Professional Documents
Culture Documents
Shams Thesis Project
Shams Thesis Project
CHAPTER ONE
INTRODUCTION
1.1 INTRODUCTION:
Afghan Telecom Corporation was incorporated in 24th September 2005 to provide unified
telecommunication services throughout Afghanistan under the stewardship of Ministry of
Communication & Information Technology. Accordingly, Afghan Telecom adopted a challenging
program aiming to transform its business from government system to the recognized commercia l
business standards, The company has developed clear strategies focusing on internal re-
organization, re-skilling and development of its staff, enhancement of its internal processes and
studying its customers' needs and requirements while continuing carrying out its national and social
duties and responsibilities.
Afghan Telecom Corporation understands that the world is changing very fast & rapid and
telecommunication is the only medium which can adapt to the changing times, Afghan Telecom is
the pioneer in implementing new telecommunication services in Afghanistan & a leader in the
Afghanistan telecommunication market. The role & use of telecommunications is significant for
the development of the people & the country. Believing in the importance of its customers and
fulfillment of their needs, Afghan Telecom Corporation is constantly adopting different strategies
that aim to support and re-enforce its competitive position, based on its strategy, Afghan Telecom
strives to enhance customer oriented culture in all its business aspects & modus operandi, this
culture has been reflected in the organizational design of the company that comprises the best
expertise in the Management level, a number of Functional Departments and Four key Business
development & Sales Units focused on the key Afghan Telecom.
1. Corporate Sale point such as different internet service like WIMAX, DSL, Micro wave,
and P2P point to point wireless.
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Chapter One Introduction
2. Landline Telephone and Mobile, VCN (Village communication network) & DCN
(Domestic Communication Network).
3. Individual Sale Points & Dealers Sale Points.
The Accounts Payable System is used to process invoices against purchase orders and to generate
payment to vendors, this system maintains detailed accounting transactions of all invoices and
credit memos charged against an established purchase order, the system determines the payment
date of invoices based on the purchase order term, Once payment is generated, the Account payable
System records the amount, invoice and or credit memo numbers as well as the check number and
the date of the payment. Access is restricted to the Accounts Payable personnel with access to
process invoices against purchase order, since this system is used to generate payments, access is
restricted to all the payment screens.
Accounts Payable is an accounting entry that represents an entity's obligation to pay off a short-
term debt to its creditors. The accounts payable entry is found on a balance sheet under the heading
current liabilities. The Accounts payable are debts that must be paid off within given period of time
in order to avoid default, for example, at the corporate level, Accounts payable refers to short-term
debt payments to suppliers and banks.
Accounts payable are those amounts of money that a business must put aside to be paid for ongoing
debts. Accounts payable is a term that refers to the money that a person or business must pay to its
creditors within a certain period of time. It is the unpaid invoices bills or statements for goods or
services rendered by outside contractors, vendors or suppliers, these debts often must be paid either
partially or in full each month. When someone pays his or her monthly electricity, telephone, cable
television and Internet Service Provider bills, for example, he or she is paying off his or her accounts
payable obligations. The term Accounts Payable also is the term that is used to refer to the unit
within an organization’s accounting department that manages these payments.
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Chapter One Introduction
These are important questions, and should include aspects of the company that made you conside r
it for investment in the first place. Look at branding, image, pricing power, size, market share,
financial position (balance sheet strength), etc.
INTERNAL CONTROLS:
Internal Controls for accounts payable should include signature requirements according to payment
amounts. Consider implementing several tiers of signature requirements, For example, you could
require an accounting manager’s signature for items of more than $5,000, an executive sign off for
items of more than $10,000 and dual signature requirement for payments of more than $25,000.
Match your signature requirements to your revenue totals and the susceptibility of your business to
fraud for maximum benefit. Afghan Telecom routine control procedures for accounts payable.
Include spot checks on individual payments to ensure accuracy, for example, review five payables
every day and check the payment amount and payee information and ensure that accounting records
have been completed correctly.
