The Knowledge of Accounting - Essay Example

Task: Finance and Accounting Accounting is one of the major fields that necessitate the proper running of the business. The facilitation of the accounting techniques and financial information necessitates the efficiency in running a business. The preparation of accounts coincides with the knowledge of the spending capabilities and the revenue accrued by the departments in the business. The proper evaluation of these tendencies facilitates the determination of the financial position of a business at any given time. It also serves as a tool of the eventual decision making in the business setting. Proper accounting portrays the ultimate financial position of the business. The accounting field provides an interrelationship with other departments in any organization. It tends to unify all the fields in any organization. All departments must spend through the consumption of the business resources. Accounting provides the platform of unifying all the expenditure and comparing it with the revenues that the business enjoy. Every department or discipline has a mandate of ensuring proper utilization to minimize the expenditure and maximize the returns. The evaluation of such disciplines is a tremendous initiative in determining the financial position of different disciplines. Examples of disciplines that require the knowledge of accounting to run them include; the human resource, ICT, marketing, and other disciplines. The information obtained from various fields in a business culminates into the final report that is portrayed in the books of accounts. Amber Herrmann Amber Herrmann is a former graduate of CFCUSM. She started her course in accounting and passed the first accounting course. She later took a business course in human resource management. She graduated as an accountant, but later switched to human resources. The human resource is involved in the recruitment of new employees, performance appraisal, promotion of the employees, and the laying off workers. It is a department that is mostly involved in the maintenance and protection of the employee welfare. Accounting Information used by the Discipline Though Amber is a human resource manager, knowledge of the accounting has propagated her to become the merited manager she is. She provides the insights about the application of the accounting knowledge in the HR department. The department is involved in the management of about 12000 employees. The welfare of these employees has to be protected. The accounting information provides them with the general liability procedures that the department requires for merited performance. During the annual general meetings, the department must prepare the most credible financial records and present them to evaluate their performance. This involves the use of the departmental cash accounts, balance sheets, and cash flows. This is due to its predisposition in the spending tendencies in most companies. “HR department has been deemed as spenders. The proper application of the accounting techniques ensures for efficient spending” (Herrmann, 15:01-15:30). The HR is necessitated to provide the final budgeting at the end of every financial year. This involves both the returns and the investments or expenditure. The HR must use the accounting discipline to ensure that the budget is sufficient and not exaggerated. They do not base their eventual values on assumptions, but on the values portrayed in the records. The proper employment of the values is necessary in making the approximation of the supplies to their departments. This may be used to cater for the general liabilities such as employee injuries, legal liabilities, performance appraisal, and payment of the employee salaries. Therefore, the knowledge of accounting is used to monitor the patterns of budgeting (Herrmann, 14:45-15:59). Most organizations believe that the HR is a department that is explicitly involved in costs, and not returns. Amber uses her accounting knowledge to ensure that the money stays in the firm. They try to minimize expenses of ridiculous dimensions to reasonable and rational levels. She analyses the accounting spreadsheets, books, and other accounting documents to maximize on this venture. They, therefore, make the venture to be business focused, rather than cost ineffective. They also work in concession to ensure that the employee liabilities are reduced. In the case of legal suits, the HR is willing to settle with its employees to avoid the costly and bureaucratic procedure of suits. All these are meant to minimize costs, and thus magnifying the application of the accounting techniques in HR. The accounting information provided by the discipline to the accounting function The accounting option provides the HR with the vital information that is essential for the running of the discipline. Accounting for the expenditure gives the HR an approximate of the total expenditures they would require at the start of the next financial year. The budgeting is done in the accounting to ensure for continuity and efficiency of the HR department. In 2012, the HR was able to produce a turnover of $500,000. Despite the increase in turnover, the expenses such as trainings, compensation claims were incurred. However, the expenses reduced tremendously by a margin of about 15%. The employee liability saved about $300,000 in expenses. All this information can be obtained by considering the accounting data provided at the end of the financial year (Herrmann, 29:52-35:20). Currently, the whole world is prone to economic fluctuations. Amber says that watching the returns on investments is a necessary step in ensuring for the business viability. The HR