Integrated accounting is that the system wherein books for the Financial Accounting and price accounting requirements are maintained in common set. This is often why, it’s called, that accountancy and Financial Accounting are integrated into one System.
CIMA defines that “integrated accounting refers to the interlocking of the financial and price accounting systems to make sure all relevant expenditure is absorbed into the value accounts. Under this accounting transactions are classified both consistent with their function and nature.”
Integrated accounting should be configured during a way that while it can provide information for cost of every unit, batch or job or the other measurable unit it shouldn’t distort financial statements viz., Profit and Loss Account and record.
The purchase of staple is often directly posted into Stores Ledger accounting, Work-in-progress Ledger accounting or Overhead Account in-stead of Purchase account.
The Direct wages are often posted into Wages accounting or Overheads accounting rather than Direct Wages account
Benefits of Integrated Accounting System:
Since figures for financial accounts and price accounts are from common source, there are no requirements for reconciliation between two.
Saving of serious time and price which otherwise get wasted in maintaining online accounting services in honolulu.
Because of auto reconciliation of accountancy with financial accounting, management reporting are going to be quick and accurate and it’ll help in timely deciding.
It simplifies and improves control mechanism
All cost related figures are basically derived from financial records so when it’s directly linked to financial accounting, it’s more reliable and accurate.
This system helps in eliminating clerical errors happens in fetching data from financial account books in preparation of cost accounts books data
Process for configuring Integrated accounting system:
First of all, degree of integration must be considered.
Full Integration: Under full integration all the value accounting elements in deriving cost of sales are integrated with bookkeeping services in honolulu.
Partial integration: Sometime when full integration is temporarily impossible , difficult or management want to check integrated system; integration are often configured up to a specific stage of cost sheet like prime cost, factory cost, cost of production etc.
Then most appropriate and adoptable writing should be developed to codifying charts of monetary accounts and price accounts including but not limited to SKU, Locations etc.
Standard process data documents should be developed containing all the small print associated with Cost Accounts and Financial Accounts.
Establish co-ordination between department handing financial information and costing information.
Account department should be trained in order that they will become conversant in , record transactions in, and prepare reports from Integrated accounting .
Appropriate accounting package got to be selected which best may suit to the wants of integration, report generation and automation of the processes.
Examples of posting under integrated accounting
Success always depends upon your ability of timely and proper deciding. To possess that ability you would like accurate, reconciled and advantageous information in your hand. This information are often generated with Integrated accounting which provides all the knowledge which you would like for deciding. Using appropriate accounting package and integrating advance application with the software, a superior integrated accounting are often developed for any business which may help keeping that business on top of the peers.
We at, Kayabooks have an expert team available to know your reporting requirements and helps you found out an appropriate system integrating your financial accounting with accountancy. We are prominent accounting outsourcing company based in USA. We will assist you with establishing integrated accounting to form your reporting requirement accurate and reliable.