Sop Fin 01

STANDARD OPERATING PROCEDURE
FOR
FINANCE
WILKEN GROUP LIMITED

WILKEN HOUSE, WILSON AIRPORT, NAIROBI, KENYA
DOCUMENT REFERENCE: SOP-FIN-REC-0.1
PREPARED BY: DATE:
APPROVED BY: DATE:
Table of Contents
FINANCE PROCEDURE
Document Reference Revision Status Effective Date
Number 1 31st March 2021 Page 2 of 38
SOP-FIN-REC-0.1
STANDARD OPERATING PROCEDURE FOR FINANCE
1 REVISION HISTORY........................................................................................................................7
2 FORWARD.........................................................................................................................................8
3 INTRODUCTION...............................................................................................................................8
3.1 Purpose Of Accounting Policy And Procedures Manual.............................................................8
3.2 Supplements To Policy And Procedures Manual.........................................................................8
3.3 Authority And Administration.....................................................................................................8
4 LIST OF ABBREVIATIONS..............................................................................................................8
5 ACCOUNTING POLICIES AND PROCEDURES............................................................................9
5.1 Policies........................................................................................................................................9
5.2 Procedures...................................................................................................................................9
5.2.1 The General Ledger.............................................................................................................9
5.2.2 Recognition of Revenues...................................................................................................10
5.2.3 Payments............................................................................................................................10
5.2.4 Cash Transactions..............................................................................................................10
5.2.5 Provisions..........................................................................................................................10
5.2.6 Accruals.............................................................................................................................10
5.2.7 Prepayments.......................................................................................................................10
5.2.8 Journal Entries...................................................................................................................11
5.2.9 Credit Notes.......................................................................................................................11
6 CASH MANAGEMENT...................................................................................................................12
6.1 Cash Receipts............................................................................................................................12
6.1.1 Policies...............................................................................................................................12
6.1.2 Procedures..........................................................................................................................12
6.2 CASH PAYMENTS..................................................................................................................12
6.2.1 Policies...............................................................................................................................12
6.2.2 Procedures..........................................................................................................................12
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6.3 Banking Policies & Procedures..................................................................................................13

6.3.1 Policies...............................................................................................................................13
6.3.2 Equity Expenditure............................................................................................................13
6.3.3 Bank Correspondence........................................................................................................13
6.3.4 Staff...................................................................................................................................13
6.3.5 Authorized Transactions....................................................................................................13
6.3.6 Monitoring Bank transactions/balance...............................................................................13
6.3.7 Depositing of Cheques.......................................................................................................14
6.4 Bank Reconciliation...................................................................................................................14
6.4.1 Policies...............................................................................................................................14
6.4.2 Procedures..........................................................................................................................14
6.5 Borrowings................................................................................................................................15
6.5.1 Policies...............................................................................................................................15
6.5.2 Procedures..........................................................................................................................15
7 RECEIVABLES MANAGEMENT...................................................................................................16
7.1 Policies......................................................................................................................................16
7.2 Receivables................................................................................................................................16
7.2.1 Debt Collection..................................................................................................................16
7.2.2 Bad and doubtful debts......................................................................................................16
7.3 Procedures.................................................................................................................................16
7.3.1 Invoicing............................................................................................................................16
7.3.2 Receipt of Payment from Debtors......................................................................................16
7.3.3 Client Debtors....................................................................................................................16
7.3.4 Doubtful Debts...................................................................................................................17
7.4 Posting Adjustments..................................................................................................................17
7.5 Review of Credit balances.........................................................................................................17
8 PAYABLES MANAGEMENT.........................................................................................................18
8.1 Policies......................................................................................................................................18
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8.2 Approvals..................................................................................................................................18
8.3 Procedures.................................................................................................................................18
8.4 Payment process........................................................................................................................18
8.4.1 Supplier payments..............................................................................................................18
8.4.2 Purchase of Fixed Asset.....................................................................................................19
8.4.3 Reconciliation of Accounts Payables Ledger.....................................................................19
9 REPORTING POLICIES AND PROCEDURES..............................................................................20
9.1 Policies......................................................................................................................................20
9.1.1 Chart of Reports.................................................................................................................20
9.2 End month procedure.................................................................................................................20
9.3 End of year procedures..............................................................................................................20
9.4 Financial Audit..........................................................................................................................20
10 BUDGETING................................................................................................................................22
10.1 Policies......................................................................................................................................22
10.2 Procedures.................................................................................................................................22
10.2.1 Budget Preparation.............................................................................................................22
10.2.2 Budgetary Control..............................................................................................................22
11 TAXATION..................................................................................................................................23
11.1 Policies......................................................................................................................................23
11.2 Procedures.................................................................................................................................23
11.2.1 Taxes..................................................................................................................................23
11.2.2 Returns...............................................................................................................................24
12 PROPERTY AND EQUIPMENT..................................................................................................26
12.1 Policies......................................................................................................................................26
12.1.1 Leasehold land...................................................................................................................26
12.1.2 Capitalization of Assets.....................................................................................................26
12.1.3 Motor Vehicles and Equipment..........................................................................................26
12.2 Custody and documentation.......................................................................................................26
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12.2.1 Insurance............................................................................................................................26
12.3 Procedures.................................................................................................................................26
12.3.1 Title Deed..........................................................................................................................26
12.3.2 Motor Vehicle, Furniture and Fittings................................................................................26
12.4 Insurance....................................................................................................................................27
12.5 Property Land rates....................................................................................................................27
13 MANAGEMENT RECORDS.......................................................................................................28
13.1 Policies......................................................................................................................................28
13.2 Procedures.................................................................................................................................28
13.2.1 Administration files...........................................................................................................28
13.2.2 Insurance Files...................................................................................................................28
13.2.3 Documents of Title............................................................................................................28
13.2.4 Cheque Books....................................................................................................................28
13.2.5 Other Accounting records..................................................................................................28
14 TRAVEL & PER DIEM POLICIES AND PROCEDURES..........................................................30
14.1 Case...........................................................................................................................................30
14.2 Day Trip.....................................................................................................................................30
14.3 Night out....................................................................................................................................30
14.4 Transport....................................................................................................................................31
14.5 Accounting for per diems advanced...........................................................................................31
14.6 Other Office Claims...................................................................................................................32
14.6.1 Working over the weekends and public holidays...............................................................32
14.6.2 Overtime............................................................................................................................32
15 SHAREHOLDERS ACCOUNTS.....................................................................................................33
15.1 Directors And Shareholders Transaction Policies And Procedures............................................33
15.1.1 Introduction........................................................................................................................33
15.1.2 Directors’ Expense Claim Accounts..................................................................................33
15.1.3 Short Term Shareholder Loan Accounts............................................................................34
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15.1.4 Shareholder Contributions.................................................................................................34

