SOP Library
SOP NO:
FS-GP10
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Financial Services (FS)
Activity:
General Accounting Plan (FS-GP)
Title:
Inter-Branch Accounting System
Date Approved/Issued:
02/09/1995
Date Effective:
03/01/1995
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
I.
STATEMENT OF POLICIES
1. Inter-branch transactions shall no longer be classified as to Cash, Inventory and Fixed Assets but shall be entered in the Advice Register Journal in the order in which they transpire.
2. Only transactions covering real or Balance Sheet accounts shall pass thru these procedures. No expense shall be charged to FOA-HOA/BOTA-ROTA/ROCA accounts by any branch or office. Instead, payment of expenses shall be thru cash advance/reimbursement or billing method. This system should instill the principle of expense accountability at the appropriate time.
3. Inter-branch transactions between offices belonging to different regions shall have the Directorate for Accounting as the clearing office.
Inter-branch transactions between provincial offices within the region shall have the Regional Office as the clearing office.
4. To minimize adjusting/reconciling entries at the end of the month, inter-branch transactions towards the end of the month, where advises are expected to overlap until the next month, shall be avoided.
5. The COCA-ROCA and ROA-POA accounts shall be closed as of February 28, 1995 and their balances be carried forward as such. Effective March 01, 1995, no transaction shall enter into these accounts except for reconciliation, adjustment or correction purposes, or when an entry refers to a transaction prior to March 01, 1995.
No stone shall be left unturned to reconcile variances of these accounts. All Regional Directors, Assistant Regional Directors and Provincial Managers are directed to create task forces to reconcile variances of these reciprocal accounts.
II.
PROCEDURAL DETAILS
1. IMPROVEMENT OF THE ADVICE FORM
1.1 The advice form is hereby revised to provide spaces for information with complete references needed in the reconciliation of inter-branch accounts (
Exhibit 1
).
Transaction details as to each remittances, supplies and materials issuances, fixed asset issuances, stock transfers, adjustment of advises and other inter-branch transaction are provided spaces for easy monitoring of transactions. This shall eliminate the long procedure of tracing documents related to the transaction involved. Immediate action can be implemented on areas that need prompt attention.
To effectively implement this, the sending office must see to it that the sender’s portion of the advice have been properly filled-up and its particulars are understandable and informative with complete references.
1.2 The advice number portion shall follow the new coding system (2.1).
1.3 All other relevant information no specified provided for in the new advice form can be indicated in the remarks portion.
2. ADVICE NUMBERING SYSTEM
2.1 Each Office shall maintain a separate numbering series on the advice.
The sending/originating office shall observe the following format for the reference code:
Example : DAB-DA-95-01-001-BAT
(Debt Advice sent by DAB to Batangas Provincial Office in January 1995 with Advice No. 001)
Sender Code – represents the letter code of the office issuing the first advice (debit/credit advice as the case maybe.
Document Code - identifies the particular document whether it is a Debit Advice (DA) or a credit Advice (CA).
Year Code - represents the particular year of the transaction occurred.
Month Code - identifies the month the transaction occurred. Each month shall be represented by number starting from 01 for January and up to 12 for December.
Advice Number - represents number in the order of preparation for the period. The advice number shall be continuous starting from number one (1) at the beginning of each month.
Recipient Code - represents the letter code of the receiving office.
b. The receiving/responding office shall observe the following format for the reference code:
Example: BAT-CA-95-01-025
(Debit Advice of DAB was responded by Batangas Provincial Office in January 1995 with Credit Advice No. 025)
Receiving/Responding Code - represents the letter code of the office responding the advice.
Document Code - identifies the particular document whether it is a Debit Advice (DA) or a Credit Advice (CA).
Year Code - identifies the particular year the transaction occurred.
Month Code - identifies the month the transaction occurred. Each month shall be represented by number starting from 01 for January and up to 12 for December.
Advice Number - represents number it the order of preparation for the period. The advice number shall be continuous starting from number one (1) at the beginning of each month.
2.2 For easy reference and control purposes, the receiving office shall alays refer to the advice number of the sending office in responding advices.
2.3 Standard Office Codes
Each office shall have an assigned standard alpha code as presented in
Exhibit 2
.
3. COPY DISTRIBUTION AND TRANSMITTAL OF ADVICE FORM
3.1 The copy distribution and corresponding color code of the advice form is as follows:
Copy 1 (white) - Sending Office
3 (brown) - COA of Sending Office
3 (pink) - Clearing Office
4 (blue) - Receiving Office
5 (Green) - Clearing Office
6 (yellow) - Sending Office
3.2 Advices shall be sent simultaneously to the recipient office and the clearing office. Supporting documents shall be attached to Copy 1, 3, and 4 of the advice to be sent to recipient office. Copy 2 shall be forwarded to COA of the sending branch. Copy 4 shall be sent to the clearing office and Copy 5 retained as file copy of the issuing office.
