Accounting and Finance Procedure

Document No. E2C-FMP-008

TABLE OF CONTENTS

I. PURPOSE. ................................................................................................... 2
II. SCOPE ......................................................................................................... 2
III. DEFINITION ................................................................................................ 2
IV. RESPONSIBILITY........................................................................................... 3-4
V. PROCEDURE…............................................................................................. 4-5
VI. MEASUREMENT ......................................................................................... 5
VII. QUALITY RECORDS ................................................................................ 6 - 7
VIII. FLOWCHART… ............................................................................................ 8

Rev. No. Rev. Date Description of Revision Revised By Approval

00 11/Oct/2016 New JBG KIA
01 29/Mar/2018 3 Years Cycle Revision SG KIA

PROPRIETARY & CONFIDENTIAL

This document and the information contained herein is E2C proprietary know-how. This document or any part
therefore should not be reproduced stored in a retrieval system or transmitted by any means, electronic or
otherwise, or divulged without permission of E2C.

E2C-FMP-008 Page 1 of 8
 I. Purpose
The purpose of the accounting and finance procedure manual are:
• To set and sustain best practices in financial management.
• To meet the E2C internal and external reporting requirements and compliance obligations.
• To ensure appropriate recording of financial transactions.

II. Scope
This accounting and finance procedure applies to all E2C employees and clients.

III. Reference Documentation

Not Applicable

IV. Definitions
The terms defined below are commonly used accounting terms, most of which are used in this guide.
Account – A personal or impersonal record of one or more business transactions to enable a balance to
be determined at any moment in time.

Accountancy - The process of analyzing, classifying and recording transactions and operations in terms of
time, quantity and monetary values.

Accounting System - The day-to-day method by which transactions are recorded and ultimately appear in
the financial statements.

Ledger - A collection of accounts. The principal book of accounts in which the entries from all the other
books are summarize divided into Cash Book, Bought Ledger, Sales Ledger and Nominal Ledger.

Ledger account - A record in the ledger showing one of the two aspects of each transaction
or group of transactions (see also ‘Account’).

Budget – is a numerical representation of an action for a specific time period, which details planned
expenditure and income.

Expenditures – is a payment in cash or barter credits, or the incurrence of a liability by an entity, in

exchange for goods or services. Evidence of the documentation triggered by an expenditure is a sales
receipt or an invoice.

Finance – is a field that deals with the study of investments. It includes the dynamics of assets and liabilities
over time under conditions of different degrees of uncertainty and risk.

Balance Sheet – also known as statement of financial position; details the total assets, total liabilities and
equity (net assets or net worth).

V. Responsibility
1. Accountant/Finance Control is responsible to:
• Assist in the formulation of the policies to be adopted by e2c in financial and manpower terms;
• Assist in carrying out the financial policies of e2c;
• Make recommendations concerning financial policies;

E2C-FMP-008 Page 2 of 8
 • Ensure that proper accounts and records of e2c assets, liabilities, operations and transactions
are maintained and that statutory objectives in this regard are discharged;
• Keep under review, the structure of e2c financial information and accountancy systems,
ensuring that they are developed and maintained as viable and efficient systems meeting the
needs of e2c;
• To fully acquaint himself with the Financial Regulations and accounting instructions, and to
take care that all are duly observed;
• To promptly bring to account, under the proper headings of the Budget and accounts, all
monies collected;
• To ensure that proper provision is made for the safe keeping of e2c money, stamps, official
receipts, requisitions, and all other accountable documents, and assets under his charge;
• To exercise supervision over all officers under his authority entrusted with the receipt and
expenditure of e2c money and to take precautions, by the maintenance of efficient and
regular checks, against the occurrence of misappropriation or negligence;
• To ensure that no payment is made without proper authority being obtained and where
applicable, quoted on the payment voucher;
• To check daily, all cash in his charge and to verify the amounts with the balances shown in his
records;
• Promptly bring to account as revenue, any cash found in his charge excess of the balances
shown in his records, and report this to the account manager;
• Promptly make good any deficiency in cash, or other e2c assets for which he is responsible
not caused by misappropriation and to report all other losses and deficiencies in writing to
the relevant account manager/managing director.
• To produce when required all cash, stamps, assets, securities, books of account, vouchers, or
other documents in his charge for inspection by account manager.
• Ensure that the financial system runs properly in order to process financial information and
generate accurate reports.
• Ensure that internal controls are enhanced and maintained at an acceptable level,
• Manage risks affecting the organizations assets and make sure risks are maintained at lower
level.
• Ensure that financial policies, procedures and donor compliance requirements are adhered to
expected standards.
• Ensure that internal and external financial reports are prepared and disseminated within
deadlines.
• Ensure there is enough cash on hand and vendors are paid promptly
• Responsible for all aspects of cash management including:
a. Monitoring receivables, billing staff and collection of debt and managing pre-payments.
b. Lead, direct, mentor/coach. Appraise and supervise the other finance staff
c. Provide budget analysis and feedback to managing director on a regular basis.

