PLANTATION SECTOR

STAND-ALONE PLANTATION UNIT (SPU)

STANDARD OPERATING PROCEDURES
PAYMENT FOR PURCHASING
BY ISSUANCE OF PURCHASE ORDER
(Index No. PP-1)
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

1 Goods Receipt HIT Stores Manager 1. Subsequent to the physical and the quality verification, SK
Updation & for all acceptable goods, a Goods Received Note (GRN)
Acceptance should be raised through system by the Storekeeper for
goods received at the estate/mill stores irrespective
whether same were delivered by the supplier direct or
through a transit location. Refer Purchasing
Procedures for Goods Receipt Process.
2. Harvest IT will generate a GRN which will be SK
automatically referred to an approved PO. At the same
time, the liability also will be created from the system.
3. Hard copy of GRN should be signed by the person who SK
sanctions the PR for acceptance of the goods based on
right quality and specification.
4. SK submits the approved GRN and delivery note to SPU SK
Purchasing Assistant for Purchasing verification.

2 Verification of Manual Purchasing 1. Supplier invoice shall be sent to Purchasing Assistant for PA
Supplier Invoice verification. All invoices received by Purchasing
Assistant shall be registered and stamped “RECEIPT &
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

Dated” immediately when received. It shall be registered

in the Purchasing Log Book at the same day.
2. Verification of supplier invoice by comparing with
Purchase Order, GRN, DO and Faktur Pajak. PA shall PA
initial in the supplier invoice to confirm that PO terms,
quality and quantity have been satisfied. PA shall
request supplier to revise its invoice if PA find that the
invoice is incorrect. This is to avoid unnecessary
subsequent correction when deliver to Finance.
3. If quality discount is required due to unfavorable quality,
PA shall identify the quality discount based on PA
agreement with supplier. A memo or correspondence
with supplier shall be attached to the supplier invoice.
4. If Faktur Pajak has not been received from supplier, PA
shall contact supplier to complete the document, and PA
inform that VAT will paid if Faktur Pajak has been
received. Faktur Pajak shall be original document.
5. Record the outstanding Faktur Pajak (FP) in the
Purchasing Log Book for all uncollected FPs from PA
suppliers. All outstanding Faktur Pajak shall be followed
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

up with supplier regularly, and update the status based

on the follow up procedures.
6. The complete set of supplier documents shall be sent to
Finance for payment process. Purchasing shall obtain
acknowledgement from PPAA in the Purchasing Log PA
Book for the transferring supplier documents to PPAA.
7. Review outstanding GRN (invoice has not been
received), and contact supplier to check the invoice
status. PA

3 Verification of Manual AM 1. PPAA signs and acknowledge receipt in the Purchasing PPAA
Payment Log Book. PPAA will not accept incomplete documents
Documents except VAT Invoice. Instances where VAT Invoice is not
available the payments will be made excluding the VAT.
2. If supplier requests payment to bank account different
with supplier master, a written confirmation from supplier
director/owner shall be attached.
3. Complete verification by performing three way matching PPAA
procedures below:
a. Invoice reflects the quantity and specifications of
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

goods as recorded in GRN and as ordered in PO;

b. Check that the GRN is signed by authorized
person, including quality checker, if required;
c. check descriptions, supplier name and supplier
address in VAT invoice are the same as
described in the supplier invoice;
d. check if any notes in the GRN that may have
implication to payment process;
e. price per unit as reflected in the invoice is the
same as reflected in PO;
f. check if any discount/quality discount has been
agreed;
g. check terms of payment is consistent between
invoice and PO;
h. check if advance payment has been made for the
respective invoice;
i. check bank account in the supplier master,
otherwise written confirmation from supplier is
required.
4. Complete “Finance & Tax Verification Checklist” after
completing the three way matching procedures above.
PPAA
5. If the above procedures result issues to be followed up
by Purchasing Assistant, other than FP pending, all the
PPAA
documents shall be returned to Purchasing Assistant to
complete the same. Purchasing Log Book shall be
updated.
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

6. If the record is in order, the supplier documents shall be

filed in document folder waiting for payment process. PPAA

4 Transfer VAT Manual/ AM 1. For invoice paid in SPU, the related VAT shall be paid PPAA
Recoverable to RO System from SPU also. However, the related Faktur Pajak shall
be send to RO for tax claim.
2. When GRN is raised, the VAT will be recorded by HIT
system as follow:
a. Dr. I/A RO – VAT Recoverable
b. Cr. Creditor
3. SPU shall send Debit Note (DN) to RO for transaction PPAA
recorded once a week. The DN shall be attached with
list of VAT transferred to RO. The list shall separate the
VAT attached with Faktur Pajak and the VAT which
Faktur Pajak has not been received.
4. When SPU subsequently sends the pending Faktur PPAA
Pajak to RO, the transmittal letter shall refer to the
related reference number of Debit Note when the VAT is
transferred to RO.
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

5. RO will record the Debit Note as follow:

a. Dr. VAT Recoverable - SPU RO -
b. Cr. I/A SPU – VAT recoverable Finance
6. RO will record Faktur Pajak received from SPU as
follow:
a. Dr. VAT Claimable
b. Cr. VAT Recoverable – SPU RO -
7. Tax Assistant in RO shall follow up with SPU for Finance
outstanding Faktur Pajak as reflected in the balance of RO
“VAT Recoverable – SPU” account recorded in RO.
8. Faktur Pajak received in RO shall be handed over to Tax
Department to claim against the VAT Output or for RO
refund process, when prepare VAT Return.
9. If the VAT return has been filed with the tax office, a
copy of the VAT return is send to Accountant Assistant RO
in RO to record the refund as follow:
a. Dr. VAT Refund/ VAT Output
b. Cr. VAT Claimable
10. Assistant Accountant shall provide ageing analysis for
outstanding balance of VAT Claimable in the monthly
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

closing financial. The Ageing report shall be submitted RO

to RFC for action plan and a copy to Head of External
Relations for information.

5 Selection of System/ FC 1. Fortnightly, PPAA generates AP Ageing Report from the PPAA
supplier invoice to Manual system. The report shall provide due date on the
be paid (PAN outstanding supplier invoice, and classified the
Generation) outstanding invoices into the following categories:
a. Invoices which have been overdue
b. Invoices which will fall within the next two weeks
2. The Ageing Report shall be reviewed by AM to select AM
invoices for payment process. AM selects invoices to be
paid by considering cash flow plan, critical suppliers, and
supplier issues. This will be discussed and agreed with
FC.
3. Send list of invoices to be paid to PPAA to start the PPAA
payment process.

6 Preparation System AM Refer to the Procedures required in Generating Payment AAF

payment voucher
PP-1 OPERATIONAL PROCEDURE MANUAL – CASH AND BANK PAYMENTS
SUBJECT PAYMENT ON PURCHASING BY ISSUING PURCHASE ORDER (PO)
ISSUE/REVISION DATE: APPROVAL DATE ORIGINAL
Sr. No Activity Manual/ Responsibility Description of Activity Done By
Application (*

and cheque (PV Voucher and Cheque.

Generation)

(* Explanation on abbreviation used:

FC Financial Controller in SPU
AM Accounts Manager
AAF Assistant Accountant in Finance
PPAA Payable and Payment Account Assistant
PA Purchasing Assistant
SK Storekeeper
RO Regional Office