January 8, 2013

Make Your Business Accountable

Filed under: Accounting,Financial Management — Tags: , — Sandi Mays @ 10:09 pm

Nowhere is it more true that business is all about dollars and cents than it is in the accounting world.

Accounting is strictly about management of funds. It is a business that makes sure a client has enough cash to continue, whether a company can meet payroll, or whether another business should make charitable contributions or deductions to reduce its tax liability.

Think about it. Without accounting, how would you know how much money you have left over? Whether it is a complex set of accounts at a corporation or a simple checking account in your own home, you have to know how to balance the books.

It used to be an accountant would slave over a desk, poring over numbers and figures with a fine-tooth comb and wearing out fingers with a tapping of a 10-key keypad or calculator. Those days, for the most part, are gone. Sure, there are accountants that still believe in the old-fashioned ways, but new techniques have been developed to reduce wear and tear on number-crunchers across the world.

Most new systems feature tools designed to stop errors from occurring. Your transactions are handled by several different departments within a company, and if one department does not have the same information as another department than the transaction could be garbled and come out wrong. These new accounting tools are meant to stop errors from taking place before they get to the critical level.

According to the Journal of Accountancy, a new technique often used by accountants involves a format called “Lean Six Sigma.” The journal refers to lean six sigma by talking about a manufacturing perspective, as it focuses on efficiency and quality. How does this relate to accounting? Simple. One of the biggest things accounting does is ferret out waste and inefficiency so you can focus on the true meat and potatoes of your number-crunching. The less waste an accounting firm or software has to eliminate, the more time it will have to work on your numbers.

When it comes to accounting software, Quick Books used to be the gold standard, much like Microsoft Office or Windows. Quick Books is still used by a lot of individuals and companies, but other software has been developed by companies like Peachtree and Microsoft. This software uses downloadable updates to keep your program fresh without having to spring for all-new programs every year.

It should come as no surprise that the top accounting firms are the ones setting the trends now. Ernst & Young’s John Ferraro, global chief operating officer of the company, heads up a firm that hired 4,500 new accountants in 2005 and is at the forefront of hiring every year as one of the nation’s top accounting companies. Other prestigious firms are out there, ones practically every accountant has heard numerous times throughout their career, and there are some up-and-coming organizations.

Accounting is one of the oldest professions in the business field, but it does not mean the business is boring. It is merely changing with the times.

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