Financial management and reporting 1. General ledger 1.1 Journal Voucher booking 1.1.1 Journal entries Entries for Month end closing and their reversals Accruals and provisions Rectification entries 1.1.2 JV must Include Following details in: Approval by an authorized person. Narration/description Adequate supporting documentation must be presented for the JV approval 1.1.3 Post journal entries accurately: Restricting access rights to staff by using password Check mathematical accuracy Verify monthly journal entries and ensure that none are omitted/ duplicated Get approval for unusual transactions 1.1.4 Check omitted journal entries and timely record it Maintain detailed closing schedule- date, person responsible, etc. Establish cutoff dates for posting of omitted journal entries(4th of each month) Make all necessary accruals and deferrals at right time. Maintain Serial control of the journal vouchers, to prevent or detect missing JVs. 14 | Page
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Financial management and reporting
1. General ledger 1.1 Journal Voucher booking
1.1.1 Journal entries
Entries for Month end closing and their reversals
Accruals and provisions
Rectification entries
1.1.2 JV must Include Following details in:
Approval by an authorized person.
Narration/description
Adequate supporting documentation must be presented for the JV approval
1.1.3 Post journal entries accurately:
Restricting access rights to staff by using password
Check mathematical accuracy
Verify monthly journal entries and ensure that none are omitted/ duplicated
Get approval for unusual transactions
1.1.4 Check omitted journal entries and timely record it
Maintain detailed closing schedule- date, person responsible, etc.
Establish cutoff dates for posting of omitted journal entries(4th of each month)
Make all necessary accruals and deferrals at right time.
Maintain Serial control of the journal vouchers, to prevent or detect missing JVs.
1.2 Inter Unit Reconciliation
1.2.1 Identify Inter unit accounts separately both general ledger and ARCL
1.2.2 Identify inter unit transaction
Monitor and review unidentified entries on regular basis
Monthly reconcile inter unit balance
1.2.3 Inter unit reconciliation should be effective and must not be forced match
Prepare inter unit worksheet separately for each unit at end of every quarter.
Approve work sheet by authorized person
Send copy of work sheet to all relevant units.
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Reconcile worksheets with statements received from the other units and match each
transaction.
Reconciliations are to be reviewed by the finance controller for resolution of
differences/outstanding issues with the other units.
Resolve and communicate differences on a quarterly basis
1.2.4 Reconcile and report inter unit transaction on time
Raise debit notes/ credit notes immediately with the originating transaction.
Approve vouchers related to inter unit transactions with the debit/credit notes.
Perform timely resolution of unrecognized transactions after appropriate approvals
1.2.5 Review cutoffs to ensure adherence to annual closing and reporting schedules
statements for consolidation
1.2.6 Receive Inter unit statements/confirmations.
1.2.7 Convert Foreign currency balances at least at year-end rates also ensure that correct
foreign currency conversion rates are used
1.3 Subsidiary Ledger Reconciliation
1.3.1 Regular reconciliation of
Tally Fidelio income trial balance with general ledger on a daily/monthly basis.
Tally ARCL and general ledger balance on a monthly basis.
Tally the store ledger balances to the inventory accounts on a monthly basis
Tally fixed asset ledger balances to the general ledger on a monthly basis.
1.3.2 Reconcile and resolve all items in the subsequent month
1.4 Depreciation
1.4.1 Categorize capital assets that are in the balance sheet and depreciate in line with
applicable accounting standards and group finance policy.
1.4.2 Take measures to prevent change in useful life of a product
Depreciation the useful life of each asset / classes of assets according to the local
statutes with generally accepted accounting policies.
Where the useful life is shorter than the physical life, get the depreciation rates
reviewed by the finance controller.
If change is made in the useful life, revise outstanding depreciation on date of change
and it is to be allocated over the remaining useful life.
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Depreciate Leasehold assets over the lease period.
In case of additional expenditure on the original asset depreciate it over the remaining
useful life of the original asset.
1.4.3 Use correct method for deprecation
Charge depreciation either on straight-line basis (SLM) or on written down value
(WDV). Selected method is applied consistently from period to period.
If any changes in the method of computing the depreciation, the finance controller has
to authorize changes and will make the necessary adjustments.
1.4.4 Charge deprecation correctly on Written off Assets, Disposed Assets, and Transferred
Assets
After the asset is transferred or sold update fixed asset register with the sale/disposal
or write off entry and stop the computation of depreciation.
Historical cost of a depreciable asset may undergone a change due to increase or
decrease in long term liability on account of foreign exchange fluctuations, price
adjustments, changes in duties or similar factors.
1.4.5 Historical cost of a depreciable asset may undergone a change due to increase or
decrease in long term liability on account of foreign exchange fluctuations, price
adjustments, changes in duties or similar factors.
1.5 Book Closing Procedures
1.5.1 Stick to the accounting period closure.
1.5.2 All data entry to be completed before the closure, and all book closure entries
appropriately approved and reviewed before (4th of the subsequent each month.)
1.5.3 Close all expenses and income accounting before the book closure.
1.5.4 Complete reconciliations of all sub-ledger to general ledger
1.5.5 Every unit has to follow the closure of checklist and include following
Bank reconciliation statements
Reconcile debtors and creditors
Cut-off procedures
Cash count and Cash in transit reconciliation
Provision and prepaid entries
Out of book adjustments
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Inter-Unit reconciliation
General ledger review
1.5.6 Generate trial balance by reviewing the overall closure procedures. The finance
controller and the general manager will review and analyze the results for the month end.
1.5.7 Avoid closing the books at month ends.
1.5.8 List and review accounting entries made subsequent to the period closure.
1.5.9 Prohibit back date entries using System-control
1.6 Ledger security
1.6.1 Enable ageing analysis
1.6.2 Get Confirmations from third parties.
1.6.3 Take timely action on issues arising from review.
1.6.4 Analyze the creditors balance bill wise on monthly basis
2. Monthly information system(MIS) 2.1 MIS Compilation
2.1.1 Closing procedure:
The accounting period closure should be prior to preparation of MIS
Get approval of all book closure entries must appropriately
Provide list of any accounting entries outside made subsequent to the period closure
but included in the MIS.
Reconcile all sub-ledgers to General ledger.
