The Key Responsibilities of the Finance and Accounting Departments in a Small/ Medium

size Business?

No matter how many people are performing finance-related tasks, the core responsibilities
are universal across businesses. They include basic accounting duties like:

 Accounts payable
 Accounts receivable
 Payroll
 Reporting and financial statements
 Financial controls
 Tax and compliance

Finance and Accounting Responsibilities Explained

Accounts This involves keeping track of all payments and expenditures,

Payable (AP): including purchase orders and invoices. Accounts payable maintains
records, verifies journal entries and compares reports from systems
to actual balances. Accounts payable also verifies expense reports
and prepares reimbursements to employees. Accounts payable
communicates with and pays vendors by scheduling payments and
ensuring all outstanding credit is current.
Accounts This involves keeping track of all payments and expenditures,
Receivable (AR): including purchase orders and invoices. Accounts payable maintains
records, verifies journal entries and compares reports from systems
to actual balances. Accounts payable also verifies expense reports
and prepares reimbursements to employees. Accounts payable
communicates with and pays vendors by scheduling payments and
ensuring all outstanding credit is current.
Payroll: Robert Half says payroll is the most common function to outsource,
at least partially. Businesses with under $499 million in revenue are
more likely to outsource payroll than larger ones. The payroll
function processes paychecks, reconciles the payroll sub-ledger to
the general ledger, remits payroll taxes, manages governmental
reporting and compliance with tax laws, and prepares payroll
statements. Payroll answers payroll-related questions and provides
tax documentation to employees, as well.
Reporting and The accounting team—ideally with the help of accounting software—
Financial is responsible for generating financial statements that tell the
Statements: business whether it earned a profit, what it owns and owes, and
whether it has sufficient cash on hand to cover its obligations. These
financial statements include the income statement, the balance sheet
and the cash flow statement. Those statements help the business
track its progress against goals, understand what adjustments to
make and build forecasts.
Financial Every business, small or large, public or private, needs strong
Controls: financial controls. For small, private businesses, financial controls like
splitting up functions within the department to ensure one person
doesn't both approve vendor payments and cut checks to vendors,
can protect against fraud. Plus, by setting up strong financial controls
and reporting from the beginning, a small business is prepared for
the increased scrutiny that will come as it grows. Financial controls
are required by law for publicly-traded companies. The penalties for
not complying with the processes, audits, controls and reporting
required by the Sarbanes-Oxley Act can include fines and jail time.
Tax & Accounting and finance teams make sure the company pays its taxes.
Compliance: These include corporate income tax, regional taxes, municipal taxes,
Dr. Mohammed Farid Fathalbab
 payroll tax and equity tax (if applicable), value-added tax and
withholding tax. Depending on the complexity of the business, it’s a
good idea to involve a Certified Public Accountant (CPA) in tax
preparation and filing processes.

6 Key Positions in Small Business Accounting and Finance Departments

Bookkeeper:  In small businesses, a bookkeeper is often the first—and most

important—hire. This person's responsibilities can vary widely
depending on the maturity of the company, but bookkeepers
focus on daily accounting tasks.
 This person could be responsible for recording and monitoring all
of the company’s financial transactions, including accounts
payable, accounts receivable, cash flow and payroll.
 They also reconcile bank statements with the general ledger and
help close the books every month.
 A bookkeeper doesn't have the qualifications to work with the
IRS in the event of a tax audit.
Billing Specialist:   For companies with complex billing processes, billable hours or a
large volume of bills, having an employee dedicated to the billing
function makes a lot of sense. In a law firm, for instance, a billing
specialist compiles hours billed by attorneys for client cases and
makes sure all clients have been billed properly.
 The billing specialist is responsible for invoice creation. They also
answer questions from clients about bills.
Payroll  This person processes payroll and prepares and maintains
Specialist:  payroll-related records and reports, including year-end reporting
and tax documents for employees. This role requires knowledge
of regulations surrounding payroll and benefits.
Tax Preparer:   An accountant can handle tax submissions and can report to the
IRS if it audits the business.
 Small business can also contract with a tax preparer if it doesn’t
have someone with this competency in-house.
 A tax preparer completes and files business tax forms.
Accounting  Businesses with more complex finances that need an internal
Managers:  resource who can take care of tax submissions, year-end
statements and government paperwork should hire an
accounting manager.
 The accounting manager can manage the bookkeeper and use
that person’s accurate daily accounting to gain insights into the
company’s finances, including opportunities to cut costs and or
gain efficiencies.
 An accounting manager may be a CPA, an exam-based license for
accountants that reflects rigorous training and experience in the
field.
Controller:  As business become more complex and the accounting team
grows, companies may need to hire a controller.
 Controllers take a more strategic view of the business’ financial
situation than the roles outlined above and are responsible for
creating and instituting financial procedures.
 Controllers also take a forward-looking view of the business,
building budgets and forecasts. They can also negotiate financial
agreements with banks, like loans and lines of credit.

Dr. Mohammed Farid Fathalbab

Dr. Mohammed Farid Fathalbab