ACCOUNTING DEPARTMENT WORKFLOW

1. ACCOUNTING DEPARTMENT WORKFLOW

2. 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)

3. RECORDING A SALE A Sales Associate creates an INVOICE. You receive a PURCHASEORDER or an ORDERFORM (through your website, mail, or fax). Staple the PURCHASEORDER/ORDERFORM and INVOICE together and file in a binder in numerical order by Invoice. Order information is entered into the SALESJOURNAL/ACCOUNTSRECEIVABLERECORD and the INVENTORYRECORDS. Send the Invoice to the customer. Order INVENTORY when needed.

4. MAKING A PURCHASE You receive an invoice from the company. Your company prepares a PURCHASEORDER and sends it to another company (vendor). Keep a file copy in the PURCHASES binder. Enter the information in the PURCHASESJOURNAL/ACCOUNTSPAYABLERECORD The invoice is forwarded to the Bank Manager. If the purchase is for inventory, update the INVENTORYRECORDS. The Bank Manager pays the bill, marks it paid, and files it.

5. RECORDING CASH RECEIPTS AND PAYMENTS The Accounting Department records ALL transactions in the CASHRECEIPTSANDPAYMENTSJOURNALin the appropriate places (as payments or receipts of cash and an explanation). Each week the BankManager 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 SALESJOURNAL/ ACCOUNTSRECEIVABLERECORD to reflect the payment. When you pay invoices from vendors that your firm has purchased from, update the PURCHASESJOURNAL/ACCOUNTSPAYABLERECORD.

6. PAYROLL The Payroll Manager completes the PAYROLLREGISTER for the pay period. The original is filed in a binder and a copy is given to the Bank Manager. The Payroll Associate creates and distributes pay stubs. By the 15th 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. The Bank Manager pays each employee. By the 15th 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. Note: Payroll is completed twice a month.

7. 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 • W2 and W3 – yearly • 1040 individual tax return – yearly • 1120 Corporate tax return – yearly