Tuesday, July 5, 2011

Accounting Basics: Public Accounting vs. Private Accounting

Next in my Accounting Basics Series: Public Accounting vs Private (Industrial) Accounting.

The old accounting text book defines public accounting as: offering accounting and related services for a fee to companies, other organizations and the general public. The other services can include auditing, tax services and consulting. The certification offered for this type of accountancy is a Certified Public Accountant. The exam is prepared and administered by the American Institute of Certified Public Accountants (AICPA).

Private (or industrial accounting) is the opposite. Instead of providing services to many clients, a private accountant provides services to a single business. In a business consisting of many accountants, the 'head accountant is typically called the controller. Private accountants may or may not be CPA's. The National Association of Accountants does offer a certificate for private accountants called a Certificate in Management Accounting (CMA). Private accountants are often much more specialized and have to adapt to the needs of their company (controlling costs, budgeting, accounting systems, etc.)

Target Follows Blockbuster and Goes Blu Ray

Follow up to my June 20, 2007 post. Looks like Target is following Blockbusters lead and supporting Blu Ray...

NEW YORK (Reuters) - Target plans to carry only Blu-ray high definition DVD players through the holiday shopping season, a move that boosts the Sony-backed technology and may deal a blow to rival HD-DVD.

In a statement on Thursday, Sony Corp. said that Target will exclusively carry Blu-ray players "at least through the holiday season" and will also expand its inventory of Blu-ray discs.

The move begins in October with Target's sale and promotion of Sony's BDP-S300 unit, which sells for about $500.

It was the second major retailer in as many months to throw its weight behind Blu-ray in the industry wide standards war reminiscent of VHS and Betamax. Blockbuster, the largest U.S. provider of home movie entertainment, in June set plans to line its shelves with Blu-ray DVDs, saying that Blu-ray rentals are "significantly outpacing HD DVD rentals."

HD DVD is developed by Toshiba Corp. and backed by Microsoft Corp. and film studios including Warner Bros.. It competes with Sony's Blu-ray which is built into its PlayStation 3 game console, and supported by companies such as Samsung Electronics Co., Apple and Dell.

Earlier this month, the HD DVD camp said its stand-alone video players have outsold rival Blu-ray players by a three-to-one margin in Europe's main markets so far this year.

Mass market acceptance of high-definition video is still some way off, due in part to the high price of the devices, and the fact that some movies and programs are available on one platform and not the other.

(Reporting by Franklin Paul)

Interviewing Tips Continued...Questions to Ask

While were on the topic, I found this article (also on BNet) with a well organized list of questions to help you stage the interview...

The 7 Interview Questions You Must Ask

by Brian Libby

There are no magic bullets when it comes to job interview questions, but the way you structure your queries is important: It's the interviewer's job to create a framework for the discussion and prevent it from running off the rails. Every company's needs are different, but a good basic strategy is to ground the interview in questions about past job performance. Then throw in some situational questions to evaluate practical decision making, and learn a little bit about how the job fits in with a candidate's biography.

Question #1: "How about those Yankees?"

Purpose: Develop the rapport needed to get the interview off the ground.
Every interview should begin with an icebreaker. It helps nervous applicants calm down and builds a sense of trust. If you have a 45-minute interview, you should spend at least the first five minutes trying to connect on a neutral topic. Make the person feel at ease and you'll solicit better information—and much more honest responses.
Alternate Version 1: "Did you go to the industry conference last week?"
Alternate Version 2: "Were you affected by the heat wave/cold snap?"
Alternate Version 3: "Did you have a good holiday?"

Question #2: "Talk about a time when you had to overcome major obstacles."

Purpose: Get a clear picture of the candidate's past performance.
Variations on this question should actually comprise your next several questions. Don't hesitate to guide the candidate through the variety of tasks (both tangible and theoretical) necessary to perform the job, and listen carefully to how he or she has handled such challenges. Pay attention to intangibles: some people are better at performing in interviews than on the job. If your candidate continually plays the role of hero or victim, that's a red flag that you're probably not getting the whole story.
Alternate Version 1: "Tell me about a time when you wrote a report that was well received. Why do you think it was successful?"
Alternate Version 2: "Describe a time when you hired (or fired) the wrong person."
Alternate Version 3: "If you had to do that activity again, how would you do it differently?"

Question #3: "What interests you about this position?"

Purpose: Find out how the candidate feels about the job and the company.
People apply for jobs for plenty reasons besides the obvious ones. Asking a candidate why he or she wants the position gives insight into their motivation. The answer may be personal (such as a narrative about what spurred them to seek a new job), or it may connect the candidate to the company: her experience with the brand, the mission statement, or the organization's role in the community. Any of these answers (or some combination) are acceptable—a personal answer can communicate trust, and a connection to the business indicates loyalty and a sense of ownership.
Alternate Version 1: "Where does this job fit into your career path?"
Alternate Version 2: "If you had to convince a friend or colleague to apply for this job, what might you tell them?"
Alternate Version 3: "What motivated you to apply for this job?"

