Business organizations usually create an accounting manual, which specifies all accounting policies, guidelines, procedures and standards for a company’s accounts. Included in the accounting manual is the classification of accounts, an outline of accounting rules to follow, and rules specific to the organization. Depending on the type of business entity, accounting manuals vary from company to company, but in general serve the same purpose at each company, even using similar outlines. That purpose is to ensure accuracy and consistency in accounting methods utilized by every individual within the firm handling accounting related tasks and procedures. The manual typically includes several different sections to cover all aspects of the accounting function.
Usually the accounting manual will begin by outlining the purpose of the document, explaining the scope of the documentation, and articulating the responsibilities required of those reading the manual. This will typically include a list of exceptions to the rules found within the manual, in addition to explaining management’s role and responsibility in ensuring adherence to the manual. These sections most often serve as the introduction to the manual.
Organization of the accounting and finance departments are usually covered thereafter, providing employees and contractors with a clear understanding of the various roles included in the company’s structure. Responsibilities of each department are outlined and specified in this section as well. The next few sections will usually explain management accounting procedures, methods and policies as related to reporting.
Focusing on the central aspects of accounting usually follows the sections on management accounting and reporting. Including the planning process, responsibilities associated, communications required and authorized authorities, the next few sections deal specifically with the framework on accounting policy and procedure within the organization. Other topics covered will often include systems used in the accounting process, internal controls, audit procedures, security, documentation, cost accounting and transactions.
Rounding out the accounting manual, the last several sections will usually cover a diverse range of accounting procedures. Often covered are administrative accounting procedures, cash accounting, asset and inventory accounting, revenue accounting and purchase accounting. Final sections will usually include specifications for resource management, provisioning of accounting resources, accounting infrastructure, and the expected work environment. Additionally, many accounting manuals will also have a section dedicated to human resources, detailing human capital requirements and expectations for filling various roles within the accounting function. Coverage of the human resources aspect is considered vital to many organizations for assuring that the accounting function is properly staffed with qualified individuals.