Checklist followed by every unit. Must include
o BRS
o Cut-off procedures (Purchase, Material Receipts, Sales)
o Cash count
o Provision statement (Inventory, Debtors, advances, Others)
o Out of book adjustments
o Reconciliation-(Debtors, Creditor, Payroll)
o Physical Inventory Reports (Liquor, MFP, Engg Stores, Other stores)
o Inter-Unit reconciliation
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o Provisions and accruals (Adequate provision/ accrual exist for all key expenses)
2.1.2 MIS report generation
Compile and circulate daily reports which must include raw material cost report
(MMS) and energy tracking (Engineering department).
On a monthly basis Flash report is compiled which includes:
o Profit and Loss account
o City competition scenario
o Room segment analysis
o F&B Income analysis
o Other income analysis
o Power and Fuel variance report
o Administrative expenses
o Manpower
o Debtors
o Creditors
o Inventory
o Project/ Renovation status
o GSTS/ RSTS Scores
o EVA
o Performance reports on special initiatives (TOP, Oracle implementation)
o Various ratios
In this report include figures for current and previous period, variance with budget,
and next month forecasting.
The budget figure included in the MIS should be the budget sanctioned to the unit by
the board
2.1.3 Information flowing into MIS:
The reports must be duly reviewed and signed by head of department and then
forwarded for compilation as per the process.
If any External adjustments/ estimates are present support it with approved document
and explanation
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Identify if any intrinsic errors do Variance analysis of all expenditure heads.
Financial controller of the Lodge should review the reports prepared and signoff
before they are forwarded to management.
2.1.4 Do not delay compilation of MIS
Establish frequency and reporting deadlines for submission of data to Accounts
department.
Compiling the MIS and forwarding the same to management before the deadline (8th
of every month).
2.1.5 Corporate has defined standard formats for collation of information and unit must
adhere to the same.
2.2 Reconciliation of MIS with Finance
2.2.1 If any External adjustments/ estimates are present support it with approved document
and explanation
2.2.2 Prepare reconciliation statement.
2.3 Receivables MIS
2.3.1 Reports on key ratios, trends and variances prepared for management review. Reports
must include
Receivables turnover,
Ageing analysis,
Provisions,
Bad debts write off,
Collection percentages,
Accounts receivable balances.
2.3.2 Maintain accuracy of receivable reports in MIS
Credit Manager should ensure that MIS carries correct figures and they tally with
ARCL.
FC should review MIS reports
Reconcile, identify and provide document in case of differences between ARCL and
books.
2.4 Income apportionment for plans
2.4.1 Rate apportionment plans
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Financial Controller must work out rates for apportionment of income, including
revisions.
All plans must clearly specify the Lodge to be credited, tax % etc.
2.4.2 The FC must send plans/ revisions to Systems manager for updation of rate plus other
details such as tax rates, department to be credited etc.
2.4.3 All rate plans and changes to rate plans are forwarded by the Systems manager to
CRO for uploading.
3. CASH: 3.1 Receipts
3.1.1 Maintain safety and timely recording of manual cash receipt book
if receipt books are manual maintain a proper record
Receipts are to be pre-numbered and use it in sequence and keep unused receipt
books in safe custody.
Alteration if any it must be duly authorized and canceled
Void receipts must be defaced and authorized with a narration of reasons for
cancellation
Account all receipts in cash register
3.1.2 All cheque received must contain adequate details, such as:
Name of the party,
Amount
Payment against
3.2 Front office cash
3.2.1 The Front office Cash should be used only for the following purposes as given in the
ICM:
Offering change to guests
Foreign Exchange encashment
Bonafide guest Paid-Outs
Refund of guest advances
For any emergency purpose specifically authorized by the Lodge Financial Controller
3.2.2 Reconciliation of cash floats
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A cash handover report to be prepared by front office staff at the end of each shift
At the end of each shift, the front office cashier should remits all funds received.
Cashiers will print at end of the day totals from Fidelio and reconcile their receipts.
3.2.3 policy and giving IOU
IOUs from the Front Office are prohibited (in accordance with the ICM).
Pick up all deviations at night audit and bring to the attention of the General Manager
3.2.4 FO cashier and general cashier must acknowledge payment and receipt.
3.2.5 FO cashier before disbursement should check eligibility.
Obtained acknowledgement for all paid out in respect of all crew allowance
Accounting in correct folio should be checked by night / income audit
3.2.6 Only authorized paid outs can be made from the front office
Paid outs are allowed only for residential guests.
The guest signs a paid out voucher which has the following details
o Name and room number
o Amount in rupees
o Reason for paid out
o Duty managers signature
o Recipients signature
The guest folio must be immediately updated with the paid out amount by the front
office staff.
A duty manager can authorize only Rs 5,000. For paid outs above Rs 5,000 the front
office managers must authorization it (for crew allowances no such approval required
from LM).
3.2.7 Proper maintenance of cash receipts
A guest folio for all advances collected at the time of reservation.
The system automatically generates a cash receipt once an entry for cash is made in
the Fidelio.
The cash receipt printed will have the name of the front office staff that has received
and closed the folio for tracking.
The cash receipt needs to be signed by the front office staff.
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Incase guest pays cash beyond Rs 25,000 their PAN number is asked for and noted or
else name and address is taken and noted
Receipts issued for all advances collected at the time of reservation.
3.2.8 For credit cards/debit cards
Card validity is checked and settlement is done by swiping the card and the charge
slip is signed and attached with the bill.
A guest folio closed with credit card payment settlement is clearly indicated by an
entry in Fidelio system.
Cheques are not accepted at front office for settlement.
In case of settlement by inner circle point redemption the IC voucher signed by the
guest is attached along with the bill and sent to TIC cell.
3.2.9 At banquets Policy exists for cash collection and is strictly adhered to. As per policy
memo dated 25 June 2003, for cash receipts exceeding Rs 25,000, obtain any of the
following
PAN or General Index number
Declaration in Form no. 60 / 61.
Details of guest viz. name and address.
3.2.10 Effective control over cashier wise transactions
Cashier wise cash books are maintained in Fidelio
Physical cash floats must be maintained individually cashier wise
3.2.11 Physical security of the cash at front office.
Restrict access to the front office cash.
Store cash in a safe locker.
The safe keys should be kept with the front office cashier and the second one in
custody of general cashier and general manager in a sealed envelope.
The sealed envelope will be opened and resealed when there is a change in cashier.
3.3 Lodge Cash turn in procedure
3.3.1 Safety of Lodge cash
Tally all collections with the cash summary report of POS and deposit in the drop box
or front office on a daily basis
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Prepared manually Lodge sales bills and verified it with the summary for accuracy
and postings
3.3.2 Do adequate documentation and witness of cash drops from Lodges.
When an employee drops his envelope in the drop box, an employee in the vicinity
must witness the drop.
