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Accounts dept. in sme

praveen kumar devarapalli (Managing Director) (361 Points)

18 August 2011

Dear All,

I have observed in lot of companies which are Small and medim enterprises and i found that Accounts dept. and accounts of such enterprises are not in the correct way.

I found some of the issues reason for not in the correct way.

1. Lack of professional accounting people.

2. Management's small eye on the accounts dept.

3. People who are coming to the Manager Post by way of the experience but he may not have statutory knowlwdge(in some of the companies).

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4 Replies

satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 18 August 2011

yes it is true, since most of the companies are small and they are propreitory oriented so they do not give much importance to the financial matters, usally they take intermediate or b com people who do not have knowledge of financial accepts, and for these companies usally their auditors only take care of their accouting accepts so they do not worry about the financial aspects much.

Srikanth (Auditor) (31 Points)
Replied 20 September 2011

Yes Mr.Praveenkumar

Personaly I too wounded in this point of view for the past 10 years.....as most of the Proprietors are not aware of the importance of accounts department since its inception........but a day make them to realise but not continue that requirement on a sustainable basis.....this will help many persons to become manager in accounts department without sufficience sound knowledge in subjects and concepts in order to improve their prefessional knowledge...

Ateeq (CA - Final) (213 Points)
Replied 20 September 2011

Yes,

I agree with you.

But in my opinion the reason could be "Small & Medium companies" cannot afford intellectuals.

Secondly they feel their company is not as bigger as tata and reliance to go in a streamlined system, and they feel "My employees are very reliable and honest".

Jyoti Goyal (Manager) (169 Points)
Replied 21 September 2011

Praveen, you are right that the small enterprises does not have correct accounts mainly reason that they dont want to expend so much amount on this part whereas they know the importance of Accounts.

Satish, you are not correct about the qualification of accountants but it is the fact that owner of these orgnaization is also interrupt in accountant's work. They have their own calculation of cash and not favoring to maintain proper cash accounting for this.

Jyoti