16 ACCOUNTING SYSTEM AUTHORIZATION AND BACK UP................................................36
16.1 Policies......................................................................................................................................36
16.2 Procedures.................................................................................................................................36
16.2.1 Passwords..........................................................................................................................36
16.2.2 Back up..............................................................................................................................36
16.2.3 Disaster Recovery..............................................................................................................36
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1 REVISION HISTORY
ISSUE/REVISION SUBJECT OF REVIEWED AUTHORISED DATE

NUMBER AMENDMENTS BY & BY &
SIGNATURE SIGNATURE
2 Roles for asst. SO
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2 FORWARD
This manual contains statements of Wilken group accounting policy and procedures. It is designed to be a
working document for management staff in the day to day administration of the accounting function.
The policies and procedures will be subject to modification and further development from time to time.
This is a dynamic working document.
3 INTRODUCTION
3.1 Purpose Of Accounting Policy And Procedures Manual
This written policy should increase an understanding and eliminate need for personal decision on matters
of companywide policy and help ensure uniformity of organization.
It is the responsibility of every member of management to administer the policies in a consistent and
impartial manner.
3.2 Supplements To Policy And Procedures Manual
From time to time supplementary and revision will be made . This new supplement will update and revise
present policy whenever deemed necessary.
3.3 Authority And Administration
This will be made available to personnel in the accounting department.
This policy and procedures manual is up to date and contains the complete accounting policies and
procedures for our company as of this date.
4 LIST OF ABBREVIATIONS
CA-Chief Accountant
CEO-Chief Executive Officer
GL- General Ledger
AR-Accounts receivable
AP-Accounts Payable
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5 ACCOUNTING POLICIES AND PROCEDURES

5.1 Policies
The company’s financial statements will be prepared in accordance with the International Financial
Reporting Standards.
5.2 Procedures
5.2.1 The General Ledger
The general function accounting consists of processes that maintain the company’s general and subsidiary
ledgers, prepare reports from this ledgers and other accounting record and safeguarding the company’s
assets.
Pastel accounting Software is currently in use.
The general ledger accounts consist of balance sheet accounts and revenue and expense accounts. These
are the official company records.
The general ledger function includes the process of maintaining of this accounts and the integrity of the
data in them.
The accounting system in use - Wilken group uses Pastel for accounting purposes. The modules in use
include the following:
A. Receivables Management Module
This module is used for debtor management specific functions include:
i) Invoicing and receipting processing
ii) Debtor analysis
B. Payables Module
This module is for credit management. Specific functions include:
i) Invoicing and payment processing
ii) Creditor analysis
C. Bank Reconciliation Module
This module is used for processing and reconciliation of all cash transactions
D. Inventory Module
The inventory module is used to capture, store and track information.
E. The General Ledger Module(Financial Module)
This is the backbone of the accounting system. All transactions through the subsidiary ledgers are posted
to the general ledger module. The GL accounts are used to generate the financial statements.
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5.2.2 Recognition of Revenues

