Accounting helps managers reduce costs Essay

Essay Title:Accounting helps directors cut down costs

Due Date: Due Date:16^ThursdayMay 2014

Haven’t you heard about the word Accounting? How about MONEY? When it comes to accounting, people will believe of money easy. As accounting is the linguistic communication of concern ( Lane 2013 ) , it is of importance to understand that how directors make better determinations by utilizing this linguistic communication. Therefore, this essay is divided into two parts. The first portion merely introduces what accounting is and the connexion between direction accounting and money. The 2nd one gives some illustrations of how people make valuable determinations with the aid of “ the linguistic communication ” . At last, It is believed that costs can be cut by accounting as what people did in these illustrations.

On one manus, what is accounting? Accounting or accounting is the measuring, processing and communicating of fiscal information about economic entities ( Needles & A ; Powers 2013 ) . Accounting, which has been called the “language of business” , measures the consequences of an organization’s economic activities and conveys this information to a assortment of users including investors, creditors, direction and regulators ( Foster School of Business 2013 ) . Besides, Accounting has several subfields or capable countries, including fiscal accounting, direction accounting, revenue enhancement and accounting information systems ( Weber & A ; Stevenson 1981 ) . Among them, direction accounting or managerial accounting focal points on the measuring, analysis and coverage of information that can assist directors in doing determinations to carry through the ends of an organisation. In direction accounting, internal steps and studies are based on cost-benefit analysis, and are non required to follow by and large accepted accounting rules ( Horngren & A ; Datar & A ; Foster 2006 ) . Managerial accounting produces future-oriented studies. For illustration, the budget for 2014 is prepared in 2013. In add-on, Horngren, Datar and Foster claimed the clip span of the studies in which both fiscal and nonfinancial information information may be involved varies widely and these studies may, for illustration, focal point on specific merchandises and sections.

On the other manus, how does accounting aid directors make valuable determinations. Some illustrations are as follows.

First, labour costs can be reduced if directors use automatons to replace portion of work force in their mills.

Foxconn, Chinese maker of Apple’s iPhone and iPad that came under planetary examination in 2010 for a twine of worker self-destructions, will trust more on automatons for fabrication in the coming old ages to cut down labour costs. Actually, there are 1.2 million workers in Foxconn. And Foxconn has been plagued by labour issues, including ailments of long hours, hapless conditions and low wage. What’s more, the company made headlines when some workers jumped from the edifice due to issues of overwork and low wage in 2010. There were 18 suicide efforts and 14 deceases. Foxconn responded with higher rewards in some of the company’s fabrication countries, while besides working to implement better direction processs in its mills. Furthermore, Foxconn besides installed anti-suicide cyberspaces around mills to deter workers from leaping ( International Business Times 2011 ) .

Obviously, confronting these jobs, Foxconn’s low-labor-cost advantage has been whittled off uninterruptedly. Therefore, the company’s challenge is run intoing higher pay demands and better conditions for workers, while maintaining playing aggressive hardball on monetary value — something rivals will hold a harder clip making for Apple, and other companies it manufactures merchandises for. Usually, a great trade of literatures on the competitory advantages of China fabrication endeavors frequently point to the low cost of labour. However, the rise of labour costs puts the development of native endeavors into rethinking in recent old ages. Therefore, Campbell ( 2011 ) found that Foxconn launched a US $ 224-million undertaking to construct one million automatons in the following three old ages for replacing 500000 workers, which is expected to bring forth about US $ 4 billion in gross over the following few old ages. There is no uncertainty that this imperium of automatons will ease lifting labour costs and disadvantages.

Second, excepting the land of robotics, it is besides possible to cut down costs for directors with the wide application of computing machine in accounting. Apparently, the rapid development of the computing machine web engineering hastens greatly the development of accounting cybernation. After come ining into the 21^stcentury, comptrollers are required to hone cognition construction and ability. But it does non intend that directors need more comptrollers.

