1. Introduction
  2. Credit and Payment of Invoices
  3. Credit on Field Purchase Orders
  4. Subcontract Invoices
  5. Petty Cash
  6. Petty Cash Commitments
  7. Advances
  8. Forecast of Funds
  9. Charges to Vendor for Overhead Costs X, Y, Z Account
  10. Assignment Conditions
  11. Approval of Expense Reports
  12. Inventories and Disposal of Office Furniture and Equipment

1. Introduction

The procedure for handling Field Accounting depends upon the type of contract or agreement between Company and the Client. Therefore, each job must be treated individually. The procedure for a project will be determined by the Manager Accounting and the Manager Construction of the Home Office, and will be incorporated in the Construction Coordination Procedure for that project.

2. Credit and Payment of Invoices

All invoices received (including invoices for payment from Petty Cash Funds), will be date stamped and registered in an invoice register (see Attachment 1) alphabetically organized by vendor, and should indicate:

  • Vendors name
  • Date received
  • Invoice number
  • Invoice date
  • Purchase Order number/Amendment
  • Total amount (excluding VAT)
  • VAT
  • Remarks
  • Date and transmittal number whenever invoice is transmitted to Bank or Client for payment.

Credit Invoices should be registered in red in the Invoice Register.

All invoices must be checked for calculation and totals.

Invoices must match with applicable MRN's and other back-up documentation. If no MRN is available and the invoice is due for payment, the Job Accountant will expedite it through the Material Supervisor.

All quantities and descriptions must be checked against back-up documents for materials, hours, services, charge, etc.

If there is a difference, the Material Supervisor, vendor, or other responsible persons should be contacted for revision to MRN, invoice or other relevant document.

Purchase Orders should be marked up when invoices are processed to avoid duplicate payments.

A copy invoice should never be paid or transmitted for payment. If the original invoice is lost, the vendor should re-issue this invoice. This is to avoid duplicate payments. If the vendor's or other third party's invoice is not correct as to quantity, unit or total cost, they must make the necessary correction by means of revised and/or credit invoice. The incorrect invoice should be returned to the vendor covered by a transmittal letter.

Under no circumstances should the Field Accountant or Auditor alter or correct an invoice, especially in cases where VAT (BTW) is mentioned.

When an invoice has been audited and verified for payment, the accounting block stamp should be put on the invoice and filled in. A bank giro or other payment document is prepared. If payment has to be effected by Client, then an invoice transmittal is prepared (invoice detail list form BN-US 472-1 may be used, Attachment 2).

After these documents have been approved for payment by the Company authorized person and/or Client and after payment has been made, the Job Accountant will post the invoice in the Invoice Register and prepare Statements of Field Expenditures.

Upon receipt of Statements of Field Expenditures, the Job Accountant will check payments against the payment documents transmitted, and if in order, will file these documents.

The Accounting Field Purchase Order file will contain:

  • Copy of Field Purchase Order
  • Copy of Request for Purchase
  • Copy of MRN, OS&D and/or OSR
  • Copy of Invoice submitted for payment
  • All correspondence pertaining to accounting

Prior to filing the copy Field Purchase Order and/or amendments, the Accountant will check the calculation and extensions.

The Accounting Field Purchase Order file will be set-up as follows:

Right side: The Purchase Order, request and Amendment.

Left side: All correspondence, MRN's, OS&D's, OSR's, copy invoices etc

3. Credit on Field Purchase Orders

The Job Accountant must maintain a reminder file on all outstanding credit payments to be received from vendors on Field Purchase Orders, OS&D claims or OSR's involving credits to ensure that the company receives credit payments on all items due. After receipt of the Credit Invoice from the vendor, the Job Accountant will process the Credit Invoice and attach to it any supporting documents such as OSR's, OS&D's, etc. If the Field Purchase Order has already been closed and a credit is due, the Purchase Order must be re-opened.

