STANDARD OPERATING PROCEDURE

FOR
ACCOUNTS, TAX & FINANCE DEPARTMENT
OBJECTIVES
The aim of this SOP is to lay down necessary directives for the smooth and efficient administrative
functioning, handling/ operating funds, functioning of Finance & Accounts Department and to ensure
that Statutory compliances are made in the following areas
a) Delegation of Authorities and Financial Powers
b) General accounting and bookkeeping procedures
c) Review of Statutory Compliances
d) Maintenance of Cash and Bank Balances
e) Disbursement of Salaries/Payroll
f) Fixed assets purchase and its accounting.

DELEGATION OF AUTHORITIES AND FINANCE MANAGER

With a view to improve the overall efficiency of funds management and to avoid delays in according
to sanctions for expenditure, the procedure has been outlined below. The structure of F&A
Department would be as follows.
CHAIRMAN

FINANCE MANAGER

ACCOUNTS MANAGER

SITE WISE ACCOUNTANTS

KEY CONTROLS WITHIN FINANCE & ACCOUNTS DEPARTMENT

1.1 RECEIPT OF BILL
There are basically three types of bill

a) Purchases or Suppliers Bills

b) Service Providers/Contractors Bills
c) Miscellaneous bills-Petty Exp etc.
 STANDARD OPERATING PROCEDURE
The following procedures shall be followed at the time of receipt of bills.
a) Entry shall be made giving details of the bills received such as date of receipt of invoice, name
of vendor, date of invoice, description in the invoice, amount etc in the Manual Register/Excel
Sheet maintained by Site-wise Accounting Staff at that specific site. Such invoice shall also be
scanned so that it can move electronically between various responsible person when needed.

b) A unique serial number code on the top of the bill would be mentioned which would be same
as the serial number on which the bill was entered in the manual register/excel sheet.

c) It should be ensured that the entry of the bills in the register will be made on the same day of
receipt of bills from vendor and hand over the details to the accounts

1.2 HOW TO CHECK THE BILLS

A. PURCHASES AND SUPPLIERS BILLS
1) Material Receipt Note/Store Receipt Note duly signed by the Authorised Store In charge as well
as Site In charge.
2) In MRN/SRN challan/Invoice quantity, accepted quantity or quantity rejected should be clearly
mentioned,
3) On the back of the original invoice or challan Gate entry no and date should be clearly
mentioned, and that number should be verified from the Gate Entry Register
4) Weighment slip of the material in case of Cement, Steel, Sand etc. The weight should be
considered only as per our Weigh bridge weight
5) Purchase order-Quantity of Material or Item and their rate should be verified from the PO. If the
rate is excess compared to PO the bill should be passed as per PO rate,
6) Test Report of Material if applicable

7) Quality report of the material

B. SERVICE PROVIDERS/CONTRACTORS BILLS

1) Check the attendance of the labour, security guard and daily wages employee

2) The attendance should be from the Biometric attendance machine, Manual attendance register
should be avoided,
3) Check allocation of the labour deployed at the site.

4) Allocation register should be jointly signed by the HR person as well as Site/Pocket in charge.
 STANDARD OPERATING PROCEDURE
5) Daily wage rate/Labour Rate should be verified from the work order issued to the service
provider.
6) Check all the applicable statutory compliances like PF, ESI, TDS, GST etc. There should not be
any default in Statutory compliance

1.3. ENTRY OF BILL IN THE BOOKS OF ACCOUNTS

1) After Collection of the Bill by the Site-wise accounting staff, bills shall be scanned properly and
accounted for and such scanned invoice shall be forwarded to accounts manager at the Head
Office on Day-to-Day Basis.

2) Site-wise Accounting staff will check the bill with the Purchase Order/Agreement/Approval of
the bill. He would ensure that necessary supporting documents are attached with the bill.

3) The Accounts Manager would check the TDS implication and GST implications on the bill and
will check whether it has been properly accounted for by the Site-wise Accounting Staff.

4) In case of purchase of any material or goods, relevant entry would be made in the stock register
for the quantity and value and serial number given in the stock register would be mentioned
in the Purchase Invoice before the purchase bill is entered in the books of accounts.

5) It would be ensured that the entry of the bills will be made within 24 hours of receipt of bills
from the vendors/contractors by Site-Wise Accounting Staff Also, it would be ensured that the
Serial numbers are correct for posting the entry in books of accounts.

1.4. PREPARATION OF APPROVAL NOTE FOR PAYMENT

1) After the above steps, approval note for release of payment of the bill shall be prepared by the
Accounts Manager along with the relevant supporting documents such as Original Invoice,
Purchase order, agreement (wherever applicable)
2) After preparing the approval note, Accounts Manager would ensure that the approval note is
signed by the relevant authorities. Once this is signed by relevant signatories, the payment note
would be approved by Finance Manager.
3) On approval of payment note by Finance Manager, the note along with supporting document
should be sent to Chairman/CEO/Director/Managing Director for approval

1.5 ISSUE OF CHEQUES / RTGS / NEFT / REMITTANCE / DIRECT DEBIT

1.) On receipt of approval of CEO/Director/Managing Director, the Accounts Manager would
prepare the cheque based on approval note signed by the relevant authorities.
 STANDARD OPERATING PROCEDURE

2.) Once the same is approved for payment, payment entry would be made in the books of accounts
by Site-wise Accountants as the case maybe on the same day and the payment voucher should
be verified by the Finance Manager.

