How businesses write up work-orders

Knowing how to write up a work order can improve a business' work-flow process, if not help save a business operation from inefficiency. Work orders and work order systems vary between businesses but can be written up to meet business job or project needs effectively. For example, if a business has a lot of client field jobs, a mobile work order system with GPS, and integrated data transfer can speed up and improve worker efficiency.

Work orders are the medium with which business tasks are documented, implemented with and recorded. Some types of work orders might involve completing a form, recording it on a computer system then delivering it to the project manager or appropriate worker, while others might consist of a verbal order and a computer entry. The following steps can help with properly knowing how to create and implement a work order.

• Define

Defining what a work order is to do is key in writing or creating a work order. If the work order doesn't have the right information on it, or isn't compatible with the business operation it is used for, then it may be incomplete, or incomprehensible. To illustrate, if clients are often on the internet, a web based order mechanism can be automatically transferred and entered into the work order system by the client.

• Develop

Either create a work order template or locate a work order software. If work orders need to be duplicated, an affordable duplication method may be used. For example, electronic orders or audio dispatch. Work order software that can be integrated with existing business applications may be idea. For example, DeFNiC has a work order software that integrates with Quicken.

• Optimize

A well designed work order will  only have necessary information and not redundant data. Work orders should be quickly created, recorded, organized, adjusted and released in a cost effective way. If combining a work order with a job order, information such as job instructions and materials used can be added with the order number, date, account, job description, client, and costs.

• Review

After the work order process is complete put it to the test by reviewing how well it works on a limited basis. The work order system can be tested on one or two clients using one or two responsible employees for feedback and observation. Weed out any bugs or flaws in the system sooner rather than later and before making the work order system primary or live.

• Refine

As work is completed the work order should be accurately updated. A cloud computing work order software such as Service Max, or Adhere Solutions work order management may be the right tool this. If the software is also electronically linked to an accounts receivable account and other financial records, this may help reduce bookkeeping time and errors.

A work order mechanism can be as simple or as complicated as you want it to be. Some work order processes may be complex and detailed, even if stated to be simplified; an example being government purchase work orders. Each business is likely to have specific template requirements and bookkeeping systems. For this reason, making a work order adaptable within an accommodating work order mechanism is especially effective in dynamic and ever changing business operations.  

Sources:

1. http://bit.ly/cRcK32 (U.S. Government Printing Office)
2. http://bit.ly/9ivsjt (Miami Dade College-J.Hortens)
3. http://bit.ly/dvMPyU (DeFNic)
4. http://bit.ly/dlx3hl (Service Max)
5. http://bit.ly/cL1BD6 (Adhere Solutions)

How small-business owners can effectively manage cash flow

Managing business cash flow affects business functionality and profitability because cash flow is the use of and movement of cash in and out of a business. Too much cash in one aspect of a business can adversely affect another aspect of a business and the inverse relation holds true as well i.e. too little cash in operations can lead to costly debt and lower net gains after return on investment.

Cash flow management can be tackled by dealing with several parts of the business by optimizing the cash flow for profitability in each of those parts. For example, business loans refinanced at lower rates optimize outflow by reducing interest costs. The goal of cash flow analysis is ideally to allow adequate availability of cash for business activities, in addition to helping maximize profit margin and/or net income after costs, taxes, depreciation, expenses and dividends if any.

The three major areas on the cash flow statement include operating, investing and financing activities. Small business cash flow always has operating cash flow and may have some form of investing and financing activities, but the amount of the latter two depend on the size the business.

• Operating cash flow

Operating cash flow should generally be positive due to steady or increasing accounts receivables, net income, and depreciation expensing of property. Cash flow notes may also increase the final operating cash flow number however an increase in operating cash flow because of liabilities may not always be a good thing.

• Cash flow from investing

A second area of cash flow is investing. This aspect of cash flow should generally be negative as cash not invested via capital expenditure in fixed assets or investments in equity ownership is cash that is potentially not growing as much as it could. Investing cash flow may also vary depending on the economic, and business cycles, in which case the cash flow may be strategically lower.

