LIFEBANK MICROFINANCE FOUNDATION INC.

Gov. Fermin Caram St., Maria Clara

Iloilo City Philippines

Managing Chart of Accounts and

other Reporting Segmentation
Business Process Manual

OVERVIEW
The organization employs a comprehensive and effective set of accounting practices, procedures and
policies that are designed to:
● Be effective in ensuring accuracy and efficiency.
● To ensure appropriate internal controls are in place which are designed to protect key assets and
prevent fraud and other such activities.
● Maintain an updated and documented record of the closing procedures that the company employs
to produce financial statements and other management reports.
● To provide historical accounting records for comparative reporting, benchmarking and other
management needs.

PURPOSE
The purpose of this business process manual is to provide methods for assignment and maintenance of
the Lifebank Foundation’s Chart of Accounts and other Reporting Segmentation requirements in order to
produce meaningful financial data for the organization and for external compliance requirements.

SCOPE
This business process applies to all general ledger accounts and reporting segmentation that the
organization’s Controller Department, Treasury Department, and Infrastructure & Information
Communication Technology Department uses to service.

RESPONSIBILITIES
The Controller Department is responsible for creating, updating, deleting, deactivating, reactivating
merging accounts, and monitoring and approving changes to the organization’s Chart of Accounts and
other reporting segmentation.
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Manage Chart of Accounts and other Reporting Segment
Business Process Manual

PROCEDURE
DESIGN OF ACCOUNTS

Chart of Accounts purpose is to provide a set of destinations for posting transactions and categorizes
these transactions for tracking and reporting purposes. Accounts should have account name, number and
account type that indicates the nature of the account. The organization is required to comply with
accounting standards, to report in accordance with governmental guidelines, and to satisfy audit
obligations.

Accounts should be arranged in the sequence they appear in the financial statements. And will have a
standard 6 digit account number that will be in series as follows:

100000 – Bank/Cash Accounts

200000 – Current Assets Accounts
300000 – Non Current Accounts
400000 – Current Liability Accounts
500000 – Non Current Liability Accounts
600000 – Equity and Retained Earnings Accounts
700000 – Revenue Accounts
800000 – Cost of Sales Accounts
900000 – Administrative Expense Accounts

The chart of accounts are established in a hierarchical configuration, meaning values within child accounts
can be summarized at a parent level, using the account-level to facilitate reporting. For example, “Rent

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Business Process Manual

Expense” and “Power, Light and Water Expense” would have a child-level structured under “Office
Administration Expense” parent-level code (rolled-up), and all “Office Administration Expenses Expense”
accounts are structured under the Administrative Expense Account.

Sample:
900000 – Administrative Expense Accounts
950000 – Office Administration Expenses
951000 – Rent Expense
952000 – Power, Light and Water Expense

Parent accounts will generally determine type of sub levels and will not be data enterable. Child Accounts
will contain detail of which data is enterable.

This structure helps with the following:

● Allows easy grouping and summarizing for processing and reporting.

● Allow various reports to be rolled up at all levels.
● Reflect relationships between the levels of responsibility.

The organization will categorize each account by its nature as follows:

● Receivable
● Payable
● Bank and Cash
● Current Assets
● Prepayments
● Non-current Assets
● Fixed Assets
● Current Liabilities
● Non-current Liabilities
● Equity
● Current Year Earnings
● Other Income
● Income
● Depreciation
● Expenses
● Direct Costs

The organization will also be using Account types to organize data in account registers and other financial
reports:

● Income Statement account types include Direct Costs, Expense, Income, Depreciation, and Other
Income.
● Balance Sheet account types include Accounts Payable, Accounts Receivable, Bank, Deferred
Expense, Deferred Revenue, Equity, Fixed Asset, Long Term Liability, Other Asset, Other Current
Asset, and Other Current Liability.
● Cash Flow Statement account types include the net of Income and Other Income, Accounts
Payable, Accounts Receivable, Fixed Asset, Long Term Liability, Other Asset, Other Current Asset
and Other Current Liability.

Creation, maintenance and updating of accounts will be the responsibility of the Controller's Department.

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Business Process Manual

DESCRIPTION OF ACCOUNTS

Account Account
Account Name Description Parent Account
No. Type

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Manage Chart of Accounts and other Reporting Segment
Business Process Manual

Document ID Title Publish Date

Manage Chart of Accounts and Reporting mm/dd/yyyy
Segmentation
Revision Prepared By Date Prepared
mm/dd/yyyy
Effective Date: Reviewed By Date Reviewed
mm/dd/yyyy
Approved By Date Approved
Final Approver's Name / Title mm/dd/yyyy

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