Category: Accounting

How Is Being Accountable Important to an Employer?

In the business world, accountability and ethics go hand in hand. In fact, accountability is often included as a core aspect of a company’s code of ethics. As an employee, accountability means the willingness to answer for your actions. By taking responsibility, you send a powerful message to your employer about your character.

Shows Responsibility

When you display accountability, you show your boss that you are a mature and responsible individual on whom he can depend. This makes him feel secure. He does not want an employee who refuses to own her conduct. For example, your boss may assign you to an important project, and it takes you longer than you expected to finish it. He checks on your progress, and you explain that you are still working on it. A more accountable action would be not to wait for him to inquire about your progress. Instead, go to him before the project runs late. Explain the delay and give him an estimate of when the work will be complete.

Saves Time and Money

When an employee fails to take accountability, time is wasted as those involved try to locate the problem. This time is better spent working instead of playing detective. If you are assigned to a team of four, and three team members work to move the project forward while the remaining member slacks off, the project may not be completed on time. If the irresponsible employee refuses to take accountability, more time is lost as your manager investigates to identify the problem. The employee’s refusal to be accountable results in wasted time, and ultimately, money.

Promotes Trust and Integrity

Trust and integrity are integral to forging strong business relationships. Your accountability shows that you have integrity and that you can be trusted. If your boss does not trust you, this may manifest itself in various ways, such as micromanaging or anxiety because he fears you will slip up. If you are accountable, his doubts about your ability to do the work are removed and he no longer feels the need to supervise you as closely.

Displays Effective Leadership

In the workplace, employees and managers are held accountable for their behaviors. A manager who takes accountability and leads by example is an effective leader that employees will follow.

Strengthens Ethical Decision Making

Customers stay loyal when they trust your communications and are confident that you have their best interests at heart. This is a major win for your employer because it enhances the company’s revenue and reputation. When all levels of the organization are educated on the company’s stance on ethics and accountability, all employees are aware of the values and principles that must be followed. When faced with decision making, they know that making the ethical choice is expected of them.

 

Why Do We Need Accountability?

There are numerous benefits when accountability is being implemented, four of the most crucial benefits are:

Accelerate Performance

Accountability evokes a sense of concern about your workflow. This also makes you more attentive to the smaller details of your assignment/s, whatever they may be. Due to extended attention you put into a task, your end result is perfect – something you feel confident in. Your confidence in your plan, or strategy, can easily be the deciding factor to overcome any obstacle. Solve every problem and complete your job with the best outcome.

Sets up for Milestones

Accountability helps you understand your ability. It helps you track how close you are to reaching your goals, and allows you to keep track of the steps you must take before becoming stronger in a field while setting milestones for the future.

Accountability enables you to define what success feels like and set milestones to measure your progress along the way. You gradually step up to perfection.

Makes You Consistent

When you start doing something, many distractions steal your focus from achieving your initial goal. Many people fall for these temptations, ultimately losing sight of their goals and going astray from their primary objectives. Accountability will hold your hand, and prevent you from giving in to these temptations.

Keeps You Happy

When you are on the road to success, every milestone brings you happiness along with a sense of accomplishment. You feel as though a weight has been lifted from your back. You feel stronger and valorous. This makes your future experiences even richer and more pleasant.

 

How to Improve Accountability?

First of all, as a leader, it’s your job to understand what makes each of your employees motivated enough to complete a job with efficiency. Every employee has a distinct drive. They are motivated in different ways. One way may work for one employee while being completely useless for another.

It’s your job to find out what maximises the motivation for each of your employees, then use this information to position them for success. Some effective ways to improve accountability include:

Setting Expectations

Setting your expectations is crucial to measure performance and to also hold your employees accountable. When you set an expectation, they work towards reaching and overcoming it. People are always motivated by a challenge. Therefore, it’s a psychological way to set up a challenge which creates a window for motivation to jump in and also overcome a set target.

