BSBFIM601 BHP Billiton Financial Policy and Procedure Manual Assignment Sample

• Internal Code :
• Subject Code : BSBFIM601
• University : Victoria University My Assignment Services is not sponsored or endorsed by this college or university.
• Subject Name : Accounting and Finance

Manage Finances

Introduction to BHP Billiton Financial Policy and Procedure Manual

The BHP Billiton Financial Policy and Procedure Manual provides the policies and procedures for finance transactions within the business which must be followed by all staff. It also provides guidelines {Business Name} will use to administer these policies, with the correct procedure to follow.

BHP Billiton will keep all financial policies current and relevant. From time to time it will be necessary to modify and amend some sections of the policies and procedures, or to add new procedures. 

Any suggestions, recommendations or feedback on the policies and procedures in this manual are welcome.

These policies and procedures apply to all employees.

Finance Authorisation Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff for all authorisations of finance transactions as noted in the policy. Edit this policy so it suits the needs of your business.

Purpose of the Policy

All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken.

This policy is to be read in conjunction with other specific finance policies where relevant.

Procedures

Prior to any of the following finance transactions being undertaken, the authorising person noted must authorise the transaction.

Where additional policy is noted, this policy must also be adhered to when undertaking the finance transaction.

Finance Transaction	Authorised Person	Additional Policy
Bank Accounts	Finance Director Chairperson	ABN 91 903 271 264
Issuing Petty Cash	General Manager	ABN 91 903 271 264
Business Credit Card	Not Applicable	ABN 91 903 271 264
Authorising New Customers	Finance Director	ABN 91 903 271 264
Authorising New Suppliers	General Manager Finance Director	ABN 91 903 271 264
Purchasing Stock	General Manager Director of Referees	ABN 91 903 271 264
Purchasing Assets/ Equipment	General Manager Finance Director Chairperson	ABN 91 903 271 264
Debt Collection	General Manager Finance Director	ABN 91 903 271 264
Payment of Invoices	General Manager Finance Director Nominated Director	ABN 91 903 271 264

Bank Account Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff for all authorisations of opening, operating and closing bank accounts. Edit this policy so it suits the needs of your business.

Purpose of the Policy

This policy sets out the requirements for use of bank accounts, including opening, closing authorisation, variations to terms and conditions, reconciliation of bank accounts and bank account transactions.

Procedures

Opening Bank Accounts

Guidance: Where a new bank account is being considered, you may like to incorporate into this policy some of the recommendations from Refinancing or switching banks information as procedure steps.

Any new bank accounts to be opened for the business must have the authorisation of Finance Director.

For each new bank account opened, the financial system must be updated and the bank account registered by Finance Director.

Closing Bank Accounts

Where it is decided that a bank account is no longer necessary, Finance Director will authorise the closure of the bank account.

The bookkeeper will then be required to complete the following:

• ensure all transactions with respect to the account (including cheques drawn) have been completed;
• lodge with the bank a letter, signed by two authorised signatories advising of the closure of the account;
• meet the bank's requirements with respect to account closure; and
• update the financial system and bank account register.

Bank Account Transactions

All deposits received must be banked within two days.

Unallocated direct deposits of more than one will be investigated fully to determine source of deposit. Where the source cannot be identified, the deposit will be allocated to suspense account to keep these funds separate and identifiable.

Cheques outstanding for more than 12 months, recommended twelve months in line with banks policy will be reallocated back to the business through the financial system

Where a payment stop on a cheque is required, this will be authorised by Finance Director.

Finance Director will be responsible for carrying out the following duties in regards to payment stop on a cheque:

• ensuring the cheque has not already been presented at the bank;
• getting authorisation to action the stop payment using appropriate forms from the bank;
• ensuring the bank receives notification of the stop payment notice;
• receiving confirmation of action from the bank of the stop payment; and
• ensuring the details of the stop payment are kept in the stop payment folder

Petty Cash Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff where petty cash is issued. Edit this policy so it suits the needs of your business.

