Maria Regina Alpez

 Standard Operating Procedure CASH ADVANCE AND LIQUIDATION/ EXPENSE REIMBURSEMENT PROCESS A. Table of Contents 1.Overview3 1.1 Process Overview3 1.2 Objective4 1.3 Scope4 1.4 Roles and Responsibilities5 1.5 Definitions5 1.6 General Requirements5 1.6.1 Segregation of Duties – Document and Risks5 1.1.1 SOX Control Document5 1.1.1 Systems6 2.Process Map6 4 Process Exception Handling32 5 Forms and Templates32 6 Appendices32 7Contact Information32 8Document History and Approval33 1. Overview 1.1 Process Overview All employees who incur expenses on behalf of GM must submit an expense report to obtain reimbursement for out-of-pocket expenses and account for business expenses paid with company cash advance. It is expected that each employee will exercise good, sound business judgment and discretion to ensure that amounts expended are in line with the employees’ duties and responsibilities and benefit the company, as only necessary and reasonable business related expenses will be reimbursed. Business related expenses guidelines: * Expenditures must be a necessary expense of the organization. * Expenses must have a clear business purpose and be directly related to goals of the organization. * Expenses must be reasonable and appropriate under the circumstances. * Expenses must be fully documented along with required approvals. * Expenses incurred for a business purpose must not be driven by personal enrichment, either in appearance or in fact. * Expenditures must comply with all applicable laws. * Expenses must meet requirements noted in the medical allowance policy (pending policy rollout). * Expenses must have valid receipts. Cash Advance is an interim process being done in order to avail funds for the business travel or business related Activities of GM GBS until such a time that a corporate card will be provided. Employees must obtain prior approval from their immediate supervisor who are level 7 and up. Cash Advance Liquidation/Expense reporting- is the process to properly account all business related expenses. An expense report needs to be provided to show how the cash advance was used 14 days upon return from the business trip. If an employee anticipates not being able to meet this deadline they should notify their direct supervisor and the final reviewer of the cash advance and expense reports (Maria Regina Alpez) in advance provide the expected date to submit the expense report which they must keep. Amounts in excess of actual expenses incurred will be processed through payroll for one-off deduction, Employees should allow five working days for review, approval and processing funds transfer for each cash advance. Expense reimbursement- process of submitting business related expenses by employees which they have initially paid for in behalf of GM. Expense reimbursement submitted on or before 7th day of the month will be process for the 15th payroll cutoff; whereas, submission made on or before the 20th day of the month will be process for the 30th payroll cut 1.2 Objective 1. Ensure that cash advance was process accordingly and appropriate controls have taken considerations to ensure that funds have been accounted properly. 2. Ensure that all authorized expenditures meet and comply with companywide established expense policy. 1.3 Scope This Standard Operating Procedure describes how to initiate a Cash Advance, the approval process, processing the cash advance (process owner), cash pro payment, preparation of journal entries, cash advance liquidation and expense reporting. This procedure applies to reimbursable business related expenses, both employee paid and those paid with a company cash advance. Refer to GM Global Travel and Expense Policy for details. https://gmweb.gm.com/legal/Legal/GECC%20Global%20Policy%20Manual/Travel%20Expense%20Policy%-.pdf Activity No Description Application GBS Business Unit 1.1.1 Determining of Cash Advance Allowance based on Country specific’s Daily Cost of Living Allowance- by Manager or Team Leader (TL) Email X   1.1.2 Do weekly Cash Advance Forecast and Budgeting ( if there are confirmed business travel) to be submitted to the Accounting and Finance Email / Excel/CMS X   Employees will submit a CA request form via CMS (Close Management System), approved by direct managers and routed to CA processor. 