Provide Performance Feedback

It’s very important to provide your employee with actionable and regular feedback – both positive and negative. Positive feedback creates a sense of accomplishment in the employee and further improves their ability so they work harder to achieve their goals.

The constant contact they have with their superiors will strengthen their sense of being valued within the workplace. Factors like timeliness, attendance, day-off requests and efficiency at work should be used in the flow of performance feedback.

Establish a culture of trust

By establishing freedom at work, you can improve workplace efficiency and also accountability. This applies majorly on the present generation of work force. A survey concluded that the present generation of millennials feels more motivated to work when they are empowered to control and set up their own schedules of work. Also, allowing your employees authority over their work schedule is the first and initial step in having them take ownership of their work.

 

Accountability results in stronger adherence to compliance.

Accountability is crucial when it comes to employees being compliant with both established and new company guidelines, laws, regulations, and standards. People who understand the consequences of failing to adhere to specific guidelines are more likely to follow them, and entire teams that feel the weight of those standards will work together to meet them.

When members of an organization are held responsible for their actions, it creates a healthier, happier, and safer working environment where everyone can focus on work instead of dealing with colleagues’ inappropriate actions or behavior. This also can reduce the number of potential lawsuits or fines your company could be faced with.

 

Balancing Accountability and Autonomy

Earlier I mentioned the need to monitor employee productivity, but the idea is important enough to expand upon it. Just how do you track someone’s productivity? Do you monitor their every action, making sure they’re always on-task and getting results?

I wouldn’t advise it. Being on top of your employees like that is a recipe for disaster, and is likely to cause even more distrust in the workplace. No one wants to be micromanaged. Plus, the second you have to leave on business they’re back to their old habits. So it really doesn’t fix anything.

The key to accountability is to passively track work without being overbearing. Have employees create to-do lists (whether they write them down or you implement a software solution) for the things they’re directly responsible for. Then leave them alone. Autonomy can be a productivity booster in the right situation, and accountability means nothing without it.

When you’re micromanaging that’s not accountability. Part of accountability is responsibility. Let them make mistakes. If they’re slacking, give them feedback on it. If their lack of work is a consistent problem, that’s when you address it.

Accountability matters because not having it means no one can be held responsible. Creating accountability, then, is about creating a culture where people value responsibility, and where people understand that accountability involves a certain degree of autonomy. Accountability is important, but when implementing it into your workplace, make sure you’re giving employees as much as you’re asking from them.

WHAT CAN YOU DO WITH AN ACCOUNTING DEGREE?

If you are someone who needs to follow a plan rather than applying for jobs willy nilly, then you have come to the right place. It might be helpful to know that we have created a career path map for Accounting majors to use to find career paths that they might have not thought about before. The map is a helpful tool to discover the career potential of your major.

BEST JOBS FOR ACCOUNTING MAJOR

If you recently graduated from college and are having a hard time finding a job, you are not alone. Luckily enough, we set out to help graduates with an Accounting degree to find the perfect job. After looking through 232,971 Accounting major resumes and millions of job listings, we were able to find which are most preferred jobs by Accounting major graduates.

Accountant

Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.

Finance Analyst

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Staff Accountant

Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.

 

What is Accounting and Why is it Important For Your Business?

A simple definition of “accounting”

Accounting is how your business records, organizes, and understands its financial information. You can think of accounting as a big machine that you put raw financial information into—records of all your business transactions, taxes, projections, etc.—that then spits out an easy to understand story about the financial state of your business.

Accounting vs bookkeeping

Accounting and bookkeeping overlap in many ways. Some say bookkeeping is one aspect of accounting. But if you want to break them apart, you could say that bookkeeping is how you record and categorize your financial transactions, whereas accounting is putting that financial data to good use through analysis, strategy, and tax planning.

The accounting cycle

Accounting begins the moment you enter a business transaction—any activity or event that involves your business’s money—into your company’s ledger. Recording business transactions this way is part of bookkeeping. And bookkeeping is the first step of what accountants call the “accounting cycle”: a process designed to take in raw financial information and spit out accurate and consistent financial reports.