Revenue is recognized in the company’s books as soon as it becomes due.
Revenue is recognized though the receivables management module of the accounting system. Invoices are
raised to respective debtors through the subsidiary module and the GL is updated thereafter.
When cheques are received they are posted into the subsidiary ledger thereafter updated in GL.
5.2.3 Payments
Invoices received from suppliers are posted into the system as soon as they are received. This is through
the payables management module.
When payments become due the cheques are drawn and the details processed through payables module.
5.2.4 Cash Transactions
Reconciliation of cash inflows and outflows MUST be done every month. The bank reconciliation
module captures all cash transactions processed through the receivables module and payables module.
This allows for reconciliation of the company cash records to bank statements.
5.2.5 Provisions
Provisions are made at the end of each period of account for:
i) Payments for services rendered in full or part where an agreement for the same is in place and
liability is certain eg audit fee,
ii) Debts whose recoverability is uncertain
iii) Taxes payable and deferred taxes
Provisions are recognized through the GL module.
5.2.6 Accruals
Accruals are made at the end of each period for:
i) Payments for services that were invoiced before the period end
ii) Salaries/ fee due by the end of the period of account but not yet paid.
Accruals are recognized through the subsidiary ledger . The pending invoices are recognized through the
payables module.
5.2.7 Prepayments
These are payments in advance for services or goods. The most common prepayments would be for
insurance, land rent and rates which are paid on an annual basis.
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Prepayments are initially recognized as assets in the receivables module. As the service cost becomes
spent with time, the level of prepayments is reduced while the expense .amount is increased. By the end
of the insurance period the entire sum paid will be an expense.
5.2.8 Journal Entries
These are adjustments that are passed to ledger entries.
All journal entries must be approved by a director.
The accountant prepares journal entries to be passed. They are forwarded to the CA checking and finally
forwarded to the directors for signing.
The following journals can be signed off by the CA
i) Cashbook journals (record bank charges as recorded in the bank statement)
ii) Depreciation Journals- To record depreciation charge
iii) Payroll Journals-To record the salaries and wages in accounting system
5.2.9 Credit Notes
All credit notes have to be approved by a director.
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6 CASH MANAGEMENT
Cash management policies have been established to facilitate efficient handling of cash, reduce fraud and
ensure funds are available when required for administrative purposes.
The CA handles cash management.
6.1 Cash Receipts
6.1.1 Policies
The Accountant will receive all cash and make all bank deposits. Pre-numbered receipts will be issued for
any monies received.
6.1.2 Procedures
All cash received MUST be banked.
6.2 CASH PAYMENTS
6.2.1 Policies
No cash payments should be made to suppliers of goods or services. All payments should be done by
cheque.
Petty cash should be used to purchase miscellaneous office items not exceeding Kshs. 5,000/=
Payments for any amounts greater than this should be done by cheque.
6.2.2 Procedures
The staff member in need of funds prepares the petty cash/payment voucher and has it approved by the
head of the department concerned. The request should clearly state:-
i) the purpose of the funds,
ii) the unit cost of the expenditure in question,
iii) Job card no.
iv) Client
v) the date when the funds are to be utilized
Example: In case of travel advance for 2 engineers, indicate: – Travel advance for Momanyi and Agoro
to Nakuru on 13 April 2009 – 16 April 2009 for Solar installation at Sarova Lion Hill = 2 X 1500 X 3
days = Ksh. 9,000); Job card no. WS00716.
Deliver the approved voucher, with the supporting documentation where necessary, to Finance Manager’s
in-tray as explained above (i.e. by close of business on Monday or Wednesday depending on when
payment is required). For Mombasa office, this will be handed over to the Branch Supervisor on the said
days.
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See the respective accountants (for the entity from which payment is to be made) for petty cash payment
on Wednesday afternoon, or Friday afternoon for the payment. The requests will be on their desks by
then. In case the payment is not approved, the applicant will receive information to this effect by Tuesday
lunch hour or Thursday lunch hour to enable them rectify the request in time for the next payment period.
NB: Where petty cash requests relate to labour costs for casuals, a casual register sheet should be attached
and signed by the department head concerned. RERs should be attached as proof of work done, for which
payment is to be made. Internal jobs should also have RERs, quoting the job cards which are opened
monthly for these jobs. These jobs will be approved by the HR Manager, if they relate to internal cleaning
or by the Finance Manager if they relate to loading or unloading equipment to or from the stores. This
will help to keep track of the cost and know where to book the costs i.e. whether part of material costs,
fixed assets or just normal admin expenses.
6.3 Banking Policies & Procedures
6.3.1 Policies
The persons authorized to sign cheques are the authorized signatories as per mandate. Only two
signatories are authorized signatories.
6.3.2 Equity Expenditure
Approval- Board of Directors
It is important to note that in an attempt to improve on efficiency cheques of an equivalent may be signed