1.1.3 Bank Processing/Processing of Cash Advance via Cash Pro Excel/ Cash Pro  X 1.1.4 Booking and Posting of Journal Entries in SAP Excel/ SharePoint/ SAP/ CMS X   1.1.5 Update Cash Advance and Expense Reporting Tracker Excel X   1.1.6 Expense Reporting Excel/SAP/CMS X   1.4 Roles and Responsibilities Role: Responsibility: Team Leader/ Manager/ Supervisor (level 7- up) Provides the proposed budget allowance for Cash Advance/ Approves cash advances, CA Liquidation and expense reimbursement in CMS. Cash Advance/ Expense Reporting Processor Process the Cash advances, Prepare and Parked Journal entries, Reconciliation of Cash advances in eARMSg Approver (Sr. Finance Analyst/Supervisor/Manager ) Periodic Review and Approve of cash advance processing, cash pro and journal entries 1.5 Definitions Term Definition Parked JE An entry waiting to be posted in SAP Posted JE An entry which is already reflected in SAP BackUp Data Supporting documents for journal entry that is being processed 1.6 General Requirements Required Item Description SAP Transaction Codes FB03 (display document); Fv50 (parked entry), FBVB, FS10N (extracting GL accounts’ transaction),FBL3N (extraction of GL accounts) Turnaround Time Five working days for CA processing; Payroll Cutoff for Expense Reimbursement: 7th day of the month- to be included in 15th Payroll, 20th day of the month- to be included in the 30th Payroll Dependencies Weekly Cash Advance Budget Allowance Payroll Processing of expense reporting End of Process Result Sign off and posting that all entries made have been processed 1.6.1 Segregation of Duties There is a segregation of duties since the Preparer of journal entries is different from the person who will review and post the entries 1.1.1 SOX Control Document Control Number Key Control Reference Financial Statement Assertion Anti Fraud? (Y/N) Year End Testing? (Y/N) TBD TBD TBD TBD TBD 1.1.2 Systems System Definition Cash Pro Website /Portal of Bank of America Merrill Lynch for online payment processing SAP System Application and Products CMS Close Management System, A repository of all in-progress, approved and signed off Cash Advances, Liquidation and Expense reimbursement, and journal entries SharePoint web application framework and platform developed by Microsoft. SharePoint integrates intranet, content management, and document management. SharePoint is mostly used by midsize businesses and large departments. eARMSg Electronic Account Reconciliation Management System Global- a portal use to do the reconciliation of each account per assignement, to provide supportable details of the reconciliation 2. Process Map 3. Detailed Process 1. Preparation of Cash Advance Allowance for Country Assignment. 1. 1. A Team Leader/ Manager will check and research on the Cost of Living allowance (meals, ground transportation and sundry expenses) applicable to their Country Assignment and sends email proposal to Roselyn Bonse As per Global policy, to determine the foreign per diem rates based on location, you can look on the website: http://aoprals.state.gov/web920/per_diem.asp Apparently, in some cases, the M & IE indicated in the website are not applicable to the Country Assignment. That’s why they need to research the cost of living allowance 1.2. A Creation of Cash Advance Forecast and Budgeting Once Roselyn Bonse approves the budget allowance, The Finance Analyst will prepare a Cash Advance Forecast and Budget report to be submitted to the Accounting and Finance Department every time there is a confirmed travel migration. Note**** Since GMGBS has no corporate card yet to implement, Manual Cash Advance Process will be used for the interim for major travel expenditures (meals, ground transportation and sundry expenses) For Airfare and Hotel Accommodation- This will be provided by AMEX and will be billed to GM GBS Philippines and to be processed via Accounts Payable Process 1.2. B Submission of Cash Advance Forms via CMS B. 1. After determining the Cash Advance Budget and approval was granted, Team Leaders and its Member will submit a Cash Advance Request via CMS (Close Management System) for approval process. Below is the Form and Format to use The Cash Advance Form can be found in the SharePoint site: B.2. Access and login to CMS using the following link https://gm.guptonmarrs.com/controllers/Ext/Pages/HomePage.aspx B.3 From the CMS’s home page click on the “Tasks” bar. B.4. Click “New B.5. In the New List Item, fill out the necessary information such as follows: Items List: **Important*** 1. For the Title: Proper Naming Convention to be used: For Cash Advance: Cash Advance_Name of Employee_Travel Date Range For Cash Advance Liquidation: Expense Reporting_Name of Employee_Month Coverage of Expense_CA For Expense Reimbursement: Expense Reporting_Name of Employee_Month Coverage Entity: This should be GM GBS Philippines Period: Month and Year Coverage of Travel Priority: Medium or High depending on Urgency