Maintaining and Effective Accounting System
Finance Department of the Companies of Auto Group shall establish and maintaining an effective Accounting System to capture data regarding the economic activity of the company.
General
Management requires accurate and timely financial reports in order to judge the performance of the Companies of Auto Group and plan for future activities.
Responsibility
Under the overall supervision of the Director Finance, Accounts Department of the Companies of Auto Group shall be responsible for maintenance of fine accounts, generation of periodic reports and providing financial information to the management.
Presentation of financial statements
The Accounts Department is responsible for preparation and presentation of monthly and annual financial statements of the Companies of Auto Group within 07 (seven) days after closing of every month and the annual accounts within 15 (fifteen) days after closing of the year.
Contents of financial statements
The Financial statements shall include:
- Balance sheet/ Statement of Financial Position
- Income Statement/ Statement of Financial Performance
- Statement of Cash Flows
- Statement of Changes in equity
- Notes to the financial statements
- Following supporting schedule shall also be prepared
i) Fixed assets
ii) Accounts receivable
iii) Advance, deposit and pre-payments
iv) Accounts payable
v) Liabilities and all unpaid obligations
General Ledger setup and posting
The Accounts Department shall setup a general ledger system to quickly and accurately accumulate all financial transactions within the framework of Chart of Accounts. The Chart of Accounts will consist of the accounts title and account number assigned to the titles.
General Ledger Activities
Ail valid general ledger entries shall be accurately recorded in the general ledger. The effective accounting system shall be designed in such a way that will facilitate in generating financial information on demand through the computerized system.Vouchers
All financial transactions vouchers must be made by using any of the following vouchers depending upon the nature of transaction:
- Payment Voucher for disbursement of money, both cash and bank including deductions by banks.
- Receipt Voucher for receipt of money in cash or cheque or through bank transfer.
- Journal Voucher for adjustment of advances, reclassification of accounts or for rectification of errors.
- Contra Voucher for withdrawal of cash from bank or deposit of cash with the bank, transfers of fund from one bank effective accounting system to another bank account of the same or another bank.
Numbering of vouchers
All payment vouchers, receipt vouchers, journal vouchers, money receipts must be sequentially numbered. All these vouchers/documents must be used chronologically in order to keep track of any missing vouchers/documents.
Documentation
All vouchers shall be kept chronologically according to its number. Separate file for different series of vouchers/documents shall be maintained. All voucher/documents files shall be kept under safe custody and only authorised person shall be given access to those vouchers/documents for effective accounting system
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