The importance of accounting software in small and medium size businesses become one of my favourite preaching topics after spending some time working with small business owners in Lagos. I was surprised to see that people still swindle in the complex and inefficient state of manual accounting. Out of curiosity, I carried out a mini [...]
Finding the best accounting software that meets and surpass the needs of your small business is not an easy task. In my career as an accountant and a business adviser, I have been asked the question; ‘what is the best small business accounting software’ many times that I can’t even remember. This shows that managers [...]
A performance measurement system is a traditional way of keeping track of what goes on in your business. The aim of performance measurement is to help managers and business owners analyse successes and failures of individuals or group of individuals. Successes or failure in this context is a function of the standard that has been [...]
Characteristics of accounting information systems are those features that distinguish an ordinary system from a system that is designed to provide management of all levels timely, relevant, reliable and unbiased processed data that is suitable for decision making. Accounting information system (AIS) is a well structure secured medium of gathering, processing, sending and receiving both [...]
Internal controls in its broadest sense is the collection of policies, procedures, practices, conventions, norms and organizational structures which managers implement in order to reduce risks to a business. Internal controls are developed with the aim of providing management reasonable assurance that an organizations business objectives will be achieved while at the same time preventing [...]
If have ever asked the question ‘what is management accounting?’ you will understand that the generic answer that you will get is tilted towards giving you just definition. Most articles that have attempted to discuss what a management accounting is often ending up supply another definition to the already saturated definitional dictionary of managerial accounting. [...]
What is a feasibility study might sound like a simple question but when faced with the reality of carrying out a feasibility study, one quickly realise how demanding and complex it is to conduct a feasibility study. Feasibility study is probably one of the most used phrases in businesses and business schools. Yet not very [...]
‘What is fraud?’ is the question that was put to me by a confused young man who was indicted for committing fraud. Fraud in the pure legal sense of it is any false representation of a matter of fact for personal gain- it does not matter how it is done. Fraud is the intentional deceptive [...]
Finding and selecting an accountant of the right standard and quality for your business can be so demanding and time consuming if you have no idea of what it is that you are looking for in accounting firm. Over time, the role of accountants in mall businesses become more obvious as most business owners that I [...]
Key accounts management strategy is what most companies that are struggling to get and retain profitable customers need in order to turn the business into a profit making venture. In this fierce competitive business environment of today, strategic stance is the key to any successful venture. Customer relation management (CRM) is not an exception. You [...]
What is a business as a question might sound silly. But, accounting and business studies teachers will be in a better position to tell how difficult it is to provide a comprehensive answer to this seemingly simple question. I can tell from the perspective of being both a business studies teacher and accounting teacher before [...]
Cost management are those calculated activities that an organization performs in the bid to reducing cost. Traditional management accounting system has been accused of being a cost containment process whereby managers of divisions work towards meeting the standards as contained in the budget. Inherent wastages and inefficiencies that are within are traditional cost processes are [...]
Elements and characteristics of strategic management accounting are those features that makes strategic management accounting uniquely different from other forms of accounting (managerial accounting and financial accounting). Before proceeding with the discussion of the elements of strategic management accounting, it will be helpful if a working knowledge of what a strategic management accounting is. Hence, [...]
Human resource management are those strategic interrelated actions that are taken by a manager with the sole aim of managing an entity’s most valuable asset –the workforce. Human resource management goes by many names including the following: human capital management, HR system, personnel management, etc. The management of the working population of a company is [...]
Who is a manager is the topic of a seminar that I recently attended on management and management functions in Spain last summer. The question seem simple but a deep reflection quickly shows that being a manager is more than a title given to certain class of people in corporate ladder. This article critically discusses [...]
Planning shouldn’t be a very difficult term to explain as many academics and professionals have made it look. We all engage in one form of planning or the other on a daily basis without even realising what it is that we do. Planning as far as we live is one function that we cannot avoid. [...]
Functions of management and what managers must do in order to stay afloat in today’s highly competitive business world has dramatically shifted from the traditional management functions as contained in most management textbooks in the market. Huge changes have taken place in the field play of business-TIKING. Business-TIKING is a new synonymous word replacing politicking [...]