The accounting cycle has six major steps:

Analyze and record transactions (looking over invoices, bank statements, etc.)

Post transactions to the ledger (according to the rules of double-entry accounting)

Prepare an unadjusted trial balance (this involves listing all of your business’s accounts and figuring out their balances)

Prepare adjusting entries at the end of the period

Prepare an adjusted trial balance

Prepare financial statements

Financial statements

Financial statements are reports that summarize how your business is doing, financially. There are three main types of financial statements: the balance sheet, income statement, and cash flow statement. Together, they tell you where your business’s money is, and how it got there.

 

Accounting Terminology Guide

A Misstatement is Inconsequential

If a reasonable person would conclude after considering the possibility of further undetected misstatements that the misstatement either individually or when aggregated with other misstatements would clearly be immaterial to the FINANCIAL STATEMENTS. If a reasonable person could not reach such a conclusion regarding a particular misstatement, that misstatement is more than inconsequential.

Abatement

Complete removal of an amount due, (usually referring to a tax ABATEMENT a penalty abatement or an INTEREST abatement within a governing agency).

Absorption Costing

An approach to product costing that assigns a representative portion of all types of manufacturing costs–direct materials, direct labor, variable factory overhead, and fixed factory overhead–to individual products.

Accelerated Depreciation

Method that records greater DEPRECIATION than STRAIGHT-LINE DEPRECIATION in the early years and less depreciation than straight-line in the later years of an ASSET’S HOLDING PERIOD.

Account

Formal record that represents, in words, money or other unit of measurement, certain resources, claims to such resources, transactions or other events that result in changes to those resources and claims.

 

Tips & An In-depth Process To Choose A Perfect Accounting Software

If you have a business, you need an accounting software to record your income and expenses. Ideally this is the first piece of software you should purchase when you start the business. However, most business owners get one only when they need to pay taxes or apply for loans.

So, how to choose a right accounting software for your business? This can get confusing as there are plenty of products available in the market today. I’m trying to make your job easy by listing down some important filtering criterias that you should consider before you invest in an accounting system.

Online or Offline

First question to ask yourself is – Whether I want an online software or a desktop based offline software? How does it matter? Well, most businesses nowadays are adopting cloud based softwares as they offer lot of advantages over traditional offline softwares. However, some businesses like retail stores require speed and not always connected to the internet. For them, offline POS (Point Of Sale) systems are the best bet.

Advantages of Cloud Accounting Software:

– Nothing to install. Just signup and start entering your transactions

– You don’t have to worry about upgrades as all changes are pushed automatically. Online softwares are always up to date.

– Can be accessed from any internet enabled device at any point of time

– Cloud accounting software providers take care of backup and maintenance which is a cost saving for you.

– Data across all your offices is always synchronised.

– It can integrate with other cloud based applications.

When you should buy an offline or desktop based software:

– You have a retail store and need to create few hundred invoices over the counter.

– You do not have internet connectivity at your business location.

Its strongly recommended that you go for an online accounting software as you will have your financial data on your tips even when you are not in the office.

 

Why Business Writing is Important For Accountants

Accountants do many things, but ultimately, they help make people’s lives more manageable. From filing taxes to regulating payroll for a small business, accountants work wonders for their clients. While crunching numbers, technology implantation and tax compliance (and more!) are all part of their job description, writing is another skill excellent accountants should possess.

Communication Skills

Excellent teamwork goes hand in hand with excellent communication. Accountants often have to work with other departments or firms to fulfill their duties. In this case, excellent communication skills are essential. Not to mention, a huge chunk of business communication happens via email these days. When financial assets are involved, written proof is always necessary. It’s important for accounting professionals to be able to discuss these matters in an articulate and clear way.

Of course, that means that emails remain on file for further reference. This alone should be enough of a motive to keep writing skills sharp. Furthermore, regular written correspondence with clients help builds trust in that relationship. When someone gives their writing that personal touch, it’s apparent in even the most transactional email. Colleagues and clients alike will take note of effective email writing.

