The Role of The Cost Accountant
Mar 21, 2016
As a cost accountant, it is not uncommon to encounter individuals who are unfamiliar with cost accounting and what our profession entails. I hear “you must enjoy numbers” or “I bet you are great at math”. There is so much more involved in cost accounting. I would not consider it math in the truest sense, but really more analysis and critical thinking. The unawareness of cost accounting is typical among the general public. However, what about a business owner? Does the owner of the business your work for truly understand what cost accounting is?
If you answered yes, then I believe you are in the minority. Why do you think this is the case? Do you consider it an issue?
Some cost accountants may feel if no one understands what they do, then why do it. Others believe it is a free pass because no one will know otherwise. However, I believe if no one recognizes the value you offer, the responsibility falls on you. You are the only one who understands the importance of accurate costing data and the value it brings to any business.
It can be discouraging when those running a business do not fully comprehend the importance of your role. However, if view the situation from a new perspective and see they believe you are then you make a positive impact.
Cost accounting has one of the most unique perspectives in a business. You control some of the most insightful information which can ultimately make or break your organization. Having the ability to observe trends before they occur allows for predictability which can be life changing. Recognize the fact that the owner does not need to understand how you know what you know, but it is much more critical for them to trust in you and the validity of the information.
In the end, I do not think it matters if everyone understands exactly what you do. What matters most is they respect what you do and recognize the value and necessity of the information you provide. What experiences have you had and what is your opinion?
Categories: Cost Accounting
Business Continuity Plan
Mar 17, 2016
What if disaster strikes your practice? An estimated 25% of businesses don’t reopen after a major disaster strikes.* Having a business continuity plan can help improve your odds of recovering.
The basic plan
The strategy behind a business continuity (or disaster recovery) plan is straightforward: Identify the various risks that could disrupt your practice and look at how each operation could be affected and identify appropriate recovery actions.
Make sure you have a list of employees ready with phone numbers, e-mail addresses and emergency family contacts for communication purposes. If any of your employees can work from home, include that information in your personnel list. You’ll need a similar list of customers, suppliers and other vendors. Social networking tools may be especially helpful for keeping in touch during and after a disaster.
Risk protection
Having the proper insurance is key to protecting your practice — at all times. In addition to property and casualty insurance, most small businesses carry disability, key-person life insurance and business interruption insurance. And make sure your buy-sell agreement is up to date, including the life insurance policies that fund it. Meet with your financial professional for a complete review.
Maintaining operations
If your building has to be evacuated, you’ll need an alternative site. Talk with other business owners in your vicinity about locating and equipping a facility that can be shared in case of an emergency. You may be able to limit physical damage by taking some preemptive steps (e.g., having a generator and a pump on hand).
Protecting data
A disaster could damage or destroy your computer equipment and wipe out your data, so take precautions. Invest in surge protectors and arrange for secure storage by transmitting data to a remote server or backing up daily to storage media that can be kept off site.
Protecting your business
If you think your practice is too small to need a plan or that it will take too long to create one, just think about how much you stand to lose by not having one. Meet with your financial professional for a full review.
- www.sba.gov/content/disaster-planning
Categories: Healthcare & Dentistry
Business Growth & Investing in Talent
Mar 16, 2016
I recently met with a long time friend who also happens to be the CFO of a large manufacturing corporation in Northern Ohio. We discussed some of the business changes occurring as the result of increased sales growth in his area. His organization started 10 years ago with sales of around $50 million and it is currently he track to reach $100 million in sales in the next few years.
Drastic sales growth offers tremendous opportunities, but there are paralleling challenges which are equally as large. The individuals who started the business had unique talents and motivations which set the stage for growth. Their quality product combined with exceptional customer service laid the foundation for success and set the stage for future growth. Every area of the business had dedicated employees with the necessary skills and the experience to ensure the company would be successful at the beginning and have the capacity to pursue additional growth.
As the company grew, the level of complexity in virtually every department of the company grew proportionately. Hence, the talents of the newly hired employees were developing to include more sophisticated skills necessary to maintain the company’s current market position. As a result, many of the founding members were unable to provide the guidance necessary to keep the company growing, profitable and able to expand. In spite of having loyal, hard-working employees, it became necessary to hire additional staff with the experience and training necessary to allow the company to continue to grow.
For example, the company engineers, who had been there since inception, were experts in the engineering concepts required for actual production. However, when a new engineer with extensive experience with larger companies arrived, it became clear that there were issues which needed resolution but there were not even on the team’s radar screen. My friend described how the topics in the engineering meetings have changed dramatically since the new engineer joined the team. They are now focused on level of activity and maintaining the company’s productivity to remain competitive in the marketplace. The basic engineering requirements have not changed but instead have become more sophisticated to keep production at the level of $100 million annually.
