Every function within an organisation contributes to its overall success. This is no less true of the accounting function, which is responsible for a number of tasks that directly impact on the organisation’s ability to meet its objectives.
Let’s take a detailed look at what these tasks are, and how they support organisations.
Producing sales invoices
The accounting function will receive initial documentation from sales made within the business, and uses this to raise sales invoices.
Accountants keep track of these invoices, and ensure that money owed to the company is received. This enables a healthy cashflow, which is the life blood of the business.
The total sales will be recorded in the monthly, quarterly and annual accounts, allowing the business to gain a clear picture of performance that informs strategic decisions.
The accounting function will be involved in collating details about all the costs of a product, and breaking this down to ensure that each product is sold at a price that makes the company profit.
These costs are monitored throughout the product’s life, ensuring that the best price is paid, and that any variances are spotted early and dealt with. This keeps the prices paid consistent, and means that profit remains steady.
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The accounting function carries out payroll each month. This is a huge responsibility, as paying staff is key to the functioning of an organisation; if staff are not paid, they won’t come to work, and operations will collapse.
The payroll function requires information from all areas of the business on the hours and rates of pay for staff, which requires having efficient and well organised processes in place.
The production of management accounts is the accounting function’s most significant role, and it is imperative that the accounts are completed on time each financial period.
Management accounts allow all members of the management team to see how the organisation is performing, and whether targets set at the beginning of the year are being achieved. This allows them to respond effectively, and deal with any discrepancies quickly, so that the organisation can make continual improvements towards meeting its objectives.
The financial accounts are used to calculate the tax payable by the company, and it is extremely important that this is done properly. Tax needs to be paid on time to prevent penalty and interest charges, which would waste funds that could have been spent on helping the organisation to grow and perform better.
It’s clear that the accounting function is essential to the success of any organisation, and it’s important to ensure you have the right skills and knowledge to get it right. If you would like to support your staff to gain a professional accounting qualification, or develop your own knowledge, get in touch below.