SOP Library
SOP NO:
FS-GP13
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
Financial Services (FS)
Activity:
General Accounting Plan (FS-GP)
Title:
Revised SOP on Interbranch Accounting System
Date Approved/Issued:
04/21/1997
Date Effective:
03/01/1997
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A. General Policies
1.
Interbranch transactions shall no longer be classified as to Cash, Inventory and Fixed Assets.
2.
All interbranch accounts shall be reclassified from the Receivable and Payable Accounts to Equity Accounts. The major account code shall be
8-97-800
and GL account codes shall be from 8-97-801 to 810 while for the
Subsidiary Ledger Account Codes
.
3.
The originating office thru the accounting section shall immediately send wire regarding fund remittances and receipt/transfer of Fixed Assets.
4.
It shall be the responsibility of the concerned unit heads (Cashier/Supply Officer/Grains Operations Officer) to immediately furnish the accounting section of the required documents covering interbranch transactions.
5.
Debit/Credit Advice
shall still be prepared as source document for recording of transaction in the Advice Register Journal (ARJ). However, advices for fund remittances and transfer of fixed assets shall no longer be routed.
6.
As a general rule, only transactions covering real or Balance Sheet accounts shall pass thru inter-branch accounts.
Expenses paid by Central Office for Administrative and Operating Expenses of field offices shall be recorded at Central Office using field office cost centers (Regionalized) and shall no longer pass thru interbranch accounts except those expenses incurred in connection with importation activity, stock insurance and those with material amount which will affect the Field Office’s Profit and Loss Statement.
7.
Interbranch payment of expenses shall follow billing procedures as defined in this guidelines.
8.
Inter-regional transactions (transactions between offices belonging to different regions) shall have the Department for Accounting Services as the clearing office.
Intra-regional transactions (transactions between provincial offices within the region) shall have the regional office as the clearing office.
B.
Charts of Accounts
1.
Reclassification of Account
The use of the existing interbranch accounts shall prevail but shall adopt new account codes as follows:
Central Office
FROM
TO
Field Office Account (FOA) 8-71-399.20 8-97-801
Regional Office
Head Office Account (HOA) 8-81-399.20 8-97-802
Head Office Clearing Account (HOCA) 8-81-399.50 8-97-803
Branch Office Transaction Account (BOTA)8-71-399.40 8-97-804
Provincial Office
Head Office Account (HOA) 8-81-399.20 8-97-802
Head Office Clearing Account (HOCA) 8-81-399.50 8-97-803
Regional Office Transaction Account (ROTA) 8-71-399.40 8-97-805
Regional Office Clearing Account (ROCA) 8-71-399.50 8-97-806
This includes old interbranch Accounts as follows
:
Regional Office Accounts (ROA) 8-81-399.10 8-97-809
Provincial Office Accounts (POA) 8-71-399.10 8-97-808
Central Office Clearing Account (COCA)8-81-399 8-97-810
Branch Office Clearing Account (BOCA) 8-71-399 8-97-807
2.
Description of Accounts
For Central Office
Field Office Account
(FOA)
- to record transactions with any regional or provincial office. The reciprocal account at the R.O./P.O is Head office Account (HOA).
For Regional Office
Head Office Account
(
HOA
) - to record transactions with C.O. The reciprocal account at the C.O. is Field Office Account (FOA).
Head Office Clearing Account
(HOCA
) - to record transactions with other regional/provincial office of other regions with Central Office as the clearing office.
Branch Office Transaction Account
(
BOTA
) - to record transactions with its provincial offices. The corresponding reciprocal account of its provincial office is Regional Office Transaction Account (ROTA).
For Provincial Office
Head Office Account
(HOA)
- to record transactions with Central Office. The corresponding reciprocal account of Central Office is FOA.
Head Office Clearing Account
(
HOCA
) - to record transactions with other Regional/Provincial Office of other regions with Central Office as the clearing office.
Regional Office Transaction Account
(
ROTA
)- to record transactions with its Regional Office. The corresponding reciprocal account of its Regional Office is Branch Office Transaction Account (BOTA).
