Summer Training Report Final 1 (1)

8/22/2019 Summer Training Report Final 1 (1)

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Standard Operating Procedures

And Financial Planning

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SUMMER TRAINING REPORT

On

STANDARD OPERATING PROCEDURES &

FINANCIAL PLANNING

(STERIA INDIA LTD)

Submitted in partial fulfilment of the requirements of

Post Graduate Programme

By

SATVINDER SINGH

PGDM (2011-13)

FT-11-1027

IILM Graduate School of ManagementGreater Noida


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DECLARATION FORM

I hereby declare that the Project work

entitled__________________________________________________________________________________(write the title in Block Letters)

submitted by me for the Summer Internship during the

Post Graduate Program to IILM Graduate School of Management,

Greater Noida is my original work and has not been submitted earlier

either to IILM or to any other Institution for the fulfilment of therequirements for any other course of study. I also declare that no chapter ofthis manuscript, either in whole or in part, is copied from any other document.

Signature of Student: _________ Signature of Company Mentor: ___________

Name of Student: ___________ Name of Company Mentor: ______________

Designation: __________________________

Date: Date:

Place: Place:


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AcknowledgementThe project title STANDARD OPERATING PROCEDURES & FINANCIAL

PLANNING has been conducted by me during 1/May/12 to 30/June/12 at Steria India

Ltd. I have completed this project, based on the primary research, under the guidance of

Kripal Singh, Vice-President, Steria India Ltd. and Lecturer Prof. F.M.A Khan,IILM Graduate School of Management, Greater Noida.

Apart from the efforts of me, the success of this project depends largely on the

encouragement and guidelines of many others. I take this opportunity to express my

gratitude to the people who have been instrumental in the successful completion of this

project.

I would like to show my greatest appreciation to Kripal Singh, Vice-President, Steria

India Ltd. He had helped me learn about the process and giving me valuable insight into

the STANDARD OPERATING PROCEDURES & FINANCIAL PLANNING. I feel

motivated and encouraged every time I attend their meeting. Without their encouragementand guidance this project would not have materialized.

The guidance and support received from all the team members including Sunny Goel, Raj

chabbra, was vital for the success of the project. I am grateful for their constant support

and help.

Last but not the least, I feel indebted to all those persons and organisations who/which

have helped directly or indirectly in successful completion of this study.

Date Satvinder Singh


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ContentS.No Topic Page No:

1. Executive Summary Page 52. Introduction Page 6

3. Objective of Project Page 6

4. Company Profile Page 7-11

5. Standard operating Procedures Page 12-516. Financial Planning in Steria Page 52

7. Analysis & Interpretation Page 53-62

8. Action Plan for FinancialPlanning

Page 63

9. Conclusion Page 64

10. Bibliography Page 65

11. Annexure Page 66-68


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Executive SummaryWhat does Summer Internship mean? How it will help me in building my knowledge? Which

type of project I have to make? In what topic I will make a project? These are some questions

which were revolving around my ears when I started my summer internship in Steria. Today I

have completed my project. It reminds me all the tuff days of summer internship. Everything

the work which I had done as well as the learning which I got from respected, experienced and

encouraging industry and faculty guides, corporate peoples, teachers, and students are not

forgettable. They help me in choosing the topic Standard operating procedures & financial

planning analyzing its features and terminology.

Standard operating procedures includes many process like I had done payroll process,

intercompany journal, Pension process, monthly journal include accrual process, prepayment

process & provision account ting. These are the procedures I had done in my summer

internship. Financial planning is the devising of a program for the allocation and management

of finances and capital through budgeting, investment, etc. When we plan the process of

financing certain risks come to fore because of different situations whether it is a loss in

investment or a situation of more debt. So we have to manage all those risks which are incurredin the business transactions.

This report not only contains the workings in project topic but also the 1 month of my basic

learning in finance at Steria India. These learning help me to analysing the report and produce a

better frame work for them. I checked some bills, form no 16, some entries in Oracle. I also

prepare many notes over there apart from my project like US GAAP & UK GAAP & taxation

part also. Then I did some entries in ORACLE and find that the security system of Steria is

very powerful. I learn about Steria functioning for their client. After that I feel reputation is an

important factor for Steria.

In the second month choose this topic financial planning in which I had analysed the 5 years

profit & loss Account, balance sheet & Cash flow statement. After analysing the financial

statements, we determine the current position of the Company Steria. I also had analysed the

various solvency ratios, activity ratios, profitability ratios & some leverage ratios of 5 years.

This is all about the overview of my project in Steria.


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IntroductionSteria is an outsourcing and technology company that helps its clients to do more. Committed

to delivering guaranteed business outcomes through a combination of technology and process

expertise, Steria gives its clients the freedom to do more with their business. Strong

relationships, commercial innovation and an integrated Indian delivery capability ensure that

Steria drives real and long-term cost reductions, performance improvements and new ways of

working tailored to each client. In this project, I had done the standard operating procedures

particularly followed in this company in which I had done pension process, monthly journals,

and corporate taxation. In this I also had done financial planning of my project under I had

analysed the financial statement for the past 5 years & to show the current position of the firm

In Standard operating procedures, these are the abbreviation of company used in this project.

XU : Steria UK Limited

NE : NHS SES (Steria employee services)

NB: NHS SBS (Steria business services)

SR: Steria recruitment

XH : Steria holding

Objective of the ReportTo analyze the Standard operating procedures & financial planning and to contribute in making it

more effective so that company can grow. Also use various tools in analyzing the financial plan and

the various standard operating techniques adopted by Steria for better functioning to achieve

maximum growth.


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STERIA INDIA LTD.Steria founded in 1969 has offices in Europe, India, and North Africa & South East Asia. In

2011, they had revenue of 1.75 billion, 21% of the Steria capital owned by its employees.

There headquarter in Paris, it is also listed in Euro next Paris market. Steria delivers IT enabled

services to public & private sectors so that they can operate more efficiently & profitably.

Steria gives its clients the freedom to do more with their business. Strong relationships,

commercial innovation and an integrated Indian delivery capability ensure that Steria drives

real and long-term cost reductions, performance improvements and new ways of working

tailored to each client. They also focus on their diversified market sectors like finance, public

services, telecommunications & transport etc. The company also in business process

outsourcing & also provides consulting services for its clients business & also operates there

information system.There are around 20000 employees working across 16 countries supports

the system, services & processes.

Steria locations in UK: Birmingham, Bedford, Edinburgh, Holborn (London), Leeds,

Northampton, Reading, Manchester.

Steria locations in India : Chennai, Noida, Pune

KEY FACTS:

Founded in 1969

Current General manager Steria UK Francois Enaud, Steria India Ltd CEO Mukesh Aghi

Over 20000 employees in the organisation in which India & UK have 9860

Revenue1.75 billion

Listed in London Stock Exchange code XAN & Euro next Paris market

o SERVICES:

Steria portfolio of services has been developed with one objective - to give our clients

the space to develop their offerings for their customers.

Steria has the depth, breadth and availability of expert resource, both on and offshore, that

supports our clients' strategies in their changing markets worldwide.

Steria solutions are built on the sector, business and technology understanding we have

developed through strong, long-term client relationships.


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o Business and Technology Consulting: Steria works with clients to define

strategies that address key business and technology challenges. We are designing and

implementing transformation programmes that ensure clients can focus on their customers

and business development. As it requires a cohesive team effort, a range of skills, and

most of all, and the experience of having done it before. Working in partnership with client

teams, Steria brings expertise in:

Business and IT programme management

Business performance improvement

Organization and people change issues

IT architecture Sourcing, procurement and services management

o IT Services: As a market leader in end-to-end application services with over 40 years

experience, Steria enables clients to realize the full value of their IT systems. We design,

build, implement, integrate and manage both tactical and strategic solutions. In partnership

with the world's leading technology providers, we are implementing some of the most

complex ERP systems in the world. In both the public and private sector, Steria is helpingclients to integrate global systems, revolutionize supply chains and harness technology to

introduce new services and channels to market.

o IT Outsourcing: Outsourcing IT processes to Steria provides a mechanism for

implementing strategic change whilst future-proofing and maximizing return on

investment from current IT systems. Our integrated on and off-shore delivery capability

guarantees a low-cost path to continuous service improvements. This is supported by a fullspectrum of venturing and partnership models designed to enable effective sharing of risk

and reward in an open and highly commercial culture.

o On and off shore delivery: With a presence in India dating back to the 1980s,

Steria was one of the first UK outsourcing and technology companies to bring UK clients

the benefits of a full portfolio of integrated onshore and offshore solutions. This heritage

gives us a unique combination of local knowledge and cultural understanding enabling usto wholly integrate UK and Indian operations. We deliver the cost-effectiveness of


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offshore, balanced with the comfort of onshore control and management rigor. Our clients

across public and private sectors are enjoying the advantages of India - harnessing global

sourcing as a highly effective means of accelerating their performance. Whether it is

business process outsourcing, application management services, or business andtechnology consulting, we guarantee improved performance, long-term cost reductions and

above all, the freedom for you to do more for your customers.

o Finance and Accounting Outsourcing: Steria is the UK leader in the

delivery of world-class outsourced Finance and Accounting (F&A) and IT services. Our

clients include BT, MyTravel and the NHS. Our Finance and Accounting services include:

General Accounting, Treasury & Cash Management, and Order to Cash, Purchase to Pay,Employee Payment and other Industry specific processes. On top of this we offer

Accounting and Business Support, Financial Planning Services and Reporting Services.