by one director. However this will call for the review of the source documents leading to the expenditure
by the second director upon the latter’s availability.
6.3.3 Bank Correspondence
Any two authorized signatories MUST sign all outgoing bank correspondence.
6.3.4 Staff
Other than directors, some members of staff have authority to perform specific transactions on behalf of
the company of the company after being introduced to the bank by directors.
6.3.5 Authorized Transactions
CA Negotiating interest rates, collecting cheque books, statements, banker’s drafts
Agent negotiating interest rates, collecting cheque books, statements, banker’s drafts
6.3.6 Monitoring Bank transactions/balance
Monthly reconciliation of bank account statements MUST be done to ensure that any errors by the bank
or management are collected as early as possible.
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Weekly analysis of inflows and outflows to the bank account MUST be done and cash position reports
generated to keep track of cash flows. This report should be submitted to the relevant members of staff.
6.3.7 Depositing of Cheques
Cheques will be written from creditors will be deposited into the operating account. Deposits of cheques
into other accounts will depend on requirements at a time (cash flows). Cheques will be written only after
review of the cash position.
Payments for operating and administrative services and goods will be drawn from the operating account.
Examples of common bank transactions
i) Request for banker’s draft
The bankers draft request must be put in writing and signed by authorized signatories.
ii) Inter- bank transfers
The instructions must be put in writing and addressed to the relationship manager in addition to verbal
response.
iii) Loan Rollover
Notification and negotiation of the rates MUST be done on phone at least a day before the loan is due to
mature. Upon agreement of new terms instruction are drawn up and signed by signatories.
6.4 Bank Reconciliation
6.4.1 Policies
Bank statements are forwarded to CA for review.
The bank statement is to be reconciled by CA on a monthly basis no more than week after receipt of the
statements and thereafter reviewed by the CA. The general ledger and reconciliation bank statement will
be adjusted to agree monthly.
6.4.2 Procedures
Upon receiving the bank statement, the Accountant prepares a monthly bank reconciliation. This is done
through the bank reconciliation module of the accounting software. The bank reconciliation will reconcile
the bank balance to the general ledger.
A journal Entry will be posted each month for items on the bank statement which are not already recorded
in the general ledger. The reconciled items include interest and bank charges.
After the general ledger is reconciled to the bank statement the monthly statement reconciliation
statement schedule of unpresented cheques and uncredited receipts are filed the bank reconciliation file.
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6.5 Borrowings
6.5.1 Policies
Board approval is required for incurring any debt other than trade payables. The CEO will be authorized
to negotiate such debt as approved by the Board of Directors.
Any loan covenants and restrictions will be reported to the Board when the debt is authorized. The CA
will review this covenants and report to the CEO and any other Directors if there violations or potential
violations of the covenants.
Interest bearing bank loans and overdrafts are recorded, as the proceeds are received, net of direct costs.
Finance costs are accounted for on an accrual basis.
6.5.2 Procedures
The authorized signatories will sign any debt agreements after receiving full board approval.
The accountant will reconcile the general ledger balances to loan statements each month. In addition,
accrued interest will be recorded in the general ledger monthly.
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7 RECEIVABLES MANAGEMENT
Internal sources for investment purposes are from sales of equipment, services, rental income
7.1 Policies
To ensure that funds are available when required, management should ensure that debts are collected on a
timely and efficient manner.
7.2 Receivables
Receivables are carried at anticipated realizable value
Account receivable record should be accurate, complete and maintained in a manner indicative of the
length the debt is outstanding.
7.2.1 Debt Collection
It is the duty of the Chief Accountant to ensure that debtor invoicing is done on a time and debtors are
pursued by all means and the maximum debt age is maintained at 3 months.
7.2.2 Bad and doubtful debts
Specific Provision is made for all known bad and doubtful debts. Bad debts are written off when all
means and reasonable steps have been taken without success
Writing off of all bad debts must be approved by the board of directors.
7.3 Procedures
7.3.1 Invoicing
Invoices should be raised to debtors through the accounting system as soon as they fall due. Monthly
statements of account should be sent to debtors to ensure that record are correct and that parties involved
are aware of amounts due.
7.3.2 Receipt of Payment from Debtors
i) Stamp received and date on the cheque forwarding letter or warrant.
ii)Record the receipt and forward the cheque for banking.
iii)
Details of the cheque should be inputted in the accounting system.
iv)A copy of the cheque received should be filed in an appropriate file together with the cheque and
file .
v) Copies of deposit slips should be filed appropriately for ease of retrival when required.
7.3.3 Client Debtors
Management will ensure that the maximum debt age is maintained at 3 months.
The following measures should be taken to recover debts:
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i) Invoice debtor on failing

