In Pursuit of Profit
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The author, Peter Cappelli, a professor at the University of Pennsylvania’s Warton School of Business, highlighted the ways in which he believes that pursuing financial goals causes businesses distort their hiring and training objectives and deprive employees of the benefits they deserve. His summary for the article was as follows: Many HR practices in the United States are bad for companies, employees, and shareholders. Firms skimp on training and development, for instance, and tightly limit head count even when they’re understaffed. They increasingly move work to nonemployees, like leased workers, and replace pensions with more-expensive 401(k) plans. They do such counterproductive things because U.S. financial reporting standards treat employees and investments in them as expenses or liabilities, which make companies look less valuable to investors. The solution he proposes is to change SEC reporting requirements, which would only help publicly traded companies, though he seems to indicate that these struggles are being felt by a broad array of business types and sizes.
Unfortunately, it seems this article misses one very important point – the ways in which accounting and HR can work together to benefit the overall business. As a result, we’d like to cover that aspect of the discussion to help remind companies that their accountants are not the villains in the discussion of hiring and employee retention.
We are in a time of change because that’s what the business world does – change. Whether innovation happens slowly or quickly and whether advancements are small or massive in scope, the world doesn’t stand still.
Amid the ever sweeping winds of change business owners must return to the core of management – asking the right questions to keep their businesses moving along at the same pace.
Only time will tell if/when a recession will occur. Right now, business owners are collectively holding their breath as they wait to see how the economy will progress over the course of the next year, which begs the question: “What should your business be doing during this waiting period?”
Knowing what you will do during an economic downturn is an important part of any risk management strategy, especially when economists are warning that the nation may be headed for a recession in the near future.
It all comes down to cash flow management. Cash flow is the tie that binds. Everything your accounting and finance personnel do is centered around managing the company’s finances to ensure they can acquire customers, run daily operations, pay staff, meet financial obligations, make necessary expenditures, and reinvest into the company. Simply put, they ensure that cash will be there today and tomorrow to keep the business going (and hopefully growing as well!).
Similarly, the recruiters at The ASP Team follow a process to help their clients find the right candidate who fits with their available accounting and finance position and culture – a work match!
What is your recourse if you cannot remedy performance issues? How do you set up future hires or service providers for success to avoid these kinds of issues in the future?
We’ll cover these topics in our guide to accounting management: The Association of International Certified Professional Accountants (AICPA) publishes an annual report detailing accounting program enrollment and graduate hiring trends. In their most recent report, they provided data on a problem that the accounting industry has been facing for the last decade. The problem is that fewer people are choosing accounting as a career. Our conversations with colleagues have yielded the same kind of feedback. It seems that fewer people (even those majoring in accounting) are going into accounting these days upon graduation. The AICPA backs this observation with data showing that from 2019-2020 the number of accounting graduates dropped by 2.8% at the undergraduate level and 8.4% at the graduate level. Furthermore, the hiring of new accounting graduates in 2020 decreased by 10%.
1/18/2023 How to Improve Close
As such, improving accounting close has become a main focus for many accounting teams over the last several years as business demands have grown and hiring qualified accounting staff has gotten more difficult.
Strategies to improve close can focus on making your accounting close faster, more accurate, or less painful… and, if you do it right, all three! 1/11/2023 How to Adjust Prices for Inflation
In an article on how consumers are responding to inflation Andy Pandharikar explains, For many years, the inflation rate in the United States has been relatively low, hovering around 2%. However, in recent months, that rate has increased dramatically, nearing 7%. However, if we measure according to the Bureau of Labor Statistics’ methodology from 1980 that figure exceeds 13%. Inflation in specific categories like ground beef has been even higher, nearing 20%. As prices rise more quickly than wages, many consumers are finding it difficult to afford basic needs. Of course, the risk for businesses is significant. Improperly managed pricing can either cost the company its customers or its profits, either of which ends in failure. Prices need to hit a sweet spot where they can generate profitable revenue and are because enough people are buying.
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3/6/2023