Introduction
Every company must perform accounting & manage books, usually referred to as bookkeeping. Accounting is important to identify the financial state of the company. Accounting involves the analysis, collection, interpretation, classification, presentation, and verification of financial information. One of these types of accounting is known as corporate accounting which is done by corporate companies. Corporate accounting involves processes such as preparing cash flow statements, financial records, balance sheets & more. It is used to handle corporate business processes such as absorption, amalgamation & creation of consolidated financial documents. Let’s discuss corporate accounting in detail.
What is Corporate Accounting?
Corporate accounting is dedicated to the operation of a single company. In this type of accounting the corporate accountants only handle the accounts of a firm. More specifically the accountants are hired in-house. Corporate accounting is normally performed to manage the financial & operational status of a company. In general, corporate accounting is performed to communicate the liabilities & assets of the firm to the investors or stakeholders.
Corporate accounting is also done to ensure that the finances of a company comply with the laws & regulations led by the government bodies. It also ensures that the business operations are managed properly and follow the organization’s policies. Corporate accountants usually manage much of their work internally, starting from report generation to presentation, everything is done internally.
Main points in Corporate Accounting
Corporate accounting is performed by a team of specialist accountants under the supervision of a Chief Financial Officer (CFO) or an executive on the same level. Corporate accountants perform several activities to maintain the financial accounts and the system of financial reporting. The duties of a corporate accountant are listed below:
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Creation & Maintenance of Accounting System for the Company
Corporate accountants install, manage & maintain the corporate accounting system or commonly known as the accounting software of a company. After installation of the software, the accountants create separate accounts designated for specific users to handle elements like equity, assets, income, expenses & liabilities. Having done so they assign accounts with the general ledger & set the overall system to record all financial transactions happening inside the organization. In advanced corporate accounting, usually, a variety of reports are created using current data & information that are used internally. For verification by regulatory bodies, financial statements of the company are also generated by the corporate accountants.
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Budget Preparation
The organization must make sure that they meet all the financial goals at year-end. To achieve this financial stability the corporate accountant prepares a budget, so each department has enough money to spend. This includes costs such as investments, infrastructure, admin, stationary, hiring, etc. The corporate accountant usually runs an internal audit to make sure that every department sticks to its budget & the goals of the company are achieved every year. The leaders of the company reviews & approves the budget.
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Calculation of Payroll for Employees
The calculation of payroll & staff salary also comes under the purview of corporate accountants. The accountants calculated the salary of employees including statutory compliance deductions, TDS, etc. this can be done weekly, fortnightly, or monthly as per the company policy. The corporate accountants make sure the staff receives their pay cheques or the salaries are transferred to their bank accounts on the designated day.
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Special Expenses Management
A company must make special payments to stay compliant with the business regulations led by the government. This includes payments like employee-related taxes, distribution of retirement accounts, bonuses for performance, overtime payments, reimbursements, etc, all these must be taken care of by the corporate accountants.
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Accounts Payable
The corporate accounting department is responsible for receiving & processing the invoice that is received by the company. Accountants after processing the invoices make the payment to the vendors or suppliers following the indicated means of payments mode. For example, the payment could be done via direct bank transfer, cheques, credit card payments, UPI, cash, etc. This also includes loan payments, GST filing & premises maintenance costs.
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Accounts Receivable
Corporate accounting also handles accounts receivables. Accountants regularly process the payments that are coming in from clients or customers. In addition to the money coming, the corporate accountants also handle any type of default cases. Organizations may assign large teams to handle past-due accounts. However smaller teams can work in coordination with the agents to retrieve the money in default cases.
What are the Benefits of Corporate Accounting?
As we have discussed so far, corporate accounting is very important for every organization. After understanding the main points of corporate accounting, let us have a look at a few benefits of corporate accounting that are listed below:
- Corporate accounting contributes to the company’s main goal, i.e., revenue generated & increased profits.
- The financial status of the company is available in real-time
- All the financial records, statements & more are maintained well
- Budget generation for a company to the expenses do not exceed the budget allotted
- Payroll processing to ensure salaries are disbursed on time
- Corporate accountants seek investments & funds for the company’s growth
- No past dues of the clients
- Tax returns filed timely
- Company records stay compliant with the government rules & regulations
- All payments & bills are paid on time, the leadership doesn’t need to intervene
What are the Qualifications of a Corporate Accountant?
In most cases for a corporate accountant, it is mandatory to have a degree in finances or accounting. Sometimes they might be requested to have the Certified Public Accountant credentials or be a qualified Chartered Accountant.
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What are the Duties of a Corporate Accountant?
Corporate accountants specialize in business accounting. The main duty of the corporate accountant is to keep the business financials fully compliant with the regulations, laws, and policies of the organization as well as the government. Corporate accountants must help the leaders of the organization in making smart financial decisions.
There are two main duties of the corporate accountant. These are listed below:
- Accounting: Deals with daily operation, tracking expenses & revenue, Paying all bills, & payroll processing.
- Finance: Analyses finances & revenue to make sure the capital is being used most effectively for benefit of the company. This also includes suggestions & estimations of project costs & making capital investments.
At the end
As we understood so far corporate accounting is highly important for modern firms. Corporate accounting helps in identifying the financial & operational status of a company in real-time. Corporate accounting is a specialized accounting done by corporate accountants in favor of a company’s financial health. If you are looking for corporate accounting software, your search ends here. Marg ERP is a corporate accounting software that could ease the burden of corporate accounting & help companies stay on top of finances.
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