of the Cash Advance request Assignee: Requestor of Cash Advance Reviewer 1: Supervisor/ Manager Level 7 and Up. Reviewer 2: Expense Reporting Analyst a.Click OK The new task should open for you to edit. If not find it in the list of task list and click on it to open the task B.6 Click “Save and Close’ after all required information have been enter. B.7. Sign-off on completed task B.8. The task will be routed to reviewer for approval. B.9. Approvers will be notified with an email to their outlook account of tasks requiring their approval B.10 Click on the ID number to be routed to the CMS task B.11 Approvers will review CMS task, the attached expense report and supporting documents. B.12 Signoff by clicking on the “signoff” B.13 Any exceptions such as non-supported expenses should be indicated in the comments box, as shown below B.14 CMS Task will be routed to Maria Regina Alpez for consolidation and inclusion in the payroll for processing 1.1.3 Bank Processing/Processing of Cash Advance via Cash Pro 1.1.3 A After the Cash Advance was approved in CMS, the Finance Analyst will process the CA in Cash Pro Payment. The FA, will have a designated cash pro access and a safe pass token will also be provided. 1.1.3.B Click on Payments tab, and payment inputs 1.1.3.B Click on the appropriate GMGBS Bank accounts: For Cash Advances: use the PHP accounts For ISP/ ITAP reimbursement: use USD Accounts For Expense reimbursement (local): to be process via Payroll- to be forwarded to BPOI 1.1.3.C Choose Payment Type: For Cash Advances-since these are deposited in the local payroll accounts, you can use the following: A. Domestic High Value (wire) - same day transfer. Use this when the cash advance is an urgent or emergency request. But a valid SWIFT code is necessary to initiate and transfer the payment. B. Domestic Low Value (ACH) - local bank clearing with 2-3 days clearing. Use this if the cash advance can be process via the normal 5 days cycle. Routing number or bank ID is necessary to transfer payment. For Expense Reimbursement (ISP / ITAP) - these are usually in USD currency or other currencies than Php subject to SITE LEADER approval. A. International High Value (Wire) - same day transfer but will require a valid SWIFT Code. Important reminders / Key Control Points: Ensure that you are processing the correct bank account numbers and account name. Double check that the bank account numbers and account names are based on the cash advance form. If does not match, validate and confirm with the CA requestor. Validate the Cash advance amount to be processed. The Additional routing instructions should be encoded for the bank charges as” OURS” Value date- The value date has a cut-off time: For same day transfer (Wire Transfer)- the cut-off is 2pm ICT time For ACH transfer- the cut-off is 11 am ICT Time To ensure that the money was received by the recipient, request for an email confirmation or screenshot of the remittance advice from the employee/ CA requestor. Sample Email Confirmation 1.1.4 Booking and Posting of Journal Entries in SAP 1.1.4. A. After payment/bank processing, Expense Reporting Analyst should parked the entries in SAP using the following Account information: 1.1.4. B Prepare Excel template for the entries to be posted in SAP. For the cash advances transaction, most commonly used accounts are: Suggested Pro forma entries: 1. Approval of Cash Advances 2. Cash Advance Liquidation 3. In case of Reimbursement (setting up accrual for the reimbursement/ cash advance excess) 4. Payment on reimbursement (thru payroll) Sample Excel File for journal entries to be posted in SAP 1.1.4.C Access SAP for QT0 to park/ post entries for GM GBS Philippines, Inc ( entity 4570) Input your GMID as username, then your designated password Please take note of the commonly used t-codes to book the journal entries in SAP: 1. FV50- to park journal entries in SAP 2. FBL3N- to download or extract transactions for an entity for a particular period 3. FS10N- to download or extract transactions per GL account Sample of Parked Entry: What are the important fields to be filled-out: 1. Document date- date when transaction incurred 2. Posting date: date when the transactions was posted 3. Currency- currency to use in posting the transaction 4. Reference- free text used as reference to the transaction 5. Document header text- free text which can be used as reference as well. 6. GL account- General ledger account where the transaction is categorized to or will roll up. 7. D/C- Debit or credit 8. Amount in doc currency- Amount indicated in the transaction 9. Tax code- if applicable tax code is needed kindly indicate P0, these normally applies to all Profit & Loss accounts. 