Accounts Payable Policy

Policy Statement:
Royal Tag is committed to ensuring the accuracy, efficiency, and timeliness of its accounts payable
processes in accordance with its financial policies and procedures, as well as all applicable laws and
regulations in Pakistan.

Purpose:
The purpose of this policy is to establish the procedures and guidelines for the management of accounts
payable transactions at Royal Tag, including the recording, processing, and payment of vendor invoices.

Scope:
The procedure is applicable to all types of accounts payable but not limited to:

Accrued liabilities

Salaries wages and other benefits payable

Rent

Trade liabilities

Stocks vendor

Store vendors

Services vendor

Construction vendors

Government Dues

Income tax

Sales Tax

Pessi

EOBI

Others

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Key Roles

Accounts Manager

Finance Manager

Tax Manger

Procedures:
Following processes are defined to be in practice at the company:

 Procedures for data entry of salary, wages and other related payable
 Procedures for data entry of stocks, stores, services and other payable
 Procedures for data entry of sales tax ,income tax, pessi and eobi payable

 Procedures for data entry of salaries, wages and other related payable
 Accounts department will receive the signed/system based working from HR
department on 1st of every month.
 Accounts specialist will ensure the accuracy of salary and commission
calculation, deductions from the working provided by the HR department.
 Accounts specialist will ensure completeness of record(system based
attendance, salary sheet, loans and advances deduction and their limits)
 Accounts specialist will complete the data entry on 2 nd of every following
Month and hand over to audit for audit on 3 rd of the following month.
 On 5th of the each month salary will be signed by CFO and approved by director
for disbursement.

Final settlement, unpaid salary record, Leaves, compare salary with budget

 Procedures for data entry of rent and other related payable

 Accounts department will receive copy of the rent agreement signed by CEO
from admin department.
 Accounts specialist will make entry of advance if any on inception of tenure.
 Accounts specialist will receive invoice/bill of the monthly rent and make the
payable entry accordingly for that month.
 Accounts manager signed Payable voucher would be get audited before making
payment.

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  Procedures for data entry of trade Liabilities
 Accounts department will receive the documents from purchase /procurement
department which includes:
Demand,
o Quotations
o Purchase orders close at month of end or not
o Inward gate Pass
o Goods Receipt note
o Sales tax Invoice doublicate verified original
o Sales tax status any exemption
 With due completion of above documents accounts specialist will record payable
and integrate the invoice with the payment terms.
 Accounts manager signed Payable voucher would be get audited before making
payment.
 Accounts specialist will sort out the payable voucher according the payment due
date.
 Other than advance and urgent payment accounts department will make payment
fortnightly/weekly.
 With the payment vouchers a software-based list containing the party name, sales
tax, income tax withheld and total amount payable after tax deduction would
audited before the signature of CFO and approval of the director.
 Income tax and sales tax status would be attached the payment voucher.

 Procedures for data entry of Construction.

 Accounts department will receive
o Agreement (BOQ) signed by the director and construction manager
o Abstract of cost
o Completion certificate
o Sales tax invoice
o Sales tax status

Stages of payment and complition

 With due completion of above documents accounts specialist will record payable
and integrate the invoice with the payment terms.
 Payable voucher with the above-attached document will be signed by the accounts
manager and handed over to audit department for audit.
 Accounts department will make payment by deducting advances, retention money if
any, income tax and sales tax.

 Procedures for data entry of Government dues

 Accounts department will receive the documents from purchase /procurement
department which includes:
o Sales Tax invoice

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 o Sales tax status
 Accounts department will enquire about the tax treatment (expense out/claim
input) for specific transaction.
 Accounts department will confirm the Pessi and Eobi calculation from the salary
sheet prepared in following month.
 Accounts manager signed voucher would be get audited before making
payment.

 Accounts department will ensure the correct aging of accounts payable in software.
 Accounts department will ensure the complete data entry of Accounts payable
By reconciling with GRN and Sales tax invoices till 5 th of the each month.
 Accounts department would will make a reconciliation of the payments due and paid in
the month and due payments on hold (with reason).
 Accounts department will maintain the records of all accounts payable data.
 Accounts department will keep the record of receiving of the parties to whom payments
are made.
 Accounts department will make bank reconciliation report on every 5 th of the month and
handed over to audit department for audit.

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