Mile Inn Systems Design and Installation

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Table of Contents
Glossary of Acronyms
List of Tables
Glossary of Terms
Flowcharting Guidelines and Symbols
Appendixes
SECTION 1 INTRODUCTION
Company
Industry
Company Overview
Form of Organization
Services/Products Offered
Corporate Social Responsibilities
Accounting Information System
Objectives of Accounting Information System
SECTION 2 BUSINESS ORGANIZATION
Structures
Department
Personnel Duties and Responsibilities
SECTION 3 SYSTEMS OVERVIEW
Control Activities
Flowchart
Basic Features
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General Accounting Plan
System Software Plan
SECTION 4 BOOK OF ACCOUNTS
Overview
Description
SECTION 5 REVENUE SUBSYSTEM
Overview
Internal Control
Flowchart and Narrative
SECTION 6 EXPENDITURE SUBSYSTEM
Overview
Internal Control
SECTION 7 PAYROLL SUBSYSTEM
Overview
Internal Control

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SECTION 8 FINANCING SUBSYSTEM
Overview
Internal Control
SECTION 9 INVESTING SUBSYSTEM
Overview
Internal Control
SECTION 10 BIR/TAX/GOVERNMENT COMPLIANCE SUBSYSTEM
Overview
Internal Control
SECTION 11 GENERAL LEDGER SUBSYSTEM
Overview
Internal Control

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SECTION 12 FINANCIAL REPORTING
Overview
Financial Statements Components
Pro-forma Financial Statements
SECTION 13 CHART OF ACCOUNTS
Overview of the Coding Structure
List of Accounts
Description of Accounts
Forms and Documents
Conclusion
Recommendation
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SECTION 1. INTRODUCTION
COMPANY BACKGROUND AND HISTORY
Mile Inn is one of the service lines owned by YDM9 Corporation located at
Lucrene Street, Helvetia Heights, Bacolod City. It started its venture on hotel
operations last October 2016. As a tourist inn, it provides lodging, food and
refreshment, and accommodation for travellers and customers.
Under YDM9 Corporation, a family-owned corporation established in 2016,
started its business in a retail industry, a grocery store, as sole proprietor for years. In
time, it decided to venture out as a distributor or dealer of Coca Cola Products.
Eventually, having the desire to expand, the owners dropped the distribution channel
and engaged in another business opportunity which is in the hospitality industry, Mile
Inn. This resulted to a new line of business – a cafeteria and a laundry shop. Having
these multiple service lines, it decided to incorporate.
THE HOTEL AND RESTAURANT INDUSTRY
The Hotel and Restaurant Industry is one the branches of the Hospitality
Industry which is composed of broad categories of fields within which lodging, event
planning, theme parks, transportation, cruise line, and additional fields that
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consequently forms part the tourism industry. This multibillion-dollar industry depends
on the availability of leisure and disposable income.
The Hospitality Industry is mainly concerned with providing accommodations,
meals, personal services and comfort that caters for both the travelling public, nearby
non-resident public and permanent residents.
The hospitality industry started in France at the beginning of the fifteenth
century. Localized geographic growth caused the improvement of the industry. As the
industry continues, the law eventually required each company engage in the industry to
keep a register of its operations. The first hotel to open has been operated by a family
for forty-six generations in AD 707.
In looking at various industries, barriers to entry by newcomers and
competitive advantages between current players are very important. Among other
things, hospitality industry players find advantage in old classics such as location,
initial and on-going investment support reflected in the material upkeep of facilities
and the luxuries located therein. Characteristics of the personnel working in direct
contact with the customers are also very important. The authenticity, professionalism,
and actual concern for the happiness and well-being of the customers that is
communicated by successful organizations is a clear competitive advantage.
The primary purpose of hotels is to provide travellers and tourists with shelter,
food, refreshment, and similar services and goods, offering on a commercial basis
things that are customarily furnished within households but unavailable to people on a
journey away from home. Historically, hotels have also taken on many other functions,
serving as business exchanges, centers of sociability, places of public assembly and

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deliberation, decorative showcases, political headquarters, vacation spots, and
permanent residences. The hotel as an institution, and hotels as an industry, has
transformed travel, hastened the settlement of the continent, and extended the influence
of urban culture.
The Hotel Industry is perhaps one of the oldest commercial endeavours in the
world. The emergence of the hotel as a significant commercial institution, however, is
a development of the past few centuries. The location of the hotels had always been
related to the transportation available. During colonial times, hotels were usually
situated in seaport towns, but by the end of the 18th centuries, when the stagecoach
had increased travel within the U.S., many inns and taverns were constructed to offer
lodgings along highway routes. After the construction of railways in the 19th centuries,
large hotels were built near railroad stations to accommodate railway travellers.
Standards of comfort rose and services became appreciable and in the large cities, the
types of lodging provided by some hotels became luxurious.
The leader in the Hotel Industry was taken by the emerging nations of Europe,
especially Switzerland, but the real growth of modern hotel industry took place in the
USA with the inception of "City Hotel" in New York in 1794. Another significant
trend begun in the 1920s was towards corporate hotels than individual ownership of
hotels. This was the result of the steadily increasing costs of building and operating
hotels
During World War II the hotel business flourished. Existing establishments
were occupied nearly to capacity at all times but no new hotels were built. Because of
the growing importance of automobile travel soon after World War II, almost all the
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new hotels built then were located near highways. By the late 1950s motels began to
rival hotels by offering a broader range of services and facilities. Motels have
increased greatly, and the number of hotels had somewhat decreased. Low hotel
occupancy rates in the 1970s led to the development of budget motels, with cheaper
lodging and fewer amenities. Bed and breakfast and country inns have also grown in
popularity since the 1970s.
The restaurant as we know it today, a place where people come to eat and drink
and socialize, is credited to the French Revolution. The idea of selling food for profit
goes back as far as the earliest civilization.
It can be traced back to the 18th Century. Displaced chefs from aristocratic
households set the precedent of private dining, a la carte menus and gourmet food,
marking the rise of fine dining. The 19th Century brought huge changes in travel,
connecting cities by railway, increasing tourism travel, helping establish luxury dining
destinations in Europe and abroad. The term restaurant itself is French, once used to
describe the rich bouillons served at taverns and public houses to restore the spirits and
relieve ailments.
Following the French Revolution at the end of the 18th Century, unemployed
chefs from aristocratic households began opening their own restaurants. They added
touches of the upper class to their establishments. Guests did not have to take their
meals at a common table, as was typical of taverns and roadside inns. Instead they had
private tables, held by reservations which were then a new concept. They dined with
fine china and cutlery, and tablecloths, all trademarks of modern day fine dining.
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Menus were framed and at the end of the meal, guests were presented with a check,
tallying the amount of their bill.
THE HOTEL AND RESTAURANT INDUSTRY IN THE COUNTRY
The hospitality sector in the Philippines is a flourishing line of business that
forms a big part in the income generation of the country. It has been forecasted to have
impressive growth and investment in the luxury sector with close to 37% growth in the
existing supply, which includes internationally known brands.
Moreover, the industry is expected to enjoy more than 70% occupancy rates
due to the aggressive overseas promotions of the Department of Tourism and the huge
influx of economic opportunities in the country.
The country’s growth sustainability mainly depends on the spur of domestic
and foreign tourism. This can be achieved by sustaining the economic growth
trajectory, maintaining political stability, and having a well-coordinated tourism plan
that will involve all stakeholders and prospect investors both from the local and
international market. The country’s economic growth is currently on its boom period
due to the Department of Tourism’s "It’s More Fun in the Philippines" campaign.
THE HOTEL AND RESTAURANT INDUSTRY IN THE CITY
The City of Smiles, the center of commerce of the Negros Island, is composed
of shopping malls, hotels, restaurants and up-and-coming businesses that offer
exceptional service. A variety of hotels and lodging houses to choose from are just
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around every corner of the city which offers the best amenities focusing on guests’
satisfaction.
The hospitality industry in Bacolod City is highly competitive and will not fall
behind upon the implementation of the ASEAN Free Trade Agreement. The human
resources of the industry in the city are armed with skills and values needed in the
industry.
COMPANY OVERVIEW
Vision
Mile Inn envisions itself to be one of the most sought after inns in the industry,
providing the gracious Filipino hospitality, exceptional and personalized services,
towards total customer satisfaction and inspiring a connection to our brand in the
experiences we provide.
Mission
Mile Inn seeks to provide top-quality courtesy catering to diverse markets
within a multi-cultural environment. Counting on the dedication and professionalism
of its employees, Mile Inn looks forward to making a mark in the field of tourism and
hospitality by offering premium accommodation, facilities, security and delivering
exceptional service to exceed every discerning guests expectations.
Goals and Objective

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Mile Inn is devoted to provide warm and sincere services that ensure pleasant
and satisfactory stay of each guest and multiplying the positive effects of this stay in a
long-term perspective. To develop and enhance our hotel structure, paying attention to
each type of services offered – business, accommodation, food and beverage and to
contribute in all times to our hotel team’s zest for personal development, training and
high motivation.
To achieve our goal of becoming more competitive and successful, we have set our
objectives as follows:
● To raise the standard of the hospitality service by the interchange of personnel,
assistance in staffing of hotels through education and trainings in the fields of
hotel industry.
● To promote good relationship and understanding among the employee and
employers within the industry.
● To ensure maintenance of hotel standards and development of our human
resources through training.
● To treat each and every guest as a unique individual and to make use of customers
feedback as a source of improvement.
FORM OF BUSINESS ORGANIZATION

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The Mile Inn is a separate business line of YDM9 Corporation that meets
certain legal requirements to be recognized as having a legal existence, as an entity
separate and distinct from its owners. It is owned by Mylene Cong, a close family
corporation who generates profits through its operations. As a corporation, it is group
of people authorized to act as a single entity which is legally a person and is
recognized as such by law. It is a legal entity that is separate and distinct from its
owners and enjoys most of the rights and responsibilities that an individual possesses
such as the right to enter into contracts, loan and borrow money, sue and be sued, hire
employees, own assets and pay taxes. Its ownership interests, however, are still not
available for exchange on the public market. Its shares may still be exchanged in
private transactions, if such transactions are allowed but it is called a “close” company
because its shares are closely held.
The shareholders, as owners, are given the powers of the corporation and have
direct control to the company. Members of the Board of Directors are elected by the
shareholders to serve as managers of the overall function and operation of the business
and promoters ethical and responsible organization culture
SERVICES OFFERED
Mile Inn is a 4-storey building providing 47 guest rooms. A function room is
available for conferences, seminars, or meetings. The Roof Deck area can be booked
for events such as parties, reunions and other gatherings. Moreover, the in-house
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Restaurant and Bar caters a variety of menu and beverage choices to satisfy customer
needs.
Accommodations include:
1. Standard Room
2. Superior Room
3. Triple Room
4. Deluxe Room
5. Family Room
6. Roof deck Room
CORPORATE SOCIAL RESPONSIBILITY
The term generally applies to efforts that goes beyond what may be required by
regulations and, or environmental protection groups. It involves incurring short-term
costs that do not provide an immediate financial benefit to the company, but instead
promotes positive social and environmental change and is important and should be
engaged in by companies to provide a warmer image of the business to customers.
Customer and employee satisfaction, and environmental and health is one the top
priorities of Mile Inn.
Customer and Employee Satisfaction

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In order to ensure and maintain top quality services, Mile Inn shall assure that
every guests and customers will be experience the earm Filipino hospitality and the
embrace of the Bacolodnon smile, through these efforts, former and current guests will
remember the experiences they shared miles away from the the City of Smiles.
Employees with the best performance shall be be rewarded with additional
bonuses during the month of recognition to motivate excellent service and customer
care.
Environmental and Health
Environmental care and providing a sanitary environment is one the top
concerns of Mile Inn. Apart from complying to environmental and sanitation laws
encompassing the Hotel and Restaurant Industry and Local Government ordinances,
Mile Inn will further broaden its responsibilities to make sure that sustainability and
sanitary amenities is achieved.
For a sustainable and an environment friendly atmosphere to be achieved, Mile
Inn promotes segragation of wastes and the usage of plastic materials for packaging of
supplies, toiletries, take-outs, food and beverage and etc. shall be limited to the
minimum as much as possible. Furthermore, electrical utilities shall be used efficiently
and will be maintained from time to time in order to reduce electrical consumption
hence limiting carbon footprint.
ACCOUNTING INFORMATION SYSTEM

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DEFINITION
Accounting, as a closed-system recording which is the collection of procedures,
methods, techniques, legal regulations, rules and experts, includes the identification,
tracking, measuring, recording, processing, storing, systemizing, valuing, controlling
and publishing of the phenomena influencing the property, financial and profit status
of the enterprise, and ensuring the conditions of continuous, undisturbed activity. In
this regulated system, the accounting information system records the economic events
influencing the enterprise, then processes them according to the demands and conveys
them to the persons or units responsible for decisions. In addition, the system greatly
contributes to preparing different reports, financial statements, working out an expense
management system and compiling controlling reports.
The Accounting Information System (AIS) is in close connection with the
management information department, the accounting and administration department,
the internal control and the information technology team. The harmonic and efficient
activity of these areas characterizes the center of the accounting information system,
which provides for the basic data of the informational database. The information
system works within the enterprise and includes two, closely related aspects – data
processing or information supplying and a decision making aspect. The data-
processing is responsible for acquiring, coding, storing, processing and forwarding the
information necessary for the activity and operation while decision making is
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responsible for using the information to influence directly or indirectly with the
management processes and the operation of the system.
An information system is a formal process for collecting data, processing the
data into information, and distributing that information to users. The purpose of an
Accounting Information System is to collect, store, and process financial and
accounting data and produce informational reports that managers or other interested
parties can use to make business decisions. Although an AIS can be a manual system,
today most accounting information systems are computer-based. .
FUNCTIONS
Accounting Information Systems have three basic functions:
 The first function of an AIS is the efficient and effective collection and
storage of data concerning an organization’s financial activities,
including getting the transaction data from source documents, recording
the transactions in journals, and posting data from journals to ledgers.
 The second function of an AIS is to supply information useful for
making decisions, including producing managerial reports and financial
statements.
 The third function of an AIS is to make sure controls are in place to
accurately record and process data.

