Standard Operating Procedures « FINANCE ACCOUNTING COACH | Free Online Accountant Reference Site

SOP: Treasury Function

In a medium to large organization, we normally would have a treasurer who reports to the Head of Finance or CFO

Hence, for uniformity and consistency purposes, it is important to establish a simple statement of policy on Treasury function.

The policy should basically encompass the following areas:

Banking
Petty Cash
Wire Transfer
Borrowings
Treasury Risk Management

Append below is a sample for Treasury [...]

SOP On Record Retention

It’s important to have a Statement of Policy on Record Retention.

This is particularly so where you have a number of subsidiaries in different countries where they need to comply with various local regulation like the Inland Revenue. By having a clear-cut policy and procedure, you can demonstrate to outsiders that from the Head Office’s view point [...]

SOP: Conducting Physical Stock-count

For many financial executives, inventory will take a major chunk of your company’s current asset. It’s therefore important that you should set up a clear policy and procedure for the conduct of the physical stock-count.
Broadly speaking, the policy and procedure of physical stock-count should consider the following areas:

a. Before Physical Stock-count,

b. During the Physical count,

c. After the count

Continue reading SOP: Conducting Physical Stock-count

SOP: Conflicts of Interest

It is very important to respect the rights of the employees to privacy in their personal activities and affairs. However, management needs to make known that the employees’ transactions and relationships with outside parties must be conducted at all times on a highly ethical basis and at arm’s length.

In conducting those relationships and transactions, the sole or primary consideration must be the best interest of the company. To achieve this, we need a Statement of Policy for this.

Append below is a sample which should be able to assist us to make known to the employees:

the importance of conflict of interests,
different kind of circumstances which can directly or indirectly leads to conflict of interest,
the consequences in the event of violation.

Continue reading SOP: Conflicts of Interest

SOP on Current Account or Inter-Company Accounts

This is my first article on Statement of Policy (SOP), so you might wonder why I’m starting with this SOP when there are a lot of other important SOPs.

Well, I choose this for two main reasons:

during my stint in a public listed company in Singapore, I was pulled into the Audit committee and was asked to resolve very substantial un-reconciled inter-company balances differences (well at that time, I just joined!)

this SOP practically applies to any company that has either a few local or overseas subsidiaries, whether it’s a trading, engineering or manufacturing concern.

Do you know how serious it is when all the un-reconciled items in the inter-companies accounts are not resolved?Your dearest external auditors might not have the comfort to express the true and fair view of the financial statements and the company’s internal control. Expenses might not have being accrued by the receiving company hence these “omitted” expenses are not properly matched with revenue and will therefore enhance the risk to the reporting of the financial statements.
The SOP or guideline if you wish to put up should have a clear policy and procedure to delineate the following key areas:

inter-Company agreement,
settlement ,
handling disputes,
reconciling and
inter-company cross border loans & financing,

Continue reading SOP on Current Account or Inter-Company Accounts

FINANCE ACCOUNTING COACH | Free Online Accountant Reference Site

SOP: Treasury Function

SOP On Record Retention

SOP: Conducting Physical Stock-count

SOP: Conflicts of Interest

SOP on Current Account or Inter-Company Accounts

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