This can all be backed up by Help Desk support, Finance Systems expertise and Shared

Services Management capability.

o INDUSTRIES:

BANKING --New approaches to the same challenges

The need to achieve operational excellence, the demand to improve shareholder returns,

and the obligation to meet regulatory compliance has remained on top of the banking

agenda for the past decade. Steria has unrivalled breadth of knowledge across all aspects

of retail and Wholesale banking. Steria consultants took lead roles in the design and

implementation of many key parts of the financial services infrastructure, such asContinuous Linked Settlement Bank and the Chip and Pin architecture for APACs.

INSURANCE--Guaranteed outcomes for industry challenges

The insurance industry continues to face the challenges of reducing costs and sustaining

growth whilst responding to regulatory pressures and the increasing demands of the

market. Helping our clients to meet these challenges, Steria has been delivering tailored IT

and business process outsourcing solutions to many of the UK's leading insurance


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organizations for over 20 years. Today, we are helping our insurance clients to focus on

meeting the challenges of the market and growing their business by:

Implementing cost effective and timely responses to regulatory change

Improving productivity and speed-to-market

Delivering guaranteed results through commercial innovation, including outsourcing and

joint ventures

PUBLIC SECTOR--Positive answers to hard questions

We help local and central government clients address the challenges of the transformation

agenda, through the effective use of IT, and through new ways of working such as sharedservices for finance, accounting and HR.

RETAIL-- A passion for retail excellence

At Steria, we have shared risk and rewards with UK retailers large and small. We have applied

retail-specific services, as well as ideas and intelligence from our work in other industries.

Whatever Steria does, ultimately, is designed to improve its position in the market - against the

competition, and with the consumer. We can make back-office and store processes more effective.

We can improve the use of IT. The end game is to free up cash and resources for investment

elsewhere, whether for the shareholders, the logistics team, or the store operations.

TELECOMS--Flexible partnerships deliver results

It's taxing everyone's minds in the telecoms sector, driving prices down, customer expectations up

and creating churn. At Steria, we can help you address the obvious pressure that this places, not

just on your margins, but on your processes, your time to market and your customers' satisfaction.

Steria has improved efficiency and reduced operating costs by as much as 25 per cent, releasing

resource and capital for new product development, marketing, customer services or network

investment.

Competitive advantage through business process outsourcing:Steria works in partnership with clients to drive substantial, long-term cost reductions and

performance improvements through BPO. By optimizing business processes, controlling

costs more effectively and helping clients make the most of technology innovations; we

are enabling organizations to do more for their customers. Our BPO portfolio centres on


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finance and accounting, customer service, back-office processing and human resources. To

deliver this, we combine both on- and off-shore delivery channels. This approach allows

us to offer high quality, cost-effective solutions that deliver a rapid return on investment.

Supporting each Steria BPO solution is a wealth of outsourcing expertise; we are

approaching our 5th year delivering BPO services, we have been delivering results throughIndia for 16 years and have over 40 years experience providing technology services. We

focus on building highly effective business relationships. We construct and evolve

partnerships to meet our clients' long term needs and tailor solutions for each client's

unique requirements.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Steria, we recognize that the Community is as important as our other stakeholders and

we try to do our bit for the betterment of this community as part of our Corporate Social

Responsibility initiatives. The objective for us is not merely charity, but to make the less

Privileged, self sufficient to the extent possible, thus making them useful contributing

members to society. What makes it really work at Steria is the fact that it is not just one

person's vision, but a belief that is enthusiastically shared and supported by all of our

employees across the world. The scope of our CSR initiatives is to empower the

community in the areas of computer literacy and education, as well as to provide care and

support to the less privileged, thus making them self reliant.


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GeneralLedgerDepartment

Chart of Accounts

Intercompany Reconciliation

Payroll Process

Pension Process

Fixed Asset Accounting

Monthly JournalCost Movement

Accruals process

Provision Accounting

Prepayment Process

Purchase Order Process

Accounts Payable Process

Bank Revaluation

Balance Sheet Reconilliation

Bank Reconcilliation

Corporate Taxation (Income tax, Wealthtax & Deferred tax)


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1. Chart of Accounts:

o General accounting policy:

Every subsidiaries of Group Steria should prepare financial statements in compliance with

the IFRS and the Group accounting policies. The financial statements of Group Steria SCA

are prepared in accordance with International Financial Reporting Standards (IFRS)

applicable, as adopted by the European Union and available for consultation

1.1 Presentation of the financial statements

The Group presents its financial statements in accordance with IAS 1, the IFRS conceptual

framework of the French National Accounting Council relating to the format for company

financial statements under the international accounting framework. Accordingly, the

following principles have been adopted by the Group:

- The income statement is presented by nature of income and expense in order to bestrepresent the Groups type of business activity.

- The Groups main financial performance indicator is its operating margin which isdefined as the difference between revenue and expenses of current activities.

- Operating profit is determined by deducting from the operating margin other unusual& unpredictable operating income and expenses of a particularly significant amount

which are presented separately in order to facilitate the understanding of performance

relating to the Groups ordinary activities. They mainly comprise the estimated fair

value of share-based payments, the impact of impairment tests of intangible assets with

indefinite useful lives, restructuring expenses and other income and expenses such as

profit or loss arising from post-employment benefit plan settlements or amendments,

actuarial gains or losses recognised in connection with the recognition (corridor

method) of such plans, etc.

- Net financial expense presents the Groups borrowing cost separately from other

financial income and expenses.

- The balance sheet presents a breakdown of current and non-current assets andliabilities.

Group Chart of Accounts Design

The Chart of accounts of the Group is designed on the Chart of account mandatory in

France, adapted in order to be compliant with IFRS standards. The Chart of Account

Guidelines book describes how to use the group chart of accounts.

The C.O.A., composed of 8 characters, is organised as a decimalised code with:

Single-digit coding for classes 1-9 reserved for the highest level of classification (class)


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Two-digit codes for the first level of subdivision within singledigit classes (sub-class)

Three-digit codes for the next level of subdivision within twodigit sub-class (account)

1.2 Group of accounts or Singledigit coding:

The Group chart of accounts considers five groups of accounts for the balance sheet, two

groups of accounts for the profit and loss statement, one group of special accounts and one

group for internal transactions in the same company.

Balance sheet:

Class 1 Capital, Provisions and Loans

Class 2 Fixed Assets

Class 3 Inventory

Class 4 Receivables and Payables

Class 5 Financial

Profit and Loss:

Class 6 Costs and Expenses

Class 7 Revenue

STERIA SPECIFICITIES:

Class 8 Accounts used to manage the IFRS entries. These

accounts are dedicated for very specific entries validated

before by the Consolidation team. The class 8 should

always be equal to zero.

Class 9 Internal accounts for costs transfer: costs & revenues

between two departments of the same company. The

class 9 should always be equal to zero.

1.3 Sub-class or Two-digit and three-digit coding

Those are used to denote its function from a classification and data processing

viewpoint.

Example of categories:


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20 Intangible Assets

21 Tangible Assets

40 Suppliers

41 Customers

76 Financial revenue

The nature:

Two-digit balance sheet accounts ending by 9 within classes 2-5 means a depreciation of

assets and linked to operating accounts ending by 8 of class 6 or 7. (Balancing by an

account 68x or 78x)

Example:

291 Provision for depreciation of tangible assets ;

39xxxxx provision for loss in value of stocks ; 491 Provision for loss in value of customers

Two-digit balance sheet accounts ending by 8 in class 2 means amortization of fixed

assets linked to operating accounts ending by 8 of class 6 or 7 (68 or 78).