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IMPORTANCE
Acquiring an accounting information system is every business owners’ goal.
AIS involves the use of software that puts together financial data. Since it can perform
other bookkeeping functions, it can also collect and process transaction data. The most
important factor of installing AIS in your business is that Stakeholders and investors
can easily obtain information that is useful in making decisions. The following factors
make AIS essential to every company:
1. Efficiency. No business wants to waste valuable time in manually storing and
filing data. With such online accounting programs, scanners are able to
automatically generate accounting information.
2. Cost-efficient. Since such programs are accessed online, the use of computers
is imperative.
3. Automation. Should investors and business owners want to see the transactions
and files for a certain year, the data and figures are automatically imported. The
data are already summarized and the information is also timely.
With the modernity of today’s technology, it has become a trend for many business
owners to shift from manual to automation to ensure that the business does well and
thrives well.
PARTS
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An accounting information system typically has six basic parts:
1. People who use the system, including accountants, managers, and business
analysts.
2. Procedures and instructions which are the ways that data are collected, stored,
retrieved, and processed.
3. Data including all the information that goes into an AIS.
4. Software which consists of computer programs used for processing data.
5. Information technology infrastructure which includes all the hardware used to
operate the AIS.
6. Internal controls which are the security measures used to protect data.
RELIABILITY
Because AIS stores and provides such valuable business information, reliability
is vitally important. The American Institute of CPAs (AICPA) and Canadian Institute
of Chartered Accountants (CICA) have identified five basic principles important to
AIS reliability:
1. Security - Access to the system and its data is controlled and limited only to
those authorized.
2. Confidentiality - The protection of sensitive information from unauthorized
disclosure.
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3. Privacy - The collection, use, and disclosure of personal information about
customers is done in an appropriate manner.
4. Processing integrity - The accurate, complete, and timely processing of data
done with proper authorization.
5. Availability - The system is available to meet operational and contractual
obligations.
Accounting information system specialist jobs are available in corporations,
accounting firms, consulting firms, non-profit organizations, and government agencies.
Objectives of the Accounting Information Systems
In every business organization, the effective and efficient flow of information
is of outmost importance. With the timely availability of information, an organization
can increase its chances of accomplishing its goals and objectives successfully.
An Accounting Information System or AIS is a system that facilitates the
collecting, processing and storing of financial and accounting information within an
organization to be used by decision makers. It has five main components namely
People, Procedures, Data, Software and IT Infrastructure. The components can be
processed manually, computerized or a combination of both. Furthermore, AIS aims to
provide adequate controls to safeguard the organization’s assets and ensure effective
and efficient operations.
Mile Inn is an organization that can greatly benefit from the implementation of
AIS. With the business’s large number of transactions and personnel, AIS will indeed
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provide a more effective and efficient collection, processing and storage of
information.
This accounting information system aims to provide timely, accurate and reliable
information to the stakeholders of Mile Inn for decision making. Specifically, this AIS
aims realization of the following objectives:
(1) To facilitate the preparation of the company’s financial statements by preparing
the procedures for the Revenue, Expenditure, Investing, Financing and Payroll
Subsystems
(2) To establish internal control procedures for the company’s Revenue,
Expenditure, Investing, Financing and Payroll Subsystems
(3) To help management assess the efficiency and effectiveness of the company’s
Revenue, Expense and Investing Centers
(4) To design working forms, documents and system
(5) To establish a functional organizational chart applicable for the business
(6) To recommend an improved workflow of processes, documents and personnel
for operations
Financial statements are the main end products of any accounting system. A set
of financial statements presents the relevant data concerning the financial performance
and position of an entity. This information is used for decision making such as
assessing whether an entity is still a going concern or still profitable. This AIS will
help Mile Inn in an efficient preparation of its financial statements and reports. With
most of its transactions already automated in this AIS, the capturing of accounting data
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is much faster and reliable. The recording and data storing is computerized thus
minimizing the company’s need to store voluminous documents and solve data
manually.
The company’s internal control will also improve with the creation of the AIS
system. Mile Inn is currently using a manual system for the generation of accounting
information. Furthermore, the model company for Mile Inn is fresh and new thus its
internal control, segregation of duties and responsibilities and its Organizational chart
is subject to changes and revision.
Mile Inn offers a wide variety of services such as accommodations, functions
and restaurant services. As such, it is only fitting to distinguish the following services
as different investment cycles for the management to assess the financial performance
of each center. The group have recommended in this AIS design that the revenue and
expenditure cycle for each investment center to observe responsibility accounting.
Henceforth, in order to apply the conceptual aspects of this system design, the
group designed documents and working forms essential to the effective capture of
accounting date in each transaction. The system interface is likewise prepared by the
group. Moreover, an improved organizational chart is created by the group considering
that the model company current Organization chart is limiting and too narrow for
effective and efficient operations.
It is vital for Mile Inn to implement an accounting system due to the beneficial
objectives an AIS aims to provide. It will indeed help in boosting the effectively and
efficiency of their operations through the availability of reliable and accurate
information.
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SECTION 2. BUSINESS ORGANIZATION

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DUTIES AND RESPONSIBILITIES
Position : Board of Directors
Job Description : The board of directors oversee the entire business operations
and is responsible to create company’s guidelines, policies
and strategies.
Specific Duties and Responsibilities:
1. Adopt strategies, business plans and budgets, approving interim reports, year-
end financial statements and annual reports, and setting instructions, policies
and guidelines.
2. Required to follow the financial development of the company and ensure the
quality of financial reporting and internal control as well as evaluate the
company’s operations based on the Board of Directors’ established objectives
and guidelines.
3. Decides on major investments and changes in the Group’s organization and
operations.
Position : General Manager

Reports to : Board of Directors
Supervises : Logistics Manager, Operations Manager & Finance Manager
Job Description : Responsible for all aspects of operations at the hotel, to day-
to-day staff management and guests. Provides leadership and

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strategic planning to all departments in support of our
service culture, maximizes operations and guest satisfaction.
Also works very closely with the hotel owners and other
stakeholders.
1. Plan, coordinate and manage all business operations to achieve corporate goals.
2. Develop and implement business plan for profitability.
3. Assist in budget preparation and expense management activities.
4. Evaluate the effectiveness of marketing program and recommend
improvements.
5. Develop strategies to improve overall quality and productivity.
6. Generate business, cost and employee reports to management.
7. Schedule regular team meetings to discuss about business updates, issues and
recommendations.
8. Respond to employee concerns in timely manner.
9. Provide direction and guidance to employees in their assigned job duties.
10. Determine staffing requirements and ensure that office positions are filled
promptly.
11. Assist in employee recruitment, training, performance evaluation, promotion
and termination activities.
12. Manage orientations and exit interviews for employees.
13. Ensure that employees follow company policies and procedures.
14. Manage administrative, logistical, human resources, and accounting services to
support company operations.

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15. Address customer inquiries promptly and professionally and ensure customer
satisfaction.
16. Identify business opportunities with new and existing customers
Basic Qualifications:
1. Must have a bachelor’s degree in hotel management or a related field with
experience in opening, managing or re-positioning a hotel with clear track
record.
2. Must have excellent computer system skills and the the ability to think clearly
and make quick decisions.
3. Must have good numeracy and logistical planning skills.
4. Must have a professional manner and a calm, rational approach in hectic
situations.
5. Must have the ability to balance customer and business priorities.
6. Must have flexibility and a 'can do' mentality.
7. Must have energy and patience and excellent communication and interpersonal
skills, especially when dealing with speakers of other languages
Position : Finance Manager

Reports to : General Manager
Supervises : Accounting Supervisor and Cashier
Job Description : The responsibility of the finance manager includes the entire
financial planning and budgeting, must provide the
management with accurate, timely, and relevant financial
data for managing the audit function in operations to deliver

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outstanding guest service and financial profitability.
1. Responsible for the preparation of company’s budget
2. Represents the finance department on the daily department heads meeting with
the general manager.
3. Manage all phases of Accounts Payable, Receivable and department budget.
4. Calculate and distribute wages and salaries.
5. Prepare regular reports and summaries of accounting activities.
6. Prepare financial statements and debtors' listings.
7. Verify recorded transactions and report irregularities to management.
8. Providing direction to the night audit team so as to ensure proper revenue
reporting.
9. Reviewing all ledger details guest ledger, city ledger and deposit ledgers to
validate proper payment and revenue posting.
10. Forecasting cash payments and anticipating challenges arising from limited
cash flow.
11. Preparing and presenting financial reports for meetings and investors.
12. Check customers credit ratings and Flag accounts as 'Black listed' for long
outstanding or defaulter accounts.
13. Performing numerical analysis of data and formulating conclusions and/or
solutions.
14. Preparing financial reports and submissions to relevant government entities.

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15. Ensures all new hire paperwork, benefits, performance appraisals, disciplinary
action forms and other pertinent personnel documents are filed appropriately
and maintained in accordance with the company HR practices.
1. Must possess Certified Public Accountant or Certified Management
Accountant titles.
2. Has at least five (5) years demonstrated accounting experience, preferably in a
hospitality or food and beverage environment and quality with a background
that includes forecasting and budgeting.
3. Strong verbal and written communications skills with strong accounting
software experience.
4. Proficiency with MS Office (Excel/Word) and automated systems.
Position : Accounting Supervisor

Reports to : Finance Manager
Supervises : Accounting Staff
Job Description : An accounting supervisor shares the same responsibilities
with a financial manager and provides support as a member
of the team.
1. Supervise every aspect of a company’s accounting function

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2. Oversee data flow and the process between accounting systems cum sub-
systems
3. Review balance sheet, general ledger accounts, and income statement schedules
4. Recommend improvement to general accounting activities so as to ensure
compliance with governmental and organizational procedures and policies, and
to also ensure the most efficient and effective operations
5. Implement automation and process improvements to reduce redundancy
6. Administer personnel-related functions and direct the work of general
accountants
7. Manage the accurate, reliable, and timely reporting for internal requirements
8. Ensure compliance with required external and internal controls
9. Assist in making key business decisions by providing special analysis
1. Graduate of four year accounting degree program or in related discipline
2. Three (3) years or more of experience in generalist accounting or finance
3. Proven ability to develop and train people on how to use financial spreadsheets
4. Highly proficient with Microsoft Excel package
5. Strong team player with ability to interact with all levels of staff in the
organization
6. Strong ability to create systems for operational efficiency.

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Position : Accounting Staff

Reports to : Accounting Supervisor
Supervises : N/A
Job Description : The accounting staff assists in a day to day finance
operations and is primarily responsible for computing,
recording, collecting and verifying numerical data for use in
maintaining accounting records of the financial operations of
the company in an accurate, timely manner in accordance
with accounting policies and procedures.

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1. Performs administrative duties such as maintaining schedules, providing
telephone support, filing, transcription and the production of forms.
2. Responsible for generating bills and collect all revenue owed to the company.
3. Responsible for assisting the accounting supervisor.
4. Provide the day-to-day efforts needed to record and assess basic accounting
data.
1. Ability to compile facts and figures.
2. Command of the English language both written and verbal.
3. Strong organizational skills with attention to detail.
4. Proficiency with MS Office (Excel/Word).
5. Master of commerce or Accounting
Position : Cashier
Reports to : Finance Manager
Supervises : N/A
Job Description : A cashier collects money from guests for their lodging
accommodations and any other fees they may incur during
their stay, including room service and telephone use fees.
The cashier also commonly required to maintain related
records and files regarding financial transactions that take
place at the front desk.

1. Processes cash, debit card and credit card transactions for guests.
2. Responsible for preparing and submitting daily bank deposits.

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3. If customers have questions or concerns about charges on their bills, the hotel
cashier should be competent in addressing them to their satisfaction.
4. Normally entails answering guest inquiries regarding fees and services.
1. Completed coursework in hospitality management or customer service.
2. Previous experience in cash handling, accounting, public relations or customer
relations is desirable.
3. Good mathematical skills are required.
4. Customer service skills are needed for this job, as well as the ability to work
well with other hotel staff personnel.
Position : Operations Manager

Supervises : Food and Beverage Supervisor, Human Resource Supervisor
and Sales and Marketing Supervisor

Job Description : Inn operations managers oversee the entire operations of a
lodging establishment. Operations include human resources,
public relations, food service, sales and finances. It is the
operations manager's job to deal effectively with customers,
bosses and staff workers while keeping the hotel running
smoothly.
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1. Ensure the premises are in operative condition as per category of the unit to
receive & serve the guests.
2. Conduct regular operations team meeting with all the HOD daily / weekly to
discuss routine operational matters, sales targets, GSTS feedback / RSTS
feedbacks and action taken for service recovery, and also any staff issues.
Minutes of the meeting to be sent to GM/RGM.
3. Randomly inspecting the stores (F & B / Kitchen) to check the stock in hand
(quality, par stock levels, expiry etc) with the F & B Manager & Chef.
4. Inspecting all departments for SOP implementation.
5. Inspecting all department with their respective Manager's for cleanliness,
ambience, service readiness, staff grooming & hospitality culture.
6. Monitor the co-ordination between all departments for smooth & efficient
operations.
7. Assessing and reviewing customer satisfaction and service recovery process.
8. Meet all dept. heads to review & train the staff to upkeep the human capital.
9. Identifying staff learning needs and assisting with development
10. Providing timely and constructive feedback to all direct reports as and when
required either formally or informally.
11. Conduct weekly / Daily meeting with marketing people for enquiry & follow
up & conversion to grow up the business.
12. Monitor and maintain operation & overhead cost in order to maintain
maximum revenue to the organization.

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1. Excellent revenue management skills with experience of budgets, P&L's and
forecasting. Working with colleagues to share skills, knowledge, resources and
networks.
2. Highly focused, have excellent communication skills, be motivated and
professional in appearance and presentation
3. Degree or Diploma in Hospitality Management is an asset or Graduates
bachelor degree and/or diploma in hotel or other related field.
4. Computer Knowledge, MS office. Experience in Property Management
Software's, Revenue Management Systems desired.
Position : Human Resource Supervisor

Reports to : Operations Manager
Supervises : Human Resource Staff
Job Description : The Human Resources Supervisor oversee the daily
operation of the Human Resources office and is responsible
for areas of employee-related , short-term and long-term
planning of the department.
1. To assist in all activities concerning the sourcing & recruitment of staff,
performance management, staff discipline and HR administration.
2. To coordinate and/or conduct departmental training and conduct new hire hotel
orientation program.
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3. Implement corporate policies and procedures on compensation, incentive,
bonus and benefits.
4. Continually assesses employee morale by analyzing absenteeism and turnover
records, lateness and resignations.
5. Coordinate and oversee all matters related to staff accommodation, facilities,
and transport.
6. Conduct needs analysis, develop, implement, and monitor training programs
and materials.
7. Assist in recruitment and hiring of all employee.
8. Assists with and ensures that all procedures concerning promotion, transfer and
staff resignation is carried on within Company policy and also within legal
boundaries.
9. Support operational efforts through proper staffing and training of associates.
10. Provide guidance to the leadership team regarding employee morale, employee
relations, coaching, counselling and discipline.
11. Promote employee communication activities and channels, to encourage and
enable feedback from staff.
12. Maintain a positive relationship with staff representatives and ensure any
employee grievances are monitored and resolved.
13. Responsible for all back office and administration of the department.
14. Develops and maintains confidential departmental staff and associated files,
documents, pay scale details and/or other important databases.
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1. Have a Strong background in employment, employee relations, benefits, wages
and salary, employee training, accident prevention, and government regulations
and policies.
2. Strong written communication skills required with an understanding and ability
to work in a multi-cultural environment.
3. Four-year (4) college degree in Human Resources or Bachelor's degree or
Master's Degree education. Well versed in HR and Payroll Management
Systems (HRIS Systems).
4. Excellent skills in Microsoft Office, HRIS system, Applicant Tracking system,
and online recruiting resources.
5. Five(5) years Human Resources management experience required preferably in
the hospitality industry and minimum experience of 1 to 2 year in the same
position at 4 Star or 5 Star Hotel.