2. Admin Assistant Controller/Document Controller is responsible to:

• Ensure that payment package is complete and accurate before processing.
• Ensure that vendors/Suppliers, Staff and Sub-recipients’ cheques are prepared and paid on
time.
• Maintain petty cash ledger and prepare petty cash replenishment.
• Prepare cash receipt voucher for cash collected and deposited to bank account.
• Ensure that copy of cash receipt and bank deposit must be attached with the Cash Receipt
voucher.
• Ensure that the Petty cash replenishment is prepared the moment the paid cash is 90% of the
cash float.

E2C-FMP-008 Page 3 of 8
 • Prepare cash and check deposit slip and give it to the agent for banking on a daily basis.
• Cash collected from staff travel advances and other receipts must be banked within the next
business day.
• Ensure that all cash at hand must be locked in a safe overnight and on weekends.
• Maintain safe ledger and keep the first key of the safe.
• Work closely with Administrative officer on physical counting of assets, stocks and property.
• Prepare a stock count report on a monthly basis
• Manage the asset register
• Prepare cash receipt vouchers.
• Retrieve documents needed for Audits
• Ensure that soft copy and hard copy month end closing packages are filed properly and done
within the due dates
• Ensure that data is posted on a daily basis, and that the financial information is processed
accurately, and reliable reports are generated timely
• Ensure that internal financial reports are generated accurately and disseminated timely.
• Perform systems analysis to identify any irregularities (such as wrong posting) and
propose immediate corrective actions to the finance manager

3. Managing Director is responsible for:

• Monitor budget allocations, expenditures, fund balances and related financial activities to
ensure that allocations are accurate, revenues are recorded, expenses are within budget limits
and/or fiscal practices are followed.
• Analyze a variety of financial information for the purpose of providing direction and support,
making recommendations, maximizing use of funds, and/or ensuring overall operations are
within budget.

VI. Procedure
1. E2C budget forecast shall consists of detailed financial budget planning for each contract and activity.
The budget forecast shall include the following information:
• Description
• Account
• Approved budget for each individual year and grand total
• Paid cost up to and including the cut-off date
• Result (i.e. difference between committed total and approved budget total)
• Forecasted cost for succeeding years

2. The budget forecast shall provide full details of all planned expenditures related to each contract and
activity

3. Project Engineer shall carry out a continuous check on committed costs and the actual expenditures
against the approved budget.

4. Project Engineer shall inform managing director concerned if the total committed costs are higher
than the approved budget for project.

5. Project Engineer shall inform managing director when it becomes likely that the total committed costs
will exceed the total approved budget.

E2C-FMP-008 Page 4 of 8
 6. All income to and expenditure from the E2C bank accounts shall be recorded by the MD in the E2C
cashbook, one will be keep in each E2C office. This cashbook can be as simple as filed bank statements
and a record of payments in/out from the account.

7. MD shall be responsible for the proper administration of the E2C bank account.

8. Copies of all transfer orders, bank statements and documents related to the E2C bank transfers shall
be kept in one binder in the E2C office.

Budget Preparation Procedure:

1. Accounts manager shall issue approved guidelines to Managing Director for preparation of annual
budgets and discusses the requirements with respective staff/discipline.
2. Accounts manager shall discuss the draft budget guidelines with respective staff/discipline.
3. Accounts manager shall prepare current year-to-date financial data with projections of year-end
totals.
4. Submit budget forms (FMP-01). These forms are reviewed by managing director, for completeness
and reasonableness.
5. After review and consultations have been made with managing director, then the budget will return
with relevant comments/changes.
6. Account manager will prepare the annual e2c draft budget plan

Budget Monitoring and Control Procedure:

1. All payments or expenses must be checked by accountant/finance control with the responsibility of
budget compliance assurance to ensure that they are in accordance with the approved budget.
2. Every month, accountant/finance control prepare budget monitoring reports and submit to account
manager in charge of budget preparation & compliance.
3. Accountant/finance control shall perform a variance analysis of the budget and provides a report
that explains all expenditure of more than 10% variance. The budget variance analysis report is
forwarded to account manager.
4. Account manager shall review the budget analysis reports and makes recommendations for action.