Purpose of the Policy

Petty cash should be used to pay for small business expenses up to $100 where payments through accounts payable or credit card are not justified or appropriate

Procedures

Issuing Petty Cash

Petty cash vouchers must be completed before any cash is taken from the petty cash float.

Only up to $100 can be disbursed at any one time.

All petty cash vouchers issued must be approved by General Manager

Once the petty cash is spent, a receipt or invoice should be attached to the voucher and returned to petty cash with any balance of monies unspent

All completed vouchers must have the following details included:

• Issue date of voucher;
• Name of person issued the voucher;
• Amount of monies disbursed;
• Details of expense;
• Invoice or receipt; and
• Signature of approval person,

Reconciling Petty Cash

Petty cash float is to be reconciled monthly. This is the responsibility of General Manager.

All petty cash expenditure must be entered into the financial system once the petty cash has been reconciled.

The balance of monies and vouchers must equal the petty cash float amount before reimbursement can be made.

Reimbursement of petty cash will be authorised by Finance Director.

Use of Business Credit Card Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff who require the use of business credit cards. Edit this policy so it suits the needs of your business.

Purpose of the Policy

This policy provides guidelines for the issue and use of business credit cards.

Procedures

An employee will only be issued a credit card once the Credit Card Authorisation Form has been completed.

The business credit card can only be used for travel, authorised entertainment and purchases of small value expenses or equipment up to the value of $ 500

No cash advances are to be taken using the business credit card unless authorised by Finance Director.

Where a business credit card is lost or stolen, then the owner of this card is to notify Finance Director who is responsible for notifying the issuing agency and ensuring the card is cancelled.

The use of the business credit card is not to be used for personal expenses.

All holders of business credit cards are required to reconcile the monthly credit card statement to the expense form, attach all receipts for payments made on the credit card and have the expense statement authorised by General Manager.

Upon completion and authorisation of the monthly expense statement, these documents are to be forwarded to {insert relevant job title here} for payment of the credit card statement.

All business credit cards are to be returned to the business when the person is requested to by General Manager or where they are no longer an employee of the business.

New Supplier Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff who are involved in supplier selection. Edit this policy so it suits the needs of your business.

Purpose of the Policy

All new suppliers to the business must be reviewed and accepted in accordance with this policy to ensure that the supplier service is aligned with the business objectives.

Procedures

Choosing a New Supplier

A new supplier must provide our business with quality product, great service, competitive pricing, and efficient delivery.

For each new supplier the following information table must be completed prior to agreeing services

Supplier Selection Background Information

Business Name of Supplier: _______________________________________________________

Location of Supplier: ____________________________________________________________

Products/Services provided by supplier: _____________________________________________
(Attach a list if necessary)

Name of business owner/ sales representative:________________________________________

How many years has the supplier been trading?:_______________________________________

Supplier Selection Review Checklist

For each new supplier being considered the following checklist must be completed

Is the supplier pricing competitive? Attach list to this checklist: ____________________________

What are the payment terms for this supplier? ________________________________________

What is the return policy for this supplier: ____________________________________________

Does the supplier provide warranties, guarantees etc.? : _________________________________

Are the suppliers representatives knowledgeable of the products/ services and industry?: ________

Is there an alternative to this supplier, has the alternative supplier been considered?: ___________

What are the delivery services of the supplier?: ________________________________________

Has a credit check been undertaken for the supplier (attach to this checklist) : _________________

Has the Personal Property Securities Register (PPSR). been reviewed: ________________________

Has the supplier been trade checked (attach this to this checklist): __________________________

Appointment of Supplier

The appointment of a new supplier will be authorised by Finance Director

All relevant details of the supplier will be entered into the financial system by General Manager once approval is obtained from Finance Director

Book Keeper will review information entered into the financial system and independently verify the bank account or other payment details of the supplier to ensure payments made are to the correct supplier

The purchasing department will be notified within one week of the new supplier being approved

Supplier Payment Terms

All purchases from suppliers must be supported by a purchase order – refer to the Purchasing and Stock control policy

Payment terms for all suppliers must be reviewed by Finance Director every once a year. Following this review each supplier must be approached to seek improved payment terms by General Manager.