Question #4: "Is there intelligent life in outer space?"

Purpose: Find out what kind of thinker the candidate is and how he deals with surprises.
This is your curveball, designed to make the candidate ad-lib instead of just reciting well-rehearsed answers. How much will he or she play along? As long as it's not too short or too long, virtually any response is a good one. But pay attention to attitude, the way the candidate approaches the problem, and the ease or difficulty they have in coming up with a response.
Alternate Version 1: "How many phone books are there in New York City?"
Alternate Version 2: "How do they get the cream filling inside a Twinkie?"
Alternate Version 3: "Why do people climb mountains?"

Question #5: "Imagine we've just hired you. What's the most important thing on your to-do list on the first day of work?"

Purpose: Learn about the candidate's judgment and decision-making skills.
This is an example of a situational question, which is like a behavioral question in that it's designed to assess judgment, but it's also like a curveball question because it illuminates the candidate's thought process. You want to see whether he demonstrates the competencies and priorities that are important to the job.
Alternate Version 1: "Say a coworker tells you that he submitted phony expense account receipts. Do you tell your boss?"
Alternate Version 2: "How would you handle an employee whose performance is fine but who you know has the potential to do better?"
Alternate Version 3: "What would you do if you got behind schedule with your part of a project?"

Question #6: "Why did you get into this line of work?"

Purpose: Measure the fit between the candidate's values and the culture of your company.
It risks a long, drawn-out answer, but this type of question will help you select candidates that fit your company's culture. It's not about finding people like you, or people with similar backgrounds that led them to your company, but about getting a sense of their values and motivations. Concepts like values and culture can be subjective and difficult to define, but you should be looking for someone whose work ethic, motivations, and methods match the company's. This isn't a quantitative measurement so much as a qualitative one. Coke and Pepsi may seem the same to people outside the soft-drink industry, but each houses people with different approaches to making cola and running a business.
Alternate Version 1: "What do you like best about your current job?"
Alternate Version 2: "When did you realize this would be your career?"
Alternate Version 3: "What keeps you coming to work besides the paycheck?"

Question #7: "But enough about you. What about us?"

Purpose: Find out if the candidate has done his or her homework.
It's a cliché to end an interview with the standard, 'So, any questions?' But the fact remains that you really do want to let the candidate ask a few things of you. Reversing roles communicates that the company seeks an open a dialogue, and it helps you ascertain just how curious and knowledgeable a candidate is about your company. If he doesn't ask any questions about the job or the business, it's a safe bet his heart isn't in it. Listen for insightful questions that demonstrate a sophisticated understanding of the circumstances of the job, the company, the competitive landscape, or the industry.
Alternate Version 1: "Where do you think the company should be in ten years?"
Alternate Version 2: "What's your opinion of our new product?"
Alternate Version 3: "Have you seen the company's new ad campaign?"

Interviewing Tips (From Managements Side)

I haven't had to do it very often, but I have told people that interviewing someone for a job is almost as nerve racking as being interviewed. This article I came across on BNet has some very useful tips...

10 Mistakes Managers Make During Job Interviews

by BNET Staff

Hiring is one of the hardest parts of managing a team. A lot is riding on the initial meeting, and if you're nervous or ill-prepared—or both—it can make you do strange things. The following mistakes are all too common, but they're easy to avoid with some advance preparation.

1. You Talk Too Much

When giving company background, watch out for the tendency to prattle on about your own job, personal feelings about the company, or life story. At the end of the conversation, you'll be aflutter with self-satisfaction, and you'll see the candidate in a rosy light—but you still won't know anything about her ability to do the job.

2. You Gossip or Swap War Stories

Curb your desire to ask for dirt on the candidate's current employer or trash talk other people in the industry. Not only does it cast a bad light on you and your company, but it's a waste of time.

3. You're Afraid to Ask Tough Questions

Interviews are awkward for everyone, and it's easy to over-empathize with a nervous candidate. It's also common to throw softball questions at someone whom you like or who makes you feel comfortable. You're better off asking everyone the same set of challenging questions—you might be surprised what they reveal. Often a Nervous Nellie will spring to life when given the chance to solve a problem or elaborate on a past success.

4. You Fall Prey to the Halo Effect (or the Horns Effect)

If a candidate arrives dressed to kill, gives a firm handshake, and answers the first question perfectly, you might be tempted to check the imaginary "Hired!" box in your mind. But make sure you pay attention to all his answers, and don't be swayed by a first impression. Ditto for the reverse: the mumbler with the tattoos might have super powers that go undetected at first glance.

