Creating Accounting Policies and Procedures

The importance of proper accounting policies and procedures cannot be overstated.  Every organization should have this manual in place to ensure compliance with governmental and grant requirements.

last updated Saturday, March 30, 2024
#Accounting Policies and Procedures #Organised Writing

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John Burson

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CONTENTS

Accounting policies and procedures are critical because they act as a guiding tool in ensuring that your employees work without supervision. Again, they are easily understood, which means that in situations where your business doesn’t accept checks, it would be impossible for any of your employees to accept checks—even when you are not around to monitor them. Drafting accounting policies and procedures isn't easy, but once they are in place, they should enable you to keep the processes simple and standardized.

Here is what to consider:

It’s important always to have organized writing

This means having a separate section for fixed assets, accounts receivable, and accounts payable. Also, consider using number systems when organizing your documentation and ensuring that each policy and procedure is given a number. For instance, accounts payable can be labelled as 1, and accounts receivable given a 2. That means if you are searching for a document relating to bill payments, then you can easily find it on the 1s series.

Consider using a template when drafting the policies and procedures 

It makes it easier to write or understand the documentation. It’s also vital to have a format that is labelled at the top with the document number, date, and name. Additionally, create a “purpose” section which describes the goal of the policy and procedure.

Use the correct grammar and spelling.

Given that policies and procedures are utilized by many people make them concise and accurate to avoid misinterpretations. Try to avoid using people’s names but instead use their positions, and ensure that you are consistent with your writing to avoid any confusion. For instance, if you have a filing bill named “Accounting Clerk,” you shouldn’t rename it to “Filing Clerk” or “Clerk I.”

Ensure that your policies are designed with internal control in mind

For instance, it shouldn’t be the task of the bookkeeper to sign off checks. In fact, any disbursed check should be followed with a sign-off from the manager or owner and should acknowledge authorization of goods and services that were received through the proper channels.

 
 
 

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