An accounting department provides accounting services and financial support to the organization it belongs to. The department usually records the payment made and receive by an organization. Besides, the other responsibilities of the department are to record the inventory, payroll, fixed assets and all other financial elements. The first function or responsibility of accounting department is to identify and record all cash received from sales and from all other sources.
The accounting department has to make sure that the cash is deposited in the appropriate checking accounts of the business and ensure that all the payments are received when they should be. The accounting department also has to make sure that all bills are paid by the company, on time and also at the least cost possible. If there is a discount for paying quickly, the accounting department will usually pay the bills as soon as possible so that the company can spend less money.
Besides, the payroll function of an accounting department ensures that the organization pays its employees accurately, including bonuses, commissions and benefits. They also have to make sure that they have not made any mistakes in paying taxes and payments to government on behalf of the employees. Furthermore, the accounting department has to check the cost of inventory over a specific period against its revenues to ensure that the cost of raw materials and others do not negatively impact cash flow.
They are also responsible for keeping track of all purchase orders by customers and keeping files on all liabilities that arise from purchases of inventories on credit. Lastly, the accounting department is responsible for recording fixed assets which could be tangible or intangible on a balance sheet with depreciation and also recording all other financial elements.
The general rule of the Companies Act of the Section 167(1) state that every company and the directors and managers thereof shall cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets and any documents required to be attached thereto to be prepared ...