Regional Office Clearing Account
(
ROCA
)- to record transactions with other Provincial Office within its region with the Regional Office as the clearing office.
C.
Documentation of Interbranch Transactions
1. Interbranch transactions shall be supported with the following documents:
Supporting Documents_
________
Transactions Originating Office Receiving Office
Fund Remittances Bank debit memo Bank credit memo
Bank Passbook Bank Passbook
Inventories-dispersal Warehouse Stock Issue (WSI) Warehouse Stock Receipt (WSR) Bill of Lading Bill of Lading
Issuance and Receipt of Statement of Supplies & Verified Statement of Supplies &
Supplies and materials Materials Issued Materials Issued (by originating office)
Issuance and Receipt of Fixed Assets Issuance Fixed Assets Receiving
Fixed Assets Report (FAIR) Report (FARR)
Others Disbursement Voucher Wire/Communications
Official Receipt received from Wire/communication sent originating office
to receiving office
2.
As interbranch transaction occurs, the issuing office shall immediately send wire messages to receiving office.
2.1.
The wire shall be clear and concise and shall contain the transaction details necessary for the recording of inter-branch transaction as follows:
Cash remittances
Amount of Remittance Bank/Fund Account
Date of remittance Bank branch
Fixed Asset Issuance
Date of Issuance Estimated Life
FAIR Remaining Life
Serial Number Amount of Accumulated
Description Depreciation to date
Unit Cost/Total Cost
2.2.
All wire messages/communications regarding cash remittances/fixed assets transactions shall be addressed to Heads of Office Attention: Regional/Provincial Accountant/Gen. Accounting Division.
2.3
The General Accounting Division/Regional/Provincial Accountant shall closely coordinate with concerned operating units/sections (i.e. operations, property, cashiering) regarding interbranch transactions.
2.4.
The DAS/Regional/Provincial Accountants shall ensure that wire messages regarding interbranch transactions are complete as to necessary details.
3. Advice Numbering System
The following numbering system shall be used for Debit/Credit Advices:
Sending:
0000-00 - 00 - 00 - 00
! ! ! ! !___ Recipient Code
! ! ! !
! ! ! !__ Advice Number
! ! !
! ! !__ Month Code
! !
! !__ Year Code
!
!____ Document/Sender Code
Example: DCO-97-01-01-BAT
(Debit Advice sent by DAS to Batangas Provincial Office
in January 1997 with Advice No. 01)
a. Recipient Code - represents the letter code of the receiving office.
b. 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.
c. 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.
d. Year Code - represents the particular year the transaction occurred.
e. Document/Sender Code - identifies the particular documents whether it is a Debit Advice (DA) or a Credit Advice (CA).
Receiving
0000-00 - 00 - 00 - 00
! ! ! ! !___ Sender Code
! ! ! !
! ! ! !__ Advice Number
! ! !
! ! !__ Month Code
! !
! !__ Year Code
!
!____ Document/Receiving Code
Example: CBAT-97-01-11-CO
(Debit Advice of DAS responded by Batangas Provincial
Office in January 1997 with Credit Advice No. 11)
a. Sender Code - represents the letter code of the office issuing the
first advice (debit/credit advice as the case maybe).
b. 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.
c. 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.
d. Year Code - represents the particular year the transaction occurred.
e. Document/Receiving Code - identifies the particular documents whether
it is a Debit Advice (DA) or a Credit Advice (CA).
4. The advice shall be reviewed and approved for entry by the Division Chief/Sr.
Accounting Specialist before same shall beposted in the ARJ.
D. Interbranch Payment of Expenses and Billing Procedures
1. As a general rule, expenses shall not be charged thru the reciprocal accounts.
2. Telephone bills and other expenses amounting to P1,000.00 and below which have
been incurred by one office but paid by another office shall be shouldered by the
paying office. Personal calls shall be collected/billed directly to the concerned official/
employee.
