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SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN

EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

Finance Policies and Procedures Manual


Use the Bizmanualz Finance Policy, Procedure, and Forms Manual to
fulfill your financial compliance requirements by establishing financial
controls and, at the same time, strengthen and improve your financial
processes for enhanced performance. Whether you are managing your
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Guide to preparing a well written manual


A Sample CFO Manual covering common
requirements and practices
36 Policies and 61 corresponding forms
Business Guide: Manage Your Business
from Start to Finish
10 Job Descriptions covering every
position referenced in the Manual
Complete Index

Hard Cover Book plus CD


containing all documents in
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Sample Policy from the Finance Policies and Procedures Manual


Treasury Management Section: Merchant Accounts

Document ID
TM1060Samp
le from the
finance
Policies and
Procedures
manual
includes an
example
procedure, a
list of topics,
forms anad
job
descriptions
Revision
0.0
Effective Date:
mm/dd/yyyy

Title
MERCHANT ACCOUNTS

Print Date
mm/dd/yyyy

Prepared By
Preparer's Name / Title
Reviewed By
Reviewer's Name / Title
Approved By
Final Approver's Name / Title

Date Prepared
mm/dd/yyyy
Date Reviewed
mm/dd/yyyy
Date Approved
mm/dd/yyyy

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

Policy:

The Company shall plan for, monitor, and review its


merchant accounts in order to ensure the greatest
value for the service.

Purpose:
To ensure the selection of a merchant account that
meets the Company's need to balance best service
and lowest cost.
This procedure applies to the Finance Department.
Scope:
Responsibiliti
es:

Definitions:

The Chief Financial Officer (CFO) is responsible for


overseeing the selection of merchant accounts and
for conducting periodic reviews of merchant
accounts.
Merchant Account Service provider that processes
credit card payments for a merchant (business), such
as our Company.
Chargeback Reversal of a credit card transaction;
can be accompanied by penalties and fees to the
merchant.
Discount Rate Fee paid by the merchant as a
percentage of the transaction amount (e.g., 3%).
Fixed Transaction Fee Flat fee paid by a merchant
on every transaction.
Holdback Percentage of transactions paid by the
merchant and held by the merchant account provider
to cover any transaction related dispute. Funds in the
"holdback account" are released to the merchant at a
predetermined time (e.g., after six (6) months).

Procedure:
MERCHANT ACCOUNT PLAN
1.1

The CFO shall periodically (e.g., annually) review the Company's use of
merchant accounts, to ensure that the Company is receiving the
required service level and that fees are competitive. A small reduction
in fees can result in significant overall savings, especially for high
volume and high dollar amount transactions; however, cost must be

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

balanced with the level of service. Credit card transactions must be


conducted swiftly and smoothly, and without interruption of service.
1.2

The CFO shall periodically review existing and potential merchant


account providers, considering and comparing attributes such as:

Monthly fixed fees;

Discount rates;

Fixed transaction fees;

Charge backs;

Termination fees and contract requirements;

Accuracy and timeliness of the existing merchant account's


processing and reporting; and
Return fees and policies.

1.3

The CFO shall create a total cost estimate for each month or quarter
based on fee information gathered (Section 1.2), using historical
merchant account use and projecting future use.

1.4

The CFO shall create a method for evaluating merchant account


service levels (for example, listing key service areas required by the
Company and rating availability of the service by existing and potential
merchant accounts). Examples of important service features include:

Charge[Type text][Type text] [Type text]backs;


Customer service availability (responsiveness, speed of
resolution);

Ease of use;

Reliability; and

Holdback policies.

1.5

Based on the review of overall fees and service levels (see Sections
1.1, 1.2), the CFO shall:
Continue the existing merchant account under the current terms;
Attempt to renegotiate terms with the existing merchant
account; or
Find and negotiate with an alternate merchant account provider.

MERCHANT ACCOUNT COMPARISONS


2.1

The CFO shall annually complete the TM1060-1 MERCHANT ACCOUNT


REVIEW with existing and potential merchant account providers fee
information.

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

2.2

The CFO shall calculate the estimated total fees per period (e.g.,
month, quarter) for existing and potential merchant account providers
and record the estimated total fees on TM1060-1. The CFO shall
consider the following when calculating estimates:

Information about the various merchant account fees;

Historical merchant account use;

Projected future merchant account use;

2.3

The CFO shall list and rate important service features of existing and
potential merchant account providers on the TM1060-1 MERCHANT
ACCOUNT REVIEW form (see Section 1.4).

MERCHANT ACCOUNT COMPARISON REVIEW


3.1

The CFO shall use the information on the TM1060-1 form to determine
if any action is required in the Companys merchant account provider
(see Section 1.5).

3.2

The CFO shall list reasons and justifications for the decision to
continue, renegotiate, or change merchant accounts on TM1060-1.

MERCHANT ACCOUNT IMPROVEMENTS


4.1

The CFO shall make changes and adjustments to its merchant


accounts, in accordance with the decision described on TM1060-1.

4.2

As part of the annual merchant provider review, the CFO shall


(re)evaluate the merchant provider evaluation process, to ensure its
continuing suitability and usefulness. The CFO shall be responsible for
making any recognized improvement to this procedure and the
associated form TM1060-1 to enhance the merchant account
review/selection process.

Effectiveness Criteria:

Lowest merchant account total fees

Effective merchant account service

Merchant account ease of use

References:
A. CFO Manual

Section 5.3.7 Merchant Accounts

Additional Resources:
A. Carroll, Jim, and Broadhead, Rick, Selling Online: How to Become a
Successful E-Commerce Merchant, Dearborn Trade, a Kaplan
Professional Company, 2001. ISBN-10 #0-7931-4517-1.