3.) After the cheque is prepared, the same would be sent for signature by the appropriate authority
like CEO/Director/Managing Director along with the payment note and supporting
documentation.

1.6 DISPATCH OF CHEQUES

1.) The cheques should be dispatched on the same day through courier unless they are hand
delivered.
2.) A control register would be maintained for all the courier sent giving details of courier number,
cheque no, name of party, amount and follow up should be done by Accounts Manager twice a
week with the courier company on the delivery of the cheque so that the control register can
be updated accordingly. It shall be ensured by Finance Manager that the above procedure and
controls have been followed within 48 hours of receipt of invoice .

1.7 CASH PAYMENTS.

1) Cash payments would be avoided as far as possible. Only petty bills or imprest accounts can
be paid in cash for the following petty expenses:

i. Expenditure for refreshments during official meetings.

ii. Staff Conveyance.
iii. Office Maintenance of petty nature
iv. Printing & Stationary of petty nature
v. Any Other Petty Expense
2) No cash payments above Rs 10,000 should be made against a single bill to a single party in a
single day.

3) Cash payments would be released only after approval of Finance Manager on receipt of the
bill for payment.

4) It is also ensured that the complete approval note along with the bill is prepared by the
Accounts Manager before handing over it to the CEO/Director/Managing Director.
 STANDARD OPERATING PROCEDURE
1.7 PAYROLL.
1.) The Accounts Manager will prepare monthly salary sheet by the 1st week of every month based
on attendance and leave records of the employees.

2.) TDS deduction would be checked with the computation of taxable income prepared for each
employee and tax deducted so far before the current month.

3.) Any adjustments for any advances or loans taken by the employee would be made before the
approval of salary.

4.) In case of new employees, appointment letters would be checked along with other relevant
documents such as last employers, relieving certificate, experience certificate. While preparing
the TDS calculations, last employers Form 16 should be considered.

5.) The salary sheet would then be checked and approved by the Finance Manager.

6.) In case of any employees leaving the company, the full and final settlement account would be
prepared by the Accounts Manager and approved by Finance Manager and
CEO/Director/Managing Director. The Finance Manager would check the following documents
before making the full and final payment: Letter of resignation, acceptance of resignation, any
loans/ staff advance/imprest outstanding, any TDS short deducted on basis of declarations not
received, copy of tax savings investments such as payment of LIC premiums, PPF, House rent
receipts, home loans certificates for which credit has been taken etc; any office equipment such
as laptop, mobile, blackberry handed over etc.

7.) Accounts Manager would prepare the final cheques for disbursement and send it for approval
to CEO/Director/Managing Director for their approval along with the relevant supporting.

1.8 STAFF ADVANCES AND LOANS

1.) Staff advances, and loans can only be given to employees after the approval of
CEO/Director/Managing Director as per the company’s HR policy.

2.) Finance Manager will ensure the advance is being adjusted monthly before disbursement of
salaries as per terms of sanction.
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JOB RESPONSIBILITIES OF FINANCE & ACCOUNTS DEPARTMENT.

2.1 RESPONSIBILITIES OF FINANCE MANAGER

1.) To follow and ensure that the prescribed procedure of internal checks and controls of book
keeping, and maintenance of accounts records are followed as per SOP.

2.) To ensure that the compliance of relevant statutory provisions of various Acts i.e. Income Tax,
Service Tax, PF, ESIC is made.

3.) Before signing the cheque from the competent authority, the Manager (F&A) shall ensure the
following:
a) There is adequate balance in the account.
b) Bank account is updated and reconciled daily.
c) All the relevant documents have been completed.
d) Post-dated cheques shall be avoided and can only be issued after obtaining written approval
of the competent authority.

2.2 RESPONSIBILITIES OF ACCOUNTS MANAGER

1.) To Ensure that Books of Accounts are Regularly Complied Consoliding data of all the sites on
Periodic basic for the purpose of Knowing the Actual Consolidated Profit/ Loss.
2.) Preparation of Salaries of all the Staff on Timely Basis.

3.) Preparation of Daily MIS Report.

4.) Various Other Task as discussed above in the SOP.

2.3 RESPONSIBILITIES OF SITE-WISE ACCOUNTANTS

1.) Collection of Bills and to Account for them on daily Basis.

2.) Preparing Daily Cash Inflow/Outflow Report and giving it to Accounts Manager.

3.) To maintain the updated records relating to the fund position and reporting to the Accounts
Manager.
4.) Various Other Task as discussed above in the SOP.