All supplier payment terms must be a minimum of 14 days.

Any variation to the above must be authorised by Finance Director.

All supplier payments are to be reviewed at least once a quarter to ensure that payment terms are adhered to. For payments made to any suppliers earlier or later than the agreed terms General Manager will prepare a report that details the reasons why payment terms have not been adhered to.

This report will be reviewed and authorised by Finance Director.

Additional Policies for Suppliers

Guidance: add, link or remove the policies listed below as required.

Purchasing Policy

Stock Control Policy

Purchasing Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff. Edit this policy so it suits the needs of your business.

Purpose of the Policy

This policy provides guidelines for the purchase of goods, services, equipment and assets for the business. 

This policy is applicable for all purchases over $100

Where items to be purchased are less than $100, then the petty cash policy is to be used.

Procedures

Request for Purchase

All purchases for business items must be requested through a purchase order. 

All items over the value of $250 must be supplied by authorised suppliers – refer to the New Suppliers Policy where the supplier is not an existing supplier

For items over the value of $1000 three quotations must be provided.

A request for purchase must address the following criteria:

• Purchasing that promotes environmental sustainability;
• Value for money; and
• Preference to Australian/locally produced.

All purchase orders must be authorised within the following guidelines:

Items Purchased	Persons Authorised	Second Authorisation
Retail Stock	General Manager	Finance Director
Spare parts, components etc.	General Manager	Finance Director
Equipment	General Manager	Finance Director
Assets	General Manager	Finance Director
{insert other types of purchases here}	General Manager	Finance Director

All authorised purchase orders are to be copied and one distributed to accounts payable with estimated payment date and one to book keeper who will check receipt of purchase against the purchase order when received.

Equipment Asset Purchases

All equipment and asset purchases must be entered in the financial system by General Manager with the following details included:

• Date of purchase;
• Supplier; and
• Make, model, warranty/guarantee information.

Service Agreements

All agreements for the provision of services to the business in excess of $250 are to abide by this policy.

Receipt of Purchases

All purchases received are to be checked against purchase order and noted as correctly supplied.

Once correct receipt has been recorded, this will be recorded on purchase order and forwarded to accounts payable for payment of purchase.

Additional Policies for Purchasing

Petty Cash Policy

Use of Business Credit Card Policy

Stock Control Policy

Stock Control Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff. Edit this policy so it suits the needs of your business.

Purpose of the Policy

This policy provides guidelines for monitoring and managing the amount of stock within the business to ensure that there are suitable levels of stock available to customers at all times. This policy covers stock in store, stock in storage, stock in distribution centre etc.

It is stock manager responsibility to ensure that the stock control policy is adhered to by all employees.

Procedures

Purchase of Stock

It is General Manager responsibility to:

• Identify core stock and ensure that appropriate levels are held at all times
• Monitor all stock levels and ‘stock turns’ (how many times stock turns over in a year)
• For fast-moving stock negotiate with suppliers for ‘just in time’ deliveries where possible
• Regularly review sales budgets and order necessary stock in line with budgets
• Negotiate with suppliers for best price, quality, delivery methods and returns policy
• Order all stock required
• Maintain “preferred suppliers” list
• Keep up to date with customer and market trends and seek out new product for recommendation to the stock manager

Purchase of all stock must be authorised by General Manager and stock control manager

All stock purchases must be requested by using a purchase order form and adhere to the purchasing policy.