10. Text- To represent description of the transaction or any reference to identify the transaction. 11. Cost Center- cost center to be filled out is 4570FIN003. This is the temporary cost center to use for GMGBS Philippines. Applicable for all Profit and Loss (P&L) accounts 12. Functional area- designated for GMGBS is 8605. Applicable for all P&L accounts. After parking the entries in SAP, The expense reporting analyst should notify the Approver (Expense Reporting Manager) that this will be posted in SAP using t-code FB50, FB01 1.1.5 Recording of All Cash Advance in CA Tracker After approval of JE in SAP, all cash advances will be lodge/ recorded to the Cash Advance Tracker which can be found in the SharePoint. https://share.gm.com/sites/GBSPH/SitePages/Home.aspx?RootFolder=%2Fsites%2FGBSPH%2FShared%20Documents%2FExpense%20Report%20Template%2FCA%20and%20Expense%20Tracker%2FCash%20Advance&FolderCTID=0x012000A04170C5B-EF9C1556EF5E&View={54C3FBF9-62D8-4C4D-9FE3-BB79FDB8074A} Creating CMS approval task for Journal Entries After approver posted the entries in SAP, The Expense Reporting Analyst will create a CMS for the posted Journal entries and attached all supporting documents which will be approved by Expense Reporting Manager. 1. Go to CMS and click on Journal Entries, click on Manual Journal Entries 2. Click on New List Item and filled out necessary information. A. Title: Journal Entry Title B. Entity: GM GBS Philippines C. Period: March 2015 D. Priority: Medium or High E. Assignee: Due date and Name of the JE Parker F. Reviewer 1: Due date and Name of Approver 3. Go to Content and click on Edit to fill out necessary information: A. Description: Short description of the journal entries B. SOX Control: No defined SOX yet C. Prepared by GFFS: No D. New this closing period : Yes E. Journal Entry #: SAP document number F. Financial Statement Impact: Check if: F.1 Pre-tax Impact- If the transaction has an impact to a profit and loss statement item F.2 Income Tax only Impact- If the transaction has an impact to Income tax only. F.3 IS Reclass Only- If the transaction has an impact on reclassification of Income Statement items only. F.4 BS Reclass Only- If the transaction has an impact on Balance Sheet Items only. G. Actual Impact: USD in Millions only H. Actual Impact: Local Currency in millions I. Local Currency if not USD: PHP ( or other currency) J. Type: recurring or non-recurring K. Reversing: No L. High Risk: No ( but depends on materiality level) M. EUCA Dependent: No N. Journal Entry support: Attached JE supporting docs. Click on SAVE and CLOSE, 5. Click on Sign Off button to route the approval to the reviewer. 6. Save all Journal Entries (JE) supporting docs in the SharePoint under General Accounting folder (JE folder) 1.1.6 CASH ADVANCE LIQUIDATION AND EXPENSE REPORTING: The standard turnaround time to liquidate the cash advance is 14 days upon return of the employee from business travel Detailed Expense/ Cash Liquidation report review will be the Manager’s/ Supervisor’s responsibility. Exceptions/ High level review of the expense reporting will be done by the Expense Reporting Analyst. If no submission of CA liquidation report was made on the prescribed period of time, all CA will be deducted on employees’ payroll account in full. To account the expenses, employees should categorized their actual expenses. Expense recognition should be properly accounted for. Sample entries of Cash advance Liquidation: There is a standard General Ledger(GL) Accounts commonly used for Cash Advances 1.1.6. A. All Cash Advance Liquidations or Expense reporting will be created by the CA requestor forwarded to his or her Supervisor/ Manager for approval via CMS portal similar with the CA request process. (see procedures for CA request process) 1.1.6. B ER Analyst will received notifications via email regarding the CA Liquidation for review after the manager has approved the liquidation report. Important things to remember: 1. Naming convention to be used: Cash Advance Liquidation_Name of Employee_Travel range 2. Attachment of official receipts/ invoices as support to the declaration made in the expense reporting/ liquidation. 3. High level or exceptions review will be done by the ER Analyst for those cases that are to be validated or need confirmation with the manager. 