There is no more critical aspect to a business than to implement an effective accounting program. Businesses will pay thousands of dollars in fines if they fail to monitor their system. Smart business people understand this.
So what goes on in accounting and bookkeeping departments? What kind of duties do this folks do when at work?
The accounting department records any payments or cash received from customers or clients of the business or service. One very important responsibility of the accounting department is to ensure that the funds are correctly deposited into the appropriate bank account. They also decide how money is spent and budgeted. They also ensure that enough money is available for the payroll folks to disperse payroll checks. They also ensure that bills are paid, specifically payments owed to suppliers and financial institutions. Some should also be invested.
Contrary to what most people may think, accounting and bookkeeping is not the same thing. Bookkeeping is really one function of accounting. Accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers.
Payroll is probably the most important responsibility or process in a company. It is a big job, but all payroll activities must be recorded and journalized in the company books for each and every employee. The payroll department has to ensure that the appropriate federal, state and local taxes are being deducted. Every employee can see what taxes have been withheld from their paycheck by looking at the pay stub. They usually include income tax, social security taxes plus employment taxes that have to be paid to federal and state government. Other deductions include personal ones, such as for retirement, vacation, sick pay or medical benefits. It's a critical function. Some companies have their own payroll departments; others outsource it to specialists.
Bookkeepers perform all manner of record-keeping tasks. Some functions are:
-They design and construct spreadsheets that outline entire business processes which are critical to the business - the buying, selling, transferring, paying and collecting.
-Bookkeepers also make entries of the financial effects into journals and accounts.
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