Accounting Basics: The Balance Sheet

 One of the fundamental components (for want of a better word) of accounting is the Balance Sheet. The balance sheet is often referred to as a statement of financial position. It can be described as a snapshot that shows the company's financial position at any given moment. Listed in the balance sheet are the company's assets, liabilities and owners equity.

If you view the balance sheet as a two column worksheet, the assets would be in the left column while the liabilities and owners equity would be in the right column. The two columns must be equal.

You won't be able to determine the company's profitability from the balance sheet. What the balance sheet will show is the solvency of the company. Analysts will look at various ratios (i.e. current ratio: current assets / current liabilities) to determine the company's financial well being.

Future entries in my Accounting Basics series will describe each of the components of the balance sheet.

Accounting Basics: Current Assets - Cash

 Cash is normally the first item listed under Current Assets on the Balance Sheet. What does cash include? Cash includes any deposits available in the bank as well as anything on-hand which might include bills and checks or money orders to be deposited.

Accounting Basics: Management Accounting vs. Financial Accounting

 This 3rd installment in my "Accounting Basics" series will discuss the differences between Management Accounting and Financial Accounting.

The private accounting field can be further divided into two sub-categories depending on how the information generated by the accountant is used.

As its name implies, Management (or Managerial) Accounting provides that information which is used by managers within the company. The information provided can be as broad as long range financial projections or as detailed as analyzing cost variances (ie budget overages). Wikipedia defines management accounting as being " concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions."

While management accounting concerns the internal use of information, Financial Accounting concerns the external use of accounting information. Of course financial accounting concepts are used in management accounting. Financial accounting involves providing information which is useful to external users such as prospective buyers and investors, creditors, government agencies, etc. Financial Statements are the most provided piece of information. These include the Balance Sheet and Income Statement (to be explained in a future post). Wikipedia defines financial accounting as "the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, government agencies, owners, and other stakeholders. Financial accountancy is used to prepare accounting information for people outside the organization or not involved in the day to day running of the company."

Budget Planning for Small Business

Every successful business relies on comprehensive budget planning. Planning a budget is an essential process in order to ensure the proper flow of a business.

Before planning for a budget, take into consideration the type of your business, what are all the expected expenses, how frequent they are, how the company will pay for it. These are all the vital measures that you have to look into.

It would always be good enough to use previous budget records as a guideline. In case, if you are a starter of a new business look for the similar business budget models.

You can make use of a spreadsheet program or any computer accounting software for planning your budget. This is not only time consuming but also assist you with the realistic in line business financial plans.

Proper recording and monitoring of budget planned with major financial transactions that occurs inside a company is mandatory for every business. A budget that is not regularly monitored cannot do any good at future financial crisis.

Plan your budget in a right way with the help of an trusted accounting professional and act accordingly.

Business networking commandments

Networking is a major prospecting tool for most of the business people. It establishes the relationship with other business people and the customers. With the business networking you can use to grow your business and the revenue. Business networking is all about building relationships, finding the people having common ideology.
Business networking helps you to meet the people and get to know about them in determining whether they are good referral partners or clients. You spend most of your time and effort on people who can help each other in your business. When the process is done properly it can truly make a difference in building a wealth of resources and the amount of business your company generates in a successful manner. If it is done incorrectly, it would actually harm your business.
In order to gain the most out of business networking, use the following commandments:
1. Always have the business networking tools with you all times, like business cards, brochures, pamphlets that tell about your business, an informative name badge and a pocket-sized business card file containing cards of other professionals whom you can refer.
2. Identify your goal to meet the number of people, as people have to trust you before they will do business with you and make sure you get all their cards. It’s an important aspect to get the business card of everyone whom you meet. This sets the stage for networking to happen. Write notes on the backs of business cards that you collect, it might be useful in remembering a person more clearly. Don’t give your business card to everyone you meet. Rather, give it to anyone who asks you for it.
3. Be a host to do things for others and help to greet people, since a guest sits back and relaxes. If you see visitors sitting, introduce yourself and ask if they would like to meet others.
4. Pay attention to the events and conversations, so that you’ll be able to learn a lot about the people in your network. Be specific and brief, before you are to say something in your discussion and make sure how you want others to know you.
5. Always try not to close a deal as networking is about developing relationships with other professionals. Meeting people at events should be the beginning of that process, not the end of it.
6. Be prepared to give the list of referrals whenever possible. If you are unable to give someone a bona fide referral, try to offer some other information that might be of interest to them (about the incoming event). Have a specific list of referral needs. The more specific you are about, then you would be able to receive more referrals.

