All businesses, no matter how large or small require either an accounting department or an accountant.
For small businesses having a qualified accountant is essential. Some small businesses may also choose to have one employee with a background in finance, perhaps with a qualification such as AAT. This will enable the business to function and adhere to most accounting policies set out by the UK Government (taxes), Europe (duties, EU trade) and the World wide policies. For a small business it is vital that the accounts are correct and therefore must be signed off by a qualified accountant (CIMA or ACCA) at the end of every financial year.
For larger businesses, it may be necessary to employ a full department of accounts people. There are many different functions within the accounts department of a business.
There will generally be a small Credit Control Team, whose responsibility it is to chase payments from customers, deal with customer queries and allocate payments as they arrive within the business.
The next role to consider is the role of Purchase Ledger; often this will be a one person role (depending on the quantity of invoices being received). This role is here to deal with all incoming invoices from suppliers, by getting authorisation from the correct departments in order to make payments efficiently so as to not have accounts put on “hold”.
Each accounts department will also have an accounts assistant, someone who can do many small jobs within the department, but this role is as crucial as any other in the department.
The final role directly in the accounts department in a business will usually be the Management Accountant, who oversees the day to day running of the office, but also prepares the monthly accounts to be sent out to the directors/managers of the company. These accounts are called the Management Accountants, and comprise of a Balance Sheet and a Profit and Loss Account. The information contained within these accounts are crucial to the running of the businesses and allows managers, directors and even share holders to make decisions based on the profitability of the company.
The final person in the line is the Financial Director, who the Management Accountant will report to. The Financial Director will be the person to ensure that everyone adheres to the policies of accounting and will keep the accounts department up to date with any changes to them, such as changes in VAT rates.
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