Job Retention

Accounting firms have raised the bar on what they expect from their employees. In fact, prospective accountants usually have to complete written and oral exams during the hiring process. Poor grammar could quickly get a rookie accountant the boot. Indeed, plenty of dismissals happen on account of poor writing skills. A large number of firms report this as a reason for job termination.

Common Writing Tasks

Accountants have plenty of writing they need to do frequently. First of all, there are technical documents like analysis of business performance or financial reports. While this kind of writing tends to be packed full of data, there should be a clear explanation. Management and clients have to be able to understand these documents, too. Failure to properly communicate can lead to trouble and misunderstandings.

How to Select a Good Accountant

The quick and easy answer to how to select a good accountant is to say, “Select me!” That, however, is not the purpose of this article, so we will provide you with some additional criteria for the selection of an accountant for your business. Before we discuss the attributes of a good accountant and accounting firm, let us review why you need the help of any accountant, good or bad.

At the very least, you will require an accountant to assist you in the preparation of your tax return. The tax department views your business as a series of taxable income and deductible expense transactions. The income tax return summarizes these transactions and calculates your contribution to the national revenue system. Unless taxation is a major hobby of yours, you will need an accountant to sort this out for you. Therefore, it is in the area of taxation that you need a good accountant.

The next reason to use an accountant is to prepare your monthly, quarterly and annual reporting to the government. Each report to the government, be it sales tax, payroll taxes or whatever, requires the completion of forms that are governed by strict regulations… regulations that, if not followed, will result in the taxing agency levying heavy fines. Again, unless you have a outside interest in this, it’s best left to people who work with it every day.

You may be thinking that the above reasons for using an accountant imply that you will be financially punished by the government if you do not do so. Partially, this is true. Inadvertently, the powers that be have devised a tax collection and reporting system that places a large burden on the independent business owner. With few exceptions, the reporting required by a five-person operation is similar to the reporting required by an organization employing thousands of people. The difference is the resources available to accomplish the task.

Now let us turn to some positive reasons for using an accountant in your business. After handling your compliance issues with the various levels of government, a good accountant should go further and help you with the financial circumstances of your business. This leads us to the first major criteria of a good accountant. Will you and your accountant be able to fully understand each other? It is extremely important that the lines of communication are clear, and the accountant takes the time to review the financial information provided. A good accountant will drop the jargon and speak to you in a way that helps you better run your business. When selecting an accountant, select someone who appears interested in your business and someone with whom you feel you can develop a rapport. The second step is to ensure that this person is the one with whom you will talk. Is the person selling the service the one who will work with you? How will this contact be made? On what schedule and under what circumstances will your calls be returned? You cannot expect this accountant to be available 24 hours per day, but it is reasonable to expect a return call within 24 hours.

How to Choose a Good Accountant

With so many accountancy firms to choose from, how do you choose a good accountant? Remember, what’s good for one business, may not be quite right for the next. Certainly, with your startups’ finances, you’ll want to choose an accountant you can trust. Not only that, but one that’s qualified and ensures you’re compliant with Companies House and HMRC. Therefore, choosing an accountant for your startup is definitely an important decision. The right accountant will keep on top of your accounts. In addition, mitigate fines and penalties and any other unwanted tax bills. Ultimately, this supports good cash flow & your ability to grow, so choose the right accountant for your startup.

How to Choose a Good Accountant?

It’s a good idea to ask people in your network. For instance, ask them how they went about choosing a good accountant and do they have an accountant they trust. Most importantly, what has been there experience with the accountant(s) they’re using or previously used? Try to drill down as much as you can. Whilst it may seem like a ball ache, avoid choosing an accountant without checking them out for the sake of ticking it off your to do list.

In addition, compare this with a general online search for local accountants. Compare at least 3 accountancy businesses and weigh up the pros and cons for each. As a startup and particularly in the early stages, cost is a driving factor for a lot of the choices we make. On average, you’re looking at around £500-750 for annual accountancy services. For example, for account filing and tax returns, although the more complicated and niche your startup, the higher the price. Your location may also affect price, but as a ballpark figure in and around London, this is what you can work towards and compare quotes with.