• Financing cash flow

If a company makes use of equity and/or cash flow loans, cash flow can be negative or positive depending on whether shares have been sold or debt paid off. Generally, the business development plans will determine if a business needs to pay off or expand its financing in a given fiscal quarter or year. For example, for companies seeking to expand and develop new projects the cash flow may be positive through debt or equity financing. However, if a new project has been completed and is now returning a profit, it may be a good time to pay off some or all of the financing for it.

• Tips for improving cash flow

Asset management can aid in lowering interest payments, accounting for maximum tax benefits and obtaining cheap or affordable financing. Lowering credit costs, reliance on lines of credit, and write offs benefits cash flow. Inversely, increasing accounts receivable terms and penalties may serve a similar affect. Risk management incorporates cash flow need forecasts in business down times, seasonal and economic cycles helping the business run smoothly. Keeping an eye on costs, business credibility, liquidity and profitability ratios can assist in the cash flow analysis process.

Cash flow management is an continuing process that is either subject to the scrutiny of private, public or individual ownership. Regardless of who owns a company, the goal of business functionality and profitability is facilitated by effective cash flow management. Through an optimization of the operating, financing and investing activities in addition to keen asset, and risk management, the cash flow of a business can not only assist with annual goals but may also aid in demonstrating management expertise to any potential investors, vendors, venture capitalists or banks.

What is cost accounting?

Cost accounting identifies, documents, implements and resolves business costs for both managerial decision making and financial reporting. Without cost accounting, businesses may have out of control expenses, inefficient business practices, excessive liabilities and no effective cost management systems and solutions. Just as financial accounting is regulated by General Accepted Accounting Principles (GAAP), cost accounting is also regulated by Cost Accounting Standards Cost Accounting Standards (CAS)

Cost accounting that encompasses a process of utilizing cost accounting information for improved business functioning is a helpful if not essential aspect of running a business competitively and efficiently. This article will discuss cost accounting in terms of 1. types of business costs, 2. cost accounting records, 3. cost management systems and 4. solutions for cost management.

1. Types of business costs

Business costs in cost accounting vary from industry to industry and the ideal business has no expenses, which is rare. The different types of costs incurred by a business reflect the management's decision making, the business products and services, and aspects of how a business is operated. Properly identifying business costs is helpful and necessary in preparing and analyzing corporate fundamentals. Some of the business costs handled by cost accounting are listed below:

• Manufacturing costs ex: Nuts and bolts
• Overhead costs ex: Lighting
• Variable and fixed costs ex: Nuts and bolts and salaries
• Direct and indirect costs ex: Paper used for invoices
• Sunk and opportunity costs ex: Investment in equipment

2: Cost statements and documents

What cost accounting also helps with is the recording and documenting of business costs. This process helps track costs every step of the way from origination, through completion of a product manufacturing, sale and service. Cost accounting statements and documents also provide regulators, investors and auditors with necessary financial information with which to analyze the profitability, accounting methods, accuracy and effectiveness of cost accounting systems. A few of the documents, reports and statements used in cost accounting are:

• Schedule of cost of goods manufactured ex: cost of completed product
• Schedule of cost of goods sold ex: costs of sold inventory
• Income statement ex: COG raw materials
• Job cost record ex: costs of work in progress
• Balance sheet ex: product and period costs

3. Different cost management systems:

Cost accounting also uses what is referred to as 'cost management systems'. Cost management systems 1. define how costs are identified, 2. organize the method by which costs are recorded and 3. assist in reviewing and improving business costs. These cost management systems are used in various aspects of business operations to properly account for, record and identify business costs. Some of these cost management systems are cataloged hereafter:

• Actual and normal costing: ex. Average and exact water used cleaning lettuce
• Activity based costing: ex: cost of electricity used shredding
• Product costing systems ex: average cost of boys and girls bicycles
• Job order costing: ex: manufacturing cost for custom furniture
• Cost allocation and cost classification: Cost per apple vs apple picker cost

4. Solutions for management:

Without solutions for cost management, cost accounting hasn't completely fulfilled its task. In other words, identifying, methodologically assessing costs and recording costs do not necessarily help a business improve.  Rather, solutions to cost management problems may be needed frequently or occasionally depending on how much a market and business environment change. With changes in prices, equipment capacity, training, know how and product manufacturing, also come possible changes to the cost accounting that studies these things.

