Efficiency – in an organisation means achieving the right result with the minimum of wasted time, effort or expense. To achieve this the accounting and finance function must provide information, internally and to other departments. This information should be complete, accurate and on time.

Solvency – means paying debts when they become due. If there is a shortage of cash there is a risk of insolvency. The accounting and finance function must ensure that management are made fully aware at all times of the cash position of an organisation: cash coming in should meet the requirement for cash going out.

Organisation should draw up formal policies and procedures which are documents which regulate a wide variety of areas of the business, for example accounting records and accounting procedures, health and safety in the workplace, confidentiality and conduct.

The accounting and finance function will be subject to external regulations, some of them set down in law, which must be complied with. Failure to do so may result in fines and extra work by accounting and finance staff.

Policies and procedures also affect working practises in the accounting and finance function. These include internal requirements such as the setting of deadlines, procedures for authorisation of purchases, payments, cheques and details of who can sign different types of authorisation.

Policies and procedures also affect the working area in the accounting and finance function. Strict regulation of issues such as health and safety, organisation of the workspace, secure storage of documents and confidentiality of information must be complied with if the organisation is to remain efficient.

Guidance policies and procedures may also be drawn up by the organisation to ensure that the office becomes ‘green’ – in other words environmentally friendly. This will cut down on wastage of resources such as energy and paper and so make the organisation more efficient.

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