Example:

280 Depreciation of intangible assets

68 Provision for depreciation

The following numbers in the second or third position mean:

6 as Financial:o 16: Financial debtso 26: Financial assetso 296: provision for loss in value of financial assetso 66: Financial costso 686: Financial depreciations and provisions

7 as Extraordinary:o 67: Extraordinary expenseso 687: Extraordinary depreciations and provisions

8 as Provision or depreciation:o 68: Depreciation and provisiono 78: Write-off of depreciation and provisiono 28: Depreciation of fixed assets

Three or more digit accounts ending by 9 (class 1-5), indicate balances of opposite sign.

Example:


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409 are used for suppliers in debit, whereas account 40 normally has a credit balance. 4098 credit note receivable outstanding has a debit balance whereas account 408

Suppliers Invoices outstanding normally has a credit balance.

o List of accounts: Each class of accounts below will be described in a specific

detailed sheet of the COA book.

Balance sheet

Liabilities Assets AssetsAssets &

liabilities

Assets &

liabilities

Class 1 Class2 Class 3 Class 4 Class 5

CAPITAL FIXED ASSETS INVENTORY RECEIVABLESand PAYABLES

FINANCIAL

(external & inter-

company)

10 Capital and

Reserves

1 Capital

4 Premium on

share

6 reserves

9 Uncalled

Capital

20 Intangible Asset 40 Suppliers

1 Suppliers

3 Bill of

exchange

4 F.A. suppliers

8 Outstanding

9 Suppliers in

debit

50 Investments

11 Profit or losscarried

forward

0 Profit brought

forward

9 Loss brought

forward

21 Tangible Asset 41 Customers

1 Customers

3 Bill of exchange

6 Doubtful

customers

8 Unbilled services

9 customers in credit

51 Bank andsimilar

institutions


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12 Profit or loss for

the Year

0 Profit

9 Loss

42 Employees

1 Remuneration

payable

5 Advance, paymenton account

7 Blocked accounts

8 Accrued amounts

payable & receivable

52 Treasury

instruments

13 Investment grants 23 Fixed Assets in

progress

43 Social security

and other social

agencies

1 Social security

7 Other social

agencies

8 Accrued amounts

payable and

receivable

53 Cash in hand

14 Tax regulated

provision

34Work in

progress

44 Government and

other public

authorities

4 Income Tax

5 Vat

- 4455 payable- 4456

deductible- 4457

collected- 4458 to be

adjusted

7 withholding tax

15 Provision for

liabilities and

charges

1 Reserves for risk /

dispute

3 Reserves for

pensions

45 Current accounts

due to or from group

companies and

shareholders

1 Group

7 Dividends

payables


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4 provision for

restructuring

5 Provision for

taxation

8 Other

provision for

charges

58 Interest to be

paid

16 Loans andsimilar debts

8 accrued

interests on loans

26 Investments andloans to group

companies

1 Not consolidatedShare

2 Consolidatedshare

46 SundryDebtors/Creditors

17 Debts and loansgroup andassociatedcompanies

27 Other Financial

assets

4 Loans5 Guarantee

deposits

37 Goods for resale

1 Hardware

2 spare parts

47 Suspense Accounts

1 Suspense account

28 Depreciation of

Fixed Assets

0 Depreciation ofintangible FA

1 Depreciation oftangible FA

48 PREPAYMENTS

AND DEFERREDINCOME

6 Prepaymentcharges7 Forward billing8 Deferred amount

29 Provision for

loss in value ofassets0 Intangible FA1 Tangible FA6 Financial assets7 Other Financialassets

39 Provision for

decrease in value ofstocks71 hardware72 spare parts

49 Provision for

doubtful debt

1 customers5 Shareholders-Current account

6 Debtors

59 Bank

overdraft

P & L

Class 6 Class 7


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EXPENSES REVENUE

60 Purchase (Except 6037)

37 Variation of inventory

4 Services (subcontracting on project)

5 Machinery, equipment and work done

6 Supplies not for stock

7 Goods for resale

9 Rebates and allowances on purchase

70 Sales

6 Services

7 Goods

8 Others revenues

9 Discount on sales

61External charges for services1 General subcontract work

2 Hire purchase and leasing charges

3 Hire and rental charges

4 Accommodation charges

5 Repairs and maintenance

6 Insurance Premiums

7 Research expenses

8 Sundry

9 Rebates and allowances on external charges

62 Others external charges for services

1 Temporary staff

2 Remuneration of intermediaries and

professional fees

3 Advertising, publication and public

relations

4 Transport of goods and employees

transportation


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5 Travel and entertaining

6 post and telecommunication

7 Bank services

8 Sundry

63 Taxes and Similar levies

1 Based on payroll due to tax authorities

3 Based on payroll due to other

authorities

5Other taxes due to tax authorities

7Other taxes due to other authorities

64 Personnel expenses

1 Staff wages and salaries

5 Social security contributions

7 Other social charges

8 Other personnel expenses

65 Other operating expenses

1 Royalties

3 Directors fees

4 Irrecoverable debt

8 Miscellaneous operating expenses

74 Operating grant

75 Other Operating Income

1 Royalties

2 Income from property not used in operations

5 Share of profits from joint venture

8 Miscellaneous operating income

66 Financial Expenses

1 Interest payable

4 Losses on amounts due from group Cie

5 Discounts allowed

76 Financial Income

1 Participating Interests

2 Other Financial FA

3 Other debtors


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6 Realised losses on exchange

7 Net loss on disposal of securities

8 Other Financial expenses

4 Investments Security

5 Discounts Received

6 Realised profit on exchange

7 Net profit on disposal of securities

8 Other financial Income

67 Exceptional expenses

1 Exceptional & Extraordinary Expenses

5 Net book value of assets

8 Other exceptional & extraordinary

expenses

77 Exceptional Income

1 Extraordinary operating profit

5 Proceeds from sale of assets

7Share of investment grants brought to

account to the financial year

8 Other exceptional & extraordinary

Income

68 Depreciation & provision

1 Operating

6 Financial

7 Exceptional

78 Write-back of depreciation & provision

1 Operating

6 Financial

7 Exceptional

69 Employee profit sharing and Income tax 79 Transfer of charges

1 Operating

6 Financial

7 Exceptional

Analytical repartition of the balance sheet

Structure of most of the Steria companies:

o Conventional departments: It does not have employee costs and records charges toreallocate the whole or part to the departments according to repartition keys.

Finance: Only one by subsidiary, for e.g all the financial costs, loans with other

subsidiaries of the Steria Group.


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Fixed Asset (or Holding): Only one by subsidiary. Used for fixed assets exceptedfor financial fixed assets for e.g acquisition, accounting depreciation (local and

group), re-billing of internal depreciation of fixed assets.

Transfer cost (or Siege): Only one by subsidiary for e.g common revenues and

costs that could not be booked on other conventional department and that will bere-billed to other department of the company. This department does not manage

any contract, only cost recovery.

Localisation: Number depends on companys needs for e.g all the transactionsconcerning sites as rent of building

Stock: Department specially dedicated to all stock transaction.

o Staff departments: It groups dedicated team or staff to one or several functionsbut does not manage any contract. (External or Internal projects)

Examples: finance, marketing, MIS department

o Operating departments: Whole or part of a profit centre benefits from apermanent headcount and manages external and internal contracts directly affected

to it.

o Mutualised department:platform which mutualised resources (machines, people)for several customers in order to saved costs. These departments manage only

internal contracts for re-invoicing exploitation departments.

o Non-Current Department: All charges booked in this department must beapproved by HQ, like :

Non-current restructuring. Change differences on current accounts. Disposal of financial Assets.

SUPERSECTOR UNIT

AREA UNIT

SECTOR UNIT

PROFITCENTER

GROUP

COMPANY

DEPARTMENT

PROJECT 1 PROJECT 2 PROJECT 3

ACCOUNTING OPERATIONAL

Flexible Key

SUPERSECTOR UNIT

AREA UNIT

SECTOR UNIT

PROFITCENTER

GROUP

COMPANY

DEPARTMENT

PROJECT 1 PROJECT 2 PROJECT 3

ACCOUNTING OPERATIONAL

Flexible Key


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2. Intercompany Reconciliation:

All different accounting teams, namely AP team, GL team etc. book all the expenses and

revenue to below mentioned GL control account and at each month, these expenses and

revenues are transferred to the concerned company by raising invoices.