• Restructuring of capital management
• Identification of redundant costs
• Redesign of cost systems
• Improved day to day operations techniques
• Enhanced sourcing and implementation of cost items

Sources: 

1. Hilton, Ronald 'Managerial Accounting: Creating value in a dynamic business environment' 5th ed,  McGraw-Hill, 2002 Chapters 1-6.
2. http://www.fasab.gov/ (Federal Accounting Standards Advisory Board)
3. http://fast.faa.gov/archive/v1198/pguide/98-30C14.htm (Federal Aviation Administration)

Accounting And Its Many Aspects

Accounting involves the taking of financial information and organizing it in ways that are representative of fiscal scenarios at given points in time. In other words, accounting re-configures financial data into things like spreadsheets, account records, financial statements, financial reports, forecasts analysis etc. This enables business owners, managers, financial analysts, government agencies, shareholders, clients etc. to be more aware of events as represented through accounting.

Accounting is regulated by federal acts of legislation and generally accepted accounting principles GAAP. Specific titles within legislative Acts govern how particular aspects of the practice of accounting is carried out. For example, public corporations may be required to produce financial statements every three months and those financial statements should generally conform to standardized accounting principles, be audited and accurate.

The field of accounting is quite broad and spans a number of areas such as managerial accounting, tax accounting, financial accounting, cost accounting etc. The profession can involve significant training, has varying levels of expertise, and requires considerable accuracy, diligence and passion for numbers and organizing of numerical information. Important aspects of accounting education, compliance and regulation can be summarized categorically in the following sections.

Accounting classes

Business schools and professional training programs offer accounting classes at various levels. These classes can help prepare the individual for a career in accounting by equipping them with the necessary know how, and skills. Accounting classes can also be taken through online programs.

Accounting courses

Accounting courses are a series of individual classes that focus on a specific topic or course of curriculum. Courses in accounting are taught by instructors and/or professors and are sometimes part of an accounting program. Completion of an accounting course may allow an accounting student to receive educational credit.

Business accounting

In the field of business, certain types of accounting methods and techniques are utilized. Business accounting involves invoicing of clients, maintaining of client and creditor account records, preparation of account statements and paying of bills. Other aspects of business accounting involve tax reporting, cost analysis, account research and financial organization.

Accounting education

To become familiar with the practice of accounting, and education is often necessary. Accounting education may include a series of workshops, a single class, a course or a program and is aimed at the task of learning and achieving knowledge of aspects of accounting.

Online accounting

Accounting classes can be taken online through online schools. Accounting can also be practiced online through educational accounting simulations or real life online applications. Online accounting makes use of the internet to learn, practice and engage in accounting via world wide web resources.

Accounting training

New jobs and careers in accounting may require one to retrain despite an existing knowledge of accounting. For example, a company may use a different accounting software and/or accounting record-keeping system making the need to train necessary. Accounting training may be provided by colleagues or professional trainers.

CPA review

Certified Public Accountants (CPA's) must pass an accounting examination to achieve licensure. CPA review helps examinees prepare for the CPA exam with greater confidence and knowledge. CPA review may also involve study of previous CPA exams and specific content requirements recommended by the American Institute of Certified Public Accountants (AICPA).

Nonprofit accounting

When a business is non-profit it is not allowed to retain earnings as profit. This can have a considerable impact on the financial accounting and record-keeping practices of a non-profit organization. Additionally, non-profit businesses are subject to different accounting practices than for profit companies.

Sarbanes-Oxley compliance

The Sarbanes-Oxley Act of 2002 is a U.S. legislated system of accounting that institutes stronger accountability toward accurate financial reporting by public companies. It also aims to reduce accounting fraud through stronger audit mechanisms, penalties, and greater executive affiliation with the accounting process.

Financial reporting

Companies that pay taxes, have shareholders, boards of directors and managers utilize financial reporting as a means of analyzing, organizing and complying with accounting regulations. Financial reporting helps a company and its owners measure financial performance and allow tax authorities to assess corporate observance of tax law.