Bookkeeping – Payroll Compliance and Documentation (Lesson 33)
The key to success with payroll accounting is properly documenting all aspects of payroll thus complying with the various legal requirements.
Accounting Cycle
The accounting cycle is the period of time for normal production and or financial reporting. For more than 95% of businesses it is a one year cycle. There are exceptions to the rule for those businesses that have cycles matching the cycle time of their products such as distillars, specialty spices or shipbuilders.
Operating Control Reports in Business
A part of any information feedback loop is the operating control reports in business. Depending on the nature and financial impact involved, these reports can be daily (Daily Operating Controls or DOC), weekly (Weekly Operating Controls or WOC) and/or monthly (Monthly Operating Controls or MOC) in management reporting. Their value is to inform management of business activity and identify any potential issues that could generate undue financial harm on the business or worse, create an unsafe product or work environment.
Create a File Structure for Accounting
Creating a file structure for accounting is critical for the overall success of the business. If properly structured, data retrieval and information access add to the overall value of the company. This article teaches the new business owner how to create a file structure to use with accounting.
The primary goal of creating a file structure is to make data retrieval easy and understandable by just about anyone involved in office operations. Keep in mind that the end user is how the structure is developed. From a simple format to a more complicated structure incorporating the entire office, the file structure should be organized in a systematic approach. First, break down the accounting function into the respective areas of importance. Next, subdivide these areas by accounting cycles. Finally, incorporate the accounting software function and the overall office to end up with a well-organized file structure for the company.
The Definition of Fixed Assets
Any tangible item not consumed within one accounting cycle (typically a year) and providing long term utility is referred to as a Fixed Asset. Traditional images include manufacturing equipment, tools, transportation vehicles, buildings and utility related systems (sewage systems, power grids, power plants and dams). In accounting, these assets are recorded to the balance sheet as ‘Fixed Assets’.