Accrual Process

Responsible Parties

• Determining the Accrual for the Job: Operations Team Leader

• The accruals are made by the operations team leader who is working on the shipments.

• Controlling Appropriate Use of Accruing: The Department Head/ Assistant Manager is responsible for monitoring and ensuring that all Accruals are entered into the ROCS by daily basis.

Objective

• The Accruals need to be adjusted by adding entries so that the financial statements report these amounts.

• It is an ongoing process, so when new expected costs or sales appear, they must be updated within the system.

• The purpose of completing an Accrual (or accruing) is so that Rhenus may estimate monthly profitability, even before the shipment is finalized.

Deadline

• Accruals to be entered once booking has been converted to a Job.

• Daily monitoring: Department Head to check the accrual report on daily basis. Department Head will share to Billing Team

• Monthly monitoring: Missing accruals must be entered on or before the last working day of each month.

Accruals Period

• The Accruals Period is based on the estimate Profit Recognition Date (PRD) which is ETD/ETA of a sea export/import shipment. For example, for any Export Ocean shipments with ETD from 1 January 2017 until 31 January 2017, Accruals must be entered if no actual AP or AR are active in the ROCS.

Email Notification from Finance Department

• Department Head will receive an email notification from the Finance Department every month. The notification aims to remind operations department to follow the Accrual cut-off schedule.

Process : Fill out the Accrual (both Sales and Cost) based on the received quotation or Tariff from the following:

• Sales and Customer Service Department

• Overseas Offices/Agents/Partners

• Subcontractors

After Accruals are entered, the Billing Team must monitor them until the Actual Invoice (for AR) or Actual Vendor Invoice (for AP) are received from the respective parties.

If the Billing Team cannot obtain the Actual Invoice before next month's cut-off, there is no need to do updates (unless there are any changes in accrued amount). Therefore, the same Accruals will be kept until the Actual Invoice has been received.

AP Invoices must be entered on the same day they are received.

Once the Actual Invoice is entered into the ROCS system, there is no need to update or modify the Accrual figure, as the system will do that automatically.

There is no automatic reverse button in ROCS. Operations should make sure that they have no pending accruals before they complete the job.

The Accrual figure must be updated if any new potential or unexpected costs or sales appear that were not originally taken into account.

Reconciliation Process

Time Frame: Team Leader/ The Department Head is allowed to verify or modify the Accruals figure before the accounting closing date.

The Department Head is required to generate the "Consolidated Accrual Report" from the Accrual Module to verify if Sales or Cost Accruals are missing or overbooked.

Arrange AP Process

• Depending on incoterms, the Billing Team will receive invoices from different parties, and after verification, the invoices will be e-signed by the Department Head. Then, the Billing Team will book the correct incoming invoices as accounts payable in the ROCS and upload it into e-file.

• Obtain AP Invoice from the Creditors

• Invoices from Various Subcontractors at Origin

• Subcontractors, such as trucking companies, warehouse, Customs brokers, terminals, liners, co-loaders, booking agents and packaging companies are those who provide a service to you at the origin. Occasionally, we may request service from subcontractors for special cases. Subcontractors will send a billing invoice that includes the previously agreed-upon quote after providing their services to Rhenus.

Invoices from Overseas Offices/Partners/Agents/Associate Agents

• Our overseas offices/partners/agents/associate agents will provide their services to us at the destination. After providing their services, they will send a billing invoice that includes the previously agreed-upon quote.

Check Correctness of Invoices

• he Billing Team must verify that the incoming invoice matches the previously agreed-upon quote from procurement team/sales support team.

If the invoice is incorrect, the Billing Team must inform the creditor immediately and request for a Credit Note or Revised Invoice.

Book Vendor Invoices in ROCS (AP Creation)

The Billing Team must ensure to book at Master Level only Vendor's incoming invoices (AP) for carriers charges related to main haul transport (unless Master Direct). Further information to be found on the Charge Codes page.

Processing Payment

Overseas Offices/Overseas Agents

• The Billing Team must generate invoice from ROCS to submit to Finance Team on daily basis/on the same day AP invoice created. The Billing Team will upload to e-file finance folders. The scan document has to be kept in the job file.

