Accounting Ethics

By Nicole Gaudioso

Accountants at some point in their career will find themselves having to make a decision whether their situation is ethical or not. Professional ethics is an important aspect of an accountant's job. As an accountant you have the commitment to each customer to demonstrate competence, confidentiality, integrity, and credibility. Competence is where you must show a level of professionalism as well as developing the knowledge and skills that you will need as an accountant. Confidentiality is when you as an accountant must keep information confidential unless authorized or legally required to release client information. Integrity is when you must communicate with the associates to avoid any conflict of interests. Lastly there is credibility which is when you must communicate information in a reasonable and objective manner.

An ethical issue could arise is in the firm you are working for. You could discover something that the firm or another employee is doing ethically wrong. You may encounter an unethical behavior or conflict. For example if you were working for a firm and you discover that a co-worker is withholding money from the firm. When you are faced with this you should try and follow you firm's polices to try and resolve the issue. For example a policy that a firm may have would contain something along the lines of stating that each employee has the reasonability to conduct a professional and ethical business practice with integrity, confidentially, credibility, and competence. It may also tell you in whom you may need to talk to if an unethical situation does occur. If your firm does not have a policy you should consider discussing the situation with your supervisor. If you feel that your supervisor is involved in the situation then you must go to the next level of management.

If trying to resolve an ethical issue, you as an employee must understand the firms business and strategies. If you feel that you may be at risk of the ethical conflict then you should also contact your personal attorney. This is because your personal attorney can advise you as to what is best for you to do in a particular situation. They will also have your best interest, and if you feel as though you can not continue to work for your firm any longer then you should give your firm your notice and leave. At times if the situation is pressing and concerns you then this may be your best bet.

Accountants are known and respected for their honesty; by showing their integrity and competence. This is why it is important for all accountants and their firms to show and practice a good ethical practice. Ethical and professional responsibility is something that should be show and taken seriously. There are plenty of businesses that did not show these things and are now no longer in business. A good example of this is a business by the name of Enron Corporation. This financial scandal involved their accounting firm and what happened was that there was an involvement of irregular accounting procedures and caused Enron to go bankrupt. The unethical issue in this case involves an accountant and what they did was shred document that were involved in the audit of Enron and this accountant was convicted and forced to surrender its CPA licenses. This is a prim example of what could happen if involved in an unethical situation. This is also a good example of why it is important for all accountants to follow and practice good ethical values, because you do not want to end you like the accountant in the Enron case.

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Accounting Software - Advanced Modules

By David Kraft

Working with the wrong accounting software is a game of give and take in most companies. Sometimes the company has to alter processes to accommodate the software's settings and at other times the company is able to customize the software to work in line with existing processes.

The trick to avoiding this game is to select the right software from the start. The result of selecting and implementing the right software in the beginning is a more automated and streamlined business that can avoid the back and forth game of adjusting processes to work with the software and vice versa. Accounting software available today comes with a number of modules that can be helpful, and if the right modules are selected, a company will gain almost immediate benefits from the new software. Some of the more common modules are:

General Ledger - The foundation of financial software, a general ledger allows users to interface with all functions of the software package. It will keep a record of all transactions, budgets, and other financials. The general ledger imports data from other modules and displays it in an easier to read format. When selecting software with general ledger capabilities, be aware of what reports you need easy access to and look for the best solution.

Sales Order Entry - A sales order entry module allows companies to store and access all of their sales orders in one place. All aspects of processing an order is put in to the system and everything from the shipping address to the available inventory is accessible. To gain the most functionality from a sales order module, it needs to be integrated with other modules, such as inventory management.

When properly configured, a sales order module allows users to complete all steps of the order process in one place. It should also be capable of tracking packages while they are en route to customers using tracking numbers.

Inventory Control - This module is relatively self-explanatory - it allows users to manage the inventory of products through the software. It is usually integrated with sales and purchase order processing modules and is capable of generating reports about inventory supply, sales, customers, accounts, inventory value, and so on.

Job Cost - This module is capable of tracking costs related to jobs and projects in certain industries, such as construction. The main function of job cost modules is to track the cost to date of a project or job and be able to analyze that cost in relation to hours, percent of budget, and so on.

When used properly, job cost modules can provide companies with beneficial information about how profitable jobs that the organization completes are. This module can be used as both a tracking and estimating software and is capable of tracking previous job costs and using real, historical data to estimate costs for similar jobs.

Purchase Order - Purchase order modules handle ordering new products from suppliers. This item tracks what supplies are in stock, how long they will remain in stock, when new supplies need to be ordered, and how much needs to be ordered. A well-integrated purchase order module will track purchase orders from their initial creation to arrival of the new supplies, however some companies do not operate a level to make this much functionality worth the additional money.

David Kraft is a freelance author with many areas of specialization. He offers advice for selecting new accounting software for businesses of all sizes at his financial software site.

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7 Advantages of Double Entry Bookkeeping

By Veronica Eyenga

In the world of bookkeeping, there are two different systems commonly used by businesses, big and small, to record financial transactions. They are single-entry and double-entry bookkeeping. Both systems "get the job done," but it depends on what your personal preference dictates. However, unless you're a small business with simple transactions then double-entry bookkeeping will be the most beneficial to you and your company's financials.

Single-entry bookkeeping is similar to a checkbook register where only a single line transaction is recorded, reflecting the credit or debit of cash. This simple way of keeping track of your money is less expensive and can be maintained in less time and with less effort. Single-entry bookkeeping only takes into account records of cash, accounts receivable, accounts payable and paid taxes. More in depth records such as assets, liabilities, inventory, expenses and revenues are not maintained, thus leading to an inadequate portrayal of your financial records. This is where double-entry bookkeeping comes into play.

