Tender Order Job Invoicing

Sales Procedure

1. Tender / Bid2. Letter of Intent (LOI)3. Contract Execution Form (CEF)4. Confirmed Order (SO)5. Jobs

• Creation• Opening• Closing

6. Invoicing7. Stores Procedures

Tender / Bid

Sales person make an offer to a potential customer

Letter of Intent (LOI)

When an offer is in LOI it has be entered into the system by sales order LOI stage with open status

Sales order has to be filled up properly with the correct customer name (as per trade license), dept code, payment terms, order amount, project name, sales person name, etc.

If there’s any information revision or cancellation, the SO has to be updated and the status of the order has to be modified accordingly.

Note:If the customer name is not matching as per the trade license then we cannot claim against insurance in case of dispute

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• Can be done in Quotation software– To ensure only confirmed orders are in

system and credit contol is done for firm orders

Letter of Intent (LOI)

Purpose of putting LOI in the system:

1. To monitor thru the system all the projects (LOI and SO)

2. To monitor sales target of individuals

3. To verify payment terms for credit approval

Contract Execution Form

Before accepting the LOI, CEF has to be prepared, signed and approved by management as per limit.

Limita. If <100,000 – by department only and

credit controlb. If >100,000 <1M – refer to “a”,

contracts department and Finance HOc. If > 1M – refer to “b” and MD.

After approval of CEF, LOI acknowledgement is sent out to customer with all review comments.


• Approved for ProcurementStage / Seal needs to be incorporated for better control

Confirmed Order

When the customer accepts our LOI with comments as per CEF and issue a PO or contract then the sales order will be converted to order.

If there’s any information revision or cancellation, the SO has to be updated and the status of the order has to be modified accordingly.

To ensure all terms and conditions Danway proposed in LOI is agreed; if any deviation go back to approval process


Job Creation Job codes are created based on SO

numbers plus sub codes (1, 2, 3…). These are also the item codes in the

sales order. Note that testing and commissioning

should always have a separate job. This is to avoid partial closing of the job.

Suggestion at tender stage: Please provide a line item value in the

BOQ for testing and commissioning.Purpose:1. Job closing and revenue recognition2. In case of any deletion etc. the 10%

(T&C) will not be deducted. Only item from the BOQ can be deducted by the customer.


• Jobs creation can be requested and Stores can create the Jobs.

• Job closing is done by Stores

Job opening

Job opening request is available in the Danway applications.

Fill up this form with correct information as per the approved CEF. (decide who should fill up)

Submit the form to BU accountant for verification and approval.

Approved form will be submitted the responsible person.

Note:In EPDC job opening is assigned to sales coordinator??


Job opening

Once the job is opened it can be checked in the inventory system (Path: Query-Jobs-Query-Job number)

Note that the estimated cost should be in line with the approved CEF.

Costs should be re-engineered / reduced as per any comments / requirements of CEF. This will also be the budget for procurement.

Procurement process can be started and materials can be taken from store thru SIV (store issue voucher)


Job Closing

Procedure & documentation for job closing

1. Job closing request – this is available in the Danway applications. Fill up this form correctly (decide who should fill up).

2. Attached the calculation / basis of provisions required

3. Submit the form to BU accountant for verification and approval.

4. Approved form will be submitted to Stores to close the Job.


• Need to review open purchase orders• Need to review materials bought and not

used

Job Closing

Before job closing, please ensure the following:

a) Readiness of the materials to be delivered (i.e. FAT, inspection and others)

b) All materials, labours and expenses required for the job has been recorded.

c) Make provisions for warranty and expected expenses to be incurred after delivering the materials.

d) Provision amount should have basis and reasonable.

Provision Notes

There are two types of provision:1. WarrantyCertain percentage has to be provided for the expenses to be incurred during the warranty period. When warranty expires the provision has to be reversed. Suggested - 2% of Danway scope (i.e. excluding principal warrantied materials)

2. Material/Expense ProvisionsThese are expected materials/expenses to be incurred after closing the job. Once the project is completed and hand-over to the customer. This provision has to be reversed.

• Provisions need to be justified– Why and how and when this will be consumed– With this we can do cash flow planning ….

Job Closing & Provisioning Once the job is closed it can be

checked in the inventory system (Path: Query-Jobs-Query-Job number)

The provision amount will be entered as others. Note that this provision relates to material / expense only and should not include the warranty.

No need to provide for the testing and commissioning expenses as it is having a separate job.


Job Closing

For the warranty provision, the amount has to be kept in the invoice.

This is to separate the warranty provisions from other provisions.

After closing, the job will become part of the inventory.


Invoicing

Issue request can be made through the inventory system (Path: Sales order-modify-items-DO request)

Invoicing

In the issue request the quantity of material/s if partial delivery has to be manually inputted.

Print and submit the issue request to BU Accountant for verification and approval.

Submit the form to Stores to process the delivery note and invoice.


• Invoicing can be done by the BU accountant

• No need for Stores to be Involved

Stores Procedure

Trading items1. Stores receives the approved issue request2. Store person will prepare pick list3. Helper will pick up the materials, pack and make it ready for delivery.4. Store person will prepare the DO and invoice

Jobs5. Production notify stores that the material is ready for packing.6. Stores will do the necessary packing at the same time production will schedule the

vehicle to be used for delivery7. Manual packing list will be handed over to stores to attached the delivery note and

load the materials. (there are cases were manual delivery notes are also made by production for partially closed jobs)

8. Stores will received the acknowledged packing list and delivery note from the transporter.

9. Prepares system invoice and hand over all documents to finance.

1. Projects will prepare the manual packing list and hand over to Transportation; Stores will assist in loading with a helper;

2. Transportation will received the acknowledged packing list and delivery note from the transporter and pass this to Finance

3. Finance will make the Invoice

Thank you

Documents

Tender Order Job Invoicing