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Position : Human Resource Staff

Reports to : Human Resource Supervisor
Supervises : N/A
Job Description : Human Resource Staff will work under the general guidance
of the Human Resource Supervisor and is responsible for
supporting the HR team on their day to day operation. Staff
coordinates the administration support to the Human
Resources team in accordance with the company’s standard
and procedures and to ensure that staffing needs are met in a
timely manner.
1. Attend any meetings on behalf of the HR Manager/ Officer.
2. Assists with the organization of the staff social events.
3. Coordinating Hotel Associate events and activities.
4. Coordinating staff daily transportation to and fro from staff accommodation.

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5. Assist and resolve hotel staff and management queries.
6. Updating salary and benefits information.
7. Developing policies on issues such as working conditions, performance
management, equal opportunities, disciplinary procedures and absence
management.
8. Helps employees identify specific behaviors that will contribute to service
excellence.
9. Responsible for the on the job orientation for new hires.
10. Assist with Internship or training program and ensuring that all Interns are
receiving the necessary support and guidance during their industrial exposure
training.
11. Assist with employee relation issues in the hotel in a confidential manner,
including disciplinarians, grievance and capability.
12. Manage HR administration such as contracts, letters and personnel files.
13. Maintenance of HR email account and ensures prompt response.
14. Analyze staff turnover and sick leave with the aim of implementing strategies
for reduction.
1. Confidence in working independently and part of a team.
2. Flexibility to respond to a range of different work situations.
3. Effective written and oral communications skills including the ability to
prepare reports, proposals, policies and procedure.
4. Bachelor degree or Masters in Human Resources.

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Position : Logistics Manager

Supervises : Maintenance Supervisor, Security Supervisor &
Purchasing Supervisor
Job Description : Ensures and maintains detailed coordination and cohesion of
the maintenance department, security department and
purchasing department.
1. Establish or monitor specific supply chain-based performance measurement
systems.
2. Create policies or procedures for logistics activities.
3. Plan or implement material flow management systems to meet production
requirements.
4. Participate in carrier management processes, such as selection, qualification, or
performance evaluation.
5. Monitor product import or export processes to ensure compliance with
regulatory or legal requirements.

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6. Ensure carrier compliance with company policies or procedures for product
transit or delivery.
7. Direct distribution center operation to ensure achievement of cost, productivity,
accuracy, or timeliness objectives.
8. Develop risk management programs to ensure continuity of supply in
emergency scenarios.
9. Plan or implement improvements to internal or external logistics systems or
processes.
10. Collaborate with other departments to integrate logistics with business systems
or processes, such as customer sales, order management, accounting, or
shipping.
11. Analyze all aspects of corporate logistics to determine the most cost-effective
or efficient means of transporting products or supplies.
12. Direct or coordinate comprehensive logistical or reverse logistical functions for
product life cycles, including acquisition, distribution, internal allocation,
delivery, recycling, reuse, or final disposal of resources.
1. Must have proven work experience as a Purchasing Officer, Purchasing Agent
or any similar role.
2. Must have good knowledge of vendor sourcing practices (researching,
evaluating and liaising with vendors).
3. Must have a good understanding of supply chain procedures.

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4. Must have solid analytical skills, with the ability to create financial reports and
conduct cost analyses.
5. Must have good negotiation skills.
6. Must have a bachelor’s degree either in Logistics, Business Administration or
in any relevant field.
Position : Purchasing Supervisor

Reports to : Logistics Manager
Supervises : Purchasing Staff
Job Description : Plans, directs, or coordinates the activities of buyers,
purchasing staff, and related workers involved in purchasing
materials, products, and services.

1. Maintain records of goods ordered and received.
2. Locate vendors of materials, equipment or supplies, and interview them in
order to determine product availability and terms of sales.
3. Prepare and process requisitions and purchase orders for supplies and
equipment.
4. Review purchase order claims and contracts for conformance to company
policy.
5. Analyze market and delivery systems in order to assess present and future
material availability.
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6. Develop and implement purchasing and contract management instructions,
policies, and procedures.
7. Participate in the development of specifications for equipment, products or
substitute materials.
8. Resolve vendor or contractor grievances, and claims against suppliers.
9. Represent companies in negotiating contracts and formulating policies with
suppliers.
10. Review, evaluate, and approve specifications for issuing and awarding bids.
11. Direct and coordinate activities of personnel engaged in buying, selling, and
distributing materials, equipment, machinery, and supplies.
12. Prepare reports regarding market conditions and merchandise costs.
13. Administer online purchasing systems.
14. Arrange for disposal of surplus materials.
1. Must have proven work experience as a Purchasing Officer, Purchasing Agent
or any similar role.
2. Must have good knowledge of vendor sourcing practices (researching,
evaluating and liaising with vendors).
3. Must have hands-on experience with purchasing software (e.g. Procurify or
SpendMap)
4. Must have a good understanding of supply chain procedures.
5. Must have solid analytical skills, with the ability to create financial reports and
conduct cost analyses.

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6. Must have good negotiation skills.
7. Must have a bachelor’s degree either in Logistics, Business Administration or
in any relevant field.

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Position : Housekeeping Staff

Supervises : N/A
Job Description : Cleans and ensures that the hotel stays sanitary, clean and
pleasing to the senses of the customers.

1. Cleaning of the rooms, making of the hotel beds and changing linen
2. Replenishing guest supplies.
3. Answering guest requests promptly on the floor.
4. Responsible for collecting guest laundry.
5. Servicing of rooms in the evening( turndown service) and also provide second
service.
6. Handing over lost and found articles if any found in the room
7. Arranging and stocking the pantry with linen and supplies.
8. Shift furniture in public areas.
9. Clearing the garbages
10. Polishing all brassware in public areas
11. Cleaning all doors, windows and ventilators.
12. Cleaning and maintaining all the fire fighting equipments.
13. Cleaning all the shafts and terraces.
14. Cleaning all the chandeliers, draperies and other hard to reach areas in public
areas
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1. Must be highly skilled in cleaning rooms, lobbies and other interior and outside
areas.
2. Must be able to give accurate and timely room service to guests.
3. Must have thorough understanding of operating cleaning equipment.
4. Must be a team player who has good interpersonal skills.
5. Must have a high level of accuracy and an eye for detail.
6. Must have excellent customer service acumen.
7. Must always be willing to assist others.
8. Must have a friendly attitude towards all customers.

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Position : Purchasing Staff

Supervises : N/A
Job Description : Responsible for purchasing raw materials, products and
supplies for an organization under the direct supervision of a
purchasing manager or buyer.

Specific Duties and Responsibilities
1. Creates purchase orders from requisitions.
2. Confers with vendors to obtain product or service information such as
price, availability, and delivery schedule.
3. Data entry and filing paperwork.
4. Obtains price quotes from multiple suppliers.
5. Runs reports to help determine needs.
6. Prepares purchase orders or bid requests.
7. Issues purchase orders to suppliers and confirm delivery date, quantity
ordered and price are correct.
8. Maintains procurement records such as items or services purchased,
costs, delivery, product quality or performance, and inventories.
9. Discusses defective or unacceptable goods or services with inspection or
quality control personnel, users, vendors, and others to determine source of
trouble and take corrective action.
10. Processes receipts and invoices for payment.
11. Expedites delivery of goods to users.

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1. Must have a college education preferably a bachelor's Degree in Business
Studies or Administration Management or anything related to business.
2. Must have working experience in procurement of wet goods and grocery items
3. Must have at least one year of experience, specializing in Purchasing Inventory
and Material Warehouse Management or anything similar.
4. Must be able to assist in the preparation of POs and be able to pick up orders.
Position : Food and Beverage Supervisor

Reports to : Operations Manager
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Supervises : Kitchen Staff & Restaurant Staff

Job Description : The food and beverage supervisor is responsible for all of
the dining rooms, restaurants, bars, kitchen, clean up
services, etc and the supervision of both the kitchen and the
restaurant staff.
1. Responsible to verify all work schedules and follow proper documentation
rules and policies and procedures.
2. Responsible for checking that all bars & kitchens are clean and all items are in
their place.
3. Responsible for making sure all coolers that have food items are properly
labeled and dated.
4. Responsible for check out of keys to open and close bars.
5. Directs the work of the restaurant staff performing the following functions of
guest service, cleaning, stocking, quality control, beverage pricing and
maintenance of workstations.
6. Abides by laws, policies, and procedures pertaining to the service and sale of
alcoholic beverages.
7. Promptly and professionally handles guest issues and communicates problems
and concerns to Department Manager.
8. Create and design food and drink menus
9. Ensure adherence to food sanitation and safety guidelines
10. Maintain food and drink inventory

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1. Must be at least 21 years.
2. Must have good verbal and written communication skills as well as
interpersonal skills
3. Knowledge of computer programs, basic kitchen, and bar
equipment.
4. Ability to solve problems and make rational decisions.
5. Must have basic math skills.
Position : Kitchen Staff

Reports to : Food and Beverage Supervisor
Supervises : N/A
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Job Description : Kitchen department is responsible for food preparation
including main food, dessert, side food, and beverage.
1. Responsible for cooking and preparing the food ordered by
customers.
2. Responsible for the maintaining the cleanliness of the kitchen
3. Responsible for removing the required ingredients from the pantry
and cleaning as well as cutting the vegetables in advance.
4. Responsible for training any new members of the kitchen staff
regarding the work culture of the kitchen.
5. Responsible for keeping all equipment clean.
1. Must have some cooking skills or background in culinary studies.
2. Must have basic knife handling skills.
3. Must have basic reading and math skills.
4. Must have the ability to measure ingredients accurately.
5. Must have basic knowledge of kitchen equipment.
6. Must have the ability to understand and carry out directions.
Position : Restaurant Staff

Reports to : Food and Beverage Supervisor
Supervises : N/A
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Job Description : The restaurant staff’s job is to ensure that patrons have an
enjoyable dining experience by providing quality customer
service. Servers work in the front of the business taking
orders, serving food and drinks, and removing dinnerware
from the table in a timely manner.

1. To provide good customer service.
2. To take customers’ orders.
3. To deliver food to the customers.
4. To answer customers’ questions regarding the menu.
5. Work closely with other wait staff and the kitchen to ensure that the
restaurant is operated efficiently.
6. To clean dishes and clear tables.
1. Must have experience in working in a service industry.
2. Must be able to provide good customer service.
3. Must maintain a neat appearance, and be able to remember patrons
and their respective orders.
SECTION 3 SYSTEMS OVERVIEW
Control Activities
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The establishment of effective internal control facilitates reliable financial
reporting by ensuring that transactions are recorded and that all of the recorded
transactions are factual, properly valued, recorded in a timely manner, classified
properly, and summarized and posted accurately. Internal control objectives
correspond to different management assertions of authorization, accuracy, valuation,
completeness, classification, existence, timeliness, safeguarding of assets, and
segregation of duties and responsibilities.
A control environment sets the tone at the top in promoting high level of
integrity, ethical behaviour and as well as emphasis on information reliability and
accountability. In support, control activities represent the means to an end goal; the
fulfilment of its objectives achieving its mission and the realization of its vision.
Physical Controls
Transaction Authorization
● Personnel with approval authority review any relevant supporting
documentation and compare with recorded transactions for appropriateness,
accuracy and compliance with all applicable laws, policies, regulations, rules,
and standard operating procedures.
● Any unusual items are marked and questioned to ensure that all necessary
information is provided for justification prior to any approval.
● Transactions that are signed by a representative of the personnel with approval
authority are not processed.
Segregation of Duties
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● Authorizations, record-keeping, and custody of assets are assigned to different
personnel.
● Monitoring activities and compliance reviews are done by personnel not related
to activities and monitored and reviewed.
Physical Security
● The “clear desk” policy to prevent unauthorized access to sensitive information
and possible loss of or damage to sensitive information.
● Papers and electronic media containing sensitive information are locked in
drawers or cabinets when not in use, particularly during non-work hours.
● Employees use identification badge in places that needs authorization for
access.
● Compliance to physical security controls is periodically reviewed.
Accounting Records/Documentation
● Initiation and authorization are documented through event monitoring logs that
records activities done through the system and personnel performing these
activities.
● Processing activities are documented through transaction listings and error
listings.
Independent Verification/Reconciliation
● Reconciliation reports are signed both by the preparer and the reviewer.
● Reconciliation process and proper authorization sought are documented and
reviewed by someone other than the preparer.
Software Controls
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The purpose is to ensure that risks inherent to the processing of all transactions
through the automated system are negated or limited.
General Control
● Approvals made through the system are done by authorities that have their own
authentication code private and not known by someone else.
● Closed loop authorization is integrated into the system.
Segregation of Duties & Reconciliation
● Reconciliations and several postings are automatically done by the system to
facilitate segregation of duties among limited number of employees.
Logical Security
● A formal log-on procedure is initiated by the accessing party to which a user ID
and password must be entered into.
● Log-in requests are compared with the system’s database that has an access
control list integrated into its employee master file allowing employees to
access part of the system he/she is only authorized to have access to.
● In case of failed log-in attempt, notification is sent to the accessing party to re-
enter user ID and password without disclosing as to whether it was the user ID
or the password that caused the failure.

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● Account lock-out policy and procedures include limited three failed log-in
attempts and formal account reactivation to be granted by the Human Resource
Division.
Information Technology Control
● Database files including logs are adequately and periodically backed up.
● Disaster continuity plans are provided in case of data corruption or loss.
● Unless otherwise permitted by the access control list, database and files are not
allowed access. Unspecified access authority is allowed only of viewing access.
Application Controls
Input Control
● Validation tests are performed to ensure that customers, vendors, and
employees are valid and authorized.
● Authorization procedures to ensure that encoded data into the system have
undergone proper authorizations.
● Missing data checks and redundant data checks
● Numeric-alphabetic data checks are performed to ensure that the appropriate
types of data are entered into the field.
Processing Controls
● Automated reconciliations are done by the system all throughout its processing
of transactions.
● Real-time reporting of error transactions is done and logs are updated as these
errors are recognized.

