13–3. Create a Policies and Procedures Manual
As is noted several times in this chapter, an unorganized accounting department is inefficient, suffers from a high transaction error rate, and does not complete its work products on time. While other best practices noted in this chapter, such as general training, cross-training, and calendars of events, will contribute to a more structured environment, one of the very best ways to create a disciplined accounting group is to create and maintain a policies and procedures manual.
This manual should list the main policies under which the accounting department operates, such as those listed in Exhibit 13.2. These are the key issues that confront each functional area and are usually limited to just a few pages. Anything longer probably indicates an excessive degree of control or some confusion in the difference between a policy and a procedure.
|Type of Record||Retention|
|Accounts Payable Ledgers/Schedules||7 Years|
|Advertisement for a Job Opening||1 Year|
|Capital Stock Records||Permanent|
|Checks (Canceled)||7 Years|
|Deeds, Mortgages, Bills of Sale||Permanent|
|Earnings Per Week||3 Years|