3. Billing of expenses shall be applicable only to the following expenses:
- gas and oil amounting to more than P1,000.00
- discretionary expenses
- training expenses
4. The paying office shall secure Acknowledgement of Expense to be approved by the head of concerned department/office to be used as basis for billing of expenses. Expenses not acknowledged shall be shouldered by the paying office.
5. Payment of expenses chargeable to other office shall initially be recorded as expense by the paying office. A reclassification entry shall be made to Advances account based on bill sent.
6. Payment of bills shall be made thru check payment.
7. Pro-forma Journal entries:
Paying Office Receiving Office
a. Upon payment of expense
DR: Expense - Cost Center xxx
CR: Vouchers Payable/Cash xxx
b. Upon billing
DR: Advances to ______ xxx DR: Expenses xxx
CR: Expenses - Cost Center xxx
CR: Advances from _______ xxx
c. Upon receipt of payment Upon payment thru check
DR: Cash xxx DR: Advances from _____ xxx
CR: Advances to ______ xxx CR: Cash xxx
E. Books of Accounts
1. Advice Register Journal
All interbranch transactions shall be recorded in the Advice Register Journal (ARJ).
Interbranch transactions which have been recorded in the other books of original entry,
shall also be recorded in the ARJ as memorandum entry.
2. Subsidiary Ledgers
2.1 The Department for Accounting Services (DAS) - C. O. shall maintain subsidiary
ledgers for its field office account (FOA) for fourteen (14) regional Offices and eighty
four (84) provincial offices.
2.2 The Regional Offices shall maintain subsidiary ledgers for its Branch Office
Transaction Account (BOTA) for all its provincial offices.
2.3 The Provincial Office shall maintain subsidiary ledgers for their Head Office Clearing
Account (HOCA) and Regional Office Clearing Account (ROCA).
2.4 Monthly debit and credit totals of the Subsidiary Ledgers shall be reconciled
with balances of the General Ledger Control Account.
3. Reclassification of Account Balances from Receivable/Payable Accounts to
Equity Accounts
3.1 All inter-branch account balances as of March 1, 1997 under the Receivable
and Payable Accounts shall be reclassified under the Equity Accounts.
3.2 The existing balances under the ROA-POA and COCA-BOCA shall likewise
be reclassified to the new Account Codes. Any existing variances shall be
reconciled.
3.3 The accounting entries to reclassify interbranch accounts shall be as follows:
a. Central Office Books
DR CR
8-71-399 Receivable-BOCA (xxx)
8-71-399.20 Receivable-FOA (xxx)
8-97-807 Equity-BOCA (xxx)
8-97-801 Equity-FOA (xxx)
b. R.O. Books
8-71-399.10 Receivable-POA (xxx)
8-71-399.40 Receivable-BOTA (xxx)
8-97-808 Equity-POA (xxx)
-97-804 Equity-BOTA (xxx)
8-81-399 Liabilities-COCA (xxx)
8-81-399.20 Liabilities-HOA (xxx)
8-81-399.50 Liabilities-HOCA (xxx)
8-97-810 Equity-COCA xxx
8-97-802 Equity-HOA xxx
8-97-803 Equity-HOCA xxx
c. P.O. Books
8-71-399.50 Receivable-ROCA (xxx)
8-97-806 Equity-ROCA (xxx)
8-81-399.10 Liabilities-ROA (xxx)
8-81-399.20 Liabilities-HOA (xxx)
8-71-399.30 Receivable-ROTA (xxx)
8-81-399.50 Liabilities-HOCA (xxx)
8-97-809 Equity-ROA xxx
8-97-802 Equity-HOA xxx
8-97-805 Equity-ROTA xxx
8-97-803 Equity-HOCA xxx
F. Reporting of Interbranch Transactions
A
Schedule of Interbranch Transactions
shall be prepared twice a month indicating the interbranch transaction for the two week period. Same shall be submitted every 16th day of the month and every 2nd day of the succeeding month to the originating and receiving office. These schedules shall serve as basis for confirmation and reconciliation on any floatation/variance that may arise within the reporting period.