7. Time management is an essential factor to be considered. When you delay in sending a message to your fellow groups, indirectly you specify them that you only care about yourself and you don’t take the time to learn about their needs. Be careful in spending too much of time with any one person, as your goal is to meet a given number of people. Always try to have direct contact with that person, so that he would gain confidence on your small business.
Follow the above commandments effectively to develop relationships with people who we can help and who can help us. Also be sure to fulfill any promises which you have made. Make most of your time to spend on business networking.

Corporate Social Reponsibility

Corporate Social Responsibility is operating a business in a manner that meets the ethical, legal, commercial and public expectations that society has of business. To be more precise it is a continuing commitment by business towards economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. CSR is most significant in large companies and small business organizations too.

Instilling and maintaining values of CSR in the employees is very important in an organization. This can certainly be done through few activities like:

Corporate governance: Ensuring sound corporate governance and compliance practices. Effective governance system includes good internal control System, management System, and auditing System.

Compliance policies are to create awareness around white-collar crimes such as bribery, dishonesty, corruption and fraud. Campaigns include

• War on Corruption: Raising the profile of white collar crime
• Identity Theft: Reminding staff to verify client identities and to keep information confidential
• Know Your Customer: A training programme for staff as required by the Financial Intelligence Centre Act.

Reporting: CSR Reports now not only include the environmental performance of the organization but also the most organizational social issues and non-financial key performance indicators. Increased transparency on reporting should be adopted.

Ethical policies: Maintain ethical policies and provide training to ensure that all employees perform with high standards of integrity and trust. Ethical policies include real concern and respect for employees (training, development, rewards, work-life balance, incentives, perks), for customers (safe, quality, value for money products and good customer service), and for suppliers (fair trade policies etc.)

Products and services: Develop and enhance products and services that provide social and environmental options for clients and prospects.

Well-being programs: Continue to provide talent management and well-being programs on stress management, physical fitness, nutrition and counseling through which employees can thrive and excel As part of employee assistance, these programs may offer health assessments, wellness workshops, counseling sessions and fitness center memberships, among others. Employee wellness programs aim to enhance employee health, leading to more productivity in the workplace.

Relationship: Build relationships with suppliers whose CSR goals and activities are aligned with expectations of the company.

Security programs: Ensure proper risk management, data security and privacy programs are in place.

Though there has been considerable research into the relationship between corporate social responsibility and profitability, the results proposed no relationship between them. Specifically, varying levels of social orientation were not found to correlate with performance differences too.

Questions and Answers About Starting an Accounting Career

An accountant plays a very important role in the functioning and efficiency of a corporation. They provide a number of vital business services to clients including the management of financial matters, auditing, and handling tax issues. However, the specific duties performed in an accounting career will differ depending on what field the practitioner works in, be it public accounting, management accounting, government accounting, or internal auditing.

Accountants will generally use computers and special accounting programs to assist them in their duties. Accountants can summarize and organize data in particular formats to make them more suitable for storage or analysis. The programs also remove a lot of the tedious manual work of accounting out of the job. For this reason, accountants will generally have a very high level of competence with computers and many employers will require them to be proficient in these programs to help keep their work accurate.

The environment in which an accountant works will generally vary depending on what field of accounting he/she is in as well as what type of company or organization he/she works for. The vast majority of accountants work in an office setting, often with many other coworkers and colleagues; although, some accountants are self-employed and may be able to work part of their job at home as well. Most accountants work a standard 40-hour week; though, there are exceptions especially in the case of tax specialists and self-employed accountants who may work longer hours during certain times of the year.

Public accounting firms often send their accountants to their clients' place of work or residence to perform audits. In this scenario, there can also be a lot of traveling involved. Accountants who travel often will most likely use a laptop to allow for the increased mobility of their accounting programs, data, and other information needed on the job.

Accountants, regardless of their chosen field, require a proficiency in mathematics as well as business. Many accountants are unlicensed, especially in the fields of government accounting, management accounting, and internal auditing. A bachelor's degree in accounting or a related field is required to become licensed as a Certified Public Accountant (CPA), Public Accountant (PA), Registered Public Accountant (RPA), or Accounting Practitioner (AP). Some companies will require their accountants to hold master's degrees as well.

There is a large demand for accountants, and as more businesses are created in the coming years, the demand is expected to increase. The rapid expansion of business is also expected to have a large effect on the types of responsibilities accountants will have. Nevertheless, these jobs can be very competitive, and many businesses are increasing their standards by which they hire and the qualifications they demand.

Accountants who have a great knowledge of computers and many different accounting software will have a better change of employment. Also, those who have more education, training, and experience will also have an edge in the job market. It is also important for accountants to demonstrate interpersonal skills as this will also help them perform their job more effectively and get along better with clients.

