Sales Procedure

1. Tender / Bid
2. Letter of Intent (LOI)
3. Contract Execution Form (CEF)
4. Confirmed Order (SO)
5. Jobs
Creation
Opening
Closing
6. Invoicing
7. 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 theres 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


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.
Limit
a. If <100,000 by department only and
credit control
b. If >100,000 <1M refer to a,
contracts department and Finance HO
c. If > 1M refer to b and MD.

After approval of CEF, LOI
acknowledgement is sent out to
customer with all review comments.
Approved for Procurement
Stage / 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 theres 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 recognition
2. 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. Warranty
Certain 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 Provisions
These 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 items
1. Stores receives the approved issue request
2. Store person will prepare pick list
3. Helper will pick up the materials, pack and make it ready for delivery.
4. Store person will prepare the DO and invoice

Jobs
1. Production notify stores that the material is ready for packing.
2. Stores will do the necessary packing at the same time production will schedule the
vehicle to be used for delivery
3. 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)
4. Stores will received the acknowledged packing list and delivery note from the
transporter.
5. 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