Detail of the drop will be witnessed by cashier and located in a logbook beside the
drop box.
Where drop box facility is not available the cash from Lodges is deposited at the front
office that turns in the total cash to the general cashier. Front office tallies all cash
collected and acknowledges
3.4 General Cash
3.4.1 Reconciliation, physical verification and security of cash
Physical verification of cash to carried out by the cashier and agreed and reconciled in
totality to the book balances.
o Independent verification of all cash and impress funds is carried out at least twice
a month
o Once at month-end, and
o Once a month on a surprise basis
Detailed written record of physical verification of cash is maintained.
Access restriction to the general cashier cabin and storage of cash in safe locker.
The safe keys are with the general cashier and the second one in custody of general
cashier and front office in a sealed envelope.
The sealed envelope is opened is resealed when there is a change in cashier.
3.4.2 Witness along with the general cashier
The general cashier, and the security guard, should open the cash drop box and
remove the remitted envelopes and check the amounts stated on the envelope with the
amounts in the logbook.
The general cashier and the security guard should signs the logbook for the number of
envelopes found and removed.
3.4.3 Verification and documentation of cash and cash envelopes
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The general cashier will count the content of the envelope in the presence of a witness
and record in the general cashier’s daily summary
Where drop box facility is not available the cash from Lodges is deposited at the front
office who turns in the total cash to the general cashier
3.4.4 Duties of the cashier are segregated from
Performing the billing function performing work on creditors, debtors
Following up on collections and ageing of debtors
3.4.5 High control over cash payment
Cash payment vouchers are to be adequately supported, serially numbered, signed
and all supporting are defaced.
Accounting has to be done for all cash payments.
3.4.6 Proper accounting of IOUs
Approve all IOUs
Mention the purpose, date and the amount of payment.
Settle these within two days
Record all IOUs in the cash scroll
Record open IOUs as a part of daily cash verification
3.5 Petty Cash
3.5.1 Use of float maintained by the accounts
Respective head of department and financial controller should authorize all payment.
Surprise check of float to be done by income auditor once a month.
3.5.2 Adequate control over petty cash vouchers
Prepare petty cash vouchers for all expenses incurred; vouchers should pre-numbered
and approved before they are fed into the system.
Maintain a register for petty cash float.
Post petty cash expenses the ledger.
Petty cash payments are restricted to a maximum of Rs 5,000.
3.5.3 Replenishing the float amount
Deface all reimbursed petty cash vouchers.
Do replenishment of float timely also when the limit is reached.
4. Bank
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4.1 Daily banking process
4.1.1 Cheque/ cash to be deposited on receipt or on a daily basis
Deposit all cash/cheque received daily or by the next working day.
Use armored car service, or two persons must take the deposit to the bank
If delay in banking due to exceptional circumstances, then record it with reasons in
writing and to be authorize by the unit Financial Controller.
4.1.2 Cash/bank receipts must be recorded accurately and timely
Record Cash/bank receipts in the correct account and in the correct accounting period
on a timely basis and to be reviewed by an authorized person
Accounting of Receipts of cheque/demand drafts through bank receipt vouchers and
cash receipts through cash receipt vouchers has to be done and all vouchers are to be
serially numbered.
4.1.3 Keep Cheque and drafts in a secure place and deposit it in the bank daily.
4.1.4 Document and securely store all the post-dated cheque until they are due for payment.
4.1.5 Cross all uncrossed cheque/demand drafts received from outside parties as ‘account
payee only’.
4.1.6 An independent person from credit along with cashier will open cheque received
through the mail. Cheque received is fed into the system and is listed, detailing the date
when it received, cheque number, amount and name of the party.
4.1.7 Reconciliation of daily banking transactions to be done regularly.
Reconciliation of pay in slips is with the bank receipt voucher has to be done to
ensure that all receipts have been banked and deposited.
Total amount of daily deposits as shown in the bank statements reconcile it with the
totals of the daily cash receipts in the cash account in the system
4.1.8 In case of high value cheque send for high value clearing.
4.2 Cheque payment
4.2.1 Unauthorized payment made with Inadequate supporting and Unauthorized signature:
Book bank payment using bank payment voucher only. Two authorized signatories
are required to sign the cheque
Review that cheque payment amounts are not subdivided to circumvent cheque
signatory limits.
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Stamp all supporting documents as “PAID” to prevent future misuse. And one
signatory must be done on the voucher and supporting. Obtain a proper receipt from
the person to whom the payment is made.
Deface the voucher as “CANCELLED” and filed when a voucher is cancelled
Payments to 3rd party name must be backed by authorization from the concerned
creditor.
4.2.2 Blank Cheque
Cheque must be stored in a safe place with restricted access
Pre-number all cheque and accounted periodically
If any break in sequence of cheque stock check why so.
Cheque books obtained from the Bank with individual cheque crossed “A/c payee”,
or so done immediately on receipt.
Keep Record of all cheque books right at the stage they are requisitioned from the
bank
4.2.3 Written Cheque
Record cheque number in the cheque book in the system
Signing of post dated and blank cheque is prohibited.
Use cashiers cheque only for withdrawal of cash for office use only.
When letters of instructions are issued for payment/purchase of demand drafts etc
these are to be backed with a cheque favoring the bank.
All cheque favoring the bank must indicate the purpose on the face of the cheque.
4.2.4 Cheque cancellations has to be documented
Stamp “cancelled” immediately on any mutilated/spoiled or cancelled cheque
Maintain all cancelled cheque in the files with the record retention policy
Updated the records to include replacement of cheque.
Make stop payment for cheque reported lost before reissued,
4.2.5 Following security safeguard to be used while preparing the cheque:
Use of reverse carbon
Super scribing “not over Rs”
Security sticker on the amount figure.
Use of cheque writers
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4.2.6 Payments on behalf of other units
Obtain proper approvals from the respective units for payment made.
Do not make Payments to the black listed parties.
4.3 Bank reconciliation statement
4.3.1 Not preparing bank reconciliations on a periodic basis
Review bank high value transactions on a daily basis
Prepare bank reconciliation statement and sign off on a monthly basis.
4.3.2 Non segregation of functions
Person independent of those performing receipt, cheque issue or any other banking
functions, performs bank reconciliations.
If for reasons of lean manning it is not possible, then the BRS must be reviewed by
the unit Financial Controller / accounts manager.
4.3.3 Identifying stale cheque.
Transfer cheque not presented to the bank for 6 months from the date of issue to a
‘stale cheque a/c’.