• Finance Team will check and provide the AP invoice to Head of Department. In case Head of Department is not available, approval must go to Director.

• Department Head will check and e-sign as the approval for the payment request

Liners/Co-loaders/Booking Agents/Subcontractors

• The Billing Team must activate AP invoice in ROCS; then upload to e-file finance folder with complete supporting documents (AP invoice with actual invoice from Liners/ Co-loaders/ Booking Agents/ Subcontractors) then Finance Department will check and process on daily basis/on the same day AP invoice created.

Arrange AR Process

Responsible Party: the Billing Team must create and send the AR invoice and supporting documents to the Principal/Shippers/Customers as per KPI.

Use of Charge Code - Air & Ocean Charge Code

The Billing Team must follow the guidelines to select the right charge codes and apply VAT as per current regulation, then break down those codes. Lump sum rates are not permitted.

Based on Shipment Type

Controlled Shipment:

The Billing Team need to create the AR invoice based on the quote from the Commercial Team (Procurement, Sales Support).

Nominated Shipment:

For billing between Rhenus's offices, the Billing Team must create the AR invoice based on the NET Cost billing, and an Intercompany Handling Charge (IHC) applies to internal billing. Please refer to the net billing policy for more details.

Note:

Bilateral agreements between offices must be submitted to the Data Center to be excluded from the monthly Net Billing reports.

Deadline of Creation of AR Invoice

The AR invoice creation deadline is based on shipment terms.

Create Rhenus Invoice in ROCS (AR Creation)

The Billing Team must never issue Rhenus Invoice from at Master level, unless:

• The job is Master Direct

• The Rhenus Invoice is issued for profit sharing.

• Own Consolidation: a proper a-meta sheet must have been finalized.

• CFS/CFS: a sharing agreement to be in place.

• Further information to be found on the Charge Codes page.

ROCS User Guides related to AR Creation:

Invoices issued can be either consolidated or individually created depending on the agreement made with the Principal/Shippers/Customers. The Billing Team may activate both local and overseas AR invoices.

Debtor's Confirmation on AR invoice draft

The Billing Team must submit the draft of AR invoice or pending AR invoice to the Principal/Shippers/Customers by email immediately after creating it.

Deadline of Confirmation from Principal/Shippers/Customers

The Billing Team must inform the Principal/Shippers/Customers of the expected confirmation deadline, which should be within six working hours of sending the pending AR draft.

Dispatch of Original AR Invoice

All original printed AR invoices must be signed and stamped by the respective The Billing Team.

Principal/Shippers/Customers.

The Billing Team must arrange for a courier to deliver the original AR invoice as well as any required supporting documentation, such as the HB/L copy or receipt and E-Vat, or the Shipper/Consignee can come to Rhenus office to pick up documents directly. A scan of the original AR invoice will be kept in E-archive.

Especially for Bekaert shipment, original AR Invoice kept by Rhenus and only send the scan of original AR invoice to Bekaert.

Invoice Modification and Offset

If The Billing Team invoiced an incorrect amount, they should follow below process:

If the incorrect amount is due to less invoicing, The Billing Team issue additional invoice for the discrepancy. The Billing Team check with Finance Dept. if the invoice has paid and if the E-Vat has been issued and/or reported. The Billing Team Staff check with Finance Dept. whether the invoice is clear to offset/cancel. The Billing Team request approval Head of Department and/or Director to cancel/offset invoice. The Billing Team are not allowed to issue a partial Credit Note. All Credit Note must be issued in full amount as per original invoice. The Billing Team notify customer as soon as possible as the new invoice created.

Credit Limit Check

If The Billing Team finds in ROCS that the credit facility from debtor is exceeded, The Billing Team must inform to respective account to follow up with the finance department.

AR & AP Invoice Upload Process to E-archive.

The Billing Team makes sure to upload all AR/AP and supporting documents for each respective job files to Shared Drive for E-filing before the team leader close the job file.

Responsible Parties

• Determining the Accrual for the Job: Operations Team Leader

• The accruals are made by the operations team leader who is working on the shipments.

• Controlling Appropriate Use of Accruing: The Department Head/ Assistant Manager is responsible for monitoring and ensuring that all Accruals are entered into the ROCS by daily basis.