Small Medium Enterprise business, commonly known as One-Man business in Nigeria due to the nature and structure of the business, often have elaborate Job functions for the accountant of such companies where the accountant is burdened to take on functions beyond standard accounting duties. There is no delegation of duties. The accountant serves as receivables manager, payable manager, inventory manager, and cashier among others. This can be cumbersome for such a person especially people with little or no job experience.
Aside from the theoretical knowledge of accounting taught at school and the use of certain accounting software or even Microsoft office. This article provides insight into the duties of a functional accountant in a small service firm.
Internal Control System.
What makes the work of the accountant smooth is a good internal control system in place. This will spell out the process of activities to carry out. Internal control includes a set of rules, policies, and procedures an organization implements to provide direction, increase efficiency and strengthen adherence to policies. The accountant needs to understand how the business is run and set up a proper internal control system if none is in place.
The accountant serves as the bookkeeper in SME. He/she is responsible for the keeping of records, maintaining of files which contain source document. The keeping of records can also be carried out with the use of accounting software this is called automated bookkeeping. A file should be maintained for each
The accountant ensures that invoices are raised for every job or project that has been agreed upon. In raising of invoice ensure that appropriate information is included on the invoice such as bank details for payment and TIN for remittance of withholding. The accountant should ensure that VAT is charged on the appropriate figures and where there is a discount, it is well calculated.
The duties of the accountant do not end with invoicing alone, the accountant should ensure proper follow up on the invoice sent to the client. The follow up can be via email, calls and personal visit. The accountant is to ensure that payment terms are met with. Where applicable, payment advice should be requested from the client upon receipt of payment. This ensures identification of the invoice paid for and any deductions made on the invoice.
Other duties of an accountant in an SME is to ensure that bills are received from suppliers for every supply. The bills should be recorded in accounting software and ensure proper follow up of payment. When payment is to be made, the appropriate tax deduction should be applied. This ensures that the company complies with standard regulatory requirements/expectations regarding tax.
The accountant is to ensure that the company has enough cash at the bank to meet short term financial obligations. The decision made by the company is to ensure that the company is liquid at all times. The accountant is to ensure that receivables are collected so that the company will be liquid.
At times the petty cash or float is in charge of the accountant, he/she must give an account on the float given. A record should be kept for this purpose. If the company has a cashier for this, the accountant is to supervise the accountant and ensure that there are a supporting document and approval for all money spent.
The HR prepares the payroll but at times the accountant is given the responsibility of preparing payroll, in compiling the payroll the accountant is to ensure that appropriate deductions are made and approval given before payment.
Monthly, bank reconciliation should be carried out to ensure that the cash book aligns with the bank statement, the report should be printed out and documented. Apart from a bank reconciliation, receivables reconciliation of each customer balance should be carried out. The accountant is to ensure that the receivable balance on his/her book aligns with the customer book. This goes for supplier reconciliation as well.
The end product of the accountant work is a report, the accountant should be sensitive in the content of his/her report. The content of the report depends on the specification of the manager but the common report is Profit and loss, balance sheet, cash flow statement, customer balance, vendors balance and graphical representation of the report.
The accountant also performs few tax responsibilities such as payment of VAT and WHT on the 21st day of the month following the month of transactions to FIRS, payment of PAYE on or before 10th of the month following the month of deductions to LIRS and payment of Pension to relevant pension administrator. Also, at the beginning of the year, there is a need for an annual return declaration. You can consult your company tax consultant for more details or visit our website to speak with a consultant.