Ensure that appropriate supporting i.e. a copy of the stale cheque or an indemnity by
the payee backs up any payment against an amount in the ‘stale cheque a/c’.
4.3.4 Errors in the bank statement, Bank charges and other debits, Other reconciliation/
unidentified items
Check and agree with unit records interest calculations and all charges debited by the
bank.
Follow up in writing with the bank for all unlinked transactions appearing in the bank
statement to be done, by accounting management.
Investigate unusual reconciling items, amounts reported by the bank that have not
been recorded by the unit, deposits in transit, and cheque that have been outstanding
for long periods.
Promptly followed up differences thrown up on account of reconciliation. It is the
responsibility of the accountant
Follow up on cheque clearance
Follow up on cheque dishonored and account for the same.
4.3.5 Obtain bank conformation on periodic basis.
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4.3.6 Cheque dishonored
Bank communicates immediately to the respective units and sends all dishonored
cheque by post or courier addressed to the Financial Controller or hands them over
personally only to person(s) authorized in writing to collect the same.
Keeps a record of all dishonored cheque including details of follow-up action and
eventual recovery.
All cases of dishonored cheque and their eventual recovery are reflected as entries in
the defaulting party’s account.
4.3.7 Adequate cut-off procedures for cash receipts and disbursements
Cheque received prior to period end and deposited on the next working day only are
considered as cheque-in-hand
Cheque issued and prepared up to the last working day of the period to be booked.
No blank cheque are to be left for the previous period, and the cheque are to be
serially continued in the next period
4.4 Bank a/c opening & maintained
4.4.1 Appropriate bank opening procedures
Bank accounts are to be opened with the authority of the Board of Directors by
passing an appropriate Board resolution.
All requests for opening of bank accounts are routed through the respective unit’s
financial controller, with information to the respective divisional General Manager.
Each unit maintains a list of Bank Accounts under its control, together with
appropriate Board Resolutions and list of signatories.
4.4.2 Authorized signatories.
Cheque signatories are authorized by the Board through a special power of attorney
or specific resolution.
All requests for additions/deletions to the list of authorized cheque signatories are
initiated by the unit Financial Controller
Each Unit lays down internal guidelines specifying levels of authority for cheque
signatories, and these are approved by the General Manager –and Chief Operating
Officer of the respective division.
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Banks are intimated to add/ delete cheque signatories by the finance controller of the
unit, immediately on transfer of the manager/signatory, including specifically for non
operative accounts Finance controller initiates the process of approaching the Board
for updating the signatory lists.
4.4.3 Action are taken to close the non operative accounts by the FC
4.4.4 Common pool of funds
Deposits and payments are managed in a manner to have a common pool of funds for
treasury management
Surplus funds are identified and appropriately invested/transferred to corporate office
as the case maybe.
4.4.5 On a regular basis access fund requirements and communicated to corporate office for
funds being made available.
4.4.6 Transferring funds in case of IHCL properties
All collections are deposited into the sweep bank account daily by the IHCL units.
Any exceptions to the above are to be approved by corporate treasury.
5. Advances 5.1 Advances
5.1.1 Advances given to suppliers/contractors
Advances to supplier/contractors are to be kept to the bare minimum.
Advances are cleared by the GM of the Lodge and, if in excess of Rs.1lakh, needs to
be signed off by respective SBU FC.
5.1.2 All advances have clear terms predetermined with respect to recoverability, tenure of
loan, pattern of recovery like monthly or one time recovery and interest payable.
5.1.3 Advances are reviewed in a timely manner by the FC
5.2 Deposits – others
5.2.1 Deposits given to parties to be recorded and accounted properly
Deposits given for electricity, housing etc are as per the norms and are accounted
properly under loans and advances.
New deposits given for telephone are expensed off.
5.2.2 Recoverability of deposits
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On cancellation of services the deposit has been refunded by the authorities and is
properly accounted for.
Housing deposits for Lodge employees are refunded at the time of lease
termination /service termination.
5.2.3 Accounting of interest properly
Deposits given, which are interest generating, are accounted for properly and are
shown as other income.
Accruals are accounted for on a quarterly basis.
5.2.4 Documents for deposits are maintained separately in a manner to facilitate easy
access at the time of recovery.
6. Receivables 6.1 City Ledger Transfers
6.1.1 Posting and transfer of Receivables from Fidelio to financial accounting package
(ARCL)
Fidelio directly interfaced with Financial accounting system whereby Debtors
balances is transferred directly to accounts receivable control ledger in Financial
Accounting package. Every morning credit department uploads the invoices into
Financial Accounting package.
Credit department generates Balance check report from Fidelio and verifies whether
the same has been posted correctly.
Credit department ensures that City ledger settlements have been duly posted to
ARCL and the control totals matched.
6.1.2 Account transferred to city ledger must have the necessary credit approvals
Credit Managers ensures that all transfers to City Ledger are checked daily for
appropriate documentation of credit extension approvals in case of adhoc credit and
by appropriate billing letters issued by respective companies in case of guests in
credit list.
Any exceptions is followed up with the concerned managers so that the laid down
documentation is complete; all exceptions is reported to the Lodge General Manager
6.1.3 Credit Manager shall ensure that:
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All supporting documents/correspondence such as the reservation request from a
company, request for extension of credit and its approval are attached to the
registration card.
A copy of the used registration card along with all other supporting is attached to the
accounts copy of each bill sent to credit department. Transfers bills with
documentation, which will facilitate follow up
6.1.4 Debtor balances must be complete, accurate and reviewed by senior management:
Bill copy along with billing letter is forwarded by the front office to credit department
for verification.
Credit department verifies the balance transferred to ARCL.
Debtors balances are reviewed by the FC and forms part of MIS forwarded to SBU
head.
6.1.5 Restricted Access to accounts receivable records.
6.1.6 Access to accounts receivable files and data used in processing receivables is
restricted to credit department and FC.
6.1.7 Access rights are reviewed on a periodic basis and accordingly updated.
6.2 Follow up & Collection procedures
6.2.1 periodic and systematic method for the review and monitoring of Accounts
Receivable:
The Credit department reviews the accounts receivable balances regularly to initiate
collection efforts on all accounts outstanding beyond standard credit period of 30
days for Travel Agents and 15 days for all other categories.
Collection efforts are adequately documented in credit files for future evaluation.
6.2.2 Collection efforts or outstanding accounts should be followed up in a time.
On a monthly basis the receivables status is reviewed in the credit committee
meeting.
