Image by West Virginia Blue via Flickr The audit of any firm is a stressful period for its employees and stakeholders. However, there are various ways and means to reduce the complications involved. For starters, one must make it a point to maintain proper records at all times. An audit focuses on the raw data available for decision making and tries to find an impartial and logical link to the conclusion. There is no value judgment involved in the audit. The professional simply wants to verify whether established rules and practices are followed in the decision making. The audit may be related to finances or to the overall management of the organization. In such a scenario, making all the essential records available to the professional will simplify the task. Vouchers, bank statements and other such documents will make it easier for the auditor to assess whether the financial statements have been prepared properly. Many big firms set up a permanent audit committee that coördinates the audit procedure with the professionals. You may not be a big firm but having a committee consisting of one or two other employees may simplify the audit of the firm. Instead of waiting for the auditor to walk in and demand documents, the committee can arrange everything well in advance to save time and effort. The idea of allowing a third-party to analyze the work done by your employees may seem repugnant at first. However, audit is a legal and practical need. In such a scenario, try to coöperate with the auditors instead of treating them like your enemy. At the end of the day, you will be the person who will lose if your business gets an adverse remark in the report submitted by the auditor. … [Read more...]
Business Audit ? Why Involve 3rd Party Professionals?
Image via Wikipedia What is the harm in conducting an audit of one’s business without involving any third-party? Any and every audit involves verification of the subject of the audit. An audit of the financial statement involves verification of every bit of information presented in the same. There must be a logical link between each transaction and the ultimate results shown in the financial statement. There must be sufficient proof in the form of documentary evidence or paperwork. To conduct the audit without involving a third-party professional is obviously going to lead to loss of credibility. What is the guarantee that the management shall not convert the audit into a rubber stamp exercise which simply approves every decision of the management? A fraud conducted by the management itself will never be caught because the judge and the thief would be the same. It is important to hand over the task of audit to outsiders even when one is carrying out an internal audit or a management audit of a specific department or a specific process. Accountability is a very important issue when public money is at stake. A wrong decision by the management or a decision based on insufficient or irrelevant facts should be identified and remedied. The process may involve censuring the actions of certain people associated with the organization. To make sure that the process is impartial and credible, it is important to involve third parties. What is more, audit is a professional exercise and requires the services of people who have been specially trained to carry out such an activity. … [Read more...]
Drafting a Compensation Plan
Image via Wikipedia A compensation plan is an important tool in employee relations. It gives employers more direction when addressing issues of compensation. It also provides employees with a clear picture of what they are earning, and what they can earn. A compensation plan should be crafted well. It should reward productivity, efficiency, and performance of the employees. There should be scope for all this in the compensation plan. A compensation plan should inspire employees to go the extra mile to achieve that extra bit of compensation. A compensation plan should cover most of what employees can expect to earn in an organization. This includes salary, bonuses, allowances, and incentives. A compensation plan could also include overtime, compensatory wages, leave enchashment, retirement benefits, stock options, health insurance, employee improvement fund, and a host of other employee-benefit compensation. A compensation plan is dependent on various factors and conditions that an employee has to adhere to. This includes working house, logging and logging out hours, usage of paid leaves and vacations amongst other things. The compensation plan has to be transparent and straight-forward. It has to clearly state what employees are being paid for, and what is expected of them if they want to be paid. Compensation should have minimum thresholds based on job function and role. In some organizations it could be based on seniority and number of years in service with the organization. The minimums in a compensation plan should be per industry standards or above it. But never below it. If it is, then the company should entitle the human resources to answer employees questions about the same. They should have credible answers. … [Read more...]
Pillars of a Successful Business
Image by plantoo47 via Flickr It is always the dream of a business-owner to create a successful business that lasts the longest. A business is expected by its stakeholders to weather the thick and thins of economic situations. If you ask any industry pundit, he will tell you that a successful business can be run only by people how have deep insights about the business. Only a solid understanding of a business can make a business-owner fully confident of taking the business forward. A complete understanding of the business only comes with years of playing in the markets. It comes the hard way. So what are the pillars of a successful business? Here are some. Planning more planning When you run a business, you need to plan at every stage. Running a business without a plan can be done once in a while. But this auto-pilot mode of running a business will not go for long. You need to plan ahead. Plan for contingencies. Plan for attrition. Plan for new business Plan for new strategies. Plan to get more market intelligence. Plan to do more research on the business. Plan to increase the businesses profits. Developing strong accounting systems A business has a lot of accounting and legal issues it will face. Having a transparent accounting system, and a neat legal slate will give business stakeholders a good night's sleep everyday. Management The management is as important as the business. Management should be dynamic, visionary, contemporary, and flexible. The organizational structure of a business also matters. The flatter the hierarchy the better it becomes for people to have access to different levels of management … [Read more...]
Avoiding Hidden Fees on Credit Cards
Image via Wikipedia The credit card has its beginnings back in the early decades of the 20th century. Since then they have become a vital part of both personal and business finance. Credit cards allow people to purchase things on the basis that they do not have the cash at that point in time, but will pay a bank or financial institution at a later date for the "money" he or she borrowed via credit. With credit cards come many different kinds of fees. What a lot of people don't realize, is that most credit cards have an interest free period. So if you pay off what you owe within, for example, 30 days, then no interest fees will be charged on your purchases. This is a good way to save money, as many credit cards have very high interest rates. Some stores impose a surcharge if you are using a credit card. If you are not sure if a store you are at does this, just ask. Try to avoid using your credit card at as many of these types of places. It may only be a small surcharge such as 1%, but if you use your credit card at many places with a surcharge it will quickly add up. Use cash when you can. The best way to avoid any hidden fees on your credit card is to read the fine print in your contract. You'd be surprised at all of the varying hidden fees. Some banks charge a fee if you pay the card off, or cancel it! Before signing up for any credit card make sure you read the contract. … [Read more...]