ii) Make follow up and send statement of account , but on failing
iii) Send notice for payment , on failing
iv) Engage a debt collector on failing
v) Take legal action.
7.3.4 Doubtful Debts
Provision should be made if:
i) Debtors are older than 3 months and there is no likelihood of collection
ii) The debt matter is in court
Timely identification of Errors
Past due notices and copies of invoices are sent to debtors to allow for timely identification of errors in
addition to prompting collections.
The credit controller issues statements every 30 days.
7.4 Posting Adjustments
Payments, Partial payments, credits and other authorized adjustments to accounts receivables (AR) are
posted against corresponding invoices in order to maintain accurate aging of the AR subsidiary ledger.
Posting and adjustments are posted in the accounting system.
Reconciliation of Accounts Receivable Subsidiary Ledger
The AR subsidiary ledger is reconciled to the general ledger periodically.
The accountant prepares periodic aging schedule for each general ledger control account and reconcile the
differences.
7.5 Review of Credit balances
A review of credit balances is performed periodically by reviewing the AR subsidiary ledger or the
debtors aging schedule.
During the preparation of the debtors schedule the Accountant analyzes the opening balances. If the
balance is as a result of posting a payment to an incorrect account, a correcting journal entry is prepared If
the credit is due to a dispute or un explained partial payment, the Chief Accountant investigates.
Appropriate adjustments are passed.
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8 PAYABLES MANAGEMENT
8.1 Policies
Wilken Group management should ensure that payments to suppliers are made immediately after utilizing
the maximum available credit period without jeopardizing the company’s credit worthiness.
Trade payables are stated at their nominal value.
8.2 Approvals
Further to the procurement Policies and procedures all invoices from suppliers of goods and services must
be approved by the respective HODS and by the Chief Accountant in some instances directors and
stamped ” Approved” before the payment process commences.
Approval limits are outlined
8.3 Procedures
The Accountant maintains accounts payable system. Prior to payment, the Accountant will code each
invoice, prepare cheques and organize the documents
8.4 Payment process
8.4.1 Supplier payments
The company shall operate two payment runs in a month; on the week of 15th and 25th of the month.
Payments shall be done on the Thursday of the respective week. The following specific expense items
will be paid in the two payment runs:
i) Week of 15th of each month – Trading supplier balances, VAT and utility bills i.e. electricity,
water (drinking water as well as meter bills), telephone, fuel, milk supply, licences (e.g. CCK,
trading licences etc), rent (Mombasa premises), internet etc
ii) Week of 25th of each month – Payroll, statutory remittances (i.e. PAYE, NSSF, NHIF, DIT), and
urgent supplier payments which were not done on the 15th.
For supplier payments to be made, the following should be available:-
i) Quotation or pricelist from the supplier. A minimum purchase level above which a quotation is
required is a follows:- amounts of Ksh. 0 to 2,000 do not require a quotation, 2,000 to 20,000
required 3 verbal quotations (there should be a list of the people called, the address, phone no.)
and one physical quotation from the supplier from whom we shall be purchasing from; amounts
above Ksh. 20,000 require at least 3 physical quotations, unless the supplier is one of our
preferred suppliers already in the database.
ii) Copy of duly approved LPO
iii) Supplier invoice (if it has been received). Accountants should make all efforts to contact the
supplier for the invoice to ensure it is available at the time of the payment. This should be
attached to the Goods Received Note (GRN) and delivery note as proof of receipt of the supplies
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iv) System printout of the specific supplier ledger account confirming the outstanding balance as per
Wilken books.
v) Supplier statement indicating the Wilken account balance as per the supplier
vi) A duly performed supplier reconciliation explaining clearly any variances between the system
balance in Wilken books and the statement balance as per the supplier.
vii) Only duly reconciled supplier balances should be paid out.
NB: Head of department to ensure that overtime claimed is overtime deserved and necessary.
8.4.2 Purchase of Fixed Asset
i) After delivery of fixed asset, confirmation of its condition and approval of the supplier invoice,
payment is processed.
ii) A copy of the invoice and LPO are filed in the fixed asset file. This serves as an easier reference
point.
iii) The payment details are inputted into the accounting system and the excel based fixed asset
register is updated.
iv) The particulars of the asset if valued over Kshs. 10,000 are then forwarded to the insurance
company and the asset placed under the appropriate insurance cover.
8.4.3 Reconciliation of Accounts Payables Ledger
The AP subsidiary ledger is reconciled to the general ledger control account periodically.
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9 REPORTING POLICIES AND PROCEDURES

