Page 272 - Accounting Best Practices

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13–4 Create a Policy and Procedure Manual
Exhibit 13.2 (Continued) 261
• Every molding machine shall be assigned a salvage value of 25 percent of
the purchase price.
Logistics:
• Any items arriving at the receiving dock without a purchase order number
will be rejected.

Travel and Entertainment:
• All reimbursements require a receipt.
• Must show all receipts for travel advances within one week of travel, or the
advance will be considered a salary advance.
• Only coach fares will be reimbursed.
• There is no movie reimbursement.
• There is no reimbursement for commuting miles.
• There is no reimbursement for lunch mileage.

• Not updated. Even the best manual will become obsolete over time, as
changing circumstances alter procedures to the point where the manual no
longer describes conditions as they currently exist. When this happens, no
one bothers to use the manual. Accordingly, it is necessary to update the
manual whenever changes are made to the underlying systems.
• Too many procedures. A common problem is that the manual is never released
because the controller is determined to include a procedure for every conceiv-
able activity the accounting department will ever encounter. However, the
main principle to follow is that the manual must be issued soon, so it is better to
issue it quickly with procedures that cover the bulk of accounting activities and
address the remaining procedures at a later date. This approach gets the key
information to those employees who need it the most, and does so very quickly.

The single most important factor in the success of a policies and procedures
manual is an active accounting manager. This person must reinforce the use of the
manual with the staff so it is not simply ignored as a one-time report gathering
dust on a shelf. Only through continual attention by the entire staff will it become
the foundation of how all key accounting processes are completed.

Cost: Installation time: