Is your business experiencing operational issues in accounting? Check out this article to learn how to start automating accounting processes.
The Key Functions in an Accounting Team: Explained!
The accounting department is a vital part of any successful business. Learn more about the different accounting functions and how they help you grow.
The accounting department is the unsung hero who ensures the financial stability of your business. Without a reliable team, there is no way to properly keep track of income, expenditures, payroll, and other financial compliances.
Accounting departments are often split into different sections to meet the different financial obligations of a business. These teams are assigned varying roles and responsibilities that help organise and streamline the process.
Accounting Team Structure
The accounting department processes the daily financial activities of the company. They are led by the Chief Financial Officer (CFO), responsible for strategising the company’s financial directions, and the Financial Controller, who makes tactical decisions regarding accounting policies.
Under them are a team of managers, supervisors, and accountants who specialise in different functions.
The 8 Key Functions in an Accounting Team
Accounting teams have several core functions that keep a business running. We list them below.
Accounts Payable (AP)
The AP department handles money that exits the business and records them as a liability. They track the goods and services purchased by the company to ensure that all expenses are paid on time. They also keep an accurate record of different suppliers’ payment information for processing.
Accounts Receivable (AR)
AR deals with money or receipts that the business receives from customers for goods and services rendered. They help keep track of invoices and remind customers to pay their dues. The AR team may also analyse the payment behaviours of their clients to formulate better tactics when it comes to collections.
Bookkeepers update financial information by completing data entries, collecting transactions, and monitoring financial records. They use a document known as the general ledger, which is essential in tracking the company’s financial position and keeping up with regulations.
Inventory Cost Management
This team handles factors that affect inventory costs like raw materials and labour. Its main goal is to keep initial costs low while preserving product quality to satisfy customers. They may also decide the inventory they need to maintain working capital at optimal levels.
The budgeting team ensures that all departments in the company stay within the set financial limits to cover necessary expenses. It is their responsibility to keep the organisation from overspending its resources.
The internal reporting team prepares financial statements to help companies make better monetary decisions and predict budget outcomes. The team creates these reports regularly to gauge the profitability of different strategies and how the business can improve them.
Tax and Financial Control
This group ensures that the business remains compliant with financial laws. It is also responsible for keeping track of changes in tax laws and how they affect the business.
The payroll team helps calculate the employees’ monetary compensation for their work. This department also ensures that everyone’s earnings are up-to-date and accounts for all factors impacting their pay.
It’s All in the Books
The accounting department plays a significant role in a company’s success, but streamlining your processes will be difficult without the right tools or strategy. Luckily, Spenmo offers a unique solution to your financial management needs.
Spenmo is an end-to-end payables software that brings internal spend management, automated bill payments, approval workflows, and accounting reconciliation into an integrated view. With it, you can save up to 50 hours on invoicing-related work, with some companies having already saved over $10,000 every month.
Book a demo today to learn more.