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● Run-to-run controls are established to control batch totals and automated
posting of transactions from one file to another.
Output Controls
● Reports filed that have passed their storage life are appropriately disposed so as
not to leak confidential information.
● Printed transaction listings and account summaries are generated on a periodic
basis in order to provide audit trail and a basis for review.
● Integrated within the access control list are the demand reports that may only
be printed by the authorized personnel.
● Listings of personnel initiating triggered reports are also produced.

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Flowchart
Basic Features
General Accounting Plan
System Software Plan
Software Implementation
Not all businesses in the industry follow the complexity of IT infrastructure.
Aside from the common focus on state-of-the-art technology present in terms facilities
provided for the customers, mostly still rely heavily on manual system in terms of its
data collection, and accounting information processing, reporting and maintenance.
However, with its fast-paced operation involving a couple of divisions more than the
other industry, the growth of the business is also determined by how its operation
adapts to this situation. To achieve efficiency in these operations, it is important for the
company to invest in an automated system that shall make use of the advent of
technology. Trying to identify a specialized vendor that can manufacture Turnkey
software to be used by the business would be difficult. In addition, having a system of
a business, that the priority is the development of its offers to the customer, fully
custom-built would be an imbalanced trade-off for the cost and benefit of efficiency in
processes.
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Modified Packaged Software
Implementing the Modified Packaged Software Alternative, commercially
available software is purchased with basic processing of accounting information
system but is modified with several data capture schemes to match needs of the
business. This mixing and matching of pre-coded software assembles a close-to-
customized Enterprise Resource Planning System (ERP) without having the risk of
purchasing a commercially available ERP at a high cost and not being able to
maximize the use of its features and modules.
Essential Features of System Software
The accounting system software of the business follows an online and real-time
collection of data and automatic updates, reconciliations and validation checks. Once
information is encoded into the system, all interdepartmental and internal-external
exchanges of information are achieved through this automation. In addition, there is:
- High throughput for online transaction processing and queries;
- Rapid file access, protection from data loss, data retrieval;
- Accommodation of file growth;
- Online view and real-time update of summary reports;
Network Topology
The physical arrangement of the components of the network follows a
Hierarchical Topology where a host computer is connected to several levels of
subordinate but transaction processing follows the configuration procedure of that of a
Star Topology. Transactions are processed in a real-time manner but nodes transmit
information such as sales and inventory movement to the host computer in batches.
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With this, the physical structure of the IT function shall be that of a distributed
data processing for subordinate components of the infrastructure but follows a
centralized one from the point of view of data processing from subordinate to the host
computer.
Database Management System
On the other hand, the abstract representation of entities, resources,
transactions and relationship with each other follows a combination of the three DBMS
conceptual models.
The collection and storage of information such as data found in the Customer
Account Master file and Employee Master Data and transactions such as
Accommodation, Functions & Events, or Restaurant Sales Transactions is managed
using the relational model. Primary keys that identify unique attribute of data are found
in a record of information. This supports the internal control design of the company
that uses unique transaction identifier for access and transaction processing.
The reconciliation of records and reports on the other hand follows the network
model of management system while validation checks as part of internal control
systems design is patterned with the hierarchical model of database management.
Back-up and Data Retrieval
Systems software makes use of the incremental back-up for control and
subsidiary master files with the use of Digital Audio Tape (DAT) drives. In this case,
the system produces back-up as changes are made. At the same time, this serves as a
data retrieval scheme wherein full back-up recovery is facilitated.

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A back-up procedure for transaction files, register, listings, and logs through
the use of cloud back-ups that makes use of Internet as a storage service provider is
used.
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SECTION 4 BOOK OF ACCOUNTS
Overview
Part of the information systems design of the business is the design for its accounting
records to aid the documentation of all economic events affecting its resources. Due to
the high automation nature of the systems design, there is a large elimination of most,
if not all, paper documents in performing this system need.
Books of Accounts are collection of all accounting records that are usually
seen, used, and produced in the accounting cycle. The source documents, journals,
ledgers, and reports in a manual system are replaced by different master files,
transaction files, registers, listings, and other files. The automation of these records
puts emphasis on the efficiency of data maintenance or storage. Furthermore, with the
ease of posting the automation provides, human errors usually happening due to
numerous postings on different accounting records are minimized.
Aside from the automated posting of transactions on paperless accounting
records, system-generated reports are also produced including listing and registers.
These documents are automatically created upon update of the different files. Inputs of
data into the system are the main manual procedure done and the rest are mostly
initiation, authorization, and manual verification in some cases.
Description
GENERAL LEDGER
The general ledger is the core of company's financial records. These constitute
the central "books" of the system, and every transaction flows through the general
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ledger. These records remain as a permanent track of the history of all financial
transactions since day one of the life of the company. It is used in conjunction with the
Subsidiary Ledgers once recorded in the journals. The debit and credit effects of every
transaction are periodically transferred to the various accounts in the General Ledger.
Such postings to the General Ledger are done every end of the month that serves as a
basis for the preparation of the financial statements.
GENERAL JOURNAL
A journal is a book or page where accounting entries are made. Journals are
sometimes referred to as books of original entry. The chronological, day-today
transactions of a business are recorded in sales, purchases, cash receipts, and cash
disbursements journals. A general journal is used to enter period end adjusting and
closing entries and other special transactions not entered in the other journals.
The General Journal is provided with columns for the date, description of the
accounts affected, posting reference and the amounts for the accounts debited and
credited.
A Subsidiary Ledger is a special ledger for a large number of accounts
SPECIAL JOURNALS
The Special Journals are preferably created for frequently occurring similar
transactions to lessen the effort and time spent on journalizing and posting. Special
Journals are commonly used for each of the following types of transactions: sales,
purchases, cash receipts, and cash disbursements.

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a. Cash Receipts Journal
The subsequent collections of the loan as well as other transactions involving the
receipt of cash are recorded in this journal. In a financing operation, cash is received
from various sources such as investments by the owner, collection of Accounts
Receivable, Notes Receivable and Interests, advances from employees and refunds for
overpayments on accounts, expenses, and returns of prior cash purchases and other
assets.
b. Purchases Journal
Purchases Journal is the special journal used for recording supplies and other assets
bought on account. Purchases of other items of assets which are intended for use in the
operations are charged to appropriate asset accounts.
c. Cash Disbursement Journal
This special journal records subsequent payment on account as well as other
transactions involving the payment of cash. Cash is disbursed for various purposes
such as for loans to the client, settlement of accounts to creditors, expenses, refunds to
employees, personal use of the owner, etc.
REGISTERS
Check Register
The Check Register stores all types of transactions, including Checks,
Deposits, ATM Withdrawals, and Fees. Checks are issued on in payment of properly
approved vouchers. It provides a designation both payee and the voucher number as
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well as convenient reference for cash payments since all issued checks arranged
numerically.
Fixed Assets Register
Fixed Assets Registers are lists of all major assets acquired by the client in a
transaction. It typically includes broad categories such as land, land improvements,
buildings, furniture and fixtures, machinery and equipment. Construction-in-progress,
inventory, etc. The register is updated to account for purchases or sale of fixed assets
and to reflect the book value of the company’s asset.
Payroll Register
The payroll register lists the employee's gross pay; deductions and net pay for a
particular pay period. The data included on the payroll register are the employee
number, employee name, regular pay, overtime pay, gross pay, deductions, et pay and
payroll periods.
Voucher Register
It records not only in support for each payment to be made for goods and
services purchased on account but also for all other transactions calling for payment by
check, including cash purchases, the retirement of debt, replenishment of petty cash
funds and payrolls. Charges on each voucher are classified and recorded in the
appropriate debit column and the amount to be paid is listed in a voucher payable
column.
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SECTION 5 REVENUE SUBSYSTEM
Overview
The Revenue Cycle is composed of the transactions that increases the inflow of
economic benefits of a certain entity. Sales, billings, performance of services and
collection of payments are among the primary activities in the revenue cycle.
The Mile Inn Revenue Cycle generates revenue from three distinct segments:
Accommodations, Bar and Restaurant and Functions and Events. Accommodation
services includes room usage by guests. Revenue is derived from booking fees from
room rentals and additional amenities availed by the guests. The Accommodations
Division has a centralized systems that integrates the reservation process, billing
process and the payment process. Revenue from this division is recognized upon
Check in wherein a Guest Information Sheet (GIS) is created as evidence of
reservation and the guest’s remaining payable. The system is updated upon check in.
Post-check in charges are entered into the system through the Room Status Report and
Order Slip provided by the concerned departments.
Second, the company derives revenue from Bar and Restaurant Services. These
services are food and beverages services that are paid upon cash basis, thus updating
the system in real time. An Order Slip is created per customer and an Official Receipt
is issued upon receipt of payment.
Lastly, functions and events provide revenue to the company. Functions and
events involves the use of the hotel’s facilities as well as meal catering. They typically
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involve a large number of customers and a large, material amount as revenue. Revenue
is recognized upon the confirmation of the event.
The receipt of cash from customers trigger the preparation of the official
receipt issued to the customer.

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Internal Control
Control Objectives
1. To ensure all and only valid and authorized revenue transactions and cash
receipts are processed and recorded;
2. To ensure recorded sales and cash receipts are properly valued and
classified;
3. To ensure transactions are documented in a manner that could support
reconciliations;
4. To ensure revenues are recognized in a timely manner;
5. To ensure sales transactions and cash receipts are properly posted in the
transaction and master files and correctly summarized;
6. To ensure data and assets are logically and physically safeguarded;
7. To ensure incompatible duties of approval of contracts, recording of
revenues, and custody of cash receipts are properly segregated.
General Controls
 Recording of receipts and custody of cash are done by the cashier and
to provide control of these incompatible duties, Official receipts are
asked to be signed by the customer and internal controls for
reconciliation (see Reconciliation) are done.

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Authorization, Approval and Verification
 Authorizations are done by the Supervisors from Accommodation,
Functions & Events, and Restaurant, identified as the one with approval
authority for matters concerning their division.
 Processing of transactions, printing of documents, and updates of
transaction files cannot proceed without encoding approval of authority.
 Approval may only be done using employee accounts of the
Supervisors, who have the only access to their account and to the
approval scheme of the system.
 Verification is evidenced by signature of the personnel with approval
authority.
Compliance Reviews
 Demand, triggered, and scheduled reports, documents, and listings are
reviewed for compliance to law and accounting recording and reporting
standards.
Documentation
 Rules, regulations, policies, and operating procedures are documented
to guide system users.
 Documents created through the system are pre-numbered and registers
for these respective documents are automatically updated.

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 Log reports are produced by the system to document successful and
unsuccessful revenue transactions processed namely transaction listing
and error listing.
 Event monitoring logs are maintained to document activities performed
by personnel involving company resources.
Reconciliation
 Reconciliation of cash receipts under the custody of Cashiers from the
Finance Department are done every day and performed by the
Accounting Staff.
 Reports generated by the system are reviewed and reconciled by the
personnel or department accountable with supporting documents.
Access Control (Logical Security)
 A formal log-on procedure is initiated by the accessing party to which a
user ID and password must be entered into.
 Log-in requests are compared with the system’s database that has an
access control list integrated into its employee master file allowing
employees to access part of the system he/she is only authorized to have
access to.
 In case of failed log-in attempt, notification is sent to the accessing
party to re-enter user ID and password without disclosing as to whether
it was the user ID or the password that caused the failure.

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 Account lock-out policy and procedures include limited three failed
log-in attempts and formal account reactivation to be granted by the
Human Resource Division.
Physical Security and Accountability
 Information systems hardware is operated with adequate power supplies
and auxiliary power source.
 “Clear Desk Policy” is practiced in which documents are locked inside
drawers or cabinets when not in use or non-working hours to prevent
unauthorized access to confidential information.
 Facilities are equipped with fire suppression equipment, smoke
detectors, and installed sprinkler system.
Information Technology Control
 Database files including logs are adequately and periodically backed up.
 Disaster continuity plans are provided in case of data corruption or loss.
 Unless otherwise permitted by the access control list, database and files
are not allowed access. Unspecified access authority is allowed only of
viewing access.
Input Controls
 Documents are automatically pre-numbered by the system.

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 Preventive controls for out-of-balance situations integrated in the
system in which further processing of the transaction is halted and
notification is sent.
 Unique authentication code is used by approval authorities.
 Missing data checks disables the system to proceed processing
transactions with fields left blank.
 The system performs numeric-alphabetic data checks on inputs to
ensure processing of correct form of data.
Processing Controls
 System performs run to run controls for every processing of data from
scratch files to master files.
 System facilitates notification in case of errors, correction, and re-
submission. Process of error correction is documented in the error
listings report.
 Unique transaction identifier is automatically created by the system to
differentiate transactions from the Accommodations, Functions &
Events, and Restaurant.
 Aside from initiation of printing of documents or reports e.g. Guest
Registration Form or Official Receipts that can trigger update of
database files and input of data on documents or forms created through
the system, operator intervention controls are established to ensure
lesser human errors in posting to different records and files.

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Output Controls
 Printed outputs are sequentially filed.
 Printed transaction listings and account summaries are generated on a
periodic basis in order to provide audit trail and a basis for review.
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Revenue from Room Accommodations

Guest Front Office Staff Cashier
C
Fills-up
Guest
GUEST Walks-in
Information
A
Sheet Guest Information
Sheet (GIS)
Guest Information Receives

Sheet (GIS) Verifies Verifies payment
guest guest from
Confirms identity identity guest
prior
reserva-
tions
Prints out Guest Checks
Hotel Information Sheet available Hotel
(with prior rooms Hotel
Management Management
B reservation) (walk-in) Enter sales data Management
System System
System
Guest Information
Sheet Assigns
1 rooms
Receipt Issues
receipt
Directs
guest to
Enter guest data Hotel
cashier for
payment
Management
System
Releases
key to
3
the guest
Fill-up Guest Information Directs 2
Guest guest to
Extend stay? YES Sheet A
Informa- cashier for
1
tion Sheet payment Receipt
NO Releases
key to
C the guest A
B
Surrender
room key
Checks-out
and pays
Hotel
add͛l
charges
Management
System
A
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Guest
(Walk-in)
• Walks in and fills up Guest information sheet.
• Fills up Guest Information Sheet and gives it to the Front Office Staff.
• Presents Identification card for identity verification.
• Makes payment to the cashier.
• Receives the receipt.
• Receives room key.
• Surrenders key to Front Office Staff.
• Checks out and pays additional charges if applicable.
(With prior reservation)
• Walks in and confirms prior reservation.
• Presents Identification card for identity verification.
• Makes payment to the cashier.
• Receives the receipt.
• Receives room key.

