Have you ever wondered how the accountants from an accounting firm in Singapore complete the accounting tasks that the business owners hand over to them? When they are doing those tasks, they need to follow the accounting procedures. Generally, these are the processes that execute certain accounting functions which are created to suit the company’s risk management policies to complete those functions more efficiently.
Typically, the accounting procedures start with the process of collecting financial documents. Some of the examples include receipts, cash register tapes, invoices, incoming bills, as well as records of salaries. Then, the next step is to reconcile and verify the accounts. The accountants need to log in to the system and verify the evidence they have with the financial information. They need to reconcile the accounts and perform internal and external reporting based on accounting procedures.
The accountants (Also see How Do the Accountants Close the Books?) should make sure that the accounting procedures can record accurate, objective and valid data. Also, they should use consistent and comparable procedures. As an instance, the accountants should not change the method they use in inventory valuation as they wish. If they have decided to record and value the inventories by implementing the first-in, first-out (FIFO) method, they should not change the method of valuation to the last-in, first-out (LIFO) method.
Another example is the accounting (Also see Comparing Computerised Accounting and Manual Accounting) procedures executed when determining the employees’ payroll. The personnel in charge may need to collect timesheets before reviewing and approving them. This is to make sure that the employees have worked for the said hours. Then, they need to apply the wage rate for the work that the employees have performed. After that, they can use this amount to identify the gross salaries and net salaries of the employees.
Besides, in the billing procedures, the accountants need to issue invoices to the customers. To do this, they need to collect information about the invoices, create the invoices and issue them to their clients. This means that they need to review the billing information daily and confirm the prices before processing the order. After reviewing the order, they need to generate the invoices and send them to the customer.
As the accounting procedures vary, the skills that the accountants should master to record the information into the accounting (Also see The Accounting Estimates That the Accountants Use) systems are different too. If the accountants have applied the correct accounting procedures, the process of recording transactions can be very efficient, and it would not take a long time. Also, accounting procedures enable people to cross-verify the information recorded. These procedures make sure that the companies follow the legal requirements too.
In a nutshell, the accounting procedures are the processes that the accountants would use when performing accounting (Also see What You Need to Know About Reserves in Accounting) functions. With the help of these processes, they will be able to manage the information better as the transparency will increase. Also, proper accounting procedures will facilitate the process of preparing financial statements.