Setting up a new Accounting Department

Franklin Osuji Onuwa Written by Franklin Osuji Onuwa · 2 min read >

Hello African Musings, It’s me again! Talking to myself of my own free will, of course. No one is forcing me to do this; not like there is a reward attached to this blogging. So, I’m setting up a new office in Chevron, Lagos; and being the CFO, I’m saddled with the responsibility of setting up a new Accounting department. Here are some of the qualities I intend for the accounting department to possess.

  • Timeliness

An accounting system that is timely is an asset to any organization because it presents information to users as and when required. A timely accounting system is able to produce the required reports for decision making just in time to make major decisions.

  • Cost-Effective

The Accounting system should have the goal of saving costs. When implementing a new accounting system, the cost of operating it should not be greater than the benefits it provides.

  • Informative

The primary goal of an accounting system is to ensure that management, the board of directors and other users of financial statements get sufficient information necessary to enable them to make informed decisions for the business. In short, an informative accounting system should be able to satisfy the needs of various users like managers, creditors, owners, and government.

  • Reliability

A reliable accounting system produces information that is free from bias. It faithfully represents what it seeks to represent. This information should be trustworthy and dependable so that users can make decisions. For the information to be reliable, it must be neutral and faithful in representing the general condition of the firm.

  • Manages Timely Payroll

The accounting department is responsible for managing and updating all payroll information for existing employees in a given business. One objective is to provide accurate payroll information and payments to employees. Employee earnings must be tax-deducted before being issued to the workers in question. In addition, the accounting department must have the goal of sending out these payments in a timely manner despite other projects or deadlines at hand.

  • Keeps Track of All Accounts Receivable

Accounts receivables describe the accounts for customers who owe the company money. Customers buying products and companies buying continuous services from the given business fall into this category. One objective for all accountants working in the accounting department is to follow up on all outstanding receivables, meaning contacting the buyers to see when the payments will be made. At the time of sale, an invoice is issued with the payment date.

Board members and executives often have meetings surrounding the issues of increasing profits without harming the quality of production. If budgetary changes need to be made, the accounting manager often offers his input on the changes, as he knows how the company stands financially. One objective is to offer changes and solutions that keep the company’s net worth balanced and ensure the budget has a positive profit figure each month despite the changes made.

  • Contributes to Financial Reporting

The accounting department keeps updated entries of company income and outgo and provides that information as the basis of preparing the company’s quarterly and annual financial statements. The department ensures that financial reporting adheres to accounting standards.

  • Provides Customer Service

Since accounting representatives often contact accounts receivables to collect payments, a common goal is to provide customer services and information whenever possible. Common department goals include answering inquiries or emails within 24 hours, paying invoices to the company within 10 business days of receipt, addressing any surcharges made to customers who missed a payment deadline, and offering information regarding current invoices.

Thank you. See you next week, bye!



Utannah Dania in General
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