ACCOUNTING DEPARTMENT WORKFLOW Binders Needed InvoicesPurchase OrdersOrder Forms

ACCOUNTING DEPARTMENT WORKFLOW

Binders Needed: Invoices/Purchase Orders/Order Forms (copies of forms) Sales Journal/Accounts Receivable Record (Excel spreadsheets) Purchases (copies of forms) Purchases Journal/Accounts Payable Record (Excel spreadsheets) Cash Receipts and Payments Journal (Excel spreadsheets) Inventory Log (Excel spreadsheets) Tax Forms (copies of forms prepared in Excel) Payroll (Excel spreadsheets) Bank Statements (copies of bank statements)

RECORDING A SALE You receive a PURCHASE ORDER or an ORDER FORM (through your website, mail, or fax). Staple the PURCHASE ORDER/ORDER FORM and INVOICE together and file in a binder in numerical order by Invoice. Send the Invoice to the customer. Order INVENTORY when needed. A Sales Associate creates an INVOICE. Order information is entered into the SALES JOURNAL/ACCOUNTS RECEIVABLE RECORD and the INVENTORY RECORDS.

MAKING A PURCHASE Your company prepares a PURCHASE ORDER and sends it to another company (vendor). Keep a file copy in the PURCHASES binder. You receive an invoice from the company. Enter the information in the PURCHASES JOURNAL/ACCOUNTS PAYABLE RECORD The invoice is forwarded to the Bank Manager. If the purchase is for inventory, update the INVENTORY RECORDS. The Bank Manager pays the bill, marks it paid, and files it.

RECORDING CASH RECEIPTS AND PAYMENTS Each week the Bank Manager prints out a copy of the current bank transactions. If one of the invoices that you sent out has been paid, retrieve the invoice from the binder, mark it paid, and file it. Update the SALES JOURNAL/ ACCOUNTS RECEIVABLE RECORD to reflect the payment. The Accounting Department records ALL transactions in the CASH RECEIPTS AND PAYMENTS JOURNAL in the appropriate places (as payments or receipts of cash and an explanation). When you pay invoices from vendors that your firm has purchased from, update the PURCHASES JOURNAL/ACCOUNTS PAYABLE RECORD.

PAYROLL The Payroll Manager completes the PAYROLL REGISTER for the pay period. The original is filed in a binder and a copy is given to the Bank Manager. The Bank Manager pays each employee. Note: Payroll is completed twice a month. The Payroll Associate creates and distributes pay stubs. By the 15 th of the month, the Payroll Manager prepares the 941 Tax Withholding form for the prior month’s payroll. The data is submitted to the VEC. The form is filed with the payroll records. By the 15 th of the month, the Bank Manager pays the payroll taxes that have been reported on the 941 Tax withholding form. The payment is recorded in the CASH RECEIPTS AND PAYMENTS JOURNAL.

SUMMARY Sales Journal/Accounts Receivable, Purchases Journal/Accounts Payable, and Inventory Records are updated as needed. Payroll is completed twice a month. Bank Statements should be printed out at least once a week. Cash Receipts and Payments Journal should be updated each time a bank statement is printed. Tax Forms should be completed according to the calendar. ◦ ◦ ◦ 941 – monthly Sales tax – quarterly W 2 and W 3 – yearly 1040 individual tax return – yearly 1120 Corporate tax return – yearly