Accounting And Time Management Accounting Essay

Category: Accounting

Introduction

The intra accounting, which was denoted in the past also as the cost accounting, operating accounting, internal or analytical accounting, is oriented to phenomena proceeding inside the company. It is not legally defined because the corporate management is completely in the competence of top managers. Its role is to ensure expended costs and it is the main instrument of the internal management of the company. The information in the intra organizational accounting serves for the corporate management to investigate factors influencing the positive or negative results of the economic activity. The data provided by it are confidential and with respect to their possible misuse they are not accessible to external users.

Primary Business Roles and activities

The calculation of the tax obligation of the accounting unit, primarily of the income tax, value-added tax, consumption tax and of other tax commitments is dependent on information documents which are obtained for a company from the financial accounting. With regard to this necessity the financial accounting must be modified in such a way in order that the achieved results should serve as adequate and reliable information for tax purposes. This modification consists of the correction of the accounting profit to the tax base. After adjustment of the tax base considering deductible and non-deductible items the rate of the tax obligation is calculated.

All indicated subsystems of the accounting system, such as financial accounting, managerial accounting, intra organizational accounting and tax accounting do not exist in our conditions in individual companies separately. They are closely interconnected, mutually dependent on each other and affecting one another in every moment. The other situation can be followed in advanced market economics where these components exist separately even despite their mutual interconnection. In real terms, it is impossible to determine the precise boarders where individual components end or begin. A relationship among the above-indicated components of the accounting system is illustrated.

Accounting is an inevitable part of the enterprise activities because it gives a global picture of the course and results of the economic activity, reveals existing problems and provides the background data for decision-making processes in every enterprise.

The users of accounting information are interested in this discipline mainly due to its basic functions, namely:

To give information about the measure of rent ability achieved by an enterprise in fulfilling its basic function, i. e. in transforming input factors into output ones,

To ensure the respective level of governance and protection of the capital entrusted to the enterprise management by various investors,

To ensure other functions, e. g. in relation to tax authorities, stock exchanges.

Secondary Business Roles and Activities

Providing assistance to the regulated community to facilitate their compliance with environmental obligations. This function partially implements the agency's strategy of pollution prevention and is becoming more prevalent as an alternative to compliance monitoring and enforcement.

Site visits are provided to facilities to assist them in identifying their obligations. These visits are targeted (e.g. shop sweeps) to get the most positive environmental effects from the assistance provided by the agency.

Efforts such as waste minimization and toxics reduction are implemented by encouraging businesses to implement reduction plans and report their progress to the agency.

Time Management / Accounting

Monitoring of agency staff time by providing project and task descriptions, allocation of staff resources and subsequently recording levels of effort expended on individual tasks by each project member. The information this satisfies many operational needs (such as payroll and cost recovery for cleanup) and also supports management decision making (such as budgeting and program coordination).

The information recorded often needs to be tied to specifics about the task, for example, the facility/site which the effort was required for. To support the types of analysis required, the information must be integrated with the agencies other information bases.

Revenue Generation

Implementation of the agencies fee-based cost recovery approach. This includes the defining of the fee rules, the calculation and production of invoices, and the administration of payments received from the fee payers. Although the fee rules tend to be very program specific, the mechanisms for invoicing and payment receipt can be standardized.

Budgeting

The preparation of, and modifications to the biennial budget. Budgeting is performed initially at the agency level and then at the individual Program level.

Contract Administration

Selecting and administering external organizations to provide services to the agency for specific periods of time.

External Reporting and Outreach

Providing reports from Agency information systems to the legislature, other government agencies and the public. Provision of training, and dissemination of educational materials to increase public awareness of environmental management issues and the role of the agency in the state.

Funding

Application for and management of granted funds from EPA and other stakeholders.

Grant Administration

Administration of grants assigned by the agency to organizations charged with supporting the agencies activities.

Human Resource Management

Create a supportive work environment and provide training and developmental opportunities to develop a workforce that reflects the diversity of the community serves.

Information Services

Planning, data administration, application development and maintenance, training and user support, data communications and network services, and computer operations.

Interested Party Involvement

Categorizing and maintaining address lists of external parties interested in the information which the agency maintains.

Policy Development and Planning

Development of national and regional policies at a high level that have potential for impact with the agency's operations. Complying with federal requirements (such as biennial reporting), the State / EPA Agreement, participation in authorization negotiations and implementing state equivalents of federal regulations. Assessing the impacts to the agency of actions from the Legislature. These actions may have been initiated by the agency.

Program Coordination and Development

Management of programs to ensure Federal and state rules and regulations are being implemented correctly, programs efforts are coordinated, and that programs are achieving departmental objectives.

Purchasing and Inventory

Authorization and administration of the purchasing of any equipments which the agency requires. Administration of the location, use and status of all Agency assets. Such assets include facilities and vehicles.

Regulatory Planning and Administration

Developing rules and regulations which reflect statutory intent and/or state interpretation of federal rules.

Business Area Dependencies

None of business areas are totally self-contained. There are numerous dependencies among them for required information. The diagram below depicts generalized relationships among selected business areas. Since there are dependencies which link any given business area to nearly every other business area, only the major dependencies are shown.

Balance Sheet

UNDERSTANDING PROFIT AND LOSS ACCOUNTS

With Practical Example

Profit and Loss Accounts

How a profit & loss account helps you manage your business?

You might not need an accounting qualification to be successful in business but understanding accounts will help you understand the basics of financial management and feel comfortable using standard financial tools and measures to monitor the performance of your business.

This article gives an overview of a profit and loss account. The other financial management accounts you need to understand and monitor are:

The balance sheetÂ

Your cash flowÂ

An annual profit and loss account, together with an annual balance sheet, form part of the annual statutory management accounts required by Companies House for Limited companies.

For a closer look at profit and loss accounts see How to create a profit and loss account.

An annual profit and loss account records annual sales income, costs and expenses and shows business performance over a specific period of time. Profit and loss accounts:

shows business performance over a specific period of time

records incomings (revenue from sales) and outgoings (cost of sales plus overheads and expenses) to show whether a profit or loss has been made

shows a summary of invoices that have been raised, or sales income that has been generated, including an estimate of work in progress but not yet invoiced

includes purchases made from suppliers for goods or raw materials, and an estimate of cost for goods/raw materials used but not yet paid for

One of the important things to remember about a profit and loss account is that it does not record whether invoices raised or received have been paid so it therefore does not indicate the amount of cash your business has (this is what a cash flow forecast is for).

Creating a profit and loss account

The figures in a profit and loss account will come from a number of different sources all over your business, so take advice from the outset on how best to lay out and categories your day to day receipts and expenses.

There is some flexibility and judgment in calculating a profit and loss account, such as how long fixed assets should be depreciated over, and what adjustments you should make to cater for bad debts. There is also flexibility over the profit and loss account format that you use. A qualified accountant will advise you what is reasonable and acceptable.

For more information see How to create a profit and loss account

What a typical profit and loss sheet looks like:

A profit and loss sheet will usually look something like this:

Income

 £ 50,000

less discounts and allowances

(5,000)

Net income

=45,000

Less direct costs (cost of sales)

 (20,000)

Gross profit

=25,000

Less indirect costs (fixed overheads)

(7,000)

Operating profit

 =18,000

Plus other income

 2,000

Less other expenses

(1,000)

Profit before tax

19,000

Less tax

(8,000)

Net profit (or net loss)

=11,000