Prime responsibility for debt collection rests with each Lodge Credit Manager who
ensures that reminder letters are sent at appropriate intervals to each party who has
outstanding accounts receivable balances.
Collection responsibility is allocated among the credit department staff. Once an
unpaid bill reaches a “trigger point” the responsibility of collection will also devolve
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on the Sales & Marketing Office which handles those particular account.In cases of
adhoc credit/one-time credit, responsibility of the manager authorizing the credit to
collect the amount due, within the due date which shall not be more than 15 days.
Data about outstanding is sent to Central Collections Cell on a monthly basis.
Additionally o/s more than Rs 25000 and more than 60 days is sent to Corporate
credit at Mumbai for scrutiny.
Outstanding statement is scrutinized and reviewed by the Credit Committees.
6.3 ARCL maintenance
6.3.1 Customer accounts opened in ARCL with after credit evaluation is done.
For all new customer accounts created in the ARCL, the credit Manager should sign
off the form as envisaged in the credit policy. Approval of FC and GM for all new
accounts created in the ARCL is taken.
For all temporary accounts or onetime credit accounts like banquet credits, adhoc
credit authorization form is available for all additions.
6.3.2 Maintain customer master on a regular basis which would include - Making the
customer active when the client is blacklisted.- Customers not active to be deleted from
the master
Controls are in place to ensure customer information entered into the master file data
is accurate and valid.
Annual review of the Customer Master File in detail and removal of all in “inactive
customers’ accounts” that have not had any activity by credit department.
Based on the Credit committee decision the client is made inactive in the customer
master in the ARCL by credit department.
Regular maintenance also includes deleting two or more codes created for the same
customer.
One time ARCL credit customer codes to be maintained under a separate group.
6.3.3 Updating/modification of customer accounts for any changes in profiles:
Process in place for updation of customer accounts for changes in profiles by
documenting and maintaining the changes for data.
All changes to approved by the credit manager.
6.3.4 Receipts are to be matched against Invoices raised
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Receipts are matched against Invoices raised
Periodic review of unadjusted credits and action to be accordingly taken.
6.4 Allowances, provisions & write off
6.4.1 Write-offs must be approved and reviewed
Write-offs are centralized and units do not have any authority to write off overdue
accounts.
All writeoff entries can be passed by the unit only on the approval of the Sr VP
Finance.
6.4.2 Unauthorized allowances at the back office
All back office allowances are done only for invoice corrections and are done with in
six months from the date of invoice.
All back office allowances to be documented and approved in writing by respective
LMs and GM.
6.4.3 The bad debt provision should be correctly calculated
As per the Taj policy all Debts exceeding 1 Year are to be provided for and in case of
government customer provisions would be made for Debts exceeding 3 year.
Bad Debts provision is created based on Taj policy by the FC of the unit based on the
directives of corporate finance.
Corporate finance department reviews the valuation reserves for adequacy and
reasonableness on a periodic basis, and makes adjustments as required.
Bad Debts provisions to be debited in the monthly Financial MIS.
6.4.4 Customer account write-offs should be adequately documented and approved.
6.5 Credit committee review procedures
6.5.1 Standard procedures to be followed by the credit committee.
All the units have a credit committee. Lodge credit committee compromises of GM,
RM, FC and Lodge Sales Manager, Credit Manager and Invitees would include Front
office Manager, F&B Manager and Banquet Manager, Person from Central
Collection.
Formal, written policies and procedures for granting credit and establishing credit for
new and existing customers are documented in the credit manual
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Formal, written policies and procedures for granting credit and establishing credit for
new and existing customers are documented in the credit manual.
6.5.2 Periodic review to be done by the unit credit committee
Each Credit Committee meets fortnightly for the first 6 months and thereafter at least
once a month, serving as a clearing house for interpretation and enforcement of the
Taj Group Credit Policy, and a source of new ideas. All committee decisions are
minute
A copy of all Lodge Credit Committee minutes is marked to the (respective)
Divisional Chief Operating Officer for information and record
7. Inventory 7.1 Receiving, QC & rejection
7.1.1 Segregation of duty or Task of receiving goods into the Lodge has to be independent
from the task of purchasing goods and maintaining inventory.
Purchase orders are raised by Purchase Department.
The goods are first received in the receiving department and Receiving Report
prepared.
In case of perishables and other direct issue items, receiving is acknowledged by user
department.
Goods are then transferred into stock ledger by Stores.
7.1.2 Receipt of goods should be by Purchase Order.
System would not allow any goods to be received if there is no P.O created in the
system.
All P.O’s raised subsequent to materials being received need to be authorized by the
FC.
A report giving P.O’s being raised subsequent to receipt of material is generated on a
monthly basis and forwarded to GM/ Head Materials/ FC.
7.1.3 Acceptance only after checking the quality.
Specifications and standards of items are mentioned in the P.O placed with the
vendor.
Standard specification parameters laid down by corporate is adhered at the time of
receiving and deviations/ rejections are recorded are reported periodically.
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Receiving personnel as well as User department representative carries out inspection
of all goods, by means of appropriate statistical sampling or a 100% check prior to
final clear acceptance of the goods.
Receiving bay is equipped with a weighing scale to check the weight of material
received and weight is tallied against order placed.
Receiving checks the expiry date of items before receipt and less than 3 months to
expiry are rejected.
The individual receiving goods and then the inventory clerk (or their equivalent)
stamps the RR to evidence the checks performed
7.1.4 Goods received must be as per the order placed or Quantity received in must be as per
order placed.
Goods are accepted as per the terms of the P.O.
In case of items where it is difficult to receive the quantity as ordered e.g. chicken,
fish etc a 5% variation is allowed. However all excessive quantity need to be
approved. Variance in quantity and weight is to be documented.
Goods not in accordance with the terms of P.O need to be approved by the
appropriate authority before final acceptance.
7.1.5 Receiving Report should be prepared on timely basis:
Check the dates on delivery challans with Receiving Report delays to be signed and
reviewed periodically.
Invoices would not be recorded without RR.
7.1.6 Maintain a track of rejections or Returns and report to accounts for reducing the
liability and costs
If material is rejected after receipt of goods, the supplier is informed of the same and
instructed to replace the goods immediately.
A gate pass is issued to the supplier for the rejected materials.
In case of excisable goods, which are few, replacement is called for all and challan
accompanying this is marked as ‘goods rejected’. Rejections are recorded in the new
Orion system through reason code which would help in quality and supplier
performance analysis.
