PROPOSAL FOR THE INSTALLATION OF A DEPENDABLE ACCOUNTING SYSTEM

1.0 PERSONNEL

An organization chart should be drawn sharing in outline the function, authority and duties of Accounting Executives, backed up by detailed definition of such duties.

2.0 BANK CASHBOOK

A Bank cash book should be kept where all lodgments into and expenditures out of the bank should be written in sequence of cheque and date each cheque payment should be back up with cheque payment voucher on the face of which the date, nature of expenditure, cheque number, name of the recipient and name with signature of the authorizing office clearly stated. These cheques expenditure vouchers are to be attached to relating invoices and receipts on which payments have been made and should properly be filed in a separate file classified as “cheque vouchers”

3.0 SIGNING OF CHEQUE

The practice of cheque being signed in advance without proper papers relating to these cheques being attached should be discouraged, as it gives room for fraud. Hitherto, cheques are being signed on the basis of a list prepared by the accounting officer only for the Accounting office to fill in the necessary information. This is a terrible loophole that should be discontinued with immediate effect.

4.0 CHEQUE EXPENDITURES

As already mentioned in the foregoing paragraphs, each payment must be backed by a payment voucher and duly filed in a numerical order. However, these duly filed vouchers are to be used in the posting of the various expenditure into their different classifications, to distinguish their nature, in the General Ledger.

5.0 BANK LODGMENT

Lodgments as reflected by each Bank pay-in-slip must be fully analyzed as to the source of such income on the reverse side. As the company maintains several Accounts with clients, the name of each pay-in-slip and where possible, the invoice on which payments are made should be specified.

5.2 On monthly basis, the following procedures should be followed

A. Summary of cheque expenditure in their respective classifications should be drawn along with summary of total income duly classified as to source of such incomes. On the basis of these extractions, posting should be made into control Accounts in General ledger.

Creditor’s Ledger and Debtor’s Ledger, to act as control on posting that might have been made into these various Accounts on individual basis.

B. Statement of transactions of Accounts maintained by the Bank should be obtained and proper bank reconciliation should be done to ensure that there are no entries in these bank statements which are not in the knowledge and approval of the management. Any entry found on these statements on which the authenticity could not be readily ascertained should be well investigated.

6.0 PETTY CASH BOOK

Base on the knowledge of financial requirement of the company in meeting day-to-day running cost, the company should set aside some amount on weekly basis or on such basis that is convenient for the settlement of expenditures of petty nature which might be numerous for inclusion into the cashbook, for sound Internal control, a different offices apart from the one keeping the Bank/Cash book.

7.0 ASSET REGISTER

This is a register, containing the list of all assets belonging to the company. Irrespective of year purchase or nature of ownership acquisition, all assets deemed to belong to the company must be recorded in this register in full details as regards date of purchase or acquisition, Description/model, value or consideration paid on acquisition.

8.0 This register should further contain information regarding depreciation provisions.

9.0 INVETORY CONTROL9.1 Inventory is defined for the purpose of this write-up as the aggregate of those items

of tangible property which are to be consumed in the production of goods or services to be available for sale to client.

9.2 As the inventory consists of numerous, there is tendency to overlook the substantial cumulative cost involved in their procurement.

9.3 Adequate controls must be instituted to ensure monitor adequacy of usage and reduction on theft and pilferage. In view of the foregoing, the below listed steps should be followed.

9.4 –Deleting an officer of the company whole function shall include sole handling of the STORE.

9.5 –Arrangement of store to ensure easy access and identification of stock.

9.6 –Maintenance of well kept stock cards to adequately monitor movement of stock into and out of store as well as closing stock value after each issuance from and receipt to store.

9.7 –Introduction of stock request forms which must clearly specify the stock item requested for and signature of the authorizing officer which should be somebody apart from the store man. As much as possible, the store-man should not be allowed to initiate any request and these request must always be raised by people directly in need of items being requested for, having received authorization from the Directors nor whoever that are delegated by them to do such job.

Preparation of an Inventory list on monthly basis preferably month ends reflecting balances on each stock card in quantities and values.

10.0 INVOICING OF SERVICES RENDERED/ MAINTENANCE OF SALES DAY BOOK

10.1 Adequate tracking invoice issue out for service rendered must be maintained and below listed points should be closely adhered to.

10.2 INVOICE PRINTING

- Maintenance of pre-numbered booklet in duplicate.

- Where invoice are issued in replacement of another proper description must be written on both the replacing invoice and the replaced invoice.

- Where invoices are cancelled, the original must be attached to the duplicate and adequately cancelled.

10.3 SALES DAY BOOK

Sales day Book should be maintained to keep track of all invoiced services rendered to clients. Furthering to the foregoing, well organized invoicing system must be initiated. The invoices so introduced must be serially numbered for ease of identification and properly filed. Where invoices are cancelled, original copies of such cancelled invoices must be attached to the duplicate.

The Sales Day Book must be kept using all information showing on each invoice. Date, Name of such income charged and listed in the sales Day Book must be extracted from which posting into General Ledger are to be made.

11.0 SALARIES, PAYE AND OTHER DEDUCTIONS

11.1 Payroll should always be prepared containing names of all members of staff apart from the Directors on a monthly basis with a single cheque being issued to cover such amount. In arriving at the Net Amount to pay as salaries, deductions must be made towards