What Is an Accounting Manual?
An accounting manual contains pertinent accounting rules and other information for a business or organization. It is a manual that is internally developed and contains information specific to the organization for which it was developed.
- An accounting manual contains the accounting policies and procedures of a company.
- Developed internally, the accounting manual contains company-specific accounting information for the firm to follow.
- The accounting manual works as a guideline for accounting personnel and as a training manual for new employees.
- An accounting manual usually contains information such as the various departments in the firm, the types of accounting used, special instructions for maintaining ledgers, reporting requirements, and budgetary information.
Understanding an Accounting Manual
An accounting manual contains an outline of all of the pertinent accounting rules, procedures, and guidelines for an organization. It is developed internally by the organization and can be used as a reference tool, to cross-train associates, or to train newly hired personnel. Accounting manuals differ in size and content from one organization to another depending on the type and size of the organization.
The accounting manual of a firm may list the positions or departments within the organization, a list of accounts, special instructions for maintaining ledgers or records of transactions, or other rules that need to be followed by the accounting staff.
It may often contain budgetary information or samples of forms that need to be completed and maintained on-site for recording purposes or sent externally for reporting purposes. Essentially, an accounting manual is an outline of all the important accounting information and procedures for a business.
Components of an Accounting Manual
An accounting manual usually opens with an introduction, explaining the purpose of the manual, and what those reading it should gain from it, as well as management's responsibility in relation to the accounts of the firm.
The next section usually tackles the different departments of the firm and highlights how they factor into the accounting process. This portion explains the company's structure and the responsibilities of each department.
Thereafter, the accounting procedures and policies are explained and how reporting should be conducted. Following this portion, the accounting manual details the process of planning, reporting requirements, and the authorized personnel who oversee these functions.
The process after this might focus on different accounting aspects, such as internal audits, cost accounting, inventory accounting, and cash accounting. The accounting manual usually ends with various resources to assist in the entire process.
Example of an Accounting Manual
XYZ corporation manufactures and sells widgets. XYZ corporation has an accounting department that keeps track of all of the facts and figures that go along with maintaining a manufacturing facility, warehousing inventory, and managing a selling and distribution operation.
All of the appropriate corporate accounts for these areas of business, including guidelines for maintaining them and the necessary forms to be completed, are all found in XYZ's accounting manual.
The accounting manual was developed internally by the XYZ corporation senior accounting staff and is used as a reference point for established employees and a training tool for new employees.