5. You Ask Leading Questions

Watch out for questions that telegraph to the applicant the answer you're looking for. You won't get honest responses from questions like, "You are familiar with Excel macros, aren't you?"

6. You Invade Their Privacy

First of all, it's illegal to delve too deeply into personal or lifestyle details. Secondly, it doesn't help you find the best person for the job. Nix all questions about home life ("Do you have children?" "Do you think you'd quit if you got married?"), gender bias or sexual preference ("Do you get along well with other men?"), ethnic background ("That's an unusual name, what nationality are you?"), age ("What year did you graduate from high school?"), and financials ("Do you own your home?")

7. You Stress the Candidate Out

Some interviewers use high-pressure techniques designed to trap or fluster the applicant. While you do want to know how a candidate performs in a pinch, it's almost impossible to recreate the same type of stressors that an employee will encounter in the workplace. Moreover, if you do hire the person, they may not trust you because you launched the relationship on a rocky foundation.

8. You Cut It Short

A series of interviews can eat up your whole day, so it's tempting to keep them brief. But a quick meeting just doesn't give you enough time to gauge a candidate's responses and behavior. Judging candidates is nuanced work, and it relies on tracking lots of subtle inputs. An interview that runs 45 minutes to an hour increases your chances of getting a meaningful sample.

9. You Gravitate Toward the Center

If everyone you talk to feels like a "maybe," that probably means you aren't getting enough useful information—or you're not assessing candidates honestly enough. Most "maybes" are really "no, thank yous." (Face it: He or she didn't knock your socks off.) Likewise, if you think the person might be good for some role at some point in the future, then they're really a "no."

10. You Rate Candidates Against Each Other

A mediocre candidate looks like a superstar when he follows a dud, but that doesn't mean he's the best person for the job. The person who comes in tomorrow may smoke both of them, but you won't be able to tell if you rated Mr. Mediocre too highly in your notes. Evaluate each applicant on your established criteria—don't grade on a curve.

Accounting Basics: Accounting and The Accounting Cycle

What is accounting? My old accounting text book defines it as: "the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by the users of the information." The text distinguishes between accounting and bookkeeping. Whereas bookkeeping involves the mechanical process of recording economic activities, accounting expands on that to include analysis and interpretation of financial information as well as preparing financial statements, conducting audits, designing accounting systems, etc.

Since this is a web based forum, lets look at Wikipedia's definition: the measurement, disclosure or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. The terms derive from the use of financial accounts. Accounting is the art of measuring, communicating and interpreting financial activity. Accounting is also widely referred to as the "language of business".

Any way you look at it, accounting is a process. It is a process of identifying economic events related to a business activity, recording these events, and subsequently reporting on this business activity with some means of financial representation (financial statements or other reports).

Accounting can be represented as a cycle:

Observe events.
Identify those events which are economic events.
Measure the economic events.
Record measurements.
Classify measurements.
Summarize measurements.
Report business activity in financial statements or other reports.
Interpret the contents of financial statements and other reports.

What really adds value to an accountants services is the ability to supply items #7 and #8.

Auditing And Accounting

Microsoft Coffe Table PC

Is there really a market for this thing; I can't imagine having such an intrusive thing in my living room...

Microsoft to unveil 30-inch touch screen computer - May. 30, 2007
Microsoft unveils coffee table 'surface computer'
Software maker will introduce a coffee-table-shaped computer that has a 30-inch display, allowing people to touch and move objects on the screen.
May 30 2007: 2:42 PM EDT

SEATTLE (Reuters) -- Microsoft Corp. will unveil a coffee-table-shaped "surface computer" Wednesday in a major step towards co-founder Bill Gates's view of a future where the mouse and keyboard are replaced by more natural interaction using voice, pen and touch.

Microsoft Surface, which has a 30-inch display under a hard-plastic tabletop, allows people to touch and move objects on screen for everything from digital finger painting and jigsaw puzzles to ordering off a virtual menu in a restaurant.
surface.03.jpg
Microsoft's coffee-table-shaped "surface computer" hopes to one day replace the mouse and keyboard with voice recognition, pen and touch.

It also recognizes and interacts with devices placed on its surface, so cell phone users can easily buy ringtones or change payment plans by placing their handsets on in-store displays, or a group of people gathered round the table can check out the photos on a digital camera placed on top.

