Why Accounting System in more Important

#accounts #finance

Hi Friends, I had spend almost 30 Plus years in Corporate Finance and Accounts in different type of industries . Whenever I have joined the company, I find people in the Accounts Department to sit late hours in the Month End , Year End . I have asked the team why you people struggling to close the books on month on month basis even after using the reputed ERP . No proper answer from them. When I have asked them what it our company business model and what are all the income streams we have, except few , no one have answers. Within a month time , I have changed the total atmosphere and never allowed any team member to sit for late hours even before the Board Meeting days. This has happened since because I always study the business from the scratch and understand their MIS requirement and implement the controls in the ERP or whatever the systems and synchronize with the reporting tools so that the report will be taken on completion of all the entries

The accounting entries to be monitored regularly so that there will not be any last minute surprise in the month/year end. This will help us to provide correct information to top management and also to other stake holders.

The information given by Accounts/Finance team is a key data for the decision making on acquisitions, getting new loan for expansion etc. So for that the information should be stored in a structured way and the ERP/Accounting Software has to be modified with controls as required for the business. I find most of companies are using the ERP only accounting purpose and for MIS purpose they are maintaining the information parallelly in the Excel etc. This will lead to manipulation of data and also time consuming.

Apart from the company stakeholders, the statutory authorities like Income tax, GST etc are believing the information provided by the Accounts team. So it is the duty of the accounts team to keep the data in a such way that to give the information to different authorities in their formats. For this the person who is heading the accounts team to understand the different requirement and make the system to capture that during the time of data entry level itself so that report can be taken at any time

I will give the detailed analyses for the above in the coming days