Accounts & Finance Department Tasks-1

Accounts & Finance department is the health-checking mechanism of a business. The end result of the company’s operations is reflected in its accounts. The accounts department must always be alert and vigilant. The finance part of the activity monitors the funds flow of the company. It also focuses on minimizing the cost of funds required by the company or on maximizing the returns on the investments made by the company.

Here are some guidelines for implementing an efficient accounting department in the company.

1. Regular Entries and Checking

• The accounting records of the company must be up-to-date. The accounts department must be very punctual in its record keeping.
• We should develop a culture of timely recording of all the transactions.
• All the sales, purchase, payment, receipt and other accounting transactions must be recorded in time and in completeness.
• Ideally, the accounting entries of the day must be completed on the same day. They should not be postponed to the next day.
• The records should be available for checking or reference at any time.
• Accuracy in accounting is of paramount importance. Do the needful to ensure that our accounting data is accurate and reliable.
• Every transaction entry recorded or any document prepared must be checked by someone other than the person who has entered it. Nothing must be unchecked.

2. Filing and Storing of Accounting Papers

• All the accounting documents must be filed properly such that they can be retrieved properly.
• Label the files properly. Have some logical naming method and follow it consistently. Explain everybody in the accounts department about this naming method.
• If the documents are stored in digital form in computers, make sure that the computer files are named properly and stored for easy retrieval.
• The government departments need last few years’ data and documents to be preserved. Our chartered accountant can guide us in this regard.

3. Compliance

• Statements or returns for all the government taxes and levies (e.g. VAT, Service Tax, Excise, Income Tax, Tax Deduction at Source etc.) should be filed in time.
• Corresponding payments of the applicable taxes should be done on time and the acknowledgments / receipts should be stored properly.
• Make sure that we are not late or are not defaulting on any due government payment.
• If we have deducted any tax on behalf of employees or any vendors, the acknowledgments / receipts / certificates for the same should be submitted to them in time. If they are available online on government web sites, they should be informed of the same.
• Various employees related statutory payments (e.g. Provident Fund, State Insurance and Gratuity etc.) must be made in time in the required format with the help of the HR department.
• Some inter-state purchase-sale transactions require submission of specific forms for every invoice transacted. Ensure their timely processing and dispatch.
• Recently, many of the tax returns are to be filed online on government web sites. Somebody should be given a responsibility and authority to do the same. They should work along with our Chartered Accountants as per their guidelines.

4. Data and Software Management

• Train all the persons in the accounts department for using the accounting software properly.
• If we are using advanced enterprise software, give proper rights to everybody as per the requirement and control structure.
• Regularly update the accounting software as soon as new updates are available.
• Take daily backup of important accounting data. At least two copies of the most recent data should be available outside the computer where it is stored.
• Periodically reconfirm that the backed up data can be restored if required.

5. Working Capital Reviews

• Regularly review the following:
  • Stock balances
  • Work-in-progress items
  • Amount receivables from debtors
• Take a decision about slow-moving stock items for slowing down their purchase etc.
• If there are any dead stock items, take a decision about disposing them off.
• Identify the debtors who are consistently paying late. Follow-up with them for payment or renegotiate terms with them.
• Minimize the working capital requirement as much as possible.

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