Microsoft (Charts, Fortune 500), the world's largest software maker, said it will manufacture the machine itself and sell it initially to corporate customers, deploying the first units in November in Sheraton hotels, Harrah's casinos, T-Mobile stores, and restaurants.
Acounting Basic : The Balance Sheet
One of the fundamental components (for want of a better word) of accounting is the Balance Sheet. The balance sheet is often referred to as a statement of financial position. It can be described as a snapshot that shows the company's financial position at any given moment. Listed in the balance sheet are the company's assets, liabilities and owners equity.

If you view the balance sheet as a two column worksheet, the assets would be in the left column while the liabilities and owners equity would be in the right column. The two columns must be equal.

You won't be able to determine the company's profitability from the balance sheet. What the balance sheet will show is the solvency of the company. Analysts will look at various ratios (i.e. current ratio: current assets / current liabilities) to determine the company's financial well being.

Future entries in my Accounting Basics series will describe each of the components of the balance sheet.
Accounting Basics: The Balance Sheet
04 Juli 2011 14:03
One of the fundamental components (for want of a better word) of accounting is the Balance Sheet. The balance sheet is often referred to as a statement of financial position. It can be described as a snapshot that shows the company's financial position at any given moment. Listed in the balance sheet are the company's assets, liabilities and owners equity.

If you view the balance sheet as a two column worksheet, the assets would be in the left column while the liabilities and owners equity would be in the right column. The two columns must be equal.

You won't be able to determine the company's profitability from the balance sheet. What the balance sheet will show is the solvency of the company. Analysts will look at various ratios (i.e. current ratio: current assets / current liabilities) to determine the company's financial well being.

Future entries in my Accounting Basics series will describe each of the components of the balance sheet.

One of the fundamental components (for want of a better word) of accounting is the Balance Sheet. The balance sheet is often referred to as a statement of financial position. It can be described as a snapshot that shows the company's financial position at any given moment. Listed in the balance sheet are the company's assets, liabilities and owners equity.

If you view the balance sheet as a two column worksheet, the assets would be in the left column while the liabilities and owners equity would be in the right column. The two columns must be equal.

You won't be able to determine the company's profitability from the balance sheet. What the balance sheet will show is the solvency of the company. Analysts will look at various ratios (i.e. current ratio: current assets / current liabilities) to determine the company's financial well being.

Future entries in my Accounting Basics series will describe each of the components of the balance sheet.

Monday, July 4, 2011

Product Pricing Issues and Strategies

Another good article on BNET (can you tell I like this website). A lot of it is common sense. The helpful thing about the BNET website is how they present the article. It has a very good layout which highlights the main points. This particular article talks about issues and strategies regarding product pricing.

Accounting Basics: Current Assets - Accounts Receivable

Almost as common a term as cash nowadays, accounts receivable is an accounting term meaning amounts owed to a business by other business or customers (individuals or otherwise). An accounts receivable arises anytime when goods are sold but cash is not received immediately; thus when you purchase something for cash at Walmart you are not creating an accounts receivable. If you commit to purchase something (say a lawnmower) and you are offered the option to pay next month, now you have created an accounts receivable on the retailers books.

Unlike a note receivable (to be discussed next), there is generally no signed agreement beyond an invoice for an accounts receivable. They are generally short term in nature (less than a year, if not only a couple months). Because of their short term nature, they are generally listed as a current asset on the balance sheet next after cash.

Microsoft Coffee Table PC

Is there really a market for this thing; I can't imagine having such an intrusive thing in my living room...

Microsoft to unveil 30-inch touch screen computer - May. 30, 2007

Microsoft unveils coffee table 'surface computer'
Software maker will introduce a coffee-table-shaped computer that has a 30-inch display, allowing people to touch and move objects on the screen.
May 30 2007: 2:42 PM EDT

SEATTLE (Reuters) -- Microsoft Corp. will unveil a coffee-table-shaped "surface computer" Wednesday in a major step towards co-founder Bill Gates's view of a future where the mouse and keyboard are replaced by more natural interaction using voice, pen and touch.

Microsoft Surface, which has a 30-inch display under a hard-plastic tabletop, allows people to touch and move objects on screen for everything from digital finger painting and jigsaw puzzles to ordering off a virtual menu in a restaurant.
surface.03.jpg
Microsoft's coffee-table-shaped "surface computer" hopes to one day replace the mouse and keyboard with voice recognition, pen and touch.

It also recognizes and interacts with devices placed on its surface, so cell phone users can easily buy ringtones or change payment plans by placing their handsets on in-store displays, or a group of people gathered round the table can check out the photos on a digital camera placed on top.

Microsoft (Charts, Fortune 500), the world's largest software maker, said it will manufacture the machine itself and sell it initially to corporate customers, deploying the first units in November in Sheraton hotels, Harrah's casinos, T-Mobile stores, and restaurants.
Microsoft's 150-lb computer: What's the point?