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• Surrenders key to Front Office Staff.
• Checks out and pays additional charges if applicable.
Front Office Staff
(Walk-in)
• Receives guest information sheet from customer.
• Verifies guest’ identity.
• Checks available rooms.
• Assigns rooms to the guest.
• Enters guest’ data to Hotel Management System.
• Direct guest to cashier for payment.
• Releases the key to the guest.
(With prior reservation)
• Checks guest’ reservation.
• Verifies guest’ identity.
• Prints out Guest Information Sheet.

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• Directs guest to cashier for payment.
• Releases the key to the guest.
Cashier
• Receives payment from guest.
• Enters sales data to Hotel Management System.
• Issues three (3) copies of receipts, one copy for finance manager, one for guest
and one copy for filing.

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Revenue from Room Accommodations

Logistics Supervisor Housekeeping Staff
Hotel
Management
System
Inspects
Assign s
rooms an d
rooms to
prepares
housekeepin
Room Status
g staff
Rep ort
Room Status Report Room Status Report
Update Hotel
Management
System
Hotel
Management
System
Logistics Supervisor
• Retrieves guest’ information from Hotel Management System.
• Assigns rooms to housekeeping staff.
• Receives the room status report from the housekeeping staff.
• Updates Hotel Management System.

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Housekeeping Staff
• Inspects rooms and prepares room status report.
• Sends room status report to Logistics Supervisor.

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Revenue from Restobar Operations

Guest Restaurant Staff Cashier Kitchen Staff
D
Prepares
Places an
an order
order
slip
Order slip N
2
1 Order slip
Order1slip
Prepares
order
D
Enter sales data
Ordered
fo od/
beverages
E
Hotel
Management
System
E
Ordered
Payment of
food/
order
beverages
Cash Cash
Issues
F receipt
1
3
Receipt 2
1
Receipt
N
F
A
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Guest
• Places an order.
• Makes payment.
• Receives receipt.
Restaurant Staff
• Prepares order slip and sends it to cashier and kitchen staff.
• Delivers ordered food/beverages to guest.
• Receives payment from guest and remits it to the cashier.
Cashier
• Receives order slip from restaurant staff.
• Enter sales data to Hotel Management System.
• Receives guest’ payment.
• Issues three (3) copies of receipts, one for guest, one for Accounting Staff and one
copy for filing.
•
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Revenue from Events Operations

Guest Front Office Staff Cashier
START G
Confirms Cash
Inquires for
availability
avalability
and fills up
of event
reservation
center
form
Enter sales data

2 2
Reservation form
1
Reservation form
Hotel Management
Makes System
down N
payment Update Hotel
Management
System
3
2
1
Cash Receipt
Hotel Management
System
N
H
G H A
2 Receipt
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Guest
• Inquires availability of event center.
• Provides necessary information for reservation.
• Makes down payment to cashier.
• Receives receipt.
Front Office Staff
• Confirms availability and fills up reservation form.
• Updates Hotel Management System.
• Gives a copy of reservation form to guest and files one copy.
Cashier
• Receives payment from guest.
• Enter sales data to Hotel Management System.
• Issues three (3) copies of receipts, one for guest, one for Accounting Staff and one
copy for filing.

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Revenue from Operations

Accounting Staff
2
Receipt
2
Receipt
2
Receipt
Records
amount to
company͛s
books and
files receipt
Accounting Staff
• Receives receipts from Cashier.
• Records amount of company’s books and files receipts.

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Cash Receipts
Outgoing Cashier Accounting Staff Accounting Supervisor
Prepares D
Daily
Retrieves cash Summary of
receipts transaction Hotel Management Receipts Signed CCS
System
Signed DCR
Generate Daily Cash Daily Summary of
Report Signed CCS Signs
Receipts
deposit slip
prepared
by Cashier
Daily Cash Report

(DCR)
Deposit Slip
Reconciles
Conducts
cash count in
the presence
of the
reliever
cashier
Signs
Cash
Count
Sheet
Prepares
Cash Count
Sheet
Signed DCR
Signed CCS
Cash Count Sheet D

(CCS)
Asks reliever
cashier͛s
Deposit Slip
signature on
DCR and CCS
Signed DCR
BANK
Signed CCS
D
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Outgoing Cashier
• Retrieves cash receipts transaction from Hotel Management System.
• Generates Daily Cash Report (DCR).
• Conducts cash count in the presence of the reliever cashier.
• Prepares Cash Count Sheet (CCS).
• Ask reliever cashier’s signature on DCR and CCS.
• Files DCR and CCS
Accounting Staff
• Collects Daily Cash Report, Cash Count Sheets already filed by Cashiers first
thing in the morning.
• Prepares Daily Summary of receipts.
• Reconciles Daily Summary of receipts to Signed DCR and Signed CCS.
• Signs Cash Count Sheet.
• Files signed DCR and signed CCS.
• Receives deposit slip from accounting supervisor.
• Deposits cash to the bank.
Accounting Supervisor
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• Receives signed CCS.
• Signs deposit slip prepared by the cashier and sends it to Accounting Staff.
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SECTION 6 EXPENDITURE SUBSYSTEM
Overview
Internal Control

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SECTION 7 PAYROLL SUBSYSTEM
Overview
The Payroll Cycle typically includes several categories of employee
compensation, including salaries, hourly wages, incentive compensation and bonuses,
overtime, vacation pay, and employee benefits such as pensions, health care and other
premiums.
The cycle consists of the preparation of updated list of company’s employees
and deducting or withholding authorized amounts from employees’ pay and remitting
to the appropriate vendor or governmental entity. It allows businesses to follow a set
series of processes in order to make timely, correct payments in compliance with
government regulations.
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Internal Control
• Employees should be hired according to the criteria authorized by the
management.
• Compensation, deductions and adjustments to payroll or personnel
records should be made in accordance with management’s authorization.
Recording
• Amounts due must be recorded at exact amount, recorded in the proper
period, and should be classified properly.
Access to Assets
• Access to payroll records, forms, and documents should be restricted to
personnel authorized by the management.
• Preparation of payroll is made by the Accounting staff, verified by the
Accounting supervisor and approved by the Finance manager.
Create Separate Bank Account
• Create bank account dedicated to payroll.

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Use Security Measures
• Payroll records should be locked up in a filing cabinet to prevent the
access of unauthorized people.

Payroll Cycle
Human Resource Staff Human Resource Supervisor Accounting Staff Accounting Supervisor Finance Manager Computer Operations
A
Payroll Cycle Payroll Master File 1 1
Reconciled Payroll
Closes Changes Payroll Register Register
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1
2 Reconciled Payroll Data
Payroll Master File Time Sheets Bank Advise Summary
1 2
Reconciled Bank
Bank Advise
Add/ Revise Advise
Existing
Information Reviews 1
Reconciled Bank
Master Applies Advise
File Monthly
Changes Salary Payroll Process
YES Rate System
Prepares
Payroll
Summary Approves
1 payroll
All personnel Payroll Register register
information correct? and
2 summary
Bank Advise General
Payroll Master File 1 Verified Payroll
1 Register Ledger
Bank Advise
1 Verified Payroll
NO 1 Approved Payroll
Summary
Register
2
Verified Bank Advise 1 Approved Payroll
Update personnel Summary Payroll
information 1
Time Sheets Verified Bank Advise 2 Approved Bank
Advise
1
Approved Bank
Advise Accounts
Payable
Time Sheets
Approves
Time Reconciles
Sheets payroll
register and
summary
Sends file
to the
bank
A
1Reconciled Payroll
Register
1 Reconciled Payroll A
Summary Bank
2 Reconciled Bank
Advise
1 Reconciled Bank
Advise
92 | P a g e
Human Resource Staff
• The payroll cycle closes every after 15 days of each month.
• He must add or revise existing information before running the payroll. If not,
update personnel information.
• Prepares time sheets
Human Resource Supervisor
• Approves time sheets
• Receives and reviews master file changes
Accounting Staff
• Applies monthly salary rate from payroll master file and time sheets
• Prepares payroll register, and two (2) copies of bank advise
• He prepares payroll summary from the following documents such as payroll
register and bank advise.
• Reconciles payroll register and summary from verified documents
Finance Manager
• Approves payroll register and summary
• Sends one (1) approved bank advise to the bank. He files the other copy together
with the payroll summary and register.

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Computer Operations
• Automatically updates the payroll process system
• Automatically updates the general ledger, the payroll and accounts payable
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SECTION 8 FINANCING SUBSYSTEM
Overview
Financing subsystem shows how a company can raise capital for upcoming
projects through external activities, which include repaying investors, adding or
changing loans, or issuing more stock. These transactions or business events affect
long-term liabilities and equity. In other words, financing activities show how a
company funds its operations and expansions externally. Internal financing is not
included.
Mile Inn at present does not have any long term debt and is self-sufficient to
run its operations from its retained earnings. However, should the need arise; financing
subsystem is presented as reference for management.
Issuance of long-term loan is done through proper authorization from the
Finance Manager, General Manager and the Board of Directors. The payment of the
long term loan is governed by the specific negotiations with the bank concerned.
Payment to the bank is through electronic fund transfer as it appears to become bank
charges on the company’s account.
Since Mile Inn is a closed corporation, issuance of stock as part of the
financing cycle is not recommended.

95 | P a g e
Internal Control
 Authorization is made by the Board of Directors, processing of the loan
is done by the Finance Manager, recording of the transaction is done by
the Controller, and the custody of cash received from the loan is by the
Treasurer.
 Only borrowings and dividend declarations with resolution of 2/3 of the
Board are processed;
 Only Request for Additional Financing reviewed and endorsed by the
General Manager are processed and submitted to the Board for
resolution;
 Only approved and verified Requests for Payment are processed by the
system.
Documentation
to guide system users;
 System generated reports and documents are pre-numbered;
 Approvals are encoded but endorsements and resolutions of the BOD
are obtained to document that proper authorization was sought.
Reconciliation
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 Treasurer reconciles proceeds from loan with Loan Contract and Bank
Notification before update of Cash Receipts Transaction File and Cash
and Cash Equivalents Master File is initiated;
 Controller reviews supporting documents with recorded liability
recognized and recorded.
Access Control
 Unique user ID and password is required upon log-in to prevent
unauthorized access;
 Log-in requests are compared with the system’s database that has an
access control list integrated into its employee master file allowing
employees to access part of the system he/she is only authorized to have
access to.
Compliance Review
 Audit Committee composed of non-executive Board of Committee
review periodic reports submitted by the management for
compliance to company-imposed rules, industry and accounting
standards of reporting and disclosure.
Input Controls
 Missing data checks disables the system to proceed processing
transactions with fields left blank;
 The system performs numeric-alphabetic data checks on inputs to
ensure processing of correct form of data;

97 | P a g e
 System performs authorization tests for financing transactions.
Authentication code from approval authorities must be encoded for
processing to continue.
Processing Controls
 System performs posting and several reconciliations as part of run-to-
run control of data processing and operator intervention control.
Output Controls
 Supporting documents such as board resolutions are chronologically
filed;
 Listings of access and report printing initiation are produced to provide
audit trail for review and check compliance to confidentiality;
 Reports and documents that have passed their storage life are
appropriately disposed.
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FINANCING SUBSYSTEM
Accounting Supervisor Finance Manager Board of Directors
Mak es
financial Proposal for Loan Proposal for Loan
analysis Application (PLA) Application (PLA)
and funds
need
Reviews
PLA Calls for a
Communic
meeting
at es with
and
financial
reviews
institution
PLA
Notes
necessary
changes to
Selects PLA
most Approv es
qualified PLA
bank
Proposal for Loan

Application (PLA)
Generate
Proposal 2
for Loan Authorized PLA
Application 1
Board Resolution
Communicat
es with bank
regarding
loan
application
Proposal for Loan

Application (PLA)
2
Authorized PLA
1
Board Resolution
Bank
2
Loan Contract
Negotiates
with the
bank Bank
Reconciles
cash
receive
with loan
contract
2
2 1
Loan Contract Loan Contract
D
D
99 | P a g e
 Makes financial analysis and identify financial needs.
 Communicates with financial institutions for loan application.
 Selects most qualified bank.
 Makes proposal for loan application and sends it to the Finance Manager for
approval.
 Reconciles cash received with loan contract.
Finance Manager
 Reviews proposal for loan application.
 Notes necessary changes to the proposal and sends it to the Board of Directors
for approval.
 Communicates with bank regarding loan application.
 Negotiates with the bank.
 Files a copy of the loan contract and send the other to the accounting
supervisor.
Board of Directors
 Calls for a meeting and reviews proposal.
 Approves proposal for loan application.
 Sends the authorized proposal for loan application and board resolution to the
finance manager.
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SECTION 9 INVESTING SUBSYSTEM
Overview
The Investing Cycle involves the acquisition of fixed assets used in business
operations generally not held for immediate resale. Fixed assets are defined as assets
that have a useful life of more than one accounting period. Mile Inn is currently
operating with fixed assets such as; kitchenware, appliances, air conditioners,
refrigerators, freezers, personal desktop computer, land, vehicles and building.
The process begins with the request for fixed assets from each division. The
requests are assessed by the purchasing staffs that further create a Proposal for Capital
Investment. Proposed fixed assets undergo a process of authorization of Proposal for
Capital Investment. Management approvals from Finance Manager and Board of
Directors are necessary for it materially affects firm’s current operations.

101 | P a g e
Internal Control
 Authorization is made by the Logistics Supervisor, recording of
purchase is done by the Accounting Staff and depreciation is calculated
by the system and reported by the Accounting Department while the
custody of investment assets is with the Storage Staff.
 Only requests approved by the Purchasing Staff are processed and sent
for review for authorization;
 Only approved and verified requests are processed by the system.
Documentation
to guide system users;
 System generated reports and documents are pre-numbered;
 Approvals and quotations are filed to document that proper
authorization was sought.
Reconciliation
 Checks and Fund Transfer Request Forms are reconciled and verified
by the Finance Manager with source documents before approval is
given;
102 | P a g e
 Revenues earned from investments are reconciled by the Accounting
Department with the amounts that should be received before being
recognized and recorded.
Logical and Physical Security
 Fixed assets are kept separate from supplies used for day-to-day
operations. Unlike supplies with tags for each supply class, fixed assets
are tagged with unique identifier for each individual item.
Input Controls
 Only Purchasing Staff is allowed to key in Proposal for Capital
Investment;
 Finance Manager encodes appropriation of funds on approved Proposal
for Capital Investment;
 System prompts for required fields.
Processing Controls
 Transaction logs for individual transactions are preserved;
 System automatically computes all accounts before payments are made;
 System will not accept forms without data on required fields;
 System does not process unauthorized transactions;
 Transaction trails are available for each process.

