Keeping Your Accounting Department in Check

Keeping Your Accounting Department in Check

by Tonia Hedrick, CPA (Senior Manager Greensboro Office)

Developing and maintaining a policies and procedures manual probably doesn’t sound like much fun, and may even seem burdensome, but an accounting policies and procedures manual can be an important tool for an organization’s accounting department. It will clarify roles and responsibilities of accounting personnel, help employees understand how the accounting system works, establish proper communication for new and existing personnel, and ensure effective internal controls over financial reporting.

A well-developed policies and procedures manual helps with consistency in the handling of various accounting tasks. For accounting activities with multiple individuals processing the same types of transactions, either as a primary function or a backup role, adequately documented procedures allows transactions to be processed in a consistent manner, regardless of the individual performing the steps. Documented policies and procedures assist with continuity of accounting processes when used as a training tool for new and existing employees. The manual can also serve as a reference for how and why things were done in the past, as well as currently, in the organization.

Each policies and procedures manual is a unique document customized to fit the size, staffing and business model of the respective organization. Despite each manual’s uniqueness, there are basic components commonly found in a policies and procedures manual: overview of organization, objective of manual, chart of accounts, organizational chart, general policies, internal controls, procedures for various accounting functions, and examples of key forms/documents. Additionally, all accounting policies and procedures manuals should have a common goal of defining policies and procedures for personnel to follow to ensure accurate and reliable financial statements are produced.

The following are some things to consider when developing a policies and procedures manual for your accounting department:
Make sure it is user friendly (i.e. include a table of contents, incorporate flowcharts to illustrate workflows).
Avoid using condescending language.
Gather input from users of the manual. Inquire as to the ease of use and understandability of the procedures outlined. Implement suggestions as appropriate and feasible.
The manual needs to be kept current. Ideally, updates should be made as policies and procedures change. However, the update process may be more manageable if the manual is divided into sections which are assigned to scheduled review periods. The review cycle would facilitate examination and update of the entire manual on a routine basis.
Make sure all personnel are aware the manual exists – and that it is accessible.
After the manual is developed, employee training may need to be conducted to ensure procedures are understood and properly executed.
If you have questions about developing a policies and procedures manual for your accounting department, please consult with your accounting professionals.

Tonia Hedrick

Tonia H. Hedrick Assurance Senior Manager, CPA

Tonia is a senior manager in our firm’s assurance area with over 5 years of experience in public accounting and over 15 years of industry experience. She works primarily with clients involved in the affordable housing industry, including tax credit properties, U.S. Department of Housing and Urban Development and U.S. Department of Agriculture Rural Development […]