfer is approved, General Manager and Group Accountant

are advised by copy of approval, to action the transfer in their books.

MANAGEMENT ACCOUNTS

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POLICY STATEMENT
Management accounts except at year-end are drawn monthly and distributed
by the 7th working day of the month following. A laid down format is
adopted for actual and budget accounts. Management accounts are
computerised on a financial package and completed on a spreadsheet
package for consolidation with Group Accounts.

PROCEDURE
1. During the month, various source documents are furnished to the
Accounts Department.
2. Such documents include
- Suppliers invoices
- Transfers,cheque requisitions
- credit notes
- debit notes
- receipts
- journals
- customer invoices
3. These are captured into Pastel resulting in the generation income
statement & balance sheet.
4. In each case, the audit trails must be checked by the Accounts clerk or
Group Accountant, to verify correctness to source documents.
A Trial Balance is generated and if it balances it is exported to the
spreadsheet packages where it is formatted into the Management
Accounts.
5. The Management Accounts are comprised of the income statement,
Balance Sheet & commentary notes.
6. Reconciliation of debtors and creditors are reviewed, if applicable,
together with variance analysis reports. After review the accounts are
distributed to all stakeholders.
9. Other schedules may be drawn as and when required.

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 INTERCOMPANY TRANSACTIONS

COMPANY POLICY
All intercompany transactions within the group must be conducted
through the use of debit notes, and not invoices that would normally be used
when charging third parties. When raised, debit notes must be furnished to
the recipient company.

PROCEDURE
1. A debit note is raised where a sister company has carried out a service
on behalf of another i.e. subcontracting or where a payment has been
effected on behalf of another company.
2. A debit note can be initiated from any department and drawn by the
Accounts clerk, stating the company charged, date, transaction
description and amount.
3. A debit note is raised in duplicate as follows:-
- Top copy to recipient company
- Bottom copy for Audit filing
4. The debit note is authorised by the Group Accountant.
5. Both companies must process the transaction in their respective books
of accounts, either as debit or credit in the same period.
6. If any transactions are processed through the debtors ledger as it
happens sometimes, the balance must be transferred to the General
Ledger Intercompany Account.
7. If any transactions are processed through the Creditors Ledger, they
must also be transferred to the Intercompany at month end.
8. All transactions must be from intercompany into the allocated
respective expense or recovery accounts.
9. Effectively, on consolidation these transactions must clear within the
group.
10. A reconciliation is drawn by each company and agreed with the other
companies.

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 INSURANCE

POLICY STATEMENT
In order to protect the company losses, the Group Accountant and the Chief
Executive Officer/Managing Director shall be responsible for the
development of insurance requirements. Insurance shall protect against fire,
theft, accident, injury to employees and various other perils.

PROCEDURE
The insurance plan will be reviewed to determine if changes are
required to protect the company.
1. Insurance purchases shall be made only after review and approval with
the Chief Executive Officer.
2. All properties, shall be covered at replacement values.
3. Insurance premiums shall be reviewed periodically to ensure that
amounts are competitive.
4. Claims handling shall be done by Group Accountant.
5. The use of ‘umbrella’ coverage policies will be considered whenever
this affords the company broad protection at rates which are equal to or
lower than individual policies.

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