The Trainee Learns More

Working hours are over.. Behind is the Bottling Area

The Trainee Learns More

For weeks of internship, I was tasked in filing provisional receipts (contains details of checks received), cash disbursement journals, purchase journals with attachments (materials and services requisition form, purchase order, receiving report) and photocopying checks to be released together with the creditor’s copy of expanded withholding tax. I wanted to know the purpose of what I am doing so I asked my supervisor about it.

Daily Cash Position Report (DCPR)

My supervisor has to prepare the daily cash position report to monitor the daily cash position of the company. The report indicates the cash inflows comprising of items such as fund transfer, official receipts, and interest on time deposits and cash outflows consisting of money market placement and debit memo, and other adjustments. Basically, DCPR includes items which are reconcilable with the bank.

In determining the total cash inflow, my supervisor has to determine the checks already cleared by looking at the passbook. Next, she will compare what is seen in the passbook and in the provisional receipts and see if they reconcile. Provisional receipts state the due date of the check so my supervisor will have an idea on the number and the amount of checks that will accrue on PEPI’s account.

Finding out total cash outflows can be done by checking checks released for payment and by asking the bank for any debit memo.

Daily Cash Position Report  Format 

Projected Cash Flows

The treasury through the treasury officer (my supervisor) is required to prepare actual cash outflow and 3-month projected cash flows to be submitted to the Chief Financial Officer.

Ideally, projected cash flows are based on estimated budgets submitted by each section or department of the company. However if this is not applicable, what my supervisor does is to base the projected cash inflows on the trend of collection of trade receivables (averaging). She noted that this is not advisable.

To continue, in estimating cash outflows my supervisor refers to the Materials and Services Requisition form for possible expenses. On the other hand, she looks at the Purchase Orders for actual expenses. Furthermore, she also asks the accounting section for progress billings on on-going projects to be included in the total outflow estimation.

Gallery

Inside the Treasury Office

The pantry

Petronas Dollar Purchase and Payment of Custom Duties

PETRONAS DOLLAR PURCHASE AND PAYMENT OF CUSTOM DUTIES

Aside from the transaction cycle, I have learned other essential matters including dollar purchase and payment of BOC duties. This aids me in painting a clearer picture on the role of the treasury section.

Purchase of Dollars

Petronas Energy Philippines (PEPI) imports LPG from its mother company Petronas Trading Corp. (PETCO). Since PEPI doesn’t have a dollar funded account, it has to purchase dollars from time to time to make its payment or remittance. In completing the dollar purchase, PEPI has to meet the requirements set forth by the Bangko Sentral ng Pilipinas or the BSP.

BSP Policy on Dollar Purchase

BSP requires from every entity to present certain documents before any dollar purchase. These are the commercial invoice and the bill of lading (shipping documents). The type of purchase depends on the available documents the entity has.

Sample Commercial Invoice from Google.com

Sample Bill of Lading from Google.com

1. With Documents

a.      Direct remittance - The commercial invoice used in this transaction does not have a fixed term. However, the purchase should be done within twenty-nine (29) days from the date of the bill of lading.

b.     Open Account- The entity has to register with BSP on or before 10 days from the maturity date of the invoice regardless of the period stated in the bill of lading. Payments to LPG suppliers most often than not falls to this category.

2. Without Documents- The entity does not have the required documents while purchasing or the terms of the commercial invoice or the bill of lading is already due. This is common in settling the accounts with suppliers of LPG accessories like regulators. Usually, these suppliers ask for a down payment before shipment of goods in which case the supplier has not yet issued the necessary documents.

In purchasing with documents, the entity has the privilege to buy at the lowest rate. If without documents, the entity purchases dollars with a premium estimating to 55 to 75 cents per dollar.

Obligation to the Bureau of Customs

One time, I was asked to make a summary of payments to Bureau of Customs (BOC). I was eager to know about the process and asked my supervisor regarding the process..

The banks (accredited ones) facilitate payments to BOC. The latter electronically lodges the Statement of Settlement of Duties and Taxes to the respective banks of payers. Every transaction has an IEIRD # with a corresponding entry to the BOC’s system.  The entity has to pay a manager’s check within 15 days from the date of lodging. Failure to do so means payment of fines.

In PEPI, the treasury officer approximates that the bank informs the entity for payment of BOC duties two to three days from the date of lodging giving them 12 days to make the payment.

Summarizing BOC Payments

Photocopying

Thanksgiving at PEPI