Invoices Processing Procedure

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The objectives of these procedures are to:

1.           Ensure that adequate checks are carried out to verify that liability exists before an invoice is recorded as a liability and approved for payment.

2.           Ensure that every suppliers invoices are supported by original documentary records to evidence the purchase order was approved and the goods and services were received.

3.            Ensure that procedure on requisitioning, purchases an receipt of goods are effectively carried out.


Accounting Record

Finance Department shall maintain Control Accounts in General Legder, Subsidiary Ledger which include Creditor Ledger and Fixed Asset Register.

Periodical Reconciliation

Monthly reconciliation will be done between the control accounts in GL and subsidiary ledgers and between creditors statement and creditors ledger.

Record of PO/Invoices received

All PO received from Procurement Dept. will be recorded in a log book and the information in the log book will be checked against the PO before initial on the log book.

Processing of Invoices

Accounts Executive shall retrieve all relevant PO/DO/supporting documents from file to proceed with processing of payment.  No processing will be done if the supporting documents are not available.

Description of Procedures

Procurement Department  is responsible for issuing Purchase Order (PO) and forward  the Finance Department Copy and User Copy to finance department.  All submission of POs to finance department must be recorded in the log book kept with Procurement Department.  The responsible Accounts Payable clerk who receive the PO must ensure the amount, quantity and suppliers name is the same as the PO that is received before initial in the log book.  The PO will subsequently filed according to the serial no. by Procurement Department.

The responsible Accounts Executive shall :

1. Stamp “Received/Date” on all suppliers invoices;

2.  Sort out all the suppliers invoices into 2 categories by “Urgent” and “Not Urgent”.

i.   Urgent supplier invoices i.e. utilities bills and other invoice in accordance with the terms and conditions of the associated agreements and other bills at the discretion of the responsible accounts executive or as instructed by the Head of Department.  All other suppliers invoice shall be classified as not urgent.

ii.  Urgent supplier invoices for payment should be chop “Urgent” at the top right corner of the relevant documents an sign by CEO/GM.

iii. Priorities shall be given to processing of urgent supplier invoices for payment.  Supplier invoices classified as not urgent shall be processed in the normal course.

iv. The accounts payable clerk shall retrieve the relevant PO/Delivery Order (DO)/Supporting documents from the file and match them with their corresponding supplier invoices.  Invoices without these PO/DO/Supporting documents will not be processed further until the documentation is in place and duly authorized.

v. If there is no original copy of the Supplier Invoice available, a certified true copy of the invoice by supplier is acceptable upon verification against suppliers account from Creditor Ledger to ensure that no payment was made earlier.

Processing of Supplier Invoices

1.  Accounts Executive (AE) shall check the pricing on the supplier invoices against those quoted on the PO and the quantity on the DO against PO and Invoice (INV).  If they do not tally, AE shall refer to requestor to follow up.

2.  Accounts Executive shall also check the computation on the supplier invoices to verify their accuracy.

3.  INV under dispute shall be filed separately and the Accounts Executive shall take necessary action to resolve the dispute.

4.  Accounts Executive shall post the entry into the Subsidiary Vreditor Ledger (CL).  The Accounts Executive shall prepare the creditors aging list and creditors proposed payment list periodically for Senior Accountant review.

5. The documents shall be filed in a temporary file in chronological order according to proposed payment date.

6. The Accounts Executive clerk shall prepare payment voucher for each payee by attaching relevant PO/DO/supporting documents and submit to relevant authority for approval and signing.

7. Cheques will be prepared upon payment voucher duly authorized by the relevant personnel.  For urgent payment, payment voucher and cheque will be prepared concurrently.

8. The payment term for each INV is effective upon full delivery as indicated in DO and irrespective of the date of INV.


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