Find the Right Type of Accountant to Hire

 In today's world of regulated business, there is increasing pressure on companies to have transparency in their financial statements. This push from shareholders and government agencies has caused a large increase in the need for external accounting, transforming audit and tax services into a commodity. The fact that these firms are now so popular means they will offer you many discounts and incentives to obtain your business as a client. In order to obtain the correct firm, it is important to know what type of service professional you need.

First, you need to prioritize the main reason in reaching out to a professional. If you are looking specifically for help with taxes or tax planning there are many small firms available to assist your business. Many of these firms can be franchises such as H&R Block or LedgerPlus or they can also be local private firms. Before committing, it is important to look at the tax firm's employees. Many will have what is called an EA, or enrolled agent. These are licensed tax professionals who are certified by the IRS after taking a test covering all types of business taxes from public to private. This type of professional will be able to do sufficient work for a small business and can be significantly cheaper than hiring a larger or public accounting firm.

If your company is in need of an audit for shareholders, or you are a private firm looking for a professional audit, it is a good idea to go with a public accounting firm. These large firms consist of Certified Public Accountants, or CPAs. CPAs are held to the highest standards by the PCAOB and have to pass a rigorous test and continue education throughout their career. Although public firms will bill you more, they hold themselves to a much higher standard for quality of work. Also, public accounting firms will do a preliminary audit of your business before they decide to take on your company as a client. This is to make sure they do not see any red flags or feel that they could give your company an adverse opinion.

Because of this, you can trust these public firms more being that they do not want to be liable for assuring your financial statements if it later comes out your company has committed fraud. Another bonus of a public firm is their representation if there is ever any litigation against your business. Many times upset shareholders want to sue a publicly traded company because they lost their investment based on so called misleading financial statements. In this case the accounting firm will stand up for you in court and defend your numbers against the prosecuting party.

These are just two basic reasons to choose an accounting firm to help your business. It is very important to evaluate your individual situation before deciding on a specific accounting professional.

Save Money: Buy Refurbished PC

 BNet had a good article (which you can read my comments on) regarding purchasing refurbished PC's...something I have no problem with. Read the article at the link below and read my comment at their site also:

Why do businesses need to asses Risk management?

The latest recession has reminded us all that what can happen in business and its obvious for all of us to think over about it. Every business faces risks that could present threats to its success. Risk is the probability of an event and its consequences in a business environment. And all the companies have started giving more importance to risk management programs these days.

Under the main factors of risk first comes credit risk. The pain of the credit crunch persists. According to the Small Business Association, guaranteed loans were down 30% in 2008. The second one is legal risk.There are possibilities that for faulty products or hazardous working conditions in an organization. Then there are many possibilities of concentration risks, financial risks and regulatory risks.

So in order to overcome all these, risk management programs should be implemented.

This includes 5 steps First you need to work out how people could be harmed. When you work in a place everyday it is easy to overlook some hazard. Walk around your workplace and look at what could reasonably be expected to cause harm. Ask your employees or their representatives what they think.

For each hazard you need to be clear about who might be harmed; it will help you identify the best way of managing the risk. Having spotted the hazards, you then have to decide what to do about them. Putting the results of your risk assessment into practice will make a difference when looking after people and your business. Review the assessment and update it regularly.

Tips to be a great sales leader

A person is said to be a great sales leader, only when he is capable of building his team in an efficient manner to achieve the sales target and company's goals. A great leader is an inspiration, a motivational tool and give their significant contribution to the success for their sales team.

Following are some of the tips to be a successful sales lead:

* Sales Managers and Sales People required to practice the professional development in order to value their growth and clients/customers.

* A well versed professional with his core skills such as, Planning, Execution, Current Marketing Trends, Industrial Knowledge, Product and Customer Satisfaction, Communication and Differentiation skills.

* Good at major accounting strategies, competitive strategies, presentation and proposal writing skills.

* Must be specific, set deadlines for the targets, capable of tackling the worst marketing situations. Share the facts and vision of the organization with the team mates and motivate them for their utmost contribution.

* Try to understand the difficulties of the sales team and support them with the necessary resources.

* Capable of learning and implementing the advanced sales techniques.

* To be an inspiring leader, you must be a reflective and risk takers.

* Value the skills of the sales person and give high training and focus on attitude.

* Communication plays a vital role to interact with the sales people. Active listening to the team mates is very essential.

The great sales leads know how to get a work done by the people. They set proper goals and encourage their team to meet the necessity. Promote an enjoyable work environment and build a culture were people value themselves, each other, company and the customers.