3.3 Upon receipt of Copy 1, 3 and 4 of the advice, the recipient office shall accomplish the corresponding portion of the advice and send simultaneously Copy 1 to the issuing office and Copy 3 to the clearing office. Copy 4 shall be retained by the recipient office a file copy.
4. RECORDING OF ITEMS RECEIVED PRIOR TO RECEIPT OF ADVICE
The policy on which office should prepae and send the advice shall be strictly implemented. However, if an office has already received the item without the corresponding advice, same shall be recorded in the Advice Register Journal if the amount can be determined as supported with appropriate source documents such as bank tickets, bank statements, warehouse documents, receiving reports and radiograms. The corresponding entry shall be assigned a permanent advice number by the receiving office. The advice number of the issuing office shall be filled up upon reciept of the advice.
5. CLEARING OFFICE AND RECONCILIATION OF ACCOUNTS
5.1 Intra-regional transaction shall have the Regional Office as the clearing office.
Inter-regional transactions shall have the Central Office as the clearing office and shall not pass thru their respective regional offices. However, the regional offices shall be informed of these transactions thru radio message.
5.2 The intra-regional and inter-regional transactions shall not be recorded in the books of the clearing officeds. However, the clearing offices must maintain a file of advices received. Once an advice is responded by the recipient office, this advice shall be matched with the advice received and shalll be filed in a separate folder.
5.3 At the end of every month, the Accountant shall reconcile his/her inter-branch transactions and prepare a
Statement of Unresponded Advices
(Exhibit 3).
5.4 The Central Office and Regional Office as clearing offices shall likewise prepare a
Reconciliation Statement of Advices Received
(Exhibit 4) and provide a copy of the statement to concerned offices including COA of the originating branch for the latter to take immediate action.
The above statement shalll be the basis for the reconciliation entries to be made by the clearing office at the the end of the month. These reconciliation entries shall be reversed upon receipt of the responding advice from the receiving end. These reconciliation and reversal entries shall be taken up in the General Journal.
6. ACCOUNT CODES
6.1 The existing NFA Chart of Accounts shall be updated to include the following accounts:
Central Office
Field Office Account (FOA) - 8-71-399.20
Head Office Clearing Acount (HOCA) - 8-81-300.50
Regional Office
Head Office Account (HOA) - 8-81-399.20
Head Office Clearing Account (HOCA) - 8-81-399.50
Branch Office Transaction Account (BOTA) - 8-71-399.40
Regional Office Clearing Account (ROCA) - 8-71-399.50
Provincial Office
Head Office Account (HOA) - 8-81-399.20
Head Office Clearing Account (HOCA) - 8-81-399.50
Regional Office Transaction Account - 8-71-399.40
(ROTA)
Regional Office Clearing Account - 8-71-399.50
6.2 Description of Accounts
a. Field Office Acount (8-71-399.20) - to record transactions with any Regional or Provincial Office. The reciprocal account at the field office is Head Office Account (HOA).
b. Head Office Clearing Account (8-81-399.50) - to record reconciliation and reversal entries with Central Office as the clearing office.
For Regional Office
a. Head Office Account (8-81-399.20) - to record transactions with Central Office. The reciprocal account at Central Office is Field Office Account (FOA).
b. Head Office Clearing Account (8-81-399.50) - to record transactions with other Regional/Provincial Office of other regions with Central Office as the clearing office.
c. Branch Office Transaction Account (8-71-399.40) - to record transactions with its Provincial Offices. The corresponding reciprocal account of its Provincial Office is Regional Office Transaction Account (ROTA).
d. Regional Office Clearing Account (8-71-399.50) - to record reconciliation and reversal entries with the Regional Office as the clearing office.
For Provincial Office
a. Head Office Account (B-81-399.20) - to record transactions with Central Office. The corresponding reciprocal account of Central Office is Field Office Account (FOA).
b. Head Office Clearing Account (8-81-399.50) - to record transactions with other Regional/Provincial Office of other regions with Central Office as the clearing office.
c. Regional Office Transaction Account (8-71-399.40) - to record transactions with its Regional Office. The corresponding reciprocal account of its Regional Office is Branch Office Transaction Account (BOTA).
d. Regional Office Clearing Account (8-71-399.50) - to record transactions with other Provincial Office within its region with the Regional Office as the clearing office.
Please refer to
Exhibit 5
for Illustrative Examples.
7. SUBSIDIARY LEDGERS
7.1 The Central Office (Directorate for Accounting) shall maintain subsidiary ledgers for its Field Office Account (FOA) for fourteen (14) Regional Offices and eighty four (84) Provincial Offices.
7.2 The Regional Office shall maintain subsidiary ledgers for its Branch Office Transaction Account (BOTA) for all its provincial offices.
III. RESPONSIBILITIES
IV. FLOW CHART
Top Page
EXHIBITS
Exhibit 1 - Debit/Credit Advice Form
Alpha Codes Exhibit 2
Statement of Unresponded Advices
Reconciliation Statement of Advices Received
EXHIBIT 5 - ILLUSTRATIVE EXAMPLES