9.1 Policies
The Chief Accountant prepares financial statements for the Wilken Group
The CEO or any other director review the monthly financial statements while the Board of Directors
approves the annual and half yearly financial statements.
The principal financial reports include; the statement of comprehensive income, statement of financial
position, cash flow statement and statement of changes in equity.
9.1.1 Chart of Reports
Weekly Monthly Quarterly/ Annually
Cash Position Management statement of Statement of Comprehensive

comprehensive income Income
Schedules of Income Statement of Financial Position
Cash flow projections Statement of Changes in Equity
Cash flow statement
9.2 End month procedure

Upon completion of the monthly bank reconciliations the CA will formulate the monthly journal entries.
There are two types of monthly journal entries, those that remain consistent from month to month
(recurring) and those that are specific to that month. The recurring monthly journals entries include
depreciation and expensing pre paid insurance.
The Accountant will maintain a file for each month which includes work papers which document the
balance of each general ledger.
The GL accounts will be reconciled monthly to help ensure that accurate statements are provided to the
management and the Board.
9.3 End of year procedures
In addition to the procedures outlined in the end of month procedure.
Upon completion of annual financial statements the CEO or any other director before commencement of
annual audit reviews report.
A file is maintained for each year’s financial reports and working papers
9.4 Financial Audit
An audit meeting will be held prior to the audit to discuss the audit plan and engagement letter.
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The CA will be responsible for the annual audit and ensure that all information required is availed to the
auditors.
At the end of the audit the CA and the auditors will meet to discuss any issues raised review the audit
process and plan for improvements the following year.
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10 BUDGETING
Wilken Group budget is a proposed plan of action. It is a statement of proposed expenditure and expected
income for a particular financial year.
When approved by the Board of directors this document authorizes expenditure and collection and
application of revenues to the appropriate activities.
Budget control is a mechanism used to regulate, direct and coordinate the company’s activities and
affairs. The budget provides all levels of management with the effective analytical tool for measuring
estimates against actual results.
10.1 Policies
The CEO is responsible for guiding the budget process and the board of directors for approval of the
budget.
10.2 Procedures
10.2.1 Budget Preparation
Budgeting is done annually around July and involves all departments in the organization. The budget
preparation MUST be complete before September. The stages of budget preparation include:
i) Review of corporate and investment policy
ii) Preparation of Investment budget
iii) Preparation and review of capital expenditure
iv) Analysis of anticipated operating inflows
v) Analysis of anticipated Operating outflows
vi) Preparation of the cash budget
vii) Review of cash budget and funding requirements
viii) Preparation of income statement budget
ix) Preparation of balance sheet budget
x) Preparation and review and preparation of the master budget
The budget is forwarded to the board of directors for approval after preparation.
10.2.2 Budgetary Control
Budget vs. Actual performance is reviewed monthly. However the entire budget is reviewed semi
annually and changes made when necessary.
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11 TAXATION
Adherence to taxation statutory requirements is a sign of good corporate citizenship.
These requirements include the filling of returns and payment of taxes.
11.1 Policies
The CA has the responsibility of ensuring that all taxes are paid and returns filed on time to avoid
penalties. Consultations should be made with tax experts whenever required.
11.2 Procedures
11.2.1 Taxes
Taxes payable include:
11.2.1.1 Corporation Tax
Currently at 30% corporate tax is paid in installments. The installments are provisions payable as below.
i) 1st Installment is payable on or before the 20th of the 4th month of the financial year
ii) 2nd installment is payable on or before the 20th of the 6th month of the financial year
iii) 3rd installment is payable on or before the 20th of the 9th month of the financial year
iv) 4th installment is payable on or before the 20th of the 12th month of the following financial year.
The installment taxes are payable based on the lower of:
i) 110% of the proceeding years taxes tax charge or
ii) The current year’s tax provision
11.2.1.2 Pay As You Earn (PAYE)
PAYE is deducted from staff and directors emoluments.
Staff salaries are taxed using the current PAYE scales while, director’s emoluments allowances and fees
taxed at the top rate of 30%
Wilken Group payroll is currently administered by the group human resources and administration
manager.
PAYE deducted for a particular month has to be remitted by 9th of every month of the following month.
The payment to the Commissioner General is attached to the PAYE credit pay in slip and deposited at the
agent bank.
The income tax rates for individuals are published after the annual government budget review.
11.2.1.3 Withholding Taxes
Withholding taxes is deducted from contractual and agency fees if the fees exceeds kshs. 20,000/=
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Withholding tax deductible has to be remitted by the 20th of the month of invoicing. A tax pay in slip must
accompany the payment to the income tax department and withholding tax certificate have to be issued to
the suppliers
11.2.1.4 Vat
Value Added Tax deducted has to be remitted by the 20th of the month after the month of invoicing. A
monthly return form VAT 3 must accompany the payment to the domestic taxes department.
11.2.1.5 Capital Allowances
Wear and Tear (calculated on cost, net of any investment deduction allowance) on a reducing balance
basis are as below:
Asset Rate
11.2.2 Returns
Financial related statutory returns include:
11.2.2.1 Annual tax returns
Annual Returns must be submitted on or before the last day of the sixth month after the financial year end
(20th December each year)
The annual tax return procedure is as follows:
i) The Board of directors approves the financial accounts
ii) The income tax return is filled out by the tax consultants and approved by the CA.
iii) The following documents are then compiled and sent to the Incorm tax department.
 Final Return Form
 Income tax computation schedule
 Original withholding tax certificates for the financial year
 Copy of audited financial statements
11.2.2.2 Withholding Tax Returns
Return for tax withheld from supplier payments
Form W10F (End of year certificate) of withholding tax must be submitted annually.
11.2.2.3 PAYE Returns
PAYE returns must be submitted quarterly.
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12 PROPERTY AND EQUIPMENT

Responsibility for managing and protecting the assets of any organization rests on the shoulders of the
Board of Directors who then rely on the management.
Documents of title are proof of ownership therefore proper management of this documents is necessary.
Motor Vehicles are assets that aid in operation. Proper maintenance and insurance against any
unforeseeable events will ensure that the company enjoys the benefit of these assets over its useful life.
12.1 Policies
12.1.1 Leasehold land
Payment to acquire lease hold interest on land is treated as prepaid operating lease rentals and is
amortized over lease period.
12.1.2 Capitalization of Assets
Only Equipment, furniture and fittings worth Kshs, 10,000/= and over will be capitalized.
12.1.3 Motor Vehicles and Equipment
Motor vehicles and equipment are stated at cost less depreciation.
12.2 Custody and documentation
An inventory of all property will be maintained.
Inventory documents will contain sufficient information for insurance purposes.
12.2.1 Insurance
Company assets should be insured against fire, damage and theft.
12.3 Procedures
Custody of Assets
12.3.1 Title Deed
Property title deeds should be kept in company safe at all times except when used as security for credit
facility.
12.3.2 Motor Vehicle, Furniture and Fittings
Fixed Asset Register will be maintained and updated.
Physical audit will be performed at least twice a year
Regular maintenance of the asset to ensure that they perform thir required use.
No equipment should be removed from the premises without the authority of the CEO
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12.4 Insurance
Insurance cover should be reviewed annually and renewed.
12.5 Property Land rates
Land rates are payable to the Nairobi City Council by end of January each year.
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13 MANAGEMENT RECORDS
13.1 Policies
Information is valuable to an organization. Proper maintenance of information is essential and it is
important for information to be retrieved when required.
Most information is not open to public examination and may only be released with the permission of
directors.
13.2 Procedures
Record Management policies
13.2.1 Administration files
This includes bank correspondence, taxation and property management files.
These files are points of reference when putting together records.
They are kept in the filling room
Filling of Correspondence into this file should be done regularly to ensure smooth accounting
administration.
13.2.2 Insurance Files
Kept in company safe by HRM
13.2.3 Documents of Title
Kept in company safe by HRM
13.2.4 Cheque Books
All cheque books should be kept in company safe and requested for when cheques need to be drawn.
Old cheque books should be kept in a non-current safe.
A record of current cheque books should be kept such that in case of loss the bank can be notified of
serial numbers.
13.2.5 Other Accounting records
i) Bank Pay in slip
ii) Cheque Movement File
iii) Monthly management file
iv) Annual accounting schedules
Electronic record should be backed up weekly and compact disk stored in company safe and another copy
stored offsite.
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14 TRAVEL & PER DIEM POLICIES AND PROCEDURES