Top 10 trends In Indian E-commerce in 2010

2010 has been a very remarkable year for the Indian e-commerce sector because this sector has caught the fancy of investors and has generated multiple entrepreneurial avenues, broadband penetration, change in buying patterns and the success of group buying sites globally.

The top categories within e-commerce are travel, classifieds, group buying, auto sales and luxury brands.

Nowadays because of life in fast pace everyone is in dire need of all the facilities online.

Online ticket companies are making huge turnovers in their companies these days. Online bus ticket booking companies and train booking are in fast growth.

Next comes Books. They were a good hook to draw in users but on its own, book retailing online is not a scalable business. It will work online but can never become very big as the average book value in India is very low.

Indians are always in love with discounts. May discount be on anything, they are always ready to afford for that. This also has been a great trend in 2010.E Bay acquired Germany’s fashion and lifestyle shopping site brands4friends.com for $200 million for high end luxury portals. In India, sites such as 99labels.com, exclusively in and Fashionandyou.com are competing in this segment.

There is a strategic shift in e-commerce. Many portals are expanding horizontally too.

Jobs, real estate, matrimonial continue to see traction. Linkedin, Naukri and Monster.com have top-recall followed by TimesJobs.com and Shine.com by HT Media. Matrimonial sites such as Consim Info Pvt Ltd’s Bharatmatrimony.com, Shaadi.com and
Jeevansathi.com continue to reign.

Expected Customer Trends In 2011.

Yet another new year has begun and there is new door for plenty of opportunities. In this year there are a list of trend for the consumers which they might feel is significant for them.

Primarily consumers expect few acts of kindness at random from business enterprises. Initially kindness was perceived only as inflexibility but now it is being seen as charismatic and more compassionate towards them.

Today 50 % of the consumers are urban citizens and they are prone to trying with new arrivals though they seem to be distanced from traditional social and familial structures.

Next, in terms of owning, bulky and irregularly used items is both expensive and unsustainable, especially in dense urban environments where space is at a premium. So consumers feel it becomes easier to book items whenever and wherever they are needed.

It is expected to see consumers rushing to sign up to services with planning that allow for endless mingling with friends, family, colleagues or strangers in this year.

Traditional marketing trend has started to diminish because booking items online has become most popular way of buying.

In 2010 companies began to take social media marketing seriously and because of that we saw social media explode as a marketing tool. This year we will begin to see companies integrate social media into their overall marketing plan.

Till now mobile phones provide access to email, messaging, calendars and websites but now location based services help in marketing through phones.

BUSINESS SOCIETY IN FUTURE

Predicting the world business in future will be imperfect but there are chances of all the types of business getting expanded due to current market situations.

All the business activities in an enterprise like accounting and banking applications are being done online through upgraded versions of software. Day-to-day activities like travel bookings, listening music, news ,information on stock, shopping and retailing are already being done in the internet which is in growing space.

Today’s Education system includes entrepreneuship and business tactics at an early stage. So the future business society in world will have young business people as there are plenty of exciting business opportunities in the fields of Internet ventures, outsourcing technology, e-commerce opportunities, software development opportunities.

Ofcourse the future business would turn everyones life into fast pace because of unbelievable technological growth. The globe seems to become small because of the technological improvement in communication sector but there are certain bitter things like global warming and inflation which are believed to affect business in a big way in future.

In the business scenario of last two years, inflation affected world business drastically. The negative impacts of inflation are the distortion prices between different time periods, interest rates rising, uncertainity , redistribution between wealth and income.

There is a led to collapse in social order and throughout their business operations because of global warming. Companies have an important impact on the natural environment .Each and every individual in a business enterprise should take responsible for saving the ecosystem in the future.

Boost your small business traffic

On the internet, search engine optimization and marketing is vital to gain an edge over your competitors.

Listed below the basic seo and internet exposure strategies to be followed inorder to boost your small business sales.

Basic Elements of SEO Strategy:

-Client expectations and objectives
-Keyword research to identify the right keywords
-Website analysis
-Competitor analysis
-Website optimization using the right keywords
-Content strategy development
-Linking strategy – reciprocal and one way link building campaigns
-Submission of website in search engines
-Directory submission
-Social media optimization strategy - news releases, forum postings, article writing and submission
-Use of natural and white hat SEO strategy to promote website
-Evaluation and tracking
-Maintenance

Achieve Better Internet Exposure:

-Establish a more successful website with better usability
-Enhance your reputation as a professional
-Boost your brand visibility, traffic and revenue
-Generate increased referral business
-Establish tremendous client loyalty
-Establish long term client relationship
-Establish your credibility