IndexCompany OverviewFunctions of Finance DepartmentPricing SectionPurchasing SectionInventory SectionBusiness DevelopmentInternship AssignmentsIntroduction/Functions of Different DepartmentsAccount ReconciliationTSLR AnalysisOperating Department Justification AnalysisResearch Report on Impact of CNG Products on PetrochemicalsTheories/Concepts LearnedComputer Concepts and ApplicationsBusiness and Professional SpeechFinancial ManagementEconomic Policy of PakistanBusiness Research MethodsConclusion for Accounting Internship ReportRecommendationsWorks CitedCompany OverviewI will begin my Accounting Internship Report essay with an overview of the company where I worked temporarily: AMAC. AMAC was established in 2006. It is engaged in services, supplies, distribution and marketing of petroleum and petrochemical products. He has experience in the fuel and lubricants sector. Having been in the industry for ten years and having worked for market leaders such as Shell and Chevron, AMAC has extensive experience in this field. The company obtained National Tax Certificate in July 2007 and also registered for General Sales Tax (GST) in May 2008 to expand operations nationwide; AMAC is also registered in the Company Act 1984, as a private limited company in Pakistan since February 2012. AMAC PVT LTD worked with Shell Pakistan Lubricants as an authorized agent in 2013 and 2014. Then it resigned from the agent position to acquire the distribution vessel of Chevron Pakistan Lubricants in late 2014 and now works as an authorized industrial distributor. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Functions of the Finance Department The Finance Department is one of the most important departments of AMAC. This department is simply responsible for monitoring the operations that take place inside and outside the AMAC House, mainly in terminals all over Karachi. This department is responsible for accounting for product purchases, hospitality and analysis of product costs and profitability, in addition to this, it also takes into account transshipments and sales made via tankers, rails and pipelines to different depots in the village. This department also manages the audit and recovery of PDCs from the Government of Pakistan and conducts financial analysis of new business opportunities that have emerged in the country. Another important function of this department is to fix fuel prices on monthly, fortnightly and in some conditions also on need basis. The entire department is divided into 3 subdivisions, Purchasing, Inventory and Pricing. In purchases we also have hospitality income. The interdepartmental structure is as follows. Price Section Prices include the costs of both regulated and deregulated products. Regulated products are those products whose prices are regulated by the Oil and Gas Regulatory Authority (OGRA) (such as PMG). Deregulated products are those products whose prices are determined by the Oil Marketing Company itself (such as lubricants) with the marketing department with an eagle keeping an eye on their competitor. The cost plus margin technique is used to determine selling prices and the margin of OMC and retailers is set by the Oil and Gas Regulatory Authority. Inventory accounting is another function of finance department which involves daily accounting of their inventory because AMAC has immense amount of storage capacity, therefore, inventory accounting plays a roleimportant in the decision-making process. It also provides balance control over those responsible for inventory-related operational activities. For financial reporting purposes FIFO (First in First out) basis is also used to account for inventory very important part of this department which involves ordering inventory at the appropriate level which does not give rise to unnecessary carrying costs and the use of discounts during negotiations. It also involves accounting for Goods and Services Tax imposed by the Government of Pakistan on the purchase of products. Purchasing Section The purchasing section basically estimates the demand for oil in the Pakistani market and places the order to the refineries. They purchase petroleum products from local and international markets. The process flow of the purchasing department basically starts with estimating the demand, placing the order and forecasting for placing the next order. The department also manages the agreement between National Refinery Limited (NRL), Pak-Arab Refinery Limited (PARCO), Attock Refinery Limited (ARL), Bosicor Pakistan Limited (BPL) and Oil & Gas Development Corporation of Pakistan Limited (OGDCL). Some of the points indicated below were similar in the agreements. Subject: The refineries must deliver the products included in the program and AMAC must purchase the products. Effective date and period: On Effective date and period, start and expiry dates of the 'agreement.Product Specifications: The quality and quantity of a specific product are mentioned by AMAC, the specified product must be received according to the agreement.Delivery: There are 3 delivery modes: Tankers, Tank Wagons, Pipelines. Sampling and testing: Testing is carried out in the refinery laboratory, under the guidance of an AMAC representative and the certificate is provided to AMAC before loading, this certificate is known as Certificate of Quality (COQ). In case the quality does not meet the requirements, an independent inspector checks the quality of the product and then reports. Price: The price is set by the Oil and Gas Regulatory Authority (OGRA). Force majeure: the delivery must be made on time is mentioned by AMAC in the contract in the event that a cause of force majeure occurs (strikes, natural disasters etc.), the delivery may be delayed but AMAC must accept the petroleum product delivered by the refineries. Arbitration: In any case, whatever the dispute occurs between both parties, then (1+1) arbitrators are hired by AMAC and other refineries to resolve the dispute between both parties. Hospitality Income section deals with hospitality income from fuel storage tanks for other OMCs by charging them rent so it has a kind of secondary functions like management and accounting of hospitality income. Since AMAC believes in the well-being of the entire society, it also allows small oil marketing companies that do not have much storage capacity, to use their storage tanks for which AMAC charges them rent to cover costs of maintenance and opportunities. This income is then accounted for like other income in the profit and loss account. Inventory Section In this section there are two main functions related to inventory management; Monitoring and Accounting of Tank Stock Loss Report (TSLR) which occurs due to working procedures, temperature, density, Inter Tank Transfer (ITT) of oil stocks. Then the TSLR reconciliation statement is made between physical inventory and SAP. Inventory accounting involves daily accounting of their inventory because AMAC has immense storage capacity, so inventory accountingplays an