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Output Controls
 Only Purchasing Staff is allowed to print Proposal for Capital
Investment;
 Authorization signature from Logistics Manager, Finance Manager and
General Manager are required before transaction shall be processed;
 Reports shall only be seen by the Purchasing Staff, Finance Manager
and General Manager;
 Copies of files and reports are to be filed in a secured drawer;
 Excess copies and unprocessed transactions are to be shredded.

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Purchase of Fixed Assets

Requesting Personnel Purchasing Staff Logistics Supervisor Finance Manager
Assesses
Request for Fixed
need for 2 2
Asset (RFA) Form
new fixed Quotation Quotation
asset
1 1
Proposal for Capital Proposal for Capital
Investment Investment
Request for Fixed
Asset (RFA) Form Verifies
request if
within
company͛s
needs
Reviews Appropriate funds
purchase for capital
decision investment
Requests
formal SUPPLIERS
quotation
Approves
Proposal for
Capital
Investment
Prepares Proposal
Quotation
for Capital
Investment
Selects
most
qualified
supplier
2
Quotation
1
Proposal for Capital
Investment
2
Quotation
D 1 2
Approved PCI Quotation
1
Approved PCI
105 | P a g e
Requesting Personnel
 Assesses need for new fixed asset.
 Prepares Request for Fixed Asset (RFA) Form and sends it to Purchasing Staff.
Purchasing Staff
 Verifies requests if within the company’s needs.
 Requests formal quotation from suppliers.
 Receives quotation from suppliers.
 Prepares Proposal for Capital Investment.
 Sends quotation and PCI to Logistics Manager.
 Receives quotation back and Approved PCI to be filed.
Logistics Supervisor
 Reviews purchase decision.
 Approves Proposal for Capital Investment and sends quotation and PCI to
Finance Manager.
 Selects most qualified supplier.
 Sends back quotation and Approved PCI to purchase staff for further
processing.
106 | P a g e
Finance Manager
 Receives quotation and Proposal for Capital Investment from Logistics
Supervisor.
 Appropriates funds for capital investment.

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SECTION 10 BIR/TAX/GOVERNMENT COMPLIANCE SUBSYSTEM
Overview
Complying with government regulations is essential for the operation of a
business in any country. Revenue Regulation no. 2-2011 which refers to the “Filling of
Income Tax Return and/or Annual Information Return by Individuals, Including
Estates and Trusts”. These Regulations are issued in order to prescribe the returns to be
filled by taxpayers in compliance with their duty to report income under the law. The
purpose of the BIR/Tax/Government compliance Subsystem is to provide an overview
of the flow of documents necessary to conform to the government regulations.
BIR Forms required
Form 1601C (Monthly Remittance return of Income Taxes Withheld on
Compensation) -filed by the employer who is required to deduct and withhold taxes
from compensation of employees.
Deadline: January to November, on or before the 10th day of the following
month and for December, on or before January 15 of the following year.
Form 1601E (Monthly Remittance return of Income Taxes Withheld on
Compensation-Expanded) - filed by the employer who is required to deduct and
withhold taxes from compensation of employees that is subject to expanded or
creditable withholding taxes.
Deadline: January to November, on or before the 10th day of the following
,month and for December, on or before January 15 of the following year.

108 | P a g e
Form 1601F (Monthly Remittance return of Final Income Tax Withheld)- The
employer files this return for the amount of final income withheld and remitted on
behalf of the employee.
Deadline: For EEPS(Electronic Filing), varies from 11 to 15 days from the end
of the month depending on the grouping set forth.
Form 1603 (Quarterly Return of final Income Taxes Withheld – on Fringe
Benefits paid to employees other than Rank and file)- This covers final income taxes
withheld for fringe benefits received.
Deadline: On or before the 15th day of the following month.
Form 1604CF (Annual Information Return of Income Tax Withheld on
Compensation and Final withholding Taxes)- filed by the employer who is required to
deduct and withhold taxes from compensation of employees on or before the last day
of January of the following calendar year.
Deadline: Filing is due on the last day of January of the following calendar year
when taxes were paid or accrued.
Form 1604E (Annual return of Creditable income Taxes Withheld (Expanded)
or Income payments from Withholding taxes)- filed by the employer who is required
to deduct and withhold taxes from compensation of employees that is subject to
expanded or creditable withholding taxes on or before March 1 of the following
calendar year.
Deadline: On or before March 1 of the following calendar year when taxes
were paid or accrued.

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1702Q (Quarterly Income Tax Return (For Corporations and Partnerships) is a
tax return intended for corporations, partnerships and non-individual taxpayers.
Deadline: On April 15 of the following calendar year.
Form 2305 (Certificate of Update of Exemption and Employers’ and
Employee’s information)- this certificate covers the update of information that may
affect the computation of personal exemptions.
Must be filed to the RDO within ten days from the date of occurrence.
Form 2306(Certificate of Final Tax Withheld)- is accomplished when the
employer issues another form reflecting the final income subjected to final tax. The
employee must receive a copy.
The employee must receive a copy of his certificate on or before January 31 of
the following calendar year when compensation was received.
Form 2307(Certificate of Creditable Tax Withheld at Source)- shows the
income subjected to expanded withholding tax paid by the employer.
- For EWT, a form 1701 or 1702 must be attached. It must be
filed on or before the 20th day of the month following the taxable quarter
- For Percentage Taxes on Gov’t. money payments, certificate
must be attached to form 2551. It must be issued on or before the 10 th day of
the following month.
- For VAT Withholding, it is to be attached to form 2550. It must
be issued before the 10th day of the month following the month the withholding
was made.
110 | P a g e
Form 2316 (Certificate of Compensation Payment or Tax Withheld for
Compensation Payment With or Without Tax withheld)- is accomplished and issued to
all employees by the employer reflecting compensation received and taxes withheld
and paid based on compensation received during the calendar year.
Deadline: This certificate must be issued to the employee on or before January
31 of the following year. In case of termination of employment, this must be issued on
the same day last wages are paid.

111 | P a g e
Internal Control
1. Ensure source information gathered from the accounting and other
external departments is accurate.
Does your tax process ensure that raw data is referenced back to the trial
balance to ensure there are no material differences?
2. Ensure tax rates used for current and future tax calculations are correct.
Does your tax process ensure that rates used in calculations have been
checked to an external source such as a current version of Income Tax Act or
taxing authority website (domestic and foreign)?
3. Ensure the accuracy of the tax calculations.
How does you tax department keep abreast of any changes in domestic
and foreign tax legislation? Does your tax process ensure that calculations are
correct by re-calculating material numbers? Does your department restrict
access to spreadsheets used for calculations? Are changes made to spreadsheets
tracked and reviewed separately to ensure errors do not occur?
4. Ensure that tax contingencies are adequately supported.
Does your tax process ensure that every contingency item is supported
with a dollar amount, a related taxation year and the rationale for the
contingency? Does your company have to comply with FIN 48 requirements?

112 | P a g e
5. Ensure the book to actual (“BTA”) adjustment has been made.
Does your tax process ensure that two separate adjustments are recorded (i)
prior year’s tax provision estimate to tax return filed adjustment and (ii) prior
year’s tax return filed to the assessed amount? Furthermore have you
considered why there are significant differences (if any) and can the provision
process be improved to reduce these adjustments.
6. Ensure inputs for future tax balances are accurate and reasonable.
The decision of whether and where (short or long term) to record a future
tax asset/liability may be partially based on the company’s revenue forecast in
specific jurisdictions, financing plans, planned acquisitions and divestitures,
etc. Does your tax process ensure that tax is involved in these strategic
discussions and has the most current information?
7. Ensure that tax entries are properly authorized and posted correctly to
general ledger and tax accounts.
This has two parts as payments into and adjustments between tax accounts
(taxing authority accounts) should be properly authorized and reconciled on a
monthly basis to ensure balances correct for each legal entity and taxation year.
The second part is to ensure that the journal entries made to record the
payments, adjustments, accruals, and expense, etc are properly authorized and
the general ledger accounts reconcile to tax working papers.

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8. Ensure that the income tax balances are recorded according to generally
accepted accounting principles.
Does your tax process ensure there is adequate documentation to support
that taxes are recorded correctly? How does the tax department keep abreast of
changes to accounting for its domestic and foreign companies? Have
accounting tax policies been approved by the chief financial officer and agreed
to by external auditors?
9. Ensure that all tax-related figures used for public dissemination have been
agreed.
Does your tax process ensure the tax department reviews and agrees all
other tax-related figures in the MD&A, annual report and annual information
return?
10. Ensure that a Tax Plan Implementation Review is performed.
Does your tax process ensure that tax plans implemented have been
appropriately authorized, implemented and measured?

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BIR/Tax/Government Compliance Subsystem
Accounting Staff Finance Manager BIR
1
Property Payroll Form A
Payroll Point of Sale
Management Download 1 Sales Receipts
System
System eBIRforms
from R&B
1 Sales Receipts
from Rooms 1
(FRN)
Fills up
Obtains the 1 Other BIR
data eBIRfor forms
ms 1
Form 1702RT
2 Form 2316
1
Payroll Form NO
Validate
1 Sales Receipts
from R&B
1 Sales Receipts
from Rooms Are the File BIR
entries Forms
correct?
NO
YES
2 Successfully
Print
Other BIR forms filed?
Final Submit
2 Copy accomplished forms
Form 1702RT to eFPS
3 YES
Form 2316
2
Form 1702RT
3
Form 2316
2
(FRN) eMail confirmation
Other BIR forms
N
A A
B
B Continue
using
ePay
eMail confirmation
Bank
END
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Accounting Staff
 Obtain data from Payroll, Hotel Management System and Point of Sale System.
 Acquire Payroll form. Sales Receipt from Restaurant and Bar, and Sales
Receipt from rooms or accommodation.
 Sends the above documents to the Finance Manager to fill up BIR forms
 Obtains copies of ITR(3) with its attachment, other BIR Forms that are due and
Filing Reference Number
 Files one copy of each form and attachment and sends the other copies to
RDO/LTDO/LT Office within fifteen (15) days from the date of eFiling(only
applicable when there are required attachments).
Finance Manager
 Download the Offline eBIRForms Package from the BIR website
 Selects the form and fills by encoding data in the return.
 Validates after completely encoding all necessary information. In case
information is wrongly placed, click update and encode the actual data and
validate the information again.
 Print a Final copy (applicable to ITR in the eBIRForms) and other BIR forms
that is nearing their due dates.
 Goes online and submit the accomplished tax return to eFPS or online
eBIRForms. A NFNH shall be generated in all returns as acknowledgement of
its receipt.
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 Existing issuances shall be paid through ePay.
 A Filing Reference Number is generated and is attached to the ITR together
with its attachments and then sent to the Accounting Staff.
 Receives eMail confirmation from BIR.
BIR
 Receives a copy or copies of each form with its attachment(s) and Filing
Reference Number.
 When forms are successfully file, sends confirmation to the business through
eMail.
If there are other attachments to be submitted such as Summary Alphalists of
Withholding Tax (SAWT), Monthly Alphalists of Payees (MAP) required under BIR
Form Nos. 1600, 1601E, 1601F, it shall prepared using the Data Entry Module or
Summary List of Sales/Purchases/Importation for all VAT taxpayers in BIR Form No.
2550Q prepared using the RELIEF of the BIR and submitted via email to:
esubmission@bir.gov.ph
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SECTION 11 GENERAL LEDGER SUBSYSTEM
Overview
It is undeniable that the general ledger is the central core of the accounting
information system where all of the financial transactions of a business are categorized
and summarized into accounts. These accounts in the general ledger then proceed to
group similar transactions into individual records producing a continually updated
debit or credit each.
Of course in order to ensure true, fair and accurate financial reporting, the data
from this subsystem collected is based on financial transactions, stored in a database,
and processed with the applicable controls. However, unlike other subsystems, the
General Ledger Subsystem focuses mainly on communication and information
functions rather than operational ones. As a result this system is generally concerned
with the recording of business transactions, classification of the recorded transactions,
validating collected transactions, updating master files and preparing financial reports.
The Mile Inn General Ledger Subsystem centralizes the information stored in
the different master files and reconciles them to ensure the integrity of data. The
information is then summarized into different accounts and used in the financial
reporting process. Any adjustment or correcting entries to general ledger accounts are
applied during this cycle using approved procedures

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Internal Control
The journal voucher is the document that authorizes an entry to the general
ledger. With that said, journal vouchers have numerous sources such as the cash
receipts processing, sales order processing, and the financial reporting group. It is vital
to the integrity of the accounting records that the journal vouchers be properly
authorized by a responsible manager at the source department.
The general ledger as a whole provides verification control for the accounting process.
In order to do this the task of updating the general ledger must be separate from all
accounting and asset custody responsibility within the organization. Therefore,
individuals with access authority to GL accounts should not:
a. Have record-keeping responsibility for special journals or subsidiary ledgers.
b. Prepare journal vouchers.
c. Have custody of physical assets.
However due to the fact that transactions are authorized, processed, and posted directly
to the general ledger. In order to compensate for this potential risk, the system should
provide end users and GL departments with detailed listings of journal vouchers and
account activity reports. These documents advise users of the automated actions taken
by the system so that errors and unusual events, which warrant investigation, can be
identified.
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Access Controls
Unauthorized access to the GL accounts can result in errors, fraud, and
misrepresentations in financial statements. In order to remedy this, the company will
keep their manual files in metal cabinets with locks as well as outsource a number of
IT specialists to design a system that gives database access to authorized individuals
only. And later on when the system has been fully set up passwords given to
employees must be changed every quarter.
Accounting Records
In order for the company to have good internal control it must be able to keep track of
its accounting records and have an accurate audit trail. The audit trail is a record of the
path that a transaction takes through the input, processing, and output phases of
transaction processing. This involves a network of documents, journals, and ledgers
designed to ensure that a transaction can be accurately traced through the system from
initiation to final disposition. This is important data because the audit trail facilitates
error prevention and correction when the data files are conveniently and logically
organized. Also, the general ledger and other files that constitute the audit trail should
be detailed and rich enough to:
a. Provide the ability to answer inquiries.
b. Be able to reconstruct files if they are completely or partially destroyed.
c. Provide historical data required by auditors.
d. Fulfil government regulation

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e. Provide a means for preventing, detecting and correcting errors.
5. Independent Verification
The general ledger functions as an independent verification step within
the accounting information system. In this case the FRS produces two operational
reports-the transaction summary report and the exception report-that provide proof of
the accuracy of this process. The transaction summary report presents the summarized
transactions found in the general ledger. While the exceptional report provides the
computer operation’s report about any anomalies and unresolved issues regarding
transactions found in the company’s database.
GENERAL LEDGER SUBSYSTEM POLICY
1. The company must outsource IT specialists at least four times a year to check
the security of the General Ledger System’s access control.
2. The Accounting Supervisor must both assess and review the general ledger and
reporting system before preparing the transaction summary with the exception report.
3. The transaction summary and the exception report must be signed by the
Accounting Supervisor before being sent to the Finance Manager.
4. The Finance Manager must review the transaction summary and the exception
report as well as produce a reviewed transaction summary and a reviewed exception
report before he or she can prepare the trial balance.