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In case RR had been prepared and the goods sent back to the supplier on account of
quality rejection, an advice is sent to accounts department by stores through an inter
office memo for raising a debit note on the party.
In case due to material rejects, items are procured from the open market at a higher
cost, the loss suffered to be recovered from the vendor
Reports detailing returns to suppliers be generated and reviewed by management
7.1.7 Correct accruals:
At month end entry for total purchase is done on the basis of goods received note
from store module by account.
Accruals are verified by the FC and signed off before posting.
7.2 Issues & consumption Booking
7.2.1 approved requisition has to be prepared for all items leaving the stores
Issues from the stores are made based on approved requisition from the concerned
department head in case of stock items. The requisition is received online.
In case of perishable items, such as fruits, vegetables etc the chef orders perishable
items through the daily market list in the system. Perishable items are given directly
to the kitchen.
The stores keeper prints out a copy of the requisition and receives acknowledgement
of person receiving the items from him. The issues are entered in the system to update
the stores ledger.
7.2.2 Material has to be physically issued on FIFO basis
Stores in-charge ensures that items are issued on a FIFO basis.
On receipt of items in the stores, it is ensured that last received items are stored
behind to ensure issue through FIFO basis.
7.2.3 Avoid Issue of expired materials which are to be used in the kitchen
The Store Keeper keeps a track of the expiry dates of each item in the stores and that
the Items are used before their expiry period.
Store keeper issues items based on expiry dates.
The Store Keeper ensures that items are not kept beyond their expiry date.
The expired items are being disposed immediately and records are maintained.
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7.2.4 Stores in charge checks the issues entered in the system with the requisition raised by
the user.Also any discrepancy would be highlighted in the monthly stock check.
7.2.5 Inventory records are to be updated for issues.
All issues are updated in the stock register at the end of the day by the stores in
charge.
Even in existing system the process is same in MMS.
7.2.6 Accounting for consumptions should be accurate
Consumption is based on issue summary for the month.
Purchase/ Closing stock is reconciled with Stores ledger on a monthly basis.
CGS items to be charged to consumption on being put to use.
7.3 Slow moving & Obsolescence monitoring
7.3.1 Avoid Purchases of non Moving Items
There may a need to stock all the items even if they are non-moving, however the
stock levels for the same to be prescribed and the same needs to be monitored. Stock
levels for non-moving to be kept at minimum.
Fresh orders to be placed after consulting the existing inventory levels and with due
justification.
In case of Non-moving and slow moving the ageing to be regularly reviewed.
7.3.2 Identification and review of slow moving/non-moving and obsolete stocks to be done
on a periodic basis.
The inventory system to be configured to flag slow moving item.(Orion control)
Slow moving item lists to be prepared at least quarterly for each storeroom; the report
is reviewed by the controller and circulated to the General Manager and department
heads. There must be evidence to support the efforts taken to move the items. If the
item has not moved for twelve months it will be force issued to the department
initiating the purchase, or written off if obsolete.
Stores in-charge sends the list of non moving items in case of food stuff to the
executive chef for action. Items are then liquidated based on his directives.
Obsolete stock is identified during physical verification and auctioned off.
Provisions/Write off made with the necessary approvals.
7.4 Physical verification & adjustments
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7.4.1 Physical verification of Food stores, General stores and engineering stores is done
monthly. Physical verification of Liquor inventory in the Lodges is done on a daily basis
while at the liquor store it is done on a monthly.
7.4.2 Physical verification of Food stores and General stores is done in the presence of
F&B Cost controller. Liquor inventory stock count is done in the presence of F&B cost
controller. Physical verification of items in the engineering stores is done in the presence
of finance personnel.
7.4.3 Stock counts are performed blind; the inventory statement is generated and handed
over to the F&B cost controller. The stores in-charge counts the items and they are then
reconciled by the F&B cost controller with the stock records.
7.4.4 Material differences between the physical and book stock must be investigated and
actions to be documented.
Physical stock against book stock is verified and variation either positive or negative
is recorded.
Variances between the physical stock and book stock are analyzed. Variances can be
on account of breakage/ spoilage/ spillage or excess or short receipt or issue. All large
variances are investigated and reasons recorded. The Cost controller is required to
document the action taken to redress the stock imbalance.
7.4.5 Adjustments to the inventory made must be with approvals
The list of variances is sent to the FC of the unit.
All adjustments to the stock are approved by the F&B Cost Controller, FC of the unit.
7.5 MFP storage
7.5.1 Proper storage facilities for Meat, Fish and poultry helping in minimum wastage of
MFP items and adulteration of items and consequently contravention to the PFA act.
Meat, Fish and Poultry are stored in a separate cold storage at appropriate
temperatures as indicated by Microbiological standards. All walk ins, reach ins and
deep freezers are maintained for ensuring temperature standards.
The temperature of the storage is less than -18 C for meat and fish and less than 5 C
for poultry.
The temperature of the deep freezer is checked daily by engineering department and
periodically calibrated.
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The deep freezer is cleaned on a daily basis.
All the cuts stored are labelled with date of receipt to ensure FIFO issue and disposal
of expired items.
7.5.2 Deep freezer stores should be adequately secured by lock and key and access to the
stores must be restricted
Deep freezer is adequately secured with lock and key
Access to Deep freezer will be restricted to assigned inventory clerks.
7.5.3 Requisitions approved by the relevant department head are being prepared for all
items leaving the deep freezer.
Butchery Kitchen chef will make a requisition for wholes against stores by predicting
future requirement from kitchen.
Issues from the stores are made based on approved requisition from the Butchery
chef. The requisition is received online.
The stores keeper prints out a copy of the requisition and receives acknowledgement
of person receiving the items from him. The issues are entered in the system to update
the stores ledger.
Meat and Fish is then forwarded to the butchery department for cutting and cleaning.
Lodge kitchen would order the processed items from the butchery store.
7.5.4 Movements of perishable items in the deep freezer are monitored closely. A list of
items lying in the freezer is drawn up and forwarded to executive chef for liquidating the
stock.
7.5.5 Fix butcher yield and high review of yield
Butcher standard yield has been fixed for all MFP items.
Actual yield is compared to the standard yield on a monthly basis.
Report for same generated and forwarded to Purchase head and GM.
Yield variance being taken up by purchase to supplier when the variance is between
what has been assumed at the time of purchase price determination and action taken
accordingly.
7.6 Monitoring of inventory controls
7.6.1 Inventory levels and reorder levels determined
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Minimum, Maximum, and Re-order levels have been fixed for all the items of stock
based on consumption pattern, requirement and lead time. These have been defined
in the system.
