NATIONAL COLLEGE OF BUSINESS AND ARTS

964 AURORA BLVD., CUBAO, QUEZON CITY

GRADUATE SCHOOL
MASTERS OF BUSINESS AND ADMINISTRATION

MANAGERIAL ACCOUTING
ACCOUTING BEST PRACTICES and
OUTSOURCING THE ACCOUNTING FUNCTIONS
By: Ms. Geraldine M. Caasi
Professor: Dr. Erlinda Daquigan

Soures:
https://doeren.com/9-best-accounting-practices-small-business/
Consider the Benefits: Outsourcing the Accounting Function, www.scsconsults.com
ACCOUNTING BEST PRACTICES

CASH MANAGEMENT
- Perform a daily reconciliation or review of cash balances by using online banking
capabilities and booking adjustments into your system in real time.
- Maintain a cash worksheet to monitor cash balances effectively and in a timely
manner.
- Conduct deposits and transfers of cash on a daily basis.
- Streamline your line of credit if you have one. If cash is limited, consider
renegotiating terms of financing agreements to affordable monthly installments or
evaluate if a sweep account would work for your organization.
- Evaluate cash-flow projections to help determine what level of cash and tracking is
needed for your organization.
- Explore ways to shorten your overall cash cycle, such as matching timing of payables
and invoicing, reviewing invoice billings timing and method of delivery (email or
automated invoicing, performing consistent collection efforts and evaluating payroll
scheduled.
ACCOUNTS RECEIVABLE
- Measure your accounts receivable performance and identify areas for improvement
by establishing a monitoring key performance indicator.
o Establishing payment protocols for large orders or overseas customers (using
efficient delivery method to send invoices and ensure regularly (weekly basis)
o Adhering to a through collections policy and documenting payment history for
each of your clients.
INVENTORY
- Cycle counts versus wall-to-wall counts.
- Month-end cutoff procedures.
- Allowances for obsolescence/physical adjustments – make sure it is written off by the
end of the year for tax, if appropriate.
- Analysis days in inventory – to identify slow moving items.
- Un-reconciled receipts/received are not invoiced.
FIXED ASSETS
- Establish a capitalization threshold for items over a set amount.
- Record them individually, not as a group.
- Maintain a detailed description of assets.
- Work with your operations teams on cost/benefit assessments before purchasing new
equipment.
- Analyze leasing versus buying major purchases.
- Review your asset listing to ensure assets exists and are in use.

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 ACCOUNTS PAYABLE
- Strengthen your purchasing approval process by defining thresholds to control
purchasing.
- Have a strict cutoff at month-end policy - create accounting calendar with set dates
that communicates cutoffs.
- Limit access to setup of new vendors – evaluate reducing the supplier base.
- Seek opportunities to negotiate better pricing form vendors (negotiating volume
discounts).
- Review sub-ledgers for items such as duplicate check numbers/payments and
miscellaneous accounts.
- Electronically store supporting information.
- Ensure all invoices are properly approved prior to payment. Verbally confirm with
approver for large electronic payments to prevent fraudulent activity.
BILL AND PAY
- Incorporate a bill-paying approval process that requires a manager approval, plus the
date, account coded to and invoice/bill amount.
- If using company credit cards create separate expense reports for charges on company
credit cards versus reimbursable expenses, set credit card limits and get them all on
one monthly statement.
NOTES PAYABLE
- Consider providing the person who posts the payment with an amortization schedule,
analyzing agreements to understand covenants and tracking them regularly, and
preparing borrowing base reports in advance.
ACCRUALS

- To close early, estimate accrual by using last payroll of prior month.

- Consider adjusting your pay cycles to limit the need for an accrual (ending on last
day of month).
- For all accruals, use reversing entries if your system has them.
MONTH-END
- Reconcile large accounts weekly or daily to reduce workload at month or year end
and identify issues timely.
- Use the accounting system cash reconciliation.
- Download bank transaction data directly into accounting system.
- Use a month-end close checklist to eliminate errors.
- Run a report of all journal entries and attach support.
- Print comparative financial statements and review variances for journal entries
needed.

Source: https://doeren.com/9-best-accounting-practices-small-business/

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OUTSOURCING THE ACCOUTING FUNCTIONS
- Accounting is one of the most important but tedious functions in small and medium
enterprises. Hiring new employees for this may be the basic solution. However, it
eats up time and resources that could be diverted to revenue generating activities.
Out sourcing this function is another way to solve this dilemma. It lets you acquire
the skills of experts without the heavy costs and time constraints.
MAJOR BENEFITS OF OUTSOURCING
COST SAVINGS
- When you outsource you do not have the cost of a full time employee. You only pay
for the hours that are required to perform the job.
EXPERTISE

- They have employees that have expertise in each area of accounting and payroll since
they are investing merely and focus only on personnel that are expert in the field.
FLEXIBILITY
- Companies that perform outsourced accounting functions tend to be flexible in the set
up and schedule for their customers.
FOCUS

- Managers will focus more on business opportunities rather than manage the internal
accounting processes.
TEAMWORK
- When a company makes the decision to outsource their accounting function, they are
actually extending their team to include additional professionals. The right
outsourcing firm can be viewed as an extension of the company’s resources.
GUIDANCE
- Companies can take advantage of that resource and often ask for guidance in several
aspects of accounting and finance.

Source: Consider the Benefits: Outsourcing the Accounting Function, www.scsconsults.com