is taught how the general ledger works to give a general foundation for the preparation of the accounting records. This has encouraged accountability on all stakeholders, including employees and other disciplines. Currently, gas prices have skyrocketed and this may affect revenue obtained by the company (Herrmann, 36:47-38:42). The preparation of the final financial position report may be affected by these economic changes and hence affecting the final returns on investment. The other use of the accounting discipline is the management of issues to do with employee benefits and liabilities. The accounting information provides a better basis of negotiating contracts with the employees. The employee is aware of the expectations of the firm. Accounting helps the department to minimize on employee benefits and liabilities to ensure that the business thrives to greater heights. It also takes into consideration the legal costs of the HR, thus making the overall cost of the HR to be regulated. Therefore, the accounting information provided is necessary in the establishment of the final position of the business. How well the interaction works between the discipline and accounting function The HR is delegated in the management of about 12000 employees. The employees must be budgeted for; to ensure for the continued productivity of the firm. An organization that values its employees enjoys the utmost loyalty and service of its functions. The employees must be treated with utmost consideration since they are peaking in ensuring product viability. Proper accounting ensures that the HR department is well coordinated and equipped to improve productivity. The employees are taught the techniques of cost reduction and return maximization. The annual reports enable them to evaluate themselves and improve productivity. This also provides the proper platform for the final decision making in the discipline (Herrmann, 29:07-30:21). The interaction between the accounting field and the HR also fosters confidence in both the employee and the managers. The employees are evaluated and their performance in terms of revenues formulated. The estimation of these values acts as a better basis of decision making in the management of the whole process. The employee is aware of what is required from him and thus the final optimum level of production. The employer is able to make decisions in terms of the employment techniques they are willing to partake. The employee is accountable for the decision he or she makes. The company is also accountable for the welfare of the employee in their capacity. This has the general benefit of both the business and the employees in general. Though accounting is a field on its own, the culminated interaction of these fields leads to the eventual revenue in the whole process. Accounting, therefore, stands out as the intermediate link between many fields involved in the production process. Larry Frum Larry Frum is a procurement officer in the business discipline. He graduated with a business major in campus. He currently works as a public procurement officer in the state of California. His discipline is concerned with the authentication of the business procurements, and ensuring that they are in line with the business requirements. The discipline applies knowledge in accounting, business management, and other cumulative disciplines. The public company is involved in the provision of the travel services to the inhabitants of California, and the whole state in general. The federal government is a major source of funding for this step in ensuring that the citizens are satisfied. To succeed in this project, the procurement officer must ensure that the services provided are facilitated efficiently and economically. Implementation of proper record keeping is a necessity. This is instrumental in making the final reports to the federal government. Therefore, the application of accounting is an efficacious step in this upbringing. The accounting information used by the discipline The prosperity of every organization depends on its ability to store financial data, and reproduce it on requisition. The travel agency must keep all the records concerning their capital, liabilities, revenues, cash flows, and other financial information. The procurement department must act within the financial means of the agency to ensure that it is economically feasible. The buying of the buses for the agency should be done by checking the financial position of the agency in order to avoid overspending and promote accountability. The accounting information is essential in ensuring that the costs are taken into records. The records are kept in the computer systems to ensure that the procurements are accounted for. The finance manager is able to order for the closure of the PO to limit the cash flows of the business. When other finances are required, the PO is opened to ensure the invoices are facilitated. The harmonization of these records leaves the procurement department with properly kept invoices, purchase orders, and other financial data. The budgeting of the procurement department also requires the accounting disciplines in the preparation of its budgets. A budget must portray the financial viability and its financial allocation. Proper evaluation of the investment opportunities and business expansion depends on the annual budget of the department. “The federal government gives 80% of the budget in the form of grants. Therefore, the budgeting must be fully accounted for owing to the complexity of the federal government necessities” (Frum, 18:07-20:14). The achievement of this process involves the employment of the accounting procedures and requirements. The