Best Accounting Practices

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World Finance Reviews

Before going to discuss the best practices of accounting, we need to understand what accounting practice is.  The practices of accounting can be simply defined as the accounting section of any organization to adopt some processes and establish internal controls. These processes are followed for all transactions of that organization and the complete accounting cycle and up to the preparation of complete financial statements. To establish the proper accounting practice or we can say to implement best accounting practices, we are required to keep in view the following main points under consideration: -

1.     Billing dates and shipping dates should be matched, the procedure of payment of overtime to employees should be matched,

2.     It may be preferred that payment may be made to the supplier before due time or up to due time,

3.     For calculating the depreciation of all assets (Fixed) the method should be the same.

4.     There should a defined system to correct the errors from the process.

5.     There should be routinely rechecking of all systems and internal controls either they are working properly or not.

6.     It is also important that the staff should be well trained, and their capacity building sections should be held on an internal basis. It will help them to work efficiently and implement newly updated advancements in accounting.

7.     It should be ensured that the changes which were made during the rechecking or examination of the process, are implanted, or again ignored. Because sometimes the changes are being ignored by the employees because they were not comfortable with the changes.

8.     The flow of the process should be proper and streamlined. It should be kept in view by the top management that there should no difference between the authorized processes and the actual processes.

9.     There should be a mechanism for correcting errors from the system. The effectiveness and efficiency should be the top priority in the whole accounting system.  

10. The accounting software should be friendly with the organization and the system should be updated and enhanced as per the recommendations of the users of the software with the approval of the top management of the organization.  

11. There should be a control mechanism that the expenses may not exceed the budget expenses if it happened then proper approval should be sought from the competent authority before the closing of that financial year.



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