Roles of accounting department in an organization?

An accounting department provides accounting services and financial support to the organization it belongs to. The department records Accounts Payable and receivable, inventory, payroll, fixed assets and all other financial elements. The department's Accountants review the records of each department to determine the company's financial position and any changes required to run the organization cost effectively.

Accounts Payable and ReceivableThe accounts payable section of an accounting department records goods and services that it receives and the payments it owes, such as inventory from a supplier or other expenses. The department records each accounts payable as a liability and accounts receivable as assets. Assets such as revenue and customers' obligations pay for goods and services. PayrollThe payroll function of an accounting department ensures that the organization pays its employees accurately, including bonuses, commissions and benefits. The department monitors employees' time off, vacation and sick days. It pays the government taxes as well as union dues and other withholding from an employee's paycheck. The department reimburses employees for expenses and makes payments to vendors. InventoryA company's inventory is the goods owned for the purpose of sale. Inventory is usually sold within a year. An accounting department watches the cost of inventory over a specific period against its revenues to ensure that the cost of raw materials, labor and overhead do not negatively impact cash flow. The accounting department tries to find a balance between high inventory levels that satisfy customers but are costly to the company and low inventory levels that satisfy the company's expenses but may dissatisfy customers. Fixed AssetsIn order to function effectively, a company may need machinery, equipment, vehicles and other fixed assets it uses over several years. The accounting department is responsible for recording fixed assets on a balance sheet with depreciation. Fixed assets could be be intangible--such as goodwill or a trademark--or tangible--such as machinery. As the company needs an upgrade to remain competitive, its financial statements will determine what the business can afford.

You can refer to below link for more information.

http://smallbusiness.chron.com/purpose-accounting-department-within-organization-24374.html

Answered by Mansoor Basheer Gombe on 22/06/2012 9:38 pm