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Chapter One Introduction
During book closing procedure at the end of a month or financial period, include sign off procedures
for all accounts payable work including summary totals and account reconciliatio ns. Additiona lly,
keep a running report that monitors payment levels from accounts payable processing, if payment
levels suddenly increase or decrease, an automatic investigation into the causes can head off
potential problems.
The internal control unit ensures that a sound internal control environment is in place at the
organization, Accordingly, this unit performs the necessary coordination work in this regard,
assuring that activities are performed regularly, efficiently, effectively and in accordance with the
management strategy and policies of the organization and the applicable rules and regulatio ns,
additionally, it monitors the integrity and reliability of accounting and recording system.
In accounting and auditing, Internal control is defined as a process affected by an organizatio n's
structure, work and authority flows, people and management information system, designed to help
the organization accomplish specific goals or objectives, it means by which an organizatio n's
resources are directed monitored, and measured. It plays an important role in detecting and
preventing fraud and protecting the organization's resources.
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Chapter One Introduction
The traditional roles and responsibilities of finance department are important for the complete
operation of the business. However, most of the functions do not have a considerable strategic
importance. The most common function of the finance department comprises the documentatio n
and the controlling of incoming and outgoing cash flows as well as the actual handling of the cash
flows. These two parts played and still play a significant role inside the department, however, due
to the computer revolution it is mostly dealt with on computerized system (such as Tally Accounting
Software). The introduction of mass computer system has made the task less labor intensive and far
quicker, even real time. Cash flows can be displayed on an up to date basis every day, performance
can be analyzed and evaluated straight away. This gives the financial department and the senior
management useful tools to see how the company is performing at any given time the finance
department is also responsible for the payment of bills, wages and salaries. This as well has been
computerized. Wages and bills are paid through electronic system; both transactions are outgoing
cash flows, on the other hand, payments for goods or services sold will be accounted in this
department.
1.6.2Accounts Payable Procedures:
Accounts Payable procedures overview;
Filling procedures.
Purchase orders vouchers.
Credit notes or refund Cheques.
Description on cheque remittance.
Control and register.
So, you ordered your goods, you received your goods, you checked the invoices to make sure they
marched what you actually originally ordered and received, some rules are as follow;
Write or stamp on your document ‘entered or processed’ to show that they have been recorded
in the bookkeeping system.
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Chapter One Introduction
File the invoices away, you can use an alphabetical concertina folder, or lever arch folder with
alphabet tabs. Label the folder ‘Unpaid Invoices’ Make sure you only use this folder for unpaid
purchases invoices so you don’t get mixed up with other paper work.
After the end of the month you will receive a statement from each of your suppliers listing all
the purchases you made during the month.
Take your invoices out of the concertina folder because now you are going to match them to
the statement. Make a tike on the statement next to the ones you have invoices for, and attach
them behind, if there are any purchases on the statement for which you do not have an invoice,
highlight it and phone the supplier for a copy. They will willingly trough one of email or fax,
because, of course, they will want their money! Never pay for an invoice that you do not have.
Once the purchase invoice matching is complete, highlight the total owing then place them back
in the folder until you are ready to pay. You could double check that all the statements added
up, match the total tally on your spread sheet.
1.6.4Audit Review:
A statistical sampling of documents is reviewed for accuracy and compliance with AFTEL policies
and/or other regulatory requirements for reimbursements or payments to individuals. All documents
tagged by data entry must be fully reviewed.
As documents are placed on hold, the department representatives are contacted by the Accounts
payable auditors reviewing the document. On a weekly basis, the Accounts payable auditors review
the documents that are still on hold and follow up with departments regarding the resolution. On
monthly basis, the Audit supervisor review the documents on hold and a decision is made regarding
the status of the pending payment, so at the end approved documents are scheduled for payment.
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Chapter One Introduction
1.6.6Routine Procedures:
Accounts payable should be balanced daily to reconcile payments to recorded entries. Any
discrepancy between the total amount paid and the total recorded should be examined and
reconciled immediately. Management oversight of every individual involved in accounts payable
should be stringent and should include routine monitoring of activities. Managers should be trained
to watch for any signs of misconduct by accounts payable staff.
