Policy

The accounting process for payment of Body Corporate accounts is managed by our Client Financials section.

The purpose of this policy is to check that:

There are appropriate checks and balances in the payment of accounts
The body corporate financial statements contain an accurate coding of expenditure
All your body corporate accounts are paid in a prompt manner, and
Your body corporate complies with all its statutory responsibilities.

1. PAYMENT PROCEDURE BODY CORPORATE EXPENDITURE - Builing Manager

The Building Manager (BM) should have a "Payment Approval" stamp for use on all invoices received which are to be paid by the body corporate. This stamp should have the body corporate name, CTS number, space for general ledger account code, BM signature and committee member signature and an area to identify if the item is to be paid from the administration fund or sinking fund and also whether it is to be included on the Asset Register.
Please see the example of a Payment Approval stamp below. . All areas of the stamp should be completed when authorising a valid tax invoice.
Contractors engaged to perform work at the complex should be advised that all invoices are to be sent to the BM at the building where the work was carried out for approval prior to payment being made to enable the BM to confirm that all goods have been received as ordered, or the work has been satisfactorily completed (whichever is applicable). The committee member should also sign to confirm that the expenditure is in accordance with their instructions
The BM needs to ensure that the supplier’s invoice is compliant with GST and other statutory issues and that the invoice is clearly addressed to the “Body Corporate…………..CTS…… A brief extract from an ATO Fact Sheet is contained in Item 8 below relating to a Valid Tax Invoice.
It is very important that the invoice is clearly addressed to the Body Corporate and not the BM or the hotel/apartment name, or Stewart Silver King and Burns, or C/- SSKB. The BM is to have the supplier amend/correct the invoice details, and re-issue the invoice if it is incorrectly addressed, to ensure that the body corporate complies with the statutory requirements for GST. SSKB accounts department cannot process incorrectly addressed invoices. Time spent by the accounts department ensuring invoices are compliant with relevant legislation will result in a charge from SSKB to the Body Corporate.
Where work is performed for the body corporate and the cost of such work needs to be split over more than one entity (i.e. a principle and subsidiary), then either –
1. The supplier is to issue distinct and correctly addressed invoices to each entity or ;
2. One invoice is made out to one entity. Form (A) On Charge Expense Payment Form must be completed by the BM and attached to the invoice. SSKB will then pay the supplier from the nominated entity and on charge the balance of the costs per the instruction Form (A) to the subsidiary or other entity. This is to ensure that this transaction is compliant with the GST legislation. It is illegal under GST regulations to split invoices across multiple entities. Even if the entity in question is not registered for GST, the bulk of all entities that SSKB deal with are GST registered; therefore this approach is used in all instances.

Note, SSKB will levy an on-charge fee for the additional work required in this instance.

2. PROCESSING OF THE INVOICE BY THE MANAGER

The BM is to :
- stamp invoices received with the Payment Approval Stamp
- code the invoice in accordance with the list of general ledgers accounts supplied
- forward the invoice to the nominated committee member who is to counter sign the invoice
- the committee member is to return duly signed invoice to the BM
- the BM is to then forward correctly completed invoices to The Body Corporate .. CTS . at PO Box 8319, GCMC Qld 9726.
- Invoices should be marked accordingly if they are to form part of the Asset Register or payment is to be made from the Sinking Fund.

3. FORWARDING INVOICES TO SSKB

It is preferred if the attached FORM B “Payment Authority Form” is completed and attached to the invoices approved for payment and forwarded to our office as a “control sheet” with the BM holding a copy for their own records.
Creditor invoices are to be forwarded to SSKB at the address in point (f) above at regular intervals for processing. It is preferred that the invoices are forwarded daily or at the most fortnightly intervals.
Cheques for payment are signed in-house at SSKB. Many payments are now done electronically. A further form FORM C Payment by Electronic Funds Transfer is also available which can be passed to contractors/suppliers to advise them of the availability of Electronic Funds Transfers for payment of their accounts. This form also requests details of their insurance coverage for the Body Corporate records.

4. PAYMENT PROCEDURES - BODY CORPORATE EXPENDITURE - No On Site Manager

The same procedure as for above applies. If there is no BM, it is preferred that a Committee member accepts the responsibility of invoice approval. However if the CM is to be substituted for the BM in regard to signing procedures, a committee resolution must be passed indemnifying SSKB of any financial liability and loss.

5. PROCEDURES FOR BODY CORPORATE EXPENSE REIMBURSEMENTS

Petty cash expenses should only be used for small items where no account has been set up with a creditor and/or payment is required at time of purchase.

FORM D Petty Cash Reimbursement is to be used when a claim is to be made to the Body Corporate for reimbursement of these expenses. Please ensure that you fill in the total on the form and sign it. The Chairman or the Committee must authorise the form or claim prior to forwarding for payment.
Original receipts showing proof of payment must be attached at all times showing amount paid, date and a brief description of the item.
Items such as the postage cost of sending the invoices to SSKB and other incidentals are to be processed in this manner.

6. PROCEDURES FOR BODY CORPORATE EXPENSE REIMBURSEMENT FOR WORK DONE BY BM

Where the BM is authorised by the Body Corporate to perform duties such as maintenance for the Body Corporate and is to be reimbursed, the BM is to generate a tax compliant invoice to the Body Corporate, addressed per point 1(c) above.
The RUM is not to approve this payment, but to have the authorised committee member and another committee member approve the expenditure.
This invoice is to be processed as per points 1 (d) through to 1 (e).

7. PAYMENT AUTHORITIES

Due to the nature of the accounting system that is used by most strata title management companies, where bodies corporate want a payment authority issued over and above the process as outlined in point 1-4 above, additional charges for time spent will be incurred and processed by SSKB.

8. PAYMENTS RECEIVED BY THE BM

Where funds are received by the Building Manager for such items as key cards, fobs or security deposits, contact should be made with SSKB Client Financials to discuss a suitable process for documenting and receipting such amounts.

9. SAMPLE OF STAMP TO BE USED BY BM

As mentioned above, this is the format of the payment approval stamp to be used by the BM. If you contact Stewart Silver King and Burns, we can arrange to have a stamp made up for you.

10. A VALID TAX INVOICE

Extract from an ATO Fact Sheet

A valid tax invoice for taxable sales that total $1,000 or more must contain :-

The words tax invoice stated prominently
The name of the supplier
The ABN of the supplier
The name of the recipient
The date of issue of the tax invoice
The quantity of the goods or the extent of the services sold
A brief description of the thing sold, and
The total price of the sale including GST

Where GST is to be paid is exactly one-eleventh of the total price, show GST separately or provide a statement such as Total Price Includes GST.

Where GST is less than one-eleventh of the total price, show the GST amount and the total amount excluding GST.