Choosing an Accountant for your Startup

First of all, decide what accountancy services you need and why. It’s important to be clear in your mind about what you need and who can provide this to your expectations. Remember, accounting and financial reporting requirements differ according to your business structure.

Secondly, check that your shortlisted accountant(s) are qualified. For example, the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountant (ACCA). This gives you the chance for recourse in the unfortunate event that mistakes, or other issues crop up.

How to choose the best contractor accountant

The right contractor accountant will take care of your tax paperwork and help you make sure you don’t pay more than you have to. More importantly, they’ll advise you on complicated rules like IR35, so you can crack on with your work without having to worry about what would happen if HMRC were to investigate you.

When should you hire a contractor accountant?

Before we discuss how to choose a contractor accountant, a quick word on when to hire one. While you might think it’s a big expense — especially if you haven’t made any money from contracting yet — it’s worth hiring one before you even start

What qualifications do they have?

It goes without saying, but you should only work with an accountant if they’re suitably qualified. At a bare minimum, they should have an AAT foundation certificate. This is an entry-level qualification which gives a good grounding in bookkeeping, costing, and other basic issues around financial administration.

Do they specialise in contracting?

As a contractor, you have to comply with complex and tricky legislation such as IR35 and the rules around expenses. These can have dire financial consequences if you get them wrong.

Individuals vs accountancy firms: who should you go for?

Like other businesses, accountants can vary enormously in size — from one-man bands to large firms with thousands of employees across the country (or even across the globe). Both have their pros and cons.

How to choose a good accountant for a new business?

When starting a new business, what are some important considerations for choosing a good accountant? What should one look for / ask for? What are some red flags?

Choosing the right accountant is one of the most important steps a new company can make. Here are some tips to consider while choosing for an accountant:

Consider a certified of chartered accountant – a qualified accountant will be able to add value to your company, especially if you expect your business to grow

Relevant experience – could be beneficial for you if the accountant you choose has experience and expertise in the market sector or industry of your business

Accounting software – if you already have an accounting software set up it’s best if your accountant already has knowledge on it

Ask for referrals

Determine the fees and costs – the accountant could offer various services for which other fees may apply, have a clear communication regarding payments

Consider whether you would prefer to hire an individual accountant or an accounting firm depending on your business’s needs

Some red flags to watch out for:

Communication and the lack of

They don’t know your industry, especially if it is something specific

They only have short contracts in their portfolio – clients would not want to let go of a good accountant

Bending the rules – a good accountant will always maintain their integrity as otherwise could get you into trouble

They are vague when answering your questions

You don’t feel confident in choosing them

How to choose the right accountant

When it comes to choosing an accountant, you’re looking to build a business relationship with someone, who ideally you’re going to be with for long haul. Of course it’s possible to switch and change, but it’s not ideal, so it’s definitely worth putting in the groundwork right from the start so you can find the right solution.

THE FIT

The first consideration is the fit.  Think, are you happy discussing the inner workings of your business with the accountant you’re considering? Would you be comfortable asking them various questions about your accounts and would they explain things in a way that you understand? Do they appreciate the general ethos of what you’re trying to achieve with your business?

CREDENTIALS

In short, is the accountant you’re considering up to the job?  In this video I explain that accountancy isn’t actually a regulated profession, which means anyone can potentially call themselves an accountant. So you might want to check they’re a member of a professional body

THE LEVEL OF SUPPORT

It’s important to think about what support you’ll need. Remember, you don’t need to have an accountant. So start considering what’s required and whether your potential accountant can support you with what you want now.

And also perhaps more importantly, coming back to the idea of building a relationship with someone, can they support you going forward with where your business wants to be? There’s no point in working with someone who will be great for a year or two and then suddenly you’ll have to swap and change. So try and think a bit longer term.