14.1 Case
Members of staff may, from time to time, be required to travel out of their work station for duty, either
client related or company related. It is the company’s duty to ensure the travelling staff member is well
taken care of while working away from his/her work station.
Travel may be categorized as follows:
i) Day trip – where a staff member is expected to travel a radius of at least 50km out of his work
station, or to a different town, but will return to his work station on the same day.
ii) Night out – where a staff member is travelling out of town, and will be sleeping in that town.
The following guidelines will apply for the categories of travel mentioned above:-
14.2 Day Trip
Any staff member embarking on a day trip for duty will be entitled to a lunch per diem of ksh.500
payable in advance. This per diem will be requested for and paid out under the petty cash policy
guidelines. For a trip to be considered to be day trip, it must be to a destination of at least 50km outside
Nairobi. This means that it is beyond – Naivasha, Kitengela, Thika, and outside Mombasa.
14.3 Night out
Any staff member embarking on a company business trip that will require him/her to sleep out will be
entitled to a night out per diem as follows, if travelling within the country
i) Employee grade 2 – 3 (Managers & Departmental heads) – Ksh.3,500 per day
ii) Employee grade 4 – 8 (all other staff members) – Ksh.2,000 per day
For travel out of the country, the per diems shall be applicable as follows:-
i) Employee grade 2 – 3 (Managers & Departmental heads) – Ksh.6,000 per day
ii) Employee grade 4 – 8 (all other staff members) – Ksh.3,000 per day
The night out per diem is expected to cater for food and accommodation while out of the work station. In
case the employee spends money, and is therefore claiming reimbursement, this will be given up to a
maximum of the above rates. This per diem will be requested for and paid out under the petty cash and
payment policy guidelines.
The night out per diem is expected to cater for accommodation and food while away from home. It is
NOT additional payment for working outside the employee’s workstation, since it is contractually agreed
that the employees’ normal duties may include work out of his work station.
Where the client provides food and accommodation, the employee is NOT entitled to a night out per
diem, since the employee’s food and accommodation needs will already be taken care of. However, under
such circumstances, the employee is entitled to a day per diem as explained above. An employee receives
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either a night out per diem or a day trip per diem, but cannot receive both for a single day’s trip out of
the workstation.
Any client jobs to be undertaken out of town should incorporate billing the client for this travel expenses
to ensure the expenses are paid for by the client being serviced.
NB: It is a regulation by the taxation authorities (KRA) for all per diem above ksh.2,000 per person per
day to be duly accounted for, failure to which the employee is liable for taxation on the amount issued.
For Wilken Staff, all employees will account for all the per diem issued, and those receiving amounts
over ksh.2,000 per day, i.e. staff in Grade 3 and above will have to provide receipts for all expenses
incurred for night outs. All staff will account for travel expense and funds for material purchase using
ETR compliant receipts. Where airtime expenses have been incurred, the scratch cards should be
presented as well.
14.4 Transport
The transport costs for the day trip or night out shall fully be catered for by the company. Transport costs
to be incurred should be requested for under the petty cash & payment policy. On return from the trip,
receipts should be provided to the finance team as proof of the transport expense incurred. The respective
employee will account for all the monies advanced as explained under accounting for advance further
below.
Where an employee uses his/her own vehicle for company duty, prior approval should be sought from the
head of department, or the officer he reports to. Only after this approval would a mileage claim be
accepted.
Mileage claim is payable at a rate of ksh.25 per km for the distance travelled on duty. The claim should
be lodged within a week from the date the expense was incurred.
Where air transport is required, the air ticket will be purchased by the company in advance of the trip,
following the company’s procurement process.
14.5 Accounting for per diems advanced
The funds advanced to a member of staff should be accounted for within a week from the date of return
from the trip. Any per diems advanced which are not duly accounted for will be recovered from the
employee’s payroll in the month in question. This also applies to any petty cash payments.
Accounting for the advance is done via the expense claim form (see copy under appendix 1 below). This
form should clearly show how much was advanced, how much was used and for what, and what the
surplus being returned is, or in case of a refund due to the employee, how much it is.
14.6 Other Office Claims
14.6.1 Working over the weekends and public holidays
Employees who give their time on weekends and public holidays are entitled to a lunch claim at a rate of
ksh.350 per person per day. The claim is due for work done on Sunday, on public holidays, or in case a
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full day’s work is put in on Saturday. However, this lunch claim is only payable if prior arrangements are
made by the Head of Department and a request lodged with finance and approved.
14.6.2 Overtime
The company does not make any payment for working overtime. However, from time to time, when duty
calls, employees shall be requested by their HOD to work beyond the contractual 8hrs per day. Where
employees work past 8.30pm, they will be entitled to dinner at a rate of ksh.350 per employee per day.
Under such circumstances, prior arrangements shall be made by the HOD. ETR compliant receipts for the
meals should be provided on the following working day to account for the expenditure incurred.
Overtime worked is compensated by off days, at a rate of time and a half for Sundays and public holidays,
and full leave day for an 8hr overtime period worked in the weekdays. For leave to be claimed, duly
signed and approved time sheets should be provided, and be approved by the Head of Department.
NB: Head of department will ensure that overtime claimed is overtime deserved and necessary.
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15 SHAREHOLDERS ACCOUNTS
15.1 Directors And Shareholders Transaction Policies And Procedures

