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The Controller's Function: The Work of the Managerial Accountant, 4th Edition by Steven M. Bragg

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Chapter 17

Operational Accounting

This chapter focuses on how to upgrade the accounting function so that it runs as a world-class department should. First we define the jobs of everyone in the department, then describe the creation of a very specific work schedule and staff meetings to follow up on particularly difficult problems. Then we move on to the proper treatment of accounting errors and how to avoid them, followed by a lengthy discussion of how to use best practices to improve operations. We also review the pluses and minuses associated with outsourcing selected functions within the department. By following these guidelines, a controller can create a confident accounting department that is thoroughly capable of quickly and accurately processing all assigned tasks.

Create Departmental Job Descriptions

The first step in running an accounting department is to determine who is responsible for each task. Without such a determination, there is no way to control the flow of activities or to know whom to talk to about fixing problems. The typical departmental structure is for there to be one or more assistant controllers who are responsible for a selected set of functional areas, such as accounts payable and accounts receivable, or cost accounting and the general ledger. Below these personnel are a number of accountants and clerks. The organizational structure is similar to the one shown in Exhibit 17.1.

Exhibit 17.1 Accounting Department Organizational Structure

Once the controller ...

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