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Creating Accounting Policies and Procedures


paperfree Aditi Bansal


Updated on Sunday, July 09, 2017

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.

tags  #Accounting Policies and Procedures  #Organised Writing #

 

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 aren'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 to always have an 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 ensure that each policy and procedure is given a number. For instance, the accounts payable can be labeled 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 labeled 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 a lot of people, makes it concise and accurate to avoid misinterpretations. Try and avoid using people’s names but instead use their position and ensure that you are consistent with your writing to avoid any confusion. For instance, if you have a filling 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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