Accounting Controls and Procedures Manual

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I have started a project with a pre revenue company that is expecting its first revenue within the next few months. They currently have no systems and procedures since they have primarily been in product development mode so far. We need to establish systems and procedures and have some degree of flexibility, within reason, as to how they will operate, however they will be operating with a small accounting staff and will probably not be compliant with segregation of duties standards. Does anyone out there have a written (MS Word or otherwise) document that can be used as a starting point for my procedures manual that they would be willing to post as a model template?  I have developed a thorough Employee handbook template I would be willing to swap.


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I do not have a complete manual for you, but I can push to a great author for such resources. Steven Bragg has written a number of books, including Accounting Systems & Controls, and the Guide to the Controller's Function. Both have some great internal controls suggestions, and it would be easy to pull out his key suggestions and customize them for the company into an internal controls process.

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I agree totally with the Guide to Controller's Function being a very informative book when it comes to accounting functions. Internal control is heavily stressed as well as basic guidelines to process and procedure.

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You should be able to find a number of templates available for developing your accountng manual on the internet. Use the term Accounting Controls manuals in the search engine.

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Having come from an ERP implementation background, I can tell you that nothing is going to cover your exact situation. Every company is different, and they all process things differently. Your policies and procedures are also going to be affected by the ERP system that you choose. These books and templates will give you a good starting point, but don't expect to find something that you can just lay into place and have it fit.

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I agree with Mark, it's going to be difficult to get a one size fits all policy and procedure accounting manual without knowing the industry, your IT systems, etc.

What I am about to recommend likely is overkill for your situation. Do a Google search on "COSO - Internal Control over Financial Reporting - Guidance for Smaller Companies", Volume IV, Working Tools.

You should find a 42 page pdf file that provides a comprehensive checklist of controls and risks.

It' not going to give you the policies and procedures you are looking for, but it is going to give you some insight into each accounting and IT areas things to look for.

If you can't locate, send me your email address and I will forward you a copy.

Generally, policy and procedure manuals should define roles (who does what), authority (approvals, limits), frequency of actions (daily, weekly, bi-weekly, monthly, quarterly, annually, ad hoc), paperwork flow and retention (both filing of paperwork and E-files), transaction verification or reconciliation, accounting treatment decisions and how to apply, and deadlines.

Hope this helps, Randy

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That is a very good idea. Another option for a small start up would be to ask their outside accounting firm to let them have an example of a process narrative from a company similar in size. The names and other specifics could be eliminated so that the other company could remain anonymous. If they don't have an outside firm yet, their law firm should be able to help with a recommendation.

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I think you should first determine what systems and processes make sense for you, then worry about documenting procedures and policies.

Start with the end game: what do financials and management reporting need to look like, then what mix of people - processes - systems do you need to meeet the end deliverables.

Thinking since you are starting up, policies and procedures should be documented retroactively.

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Your most comprehensive source of information is the COSO Internal Control - Integrated Framework ( They have a set of manuals that cover everything you are looking for. The "Illustrative Tools for Assessing Effectiveness of a System of Internal Controls" has examples and templates that you can use or modify to work in your environment.

At a minimum, you should identify all risks to financial reporting and document all necessary controls that will mitigate these risks. I usually do this process by process, for example, a set of risks in the revenue cycle, another set of risks in the expenditure cycle, etc. For each identified risk there should be one or more controls to mitigate it, and preferable a good balance of preventive and detective controls.

The reality in a small organization, especially one that never had an internal control environment is that not all identified risks can be adequately mitigated (segregation of duties issues being one of them). When you have a basic framework and are able to document the processes and evaluate the effectiveness of the various controls (and procedures) you've established, periodic adjustments are usually all that are required. As the organization grows, additional controls and procedures can be put in place.