Minimum, Maximum and Re-order levels are reviewed periodically and changed
accordingly.
Minimum, Maximum and Re-order levels have been defined in the system. Purchase
requisition is automatically raised in the system when re-order levels are reached.
Stores in-charge on a weekly basis runs the min-max report which given the list of
items that have reached the re-order levels.
7.6.2 Avoid Keeping too much inventory on hand or Situations of Stock out
Stocks are to be maintained as per the levels fixed for each item. Purchase
Requisition is raised by stores, based on the min-max report and verification in the
stores ledger.
In case items to be procured are in excess of the maximum stock levels these need to
be appropriately authorized by the GM/FC of the unit.
7.6.3 List of all critical items is available with engineering department. It is ensured at all
time that there is a sufficient stock of these critical items by engineering stores.
7.6.4 Inventory stores should be adequately secured by lock and key and access to the
stores must be restricted to assigned inventory clerk
Inventory stores is adequately secured with lock and key
Access to stores is restricted to assigned inventory clerks.
7.6.5 Inventory is valued on the basis of moving weighted average or Net realizable value
whichever is lower as per the Taj policy. Inventory valuation is reviewed by the FC and
signed off.
7.7 Liquor inventory
7.7.1 Proper purchases of non Moving Liquor brands
There may a need to stock all the brands even if they are non-moving however the
stock levels for the same to be prescribed and the same needs to be monitored.
Reorder levels to be fixed at minimum for non moving brands.
Fresh orders to be placed after consulting the existing inventory levels.
In case of Non-moving and slow moving the ageing to be regularly reviewed.
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7.7.2 Purchase of imported liquor by paying duty and under the EXIM policy and as per the
Taj policy
Procedure for import of liquor is communicated by corporate purchase to all the units.
Foreign liquor for all the units under the luxury division is imported under a single
license. Corporate purchase forwards the license copy to unit purchase.
P.O is authorized by the FC and GM of the unit.
In case due to certain emergencies imported liquor has to be purchased by payment of
duty, approval of GM and Materials head Corporate to be taken before placing the
order.
7.7.3 Issue of liquor from the main store to the Lodge must be valid approvals leading to
Contravention of excise laws and misappropriation of liquor.
Lodges raise requisition duly authorized by Lodge managers to FL-1 store room for
their imported liquor requirement.
All issues from the FL-1 store room are supported with FL 9 form duly authorised by
the excise inspector.
7.7.4 Independent, appropriately conducted inventory counts being carried out
Physical verification of Liquor inventory in the liquor store is done on a monthly
basis with the stock as per excise register.
Liquor inventory stock count is done in the presence of F&B cost controller
Variance between excise records and physical stock is adjusted after approval.
7.7.5 Liquor stores must be adequately secured by lock and key and access to the stores
must be restricted to assigned inventory clerk
Liquor stores is adequately secured with lock and key
Access to Liquor stores is restricted to assigned inventory clerks.
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Expenditure
1. Procurement – Materials 1.1 Annual rate contracting process
1.1.1 Coverage of regional purchase
Data submitted to Regional purchase/central purchase committee should be
comprehensive and include perishables, provisions and other raw material for food
production giving consumption of immediately preceding calendar year and average
cost.
Process of compiling and verification by Regional purchase/central purchase.
Identification of regional and national purchase items by Committee
1.1.2 To obtain copies of trade prices and compare the same with the contracted rates and
downward revision to be done wherever possible.
1.1.3 Stick to method of purchases suggested by the corporate. The method employed for
purchases could be Cost Plus, Auction, Negotiations based on Quotes.
The method followed for purchases to be defined for instance: Services should be
bought based on Cost Plus Mechanism, Commodity purchases based on Auctions and
negotiations
List of all the items and the method of purchases to be followed to be available to the
units
Exception report for deviations to be generated.
1.1.4 For regional contracts - invite quotations and more than 3 vendor has to be identified
for each contract
1.1.5 Recommended purchase strategy must be followed for regional purchase
1.1.6 Negotiation process should be effective and Comparison statement prepared should
not contains errors / commissions / omissions
1.1.7 Review market trends vis-à-vis Contracted rate during the contract period
1.1.8 Have predefined time lines and strictly follow this.
1.1.9 Adherence to brand stands in procurements.
1.1.10 Proper system for identifying alternate vendors and continuous vendor development
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1.1.11 Vendor evaluation on different criteria like Quality, Price, satisfaction of the user,
adherence to delivery schedule, rejections, quality specifications etc to be done on an
annual basis for all major suppliers.
1.2 Adherence to RPC / CPC
1.2.1 Regional/national contract which will include party, Quality, Rate, Volume discounts
Comprehensive list of contracts (regional/national) are available with the unit.
Deviation individually justified with financial implication and approved by unit
Purchase committee and documented with logic note.
Process to compile deviations and Communicating the same to the central purchases
1.2.2 Unit to send a list of purchases which are eligible for free stocks or discounts to
Central Purchase on a quarterly basis.
1.3 Purchase Process-Others
1.3.1 Identify alternate vendors and have continuous vendor development
1.3.2 Vendor evaluation on different criteria like Quality, Price, satisfaction of the user,
adherence to delivery schedule, rejections, quality specifications etc to be done on an
annual basis for all major suppliers.
Request for quotations not sent out to vendors i.e. not more than one vendor has been
identified for each contract
As many quotations to be invited from vendors but not less than three quotes.
1.3.3 If minimum three quotes are not available purchase committee to authorize and
prepare a logic note to this effect.
1.3.4 Documentation of the negotiation process
Purchase documentation must include comparative analysis.
If competitive quote is precluded due to a sole or limited number of Contractors, this
fact should be reflected by logic note.
1.3.5 Method of Purchases suggested by the corporate. The method employed for purchases
could be Cost Plus, Auction, Negotiations based on Quotes.
The method followed for purchases to be defined for instance: Services should be
bought based on Cost Plus Mechanism, Commodity purchases based on Auctions and
negotiations
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List of all the items and the method of purchases to be followed to be available to the
units
1.4 Order – placing
1.4.1 Reorder levels are fixed based on lead time, minimum stock and future requirement
for the all the stock items. Indents are raised by stores when stock reaches Reorder level
in case of Stock items. In case of daily bazaar items are procured daily based on indent
raised by chef. In case of Non stock items when requisition duly authorized is received
from the user
1.4.2 Approval of Indents at the appropriate level prior to the order is placed.
Indents are to be approved by the concerned department head. P.O to be raised only if
there is an approved Indent.