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

B. Ogden, Anthony L., What Every Business Should Know About Accepting
Credit Cards, BankCardLaw Media Corp., June, 2004. ISBN-10 # 09759-6050-4; ISBN-13 # 978-09759-6050-9.
C. Dont Fly By Night: The Inside Information on Merchant Accounts,
available at http://www.powerhombiz.com/vol39/merchant.htm.
D. Choosing an Internet Merchant Account, available at
http://www.findmyhosting.com/web-resources/Articles/internetmerchant.htm.
E. "Merchant Account 'How-To' Tips for Beginners", available at
http://www.goemerchant.com/getting_started.htm.
Forms/Records:

TM1060-1 MERCHANT ACCOUNT REVIEW

Meeting minutes and reports

Revision History:
Revisi
on
0.0

Date

Description of changes

mm/dd/yy
Initial Release
yy

Request
ed By

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

TM1060-1 MERCHANT ACCOUNT REVIEW


1. Merchant Account Fees

Merchant Account
Provider

Comments:

Fixed
Fees

Discount
Rate

Transaction
Fees

Termination
Fees

Misc.
Fees

Estimated Total
Fees (per period)

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

2. Merchant Account Services


Merchant Account Provider

Service
Feature 1

Service
Feature 2

List Specific Service Feature >

Comments:

Decisions, Justifications, and Actions for Merchant Accounts

Service
Feature 3

Service
Feature 4

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

Approval

Finance Policies and Procedures Manual:


40 Prewritten Policies and Procedures

1.
2.
3.
4.
5.
6.
7.

Finance Administration
Financial Objectives
Management Responsibility
Continuity Planning
Document Control
Record Control
Annual Stockholders Meetings
Board of Directors Meetings

8.
9.
10.
11.
12.
13.
14.
15.

Raising Capital
Business Plan
Capital Plan
Valuation
Bank Loans
Stock Offerings
Debt and Investment
Asset Acquisition
Leasing

16.
17.
18.
19.
20.
21.

Treasury Management
Working Capital
Cash Management
Inventory Management
Related Party Transactions
Foreign Exchange Management
Managing Bank Relationships

Treasury( Management Cont)


22. Merchant Accounts
23. Letters of Credit

24.
25.
26.
27.
28.
29.

Financial Statements
Financial Forecasting
Financial Reporting
Financial Statement Analysis
Financial Management Review
Financial Restatements
Financial Information Release

30.
31.
32.
33.
34.
35.
36.

Internal Controls
Sarbanes-Oxley Compliance
SSAE-16 Compliance
Risk Assessment
Risk Management
External Auditing
Internal Auditing
Corrective Action

SAMPLE FROM THE FINANCE POLICIES AND PROCEDURES MANUAL INCLUDES AN


EXAMPLE PROCEDURE, A LIST OF TOPICS, FORMS ANAD JOB DESCRIPTIONS

61 Corresponding Forms and Records


Finance Administration
1.
2.
3.
4.
1.
2.
3.
4.
5.
6.
7.
8.

Financial Objectives
Sample Management Review Agenda
Continuity Plan Worksheet
Document Request
Document Control Database
Sample Master File Guide Index
List of Finance Records
Record Retention Guidelines
Notice of Shareholders Meeting
Authorization of Proxy to Vote Shares
Minutes of Shareholders Meetings
Minutes of Board of Directors Meetings (example)

Raising Capital
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.

Business Plan
Capital Analysis
Capital Plan Worksheet
Capital Plan
Valuation Plan
Valuation Improvement Plan
Valuation History
Loan Application Checklist
Stock Offering Plan
Debt and Investment Plan
Debt and Investment Action Log
Asset Acquisition Criteria
Asses Acquisition Request/Worksheet
Lease/Buy Financial Analysis

23.
24.
25.
26.
27.

Treasury Management
Working Capital Plan
Cash Management Plan
Inventory Management Plan
Inventory Management Results
Related Party Transaction Policy & Conflict of Interest
Questionnaire

Job Descriptions:

28. Related Party Transaction


Questionnaire Log
29. Foreign Exchange Management Plan
30. Foreign Exchange Results
31. Banking Relationship Contact Management Log
32. Banking Relationship Meeting Agenda/Minutes
33. Merchant Account Review
34. Letter of Credit Checklist

35.
36.
37.
38.
39.
40.
41.
42.
43.

Financial Statements
Financial Forecasting Checklist
Financial Report Checklist
CEO/CFO Certification Checklist
Financial Analysis Plan
Financial Management Plan
Financial Management Meeting Agenda
Financial Restatement Checklist
Financial Information Request
Financial Information Releaset Log

44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.

Internal Controls
Sarbanes-Oxley Compliance Checklist
SSAE-16 Compliance Checklist
Risk Assessment/Management Worksheet
Sample Chart of Accounts
Internal Control Checklist
Corrective Action Plan
Audit Schedule
Audit Plan
Audit Checklist
Audit Opinion
Audit Report
Nonconformity Report
Corrective Action Request
Corrective Action Log

A complete job description is included for each of the 10 positions referenced in the
Finance Polices and Procedure Manual. Each position includes a summary description of the position, essential
duties and responsibilities, organizational relationships, a list of the procedures where the position is referenced,
specific qualifications, physical demands of the position, and work environment.
Board Member
Document Manager
Internal Audit Team Leader
Chief Executive Officer (CEO)
External Auditor (Independent
Internal Auditor- Accounting
Chief Financial Officer (CFO)
Auditor)
Risk Manager
Controller
Financial Manager