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Key Functions of Your Accounting Department

08 May 2021

Businesses are influenced by entrepreneurial decisions, which may come overnight. This flexibility can impact other departments in the organisation, so keeping the accounting aspect strong is critical for continuous business growth.

But what does the accounting department do in an organisation? We'll see that in this read.

Important roles of the accounting department

Differing a bit from what certain persons may think, here are the key functions of any department handling a business' account:


  • Money out: Paying out to external persons and recording the payments.
  • Money in: Processing payments that come into the organisation.
  • Payroll: Ensuring that everybody, including the government, gets their pay.
  • Reporting: Preparation of financial reports like Balance sheets, P&L, budget, etc.
  • Financial control: Implementing measures to prevent theft, errors, and fraud.


Let's look at these essential accounting roles in more details.

Accounts payable (money out)

There are people (vendors) who provide an organisation with basic and necessary items, equipment, services, etc. Paying them on time is very important. Another responsibility of accountants London is to watch out for money-saving opportunities. For instance, paying some vendors on time may attract some discounts or incentives. The accounting department should know if anything like this is available. Organising a schedule for accounts payable is important to avoid charges on late payments.

Accounts receivable and revenue tracking (money in)

It is critical that the account department monitors and keeps records of all the monies that come into the organisation. This includes any outstanding invoice. Customers should be reminded firmly and politely to pay their invoices on time. It's the crucial role of accounts payable to create and track invoices.

Payroll

The employees relevant to the organisation's smooth operations need to be paid for their working hours and on time. The accounts department holds this responsibility. Again, they ensure state and federal government taxes are assessed and paid without delay.

Reporting and financial statements 

Proper data collection is essential for preparing financial reports necessary for forecasting, budgeting, and other primary decisions. Again, these reports are your communication tools with other bodies like banks, investors, stakeholders, professionals, etc., that help your business grow.

Financial controls

This is all about reconciliations, sharing responsibilities, and adhering to the GAAP standards of accounting principles. All of these are done to comply with the legislation and prevent theft and fraud. The financial controller establishes processes and systems to execute this role flawlessly.

What are the important positions in an accounting department?

A lot of business accounting units have significant personnel holding relevant offices to implement proper financial accountability. Since you know the responsibilities of the accounting department, it's important you also know the brains behind the financial sector of an organisation:

Chief financial officer (CFO)

They're the head financial executive of big businesses. The supervision of financial strategy, business health, and management of the other financial departments rest on the shoulders of the CFO. Again, they're responsible for raising the business over harsh market conditions and through every growth stage. Poised to sustain the fiscal success of the business, CFOs use their financial knowledge to advise top management on the financial implication of any decision taken.

What their duties cover include:

  • Financial planning
  • Control and reporting
  • Short and long-term business strategy
  • Mergers and acquisitions
  • Hedging
  • Cash management
  • Corporate finance
  • Internal risk management
  • Auditing and accounting

Financial controller

Together with the CFO's, COO's, and financial directors, the financial controllers are important London accountants saddled with preparing, analysing, reporting, and accounting for the company's finance. They concentrate on direct financial problems and management.

Treasury manager

He or she formulates and develops treasure policies. They develop unique banking relations, spot juicy opportunities for investment, lower finance cost and improve credit facilities.

Accounting manager

Manages the organisation's accounting activities by establishing and implementing accounting principles following auditing policy and mandatory requirements. They don't handle or negotiate but report on the financial and cost set of accounts.

Chief accounting

Same duties as accounting manager; just a role shift following job title.

Accounting supervisor

Same duties as accounting manager; supports the role as a team member.

Accountant

Bears the important task of measuring and interpreting financial information. Their job outcome maintains compliance and forms the basis for advanced financial strategies.

Bookkeepers

Function in the daily recording and assessment of basic accounting data. Their role is usually not strategic.

Final words

The accounting department carries out several other responsibilities. The above are just a few of the basic roles and responsibilities. It all comes down to your kind of business. 

Bear in mind that both key and general accounting functions have to be performed excellently for optimum business success.

Need assistance with your accounting department? Contact Accountants in London for the best accounting services.


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