1. 42100000 ( Staff Remuneration Payable)2. 42581009 (Godfrey Davis lease cars control Account)3. 42581010 (Mobile Phones Control Account)4. 42581012 (Company Credit Card Control Account)5. 42581014 ( Arval Fuel Control account)6. 42581013 ( Expenses Control Account)

Following are the instances where entries are passed using these accounts:

a) Payroll cost of BA, XH, SR, NB paid by XU.

b) Fuel charges, mobile expenses, Car lease, Company Credit card etc of BA / NB / NE/ SRpaid by XU.

c) Vendor payments made by XU against consolidated invoices raised on XU which containexpenses of other companies as well.

1. 42100000 (Staff Remuneration Payable)

This is an Inter-company Payroll Account; it is used as payroll cost of other entities like SR,

XH, NE and BA are paid by XU on their behalf.

For Exp. : Payroll Cost of BA paid by XU:-

Accounting treatment:

XU BABook The Invoice

XXXXXXX Salary A/c DebitTo 42100000

Payment of Expenses42100000 Debit

To Payroll Control A/c

XXXXXXX

Billing Through ACCOUNTRECEIVABLE

ACCOUNT PAYABLE

SO_BA a/c DebitTo 42100000

42100000 DebitTo SO_XU

Same procedure will be followed while raising payroll invoices on SR, XH and NB.

Here also, the following points have to be kept in mind:

a)No VAT will be charged while raising the invoicesb)Amount charged by invoices will be net off PHI and SMP Credits.


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2. 42581009 (Godfrey Davis Lease Car Control Account)

Every month AP received the consolidated invoice from Godfrey Davis for the cost of vehicle

used by UK Steria employees. When AP makes the payment to the vendor they pass

following entry in the books of XU.

Step1:- Initially at the time of payment, the following entries are passed by the AP Team

Books of XU: - 425810009 Debit

To Vendor

Then GL book the cost to their respective department on the basis on employees detail and

pass the journal entry. If expenses belong to other entity like NE then XU will raise the

intercompany invoice and post following entry before raising intercompany invoice in other

books. For example:

In Case of NE and XU:

Books of NE: - Expense A/c Debit

To 425810009

Step 2:- At the time of raising the invoices, the following entries will be passed in the

respective set of books

Books of XU: - Entry will be done by the AR Team in Mondeo.

SO_NE a/c Debit

To 42581009

Books of NE: - Entry will be done by AP team once invoice will be raised by XU.

42581009 A/c Debit

To SO_XU

3. 42581012 ( Company Credit Card Control Account)

For Inter company prospective we have two types of Barclay Cards:-

1.Centrally paid Non Purchasing Card2.Centrally paid Purchasing card

Transactions are booked via STEM or by uploading in AP module. If the expenses are

incurred for entity other than the entity which paid the monthly bill to the Barclays, then it

will require an inter-co invoice to be raised.

4. 42581010 and 42581014 (Fuel & Mobile Phone Control Account)

Mobile: Every month AP received the consolidated invoice from vendor (O2 UK Limited)

for the cost of Mobile phones and Blackberry used by UK Steria employees. When AP

makes the payment to the vendor they used 42581010 accounts.


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FUEL: Steria has provided Arval Fuel Cards to employees in UK and on weekly basis GL

team received fuel details from Arval PHH Business Solutions Ltd through e-mail.

While booking mobile and fuel cost in oracle the actual usage charges excluding VAT will

be taken care by debiting expense account with department code and crediting above

control accounts. If the expenses belongs to other entities,

Intercompany invoice will be raised on other business units from XU. This action is being

taking place on or before the end of the month.

The basic reason to raise the invoices in respect of the above, is to book the expenses in

the entity to which they belong and thus to represent fair picture of the profit and losses of

any entity.

For accounting treatment 42581009 (Godfrey Davis) procedure will follow.

4.1 42581013 (Expenses Control Account - AP)

VENDOR PAYMENTS MADE BY XU AGAINST CONSOLIDATED INVOICES

RAISED ON IT

1)Company Code2)VAT Charged on the original invoice

While raising the intercompany invoices on different entities, we must consider the fact

whether VAT has been charged by the vendor on the original invoice or not and in case, no

vat is charged on the original invoice, intercompany invoice will be raised without chargingthe VAT. Reason behind this is very simple and straight:

When we raise intercompany invoice on any of the entity, it is simply a reimbursement of

expenses being paid by XU on behalf of any other entity and no value has been added to the

services or we can say that no value added services are provided by XU to the entity on which

invoice is being raised. So, there is no question of charging VAT if VAT is not charged in the

original invoice.

Accounting Treatment:

Step 1: At the time of booking the invoice

Books of XU: 42581013 A/c DebitTo Vendor A/c

Step 2: At the time of making the payment to the vendor by AP team:

Books of XU: Vendor A/c Debit

To Bank Account

Step 3: At the time of raising intercompany invoice

Books of XU: SO_BA/SO_NE/SO_XH/SO_NB Debit

To 42581013 A/c


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Step 4: Once invoice is raised and forwarded to the concerned entity:

Books of Second Entity: 42581013 A/c Debit

To SO_XU

While forwarding the inter company invoice to the concerned entity, details originallyprovided by the AP team are to be forwarded to the concerned second entity as a

supporting document for booking the expenses through Journal in their books of accounts.

GL team booked Expense in second entity:

Expense A/c. Debit

T0 42581013 A/c

3.Payroll Process:

Note 1: Payroll Cost of UK Employees refers the payroll cost of XU, SR and NB.

1) Pay UKIt contains various components of current month salary that is to say Segregationof Payroll Cost like Basic Pay, Various Bonuses, Various types of Commission, Different

types of Overtime Cost, Redundancy Payment, Holiday pay, PHI ,SMP and Employer

Contribution to Pension and National Insurance etc.( There are around 110 types of cost

which generally comes in this tab.)

Please note: - This file is used for the purpose of booking payroll cost in Profit and Loss

Account.

2) Ded UK It contains various deductions from the salary that is to say Net Pay, PAYE,Employee Contribution to NI, Employee Contribution to Pension, Deduction against

Advances, deductions against Student Loan etc. ( There are around 85 types to deductions

which generally comes in this tab).

Please note: - This file is used for the purpose of booking payroll in Balance Sheet Control

Account.

3) Cost UKIt contains only Summary of Payroll Cost that is to say Gross Pay, EmployerContribution to NI and Pension, only 3 Columns are there (All types of cost mentioned in

Pay UK are clubbed in Gross Pay).

Note 2:- Gross Total of each tab should match with gross total of other two tabs. Take the case

of UK employees if Pay UK has total gross cost of 15,482,412.40 then exactly same cost

should appear in Pay UK and Ded UK, if there appear difference then Payroll team should be

immediately informed about the difference.

Please note: - For the purpose of posting payroll in General Ledger, we basically use only Pay

and Ded tab.

Following are the costs that have to be clubbed in Pay tab.


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Types of Cost Oracle code

All types of Bonus Cost 64132000

All types of Commission 64132400

All types of Overtime Cost 64121000

All types of Redundancies Cost 64142000All types of Share based payment 42570010

Other than above cost (including Basic

pay)

64110000

Note 3:- Payroll cost reported by each tab of payroll file do not have to be altered, whatever

cost reported has to be processed as it is, but following are the some exceptions which have to

be done in the payroll file. (It is to be noted that whatever changes we do, should be done in

Pay tab & Ded tab so that there should not come any difference in Pay tab & Ded tab of the

file in any point of time).

(a)PensionPayroll file does not report Pension Cost, it is reported by Bluefin hence PensionCost has to be separately added up in the Payroll file. (All types of Pensions reported by

Bluefin like Steria Retirement Plan (SRP), Federated Pension Plan(FPP), and GPP Plan

like Scottish Widows are populated in payroll file). This exercise is done so as to have

combined file for Payroll & Pension.

(b)LOC (Labour on Cost) -- 3.50% of basic payis separately added up in each tab.

(c)PHI (Personal Health Insurance) PHI Cost is included in Pay tab, we fetch it out fromPay tab and update the same with negative values in separate column in Pay and Ded tabs

.The purpose of negative value is we debit the value of PHI from Long Term Sick Control

Account (Balance Sheet) and credit Salary Cost (P& L A/c). In nut shell, firstly we book

PHI as salary cost and then we credit it by debiting Long Term Sick Control Account, we

set off PHI expense against credit received from insurance company and this credit is

placed in Long Term Sick Control Account.