1.6.7Internal Controls:
Internal controls for accounts payable should include signature requirements according to payment
amounts. Consider implementing several tiers of signature requirements. For example, you could
require an accounting manager's signature for item of more than $5,000.00, an executive sign- off
for items of more than $10,000.00 and dual signature requirement for payment of more than
$25,000.000, Match your signature requirements to your revenue totals and the susceptibility of
your business to fraud for maximum benefit.
Afghan Telecom routine control procedures for accounts payable, include spot checks on individ ua l
payments to ensure accuracy. For example, review five payables every day and check the payment
amount and payee information and ensure that accounting records have been completed correctly.
1.6.8External Control:
Most external audits include accounts payable as a testing area. External audits should take a
detailed accounts payable listing and trace totals from the details through all accounting records to
the summary total and should include the bank withdrawals.
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Chapter One Introduction
From long time, Accounts payable recovery audits have focused on loss detection and recovery,
and learned how to prevent losses from happening in the first place.
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Chapter One Introduction
Chapter One: The overview and background of the study in order to create an interest of
the readers to further continue the study.
Chapter Two: is specified for Literature review.
Chapter Three: Comprises research methodology and design.
Chapter Four: Covers the Finding & Analysis of the Thesis.
Chapter Five: This chapter contains the discussion, conclusion, and recommendation of
the research.
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Chapter Two Literature Review
CHAPTER TWO
LITERATURE REVIEW
Literature Review:
2.1 CFO research service. (March 2008):
On March 2008, so according to them in recent years, CFO research service has documented finance
efforts to drive cost, complexity, risk and error from its routine transaction processes. We have
found that streamlined business processes, often paired with improved technology systems for
transaction processing, are the foundation of many of these efforts. Our survey of senior finance
executive in North America explores finance executives interests, problems, and plans in the
management of Accounts Payable.
How well are companies performing in accounts payable? Survey results show that, in general,
companies are executing basic accounts payable activities well. Good performance in basic
activities like receiving invoices, reconciling them with purchase orders, and issuing payments is
certainly to be expected; companies that execute the basics of Accounts payable very poorly
probably would not expect to remain in business for long. But finance executives see room for
improvement in their companies, Accounts payable performance, not only for higher value
activities such as producing information to support decision making and timing payments
optimally, but also for activities such as matching payments to contract terms, directing payments
to the right places and accounts, and documenting transactions.
How serious are shortfalls in accounts payable performance? We sought to gauge the broader
impact of problems in accounts payable by asking respondents to estimate the degree of risk
associated with Accounts payable, these risks appear to be particularly acute when dealing with
external suppliers.
Finance executives responding to our survey also found a note of caution: Be careful, they write,
note to sacrifice control for cost savings. "You can't minimize cost at the risk of following lax
controls," a respondent writes. At the same time, other open-ended responses suggest a differe nt
warning: Complete control (and a corresponding elimination of risk), they write, comes at the cost
of efficiency.
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Chapter Two Literature Review
Purchase made on account as a proxy for the quantity of trade credit offered to the firm. Their
sample consists of small firms some of which may be credit rationed by suppliers. Since our Sample
firms are larger firms we make an assumption that all purchases are on credit and use their annual
purchases as a proxy for the supply of trade credit. We believe that this assumption is not very
restrictive, since large firms typically don’t pay their purchases in cash. In measuring the supply of
trade credit we have an advantage over previous research since we know the exact amounts of the
sample firms’ annual purchases. Petersen and Rajan had to Estimate the amount of purchases to
measure supply of trade credit since U.S. firms do not provide information on the division of cost
of goods sold into different cost categories such as wages and purchases.
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Chapter Two Literature Review
firms’ incentive to use trade credit as a means of price discrimination. Increases in the interest rate
level also increase the amount of accounts receivable through increased demand for trade credit.
The most important determinants for the level of accounts payable appear to be the supply of trade
credit, firm size, interest rate level, the ratio of current assets to total assets, and insufficient interna l
financing.
At the end and Conclusion of this research, Market cost of capital also has an effect on their level.
