Do you have an accounting department in your company? Instead of having one, most small businesses may choose to engage an accounting firm Singapore as hiring in-house accountants may be too costly, especially for start-up companies. Doing so can ensure that all the business books are well-organised, and all the financial statements are accurate and can represent the company’s financial position. However, as your business grows, you may consider establishing an accounting department in your company to cater to the increasing need of getting piles and piles of accounting tasks done quickly.
The responsibilities of the accounting department include a lot of administrative functions. Although these functions will be treated as “back office” activities, all the companies will need them so that they can run their business activities smoothly. Listed below are some tasks that the accounting department is responsible for:
– Accounting for payroll
The accountants who are responsible for payroll (Also see Essential Audit Objectives for Payroll Audits) should collect information from the company’s human resource department on the time that the employees have worked as well as their pay rates. Then, they need to calculate the tax and any other deductions that they should make from the employees’ pay before issuing the amount of net pay to the employees by using cheques, direct deposits or by cash.
– Accounting for taxes
The responsibilities of the tax accountants are to estimate the sum of taxable income (Also see Importance of Statement of Comprehensive Income) the company may earn and pay income (Also see What Can You Find in an Income Statement?) tax to the government regularly according to the amounts they estimated. Also, they need to issue tax fillings in other areas like sales taxes, property taxes, and so on.
– Collecting payments
The company’s accounting department should track the outstanding invoice payments from their client and collect the payments from them by using various methods such as attorney letters, phone calls, as well as emails.
– Billing invoices
This means that the accounting department should gather information from the sales department as well as the shipping department. Then, it needs to create invoices by using that information and send them to their clients.
– Generating financial statements
The reporting group in the accounting department should create adjusting entries so that the initial financial results of the company will comply with the applicable accounting frameworks. Also, it should write some footnotes and attach them in the financial statements (Also see What is a Financial Statement Review?), as well as release the company’s financial after each reporting period has ended.
– Internal reporting
The accountants in the department who are responsible for cost accounting should provide the management with considerable values. To achieve this, they should calculate the profitability of different client groups, products, services, product lines, stores, sales region and more. The management may change the areas of analysis regularly so that it can see the business from various aspects and at the same time, place the growth of the company’s financial results as the top priority.
– Settling the accounts payable
The accountants who are responsible for this should collect the supplier invoices as well as the employee expense reports. Then, they need to confirm that the amounts are authorised for payments before issuing them to the recipients on the dates they have planned for those payments. Also, they need to pay attention to any early payment discounts and determine whether taking those discounts will be economical for the company.
There is a high possibility that the company will integrate a lot of controls in the areas mentioned above.