System control whereby only on receiving an approved indent, purchase department
will be able to generate a P.O. (Orion)
1.4.3 Purchase orders are to be approved at the appropriate level
1.4.4 Standing orders in MMS must be in line with RPC contracts
All standing orders are reviewed in the system by Chief Accountant to ensure that
only items contracted has been entered in MMS and rates are also as per contract.
Specifically check that non-contracted items are not included in standing orders.
1.4.5 Purchase orders must not be duplicated
1.4.6 Purchase Order- Purchase Order should be comprehensive and must contain clauses
for Taxes, Transportation and delivery schedule
1.4.7 Avoid Pending Purchase orders- Purchase commitments made should be effectively
tracked.
1.4.8 Have budgeted purchases of stock/perishable items
1.4.9 Have Standard spelt out SBU wise for procurements. Adhere to this Standardization
with respect to procurements.
1.4.10 Access to Vendor Master is must be controlled or Changes to the master file are
adequately
1.4.11 Access given to the employees should be in line with the job function. Access rights
must be evaluated on an ongoing basis.
1.5 Emergency purchases
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1.5.1 Control over Cash Purchases
A monthly report of all the cash purchases giving the following details is generated:
o Items purchased
oQuantity
oMarket Price
oActual Price paid
oContracted Price if any
oValue
Review of such purchase on a monthly basis to ensure that such purchases are
within specified norms and where necessary corrective action to be taken.
This report is forwarded to the FC and Head of Materials (CPC)
2. Procurement – Services 2.1 Annual Rate Contract for Services
2.1.1 Evaluate need for AMC leading lack of preventive maintenance.
2.1.2 All Services should get covered under annual maintenance contract.
2.1.3 Adhere to CPC service contracts
2.1.4 Paying a price different then what has been agreed upon by the CP
2.1.5 Contract to be drawn based on the format given by CP. General Contract conditions
be prepared by User and Purchase Department and pre vetted by Legal Department. It
includes - The provisions for taxes and statutory liabilities (ESIC, PF, TDS etc) -A clause
protecting the Lodge from any liability on account of any accident, injury etc to the
Vendor's personnel at the company’s premises. -Vendor shall ensure to keep the
company’s premises free from waste, rubbish etc.
2.1.6 Purchase Orders for Rate agreements are approved by GM and FC and forwarded to
CP for final approval.
2.1.7 Request for quotations to be sent out to vendors
2.1.8 Quotations received from the Vendors must be complete
2.1.9 Competitive prices should be determination
2.1.10 Proper renewal of contract or discontinuity of an old contract after expiry of the
contract period after assessing the need for the services needed
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2.1.11 Jobs are done as per the contract terms. Leading to satisfaction due to high standard
delivery.
2.2 Work Order – Engineering
2.2.1 All the repairs and maintenance expenditure to be incurred need be budgeted. If it
exceeds budget it needs to be approved by Financial Controller and GM of the Lodge.
2.2.2 The scope of work for contractor has to be complete.
2.2.3 Quotations received from the Vendors are must be complete
2.2.4 Adequate documentation of the decision of selection of Contractor
2.2.5 All Work orders to be appropriately authorized as per the authority schedule before
the job is awarded to the Contractor.
2.2.6 Work done by the Contractor should be good and does meet Lodges quality standards
2.2.7 The Work order should define the time period for completion of the job. Penalty
clause for non completion within the time period should be defined in the contract.
2.2.8 In case materials for job work are supplied by the Lodge, Contractor must use only
required quantity of material and minimize wastage.
2.2.9 Payment to be made only for jobs completed by the Contractor.
3. Expenditure Control 3.1 Bill Passing Materials:
3.1.1 Control access to Vendor Master. Changes to the master file should be adequately
monitored
3.1.2 Do not create duplicate Vendors.
3.1.3 Vendor changes or additions should be complete or accurately made.
3.1.4 Access given to the employees should be in line with the job function. Access rights
to be evaluated on a ongoing basis
3.1.5 Recive all necessary billed for goods
3.1.6 Consider advance that has been already made at time of final payment of suppliers
bills
3.1.7 Avail all the eligible Discounts
3.1.8 Strictly avoid duplicate payments
3.1.9 Payments must be authorized
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3.1.10 Payments to be made only with proper support documents.
3.1.11 Payments are to be made in a timely manner
3.2 Travel agency commissions paid:
3.2.1 For Bookings received directly at the Lodge, written communication to be obtained
from the travel Agent, in the form of a letter / fax / e-mail. The Reservation staff must
ensure that the Agent’s Profile is attached to each booking. It is forwarded to Credit
Department. For reservations to the Lodges through the CRS or otherwise, complete
details of the Agent making the booking must to be transmitted to enable the Lodge
Reservations to attach the relevant profile.
3.2.2 Commission being paid only to travel agents who are eligible to receive
3.2.3 Claims made by the travel agent for commission for bookings should materialized
3.2.4 Commission paid to the agent must be as per the company defined rates structure
3.2.5 Only authorized commission be paid
3.2.6 Non - Erroneous calculation to be made at the time of commission payment
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Fixed Assets
1. Budgeting and sanctioning process 1.1 Capital Budget Logic and approval
1.1.1 Adequate budgeting process, investment analysis and prioritization process
For capital expenditure budgeting payback period analysis is done. Investment
analysis and a prioritization process followed.
Justification is given for assets purchases at the time of budgeting and whether it
enhances the product image or product quality.
1.1.2 Adequate detail specification and accurate item wise estimates submitted by the units
for the budget
Unit to submit detailed item wise budget proposals to the Chief operating officer
of luxury Lodges for the next financial year.
An acceptance document will evidence the review for the same
Budget contains number of assets within the asset category proposed for purchase
and its budgeted values.
1.1.3 Monitoring of variances i.e. Availability of budget and actual spent has to be verified,
or Balance budget availability checked, also obtained approvals for commitments in
excess of the budget
Monitoring of capital expenditure is within the original authorized capital
expenditure budget.
Variance analysis to be prepared and reasons for the same enumerated. -
Inaccurate estimation/ budgeting - Change in specifications - Any additions - Any
others (please specify)
Any variance/cost overruns should be reported to central purchase and
appropriately authorized
Finance department shall not make payments in excess of approved budgets.
1.1.4 Adherence of central purchase rates for budget preparation.
CPC rates are taken for budget preparation.
Where CPC rates are not available there should be justifiable basis for the rates
adopted.
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Where CPC rates are available and different rates are used proper justification is