(d)92% of SMP (Smart Medical Plan)SMP Cost is included in Pay tab; we fetch it out from

Pay tab and update the same with negative values in separate column in Pay and Ded tabs.The purpose of negative value is we debit value of 92% SMP from NI Control Account

(Balance Sheet) and credit Salary Cost (P& L A/c). In nut shell, firstly we book SMP as

salary cost and then we reverse 92% of SMP by debiting NI Control Account and crediting

salary account. In nut shell we reduce NI liability by 92% of SMP value.

Preparation of Master GL file

This file is prepared for the purpose of making Department-wise GL Accounting journals

which have to upload in to the Oracle system by 1st of next month.

Following are the steps which are followed in preparation of Master GL file


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Step 1 Using Pay tab & Ded tab of Payroll file for preparing master GL file.

(Pay Tab will used for booking Payroll Cost in P&L and Ded Tab will used for Balance

Sheet Purpose)

Step 2 Prepare Pivot table / Summary of Pay tab (Company wise to Department wise to

Salary Components wise to payroll cost), format is attached below.

Company Code Cost Code Data Total

SO_XU DPB455 Sum of PHI Value this time (Minus) -12121.27

SO_XU DPB840

Sum of 92% of SMP Value this time

(MINUS) -5086.32

SO_XU DPA555 Sum of Total DC Pension 39604.01

SO_XU DPA675 Sum of Basic Pay Value this time 42491.53

Step 3 Prepare Pivot table / Summary of Combined Ded tab (Company wise to

Department wise to Salary Deductions wise to payroll cost), format is attached below.

Company Code

Cost

Code Data Total

SO_XU DPA553

Sum of Net pay (Including Tax Credit &

Rounding) 640457.97

SO_XU DPA553 Sum of Tax paid in this period 232853.93

SO_XU DPA553 Sum of Total DC Pension 148329.86

Step 4.Make sure total cost of a particular department code of a particular company in the

Pay pivot table prepared above is matching with total cost of same department code of a

same company in the Ded cost table prepared above. This is achieved by making again

pivot table of each pivot table made above but this time Company wise to Department

wise to payroll cost.

Step 5 Add up pivot tables of Pay and Ded tab prepared above so as to have combined

pivot table taking figures of the Ded tab on a separate Column (Credit Column). This file

is called Master GL file and we have to make following addition / changes in the file so as

to get it as per prescribed format.

1) Currency2) Last Date of Month


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3) OFA Codes of each component of Salary and deduction from Salary. ( Make sure rightcode is being used for right cost)

4) Negative Values not to be shown in this prescribed format instead they are shown on debitside if negative value come in credit column or vice versa.

Preparation of Intercompany Payroll Journal

XU firstly pays whole of the payroll and pension cost of all other companies i.e. SR & NB.

So other entity has to transfer his liability to XU which has been created through payroll

journal. After successfully uploading of payroll journals in all three entities, we have to

pass the intercompany payroll journal.

In the book of XU

Intercompany payroll journal is created through crediting the payroll liability of other two

entities and Debiting the payroll control account COA 42100000 with respective flex field

so that we can raise a separate Intercompany Payroll invoices to other entities.

COA Cost Code Destination Debit Credit

43710100 GL-B344 0 45031.53

43100000 GL-A710 0 59785.6

44700001 GL-B344 0 62196.37

42100000 GL-A711 0 217352.96

44570000 GL-A629 0 1.04

43713100 GL-B420 0 675.58

43780000 GL-B191 0 678.88

43100000 GL-A634 0 2555.81

43713100 GL-A629 0 3119.7

44700001 GL-A629 0 3798.26

42100000 GL-A634 0 17412.65

42100000 GL-CXU1 GL-CSR1 152586.56

42100000 GL-CXU1 GL-CNB1 2344560.22


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In other entity (SR & NB)

Intercompany payroll journal is created through debiting the payroll liability and crediting

the payroll control account COA 42100000 with flex field so that we can book the

Intercompany Payroll invoice raised by XU.


42100000 GL-B420 0 9274.95

42100000 GL-B534 0 11529.52

42100000 GL-A633 0 11560.4

42100000 GL-B191 0 16596.34

42100000 GL-A634 0 17412.65

42100000 GL-CSR1 GL-CXU1 152586.56


42100000 GL-A712 0 213383.9

42100000 GL-A710 0 213579.1

42100000 GL-A710 0 214760.6

42100000 GL-A711 0 217353

42100000 GL-CNB1 GL-CXU1 2344560.22

Preparation of Master Bears file

This file is prepared for the purpose of preparing employee-wise cost which have to be

uploaded in to Bears System. This file is prepared through the help of Pay Tab prepared at

Step 1 above, this is basically the employee-wise pivot table which contains all cost relatedto employees. Please notes the following things

1) There is different coding for companies which used for this file are as follows:

Company Codes Company Codes Company Codes

SO_XU 001 PA1

SO_SR 003 PA3

SO_NB 007 PA7


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2) Employees codes have to be in 6 digits, if any employee has employee code which is of

less than 6 digits then make it of 6 digits by putting 0 as prefix.

3) Negative figures have to be shown as positive ones but we have to show sign in

respect negative value in the next column named as Blank Col.

Account Total

Blank

Col.

Payroll

Company

Emp.

I.D. Surname

First

Name

64110000 2,573.88 - PA4 602795 LAMBERT SJ

64110000 1,233.78 - PA4 602884 RICHARDS MH

64110000 459.56 - PA4 602928 COOPER EG

64121000 77.64 - PA4 602916 O'SULLIVAN JM

Payroll Accounting Process: XU firstly pays whole of the payroll and pension cost of all

other companies i.e. SR & NB and then raises AR invoices to them for the recovery of

payroll & pension cost paid on their behalf.

In XU Book

Salary Journal at GL Level

Debit

Payroll & Pension Cost Accounts -

Profit and Loss Accounts Only XU Cost

Credit

Payroll and Pension Control

Account - Balance Sheet Codes Only XU Cost

Payment Journals done by Steria Cashier

Debit


Account - Balance Sheet Codes Cost of all Companies

Credit Bank Account Cost of all Companies

Inter-company Journal at GL Level

Debit

Intercompany Control Account i.e.

42100000.GL-CXU1.GL-CNB1 For NB

Debit


42100000.GL-CXU1.GL-CSR1 For SR

CreditPayroll and Pension Control


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Account - Balance Sheet Codes

Invoice Raising at GL Level

Debit NB Account X

Debit SR Account X

Credit


42100000 X

Receiving payment of payroll invoices raised

Debit Bank Account X

Credit NB Account X

Credit SR Account X

In Other Companies Book (SR & NB)

Salary Journal at GL Level

Debit Payroll & Pension Cost Accounts -Profit and Loss Accounts Only respective CompanyCost

Credit


Account - Balance Sheet Codes

Only respective Company

Cost

Inter-company Journal at GL Level (NB)

Debit


Account -Balance Sheet Codes X

Credit

Inter-company Control Account i.e.

42100000.GL-CNB1.Gl-CXU1 X

Inter-company Journal at GL Level (SR)

Debit


Account -Balance Sheet Codes X

Credit


42100000.GL-CSR1.GL-CXU1 X


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Payroll Invoice at GL Level

Debit


42100000 X

Credit XU Account X

Payment Payroll Invoice- done by Steria Cashier

Debit XU Account X

Credit Bank Account X

4.Pension Process:

This is the Pension process of UK employees.

A) Steria GPP contribution scheduleB) Steria FPP DB ReportC) Steria SRP DB Report

Following adjustment are made in above files:

1) In Steria FPP DB report, we have to calculate the employer contribution by using theemployee contribution, employee percentage & Total percentage.

Formula for calculating the Employer contribution:

Employer contribution = Total contributionEmployee contribution.

Total contribution = Employee contribution x Total percentage

Employee percentage

2) In Steria SRP DB report, we have to calculate the employer contribution by using theEmployee contribution, Employee percentage & Employer percentage.

Formula for calculating the Employer contribution:

Employer contribution = Employee contribution x Employer percentage

Employee percentage

3) In Steria GPP contribution schedule, Updation of Employer and Employee contribution

under different schemes reported through payroll.

4) In all above file, Updation of Additional Variable Contribution (AVC) coming through

Payroll.