Double-entry bookkeeping, which has been around since the 1400's and is the basis of general accepted accounting principals, is a little more involved. Instead of only one transaction in one column, double-entry makes two entries for every one transaction. A credit entry is made for revenue brought into the company and a debit entry for every transaction paid. In the end, these two entries will offset each other so that both sides will add up to zero. With this in mind, double-entry accounting provides the following advantages over single-entry bookkeeping:

1. A check against a bookkeeping error including theft are automatically provided when transactions are recorded and the total amount of debit entries equals the total amount of credit entries.
2. The preparation of financial statements can be created with ease due to the accurate and continuous calculation of profit (credit) and loss (debit).
3. With both entries recorded (sales and purchases) you can track who owes the company money and who the company owes money to more easily.
4. The company's financial position is clearly illustrated and can be accessed quickly for effective business planning.
5. With a higher degree of required entries, double-entry bookkeeping has a strict approach creating detailed records of all assets so that your company doesn't lose track of any income.
6. Double-entry bookkeeping takes internal transactions such as entry adjustment into account which provides more accurate information at the end of the fiscal year.
7. Omission of important data is never a problem because each transaction is recorded twice in two separate columns.

While the benefits have been reduced greatly due to introduction of computerized systems, double-entry bookkeeping will still be more practical when it comes to detecting fraud and errors. Whether you are a single or a double-entry bookkeeper, as long as you're maintaining your financial records correctly, then continue crunching those numbers and getting the results you desire.

VBP Outsourcing is a full-service marketing and accounting firm located in Glen Burnie, Maryland. We specialize in providing intergrated creative and financial business solutions with a customized, partnership approach.

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Cash Flow Tips For Your Business

By Marc Sodomka

Here are some effective methods for you to manage your cash flow;

Do you know what your bank balance is today?

If not, why not? That's the first step to understand how much money you have. Try and get into the habit of reviewing your bank balance daily and determine what your income and expenditure commitments are for the following week.

Cash Flow is KING! - You need to understand what brings cash INTO your business and what takes it OUT. Once you have mastered this and you're now trained to think of doing point no. 1 above then you're on your way to understand how to manage your cash flow.

Manage your debtors diligently - Never allow them to exceed your trading terms without contacting them for an explanation. Keep on top of this because it's easy to think that you don't have time, or something else gets in the way. A sale is not a sale until the money is in the bank, that's what I live by. You will spend an enormous amount of time making the sale, but until the money has been paid your efforts are fruitless. Follow up your outstanding accounts so the money is in your bank account and not theirs.

Manage your suppliers - If you know the suppliers well then why not negotiate extending your trading terms with them? If you have a sound relationship with them then they may be more willing to assist you.

Keep inventory levels down - Discard obsolete or slow moving stock as it's just costing you money by sitting there in your warehouse.

Create a cash flow forecast - By doing this you're able to see where there maybe cash flow surplus or shortfall that you need to action. It's best to take the forecast out over 12 months to really benefit from the exercise.

Want to know more about some innovative ways of increasing your cash flow? Then let me also show you how to create a budget, how to be a leader and to effectively manage your time to name a few.

Marc from Cash Flow into Action

http://www.cashflowintoaction.com

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Tips to Plotting Out Your Finance Scorecard

By Sam Miller

Managing finances is not all that it is cracked up to be. The typical breadwinner or the person who handles the allocation of money in the family would certainly attest to that. Translate this to the corporate setting and you would certainly say that this is about a hundred times more difficult than it was in the simple home setting. Managing finances is never as easy as it may seem, not by a long shot at all. This is precisely why you need to implement an efficient finance scorecard to foster better financial management. Despite how tedious the whole process might be, you would still need to look into it because the effectiveness of the distribution of funds and resources would depend on this.

Financial management would actually demand a lot of techie knowledge because you would be handling the balancing of funds and the application of finance principles to ensure fair and productive allocation of resources. If you have a finance management team in your company, then you surely must see its members rendering several hours of overtime, especially when it is just about that time of the month when the team has to show the members of the upper management team how the company's funds and resources have been used - basically, where these were put into.

We all know how effective a managerial tool the balanced scorecard of BSC is. Moreover, this tool can be applied in just about any industry in the corporate world today, so as long as its application is done accordingly. How can this tool be applied in financial management then?

You have to understand that the BSC is basically the management team's way to have a bird's eye view of what is going on in the enterprise. With the BSC applied to finance management, it would then be easier for the team to pinpoint the strengths and weaknesses of the finance management team itself as well as the endeavors that it has taken upon. Moreover, from the name of the tool itself, the BSC takes on a balanced approach towards measuring the performance of the team itself. Thus, you are sure to have metrics and key performance indicators or KPIs plotted on the scorecard that are all objective and unbiased.

Another features of the BSC is that it actually provides a guide that the finance management team's evaluator could make use of when conducting the process of evaluating the company's financial processes. With this guide as basis in ensuring the effective performance of the team regarding managerial duties, there would be more room for your company to garner more savings.

If you are not too sure what metrics and KPIs to include in your finance scorecard, then go online and search for some guides that can help you. Do not copy all metrics used by other companies, not even if you belong in the same industry. You have to choose just the ones that are relevant to your enterprise. When it comes to KPIs and metrics, you should know that less is actually more so just choose a relevant few to begin with.

If you are interested in Finance Scorecard, check this web-site to learn more about finance metric.

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