The latter result may be largely explained by increasing demand of trade credit when market interest
rates rise. All the variables that were used to explain the level of accounts payable were statistica lly
significant although their signs were not always expected. The results show that the most important
variables behind accounts payable policies are supply of trade credit, firm size, level of interest
rates, asset maturity and internal (insufficient) financing.
2.6 Porshia Russell (2010),
In order to process payments the following documents are required; an invoice, receipt, or
equivalent documentation for expenditures that includes the amount, date, place, business
relationship, purpose, and parties involved where applicable.
When research Accounts payable has receiving information, and invoices matched directly to a
purchase order these items will be processed daily. Invoices over $ 5,000.00 require approval of
project Director.
Also they use Blanket Purchase Orders &Departmental Purchase Orders, A specified amount is set
up by the department to a specific vendor, and supplies called in as needed. When invoices are
received in Accounts payable, they are sent to the department for approval via e-mail or Fax to
expedite processing.
Departmental purchase order, when They are given to departments in Pre-numbered Groups, by the
office of Grants Management to be used by departments for emergency items, which are needed
immediately and are under $1,000.00; the department calls the order in to the vendor directly, and
then sends the completed paperwork to Grants management for signatures. Once Accounts payable
receives the invoice, and receiving information, payment processed, Also field expenses are a
spreadsheet listing the expenses, and supporting documentation. In case where receipts cannot be
obtained due to extenuating circumstances, a journal listing of expenses is acceptable .
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Chapter Two Literature Review
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Chapter Three Research Methodology
CHAPTER THREE
RESEARCH METHODOLOGY
Research Methodology
Quantitative research
Quantitative research is generally associated with the positivist/postpositivist paradigm. It usually
involves collecting and converting data into numerical form so that statistical calculations can be
made and conclusions drawn.
The process
Researchers will have one or more hypotheses. These are the questions that they want to address
which include predictions about possible relationships between the things they want to
investigate(variables). In order to find answers to these questions, the researchers will also have
various instruments and materials (e.g. paper or computer tests, observation check lists etc.) and a
clearly defined plan of action.
Data is collected by various means following a strict procedure and prepared for statistical
analysis. Nowadays, this is carried out with the aid of sophisticated statistical computer packages.
The analysis enables the researchers to determine to what extent there is a relationship between two
or more variables. This could be a simple association (e.g. people who exercise on a daily basis
have lower blood pressure) or a causal relationship (e.g. daily exercise actually leads to lower blood
pressure). Statistical analysis permits researchers to discover complex causal relationships and to
determine to what extent one variable influences another.
Qualitative research
Qualitative research is the approach usually associated with the social constructivist
paradigm which emphasises the socially constructed nature of reality. It is about
recording, analysing and attempting to uncover the deeper meaning and significance of
human behaviour and experience, including contradictory beliefs, behaviours and
emotions. Researchers are interested in gaining a rich and complex understanding of
people’s experience and not in obtaining information which can be generalized to other
larger groups.
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Chapter Three Research Methodology
The Process
The approach adopted by qualitative researchers tends to be inductive which means that they
develop a theory or look for a pattern of meaning on the basis of the data that they have collected.
This involves a move from the specific to the general and is sometimes called a bottom-up approach.
However, most research projects also involve a certain degree of deductive reasoning (see section
on quantitative research for more details).
Qualitative researchers do not base their research on pre-determined hypotheses. Nevertheless, they
clearly identify a problem or topic that they want to explore and may be guided by a theoretical lens
- a kind of overarching theory which provides a framework for their investigation.
The approach to data collection and analysis is methodical but allows for greater flexibility than in
quantitative research. Data is collected in textual form on the basis of observation and interactio n
with the participants e.g. through participant observation, in-depth interviews and focus groups. It
is not converted into numerical form and is not statistically analysed.
3.3 Population:
The target population for this study consists of a telecommunication industry in Afghanistan.
3.4 Sample:
As a sample I have selected Afghan Telecom Corporation.
