Table of Contents
1. Purpose
To describe the format, handling and administration of Sales invoices to outside Clients and between own Affiliates for Engineering, Procurement and Construction services.
2. General
This procedure applies to all projects for which a Sales order document and related project number has been issued by Contracts Department.
3. Responsibilities
The Manager Project Accounting is responsible for the execution of this procedure.
4. Procedure
4.1 Registration of Project Number
Upon receipt of a sales order document, Project Accounting shall enter the assigned project number and related project details into the Accounting system.
4.2 Preparation of Sales Invoice
Project Accounting shall obtain from the signed contract all relevant financial and commercial conditions.
For reimbursable projects billing conditions shall be entered into the “Accounting Service Billing System”
At the end of each monthly cut-off date “Service Billing” produces a draft invoice specification based on actual cost information accounted during the month.
Project Accounting shall match the draft invoice specification against monthly job expenditures and make adjusting accounting entries, if required, to meet contractual billing requirements.
Project Accounting shall assemble any required supporting documents, which shall be attached to the draft sales invoice.
For lumpsum projects. Project Accounting shall prepare a draft invoice on the basis of a contractual payment schedule, milestones achieved or progress made. The information on milestones and progress shall be provided by the Project Manager.
Draft sales invoices shall be in the format of exhibit A and invoices shall be numbered by project number followed with a 2 digit sequence number (e.g. 21081001-01).
Any applicable VAT shall be clearly stated on the invoice.
4.3 Request for Approval
Within one week after each monthly cut-off date or on the specific contractual date, if applicable, Project Accounting shall submit (hand-carried) the draft Sales Invoice together with the invoice approval sheet (Exhibit B) to the Project Manager and request approval and return within one day.
If project Manager or his designate are unable to approve due to absence, the Manager Project Accounting shall be authorized to approve the invoice on behalf of Project Management and obtain Project Manager’s approval later.
4.4 Release of Approved Sales InvoiceAfter receipt of Project Manager’s approval, Project Accounting shall mail the original sales invoice with supporting documents to Client by courier services.
Copy of each sales invoice as well as copies of supporting documents shall be kept on file.
4.5 Sales Invoice Registration
Project Accounting shall register the sales invoice in general ledger “Accounts Receivable” on the date of submission to Client.
A copy of the Sales Invoice indicating the AIR entry number shall be sent to General Accounting.
4.6 Accounts Receivable
Project Accounting shall expedite timely receipt of the Sales Invoice amount, in accordance with the contractual due date and shall report any overdue amounts to the Project Manager.
4.7 Billing Status
Project Accounting shall maintain a Billing Status per project No. (billing center). This Status shall reflect all amounts billed for the period and cumulative.
5. Flowchart
6. References
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Document Number |
Title |
Level |
6.1 |
CM-MA-114 |
Procedure for the Allocation of Charge Numbers |
2 |
7. Attachments