What is internal accounting? Describes the work of internal accounting in a business, including: warehouse accounting, payroll accounting, sales accounting, general accounting…
I. What is internal accounting? Job description of internal accounting in a business
Internal accounting of an enterprise is the activity of collecting, processing documents, recording, summarizing and controlling activities related to assets actually arising at the enterprise.
Accordingly, internal accountants must ensure recording and monitoring of all daily accounting activities such as:
- Issue, check, control valid and reasonable internal accounting documents and circulate them in the correct order;
- Accounting for internal accounting documents;
- Keep internal documents properly;
- Supervise and perform appropriate work for other internal accountants;
- Prepare weekly, monthly, quarterly or ad hoc reports as required by business managers.
In addition, internal accountants can be assigned tasks of statistics and analysis of actual production and business data of the enterprise in order to report and advise executives to have a true and accurate view of the enterprise’s financial situation.
However, each business has different scale and operating method, so there will be different specific jobs.
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II. Classification of internal accounting work, what does internal accounting do?
There are many areas of internal accounting, an accountant can perform one or more areas of accounting depending on the size of the company. Specifically including:
1. Fund accounting
Fund accounting (payment accounting) has the following tasks:
- Take on the role of implementing, supporting and controlling cash funds for the company;
- Prepare, check and compare revenue and expenditure documents (receipts, payment vouchers, etc.);
- Manage, support and conduct verification of the authenticity of cash receipts and disbursements in the company;
- Posting entries related to cash transactions;
- Fully and accurately update data, time of receipt – payment – cash balance in the cash book;
- Report according to reality.
2. Bank accounting
- Prepare, check and monitor payment authorization documents, withdrawal checks, cash deposits, foreign currency purchase and sale documents… according to company needs;
- Monitor bank account fluctuations to report to superiors for management planning;
- Post related entries;
- Prepare reports related to bank accounts as required by superiors.
3. Warehouse accounting
Normally, warehouse accountants will undertake the following tasks at the enterprise:
- Prepare, check and compare import and export documents (import notes, export notes, delivery and receipt minutes, etc.);
- Manage, support, and perform verification of the authenticity of import and export activities in the company;
- Prepare import – export – inventory reports based on actual unit occurrences.
4. Payroll accounting
Payroll accounting specifically does the following work:
- Record and promptly and fully reflect the current status and fluctuations in the quantity and use of labor time;
- Calculate accurately, promptly, and in accordance with policies and regulations on salaries, bonuses, benefits, insurance, etc. to be paid to employees;
- Conduct inspections of compliance with policies and regimes on labor, wages, social insurance, health insurance, and union funds;
- Prepare reports on labor, wages, social insurance, health insurance, and community insurance within the scope of accountant’s responsibility;
- Organize analysis of labor usage, salary fund, social insurance fund, health insurance fund, trade union…
5. Sales accounting
Sales accountants will perform tasks related to business revenue and manage sales revenue and expenditure. Some of the main tasks related to sales accounting are as follows:
- Update sales price and quantity indicators and notify relevant departments;
- Issue sales invoices to customers and attach related documents such as delivery and acceptance reports, acceptance reports, etc.;
- Enter sales figures for tracking;
- Check, control, support collection, debt collection statistics;
- Generate sales data reports;
- Prepare sales list reports and accounts receivable reports by sales period or as requested by superiors.
6. Accounts receivable accounting
The daily work of an accounts receivable accountant is mainly related to accounts receivable (receivables – payables), including:
- Identify debt;
- Review debt payment status of each subject based on contracts and orders;
- Edit supplier and customer information every time there is a transfer or change;
- Participate in urging and collecting debts;
- Prepare reports on the status of debt settlement;
- From actual accounting operations, make reports on debt status, make debt collection plans to implement and report.
7. General accounting
General accounting plays a very important role in a business, because this job requires comprehensive coverage from the stage of collecting and processing data on daily accounting documents to the reporting stage.
Depending on the business situation, the general accountant can take on the entire task or compile it from accountants to analyze data and prepare reports for presentation to superiors.
In addition to the above fixed-time tasks, the general accountant must also coordinate with the chief accountant and other accountants to:
- Assign and supervise the work of other accountants;
- Participate in inspection work at departments and units;
- Propose solutions to outstanding financial and accounting tasks and errors of the enterprise;
- Inventory and manage documents, records, and accounting books within the prescribed time limit;
- Analyze data on financial reports and participate in explaining and settling taxes at the enterprise;
- Make adjustments to corporate tax payment activities as required by tax settlement agencies;
- Establish and maintain external relationships such as with the Tax Department, banks, suppliers, customers, etc.
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8. Chief Accountant
The chief accountant plays a very important role in managing and monitoring the financial situation of businesses and organizations, and is an important link to provide the most accurate data on the financial situation of the company. Therefore, the chief accountant has many tasks, specifically:
➨ Manage all accounting departments
As the person with the highest authority in the accounting department, responsible for problems related to the financial activities of the enterprise, the chief accountant needs to:
- Management and training to improve the performance of the entire enterprise and accounting department;
- Take on tasks such as customer care, suppliers, transactions with banks, tax authorities, etc.
➨ Internal monitoring
At the end of the year, there will be revenue and expenditure, asset inventory, etc. This will more or less affect business operations. Therefore, the chief accountant needs to monitor this settlement very carefully to always meet the requirements of superiors at any time.
In addition, internal monitoring also helps the chief accountant grasp the business situation and have timely solutions to optimize costs and increase business efficiency.
➨ Financial analysis and forecasting statistics
This is the most important job for those who hold the position of chief accountant. The chief accountant will consider subjective and objective factors to make statistical reports and predictions about the financial situation of the past accounting period or the future accounting periods.
Thanks to this data, business owners will know whether to invest more in other areas or not, to maintain, increase or decrease the budget and capital. At the same time, businesses will also predict emerging risks and promptly correct financial violations.
9. Internal control
In general, internal control specialists typically undertake the following tasks:
- Review and evaluate all financial and accounting processes and regulations currently being applied at the company;
- Check, propose, advise and supplement the company’s accounting and financial procedures to detect procedural errors and financial risks for the Board of Directors;
- Collect, analyze and evaluate accounting documents, reports and data;
- Identify risks arising from control and audit work to advise on solutions and effective risk management.
Through these activities, internal control plays a role in minimizing risks, optimizing processes, ensuring the accuracy of records, promoting operational efficiency, and ensuring compliance with regulations.
III. Frequently asked questions about internal accounting work
1. Distinguishing between internal accounting and tax accounting, is it necessary to have 2 employees concurrently in charge of internal accounting and tax accounting at the enterprise?
Internal accounting and tax accounting both handle accounting operations. However, there are certain differences between these two accounting jobs, specifically:
- Internal accounting: Process all transactions, internal activities, review according to the company’s internal regulations and report to management to serve the company’s administrative activities;
- Tax accounting: Process documents according to tax regulations to prepare reports according to current tax laws.
Depending on the accountant’s ability and needs, the amount of work involved in the business may require separate accountants to take on the positions of internal accounting and tax accounting.
Business owners should note that, in order to do tax accounting, accountants need to understand the regulations of the tax authorities to avoid submitting incorrect or incomplete reports according to the regulations of the tax authorities.
2. How to organize accounting work in a company?
Depending on the size of the business and the accountant’s capabilities, a small or medium-sized business may only need 1-2 accountants to handle all accounting operations.
However, for larger businesses, a complete accounting system is needed to ensure the requirements of asset management and financial management in the business.