Receiving Stock

When stock is received from the supplier, it is stock control manager responsibility to:

• Review delivered items to delivery docket, including quantity, quality and completeness of order
• Match delivery docket to purchase order
• Follow up and ensure correct stock order will be received where there is under/over-supply, damaged goods etc.
• Store the stock securely and in appropriate area
• Update all stock records for receipt of goods
• Inform sales manager of any under/over supply or damaged goods

Managing Stock

It is stock control manager responsibility to:

• Identify core stock and ensure that appropriate levels are held at all times
• Monitor all stock levels and stock turns
• Regularly review sales budgets and ensure that stock is ordered in line with budgets
• Understand each stock item – which items are the fast and slow moving stock
• Monitor re-order levels and ensure orders are placed in adequate time to reduce non-availability of core or necessary stock items
• Ensure that all stock items are priced in line with Market Rates
• Ensure that all staff are aware of new product, price changes and procedures for accurate recording of all stock movements

• Meet weekly with Stock Manager and Sales Manager to co-ordinate stock purchases, review stock performance, sales performance and Controls to minimize theft of stock.
• Ensure that all staff are aware of new product, price changes and procedures for accurate recording of all stock movements
• Ensure that there are adequate controls (physical and administrative) in place to minimise theft and/or waste of all stock items
• Organise and oversee physical stock take twice a year and match records of stock take to administrative and financial records

It is all sales employees’ responsibility to:

• Identify core stock and ensure that appropriate levels are held at all times
• Raise purchase orders for low levels of stock
• Adhere to mark downs policy, discounting stock policy, visual display policy
• Understand the importance of good stock control
• Keep up to date with stock pricing and new products
• Ensure that all stock records are kept accurately
• Ensure that all stock is securely stored to minimise theft and wastage

Additional Policies for Stock Control Policy

Guidance: add, link or remove the policies listed below as required.

Purchasing Policy

Finance Authorisation Policy

New Supplier Policy

New Customer Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff who are involved in customer selection. Edit this policy so it suits the needs of your business.

Purpose of the Policy

All new customers to the business must be reviewed and accepted in accordance with this policy. This policy is to be read together with  Customer Credit Limits Policy.

Procedures

Choosing a New Customer

A new customer must support our business with good credit quality, prompt payers, etc.

For each new customer the following information table must be completed prior to agreeing services

Customer Background Information

Business Name of Customer:

Location of Customer:

Products/Services required by customer:
( Attach a list if necessary)

Name of business owner/ sales representative:

How many years has the customer been trading?:

Customer Review checklist

For each new customer being considered the following checklist must be completed

Have trade references been sourced for the new customer:
(Attach copies)

Has the customer been informed of the trade terms of 30 days from invoice and agreed to these terms? :

Has the new customer completed a credit application form? :
(Attach completed form)

Has the Personal Property Securities Register (PPSR). been reviewed?:

Appointment of Customer

The appointment of a new customer will be authorised by Finance Director

Each new customer will have a credit limit set. This credit limit will be set in accordance with the Customer Credit Limits policy

All new customers must be given the New Customer Letter which must be signed and returned by the customer before any sales are to take place.

All relevant details of the new customer will be entered into the financial system by General Manager once approval is obtained from Finance Director

Finance Director will review information entered into the financial system to ensure all information is correct.

The sales department will be notified within one week of the new customer being approved

Customer Credit Terms

All customer payment terms must be 14 days.

Where a customer has requested longer payment terms than the policy, this should be referred to and authorised by Finance Director

All customer payments are to be reviewed once a quarter to ensure that payment terms are adhered to. For payments made outside of the agreed terms General Manager will prepare a report that details the reasons why payment terms have not been adhered to.

This report will be reviewed and authorised by Finance Director

Additional Policies for Customers

Guidance: add, link or remove the policies listed below as required.

Customer Credit Limits Policy

Customer Debt Collection Policy

Customer Service Policy

Customer Credit Limit Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff if customer credit limits are breached. Edit this policy so it suits the needs of your business.

Purpose of the policy

This policy is to make sure a customer doesn’t get too far into debt with you without a payment plan being put into place or work stopped.

