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Detailed overview of key process changes in the FICO department, from expenses to cash transactions, aiming for better efficiency and structure in financial operations.
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FICO – KEY PROCESS CHANGES • All expenses which were represented by cost codes in legacy will be GL Accounts in FI • Job Numbers which were part of the General Ledger in Legacy will be Cost Centers in CO • Sphere wise sub ledgers will be eliminated through use of Business Area • Structured numbering of GL Accounts through use of Accounts Group for easy identification and grouping. • Centralized creation and maintenance of all master records • Use of other modules for F&A functions : – - Payroll to be processed through HR module - Sales Billing to be done through SD module - Inventory Accounting & Invoice verification in MM module
FICO – KEY PROCESS CHANGES • 95% value write off in respect of slow/non moving inventory items will be through provision entry not affecting Stock ledger • MRN to be valued at Current Moving Average price instead of issue price. • Automatic GRN valuation through inclusion of planned delivery cost in Purchase Order. • Use of Special GL for Down payment, Supplier Advances etc. • Departmental Advances to be linked to Personal Account through Alternate GL for easy identification • Traveling, Medical, LFA/LTC advances and adjustments will be done through off cycle payroll and not through personal A/C • Employees Personal A/C will be a 7 digit Number starting with 7 and ending with Salary code/Regn No. ( e.g. 7002145) • All Loan payments to be disbursed through Off cycle payroll
FICO – KEY PROCESS CHANGES • Doctors Pool Fund payments through Payroll • Three GL Accounts for every Bank Account : - Main Account, Issue Account & Deposit Account • Use of Cash Journal for all Cash Transactions • Cash payments vouchers prepared by other sections will be through Cash Payment contra account • Departments will be authorized to adjust the amount spent from Imprest cash through Cash Journal, as per DOP. • Payment vouchers not to be routed through planning or any other department. • FI expenses will automatically flow to Cost Centers, Profit Centers and Business Area • Self verification of assets like Furniture etc. by user departments through the system
FICO – KEY PROCESS CHANGES • Responsibility accounting through Profit Center • Use of Process orders in LPG for product costing • Alternate Hierarchy in Profit Center and Cost Center • Restrictions on use of wrong Job Number • Condensate to be considered as Joint Product of LPG plant • Production cost and Depletion will be allocated to well level. • Capturing of depreciation at cost center level • General Overheads will be General Services in SAP • General Services will be Engineering Services in SAP • Departmental Overheads will be Drilling & Production Services
FICO – KEY PROCESS CHANGES • Iterative cost allocation between General and Engg. services • Man power Cost will be directly booked to related cost centers at primary level through payroll. No Wage Allocation advice to be sent by departments • Maintenance Cost to be booked through Plant Maintenance (PM) Orders. • Departments to provide information for cost allocation e.g. vehicle utilization statement etc. through the system. • Expenditure of Delhi office , S&CP, Vigilance, S&IA, BD & TPP etc. are to be shown as Corporate expenses directly in P&L A/C • Income and Expenses of BD & TPP services rendered by various departments to be shown under respective departments
Numbering Logic for Cost Centers • a) First three digits = Department or sphere, say Production/ Delhi • b) Next two digits = Sub Location, say Digboi /Naharkotia • c) Next one digit = Type of cost center say • A=Operation B=Maintenance and C= Common • d) Last four digits = existing job numbers • Example: • OILNKA0651 = OCS 5- Operations (Job No. 06/0651) • OILNKB0652 = OCS 5- Maintenance (Job No. 06/0652) • ELENKC0580 = CE- Electrical office (Job No. 17/0580) • DELDLC0703 = Delhi office (Job No. 17/0703)
