What is an Accounting Manual?

An accounting manual is an internally-developed handbook that contains the policies and procedures to be followed by an accounting staff. In addition, the manual may contain sample forms, a chart of accounts, and job descriptions. The manual can be used as a training guide for new employees and for anyone cross-training on new functions, as well as a refresher for existing employees. As such, it is a good way to ensure that accounting transactions are completed consistently across the organization.

An accounting manual may also include the annual budgeting forms to be filled out by department managers, which are then forwarded to the accounting department for inclusion in the annual budget. The manual may also provide a schedule for when budget information is to be completed and reviewed.

Advantages of Having an Accounting Manual

There are numerous advantages associated with maintaining a well-structured accounting manual. These advantages are as follows:

Better process standardization. The manual states exactly how procedures are to be conducted, which promotes processing standardization. This reduces processing errors and therefore the number of error corrections required.
Enhanced record accuracy. Because an accounting manual results in more standardized transactions, record accuracy is improved. This in turn results in cleaner accounting records, and therefore more accurate financial statements.
Better training. An accounting manual can be used as the basis for training new employees in accounting procedures. This gives them a ready reference tool, and so should allow them to become proficient users of your accounting system in less time.
Better internal controls. You can include internal controls in your accounting manual, so that employees are more likely to incorporate controls into your accounting processes. This should make it more difficult for someone to commit fraud.