revenues for the travel agency ranges from $90 million. The revenues find their application in different ways. About $70 million is used as the operating cost of the travel agency. The money must flow in order to ensure effective financial viability. The procurement department is essential in ensuring that they procure service enhancements to amplify liquidity. To accomplish all this, they need to prepare invoices and purchase orders that should show the figures that are correctly tabled. The application of the accounting ledger preparations is a paramount step. The accounting information provided by the discipline to the accounting function The federal government provides the travel agency with most of the funding. At the end of the financial period, the procurement office must provide statistical data about their spending. This expenditure is required by the accounting departments in the preparation of the profit and loss accounts. The revenues of the travel agency are compounded and the turnover determined. The accounting discipline requires the data concerning the purchases and procurements by the procurement department. The procurement department must find a way of investing the grants from the federal government. This information is fed into their software to ensure that it could be retrieved. The accounting department prepares the accounting data, and sends them to the federal government. Therefore, the accounting department requires this data at the end of a fiscal year (Frum, 39:29-41:07). The procurement department is involved in a variety of activities. In their enterprise planning system, they portray their procurements, costs, and revenues. They make decisions on how they spend their budget allocations. The labour required and the equipment to be employed in the process are broken down. The acquisition of the money from different organizations beside the government reimbursement require financial scrutiny. The organizations must audit the financial expenditure to ensure the effective investment of their grants. The accounting departments require the financial data from the procurement offices in order to prepare the correct financial data. This data is essential in maintaining the confidence of the organizations. The tracking of the financial data is, therefore, an essential step for the accounting discipline. The travel agency serves around 12 million passengers per year. The number is likely to rise due to the procurement of new buses in the travel agency. Therefore, better spending and utilization of the capital money and operating costs is vital (Frum, 39:46- 46:01). A conglomeration of these values validates the agency the performance in the public market. The financial position of the agency depends on the procurement department since it is central in the procurement of assets to the agency. The accounting section then uses this data to prepare the balance sheets for the agency. They can also project the business growth over the years. Therefore, the information from the procurement department is central to the accounting discipline. How well the interaction works between the discipline and accounting function The interaction between these two departments is essential for the overall performance of the business. Every individual in the procurement department is considered an accountant. This is because they must provide the accounting information necessary for the evaluation of the business performance. The information is necessary for the re-examination and structural adjustments in the business. This decision can only be made by considering the values prepared in the accounting discipline. The values are likely to collectively show the performance in terms of expenditures and revenues. The profitability of the business can, therefore, be determined effectively. The travel agency obtains most of its funding from the federal government. The agency is regulated to use the money before the grants expire. The procurement offices place the requisitions and then posts the information to the accountant. The accountants harmonize the operation to ensure effectiveness of the money to the last cent. They also help in solving the challenges of budgeting for the procurement offices. They can base their procurements on the accounting data that is provided. This also aids in the limitation of excessive spending, and the loss of funds. The amount that has not been spent is easily obtained in the accounting field. This is a possible way of ensuring for a proper investment system. Therefore, the accounting and the procurement section are important in ensuring for the harmonization of the whole business (Frum, 22:01-23:52). Conclusion In conclusion, the knowledge of accounting can, therefore, be applied in many disciplines due to their relationship quotient. Proper interaction between the disciplines and accounting is paramount. The disciplines provide data to accounting, and accounting provides the information that is used by the disciplines. The talks by Amber Herrmann and Larry Frum provided an explicit evidence for the application of accounting in their fields. Though they are not accountants professionally, they sum up the requirement of Accounting in their fields. Work cited Larry Frum “ACCT 201” California State University. 5th march 2013. Guest Lecture Presentations. Retrieved from http://hermes.csusm.edu/Mediasite/Catalog/Full/5c7fb1d6d850497a9f8dc74c41f3621821 video presentation Amber Herrmann “ACCT 201” California State University. 11th March 2013. Guest Lecture Presentations. Retrieved from http://hermes.csusm.edu/Mediasite/Catalog/Full/5c7fb1d6d850497a9f8dc74c41f3621821 video presentation Read More