CURRENT EXPENDITURE CYCLE

1. Plan Procurement Report

The Business Development Group, together with the Estimating Team, will hand over all the tender
documents of the awarded project proposal (ano yung mga tender documents) to the Operations Team.
The Operations Team will be responsible for creating the Project Management Team which is composed
of the representatives from different departments. The Materials Engineer is the representative of the
Procurement Head Office on site.

The Operations Team will assign the Procurement Project Officer to develop an initial procurement
strategy. This will be sent to the Division Head for approval. If the procurement strategy is approved, the
Procurement Project Officer will prepare the Procurement Program Monitoring Report(PPMR) to be
acknowledged by the Division Head(?). The acknowledged PPMR will be sent to the Procurement Head
Office. If the initial procurement strategy is not approved, the Procurement Project Officer will make a
procurement strategy again until it is approved.

2. Process Purchase Requisition

The Procurement Project Officer will transmit the supporting documents together with the PPMR to the
Procurement Head Office. The Materials Engineer will prepare the purchase requisition based on the
PPMR which will be encoded on Quicknet. The Cost Engineer will determine if the purchase requisition is
within the budget. If it is within the budget, it will be approved by the Cost Engineer or Project Manager.
If it is unbudgeted or under budgeted, it will be approved by the Division Head. Then, the Cost Engineer
will provide an Approval Routing Slip(ARS) to be approved by the Cost Engineer or Project Manager. The
Procurement Head Office will officially commence its operation when they receive the approved
purchase requisition.

3. Canvass Bid Tab

The Procurement Specialist will receive the purchase requisition. Then, the he will source accredited
suppliers from their database. He will make a shortlist of accredited suppliers and will request for
quotations. When he receives the quotations from the suppliers, he will prepare a bid tab for major
materials and will encode it on the canvas sheet for minor materials. After preparing the bid tab, he will
endorse it to the Project Manager. Then, they will have an award recommendation for their supplier.
The Bidding Committee composed of the (---) will award their chosen supplier. The bid tab will be sent
to the Procurement Head for approval. On the other hand, the canvas sheet will be acknowledged by
the Project Manager and will also be forwarded to the Procurement Head for approval.

4. Prepare Purchase Order

The Procurement Specialist will make the purchase order using the Quicknet which will be sent for
approval to the President if it is above 5 million pesos together with the necessary documents. If it is
below 5 million pesos, it will be sent to the Division Head for approval. After the approval of the
purchase order, it will be sent to the Accounting Department to be uploaded in the purchase order
database. First Balfour Inc. has two kinds of purchase order, service purchase order and materials
purchase order. If they will prepare a service purchase order, they also need to prepare a service
agreement. In cases when they need to change their orders, the Materials Engineer will create a change
request order to be sent to the Procurement Specialist. The Procurement Specialist will make a change
order notice to be given to the Procurement Head for approval. The approved change order is also
uploaded to the purchase order database. This change order is only applicable to call-off items.

5. Process Received Goods

The ordered goods will be delivered to the warehouse(?). It will be subject to inspection before actually
accepting it. The warehouse man will make a receiving inspection report based on the received goods.
This will be filed to the Receiving Report File. The Receiving inspection Report will also be sent to the
supplier, accounting department and inventory department. When the Inventory Department receives it,
they will update the inventory record. The quantity received will be updated in their Inventory Record
database. The Inventory Department will prepare an inventory summary to update their General Ledger.

6. Set-up Accounts Payable

The Head Office Accountant or Finance Officer will compile and review the Invoice, Purchase Order and
the Receiving Inspection Report using the three-way-match. Then, the Head Office Accountant or
Finance Officer will make an accounts payable voucher. It will be uploaded in their Open Accounts
Payable Voucher module. It will be sent to the Project Head, Division Accounting Head or Corporate
Accounting Head for approval. The AP voucher will posted in the General Ledger and Accounts Payable
Ledger after the approval. It will also be uploaded in the Open/Close Purchase Order File to close the
purchase order.

7. Process Check Summary

The Accounts Payable Voucher will be transmitted from accounting assistant to the treasury assistant.
Then, the treasury assistant will prepare an Accounts Payable Aging Report followed by determining
which bank payment method will be used. The payment details will be transmitted to the Check Register
database. The payment details will also be used to prepare check summary to be reviewed by the (---).
After reviewing the check summary, it will be endorsed by the (---).

8. Prepare Cash Disbursement

The check summary will be approved by the bank. After the approval, the check summary will be signed
by the (---). The (---) will then approve the preparation of manager’s or corporate checks. The
documents (---) will be stamped as paid. Details about the checks will be transmitted to the Accounts
Payable Ledger. A copy of the check and the accounts payable voucher will be filed in the Closed
Accounts Payable Voucher Module. After securing the approval of checks, they will deliver it to the bank
and notify the supplier that it is ready to be picked up in the bank.