G. Reconciliation of Interbranch Accounts
1. The intra-regional and inter-regional transactions shall not be recorded in the books of
the clearing offices. However, it shall be the responsibility of the clearing
offices to monitor and reconcile interbranch accounts.
2. The C.O. and R.O. as clearing offices shall prepare a reconciliation statement to
determine variances that may arise between the reciprocal accounts and inform the
concerned offices of the variance(s) to effect the necessary adjustments.
3. The Regional Office shall prepare elimination and reconciling entries to eliminate the
variance of the reciprocal accounts. These elimination/reconciling entries shall be
reversed at the beginning of the next accounting period. For purposes of preparing
consolidated financial statements, the Central Office/Regional Offices shall present
the net effect of the interbranch accounts in the equity portion.
H. Pro-forma Journal Entries
DR CR DR CR
1. To record remittance
a. From Central Office to Field Office
C.O. Books F.O. Books
CR: FOA-Reg./Prov. xxx
DR: Expense - Bank Charges xxx
DR/CR: Cash in Bank (xxx) xxx*
* For the Bank Charges
b. From Field Office to C.O.
DR: HOA xxx
DR: Expense-
Bank Charges xxx
CR: Cash in Bank xxx
c. Regional Office to Provincial Office Regional Office
DR: BOTA-Prov. A xxx
DR: Expense-Bank
Charges xxx
No entry to C.O. books DR/CR: Cash in Bank (xxx) xxx
Province A
DR: Cash in Bank xxx
CR: ROTA xxx
2. To record Issuance/Receipts of Supplies Inventory and/or Fixed Assets
a. From C.O. to F.O.
DR/CR: FOA xxx xxx DR: Appropriate Asset
Account xxx
DR: Appropriate Asset Account (xxx) DR/CR: HOA xxx xxx
CR: Accumulated Depreciation- CR: Accumulated
-Appropriate Asset Acct. (xxx) -Appropriate Asset Acct. xxx
-Appropriate Asset Acct. (xxx)
b. From F.O. to C.O.
DR: Appropriate Asset Account xxx DR/CR: HOA xxx xxx
DR/CR: FOA xxx xxx CR: Appropriate Asset Account xxx
CR: Accumulated Depreciation xxx CR: Accumulated Depreciation
-Appropriate Asset Acct. (xxx)
c. Regional Office to Provincial Office
R.O. Sender:
NOT ENTRY to C.O. BOOKS DR/CR: BOTA xxx xxx
DR: Appropriate Asset Account (xxx)
CR: Accumulated Depreciation
-Appropriate Asset Acct. (xxx)
P.O. Recipient
DR: Appropriate Asset
Account xxx
DR/CR: ROTA xxx xxx
CR: Accumulated Depreciation
-Appropriate Asset Acct xxx
3. To record the Dispersal and Transfer-In of Stocks
a. Within the Region
ORIGINATING/SENDER RECEIVING/RECIPIENT
Province A Books Province B Books
DR: ROCA -Prov-B xxx DR: Items for Sale-Misc.
Inventory xxx
CR: Items for Sale-Misc. Invty. xxx DR: Spillages xxx
CR: ROCA - Prov. A xxx
b. Outside the Region
DR: HOCA-Reg. II-Prov.A xxx DR: Items for Sale-Misc.
Inventory xxx
CR: Items for Sale-Misc .Invty. xxx DR: Spillages xxx
CR: HOCA - Reg. I-Prov. A xxx
III. RESPONSIBILITIES
RESPONSIBILITIES
ORIGINATING RECEIVING
A.
Remittance to Field Office
A.
Receipt of fund transfer from C.O.
Application for Bank Transfer and/or Bank Receipt of remittance from C.O.
Debit Memo
DTBFM - C. O.
Cashier - F.O.
- Accomplishes the fund transfer through - Coordinates with the bank immediately
the banks; upon receipt of the wire, re: Fund remit-
tance from C.O.;
- Submits daily to the DAS a copy of the - Secures bank tickets/bank credit memo
application for bank transfer; and updates passbook as soon as
transaction arises;
- Secures bank credit memo/updates passbook - Furnishes accounting section the bank
and submits to DAS immediately; ticket/debit memo or the passbook daily
- Sends wire to F. O.