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5. The General Ledger Subsystem must also aim to ensure logical and physical
security of data and existence of limitations and access controls.
6. Completeness and correctness of data entry records must be ensured by the
finance department.
7. All transactions and relevant activities are too documented.
8. The Finance Department must ensure that their practices align with the
company objectives as well as the laws and regulations imposed by the government.
General Ledger Subsystem
Computer Process Accounting Supervisor Finance Manager
Reviews
Assesses records transaction
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and prepares summary and

BIR/TAX/ transaction exception
Revenue Expenditure Payroll Financing
GOVERNMENT summary w/ report and
Cycle Cycle Cycle CYCLE Cycle exception report prepares trial
balance
Reviewed Transaction
Transaction Summary w/ Exception
Summary w/ Report
Exception Report
General Trial Balance

Ledger and
Reporting
System
To Financial
Reporting
Phase
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Computer Process
1. Receive data from Revenue, Expenditure, Payroll, BIR and Financing Cycles.
2. Compile all date and send to general ledger reporting system
3. Send general ledger reporting system data to the accounting supervisor.
1. Receive data from general ledger reporting system.
2. Assess records and prepare transaction summary with exception report
3. Send transaction summary with exception report to Finance Manager
Finance Manager
1. Receive transaction summary and exception report.
2. Review transaction summary and exception report and prepare trial balance.
3. Produce reviewed transaction summary and exception report and trial balance.
4. Proceed to financial reporting.

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SECTION 12 FINANCIAL REPORTING
Overview
Financial reporting is one of the bedrocks of modern business. It is essentially a
way of following standard practices to give an accurate depiction of a company’s
finances. It also summarizes the transactions that happened within the business cycle.
The primary purpose of financial reporting is to provide financial information
to various stakeholders including government regulatory agencies such as Securities
and Exchange Commission and Bureau of Internal Revenue. It follows the format and
policies prescribed by Philippine Financial Reporting Standards and other regulatory
bodies. It is governed by statutory and common law, and it should be done according
to ethical standards.
Financial statements are collection of reports about an organization's financial
results, financial condition, and cash flows. Relevant financial information is presented
in a structured manner and in a form easy to understand.The company’s set of financial
statements consist of the Statement of Financial Position, Statement of Comprehensive
Income, Statement of Changes in Shareholders’ Equity, Statement of Cash Flows and
the Notes to Financial Statements.
Financial Statements are prepared on a going concern basis and accrual basis of
accounting wherein income and expenses are matched in the periods in which benefits
are incurred regardless of the timing of its cash flow.

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Financial Statements Components
Statement of Financial Position
The statement of financial position, also known as the Balance Sheet, provides an
overview of assets, liabilities and stockholders' equity at a specific point in time. It is a
financial statement that provides a snapshot of what a company owns and owes, as
well as the amount invested by shareholders.
Statement of Comprehensive Income
The statement of comprehensive income provides a more comprehensive
information on financial performance and illustrates the results of operations
recognize during the period.
Statement of Changes in Shareholders’ Equity
The statement of changes in equity shows the movements in the elements or
components of shareholders’ equity. The statement explains the changes in a
company's share Capital, accumulated reserves and retained earnings over the
reporting period. It breaks down changes in the owners' interest in the organization,
and in the application of retained profit or surplus from one accounting period to the
next.
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Statement of Cash Flows
The Statement of Cash Flows provides relevant information about cash receipts
and cash payments of an entity during a period. The cash receipts come from many
different revenue generating activities while the cash payments mostly relates to its
cost. Also, it summarizes the operating, investing and financing activities of an entity.
Notes to Financial Statements
The Notes to Financial Statements provide narrative description of items
presented in the financial statements and information about items that do not qualify
for recognition. It contains information in addition to that presented in the statement of
financial position, statement of comprehensive income, statement of changes in equity
and statement of cash flows. It helps clarify or enhances the understability of the
statement.
Note 25
Basis of Preparation
The company’s Financial Statements policy were prepared under historical cost
basis and presented in Philippine Peso that shall serve as the company’s functional
currency and all values are to be rounded off to centavos.
Compliance with Government
Financial Statements shall be prepared in accordance with Philippine Financial
Reporting Standards and be presented upon the board of directors and stakeholders.
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Accounting Policies Adopted
Accounting Policies adopted are consistent with prior year financial statements
in accordance with standard set forth by the International Accounting Standards Board
and Philippine Financial Reporting Standards
Note 26
Significant Accounting Policies
Revenue Recognition
Room Accommodation Revenue shall be recognized upon customer’s checking
in whereas Restobar Revenue shall be recognized upon receiving customer’s order and
Functions and Event Revenue recognition upon update of hotel management system.
Cash and Cash Equivalents
The cash account includes cash on hand, petty cash and cash in banks that are
unrestricted and can be used by the management in their operations. Cash equivalents
are short- term and highly liquid investments that are readily convertible into cash and
so near their maturity that they present insignificant risk of changes in value because of
changes in interest rates and can be used by the business on their operation.
Trade and Other Receivables
Trade and Other Receivables are recognized initially at transaction price
following the gross accounting method.
Fixed Assets Cost Measurement, Estimated Useful Life and Depreciation Policy
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The company uses a straight line depreciation policy and the useful life of asset
shall be upon management assessment, included in depreciable cost are all cost
necessary to bring the asset to its intended use.
The following useful lives of Fixed Assets shall range as follow:
Land Improvements 5 – 10 years
Building 15 – 25 years
Office Equipment 5 – 10 years
Furniture and Fixtures 5 – 10 years
Machinery, Tools and Equipment 10 – 20 years
Utensils, Glass Wares and Dinning Wares 3 – 5 years
Appliances 3 – 10 years
Management Accounting Judgement and Estimates
The management’s judgement and estimates shall be based on the events that
occurred and shall not deviate from the rules set forth by the Philippine Financial
Reporting Standards and shall be in effect in the periods covered unless another
estimate will be imposed provided change in Accounting Policy shall underwent
proper procedure.
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Pro-forma Financial Statements
Mile Inn
Statement of Financial Position
December 31, 20XX
ASSETS
Not
Current Assets
e
Cash and cash equivalents 1 XXX
Trade and other receivables 2 XXX
Supplies 3 XXX
Prepayments 4 XXX
Total Current Assets XXX
Noncurrent Assets
Property, plant and equipment 5 XXX
Intangible assets 6 XXX
Other noncurrent assets 7 XXX
Total Noncurrent Assets XXX
XXX
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade and other
8 XXX
payables
Accruals 9 XXX
Dividend Payable 10 XXX
Total Current Liabilities XXX

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Noncurrent Liabilities
Long term loans payable 11 XXX

Total Noncurrent Liabilities XXX
TOTAL LIABILITIES XXX
Shareholder's Equity
Share Capital XXX
Share Capital
XXX
Excess of Par
Unrestricted
Retained XXX
Earnings
Restricted
Retained XXX
Earnings
Total Shareholders' Equity XXXX
TOTAL LIABILITIES AND EQUITY XXXX
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SECTION 13 CHART OF ACCOUNTS
Overview
The Chart of Accounts is used to organize the finances of a company and to
segregate the expenditures, revenue, assets and of course, liabilities in order for
financial statements and managerial reports to make more sense. All in all, it provides
framework within which the accounting records of the company are constructed. It is a
list of general ledger accounts consisting of real (balance sheet) and nominal (income
statement) accounts which are summarized monthly and posted to the General Ledger
(GL) which are then consequently listed in the Trial Balance (TB) in preparation for
coming up with a Financial Statements (FS).
Elements of Financial Statements

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Elements of financial statements relate to the status or measurement of
financial position and results of operation of each branch office which are relevant to
decisions that would require the commitment of resources. Those elements directly
related to the measurement of financial position as shown in the balance sheet are
assets, liabilities and equity. The elements directly related to the measurement of
performance which is shown in the statements of income and expenses are
revenue/income and expenses. The definitions of the different elements are as follows:
a. Assets - are economic resources controlled by the entity as a result of past
events and from which future economic benefits are expected to flow to the
entity. Of course assets also include certain prepaid expenses or expenses paid
in advances but its economic benefit extends beyond the end of the accounting
period; and is measured in conformity with generally accepted accounting
principles.
b. Liabilities – are economic obligations of the enterprise arising from past events,
the settlement of which are expected to result in an outflow from the enterprise.
Liabilities also include certain deferred credits or income collected in advance
but considered unearned as of the end of the accounting period; and recognized
and measured in conformity with generally accepted accounting principles
c. Stockholder's Equity- the interest of the company which is the excess of its
assets over its liabilities.
d. Revenues- increase in economic benefits during the accounting period in the
form of inflows or enhancements of assets or decreases of liabilities that result
in increases in stockholder's equity.

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e. Expenses- decreases in economic benefits during an accounting period in the
form of outflow or depletions of assets or incurrence of liabilities that result in
decrease in stockholder's equity.
List of Accounts
Balance Sheet Accounts
The balance sheet accounts consist of assets, liabilities and stockholder's
equity. These are classified into the following;
Assets
Current Assets
Cash on Hand
Petty Cash Fund
Cash in Bank Account - 1
Cash in Bank Account - 2
Cash in Bank Payroll Account
Cash in Bank Settlement Account

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Cash in Bank Loan account
Accounts Receivable – Trade
Accounts Receivable – Functions and Events
Accounts Receivable – Employees and Officers
Accounts Receivable – Other
Allowance for Doubtful Accounts
Supplies
Supplies – Bar and Restaurant
Supplies– Kitchen
Supplies – Housekeeping
Office Supplies and Materials
Prepayments
Prepaid Insurance
Prepaid Payment Other
Operating Licenses
Non-Current Assets
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Property, Plant and Equipment
Land
Land Improvements
Accumulated Depreciation – Land Improvements
Building
Accumulated Depreciation – Building
Office Equipment
Accumulated Depreciation – Office Equipment
Furniture and Fixtures
Accumulated Depreciation – Furniture and Fixtures
Machinery, Tools and Equipment
Accumulated Depreciation – Machinery, Tools and
Equipment
Utensils, Glass Wares and Dining Wares
Accumulated Depreciation – Utensils, Glass Wares
and Dining Wares
Appliances
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Accumulated Depreciation - Appliances
Intangible Assets
Accounting Systems
Accumulated Amortization – Accounting Systems
Computer Operating Systems
Accumulated Amortization – Operating Systems
Other Assets
Other Assets
Deferred Tax Charges
Liabilities
Current Liabilities
Trade and Other Payables
Accounts Payable – Vendors
Accounts Payable – Salaries and Wages
Accounts Payable – Social Security System
Accounts Payable – Pag –Ibig
Accounts Payable – Philhealth

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Accounts Payable – Withholding Tax
Accounts Payable – Executive Compensation
Advances from Vendors
Income Tax Payable
Short Term Loan Payable
Advances from Stockholders
Accruals
Accrued Interest Payable
Accrued Salaries and Wages
Accrued Executive Compensation
Dividends Payable
Dividends Payable
Non-Current Liabilities
Long Term Loans Payable
Shareholder’s Equity
Share Capital
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Share Capital Excess of Par
Unrestricted Retained Earnings
Restricted Retained Earnings
Revaluation Surplus
Revenue/Income and Expense Accounts
The revenue/income and expense accounts consist of the following:
Revenue
Sales
Accommodation Sales
Functions and Event Sales
Restaurant & Bar Sales
Other Income
Miscellaneous Income
Expense
s
Operating
Purchases
Purchase Return and Allowances
Spoilage
Insurance Expense
Utilities Expense
Repairs and Maintenance
Depreciation Expense – Land Improvements

Depreciation Expense - Buildings
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Depreciation Expense-Utensils, Glass Wares and Dining
Wares
Depreciation Expense – Appliances
Miscellaneous Expense
Administrative Expense
Salaries and Wages
Executive Compensation
SSS Employer Share
Pag-ibig Employer Share
Philhealth Employer Share
Office Supplies Expense
Employee Training and Development
Business Tax and Operating Licenses Expense

Interest Expense
Coding Structure
The company shall use a five digit coding scheme to identify the chart of
accounts, in which the first digit shall pertain to Financial Statement Classification, the
second and the third pertains to the Primary Account Classification, lastly the fourth
and the fifth will refer to the Sub-Account Classification. Presented below is an
example of an account with its corresponding code.
Financial Statement Main Account Sub Account Account Title
Classification Classification Classification
1 01 01 Cash on Hand
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Asset Cash and Cash Cash in Bank
Equivalents
Financial Statement Classification main grouping includes Asset, Liabilities,
Stockholder’s Equity, Revenue and Expense. Presented below are the Financial
Statement Classification and its corresponding range
Financial Statement Classification Range
Assets 1-00-00 to 1-99-99
Liabilities 2-00-00 to 2-99-99
Equity 3-00-00 to 3-99-99
Revenue 4-00-00 to 4-99-99
Expense 5-00-00 to 5-99-99
Elaboration of Coding Structure
Financial Statement Main Account Classification Main Account Title
Classification
Asset (1) 01 Cash and Cash Equivalents
Asset (1) 02 Petty Cash Fund
Asset (1) 03 Cash on Bank
Asset (1) 04 Trade and Other Receivables
Asset (1) 05 Supplies

