Debt recovery is an activity that requires coordination and connection between different departments and divisions of the enterprise to achieve the highest efficiency. Accordingly, the accounting department directly grasps data on proceeds, total revenue, as well as the value of debts in the business’s operations, so they have a very important role in the debt recovery process. In the following article, TNTP’s lawyers will give opinions on the role of the accounting department in controlling and collecting company’s debt.
1. Overview of corporate accounting department
Any business during its operation needs a department to manage cash flow and finances and monitor any changes related to the business’s finances and budget to ensure balance in revenue activities. spend. This is one of the basic roles of the corporate accounting department.
According to the provisions of Article 4 of the 2015 Accounting Law, the accounting department’s tasks include:
i. Collect and process accounting information and data according to the subject and content of accounting work, according to accounting standards and accounting regimes.
ii. Inspect and monitor financial revenues and expenditures, collection and payment obligations, and debt payments; inspect the management and use of assets and sources of asset formation; Detect and prevent violations of financial and accounting laws.
iii. Analyze accounting information and data; Advise and propose solutions to serve the management requirements and economic and financial decisions of the accounting unit.
iv. Provide accounting information and data according to the provisions of law.
Thus, it can be seen that the accounting department plays a very important role in the operations of the business. Any change in cash flow within the business will be recorded by the accounting department, including all debts.
2. The role of accounting activities in corporate debt recovery
a) Is the department that understands the most about debt history
As mentioned in part 1, one of the main functions of the accounting department is to accurately record and manage a business’s finances. A business’s debts are also part of its financial activities and will be recorded, monitored, and managed by the accounting department right from the moment business activities arise between the enterprise and the debtor.
Normally, when starting the debt recovery process, businesses tend to begin by determining the debtor’s final debt, then trace back related transactions to understand the entire history of the debt for collection purposes.
At that time, the accounting department, having recorded all financial activities between the business and the debtor from before the debt arose, will have a comprehensive view of the debt history. Therefore, when a business undertakes debt recovery measures, the accounting department will be the entity that fully understands the debt situation to coordinate with the legal department or other departments for an effective recovery process.
b) Support in providing necessary documents for debt recovery
To ensure the debt recovery process, the most important documents that businesses need to prepare include: Invoices, delivery records; Transaction history and Minutes confirming remaining debt. These are documents that the accounting department records, manages data in documents and can directly issue and store these documents. Therefore, the accounting department will be the first department to determine which documents are necessary to handle respectively at each stage of debt recovery.
In addition, because it is the party that directly enters and manages debt data, the accounting department often understands the history of debt better than any other department at the business. Therefore, the accounting department will easily explain the data, the content of the debt, and the changes in financial items related to the debt up to the present time so that the debt handling departments can easily understand the debt and to do necessary debt recovery measures.
Above is TNTP’s article on the topic: “The role of the accounting department in controlling and collecting corporate debt”. Hope this article is useful to readers in work and life.
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