15.1.1 Introduction
Transactions involving directors and shareholders of the Group are of three main categories:
i) Directors expense claims
ii) Short term shareholder loans for working capital requirements
iii) Long term shareholder loans for capital investment
This policy explains how the above transactions involving both the directors & shareholders of the
company will be treated for accounting purposes, in the Wilken Group books of accounts.
Shareholders for Wilken Group are:
i) Graham Shaw
ii) Cibiya Africa
Directors of the Group are:
i) Graham Shaw( C.E.O)
ii) Andrew Lopokoiyit(Executive Director)
iii) Michael Osiemo (Newton Osiemo acts as his alternate)
The model of working of the various categories of director and shareholder transactions are explained
below:
15.1.2 Directors’ Expense Claim Accounts
This includes any expense that is incurred by a director whilst undertaking company business, for
example on safari, on entertainment etc. For the expense to be accepted as a company expense, a duly
filled expense claim form should be filled in and be approved by at least one other director before it is
submitted to finance department for posting into the account and subsequent refunds of the amounts
spent.
15.1.2.1 Process
The director in making the expense claim will fill the expense claim form, which has to be approved by
any one other director. For example if Graham requests for some money, or he fills the expense claim for
money already spent, the voucher has to be signed by either Andrew, Newton or General Waweru. The
expense claim should clearly state:
i) The purpose of the funds
ii) The date the funds were utilized
iii) The director’s name
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A sample of the expense form is attached (see Appendix 1)

Each director will have his own expense account and details of the expense be posted in their accounts.
This account acts as the staff members’ safari advance account and is payable on claim.
15.1.3 Short Term Shareholder Loan Accounts
These accounts will hold money that the shareholders lend the company as working capital for example
for payment of suppliers, cash payments for project procurement, soft loan for staff salaries, etc. These
amounts are supposed to be refunded back to the shareholders as soon as funds are available, as they are
short term funds payable in the financial year in which they are lent. This amount should be posted in the
individual shareholders’ short term loan accounts.
15.1.3.1 Process
The director providing the short term loan will fill in the shareholder short term loan voucher. The
voucher will be accompanied by the supporting documentation of the funding provided, e.g. copy of the
bank transfer instructions confirming the amounts transferred, a copy of the receipt for money given in
cash or by cheque to the company, or whatever other supporting documentation which will act as proof of
the loan given.
The voucher will then be signed off by the shareholder giving the funding, and counter-signed by one
other shareholder, or his representative. For example, if Graham provides a short term loan, he will fill the
shareholder short term loan voucher and have it countersigned by either a representative of Cibiya, or
General Waweru.
The approved voucher will then be submitted to finance department for posting into the account and
subsequent refunds of the amounts given will be done as soon as the money is available.
The shareholder short term loan voucher should clearly state:
i) The purpose of the funds
ii) The date the funds were issued
iii) The shareholder’s name
NB: See attached a sample of the Shareholder Contribution Form attached under Appendix 2
15.1.4 Shareholder Contributions
This refers to funds shareholder injections in form of capital expenditure, fixed assets bought for the
company by the shareholders, or money advanced for the long term. These amounts should reflect as a
long term input by the shareholders, as they shall eventually contribute to shareholder equity.
The process of recording the shareholder contribution is similar to that of short term shareholder loan, the
only exception being that a shareholder contribution form will be filled in place of the short term
shareholder voucher (see a sample of the Shareholder Contribution Form attached under Appendix 3.
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NB: Filing department will maintain a file for each of the shareholders and directors, with all the details
of their transactions and supporting documents.
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16 ACCOUNTING SYSTEM AUTHORIZATION AND BACK UP

16.1 Policies
The accounting system (Pastel) will have access controlled by passwords. The IT Administrator (IT)
controls all technical aspects of the system.
The IT will be responsible for data back up and disaster recovery.
16.2 Procedures
16.2.1 Passwords
The IT maintains a record of all authorized users and the level of password access each user has
16.2.2 Back up
Data backup procedures are outlined in the IT Policies and procedures.
16.2.3 Disaster Recovery
Disaster recovery is outlined in the IT Policies and procedures manual
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Policy endorsed by: ………………………………………. …………………

…………………..
Name (Chief Accountant) Signature Date
………………………………………. ………………… …………………..

Name (Accountant-Telecoms) Signature Date
…………………………………. …………………
…………………..
Name (Accountant-solar) Signature Date
………………………………………. ………………… …………………..

Name (Accountant-wireless) Signature Date
………………………………………. ………………… …………………..

Name (Accountant-Aviation) Signature Date
……………………………………… …………………… ………………....

Name (Accountant-Eastcom) Signature Date
…………………………………….. …………………
………………….
Name (Director) Signature Date
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……………………………………… …………………… ………………....

Name (Director) Signature Date
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STANDARD OPERATING PROCEDURE

WILKEN GROUP LIMITED

STANDARD OPERATING PROCEDURE FOR FINANCE

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6.3 Banking Policies & Procedures..................................................................................................13

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15.1.4 Shareholder Contributions.................................................................................................34

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ISSUE/REVISION SUBJECT OF REVIEWED AUTHORISED DATE

2 Roles for asst. SO

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5 ACCOUNTING POLICIES AND PROCEDURES

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5.2.2 Recognition of Revenues

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i) Invoice debtor on failing

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9 REPORTING POLICIES AND PROCEDURES

Weekly Monthly Quarterly/ Annually

Cash Position Management statement of Statement of Comprehensive

9.2 End month procedure

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