1.1.6. C. After final review and sign off, any difference of cash advance and actual expenses (CA excess or reimbursement) will be forwarded to the ER Manager for submission to BPOI for payroll processing. For Cash Advance Excess- This will be an outright deduction to the employee’s payroll account in one time-basis only. An additional statement/disclaimer was added in the CA form to add clarity on the Cash advance process Disclaimer on cash advance form For CA reimbursement- This will be forwarded to BPOI for payroll processing: To be included in the 15th Payroll period- expense report should be submitted on or before every 7th of the month To be included in the 30th payroll period- expense report should be submitted on or before every 20th of the month 1.1.6.D All data regarding cash advances will be lodge and recoded in the cash advance tracker (any return payments, excess cash advance, reimbursement) 1.1.6 E. Once entries for Cash Advance Liquidation were posted in SAP (see SAP procedures on parking and posting of entries 1.1.4), this will be encoded in the CA tracker for monitoring purposes similar with any payment returns, excess cash advance and reimbursement. 1.1.6.F. Payroll entries should also include the expenses reimbursement or CA excess to properly account the balance in the Cash advance GL Account which will be booked in SAP as well BPOI Payroll entries SAP entry Expense Reimbursement/ Reporting Similar to the Cash Advance liquidation, there are also expenses that are reimburse which should be all business/corporate related. Employees will need to undergo same approval process thru CMS. Similar process in booking and posting process in SAP. Variations: Expenses related to ISP/ ITAP – payment processing is via CashPro and in USD This should contain approval from SITE LEADER, and is usually processed via International Wire transfer using the SWIFT Code details. Sample: Cash Pro Payment Expenses submitted by employees –payment processed thru payroll and in PHP Sample of expense reporting First Page 2nd pager Booking and posting of the expenses in SAP are similar to the cash advance liquidation process (see SAP booking process 1.1.4) All details of expense reimbursement will be lodge and recorded in expense reporting tracker Expense Reporting Tracker Exceptions handling: 1. Invalid Bank Transfer due to incorrect bank details- Once the Cash CA Requestor confirms that the fund transfer was unsuccessful, the Expense Reporting Analyst should contact Bank of America to confirm and validate the incorrect bank transfer and send letter of payment refund request/ cancellation of wire transfer Sample Letter of Cancellation request to Bank of America After sending the letter of request, wait for 2-5 banking days and validate with Cash Pro if the payment was already credited to GM’s bank accounts After validation, check if this needs to be booked as well in SAP. If transactions are within the same month, no need to book in SAP. If there is a timing difference issue, a corresponding entry should be booked in SAP to properly account the payment return. This must be also log to the CA tracker. 2. Cancelled Travel Migration but CA was successfully transferred to the CA recipient. – If in any cases there were cancellation of a Business Travel and a particular CA was already transferred to the account of the Beneficiary, ER Analyst should advise the Employee (CA requestor) to send back the funds to GM by initiating a check issuance payable to GM GBS Philippines Inc. The same is required to be booked and posted in SAP to account the applicable bank charges, and log in the CA tracker Sample Check payment Sample Check deposit Sample email regarding the payment return SAP posting Note: Reconciliation will be discussed in a separate SOP 4 Process Exception Handling Process Exception Scenario / Case Escalation Matrix Notes on Country Variances / Additional Information Case No 1 Invalid Bank Transfer due to incorrect bank details/ return payment Cash Advance Requestor- to contact Expense Reporting Analyst/ Supervisor/ Manager Expense Reporting Analyst- to contact Bank of America c/o Macky Canillas, Branch Manager of Bank of America, Makati Branch Expense Reporting Analyst- to inform Expense Reporting Manager 5 Forms and Templates Cash Advance Request form Expense Reporting TemplateCash Advance and Expense Tracker 6 Appendices The following Catalyst courses as suggested pre-requisites to this training: Not applicable 7 Contact Information System / Application Contact Person Contact Details SAP Yreny Saberon/ Arnold Reobaldo-;-CMS Roselyn Bonse-SharePoint Yreny Saberon- 8 Document History and Approval Version History Reason for Revision Author Approved By Signature Version 1.0 Creation of Cash Advance and Expense Reporting Process Maria Regina Alpez Roselyn Bonse- Initial Approver Arnold Reobaldo-Compliance