Standard Operating Procedures (“SOPs”) are clearly defined and documented sets of instructions for any specific tasks and processes. They help to govern and standardize the operational roadmap of an organization. SOPs are normally laid down for all the business departments in an organization, i.e. Accounts & Finance, HRD/ HRM, Production, Purchase/ Inventory, Planning, Legal, Marketing & Branding, Sales, Corporate Communication, etc.

Importance of SOPs for the Accounts & Finance Department

·         Accounting and Finance are the nerve center of any organization through which business performance can be measured internally and externally. These departments manage cash inflows and outflows associated with routine tasks like supplier and rental payments, staff salaries, monthly interest payments to financial institutions, etc. Importantly, SOPs in accounting and finance are necessary directives to ensure day-to-day transactional governance, implementation of statutory compliance measures, consistency in customer experience (“CX”), and a reduction in employee training time. This leads to profitability, growth, and increased goodwill for the company.

·         Financial management refers to the strategic planning, organizing, directing, and controlling of financial undertakings in an organization or an institute. It also includes applying management principles to the financial assets of an organization, while also playing an important part in fiscal management. Take a look at the objectives involved:

•   Maintaining enough supply of funds for the organization;

•    Ensuring shareholders of the organization to get good returns on their investment;

•    Optimum and efficient utilization of funds;

•    Creating real and safe investment opportunities to invest in.

Here are the essential SOPs for Accounts & Finance. We will explore the typical responsibilities of finance department for the following areas;

•         Receipt of Bills

•         Entry of Bill in the Books of Accounts

•         Issue of Cheques

•         Dispatch of Cheques

•         Cash Payments

•         Fixed Asset Register

•         Direct Taxes

•         Indirect Taxes

•         Employee Insurance

•         Delegation of Authority Matrix

•         Bank Payment

•         Tours & Travel Statements

•         Compliance of Audit Queries

•         Cash payments and Journal Vouchers

•         Responsibilities of Finance Manager

•         Responsibilities of Accounts Officer

•         Responsibilities of Accountant/Cashier

•         Insurance Requirements

•         Various Governing Acts

•         Intellectual Property Rights

•         Cost Reduction Initiatives

•         Asset Management

•         Accounting Metrics

•         Collection Policies

•         Inventory Management

•         Annual Budgeting

•         Tracking Credit Card Auto-Payments

•         Sales and Accounts Receivable

•         Purchase and Accounts Payable

•         Financial Statements finalization

•         Internal Reporting

•         Cash-flow Management