Accounting firm insurance is a necessary evil that every professional accountancy firm must have else, settle in limbo. Accounting firms in recent time are adding more business line to their range of services making their business risk exposure increase at an exponential rate. The traditional business lines of auditing and consulting with narrowed focus was [...]
Financial accounting is that branch of accountancy that seeks to keep record of the financial activities of a company using specified standards and legal requirement. At the elementary level, it is believed to revolve around ‘debiting and crediting’ items. You debit the receiver and credit the giver. Financial accounting function includes the preparation of financial [...]
Motivating accountants and other finance professionals has never been as important as it is now as the whole world needs more motivated accountants and financial management experts to tackle the fierce financial challenge that is looming in the business world. Professional bodies are busy asking serious questions regarding accounting ethics, governance and business ethics. The [...]
What is accounting is a broad question that a lot of people think is as simple as defining the term accounting. In as much as defining accounting is part of the process of explaining what accounting is, it is not a complete answer to the question of what is accounting. In this article, a different [...]
XBRL as financial accounting reporting format made its way into the limelight of financial reporting in the mid 2000s with companies given the option of voluntarily producing their annual reports using XBRL. XBRL stands for extensible Business Reporting Language which was developed to meet the real-time accounting information of employees, financial analysts, investors and other [...]
The central idea that quickly spread amongst both academic and practicing accountants is that ABC tries to allocate overhead costs to cost object more accurately than traditional system. ABC use cost drivers to allocate overhead costs to cost object by firstly identifying those activities that drives costs and then attribute costs to the product based [...]
In the wake of the protracted debate as to which costing method (Marginal or Full costing), activity based costing (ABC) approach to ascertaining the true cost of products appeared as a promising decision support tool in an era where the existing costing methods were being heavily criticised, Geri and Ronen (2005). There was a loud outcry [...]
Financial management swot analysis is a new paradigm in finance whereby financial managers are encouraged to simulate on different financial scenarios before applying it to real life situation. It all revolves around finding an optimum financial pressure that a business can bear. This is similar to the financial stress test that banks periodically undergo. WHAT [...]
IMPORTANCE OF FINANCIAL PLANNING Financial planning is an essential element of the whole process of financial management that one cannot do without if you really want to make a in your quest to achieving financial freedom. It is the foundation upon which every other building of financial empire is built. THINGS TO CONSIDER AS A [...]
Internet marketing is one of the most powerful tools that all successful business people of our time employ. It does not matter what kind of business you are into, what matters is your ability to leverage on the enormous potential of the internet to sell your accounting services as an accountant to the entire world [...]
Traditionally, accounting is defined as a process that collect, collate, analyse, interpret and communicate financial/ accounting information in a prescribed format that is easily understood by the intended users. In as much as this definition of accounting is correct, it makes accounting look like a mechanical process that does not interact much with the business [...]
By scope of financial statement analysis, we simply mean those vital issues that must be dealt with while carrying out financial statement analysis exercise. Financial statement analysis is a subset of the whole body of business analysis. Financial statements analysis is not all about ratio analysis as many would think. It goes beyond that and [...]
The question of what financial statements are used for is an important one as it raises awareness as to the importance accounting as a whole. Many debates went on in the past and are in fact still going on now amongst academics and professional accountants on the relevance of accounting numbers. This whole argument was [...]
The purposes and benefits of accounting keeps widening as the importance of accounting broadens. I am writing this article in response to a question put to me by one of my readers in a previous article referred to above. This post will be tailored to meet the specific requirement of the question which I have [...]
International political economy is the melting point of both politics and economics as it concerns the states at the global level. In common parlance, international political economy is the interaction between: productions, buying, selling, laws, customs, and beliefs of different countries playing at the international scene to protect our foreign investments. One lesson that was [...]
Financial statements have a vital role to play in the overall business valuation process. Two kinds of information at least are contained in the financial statement that every financial analyst must always strive to identify/ recognise and put them to maximum use. I would like to make a point clear here: valuation model is not [...]
Business valuation techniques and methods of valuing a business has in recent time receive lots of attention both from the field of academic and from practitioner with many empirical tests and evidences provided. Most of these empirical evidence conflicts on what the most popular and acceptable method of valuation is. My intention in this article [...]
