Things to know before appointing an Accountant in India
Having analyzed the basics of accounting and the history of accounting in my previous blog, I move on to the following topics to be discussed in this blog.
I will address the following
- Who can be an accountant?
- What is the qualification and knowledge required for an accountant?
- Roles and responsibilities of a bookkeeper
- Role of a senior accountant or chartered accountant in a company
- How can my accounts department stay updated with changes in tax laws, rules and government regulations?
Who can be an accountant?
We have seen the differences between a bookkeeper and an accountant. A bookkeeper may not have a specific academic qualification or specialized degree. However, anyone with basic accounting knowledge and being well versed with accounting software can be appointed. In India commerce graduates with B’Com or M’com degrees are generally appointed as bookkeepers or junior accountants.
In contrast, for someone to discharge his duty as a senior accountant, specialized academic qualifications, knowledge and skills are required. A Chartered Accountant is best suited for a senior role or a head accountant.
Role of a bookkeeper (Responsibilities of a junior accountant):
- Basic record keeping and data entry work in the accounting software
- Managing physical documents, filing of vouchers, bills etc
- Retrieving basic information of payments, receipts, and party ledgers and keeping them readily available
- Preparing payments for vendors, salaries etc
- Handling petty cash expenses and receipts
- Undertaking basic banking work
Junior accountants and bookkeepers help lay the foundation for the accounts department. However, this is also the area where companies may experience higher job attrition. Them being away from the job or there being a vacancy for even a few days will lead to multiple cascading effects. Companies need to make an effort to bridge this gap. Hence it is important to have an internal system and guidelines for new joinees who can quickly understand and adapt to the organization.
Read more about our ‘Induction and Training Services’ which can help for training of junior accountants.
Role of a senior accountant or chartered accountant in a company
- Accounts finalization and reconciliation work
- Handling budgeting, finance and monitoring exercise with the management
- Approving and authorizing major transactions, events and payments
- Preparing workings for and making tax payments
- Compliance related filings like TDS, GST, Profession Tax returns
- Coordinating with auditors for annual accounts, books closing, auditing, Income tax return filing
- Making submission and coordinating with tax authorities, banks, external agencies
These are crucial activities and functions of an organization that the head of accounts department handles.
Our consulting services for accounts team and senior accountants are targeted to providing customized solutions. Read more here.
Keeping abreast with latest amendments in accounts and taxation laws is a continuous task and there is no simple answer. The way to gain knowledge is to continuously be in touch with the updates in a particular sector, subscribing to knowledge sessions, reading about tax updates etc.
It may also be a good option to outsource part of the accounting or compliance functions which will enable a professional Chartered Accountant firm to review the books on a periodic basis. Over a period of time certain functions are done in the same way without being reviewed – hence it always benefits if internal documents are reviewed by a third person who is an expert.
Contact us for our accounts review and consulting services.