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Chapter Three Research Methodology
Availability of data: this research is based on primary & secondary data, In order to get reliable and
accurate data, I used a questionnaire, and the questions were answered by the use of tick in the
provided space or Box
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Chapter Four Discussion and Analysis of the Findings
CHAPTER FOUR
DISCUSSION AND ANALYSIS OF THE FINDINGS
Discussion and Analysis of the Findings
4.1 Overview
This chapter mainly deals with discussion, presentation, questionnaire and analysis of findings from
the study entitled causes, effects and solutions of having the internal control unit in Afghan Telecom
Corporation and Important of Internal Control unit on Accounts Payable system of Afghan Telecom
Corporation
Figure 1:
Gender
5%
Male
female
95%
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Chapter Four Discussion and Analysis of the Findings
The questionnaire was distributed to 20 employees; the table above indicates that more males than
females were involved in the study at a percentage of 5% whereas females formed only 95%. There
were more male respondents in the study than females
Figure 2:
Age catagory
20%
30%
Age group
20-25
26-35
36-45
50%
The questionnaire was distributed to 20 employees, the above bar graph indicates that only (30%)
of the respondents were within the age group of 20-25, (30%) of the respondents were within the
age group of 26-35, and (50%) of the respondents were within the age group of 36-45were (20%).
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Chapter Four Discussion and Analysis of the Findings
Figure 3:
Department
10%
5%
which Department do youwork in?
10% Finance
Admin
Marketing
55%
HR
IT
20%
The questionnaire was distributed to 20 employees; out of these 11 employees 55% of the
respondents work in Finance department, 10% work in marketing department 10% work in IT
department 20% Admin and 5% HR Department.
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Chapter Four Discussion and Analysis of the Findings
Figure 4:
Procedure of AFTEL
15%
Manual
20% Computerized
Manual& computerized
65%
The Upper chart shows that Answer of Bureaucratic 15% Computerized 20% and the remaining
Manual and computerized were 65 %.
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Chapter Four Discussion and Analysis of the Findings
Figure 5:
Strengthnes
20%
Providing the cheaper prices
Questionnaires distributed to 20 persons about strengthens of Afghantelecom which the most votes
went to Providing cheaper prices 65% Good relationship with external Agencies 15% and higher
coverage takes 20%.
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Chapter Four Discussion and Analysis of the Findings
Figure 6:
Audit System
5%
15%
10%
Every Quarte
Every month
Once in a yar
continuously
70%
Table shows that Questionnaire Asked about Audit System of Afghantelecom the most Staff Agreed
for once in a year shows 70% every quarter shows 5% Every months shows 10% And continuo us ly
shows 15% votes.
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Chapter Four Discussion and Analysis of the Findings
Figure 7:
(GAAP)
25%
30%
Completely
Seldom
NO
45%
Surly there in AFTEL using (GAAP) but may or may not the respondents of other departments
don’t know about this terminology graph showing 25% completely 45% Seldom and 30% NO.
NO 13 65%
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Chapter Four Discussion and Analysis of the Findings
Figure 8:
IFRS
35%
Yes
NO
65%
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Chapter Four Discussion and Analysis of the Findings
Figure 9:
TALY
0%
5%
20%
High
Good
fair
Not good
75%
4.10 Does finance Department allocate fair budget for its development and
expenses projects?
Table 10: Budget inquiry
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Chapter Four Discussion and Analysis of the Findings
Figure 10:
Budgeting
35%
Yes
NO
65%
4.11 Do you have any unclear Dues with finance Payable section?
Table 11: staff payment clearances
Do you have any unclear Accountability with finance Payable section? Frequency Percentages
Yes 6 30%
NO 14 70%
Figure 11:
clearances
30%
Yes
NO
70%
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Chapter Four Discussion and Analysis of the Findings
Afghan telecom sometimes offering loans to its Needy staffs so here asking whether they paid their
installments as per contracts signed Or cash is issuing to procurement cashier to purchase urgent
and requested Assets so from 20 persons 30% person of them is did not clearer and 70% of them
cleared their Dues.