important role in the decision making process. It also provides balance control to those responsible for inventory-related operational activities. For financial reporting purposes, the First In And First Out (FIFO) basis is used to account for inventory. At the end the comparative analysis of the TSLR of the same month with the comparison of the previous year is carried out in the form of ratios. Business Development Common tasks that fall under this function include sourcing and diversifying into profitable businesses, deals, raising debt and equity financing, most suitable location from which the business can benefit, making capital structure decisions, and providing information about high-level strategic decisions such as entering a new market. In AMAC Finance there is a large department with several ongoing assignments. Different employees work on different assignments with one main goal: transparency of all operations. Internship Assignments The tasks I was assigned during my 6 weeks included the following. Introduction/Functions of different departments I started my first week of internship with introduction, functions of all departments and its importance. The first week was mainly spent observing the different departments and how the departments coordinate with each other. At the end of the first week I could think that all the departments of the company work together and there is a chain of command that goes from person A to person B and so on. Account Reconciliation Each month the lubricant transactions are measured in two ways ; one is done physically/manually, the other is done in QuickBook. At the end of each month, the two entries are compared, this is known as reconciliation. The values ​​of both records match, and if there is any difference, you can try to justify it in terms of physical or computer error. Otherwise the difference is called into question and must be justified. I managed to reconcile two months of August and September 2018. The analysis of TSLRTSLR stands for Tank Stock Loss Report where losses/gains in oil are mentioned. The objective of this analysis was to determine the total loss/gain of a specific tank at a specific terminal. Each month's tank net has been noted separately and has been stamped in the Excel sheet to prepare a proper TSLR analysis for the latest fiscal year. Analysis of justifications by the operations department In case of anomalous performance behavior of some specific terminals, the finance department questions the operations department in writing about the anomalous behavior. The operations department is required to respond to these justifications based on certain facts and figures. After receiving these justifications, you need to verify them. If the answers are justifiable, the questions are removed, the others are then questioned in the monthly CFT meeting.Research Report on the Impact of CNG Products on PetrochemicalsA research report was assigned individually to each finance intern, the topic that was assigned to me was the impact of CNG products on petrochemicals. We were supposed to submit the report on the last day of our internship, we were suggested to interview the supervisors of different finance departments, read articles and news and surf the internet to find out the negative effects of CNG products on petrochemical products. My report was prepared after interviewing many supervisors and researching online magazines and articles, and finally concluded that methane has many positive points, one is the high amount of gas in the country, it is less harmful to the environment and governmentsupport with it. Initially this hit the petrochemical sector very hard, but as the decrease in state support for methane, observable recently from methane prices, and the closure of methane stations are once again leading to an increase in petrol/diesel consumption. Theories/Concepts learned My internship at AMAC was a great learning experience. It helped me gain practical insight into how departments function in such a huge organization. The fact that finance is one of the most important departments in the purchasing process of AMAC, limited liability company, has given me a lot of experience. Computer Concepts and Applications I studied this course in my first semester and this really helped me since Microsoft Excel is a very important application which is used in all organizations. While preparing the monthly reconciliation report, a lot of help was gained with MS Excel, where functions like VLOOKUP, TABLE OF CONTENTS, IF AND HLOOKUP were used. For the other tasks other simple MS Excel functions were used like creating tables, merging cells, etc. Business and Professional Speech BPS was studied by me in my 7th semester and it really helped me a lot because like most of it Temporary employees/supervisors spoke to me in English and I could respond to them confidently and clearly so that it was two-way communication. When I took this course, my teacher helped me gain the confidence to speak more fluently. Financial Management This course really helped me understand financial statements. One of the main problems that was constantly discussed with the trainees for a unique solution was that of Circular debt, which AMAC is facing. I have studied the concept of circular debt in financial management, which refers to the debt prevalent between different companies. Each company is obligated to pay to the other company and depends on the latter for payment. In financial management, while preparing the working capital management report of oil and gas marketing companies, we also analyzed the decline in performance due to circular debt. Pakistani Economic Policy Pakistani Economic Policy was another important course that I studied and realized its importance while serving as an intern in the finance department. While inquiring in the purchasing section, I discovered that the order for the delivery of petrochemical products was placed at least 15 days before. Keeping in mind the economic conditions of the country, the estimated requirement of the country is calculated and the order is placed. According to the confidential information provided, if in case of war Pakistan could survive without oil supply for next 21 days. So the requirement is calculated to keep the country running for the next 21 days without any oil supply. Business Research Methods As part of our internship, each individual finance intern was assigned a topic to research a topic, the topic I was working on. assigned was “Impact of CNG products on POL products”, for this research I was suggested to interview several managers and seniors of my department, as well as other departments. So I personally interviewed some senior employees to complete my research. The research interview skills I learned in the Methods in Business Research course were really useful and my research was supported by many senior employees in the finance department of AMAC, Private Limited. Conclusion for Accounting Internship Report My Experience at