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Two tabs that would be made in a excel sheet;

a) AVCXUK which contains Employee ID & Name with amount of contributiondeducted from their Salary for that particular month and this contribution have to be

updated in the GPP contribution, FPP contribution, Cleveland Police contribution &

Prudential AVC contribution file.

b) PENXUK It contains employer and employee contribution towards various pensionschemes

Pension Payment

a) GPP Contribution Scheme: Bluefin provide us figures like how much amount is

required to be paid to Scottish Widows Plc along with the amount of deductions on

account of Employee and Employer made by payroll team, if any.

b) Federated Pension Plan (FPP): Bluefin provide us figures like how much amount is

required to be paid to Federated Pension Plan in respect of NHS Employees along

with the amount of AVC deducted by Payroll team, if any.

c) Steria Recruitment Plan (SRP): Bluefin provide us figures like how much amount is

required to be paid to Steria recruitment Plan along with the amount of AVC deducted

by Payroll team, if any.

d) Hertfordshire Local Govt. Pension Fund: Pension and AVC file given by Payroll

provide us figure like how much amount as employer and employee contribution to be

paid to Hertfordshire Local Govt. Pension Fund.

e) Cleveland Police Contribution: Pension and AVC file given by Payroll provide us

figure like how much amount as employer and employee contribution to be paid to

Teesside Pension Fund.

f) Prudential AVC: Pension and AVC file given by Payroll provide us figure like how

much amount as employer and employee contribution to be paid to Prudential AVC

department.

g) Deficit Removal Payments: Jon Taylor has provided us with one spread sheet whichcontains how much amount has to be paid each month pertaining to deficit removal

under following pension schemes:

A. Steria Management Plan (SMP)B. Steria Retirement Plan (SRP)C. Steria Electricity Supply Pension Scheme (SESPS)D. Steria Pension Plan (SPP)E. Federated Pension Plan (FPP)


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Particulars Name of the payee Oracle code to be debited

For GPP Contribution Scottish Widows Plc 43713100.GL-CXU1.0

For Steria Management Plan (SMP) BCC Steria Management

Plan TST Ltd.

43710000.GL-CXU1.0

For Steria Retirement Plan (SRP) BCC Steria Retirement PlanTST Ltd. 43710000.GL-CXU1.0(Deficit Funding)

43711100.GL-CXU1.0

(Normal Contribution)

For Steria Electricity Supply Pension

Scheme (SESPS)

Bluefin Corporate Consulting

Ltd.Steria Electricity

Supply Pension Trustee Ltd.

43710000.GL-CXU1.0

For Steria Pension Plan (SPP) BCC Steria Pension Plan

Client Account

43710100.GL-CXU1.0

For Federated Pension Plan (FPP) The Federated Pension Plan 43710100.GL-CXU1.0

For Hertfordshire Local Government

Pension scheme (Hertfordshire LGPS)

Hertfordshire County

Council Pension

43713100.GL-CXU1.0

For Cleveland Police Teesside Pension Fund 43713100.GL-CXU1.0

For Prudential AVC PACCORPPMS6000 43713100.GL-CXU1.0

5.Bank Reconciliation Statement:

In the bank reconciliation statement, it was actually same as in the bank like there are two sets

of balance need to make or to make a check like balance as per bank book & pass book. Also

there should be a difference between the two that should taken under a view that it should belike

Cheque issued but not cleared

Cheque deposited but not cleared

Errors of omission ( double booked, double payment)

Like bank charges would be deducted as per pass book

Interest paid by bank treated as added in pass book

Amount recorded in the bank book but not recorded in Oracle path.

In all these processing of BRS, there would be certain time utilised like in firstly depositing

the certain amount in one part, then processing, then clear/deposit to final settlement. So these

should also create discrepancies in both the balances in cash as per pass book & bank book.

6.Fixed Asset Accounting: In India the fixed assets entry is entered by AP team & is

added to FAR by FA team.


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Fixed Asset Accounting process in Steria India Ltd.

In India, Individual assets costing Rs. 5000 or more are fully depreciated in the year of

purchase.

In U.K, Individual assets costing GBP 500 or more are fully depreciated in the year of

purchase Computer softwares are in the nature of software licenses & are amortised over the lower

of license period or three years.

Increase in the value on revaluation shall be credited to revaluation reserve while the

decrease should be charged to profit & loss account.

Profit/loss on disposal should be charged to profit & loss account.

Assets Class, Ledger Codes for Depreciation Booking & Its Rates

Asset Classification Ledger

Code

Steria

India Rates(%)

P & L

Accounts

Balance

SheetAccounts

Description

Software 20510000 33.33/perio

d

68111510 28051000 Dep. of Softwares

Hardware/computers 21830000 25% 68112830 28183000 Dep. of

Computing

Equipments

Land 21100001 68112100 29200000 Dep. of Lease

Land

Building 21300000 20% 68112300 28130000 Dep. of Building

Electrical Installations 21350000 3% 68112810 28181000 Dep. of Sundry

GeneralLease hold 21350001 period 68112813 28135001 Dep. of Lease

FA number issued by APteam on receipt

information provided byprocurement team

against Approved PO

AP team to processinvoice submitted byprocurement & debitAsset GL , photcopy

send to FA team

FA team to validateledger booking &

suggest corrections ifrequired

Depreciation run once amonth on ABEL &

interfaced to oracle

Disposals/transfersdone based on

approved request oragainst policy

After validations assetis created on ABEL(FAR)against specified asset

number

GL vs ABEL recociliation

& pass correctionentries if required


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Improvement Hold Improvement

Plant & machinery 21540000 25% 68112854 28154000 Dep. of Plant &

Machinery

Furniture & fixture 21810000 10% 68112840 28120000 Dep. of Furniture

& Fixtures

White goods 21811000 20% 68112811 28181100 Dep. of White

Goods

Vehicle 21820000 25% 68112820 28182000 Dep. of Transport

Equipment

Office equipment 21840000 20% 68112840 28184000 Dep. of Office

equipment

Accounting entries:

I. Additions:

21830000. GL-A959.0 Dr. XXXX

Vendor/Bank.GL-CSI1A Cr. XXXXII. Transfer:

21830000. GL-A961.0 Dr. XXXX

21830000. GL-A959.0 Cr. XXXX

A similar entry of transfer of depreciation reserve needs to be passed manually

III. Disposal without value:

28183000. GL-A959.0 Dr. XXXX

21830000. GL-A959.0 Cr. XXXX

IV. Disposal with value:

Bank /Vendor. GL-CSI1A.0 Dr. XXXX

28183000. GL-A959.0 Dr. XXXX

21830000. GL-A959.0 Cr. XXXX

67520000/77520000.GL-A959.0 Dr./Cr. XXXX (Balancing factor)

V. Depreciation booking:

68112830. GL-A959.0 Dr. XXXX

28183000. GL-A959.0 Cr. XXXX

Recording Assets on ABEL to add to FAR (Fixed Asset Register):

ABEL is software on a remote desktop in France and is used to capture FAR.

After the accounting entries in asset GL are identified, they are captured on ABEL.

Mandatory fields while capturing assets details on ABEL are: Description of Asset, Asset

class/family, Acquisition date, GL posting date, Number of asset (1 always), Net purchase

value, Operational department, Conventional department, Super sector, Site.


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All the transfers & disposals in the month have to be effected before the depreciation run

in the month.

Any disposal or transfer after depreciation run would require re-run of depreciation in the

month to account for the incremental effect.

Actual periodic calculation is run only in a month After depreciation run on ABEL the interface with OFA has to be initiated immediately.

ABEL created an export file for depreciation booking which is interfaced to Oracle.

Only GL accountant role & GL local administrators have the right to interface the entries.

7.Monthly Journal Entry Rules: The following rules are too used to made accurateentry of journals in OFA.

a. Revenue: Revenue must be created in PA (Project Accounting) not GL (General ledger);

therefore any general entry will be reversed in the following month & should be corrected

in PA.

b. Internal cost / Internal revenue: Internal transactions are entered on accounts beginning

with 9, it is essential that across the company internal costs are equal to internal revenue,

therefore a debit entry to 9 account must be balanced with a credit entry to a 9 account &

vice versa.

c. Costs: A journal on 6xxxxxx.project.0 will affect gross margin, whereas a journal on

6xxxxxx.GL-xx.0 or 6xxxxxx.AA.0 will affect operating cost.

d. Provisions: Movements in the balance sheet provision accounts (15xxxxxx) be matchedby an equal & opposite movement in a provision movement account (68xxxxxx for

increase, 78xxxxxxx for decreases). The loss on completion provision account (15160000)

is calculated in PA based on project costs & project budget information. Any adjustments

to this account must be reversing with correction made to PA data of the following month.

e. WIP (Work In Progress): As with the provisions, movements in the balance sheet WIP

accounts (345xxxxx) must be matched by an equal & opposite P& L movement in a WIP

movement account (713xxxxx).

f. General:

Please separate out reversing & non reversing entries when providing journals.

