SECTION 5: ACCOUNTING POLICY

I. Purpose

This policy establishes clear financial management procedures to ensure the accuracy, security, and transparency of AVCI’s financial transactions. Proper cash handling, petty cash management, and daily collection reporting are crucial for regulatory compliance, fraud prevention, and the integrity of financial records.

This policy is aligned with the following Philippine laws and regulations:
• Labor Code of the Philippines (PD 442) – Governs employment responsibilities related to financial tasks.
• Republic Act No. 11232 (Revised Corporation Code of the Philippines) – Mandates proper bookkeeping and financial record-keeping for businesses.
• Republic Act No. 10963 (TRAIN Law) – Requires accurate reporting and tax compliance for veterinary services.
• Republic Act No. 8792 (E-Commerce Act of 2000) – Governs electronic financial transactions (e.g., online payments, digital receipts).
• Republic Act No. 9514 (Fire Code of the Philippines) – Establishes safe cash storage practices to prevent financial and property losses due to fire.
• Republic Act No. 8485 (Animal Welfare Act of 1998, as Amended by RA 10631) – Ensures financial transactions align with ethical veterinary practices.

II. Cash Box Management

To maintain security, transparency, and accountability, the following policies will apply:

1. Authorized Personnel for Cash Box Handling
◦ The receptionist is not permitted to hold cash box keys.
◦ Only two designated staff members (approved by management) will be assigned to hold the cash box keys.

2. Cash Box Opening and Closing Schedule
◦ Cash box must be opened only at these times:
   ▪ Start of the morning shift
   ▪ Start of the afternoon shift
◦ Cash box must be closed at these times:
   ▪ End of the morning shift
   ▪ End of the afternoon shift

3. Security and Storage
◦ The cash box must be stored in a locked, fireproof safe when not in use (RA 9514).
◦ Access logs must be maintained to track who opens/closes the cash box.
◦ Surprise audits may be conducted by the clinic manager or external auditors to prevent fraud.

4. Prohibited Cash Box Activities
◦ No unauthorized staff should handle the cash box.
◦ Personal money should not be stored in the cash box.
◦ No cash transactions should be made without issuing an official receipt (RA 10963 – TRAIN Law).

III. Petty Cash Management

Petty cash is allocated for minor, daily operational expenses and should be managed separately from revenue collections.

1. Petty Cash Fund Allocation
◦ A fixed amount of petty cash will be assigned to the receptionist at the start of each week.

2. Expense Approval Process
◦ Expenses below ₱800 may be approved by the designated keyholders.
◦ Expenses of ₱800 and above must be reviewed and approved by the supervisor or practice manager before disbursement.

3. Daily Petty Cash Reporting
◦ The daily petty cash balance must be calculated and reconciled as follows:
   ▪ Previous day’s balance – Total expenses incurred = Current day’s balance
◦ All expenses must be supported by official receipts, invoices, or documentation.

4. Petty Cash Count and Verification
◦ The designated cash box keyholders must count the petty cash at the start and end of each shift.
◦ Any discrepancies must be reported immediately to management.
◦ A monthly petty cash audit will be conducted by the finance department.

5. Petty Cash Fund Restrictions
◦ Petty cash must never be mixed with daily sales collections.
◦ Personal expenses cannot be paid using petty cash.

IV. Daily Collection Handling

Proper handling of daily collections ensures financial integrity, fraud prevention, and regulatory compliance with RA 10963 (TRAIN Law) and RA 11232 (Revised Corporation Code).

1. Separation of Funds
◦ Daily collections must be kept separate from petty cash funds.
◦ At the end of each shift, the total daily collections must be sealed in an envelope and stored in the designated cash storage area.

2. Collection Validation Process
◦ The daily collection amount must match:
   ▪ The total sum of all Sales Invoices (SI) or Temporary Receipts issued for that day.
   ▪ The database records of transactions processed within the specified period.

3. Deposit and Remittance Process
◦ End-of-day cash deposits must be recorded, and all deposits must be acknowledged by an authorized staff member.
◦ Cash deposits should be made daily or at least three times a week to prevent large cash holdings at the clinic.

4. Reporting and Audit Compliance
◦ Daily collection reports must be submitted to the accounting department before the end of the shift.
◦ Discrepancies between sales records and actual cash collected must be reported immediately.
◦ All financial records must be kept for a minimum of five (5) years, as required by Bureau of Internal Revenue (BIR) regulations.

V. Electronic Payments and Record-Keeping

AVCI accepts digital transactions to ensure compliance with RA 8792 (E-Commerce Act of 2000) and RA 10963 (TRAIN Law).

1. Accepted Payment Methods
◦ AVCI accepts cash, credit/debit cards, GCash, bank transfers, and online payment gateways.
◦ Electronic receipts must be issued for all non-cash transactions.

2. Digital Record-Keeping Requirements
◦ All transactions must be logged in the accounting system.
◦ Data encryption and cybersecurity measures must be in place to protect financial data.

VI. Fraud Prevention and Accountability

To ensure financial integrity, AVCI implements the following fraud prevention measures:

1. Segregation of Duties
◦ Cash handling responsibilities must be separated from accounting and financial reporting duties.

2. Random Audits and Compliance Checks
◦ Regular internal audits will be conducted without prior notice.
◦ Any unexplained discrepancies may result in disciplinary action or termination, as per the Labor Code and AVCI policies.

3. Whistleblower Protection
◦ Employees reporting fraud, theft, or financial misconduct will be protected from retaliation under the Labor Code.

VII. Policy Review and Amendments

• This policy will be reviewed annually to ensure compliance with accounting regulations, labor laws, and tax laws.
• Amendments will be communicated to all employees and incorporated into the AVCI Employee Handbook.

VIII. Compliance and Enforcement

• Non-compliance with this policy may result in disciplinary action, up to and including termination, as per the Labor Code.
• AVCI reserves the right to update financial management procedures to align with new regulations.