For supplies to subcontractors on site e.g. diesel oil, gasoline, oxygen, acetylene, telephone and printing facilities etc., the Job Accountant will issue an invoice against the vendor requesting payment by check or into the Field Bank Account. All invoices issued will be given a sequence number and registered in a "Company Invoice Register". Amounts received will be noted in this register and the appropriate account credited in the Field Expenditure Statement or Bank Expenditure Statement. If any checks issued to the company concerning Home Office Purchase Orders are received in the Field Office, they shall be transmitted immediately to the Home Office Accounting Department with all pertinent details. No cheques re­ceived by the Field Office concerning Home Office Procurement, etc., should be deposited to Field Bank Account or endorsed or cashed by field personnel. All checks must be made payable to "Company".

4. Subcontract Invoices

Invoices on field issued subcontracts are handled in the same manner as material invoices except that the Site Engineer's approval on the invoice is substituted for the material receipt. The subcontractor will prepare his invoice in the number of copies as stated in the Purchase Order, backed up by a copy of the signed Progress Certificate, Escalation, if applicable, shall be invoiced separately. Terms of contract regarding separation of labor costs from materials, etc., must be closely monitored.

Invoices for Home Office Subcontracts are signed by the Site Engi­neer only when related to receipt of materials or services as billed, and then forwarded to Home Office Accounting Department. Balance of audit on the Home Office Subcontract is performed in the Home Office.

All purchase orders, amendments, and invoices submitted for payment will be registered on Commitments/Expenditure cards, (Attachment 3). These cards will be maintained by Purchase Order number and will show cumulative totals of Commitments and Expenditures so that a direct comparison of "Commitments" and "Expenditures" can be made.

It may sometimes occur according to the type of contract that invoices will be paid at site.

Detailed processing of invoices will be described in the Construc­tion Coordination Procedure.

5. Petty Cash

The Petty Cash Fund will be established by the Office Manager in an amount to be agreed upon with the Home Office Accounting Department. The fund should be set-up gradually and in an amount not to exceed actual requirements. The fund is initially established by a transfer of funds from the Client's Bank Account or from the Home Office Accounting Department to the Field Bank Account.

Each Petty Cash purchase expenditure or receipt is supported by the paid receipt or signed petty cash voucher (Attachment 4). Petty cash receipts must show the VAT (BTW) amount. The voucher is filled out in detail, including the Account Code affected by the transaction. Every voucher will be signed by the Office Manager and Project Construction Manager. This fund is not to be used as a drawing account for cash advances to field personnel unless authorized by the Project Construction Manager. As required, the Petty Cash Fund is maintained by means of withdrawals from the bank account, author­ized by the Office Manager and countersigned by the Project Con­struction Manager.

It is the Project Construction Manager's responsibility to ensure that the cash-on-hand ledger is correct prior to authorizing extra funds.

Every Monday the cash slips for the previous week are gathered and listed on the "Statement of Field Expenditures not covered by Purchase Orders" (Attachment 5) or the "Statement of Field Expendi­tures covered by Purchase Orders" (Attachment 6).

Before compiling the Statement of Field Expenditures, the Job Accountant will check all vouchers against the Cash Book. He will then prepare a statement signed by the Project Construction Manager showing the Cash Balance on hand at closing time the previous Friday. If invoices on Field Purchase Orders are paid from Petty Cash Funds, a notation must be made to this effect in the Invoice Register. Furthermore, he will prepare an operating account report, (Attachment 7) each month, to be accompanied by a Concilliation Statement signed by the Office Manager and the Project Construction Manager. He will attach to this statement a copy of the Bank State­ment showing the Bank Balance at the end of the month. This Concil­liation Statement may also serve as a Request for Funds from Home Office Accounting Department. In this case, the money required to replenish the Bank Account should be noted.

A cash shortage or overage is resolved by issuing a Petty Cash voucher in the amount of the shortage or overage (Debit or Credit) with an explicit explanation signed/approved by the Project Con­struction Manager.