For any Fixed asset/ Depreciation adjustments, please discuss with the fixed asset

manager.

For any payroll adjustment, please remember to consider the effect of clearing.

To avoid some errors, some COA codes can only be used with a project, others

only with a department.


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COA NAME DETAIL

40810001 Manual Accruals Department only

48600000 Prepayments Dr & Cr. Must both be onthe same project/ Dept.

68150000/78150000/15160000 Loss Provisions Project only

15xxxxxxx All other Provisions Department only

70xxxxxxx/41810000 Revenue Project only

90021000/90021100 Internal Revenue/Cost Project only with Interco

flex field

34500000/71345100 WIP Project only

42861000 IB Accruals Department only

64xxxxxx Payroll related Items Department only

Journal Entry Processing:

Follow the journal rules

Enter an approved journal entry & post it

Enter Correct COA code for all transaction

All fields must be completed

Journals should be reviewed & approved as per defined authority levels

A journal requires a valid COA code, project or dept. code & a destination segment

Journal Entries:

Non Reversal: Permanent Journal

6xxxxxxx Dr 500

To 40810000 500

Reversal:

April: 6xxxxxxx Dr 1000 (Reverse on next month)

To 48100000 1000


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May: 48100000 Dr 1000

To 6xxxxxx 1000

6xxxxxxx Dr 1000

To 48100000 1000

8.Accrual Process: In the process of accrual, there are different costs that we need toaccrue in a due time to evaluate different costs. So firstly we need to make provision of any

non operating expenses.


Bonus Account Dr

To Provision for Bonus A/c

Provision for Bonus A/c Dr

To Bank Account

9.Cost Movement:

In the process of cost movement there are different costs of the department that could be

incurred by one company firstly then later they had to repay that amount to them in a way like

cost movement, that could be put into their cost structures. Like in our company, the area unit,

then super sector, then sector, then departments then there are different project. Under the

project part, there is a cost we need to render in this cost movement process. In this process,like there are many times dept wrongly entered the cost of one dept. into another dept. so for

that they need to offset the wrong entry into right by passing another entry to nullify the dept.

cost.

. GL-A504 (wrongly entered)

Accounting Entries:

65800000. GL-CXU01.0 Dr. 500

40100000. GL-CXU01.0 Cr. 500

Correct:65800000. GL-A550.0 Dr. 500

65800000. GL-A504.0 Cr. 500

10. Bank Revaluation:

This topic is all about the bank revaluation, in which foreign money value appreciated or

depreciated with the due time. So there would be a process to evaluate all factors. Like in the

above example:


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(Amount) 31.1.12 30.6.12 Difference Result

EURO 500 @ 60.70 61.72 1.02 510

USD 600 @ 55.70 52.48 (3.22) (1932)

So through this we can see that the price of the EURO would be appreciated by 1.02 & USD

would be depreciated by (3.22). The result came out also gives EURO a positive balance &

USD a negative balance. In Steria It will be recorded as if it is an Exchange loss that it would

be debited & if there will be Exchange profit then it would be credited against Bank account.

ENTRIES:

Bank Account Dr 510

To Exchange Profit Account 510

Exchange Loss Account Dr 510

To Bank Account 510

11. Provision Accounting: The general rule is that movements in Balance Sheetprovision accounts (15xx) must be matched by equal movements in the specific P&L

provision movement accounts (68xx and 78xx).

Increase to Provision (non-restructuring / exceptional)

Dr 681xxxxx (Expenses)

Cr 15xxxxxx (Balance Sheet Provision Accounts)

Increase to Provision (restructuring / exceptional / industrialisation / integration). Thenon-current dept must be used for the P&L side of any exceptional cost.

Dr 6875xxxx.GL-NAXU.0

Cr 15xxxxxx

Decrease to Provision (non-restructuring / exceptional)Dr 15xxxxxx (Balance Sheet Provision Accounts)

Cr 781xxxxx (Revenue)

Decrease to Provision (restructuring / exceptional / industrialization / integration)(The additional lines are needed to move the expense below the line)

The non-current dept must be used for the P&L side of any exceptional cost / credit.


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Dr 15xxxxxx

Cr 7875xxxx.GL-NAXU.0

Dr 67180000.GL-NAXU.0

Cr 6xxxxxxx

OPA system-generated loss provisions (15160000) must be against a project. Other

provisions should be against a dept.

Specific accounts are as follows:

Note that Not used means released without any cash being spent.

Used implies that the provision was utilised for the purpose for which it was

set up.

Note also that a code ending in 1 usually implies long-term, whereas a code

ending in zero will usually be for short-term provisions.

12. Prepayment Process:

For creating and releasing a prepayment, the Project Finance Analyst (PFA) has to provide

the details in the below given prescribed format to the GL Team for its action:

Prepay PeriodSupplier Invoice Project From Until Total

Name Number COA Number DPA Amount Months

Cristie Data Products

Ltd

22368 61560000 1029288_U DPA4952,562.00

Dec-11 Nov-12 12

Sout Bucks DistrictCouncil

40057 61321000 1106058 DPA495 2768.44 Jan-12 Dec-12 12

Note: All the details mentioned above are mandatorily required for its action.

We cannot prepay a receipt. We can only prepay the invoiced cost.

This is to avoid grossing up the BS with accruals and prepayments for the same

item.

If anyone requires prepaying an un-invoiced receipt then it must be on a reversing

basis and the Balance Sheet side must be on the Accruals account (40810000), not

the Prepayments account.

Accounting Treatment

1. Entry for creating the Prepayments in Oracle: To move the cost from P&L to Balance

sheet Prepayment account, a GL journal is required By Debiting the Balance Sheet

Prepayment code and crediting the Original expense/ cost code as follows.


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COA Project Destination Account DR CR

48600000 1029288_U 0 Prepayment A/c 2562

48600000 1106058 0 Prepayment A/c 2768.44

61560000 1029288_U 0 Expense A/c 2562

61321000 1106058 0 Expense A/c 2768.44

2. Entry for releasing the Prepayments in Oracle: For monthly prepayment release to P&L,

a GL journal is required By Debiting the Original expense/ cost code and crediting the

Balance Sheet Prepayment code as follows.

COA Project Destination Account DR CR

61560000 1029288_U 0 Expense A/c 213.5

61321000 1106058 0 Expense A/c 230.7

48600000 1029288_U 0 Prepayment A/c 213.5

48600000 1106058 0 Prepayment A/c 230.7

3. After passing the Journal entry for creating and releasing the prepayment as given in Step

1 & 2. We have to run a special process in ORACLE through which we transfer the release

from GL into PA, allocating it on project as ECSE other charges.

It may be run many times during the month end process, but must be run after the final

prepayment journals have been posted.

4. The above prepayment process (Step 1, 2 & 3) will be done as early as possible in order to

allow finance managers as much time as possible before month end in which to review

their costs.

13.Purchase order Process:

USER REQUEST FORPURCHASE ORDER

FILE ANAPPLICATION OF PO(PURCHASE ORDER)

PURCHASE DUEAFTER

APPLICATION BEEN

RECEIVED

NEGOTIATIONWITH VENDOR

NEED TO FILEQUOTATION OF

PRICE LIST

NEED TO SELECTTHE LEASTEFFECTIVE

PURCHASE DEPT.PASSED THE PO TO

OTHER DEPT.

GRN (GOODSRECEIVED NOTE)

WOULD BE MADE

RECEIVED BYFACILITY MANAGER

AT ENTRY GATE


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Accounting Treatment of Purchase Order:

Material Receipt Entry:

Asset A/c Dr.

To GR/IR clearing A/c

Accounts Payable Clearing Entry:

GR/IR A/c Dr.

To Vendor A/c

Accounts Payable Payment Entry:

Vendor A/c Dr.

To Bank A/c.

14. Accounts Payable process:


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Accounting Treatment of Accounts Payable:

Profit and loss A/c Dr.

To Supplier A/c

Payment

Supplier A/c Dr.