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Asset (1) 06 Prepayments
Asset (1) 10 Property, Plant and Equipment
Asset (1) 11 Intangible Assets
Asset (1) 12 Other Assets
Liabilities (2) 01 Trade and Other Payables
Liabilities (2) 02 Accruals
Liabilities (2) 03 Dividend Payable
Liabilities (2) 10 Long Term Loan Payable
Equity (3) 01 Share Capital
Equity (3) 02 Retained Earnings
Equity (3) 03 Revaluation Surplus
Revenue (4) 01 Sales
Revenue (4) 02 Other Income
Expenses (5) 01 Operating and Administrative
Expenses (5) 02 Non-Operating Expense
LIST AND CODING OF CHARTACCOUNTS
Account Code Account Title
Assets
CURRENT ASSETS
1-01-01 Cash on Hand
1-02-01 Petty Cash Fund

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1-03-01 Cash in Bank Account - 1
1-03-02 Cash in Bank Account - 2
1-03-03 Cash in Bank Payroll Account
1-03-04 Cash in Bank Settlement Account
1-03-05 Cash in Bank Loan account
1-04-01 Accounts Receivable – Trade
1-04-02 Accounts Receivable – Functions and Events
1-04-03 Accounts Receivable – Employees and Officers
1-04-04 Accounts Receivable – Others
1-04-05 Allowance for Doubtful Accounts
Supplies
1-05-01 Supplies – Bar and Restaurant
1-05-02 Supplies– Kitchen
1-05-03 Supplies – Housekeeping
1-05-04 Office Supplies and Materials
Prepayments
1-06-01 Prepaid Insurance

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1-06-02 Prepaid Payment Other
1-06-03 Operating Licenses
NON-CURRENT ASSETS
Property Plant and Equipment
1-10-01 Land
1-10-02 Land Improvements
1-10-03 Accumulated Depreciation – Land Improvements
1-10-04 Building
1-10-05 Accumulated Depreciation – Building
1-10-06 Office Equipment
1-10-07 Accumulated Depreciation – Office Equipment
1-10-08 Furniture and Fixtures
1-10-09 Accumulated Depreciation – Furniture and Fixtures
1-10-10 Machinery, Tools and Equipment
1-10-11 Accumulated Depreciation – Machinery, Tools and
Equipment
1-10-12 Utensils, Glass Wares and Dining Wares
1-10-13 Accumulated Depreciation - Utensils, Glass Wares and
Dining Wares
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1-10-14 Appliances
1-10-15 Accumulated Depreciation - Appliances
Intangible Assets
1-11-01 Accounting Systems
1-11-02 Accumulated Amortization – Accounting Systems
1-11-03 Computer Operating Systems
1-11-04 Accumulated Amortization – Operating Systems
Other Assets
1-12-01 Other Assets
1-12-01 Deferred Tax Charges
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables
2-01-01 Accounts Payable – Vendors
2-01-02 Accounts Payable – Salaries and Wages
2-01-03 Accounts Payable – Social Security System
2-01-04 Accounts Payable – Pag –Ibig

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2-01-05 Accounts Payable – Philhealth
2-01-06 Accounts Payable – Withholding Tax
2-01-07 Accounts Payable – Executive Compensation
2-01-08 Advances from Vendors
2-01-09 Income Tax Payable
2-01-10 Short Terms Loan Payable
2-01-11 Advances from Shareholders
Accruals
2-02-01 Accrued Interest Payable
2-02-02 Accrued Salaries and Wages
2-02-03 Accrued Executive Compensation
Dividend Payable
2-03-01 Dividend Payable
NON – CURRENT LIABILITIES
2-10-01 Long Term Loan Payable
Equity
3-01-01 Share Capital
3-01-02 Share Capital Excess of Par

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3-02-01 Unrestricted Retained Earnings
3-02-02 Restricted Retained Earnings
3-03-01 Revaluation Surplus
Revenue
Sales
4-01-01 Room Accommodation Sales
4-01-02 Functions and Event Sales
4-01-03 Restaurant & Bar Sales
Other Income
4-02-01 Miscellaneous Income
Expenses
Operating Expenses
5-01-01 Purchases
5-01-02 Purchase Return and Allowances
5-01-03 Spoilage
5-01-04 Insurance Expense
5-01-05 Utilities Expense

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5-01-06 Repairs and Maintenance
5-01-07 Depreciation Expense – Land Improvements
5-01-08 Depreciation Expense - Buildings
5-01-09 Depreciation Expense - Utensils, Glass Wares
and Dinning
Wares
5-01-10 Depreciation Expense – Appliances
5-01-11 Miscellaneous Expense
Administrative Expense
5-02-01 Salaries and Wages
5-02-02 Executive Compensation
5-02-03 SSS Employer Share
5-02-04 Pag-Ibig Employer Share
5-02-05 Philhealth Employer Share
5-02-06 Office Supplies Expense
5-02-07 Employee Training and Development
5-02-08 Business Tax and Operating Licenses Expense
5-02-09 Interest Expense

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Detailed Description of Accounts:
Each account in the chart of accounts is defined to ensure a uniform classification and
recording of transactions. Also, it would aid management in the analysis and
interpretation of the financial data submitted by the Branch.
ASSETS
Cash on Hand
This account represents funds that are immediately available to a business, and
can be spent as needed.
Petty Cash Fund
This account represents to a fixed amount of cash set aside intended for
payment of petty or miscellaneous authorized expenditures not exceeding P500.00.
Cash on Bank
Refers to actual money deposited to depository bank under the name of the
corporation.
Accounts Receivable (Trade, Functions and Events, Employees and Officers, &
Others)
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These accounts represent money which is owed to the company by a customer
for products and services provided on credit.
Allowances for Doubtful Accounts
This account represents the amount set-up to provide for possible losses due to
uncollectible accounts.
Supplies (Bar and Restaurant, Kitchen, Housekeeping)
This account represents the objects acquired by the company in order for the
business to continue its day-to-day functions.
Office Supplies and Materials
This account represents the materials that are consumed within an office setting
during the company’s normal business operations.
Prepayments
This account represents the amount paid in advance for expenses such
insurance of services vehicles or building, operating licenses and other prepayments,
etc.
Land
This account represents the cost of the land used for its main operation plus all
cost and charges made therein such as transfer of title, sales commissions, taxes,
surveying fees, legal fees, etc.

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Land Improvements
The cost of depreciable improvements after land acquisition (i.e. payments,
fencing, water system, drainage system, sidewalks, etc. that are subject to depreciation
over their useful life)
Building
Cost of the building constructed on the land owned by the company and used
for its main operation. Major repairs or improvements that will prolong the life of the
building are considered additional cost.
Furniture and Fixtures, Office Equipment, Machinery, Tools and Equipment &
Appliances
These accounts represent the acquisition cost or appraised value of movable
(furniture) or immovable (fixtures) properties and office equipment used in the
company's ordinary course of business such as tables, chairs, cabinets, computers,
copiers, etc., including incidental expenses incurred in acquiring them up to the time
they are received. This account is also use to record the cost of application software or
computer program purchase by the company to expedite the recordkeeping of business
operation. Depreciation is determined periodically in accordance with generally
accepted rates.
Utensils, Glass Wares and Dining Wares
This account represents the acquisition cost of the utensils, glass wares and
dining wares used in the company's ordinary course of business. Depreciation is

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determined periodically in accordance with generally accepted rates.
Accumulated Depreciation
This contra-asset account represents the accumulated amount of depreciation
expense taken on the object(s) since it was acquired.
Intangible Assets (Accounting Systems & Computer Operating Systems)
This account represents an asset that is not physical in nature. Corporate
intellectual property, including items such as patents, trademarks, copyrights and
business methodologies, are intangible assets, as are goodwill and brand recognition.
Other Assets
This account represents long term assets that are not classified as investments,
property, plant, equipment, or intangible assets.
Deferred Tax Charges
This account represents an asset on a company's balance sheet that may be used
to reduce its taxable income
LIABILITIES
Accounts Payable-Vendors
This account represents the amount owed by the company to its vendors.
1. Credit this account for purchases of supplies, furniture, fixtures and equipment
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on credit.
2. Debit this accounts for payments made or credit memo adjustments.
Accounts Payable-Salaries and Wages & Executive Compensation
This account represents the amount owed by the company to its employees
1. Credit this account for purchases of supplies, furniture, fixtures and equipment
on credit.
2. Debit this accounts for payments made or credit memo adjustments.
Accounts Payable-SSS, Philhealth and Pag-ibig Payable
This account represents the amount owed by the company to the government
agencies.
1. Credit this account for the employees’ payroll deductions for SSS, Philhealth
and Pag-ibig employee share.
2. Debit this account upon payment for SSS, Philhealth and Pag-ibig. The amount
debited represents employees share only.
Advances from Vendors & Stockholders
This account represents the amount owed by the company to its vendors and
stockholders.
Withholding Tax Payable
This account represents the amount withheld by the company from employees'
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wages and the amount that should be paid directly to the government by the employer.
Income Tax Payable
This account represents the amount of tax liability at the end of the period.
Short Term Loans Payable
This account represents the small loans owed by the company to the bank.
Accruals
This account represents expenses incurred but not yet paid as of cut-off date.
Dividends Payable
This account represents amount declared as cash dividends by the Board of
Directors to stockholders of record.
Long Term Loans Payable
This account represents the long term debt owed by the company to the bank.
STOCKHOLDERS' EQUITY
Share Capital
This account represents the amount of stocks owned by the shareholders of the
company
Share Capital Excess of Par
This account represents the capital contributed by the shareholders in excess of

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the par or stated value of the shares outstanding.
Restricted Retained Earnings
This account represents part of retained earnings appropriated or set aside for a
specific purpose.
Example: Reserve for expansion or reserve for operation
Unrestricted Retained Earnings
This account represents the free or unappropriated portion of the accumulated
profits earned or realized which is retained in the business to strengthen the capital
structure of the corporation.
Revaluation Surplus
This account represents the excess sound value over the carrying amount of the
revalued asset.
REVENUE
Sales
This account represents the amount of revenue earned from the company’s
normal day-to-day operations.
Other Income
This account represents any income which cannot be appropriately classified
under any of the foregoing income accounts.

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EXPENSES
Purchases
This account represents the expense spent by the company in order to acquire
supplies for the bar and restaurant, the kitchen, and the housekeeping department.
Purchase Return and Allowances
This account is a contra-expense account that represents the supplies returned
to their respective vendors, should they fail to meet the quality standards required by
the company
Spoilage
This account represents the expense incurred by the company due to the expiry
and spoilage of some of the company’s purchases.
Salaries and Wages & Executive Compensation Expense
This account represents the expense incurred by the company when paying the
salary of its employees.
SSS, Philhealth and Pag-ibig Share Expense
This account represents the share of the company in the SSS, Philhealth and
Pag-ibig premiums of its officers and employees.
Office Supplies Expense
This account represents the expenses incurred by the company in regards to the
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usage of its office supplies.
Insurance Expense
This account represents payments and amortization of premiums or insurance
such as fidelity bond, car and fire insurance.
Utilities Expense
This account represents cost of electricity and water incurred in business
operation.
Repairs and Maintenance
This account represents expenses incurred in the repair and maintenance of
facility and equipment except major repairs that prolong the life of the asset.
Employee Training and Development
This account represents expenses incurred for the training and seminars
attended or conducted by the company for the sake of training its employees.
Depreciation Expense
This account represents the allocated portion of the cost of a
company's fixed assets that is appropriate for the accounting period indicated on the
company's statement of income.
Miscellaneous Expenses
Any expense which cannot be appropriately classified under any of the

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foregoing expense accounts.
Business Tax and Operating Licenses Expense
This account represents expenses incurred for taxes other than income tax and
for acquiring business permits and other operating licenses required by the government
for the business to possess in order to continue its day-to-day operations.
Interest Expense
This account represents the cost incurred by an entity for borrowed funds.
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Forms and Documents
Conclusion
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Flowcharting Guidelines and Symbols

Corporate Social Responsibilities

Accounting Information System

Objectives of Accounting Information System

SECTION 2 BUSINESS ORGANIZATION

Personnel Duties and Responsibilities

SECTION 3 SYSTEMS OVERVIEW

General Accounting Plan

System Software Plan

SECTION 4 BOOK OF ACCOUNTS

SECTION 5 REVENUE SUBSYSTEM

Flowchart and Narrative

SECTION 6 EXPENDITURE SUBSYSTEM

Flowchart and Narrative

SECTION 7 PAYROLL SUBSYSTEM

Flowchart and Narrative

SECTION 8 FINANCING SUBSYSTEM

Flowchart and Narrative

SECTION 9 INVESTING SUBSYSTEM

Flowchart and Narrative

SECTION 10 BIR/TAX/GOVERNMENT COMPLIANCE SUBSYSTEM

Flowchart and Narrative

SECTION 11 GENERAL LEDGER SUBSYSTEM

Flowchart and Narrative

SECTION 12 FINANCIAL REPORTING

Financial Statements Components

Pro-forma Financial Statements

SECTION 13 CHART OF ACCOUNTS

Overview of the Coding Structure

Forms and Documents

refreshment, and accommodation for travellers and customers.

Under YDM9 Corporation, a family-owned corporation established in 2016,

time, it decided to venture out as a distributor or dealer of Coca Cola Products.

these multiple service lines, it decided to incorporate.

THE HOTEL AND RESTAURANT INDUSTRY

on the availability of leisure and disposable income.

The Hospitality Industry is mainly concerned with providing accommodations,

non-resident public and permanent residents.

The hospitality industry started in France at the beginning of the fifteenth

for forty-six generations in AD 707.

In looking at various industries, barriers to entry by newcomers and

communicated by successful organizations is a clear competitive advantage.

serving as business exchanges, centers of sociability, places of public assembly and

deliberation, decorative showcases, political headquarters, vacation spots, and

permanent residences. The hotel as an institution, and hotels as an industry, has

world. The emergence of the hotel as a significant commercial institution, however, is

types of lodging provided by some hotels became luxurious.

During World War II the hotel business flourished. Existing establishments

popularity since the 1970s.

goes back as far as the earliest civilization.

tallying the amount of their bill.

THE HOTEL AND RESTAURANT INDUSTRY IN THE COUNTRY

The hospitality sector in the Philippines is a flourishing line of business that

existing supply, which includes internationally known brands.

influx of economic opportunities in the country.

The country’s growth sustainability mainly depends on the spur of domestic

trajectory, maintaining political stability, and having a well-coordinated tourism plan

THE HOTEL AND RESTAURANT INDUSTRY IN THE CITY

of shopping malls, hotels, restaurants and up-and-coming businesses that offer

providing the gracious Filipino hospitality, exceptional and personalized services,

Mile Inn seeks to provide top-quality courtesy catering to diverse markets

within a multi-cultural environment. Counting on the dedication and professionalism

hospitality by offering premium accommodation, facilities, security and delivering