CODA Financials Inc. has released new package, CODA 2control Expenses. It is designed to standardise and automatize disbursal claim processes, salvaging clip and money on processing, disposal and audit, the company said in an proclamation. This new stand-alone merchandise allows any employee to fix and subject disbursals in conformity with the company policy. Electronic claim signifiers are tailored with the organization’s relevant rates and regulations built in, rushing up completion and cut downing mistakes. Furthermore, an disbursal direction study conducted by Aberdeen Group among 377 companies in March 2007 found that those utilizing manual disbursal systems were passing twice every bit much on treating each claim as those that had automated the procedure, at US $ 30.50 per claim. A company processing 5000 disbursal studies a month can salvage about US $ 16.30 per study on processing costs, ensuing in an one-year economy of US $ 976000. Therefore, the integrating of accounting information system and direction system with information has become a necessary tendency of web economic system ( Financial Executive 2008 ) .

TEIUAzAN ( 2009 ) thinks the computing machine makes the life of the comptroller easier. And TEIUAzAN says the undermentioned: we believe that a modern accounting is the lone 1 that fulfills its undertakings by utilizing modern instruments, information equipments, among which the cardinal place is held by the electronic reckoner. It is apparent that costs will be lower with scientific and technological advancement and the rapid development of computerized accounting.

Third, the paperless office is an of import portion of the reform for computerized accounting classs, which is able to take down costs and raise environmental benefits. More and more companies are involved in e-commerce activities, which means most of their concern informations and accounting informations become electronic and paperless. Fisman and Sullivan ( 2013 ) uncertainty it will affect paperless-ness or a twenty-four hours in which we all work remotely from the corner Starbucks. Therefore, it is a critical issue of the accounting office to utilize modern package development engineering to recognize paperless office.

Kerry hotel Pudong Shanghai has introduced a paperless check-in and check-out system that will non merely streamline processs but cut down waste paper. Although this green strategy is the first of its sort in Shanghai, it is non the first for the hotel group: the late refurbished Kerry Hotel Beijing has besides adopted the paperless system ( Business Traveller 2012 ) .

Clearly, hotels are simplifying their paper-based accounting systems and are replacing their paper-based systems with information webs based on the rules of electronic for take downing costs, cut downing mistakes and streamlining processs. As it is known that increasing quality every bit good as bettering productiveness is non easy at the same clip. However, Hilton, Marriott and many other hotel ironss are merely making that through paperless accounting packages, such as the IQ system.

The EDI ( Electronic Data Interchange ) Group study of more than 1,500 users of EDI found that companies could salvage between $ 1.60 and $ 5.20 per papers ( e.g. purchase order, bill, etc. ) by exchanging to electric procurance ; error rates can worsen more than 50 per centum every bit good. The most common first measure in re-engineering procurance is to implement an electronic catalog and telling system, such as the IQ system implemented by Marriott International. But success requires a “ vision from person who has been in the field, and knows how difficult it is to acquire information on a merchandise, ” harmonizing to Alan McCarty, manager of lodging procurance for Marriott.

McCarty, a procurement officer certified by the National Association of Purchasing Management, developed the IQ system to pass on merchandise specifications and supply electronic buying to more than 500 sellers on a private web. In merely two old ages, the IQ system has automated the purchase of 95 per centum of cosmetic points for the Courtyard by Marriott belongingss, and is now being expanded to cover Residence Inns and other Marriott trade names. As a consequence of his attempts, McCarty ‘s system was nominated for the Quality Cup award, sponsored by USA Today and the Rochester Institute of Technology ( Tobey 1996 ) .

Actually, most of hotels feel that they are closer to the inside informations of their ain hotels by paperless office. For case, Marketing research, which the hotels took one hebdomad of clip or more to finish, can now be accomplished in several proceedingss. Although, it is clear that many people harbor practical concerns and uncertainties about the promise of paperless office, whether we like it or non, paperless system are slow making mass credence. Briefly, office without any paper methods advantage over traditional office methods.