To Bank A/c

15. Balance sheet Reconciliation :

On a monthly basis all tax accruals, which must be supported by an appropriate level of

documentation, must be reconciled to the General Ledger. These reconciliations will be

reviewed by the Accounting Manager. On a quarterly basis the current year estimate of tax

liability will be reviewed and updated by the Head of Tax to ensure that unusual items areidentified and analysed. Any adjustment arising will be recorded so that the revised

calculation agrees to the General Ledger. They also need to check the balances which are still

idle in reconcilliation & they need to clear them before the quarter end.

Sundry Debtors & Sundry Creditors

Current assets & Liabilities

Provisions

Current accounts

Bank accounts (US entities)

Payroll

Sector Reconciliations

16. Corporation Tax :

INTRODUCTION: This Policy defines the rules within Steria for recording theappropriate corporation tax expense in the profit and loss account and for accounting for

the creation, utilisation and release of corporate tax provisions in line with UK accounting

and tax legislation. It also establishes the related accounting structure. For the purposes of

this Policy, corporation tax includes all domestic and foreign taxes which are based on

taxable profits. Whilst such taxes are commonly referred to, within the Steria chart of

accounts, as Income Tax, under UK legislation they are referred to as Corporation Tax.This policy does not cover the accounting for other taxes such as Value Added Tax (VAT)

or payroll-related taxes such as Pay as You Earn (PAYE) and National Insurance (NI).

These are covered by separate accounting policies, for details of which refer to Accounting

Policy 0440: Amounts due to or from Government.


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The main difference between the International Accounting Standards and UK GAAP lies

in the conceptual basis for recognising deferred tax. Whilst tax accounting entries in the

UK will be based upon UK legislation, additional data will be made available to Steria

headquarters in Paris to enable the consolidated results of the group to comply with

International Accounting Standards.

Note that account descriptions are in line with Steria chart of accounts. In some cases an

alternative description has been provided in [square brackets].

1. Balance Sheet:

Amounts due to or from Government Agencies in respect of corporation tax will normally

be recorded in a Class 4 (Third-party) Balance Sheet account, with a 4 (Government

Agency) sub-class. Thereafter the third digit indicates the nature of the tax with 4

representing current income, or corporation, tax and 8 representing accrued (deferred tax)

amounts.

For the purposes of corporation tax all current amounts are deemed to be payable or

receivable (rather than accrued) and are to be shown in accounts 444xxxxx. All deferred

tax, conversely, is to be shown in accounts 44870xxx.

2. Profit & Loss account:

The cost of corporation tax will be recorded in a Class 6 (Expense) account, with a 9

(Income Tax) sub-class (69xxxxxx). Thereafter the third digit indicates the nature of the

tax with 5 representing current income, or corporation, tax, 8 representing deferred tax

amounts and 9 representing tax loss carry back amounts.

Therefore, current corporation tax amounts are to be shown in accounts 695xxxxx,

deferred tax in accounts 698xxxxx and tax loss carry-back amounts in 699xxxxx.


1) Accrual of current corporation tax liability, assuming a taxable profit

Dr 69510000 Income Tax [Corporation Tax]

Cr 44400000 Income Tax [Corporation Tax]

A reversal or reduction of the current tax liability will result in the above entry being reversed.

2) Accrual of the deferred corporation tax liability or tax asset

(1) Dr/Cr 69800000 Deferred TaxOther

Cr/Dr 44870000 Deferred tax accountother

OR


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(2) Dr 44870100 Deferred Tax account on fiscal loss

Cr 69800100 Deferred Tax on fiscal losses

(1) Used for deferred tax relating to short-term timing differences and accelerated capital

allowances.

(2) Used to record the deferred tax asset on tax losses carried forward.

A reversal or reduction of the deferred tax liability will result in the above entry being

reversed.

3) Payment of amounts on account

During the year payments made on account of the current year liability will be recorded as

follows:

Dr 44400000 Income Tax [Corporation Tax]

Cr 512XXXX Bank

Final payments in settlement at the end of the accounting period will be recorded in the

same accounts.

4) Quarter-end adjustmentscurrent tax

The Head of Tax is responsible for maintaining an analysis of account 44400000 by

accounting period. At each quarter end he should identify any accounting periods where

the tax amount is recoverable from HMRC and instruct the Accounting Manager to

transfer that amount to a debtor account as follows:

Dr 44430000 Income tax recoverable [Corporation Tax recoverable]

Cr 44400000 Income Tax [Corporation Tax]

The above journal should be reversed in the last month of the next quarter and replaced by

a new journal if required.

When the corporation tax overpayment is recovered from HMRC, the following entry will

be recorded:

Dr 5122xxxx Bank

Cr 44430000 Income tax recoverable [Corporation Tax

recoverable]

5) Wealth tax Payable:

In the Wealth tax computation in our company; they were particularly doing their wealthtax computation on their Cars only, as if there many of the employees insured their car


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with the company. There were many particulars would be made in respect to computation

like description, value of the car , insurance amount, policy starting as well as expiry date.

In the end they need to make a total of Insurance amount with respect to standard

deduction of 3000000 if that particular amount is greater than 30 lacs. The remaining

would liable a 1% of wealth tax that should be submitted to govt. There should be properaccounting entries recorded in Accounts payable department & that amount also be

payable through bank by creating a provision of wealth tax payable.

Accounting entries:

Wealth Tax Expenses Account Dr

To Wealth Tax Payable A/c

Wealth Tax Payable Account Dr

To Bank Account

Corporation Tax accounts used:

The list of corporation tax accounts (both Balance Sheet and Profit & Loss account) in the

Steria chart of accounts is quite extensive. In the interests of clarity, the accounts available

for use in the UK are listed here.

Balance Sheet

44400000 Income Tax [Corporation Tax]

44430000 Income tax recoverable [Corporation Tax recoverable]

44440000 States - Carry back debts [Corporation Tax loss carried back]

44870000 Deferred tax accountother

44870100 Deferred Tax account on fiscal loss

Prof i t and Loss account

69510000 Income Tax [Corporation Tax]

69800000 Deferred TaxOther

69800100 Deferred tax on fiscal losses


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Financial Planning: It is the devising of a program for the allocation and management of

finances and capital through budgeting, investment, etc. When we plan the process of financing

certain risks come to fore because of different situations whether it is a loss in investment or a

situation of more debt. So we have to manage all those risks which are incurred in the businesstransactions.

Steria comes under top 50 companies of the world with their better financial planning and

risk management system. Their way of doing thing is far better than other organization in

their field. The financial planning which Steria use I am describing here. They also have a

better understanding level and management plans for risk recurred in their business.

Financial planning in Steria:-

This is a financial plan followed by Steria

BANK

CLAIMS AND APPROVE

EXPENSES

DELIVER PRODUCT AND

SERVICES

CREATE / AMEND PROJECT

AND PRICING DATA

RECORD AND

APPROVED TIME

MANAGE

RESOURCES ANDDEVELOP

CAPABILITY

CHECK PROJECT

FINANCES

STERIA U.K.

PERFORM BILLING

PERFORM PERIOD END CHECKS

PRODUCE

FORECASTS


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Financial statement analysis; It is the collective name for the tools & techniques

that are intended to provide relevant information to decision makers. The purpose of such

an analysis is to assess a company`s performance. It includes comparison of the same

company over the periods of time.It also refers to classification of the various items givenin Financial Statement and further its interpretation. It is the powerful mechanism ofascertaining the financial strengths and weaknesses of a firm.

Financial Statement analysis enables investors & creditors to:

Evaluate past performance & financial position: The starting point in the analysis of a

company is to look at the past record. These past information help in finding or judging the

future performance. For example trend of past sales, earnings, cash flow, profit margin &

return on investment provide a basis for evaluating the efficiency of a company

performance & aid in assessing its prospects. To a large extent, the expectations of

investors & creditors about future performance are shaped by their evaluation of past

performance and current position.

Predict future performance: Investors & creditors use information about the past to

assess a company prospects, investor expect an adequate return from the company in the

form of dividends & market price appreciation. Creditors expect the company to pay

interest and repay the principal in accordance with the terms of lending. They areinterested in predicting the earning power & debt paying ability of the company.

Analysis of Profit & Loss Account

a) Revenue: The revenue in the year of 2011 is 17, 47,677, this shows an upward trend in

the revenue as shown in the graph. After 2008 it was like steep decrease but also it went

Summer Training Report Final 1 (1)

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