DAS - C. O
.
Accounting Section-FO
- Prepares debit advice and FAX - Immediately upon receipt of bank debit
source documents memo (bank ticket)/prepares wire
confirmation/Credit Advice and encodes
the transaction in ARJ
- Encodes the transactions at IBAJ
and then memo entry in ARJ
B.
Stock Dispersal and Transfer-In
Dispersal (Issues) Transfer-In (Receipt)
Sr. Grains Operations Officer (WS II) Sr. Grains Operations Officer (WS II)
- Prepares the documents for the dispersal - Receives the stocks together with the
activity (WSI); documents;
- Issues the stocks and validates the - Prepares the required documents for the
documents prepared by the Whse. Assistant; receipt of stocks;
- Submits to accounting section list of - Submits to the Accounting Section the
previous day transaction together with WSR (accounting copy) duly validated
the documents. by the SGOO/WS II, at the first hour
of the following day (on or before
9:00 AM);
Accounting Section - F.O.
Accounting Section F.O.
- Assigns cost based on book value and - Coordinates with the operation section
wire cost to the receiving office; re: wire from the originating office
or call originating office, in case
the same has not been received;
- Prepares Debit Advice and records same - Records the receipt of stocks based on
in the ARJ; the WSR and apply the unit cost
wired by the originating office;
- Sends advice to the receiving province - Upon receipt from the originating office,
cc: Central/Regional offices adjust the unit cost, if any and records
the spillages:
- Informs regional office/central office
for material incurrence of spillages.
For interbranch transfers of inventories, the Provincial Accountants of the
issuing province shall ensure the correctness of the total cost of stocks
transferred. On the other hand, the Provincial Accountant of the
receiving office shall ensure that the stocks received plus
spillages are recorded at the total cost transferred by the
issuing office.
Example: NFA Batangas issued 500 bags or 25,000 Net kilogram of rice to
NFA Calapan at P10.00/kilo or total cost of P250,000.00
Books of NFA Batangas
DR: ROCA 250,000
CR: Inventories 250,000
Books of NFA Calapan
DR: Inventories (24,000 kilos
received) 240,000
DR: Spillages (or Appropriate
account if chargeable
against carrier) 10,000
CR: ROCA 250,000
Incurrence of material spillages shall be immediately reported to the
regional/central office for proper action
C. Receipt and Issuance of Fixed Assets
Issuance of Fixed Assets Receipt of Fixed Assets
GSD Supply Officer
Supply Officer- F. O.
- Issues the fixed assets and prepares - Receives the fixed asset and shall see to
the FAIR. If asset is not new it that the item is in order and ensures
coordinates with DAS/Accounting Section that data per supporting documents are
for the cost and accumulated depareciation; complete;
- Sends/ships the item together with the - Acknowledges the receipt of the item by
FAIR; issuing a FARR (in three copies);
- Furnishes DAS/accounting section a copy - Furnishes the Accounting Section of the
of the FAIR on same day the fixed assets original of the FARR, the duplicate
for attachment to the FAIR, for GSD or
Supply Officer file.
DAS/Accounting Section
DAS/Accounting Section
- Sends wire/FAX FAIR to receiving office - Sends wire confirmation to issuing office;
- Prepares debit advice based on FAIR and - Prepares credit advices based on FARR
records same in the ARJ. and records in ARJ.
Failure on the part of responsible officials to act immediately or to send necessary
information regarding interbranch transactions to concerned offices shall be
considered a violation of this SOP, and shall in accordance with P.D. 807 and
RA 6713, subject them to the administrative offense of violation of Reasonable Office
Rules and Regulations and shall,upon conviction, suffer the penalty of Reprimand,
Suspension or Dismissal, as the case may be.
This sanction is being implemented to minimize and if possible, extinguish variances
on the interbranch transactions.
IV. FLOW CHART
Top Page
EXHIBITS
Schedule of Interbranch Transactions
Subsidiary Ledger Account Codes
Debit/Credit Advice Form