He concluded that unless businesses are willing to invest in new talent as the company grows, they will soon be antiquated and unable to fully capitalize on the opportunities and exploit the market properly. This is true not only in the production and engineering areas, but in all the supporting areas such as marketing, sales, accounting, administration, and personnel. Every area has growth-related challenges and opportunities, and only individuals trained and experienced in how those can best be met have the tools to fully benefit the company. Talent acquisition can ultimately play a significant role in your business development.
Categories: Cost Accounting
What is Cloud Accounting?
Mar 15, 2016
Whether you know it or not, you use the cloud on a daily basis. If you log onto Facebook, pay your bills online, or surf the internet, you are using the cloud. Cloud computing, or the cloud, is the general term for anything involved in delivering hosted services over the Internet rather than on your local desktop. The cloud utilizes multiple remote servers networked to permit the sharing of data-processing tasks, centralized data storage, and online access to computer services or resources. The cloud permits higher volumes of information to be shared than the traditional direct connection to a server.
What is cloud accounting?
Cloud accounting serves the same function as the accounting software installed on your computer. However, the program runs from outside servers and access to the program involves using your web browser, over the Internet.
Cloud accounting employs the cloud to process your accounting transactions. Traditionally, businesses and organizations purchased accounting software, installed it on internal computers or networks, and processed transactions with the program. WVC RubixCloud provides an application (general ledger software) which is hosted on someone else’s system, allowing you to complete your processing by accessing the program online. All of your data is securely stored and processed on a remote server in the cloud.
How secure is my data?
Often times, the cloud is more secure than being on your own network. In fact, cloud computing offers a level of physical and electronic security that an on-site server or a locked file cabinet cannot begin to approach. It’s important to understand that data hosted in the cloud is managed by a data center. All data centers are different and independent. You need to make sure the data center you choose can manage the data you are processing. There is a whole checklist of security measures you should be aware of, and I will address those in a future post.
Cloud computing offers more reliable protection from internal data loss than other communication methods because it gives you centralized control over your data. It’s much easier to establish and enforce policies for a cloud-based system than for the individual silos of email accounts, physical media, applications and flash drives that handle on-site data storage.
Is cloud accounting expensive?
Computing in the cloud has proven to be significantly inexpensive compared to traditional methods. There are fewer overall costs associated with cloud computing. There is no software to install and maintain. The IT infrastructure required is simply a connection to the internet, whereas traditional methods include a series of networks, applications, and workarounds. Cloud computing provides you the flexibility to utilize only the services you want, when you want them, and at a fixed monthly fee.
So, now that you know more about the cloud and cloud accounting, why should you make the transition? Click here to for 10 reasons you will love WVC RubixCloud.
By: Jennifer Kinzel, Director of WVC RubixCloud
Categories: Other Resources
The “Art” of A Tax Deduction
Mar 10, 2016
Valuing Artwork
Making a donation to a museum, educational institution, or other qualifying charitable organization can give you an opportunity to share your collection with others and provide you with a charitable income-tax deduction. If such a contribution is among your charitable goals, your first step generally should be to obtain a written appraisal from a qualified source to support your claim.
What Constitutes a Qualified Appraisal?
A qualified appraisal is one that’s made by a qualified appraiser and dated no earlier than 60 days before the date you donate the artwork. Very generally, a qualified appraiser is one who has the education and experience to value the type of property being appraised and who regularly prepares appraisals for a fee.
Typically, the appraisal should include the following:*
- A sufficiently detailed description of the artwork (e.g., size, subject matter, medium, name of artist)
- The authenticity and condition of the artwork
- Any donor restrictions (or the terms of any other agreement) on the disposition or use of the artwork by the charitable organization
- The appraised fair market value of the artwork
- The specific basis for the valuation
- The date (or expected date) of the contribution
Claiming the Deduction
The IRS has certain requirements that must be met in order to claim the deduction for donated artwork. For donations of artwork valued at $20,000 or more, you must attach a complete copy of the signed appraisal to your tax return and be prepared to provide a conforming photograph of the artwork if requested by the IRS. If the artwork has been appraised at $50,000 or more, you can request a Statement of Value for the item from the IRS before filing your return. A copy of the qualified appraisal and a check or money order for $5,700 (for up to three items) must be submitted with your request.
Categories: Other Resources