How is the communication between finance and other Department? Frequency Percentages
Strong 6 30%
Good 11 55%
Weak 3 15%
Figure 12:
Communications
15%
30%
Strong
Good
weak
55%
In this question Asked About communication between finance, HR , Admin, IT and marketing
Department the Answer shows 30% Strong 55% good and 15% weak.
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Chapter Four Discussion and Analysis of the Findings
Figure 13:
Coordination
10%
20% Strong
fair
Good
60% weak
10%
Coordination is the most importing thing between internal and external users of anOrganiza tio n
here asked from afghan telecom different Staffs showing 60% strong,10% fair,20% good and 10%
weak.
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Chapter Four Discussion and Analysis of the Findings
Do you apply proper coding System in your Documentation process? Frequency Percentages
Yes 6 50%
NO 6 50%
Figure 14:
coding System
Yes
50% 50%
NO
These two questions referring to finance department shows 50% Yes and 50% NO.
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Chapter Four Discussion and Analysis of the Findings
Figure 15:
40%
Yes
NO
60%
40% of finance Staff Says that there is Regular Chart of Accounts and the rest 60% says not
regularity in Chart of Account By an interview will clear these irregularities.
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Chapter Five Conclusion & Recommendations
CHAPTER FIVE
CONCLUSION & RECOMMENDATIONS
Conclusion & Recommendations:
5.1 Overview:
This Chapter concludes the whole study based on real data analysis and point out the main
findings, and further we have given recommendation for improvements based on data analysis.
5.2 Conclusion:
The purpose of this research is to provide information about Accounts payable system of Afghan
Telecom Corporation, the office of Accounts payable is responsible for ensuring that all payment
for the contractor are processed in accordance of policies and procedures.
For this purpose the questionnaire was distributed to 20 employees; more than 30% of the
respondents believe that not regularities of “GAAP” there, the major factors of Accounts payable.
While the 70% percentage of other respondents believes that it's the Analysis discrepancies and
unpaid payments, and 65% of the respondents voted to prepare payments for good budgeting, and
the remaining 35% of employees were off the opinion is Not, code and enter Accounts payable data
in the system that is not following “GAAP”
And also for the purpose of an effective internal accounting control over Accounts payable 70% of
the respondents believe that only Auditing Manually, while 30% of the respondent voted to the not
or disagree.
Three questions among the Questioner were especially for finance Department Staffs about regular
chart of accounts communication and proper coding System so, there Are Different Answers About
three impertinent Questions the conclusion of these three questions Are generally the Strong voted
are negative there are not good communication, proper coding system and not regular chart of
Account. Although the questioners are not distributed to junior of other departments because the
seniors of other departments are aware about accounts payable Department.
5.3 Recommendations:
Indeed in this recommendation portion the researcher will try to give the best suitable
recommendation on the basis of facts & realities of this research reports.
All the recommendations are as follow;
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Chapter Five Conclusion & Recommendations
The company must start work on implementation of the standard rules and regulation of the
financial department in order to compliance the financial processes in line with the
requirement of generally accepted accounting principle (GAAP) rather than considering only
the TALLY software and experienced employees.
The company management must focus more on the standard financial rules and regulation,
and using the mentioned software, because following standard rules and regulation, it trains
the employees of the company that what and how to do the work.
The company should assign the responsibility to the employees whose are able to fulfill it.
The management of the company must focus on having internal control unit in their
organization by all their financial processes will be totally in line with the requirement of
generally accepted accounting principle “GAAP”.
Through this research report I am strongly recommending management of the company that
they should have the expert and specialist employees in the financial unit so as to improve the
financial management affairs.
The company should make a strong relation among Departments and make the Staff of finance
expert in their duties.
A regular coding system is required.
The documentation process after paid should be accomplished and make regular files Archived
in order to be ready for audit.
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Reference:
Websites
http://www.miami.edu/index.php/hr/HR_systems/UMSYS/purchasing_and_accounts_payable_
systems/accounts_payable_system/
http://www.investopedia.com/terms/a/accountspayable.asp
http://www.britannica.com/EBchecked/topic/3037/account-payable
http://www.accountspayable.co.uk/resources/books.php
www.afghantelecom.af
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