Accounts division of an enterprise is responsible for preparing day book and ledgers. The entries in day book are well founded and supported by approved bills and voucher. A proper accounting system operated under an ERP system will provide various MIS to the management. These MIS include suppliers’ details such as their products, price behavior, payments terms, reliability etc. In the same line information from accounts will help to monitor the effectiveness of logistics for inward movement and outward movement, inputs converted into output and its effectiveness; stores maintenance, sales and delivery. Also, the recovery of receivables and monitoring of payments to creditors and expenses. Assume that the accounts department is up to date and providing with timely information, management can take dynamic decision, and action to face competitors with a result to earn margin in business.
Finance is part of accounts department but it is related to the inflow and out flow of funds. Inflow may be the sourcesof capital, borrowed amount or profit generated by the enterprise. Out flow generally for capital expenditure, business expenditures and dividend payment. Arrange inflow at minimum cost and at minimum risk. This is a challenge to the management. The other side payment is also to be considered with prudence. Heavy capital expenditure may result a large borrowal. Hence BEP may prolong to an uncertain period. If revenue expenditures are not monitored strictly, it will reduce the net profit. If the dividend policy is uncertain, then the working capital may be affected or may be resorted for outside borrowing. The finance function of accounts department is also to function on a prudent manner to generate wealth for the organization. Many enterprises in the area of micro unit and small unit are giving lesser importance for accounts and finance function of the business is the one of the main reasons for business failure.
Another role the accounts department, generally follow is the compliance with the provision of income tax Act, Good and services Act, compliance with labour laws like EPF, EST etc. Non compliances with the tax laws and other civil laws etc. will also cause for failure of the unit. It is sure that the labour welfare rules are not strictly followed, the unit is not able to get the support, which will affect the employee productivity. From the above, it is clear that the role of accounts and finance department is vital for the survival of the unit. “Don’t ignore it”
ASPIRE FOUNDATION is competent to support any institution, in start up stage or growth stage, for their accounts and finance function