In decision, this essay merely explains the linguistic communication of money and depict some utile steps of accounting including robotics, computerized accounting and paperless office that directors can take to make better determinations. As an old expression goes, clip is money. Obviously, Accounting is of great aid to salvage disbursal and manage clip in order to do more net incomes.

Mentions

American Institute of Certified Public Accountants & A ; Committee on Accounting Procedur

1940, “ Reports of Committee on Terminology ” , viewed 11 May, 2014,

& lt ; hypertext transfer protocol: //clio.lib.olemiss.edu/cdm/ref/collection/deloitte/id/9342 & gt ; .

Business Traveler 2012, “ HOTEL UPDATES ” ,Business Traveller,March, Asia-Pacific

Edition, p. 18.

Campbell, Colin 2011,Maclean ‘s, 21 November, Vol. 124 Issue 45, p. 41.

Emerald 2013, “ Asian Review of Accounting Information ” , viewed 11 May, 2014.

& lt ; hypertext transfer protocol: //www.emeraldgrouppublishing.com/products/journals/journals.htm? id=ara & gt ; .

Financial Executive 2008,Financial Executive Jan/Feb, Vol. 24 Issue 1, p. 61.

Fisman Ray & A ; Sullivan Tim 2013,The Org: The Underliing Logic of the Office, 8 January,

Twelve, New York.

Foster School of Business 2013, “ Department of Accounting ” , Foster School of Business

2013.

Horngren Charles T & A ; Datar Srikant M & A ; Foster George 2006,Cost Accounting: A

Managerial Emphasis ( 12th ed. ), Pearson Prentice Hall, New Jersey.

International Business Times 2011, “ Apple Partner Foxconn Adding One Million Robots ;

Rising Labor Costss Likely Prompt Move ” , International Business Times, 1 August.

Acerate leafs, Belverd E & A ; Powers, Marian 2013, “ Principles of Financial Accounting ”i??

Fiscal Accounting Series ( 12 ed. ) ,Cengage Learning, Boston.

Peggy Bishop Lane 2013, Why Accounting Is the Language of Business, 23 September,

viewed 14 May, 2014,

& lt ; hypertext transfer protocol: //kwhs.wharton.upenn.edu/2013/09/peggy-bishop-lane-on-why-

accounting-is-the-language-of-business/ & gt ; .

TEIUAzAN, SORIN-CIPRIAN 2009, “ Annalss of the University of PetroAYani ” ,Economicss,

Vol.9 Issue 2, pp. 313-318.

Tobey, David H 1996, “ Automatic I.D ” ,Newss, March, Vol. 12 Issue 3, p. 36.

Weber, Richard P & A ; W. C. Stevenson 1981, “ Evaluations of Accounting Journal and

Department Quality” ,The Accounting Review, Vol.56 Issue 3, pp. 596–612.

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Assessment Criteria – Essay/Report

Standards:The result shows:	FailUnsatisfactory public presentation	Base on ballsMerely satisfactory public presentation	RecognitionGood quality demoing more than satisfactory public presentation	Differentiation Superior quality showing independent thought	High Differentiation Outstanding quality demoing creativeness and originality
Ability to place and use cardinal constructs ( 40 % )	Cardinal constructs are non identified and applied in treatment.	Cardinal constructs are slightly identified and applied in treatment.	Cardinal constructs are satisfactorily identified and applied in treatment.	Cardinal constructs are good identified and applied in treatment.	Cardinal constructs are strongly identified and applied in treatment.
Sound theoretical base/research to back up schemes ( 40 % )	Lacks theoretical support/evidence in treatment.	Ill supported with limited theories in treatment.	Satisfactorily supported with theories in treatment.	Well supported with theories in treatment.	Strongly supported with theories in treatment.
Critical analysis ( 20 % )	Lacks critical analysis in treatment.	Limited critical analysis in treatment.	Critical analysis is satisfactory in treatment.	Good critical thought demonstrated in treatment.	Strong critical thought demonstrated in treatment.
Mark scope out of 100	0- 49.5	50 – 64	65 -74	75-84	85+

Created:9 October 2012

Modifed:20 May 2013Version:2

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