6. Petty Cash Commitments

On the cut-off date for monthly reports, the Job Accountant will submit to the Project Construction Manager a cumulative listing of all Petty Cash expenditures by Company Code of Accounts.

7. Advances

Under no circumstance is it permitted for any employee to become indebted through one or more advances from the Petty Cash or any other source for an amount in excess of Dfl. 1,000.= without prior approval from the Home Office Construction Department.

8. Forecast of Funds

To finance field and if applicable payroll expenditures, forecasting of funds shall be done periodically and as outlined in the Construc­tion Coordination Procedure for the project.

9. Charges to Vendor for Overhead Costs X, Y, Z Account Codes

For charges to vendors or subcontractors on X, Y and Z accounts, such as telephone, telex, printing services and rental of cranes etc., the Office Manager will accumulate these charges and have vendor/subcontractor approval for these costs monthly. He will then prepare and mail monthly an invoice to vendor for the costs involved including the VAT (BTW) tax, which must be specified separately. To the costs, he will add a percentage for overheads. All invoices must be backed up by copies of supporting documents, i.e., approved delivery slips, approved AVO's etc.

Invoices will be numbered sequentially, INV-001, INV-002 etc. An Outgoing Invoice Register will be maintained. Whenever payments of above invoices are made, the Office Manager will credit the subject account and further follow the accounting procedure for credit invoices. He will also mark up the Outgoing Invoice Register with the payment date.

10. Assignment Conditions

For each assignment, the employee will receive a so called "Assign­ment Agreement" which forms a temporary attachment to his employment agreement with the Company.

In such Assignment Agreement, all specific conditions such as assignment allowances, travel and relocation, as applicable for the project are specified.

Prior to his departure for the new assignment, the employee reviews his Assignment Agreement at the Home Office with representatives from the Construction and Personnel Departments and signs for acceptance. A copy of the Assignment Agreement is sent to the Project Construction Manager of the project for his reference and file. Any questions that arise in the field on individual Assignment Agreements should be referred to the Project Construction Manager who, as and when required, shall consult with the Home Office Construction Department.

In case assignment conditions are revised during the course of the project, such revisions shall be laid down in an attachment to each individual's "Assignment Agreement" which will be issued by the Home Office Personnel Department.

11. Approval of Expense Reports

Unless otherwise specified in the Field Coordination Procedure for the project, expense reports for relocation costs that occurred in the Home Office, e.g. air tickets, removal expenses etc., shall be sent to the Home Office Construction Department for approval. Where necessary they will be returned to the site for further processing.

Expense reports for salary related expenses/allowances, e.g. the settling-in allowance shall also be sent to Home Office Construction for approval and further processing.

Generally all other field expense reports that are in accordance with individual assignment conditions as per the foreign assignment agreement or Company established policies and procedures shall be signed by the Office Manager for correctness and approved by the Project Construction Manager. Expense reports from the Project Construction Manager require the approval of the Manager of Con­struction. Reference is made also to Expense Report Procedure (Attachment 10).

12. Inventories and Disposal of Office Furniture and Equipment

From the start and throughout the project the Office Manager, in cooperation with the Warehouse Supervisor, shall maintain a priced inventory of all buildings, furniture, office equipment, major tools, automobiles and any other valuable items purchased for the project.

On the basis of this inventory, the Warehouse Supervisor shall make regular inventory checks and report any shortages to the Office Manager. Upon completion of the project the disposal of the inventory shall be coordinated with the Home Office Construction Depart­ment, or with the client for items that are client's property contractually.

In principle, where the property is to be sold the Office Manager is responsible for obtaining the best price on the basis of at least three offers from interested bidders. Preference should be given to selling on an item by item basis to obtain maximum return. If this is not feasible, selling on a total lot basis may be done.

In any case, special consideration must be given to extra expensive items, such as construction equipment, if any and automobiles. For the disposal of surplus A-T materials, special instructions shall be obtained from the Project Manager and the Procurement Manager, or the Client where applicable.

13. Administation File Summary

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