Customer care services is one skill that today’s accountant cannot do without as business operations continues to integrate. Gone are the days when only customers’ care advisors are seen as the only professionals that can make impact on the life of the customers. The dancing tone has changed and therefore calls for an immediate change [...]
Church frauds as weird and unpleasant as it may sound has become part of the system in most church across the world today. People now actively seek opportunities and loopholes in churches to steal money and commit other economic crimes. Some eyebrows were raised when I first wrote on the importance of accounting in churches; [...]
Green investments also known as social responsibility investment and quality corporate governance over the time has shown to be a bedrock upon which business success is hinged – corporate bodies build their success by hybrid investment strategy that is a product of social responsibility screening of investment and good corporate governance. Investors that is mindful [...]
Fundamental analysis is all about intelligent and informed forecast in an attempt to establish an intrinsic value that corrects for that vital information that is missing from the financial statement. Business valuation and financial analysis are incomplete without proper and logically sound fundamental analysis. Traditional methods of valuation like; method of comparables, screening analysis, and [...]
Suboptimal practices in companies are a situation whereby responsible managers fail to do the right thing just to take advantage of existing controls and procedures. Management and decision makers have to continually struggle with highly unpredictable human factors in the quest to provide lasting solution to incongruence actions that various mangers are vulnerable to take. [...]
Foreign investment decision is a tough and often complex investment decision that sharply differs from the traditional domestic decision on investing. The normal financial evaluation of discounted cash flows technique are not fully relied on in making foreign investment decision as we do in making domestic investment decision as well as financing decision. Best practices [...]
Transfer pricing is one single area of managerial accounting that has been generating heat and still generates more heat. The existence of interdependencies in divisional-ised companies creates a problem of determining at what price goods needs to be transferred within a business. Transfer pricing exist because of the existence of interdependent activities within a company. [...]
Business analysis is a methodological process of evaluating a company’s economic prospects and risk in the light of the entity’s strengths and weaknesses. This exercise is done in order to come to a consensus business valuation terms i.e. making willing parties agree on an intrinsic value of a company. Business analysis serve as the foundation [...]
A lot of people now use the phrase asset register without truly understanding what it is all about. So many things have been mistaken to be an asset register. In this article, an attempt will be made to explain what an asset register is in a simple manner. It is however important to give a [...]
INTRODUCTION Middle level managers are the tactical managers acting as a link between the strategic and functional managers. Their roles in business processes and decision making cannot be overlooked; hence they need to be adequately motivated. One of the theories that attempt to come up with better system of motivating middle-level managers is the Expectancy [...]
The use of contribution analysis cannot be fully understood if the meaning of the term is not first explained. Hence, I would like to start with the definition of contribution analysis, and how it is calculated. Contribution analysis is defined as: the payment made by individual products towards recovering the fixed cost of a business, [...]
Variance analysis is a technical jargon used to explain a situation where actual result or outcome of an event significantly and materially differs from planned, expected or targeted results or outcomes. Note the emphasis on the words significant and materiality. In accounting, materiality is defined as a situation where the omission or inclusion of an [...]
Financial planners are one of those professionals that we cannot do without if we realy want to better our finances. We all make decisions on a daily basis, we decide on what to eat, wear, drink, read, phone calls to make, places to visit, etc. we even plan for our finances (consciously or unconsciously). Failing [...]
Budgeting process or budgetary system is a critical thinking area of managerial decision making that management accountants needs to handle with care else, make grave mistake that may cost the business all it has ever worked for. Budgetary system talks about the steps that should be followed by managers to make a reasonably implementable budget. It [...]
Budgeting in its general sense is the act of quantifying objectives in financial terms. Budgeting assists managers in decision making process in an organization. It is the function of the management accountant to provide information needed in budgeting process. A management accountant must be happy with the functions of budgeting described here. This article will [...]
Functions of management accounting cannot be fully appreciated if a working definition and explanation of what a management accounting is all about is not reasonably provided. To this end, I would like to start this article by providing a brief description of what management accounting is below. WHAT IS MANAGEMENT ACCOUNTING? Management accounting is the [...]
