Office procedure I

Business Studies J.S.S 3 First Term

WEEK 3

Office procedure I

Performance Objectives

Students should be able to:

     1. Explain the meaning of office procedure.

     2. List the importance of office procedure.

     3. Explain the procedure for making payments.

Content

Meaning of Office Procedure

Office procedure is a set of rules or policies guiding the operations of an office. Office procedure can also be defined as the sequence in which certain operations are carried out in respect of what is done. What it is done, how it is done, who does it, when and where it is done in the organization. Office procedures set the standard for how staff work together in the office.

Importance of Office Procedure

1. It ensures efficient, consistency and professionalism of an office task.

2. Office procedures create a uniform way of doing things.

3. It helps us to know how to handle both incoming and outgoing mails.

4. It reduces operational cost, chances of errors and fraud.

5. It makes office workers understand their various assigned duties.

6. It enhances better coordination and speedy completion of the task.

7. Instils disciple in an organization.

Procedure for preparing bills, invoice and receipt

1. Before preparing bills, invoice and receipt the following steps must be taken.

2. Write your company's contact, including mail, phone number and address.

3. Create an original customer invoice number using letter, number or both. e.g. Job -001 or Smith – Job-001.

4. Date the invoice.

5. Describe the work you performed e.g the number of materials used and hours spent.

6. Add up total quantities of materials, product and services provided. Its called sub-total.

7. Factor in sales tax based on taxable items provided. If it is a resell product, you add the VAT (Value added tax).

8. Sum up the subtotals and sales tax to arrive at the final job cost.

9. Indicate terms of payment; when you want to get paid. If within 15 days, it is NET 15.

10. State how you will get paid i.e. by cheque, credit card, or cash on delivery.  

Procedures and methods of making payment cash

1. Cash payment: Cash is legal tender can be coins or naira notes. A small amount is usually paid by cash.

2. Cheque: A cheque is a written order to pay on demand a stated amount to a named person at a particular date. To secure payment of the large amount, cheques are issued. Cheques are issued to owners of current account and it is payable within three working days after deposit. The cheque is normally prepared by the clerk in the sales office or by the drawer (the account owner). There are four types of cheques and they are

a. Bearer cheque

b. Order cheque

c. Open cheque

d. Crossed cheque.

Cautions or steps to be taken in preparing a cheque

i. There must be a date.

ii. The payee name must be written in full and clear.

iii. The amount must be stated and must agree in word and figure.

iv. Record the purpose of the cheque.

v. Any alteration must be backed by payee signature.

vi. All signatory of the payee must be uniform.

vii. The signature of the drawer (account holder) must appear and it must be the bank authorized signature.

Parties to a cheque

Three parties are involved in the payment of a cheque:

1. The Drawer: This is the person who draws and signs the cheque, and from whose account the money is removed.

2. The Drawee: This is the bank on whom the cheque has been drawn.

3. The payee: This is the person to whom the amount of money on the cheque is paid.

Advantages of the cheque system

1. Cheques provide a simple method of cash transfer.

2. Cheques provide a relatively safe method for the settlement of debts.

3. Cheques provide a simplified method for the payment of salaries and wages.

4. Cheques eliminate the burden and danger of carrying large amounts from place to place.

5. Cheques minimize fraud in business transactions.

 

3. Bank draft: To initiate bank draft payment, bank review request to see if there are sufficient funds. If confirmed, the sum is set aside from the drawer account when the draft is issued. A bank draft is a written order for money to be paid by a bank, especially from one bank to another. It is a cheque drawn by a bank on itself.  Normally, a bank draft is prepared by a commercial bank. A commercial bank drawing a bank draft should have received an equivalent amount, plus a standard commission from the person buying the draft.

4. Bank transfer: Funds can be transferred at the banking hall, through mobile phone and via the Automated Teller Machine. First and foremost, both drawer and payee must have a bank account. To transfer at banking hall a withdrawal slip is filled, stating account name, number and bank. It is a method whereby the buyer instructs his or her bank to transfer some money from his or her account to the account of the seller whether in the same bank or in another bank. In these days of online banking, it is very easy to pay some money into an account from any branch of the same bank in Nigeria. For international transfers, there are money transfer services offered by banks e.g Money Gram, Western Union, etc.

5. Cashless system: This is an electronic means of making payment. To start a cashless or electronic payment, you must be computer literate, have access to the internet or have a mobile phone. You must also have a security code. There are six electronic payment systems, and there are:

i. Payment by wire: Money can be transferred by visiting a bank. The sender completes a transfer form. Once completed the bank assigns a code as a confirmation number.

ii. Payment by debit card: Transferring cash through a card generally known as ATM card. It can be done through an ATM machine or POS Machine.

iii. Payment by credit card: This serves as a means of payment for purchase to a particular limit from the retailer or seller.

iv. Payment by charge card: This is another card issued by financial banks that allows the cardholder to charge the sum due to a particular account.

v. Payment by POS machine: A POS is a point of sale machine, terminal or box, which allows a seller to accept or make a payment from a buyer. A buyer uses his or her ATM card, or accept debit or credit card, in conjunction with a PIN code (Personal Identification Number). Though similar to an ATM machine, however, it accepts payment only to the registered company that his account with the bank.

vi. Payment through the cash office: To make using the cash office, the sender visits the bank website. He/she gives the address, recipient name and payment destination. The recipient has to present the code with an authentic Identity card to the cash office.

The procedures involved in payment

1. Insertion of the card following a voice prompt.

2. Typing your secret code or password.

3. Selecting the account operated.

4. Picking the transaction to be involved.

5. Key in the account number and or the bank to receive the money.

6. Affirming the amount to be raised.