Page 271 - Accounting Best Practices

c13.qxd 7/31/03 3:22 PM Page 260
260
Exhibit 13.2 Sample Policies Page General Best Practices
Accounts Payable:
• Any supplier invoice within 5 percent of the price indicated on the buyer’s
purchase order requires no additional authorization to pay.
Document Archival:
• Use the following format to determine when to dispose of old records:
Type of Record Retention
Accounts Payable Ledgers/Schedules 7 Years
Advertisement for a Job Opening 1 Year
Capital Stock Records Permanent
Checks (Canceled) 7 Years
Deeds, Mortgages, Bills of Sale Permanent
Earnings Per Week 3 Years
Financial Statements Permanent
General Ledgers (Year-End) Permanent
Hiring Records 1 Year from Date Record
Made or Personnel Action
Taken, Whichever Is Later
Insurance/Pension/Retirement Plans 1 Year after Termination
Invoices to Customers 7 Years
Minute Books, including Bylaws
and Charter Permanent
Payroll Records—Employment Data 3 Years from Termination
Physical/Medical Examinations Duration of Employment,
plus 30 Years
Property Records Permanent
Sales and Purchase Records 3 Years
Stock and Bond Certificates (Canceled) 7 Years
Subsidiary Ledgers 7 Years
Tax Returns Permanent
Time Cards 3 Years

Fixed Assets:
• The minimum dollar amount above which expenses are capitalized is $2,000.
• Any member of the Management Committee can approve an expenditure for
amounts of $5,000 or less if the item was already listed in the annual budget.
• Any capital expenditure exceeding $5,000 requires the approval of the president,
plus all expenditures not already listed in the annual budget, regardless of the
amount.