Payment Policy

Policy brief & purpose

Our Payment company policy outlines how we are regulating our internal payment
procedures to external parties. This policy shall guide us through our internal
payment processes to ensure that we can pay suppliers on time, and maintain good
business relationships with suppliers. Knowing when we can expect payments to be
made to your suppliers can also help you manage your own internal processes for
requesting for payment and releasing payment to your vendor.

Scope
This policy applies to all companies in the Kargo group and all supplier payments.

Policy elements
This policy shall discuss the following conditions surrounding payments within the
Kargo group, including:

 Required documentation
 Procurement to payment request approval
 Payment release approval
 Payment terms
 Payment cycle

Required documentation
All transactions requiring payments must be supported with the following
documentation:

 Valid / Original Invoice

 Tax ID (Entity or Individual)
 Copy of Signed Contract approved by head of department (for services)
 Purchase Requisition Form approved by head of department (for goods)
 Valid VAT Slip (if any)
 Payment Request Form approved by head of department
 Do’s and don’t’s

Valid / Original Invoice

 All invoices must be in accordance with our invoice requirements, otherwise

the document will not be processed for payment. Invoices for all Kargo group
companies should be issued according to the following requirements and
contain:
 Supplier name
  Supplier address
 Supplier tax ID
 Supplier bank
 Supplier bank account number
 Supplier bank account holder name
 City or regent (for local banks where the account is open for bank
accounts other than BCA)
 Bank address
 SWIFT CODE (for overseas banks)
 Invoice date
 Invoice number
 Kargo’s purchase order number (if applicable)
 Supplier's product number (if possible)
 Description of products and/or services delivered or, if possible,
supplier’s product name
 Quantity
 Initials of the ordering person at Kargo (not required if Kargo purchase
order is used)
 VAT amount specified
 Invoice amount
 Currency

If any of the above-mentioned information is missing, the document will be returned

along with a request for a new, corrected invoice.

 The most preferable way of delivering invoices is through submitting hardcopy

of the documents.
 In case down payments are required prior to delivery of products or services,
please make sure that a copy of the original invoice is provided, along with a
valid VAT slip (if any).
 We pay only correct invoices.
 In case of any disagreements concerning content of invoices, full crediting is
claimed along with a new corrected invoice.

Tax ID (Entity or Individual)

 When it comes to payment, Kargo is acting as a state treasury, and is

responsible for remitting VAT (if any) and withholding taxes. Tax ID (NPWP) is
required for serving these purposes.
 Submitted invoices must be accompanied by a copy of the counterparty’s tax
ID.

VAT:
 Entities that have gross revenue more than IDR4.8billion are required to
register for PTKP (‘’VAT-registration’’).
 Individuals typically issue invoices without VAT.
 For all invoices billed to Kargo, please ensure that the accompanying VAT
slips have at the minimum, the following information:
 1. the name, address and NPWP of the taxpayer delivering the taxable
goods or services;
2. the name, address and NPWP of the purchaser;
3. the type of goods or services, the quantity, the sales price or
compensation and any discounts;
4. the VAT that has been collected;
5. the LST collected (if any) on luxury goods;
6. the code, serial number and date of issue of the invoice;
7. the name and signature of the authorised signatory to the invoice.

The validity of particular tax invoices is a key to successfully claiming the input
tax as a tax credit. These VAT Input can be utilised to offset against Kargo’s
VAT Output. Any incorrect information may result in VAT slips being
unusable, ie: incorrect quotation of Kargo’s tax ID.

WHT:
 All counterparties that are entities typically have a corporate tax ID. However,
in cases where the companies are initially set up, they may not have a tax ID
readily.
 Similarly, individuals may or may not have a tax ID, depending on their tax
registration status.
 In the absence of a tax ID, these counterparties are charged a tax surcharge
on top of the standard rates.
 Corporates that do not have tax ID are charged a 100% additional surcharge
on top of the standard rate. Tax rates may vary depending on the nature of
services. For example: services subject to WHT 23 of 2% qualifies for a 4%
tax rate in the absence of a tax ID.
 In contrast, individuals are set on a progressive income tax. Individuals that
do not own a tax ID will be charged a 20% surcharge on top of the standard
rates.

For example: an individual earning within a taxable income bracket of up to

IDR 100million will be subject to a tax income of 3% (from 2.5%).

 All invoices are assumed to be gross amounts, and are therefore subject to
withholding taxes, unless otherwise agreed upfront in the form of a signed
contract.
 Note that the amount of withholding tax depends on the nature of services
being rendered to Kargo.
Copy of signed contract

All invoices for services above IDR25 million must require a signed contract
by both parties to provision against cases of undelivered services. For
payment purposes, all contracts must at least, contain the following agreed
provisions:
1. Terms and conditions of services
2. Payment terms
3. Fees and payments
4. Taxes
It should be made clear whether the amount charged is on a
gross or net of tax basis.
5. Other information, as follows:
Bank name
Bank account number
Bank account holder
City
SWIFT CODE (for overseas banks)
Tax ID

 Procurement to payment request approval

o All procurement processes are submitted in the form of an email
request, approved by head of department.
o All payment requests must be approved by head of department.

 Payment release approval

o All payment releases are input by accountant and approved by head of
finance.
o All payment releases above IDR100million/batch requires a prior
signatory approval by Yodi.

 Payment terms
o Standard payment terms are 30 days.
o Due date is calculated by applying agreed terms to the latter of valid
invoice presented or goods receipt or services rendered date. All
invoices are paid on our calculated due date.
o If an invoice falls due during a weekend or holiday, the payment
transaction is executed on the following business day.

 Payment cycle
o We make payment on a daily basis where we are currently scheduling
two payment batches per day:
1. At 12:00
2. At 16:00
 o It is mandatory to submit your payment at the latest 2 hours before the
payment batch is executed. Any late submission will be processed in
the next batch.
o Please note that there is a lead-time for processing payments to non-
BCA accounts.

 Do’s and don’t’s

Do’s

o Submit your payments timely.

o Update finance with the latest payment status with your vendor.
o Obtain approval for your procurement to payment requests.
o Provide valid, complete and accurate documentation prior to requesting
payment release to finance.

Don’t’s

o Provide incomplete, inaccurate or invalid documentation for payment

release to finance.
 Finance needs to perform verification to documentation prior to
making payments to ensure completeness and accuracy of
numbers presented in the documents.
 A three-way match between signed contract, invoice and
deliverables will be performed to ascertain validity of
transactions.
o Provide bank information that is not accurate or complete, and that
does not match with that of contained in contract and invoice.
o Submit untimely payments to finance, resulting in overdue payables.
Team should aim to provide finance with all of the required
documentation for processing payments immediately after incurring
expenditures.