Accounts receivable & Income audit – Agreed action plan

Month end closing for accounts receivables

The manner in which the month end closing for the various accounts receivable balances is
documented and filed could be improved. In particular at month end, print outs should be made of
all subsidiary ledgers and the reconciliation to the general ledger should be documented and signed
off by the responsible person. The printouts should be filed in a month end closing file for easy
reference.

A month end closing checklist needs to be made which ensure that the mentioned checks are
properly performed and documented. In addition, specifications should be made for all accounts
which do not have a subsidiary ledger

Action: FC to implement month end closing checklist for each accounts receivable staff to ensure
that all the necessary reconciliations, specifications and control calculations are preformed and
properly filed.

Due date: 31 January 2012

Reconciling difference GL and subsidiary ledger

A carried forward reconciling difference between general ledger and subsidiary ledger “guest ledger”
exists of IDR 57,948,132.

This difference was previously highlighted and just needs to be written off so that general ledger and
subsidiary ledger are in agreement

Action: FC to write off reconciling difference in the accounts.

Due date: 31 January 2012

Documentation of daily income audit

Although the income auditor performs a daily check between the income recorded in the VHP
system and related receivable, cash and credit cards, this check is not documented and signed off by
the income auditor.

The daily income audit should be properly documented by means of a cover sheet which shows that
the necessary checks were performed and which is signed off by the income auditor and filed.

Action: FC to ensure that daily income audit is properly documented and filed

Due date: 31 January 2012

Filing system for income audit

In the current set up photo copies are made of all guest bills and the credit card settlement advise
printout’s. This system of making photo copies of the guest bills is time consuming and not really
necessary since all original documents related to the daily income audit should be filed in one place.

The current way of working needs to be changed so that no more unnecessary photocopies of guest
bills are made. It should also be evaluated whether it is really necessary to photocopy the
settlement slips from the credit card machines

Action: FC to implement single filing system without unnecessary photocopies. Furthermore all
original documents related to the daily income audit should be filed together and only in one
place for easy reference.

Due date: 31 January 2012

Frequency of credit meetings

Currently credit meetings are only held once a month. As a result accounts receivable can easily
become overdue.

Ideally a credit meeting should be held on a weekly basis, but if not practical, at least bi-weekly.
Proper attention should be given to overdue and over limit accounts so as to minimise risk and
improve cash flow

Action: FC to discuss and agree with management whether credit meetings should be held weekly
or bi-weekly.

Due date: 31 January 2012

Review of other amounts receivable

There are many old and overdue outstanding balances from various third parties such as company
ledger, individual ledger, employee ledger and others.

It should be evaluated whether or not these balances can be collected or should be written off and
appropriate action should be taken.

Action: FC to evaluate and discuss with Management which balances can still be collected and
which should be written off. Appropriate steps should be taken to collect amounts deemed still
collectable.

Due date: 31 January 2012

Standard operating procedures

The standard operating procedures no’s 4,9,10,12 which are related to the Income audit & Accounts
receivable function need to be reviewed and agreed between Income auditor, accounts receivable
officer and FC.

Action: FC to discuss and finalise the SOP’s with Income auditor and accounts receivable officer
and to document the acceptance of the SOP’s by the mentioned functions.

Due date: 31 January 2012