KENYA FOREST SERVICE DOCUMENT TITLE:

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1 ISSUE NO: 1 PAGE: 1 of 8 ISSUE HISTORY ISSUE DESCRIPTION OF CHANGE PROCESS PILOT EFFECTIVE DATE 1 None, no change has been done. Accountant 14 th June 2010 REFERENCED DOCUMENTS COPY HOLDERS REF QPM QPM - 7 PM WI TITLE Quality policy manual Product Realization Procedure Manual KFS Service Charter Work Instructions Strategic Manual Financial Manual Contracts International Financial Reporting Standard International Accounting standards Forests Act Director 2. Deputy Director 3. Chief Accountant 4. Chief Finance Officer 5. QMR

2 ISSUE NO: 1 PAGE: 2 of 8 RECORDS / ANNEXES REC NO REC TITLE Debtors aged list Statement of Accounts Process flow Chart Credit Application Form

3 ISSUE NO: 1 PAGE: 3 of 8 TABLE OF CONTENTS ISSUE HISTORY... 1 REFERENCED DOCUMENTS... 1 RECORDS / ANNEXES SCOPE PURPOSE RESPONSIBILITY AND AUTHORITY OBJECTIVES TERMS AND DEFINITIONS DETAILS OF PROCEDURE Debt Management Credit Evaluation... 7 PROCESS FLOW CHART (Credit Control)... 7

4 ISSUE NO: 1 PAGE: 4 of 8 1. SCOPE This procedure covers from debt management, receiving credit applications to approval. 2. PURPOSE This is to ensure effective and efficient control in debt and credit management. 3. RESPONSIBILITY AND AUTHORITY 3.1 Director Approves the KFS s credit policy. 3.2 Deputy Director Finance and Accounting Overall responsible for formulation and revision of the KFS s credit policy. 3.3 Chief Accountant Overall responsibility for ensuring the debtors' accounts are well managed and debts are collected on time Responsible for collecting debts from the clients and to be the main interface between customers and the service Overall responsible for formulation and revision of the service s credit policy. 3.4 Senior Accountant Overall integrity of Debtors' Ledger Responsible for ensuring overdue debts are provided for per IAS Implements the credit policy Monitors the application of the credit policy. 3.5 Accountant I Updating and Management of Debtors' Ledgers Keying in Receipts, Cheques, C/Notes, D/ notes, JVs and Filing Evaluate all credit application forms Recommends credit limit Opens and maintains customer accounts.

5 ISSUE NO: 1 PAGE: 5 of Departmental Heads Assist as assigned. 4. OBJECTIVES NB: Refer to the performance contract. CSF KPI TARGET(S) DUE Conformance to credit policy Number of defaulters Less than 20% default rate Monthly 5. TERMS AND DEFINITIONS TERM KFS DIR IAS IFRS DD DIR JVC/JVD FAD ACC DEFINITION(S) Kenya Forest Service Director International Accounting Standards International Financial Reporting Standards Deputy Director Director Journal Voucher Credit/Debit Finance & Accounts Division Accounts 6. DETAILS OF PROCEDURE

6 ISSUE NO: 1 PAGE: 6 of Debt Management Provide products/services as per clients needs Complete Job files are forwarded to Accounts Department for invoicing Raise charges as per the rates agreed upon with the client Post all clients receipts and invoices Prepare Statement of Account at the end of the month Send the Statement of Account to the client for payment purposes Print out aged debtors list Circulate the print out of the aged debtors list to the HOD for Debt Collection Heads of Departments collect outstanding debts that fall under their respective departments. The heads of departments call, , fax or present themselves physically when pursuing outstanding debts Heads of departments present their debt collection report every alternate week at the debtors meeting. The DD Finance and Accounts chairs the debtors meeting. The DIR receives progress reports on debt collection. Debtors meetings are held every alternate week. The report include progress on outstanding debts such as debts that are proving hard to collect, debts that are due for payment and when, debts that have been paid etc.

7 ISSUE NO: 1 PAGE: 7 of The Director gives instructions on overdue debts. This may include:- Putting more pressure, Visiting clients premises etc The heads of departments implement the agreed instruction from the Director on the outstanding debts. The instruction is aimed at making debtors pay Chief Accounts Officer is advised to hand over such debtors to a lawyer who legally takes up action regarding the collection of the debts The lawyer then legally proceeds to collect the outstanding debts that can only be collected through the legal channels. 6.2 Credit Evaluation Receive credit inquiry Issue credit application forms Receive completed credit application forms Carry out credit appraisal Communicate to applicant the decision on their credit application Recommend credit limit for approval Communicate approved credit limit to applicants. PROCESS FLOW CHART (Credit Control) HOD ACCOUNTANTS DEBT MEETING ACCOUNTS MANAGER LAWYER

8 ISSUE NO: 1 PAGE: 8 of 8 START PROVIDE SEVICE INVOICE CLIENT PREPARE STEMENT OF ACCOUNT COLLECT OUTSTANDING DEBTS SEND DEBTORS LIST TO DEPARTMENTS REPORT COLLECTION PROGRESS IN MEETING NO OK? RECEIVE COLLECTION REPORTS FROM MANAGERS YES GIVE INSTRUCTIONS ON OVERDUE DEBTS INSTRUCTS ACCOUNTS MANAGER TO HAND OVER DEBTS INSTRUCTS LAWYER TO COLLECT OUTSTANDING DEBTS PURSUES AND COLLECTS IMPLEMENT AGREED ACTION END