Procedures

Reports on customer credit must be run every month.

When a credit limit is breached all relevant staff will be notified. This includes persons from sales, distribution, accounts collection, Finance director, General Manager and Board of Directors.

Any current outstanding orders should be stopped until the breach in the credit limit has been rectified. All staff working on the order or sale Book Keeper / Accounts collectionfor the customer should not carry out further work until authorised by General Manager, accounts collection manager etc.

Review outstanding orders and sale history

If the customer has a large number of orders outstanding or has increased the volume of orders since the last credit review, then a review of the credit limit must be undertaken.

This is the responsibility of Finance Director

If the credit limit needs to be increased, this must be approved by Finance Director.

 Once this has been approved, all staff working on outstanding orders must be notified to restart the customer’s orders.

Credit limit is breached due to outstanding payments

General Manager must make a list of all outstanding payments. 

Sales Manager must ring the customer and explain that further orders cannot be processed until the account has been paid. Explain that a payment will need to be made before the next order can be processed.

If the customer is having difficulty, make a schedule of payments to bring them back in line with their credit limit.

Get the signoff of Finance Director before discussing this option with the customer.

Use the following script to assist with the call:

“Hi John, how are you? Just thought I would give you a ring about your outstanding orders. Unfortunately, we have noticed that payments for previous sales have fallen behind on your account and these will need to be paid for before we can process the next set of orders. Are you able to fix this up today so we can continue on your order?”

If they cannot pay on the day of the phone call, then get an expected payment date from them and confirm that any outstanding orders cannot start until the payment is made. 

Review payment terms for the customer

If the customer has increased the volume or value of orders since the last credit review, the payment terms must also be reviewed by Finance Director. 

Where large orders are being placed then the payment terms should include deposit on order and/or progressive payments for each order. This must be discussed and agreed with the Account Collection Manager.

Customer Debt Collection Policy

Policy Number: ABN 91 903 271 264

Policy Date: 2020-05-20

Guidance: This policy should be read and carried out by all staff who undertake collection procedures within the business. Edit this policy so it suits the needs of your business. For phone and email templates to assist you with your debt recovery process visit the Business Victoria Debt Recovery page - http://www.business.vic.gov.au/operating-a-business/managing-finances-and-tax/invoicing-and-debt-recovery/debt-recovery.

Purpose of the Policy

This policy provides guidelines for the collection of late payments from customers.

Procedures

An aging debtor report is to be run every monthly. All overdue customer payments are to be noted and the following procedures undertaken until recovery of outstanding amounts.

• First Contact: Once the payment is overdue phone or email the customer. Remind them that payment is due and has not been received. Ask them when they will be paying you and keep a record of the conversation or email. Remember to be nice, they may have forgotten or paid into the wrong bank account. 
• Overdue reminder: If they do not respond to the phone call or email, try contacting someone else in the business. Let them know who you are trying to contact. This often results in a return response from either the person you were trying to contact or someone else from the business. Make a note of all conversation details on the overdue customer payment record.
• Final notice: When a payment is overdue for 10 days a final notice is to be sent either by phone or email. A record of this notice must be entered onto the overdue customer payment record
• Direct contact: Where there has been no response to the final notice within 14 days then Finance Director/General Manager must either visit the customer or phone where previous contact has been by email. The purpose of this step is to secure a date of payment. A record of this notice must be entered onto the overdue customer payment record.
• Formal letter of demand: Where payment remains outstanding and there has been an unsatisfactory response from the customer, authorisation from Finance Director for the formal letter of demand to be issued must be obtained. Once authorised this letter is to be sent via registered mail and a record of this notice must be entered onto the overdue customer payment record.

• Debt collection agency: Where the amount outstanding is in excess of $1000 and Finance Director has approved, a debt collection agency is to be appointed to recover the debt.
• Write off debt: Customer payments that remain outstanding for 50 days are to be written off as bad debts and no further sales are to be undertaken with that customer without approval from Finance Director.

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