Page 6 Chapter 1
P. 6
CHAPTER 1
Accounting Roles and Transactions
Flat Structure
Finance Director
Office Manager
Accounting Accounting Accounting Accounting
Technician Technician Technician Technician
Each of the above structures has been shown in a functional format, with each position
showing what its function is. They could have been shown by regional area (Finance
Director North and Finance Director South for example), by product (Finance Director
Private Vehicles and Finance Director Commercial Vehicles), or a structure could be set up
for individual projects.
Accounting transactions
No matter what the business or how it is structured all businesses carry out transactions
which are common to all.
All businesses sell goods or services
All businesses purchase goods and services and pay expenses
All businesses pay money into a bank account and make payments from it
All businesses pay wages or a remuneration of some kind.
All these transactions must be recorded in some form. Some small businesses simply collect
all invoices and receipts and give them to the accountant at the end of the year so that the
accountant can produce financial statements from them. An invoice is a list of goods or
services sold and given to the purchaser for payment. A receipt is a written
acknowledgement that payment has been made for goods or services. Some small
businesses record these transactions in their books as they occur, making the accountant’s
work easier and less time consuming (and therefore usually less expensive). A larger
business will need to employ staff to look after the recording of these transactions since it
will not be physically possible to do this on one’s own. Books can be kept either by hand
(manually) or on a computer.
Retaining documents
Legally there are differing instructions on how long accounting documents are to be kept.
The Companies Act 2006 states that a public limited company must keep records for six
years from the date they are drawn up. Since the accounting records are made up for the
‐ 6 -
