Retail Stock Accounting SOP

Retail Stock Accounting SOP Retail Stock Accounting Standard Operating Procedure

TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY... 2 2.0 PROCEDURES... 3 3.0 Generating Sales Purchase Requisition... 3 4.0 Sales Purchase Requisition (SPRs Approval)... 3 5.0 Raising Goods Received Note (GRN)... 3 6.0 Warehouse Function... 3 7.0 Ledger Entries... 4 8.0 Value Addition of Coffee... 4 9.0 Stock Order Placement (Tea and Coffee)... 5 10.0 Stock (Tea)... 6 11.0 Tea Purchase... 6 12.0 Batch Posting for Tea Purchase... 6 13.0 APPENDICES... 6 14.0 REVISION HISTORY... 8 Retail Stock Accounting Standard Operating Procedure Page 1

1.0 EXECUTIVE SUMMARY Document ID Title Print Date RETAIL STOCK ACCOUNTING SOP Revision Prepared By Date Prepared VINCENT ONYANGO Effective Date: Reviewed By Date Reviewed Approved By Date Approved Applicable Standard: PURPOSE: To ensure that clear guidelines for accounting for retail stock (tea and coffee) in terms of proper recording, issuance and approvals are adhered to. DEFINITION OF TERMS Stock; The amount of merchandize, goods held by a company for its day to day operations. ROLES AND RESPONSIBILITIES Sales and Marketing Manager (SMM); Ensures there is constant stock for day to day operations. Finance Manager (FM); Is responsible for reviewing and approval of all sales purchase requisition. Senior Accountant (SA); Verifies the sales purchase requisition raised. Accountant; Is responsible for raising a sales purchase requisition INTRODUCTION This SOP covers both tea and coffee held by the retail division. Retail Stock Accounting Standard Operating Procedure Page 2

2.0 PROCEDURES 2.1 The procedure for raising a sales purchase requisition in the system (ERP-Harvest) is as follows. 3.0 Generating Sales Purchase Requisition Unit function Inventory Transaction Purchase Requisition Save Input Details 4.0 Sales Purchase Requisition (SPRs Approval) 4.1 The process of raising an SPR in the ERP-Harvest is as shown below. Transaction PR Sanctioning LPO Approval Sent to supplier 5.0 Raising Goods Received Note (GRN) 5.1 The process of raising GRN in the ERP-Harvest is as indicated below. Transaction GRN + DN Input Details i.e. match delivery with LPO in ERP Invoice 6.0 Warehouse Function 6.1 The is carried out in the retail module as shown the system (ERP-Harvest) below. Transactions Coffee process Purchase Input coffee purchase details i.e. coffee type, supplier, brand, currency etc. Update Retail Stock Accounting Standard Operating Procedure Page 3

7.0 Ledger Entries Dr. Stock Dr. Purchase Dr.VAT (Where applicable) Cr. Trade payable control Cr. Cost of Sales 8.0 Value Addition of Coffee Blending Transaction Input Details i.e. brand, batch no., output bags, grades etc. + DN i. Upon blending coffee the following ledger entries are made; Dr. Stock (Blended) Cr. Stock (Raw material) Roasting Blending Transaction Input Details i.e. brand names etc. i. On roasting the ledger entries made are; Dr. Stock (Roasted) Cr. Stock (Blended) Packed Input Details Finished Products Retail Stock Accounting Standard Operating Procedure Page 4

8.0 Value Addition of Coffee (Continued) i. After packing ledger entries made are; Dr. Stock (Packed) Cr. Stock (Roasted) Dr. Finished Products Cr. Stock (Packed) Cr. Finished Product Dr. Cost of sales 9.0 Stock Order Placement (Tea and Coffee) 9.1 Below is the procedure in the system (ERP-Harvest) that is executed whenever an order is placed by a customer. Stock Order Process (Transferring stocks from Kiambu to Ruiru) Sales Order Process (Raising an invoice to a customer) Input Details i.e. product code, request to, sanction authority, requested by etc. Input Details i.e. payment type, customer name, sales person, validity, order type, sanction authority). Update i. The ledger entries done when sales order is made include; Dr. Debtor s Cr.Sales Dr. Cost of sales Cr.Stock Dr. Trading a/c. Cr. Cost of sales Retail Stock Accounting Standard Operating Procedure Page 5

10.0 Stock (Tea) 10.1 It is another type of stock held by the retail division. The procedure for tea acquisition and posting in the system (ERP-Harvest) is as shown below. 11.0 Tea Purchase 11.0 The procedure for tea purchase as captured in the system (ERP-Harvest) is as shown below. Warehouse Trading Transaction Purchase Save & close Input Details 12.0 Batch Posting for Tea Purchase 12.1 The procedure on how batch posting of tea purchase is done in the system (ERP-Harvest) is as shown below. Transaction Batch Posting for Tea Purchase Input Details Save & Close 13.0 APPENDICES 13.1 A sample of Sales Purchase Requisition 13.2 A sample of Goods Received Note Retail Stock Accounting Standard Operating Procedure Page 6

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14.0 REVISION HISTORY SASINI LIMITED Revision Date Description of changes Requested By Initial Release Retail Stock Accounting Standard Operating Procedure Page 8