Thursday, March 31, 2011

Accounting Changes To Push For Progress

Businesses compete for their market. And with the many companies that come out these days, the competition even gets tougher. Companies and businesses therefore have to strengthen their strategies and do everything in order to attract their prospective clients.

This is one of the many reasons why the leaders of the accounting profession have come to a decision to implement the International Financial Reporting Standards or IFRS by January 2012. The IFRS is part of their goal for change. However, the problem seen is how they will get to that goal.

“It's not a question of where we should go but of how [we should get there] and at what pace," said Deputy Finance Minister Sergei Shatalov.

The IFRS is seen to allow accounting professionals to participate in the formation of a global financial system.

However, the biggest problem seen here is that even if there are only several months remaining before the implementation of the IFRS, there is still no Russian translation considering that the target capital is Moscow.

“There is need for official guidance, official policy and official understanding for the public," said Kirill Altukhov, a partner at audit and advisory firm KPMG in Russia and the CIS.

Furthermore, the impact of the mandatory implementation of the IFRS will only be beneficial to the minority publicly listed companies. All of which have already started using the new system.

On the other hand, Surgutneftegas, has submitted recently its accounts under US generally accepted accounting principles of 2001. Its value has reached $33.6 billion. However, the company has not yet been publicly listed. And that is the problem seen now with the implementation of the IFRS.

Another obstacle to the implementation of the IFRS is the lack of trained professionals. Professors and teachers are also having arguments on the issue.

Despite the benefit of implementing the IFRS, the problems have to be settled first before moving on to the next stage.

News Source: The Moscow Times

Tuesday, March 22, 2011

A Warning for Companies About Their Accounting Software

Businesses are a good investment. It allows the owner to earn money and maintain control of their time. Businesses help the economy by employing staff and paying taxes. However, for this business to flourish it must be properly managed. This is best achieved by using a suitable accounting software package to help the accountant and bookkeeper in monitoring the company’s transactions and performance.

There are many accounting software packages available, many of which can be found on the internet. The choices and prices are so varied that choosing the correct package for your business can be overwhelming. However, selecting the correct package is very important as there are risks associated with using the wrong software.

Accounting software that is outdated may pose a risk to a company. It is important that accounting software is regularly updated to reflect the changing business and taxation landscape. This was according to accounting expert, Rhys Roberts. He added that outdated software lacks functionality and security measures which may expose a company to various risks. Furthermore, inappropriate accounting software can develop performance issues that may lead to errors and further risks.

"Using the wrong accounting software can reduce the efficiency of your business, increase your operating costs and make controlling your operations more difficult," Roberts said.

Gwen Morgan, business author, told Entrepreneur Magazine that choosing the most suitable accounting software is one of the most important investments any small business can have these days.

Investing in accounting software is just a one-time expense. Why take the risk when you can be secured?

News Source: »

Wednesday, March 16, 2011

Accounting Shift Clears Past and Present

Business will always have losses. No matter what the industry, it is just part of a business’ life cycle to incur losses and do everything it can to earn those losses back. Even the biggest multinational companies are not spared from this naturally occurring event.

However, a more interesting accounting change has been born. It is called mark-to-market accounting. Today, high profile companies are beginning to move towards this method and in effect, they no longer have to report billions of dollars in losses.

The accounting change works in a rather simple way. Companies are allowed to change their past financial accounts retroactively and make it seem like the losses were incurred in the previous years. AT&T, Verizon, and Honeywell did the same. AT&T had a total of $17 billion in losses. Verizon had losses of $22 million dollars while Honeywell had $7.5 million dollars in losses. Without the accounting change, mark-to-market accounting, the losses would have been spread over many years in losses. At least, by this way, the losses are traced sooner and the effects are not as widespread.

The mark-to-market accounting system is a response to what has been aspired and that is to have converging global accounting standards.

Jonathan Waite, Director of Investment Management Advice and Chief of Management Advice, said, “Effective implementation of some of their investment and hedging strategies would work better without the smoothing mechanisms.”

This has been agreed and seconded by Verizon CFO, Fran Shammo, saying that the new accounting policy makes financial reporting easier to understand and it allows for transparency in operations.

Businesses will never prosper if the accounting system being used is not effective. The management depends on how efficient the accounting system is. So even if your company or business is only at its infant stage, it still pays to use the latest accounting policy, the mark-to-market accounting policy.

News Source:

Monday, March 14, 2011

Bookkeeping Tips You should Not Miss

Running a business is never an easy task. Be it a small business or a large one, the skills needed to manage and control it are the same. Listening to all news about how multimillion and multinational companies fall are scary and depressing. Therefore, all aspects of the business, especially accounting and bookkeeping, have to be taken care of.

Here are a few accounting tips for your small business to flourish:

Accounting softwares are very necessary for a small business. That is why as an owner, one has to learn the ins and outs of accounting and bookkeeping to make sure the business is working. Not only that, one should also train a member of the family on different roles. Besides this, an accountant and a bookkeeper have to be hired. The risk is too high for a beginner to be experimenting on his small business.

Have a copy of all pertinent papers involving your small business. Receipts invoices, and business cards have to be scanned for safekeeping. A software called NeatReceipts can help your small business in this area.

If you have a personal account, keep this separate from the small business’ bank account. This tip can help you avoid confusion and mix-ups of your finances. Whatever money that has been earned from the business should remain in the business’ bank account.

Stick to using credit and debit cards. This is important for you in order to keep track of write offs.

Try using a software that can store all your paperwork from receipts to invoices. Since using paper in a small business will take too much space in your office, a software can help and will not only allow a clean office space but also a clean and orderly filing.

These are just a few tips. But make sure you follow them in order for that small business to grow. Hard work, patience, and an organized bookkeeping system are your keys to progress.

Tuesday, March 8, 2011

A Report on the Performance of Small Businesses

Everywhere in the world, there is a feel of the financial crisis. May it be a small or big enterprise; there is always the effect of the financial crisis. This is why many businessmen and businessman-aspirants are thinking twice about starting up a business today. But recently, Intuit completed a survey with Intuit customers. This group consisted of accounting professionals and small business owners. The results reflect what these people have to say about the current status of businesses.

For one, 65% of accounting professionals and 54% of small business owners believe that their businesses grew in the last 12 months. However, 75% and 80%, respectively, say that the economic status is only “fair” and “poor”. Though this is the case, 94% of accounting professionals and 87% of small business owners feel much optimism that their businesses will grow in today’s economy.

It is also interesting to note that 38% of accounting professionals are already using the online accounting software. On the other hand, only 29% of small business owners are using the said application. The online accounting software enables an accountant or businessman to go elsewhere but remain connected to his business via the internet. Although only 38% of accounting professionals are availing the online accounting software, a great 74% believe that this is a very effective tool for business management.

Another finding states that 60% use email and 54% use the telephone to talk with their accounting professionals on a regular basis. This means that monitoring of one’s business is already possible even when you are in a remote area.

These figures are very important bases for anyone who is into business. There is actually a hope for businessman-aspirants because there are a number of ways for one to play his cards. And the birth of the new online accounting application is surely a huge leap in the business sector. Hopefully, people will see its relevance in the few weeks to come.