Payment Procedure:

1. All payments will be authorized by managing director. When an invoice is received, it will match with
the purchase order and checked for validity and correctness, a payment voucher will be raised.
Accountant will ensure that all procedures and checks have been followed and all supporting
documents attached before a payment voucher (FMP-02) is sent to managing director for final
authorization.
2. Payments will be posted promptly to the cash book and to the general ledger.
3. Paid vouchers represent an essential means of supporting and explaining a payment as well as
evidence that the necessary approval was given, and procedures followed before making a payment
and that voucher number and order are available for future reference.

VII. Measurement
Not Applicable

E2C-FMP-008 Page 5 of 8
 VIII. Quality Records

FMP-01: Annual Budget Template

FMP-02: Payment Voucher

E2C-FMP-008 Page 6 of 8
Ensiab Engineering Consulting
Annual Budget Expenses (FMP-01)
Shaded cells are calculations.
Planned Expenses Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR
Employee Costs

Wages
Benefits
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Office Costs

Office lease
Gas

Electric
Water
Telephone
Internet access
Office supplies
Security

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Marketing Costs

Web site hosting

Web site updates
Collateral preparation

Collateral printing
Marketing events
Miscellaneous expenses
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Training/Travel
Training classes

Training-related travel costs

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

TOTALS
Monthly Planned Expenses SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
TOTAL Planned Expenses SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
Ensiab Engineering Consulting
Detailed Expense Estimates
Shaded cells are calculations.
Actual Expenses Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR
Employee Costs

Wages
Benefits
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Office Costs

Office lease
Gas

Electric
Water
Telephone
Internet access
Office supplies
Security

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Marketing Costs

Web site hosting

Web site updates
Collateral preparation

Collateral printing
Marketing events
Miscellaneous expenses
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Training/Travel

Training classes

Training-related travel costs

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

TOTAL Planned Expenses

Monthly Actual Expenses SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
TOTAL Actual Expenses SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
Ensiab Engineering Consulting
Detailed Expense Estimates
All cells are calculations.
Expense Variances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YEAR
Employee Costs

Wages
Benefits
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Office Costs

Office lease
Gas

Electric
Water
Telephone
Internet access
Office supplies
Security

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Marketing Costs

Web site hosting

Web site updates
Collateral preparation

Collateral printing
Marketing events
Miscellaneous expenses
Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

Training/Travel

Training classes

Training-related travel costs

Subtotal SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00

TOTALS
Monthly Expense Variances SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
TOTAL Expense Variances SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00 SAR 0.00
Ensiab Engineering Consulting
Detailed Expense Estimates
Expense Category Planned Expenses Actual Expenses Expense Variances Variance Percentage
Employee Costs SAR 0.00 SAR 0.00 $0.00 #DIV/0!
Office Costs SAR 0.00 SAR 0.00 $0.00 #DIV/0!
Marketing Costs SAR 0.00 SAR 0.00 $0.00 #DIV/0!
Training/Travel SAR 0.00 SAR 0.00 $0.00 #DIV/0!
TOTALS SAR 0.00 SAR 0.00 $0.00 #DIV/0!

Planned Expenses Actual Expenses

Training/Tra Training/Tr
vel avel
0% 0%
Employee Office Costs
Costs 0%
Office Costs 0%
0% Marketing
Marketing Costs Employee
Costs 0% Costs
0% 0%
Employee Costs Office Costs Employee Costs Office Costs
Marketing Costs Training/Travel Marketing Costs Training/Travel

Monthly Expenses
SAR 1.00

SAR 0.90

SAR 0.80

SAR 0.70

SAR 0.60
EXPENSES

SAR 0.50

SAR 0.40

SAR 0.30

SAR 0.20

SAR 0.10

SAR 0.00
1 2 3 4 5 6 7 8 9 10 11 12
MONTH

Planned Actual Variance

 FMP-02
Payment Voucher

CURRENCY: AMOUNT: O/S AMOUNT:

MODE OF PAYMENT: Cash Cheques Manager’s Cheques

Bank Transfer

PAY TO:

DELIVERY INSTRUCTIONS:

NATURE OF PAYMENT:

ACCOUNT CODING (To be completed by request originator)

Description Amount Account Other Code

Total

INTERNAL CONTROL APPROVALS

Originator Date:
Accountant/Budget Analyst Date:
Managing Director Date:

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IX. Flowchart

Input Documents

Produce Budget E2C E2C Profit & Loss

Forecast E2C Balance Sheet
Time Sheets
Expense Sheets
Cashbook
Bank Statements
Submit Budget E2C
Planned Purchases
Forecast to MD
for Approval Inventory of capital items
Invoices Subcontractor &
Vendors

Approved
No
Budget
Forecast

Yes

Distribute E2C
Approved E2C
Budget Forecast

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