The New Buzz Phrase: Employee Engagement

“Has the emerging dotted line between profitability and employee happiness simply become a strategic advantage business can’t afford to ignore?”

Georgetown Alumni Career Services

Examining employee commitment to organizational priorities isn’t necessarily a new concept but it’s definitely one that is trending in 2014.  It has even left one writer even asking “is employee engagement the new black?”

After seeing the headlines in so many places, I can’t help but wonder, why now?  Management 101 fad or cultural paradigm shift? In a world where the job market is still tough, it’s not necessarily an employer’s market.  Company culture, benefits, perks, and overall brand are still major factors for job seekers to consider.

So, what gives? Why now?

Is it the new generation of millennials entering the workplace that are influencing the way we do business?
Is it that technology has forced work and life to merge more than it has in the past and therefore we need more out of our work?
Has the emerging dotted line between profitability and employee happiness simply become…

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8 Essentials of Extraordinary Financial Reporting

Continuing with our series of “8 Essentials”, let’s take a look at the why, what and how of your small business financial reporting.

First of all “why” do we need financial reports?

1) On the most basic level, we are in business to make money. Financial reports inform us as to what is working and what isn’t working. They are one of the key components guiding our decision-making process and those of our investors.

“What” are the most basic reports?

When I interview a prospective bookkeeper, I always ask this one question, which 80% of the time is answered incorrectly. “What is the difference between a Balance Sheet and an Income Statement?”

2) The Balance Sheet –  A report indicating what a company owns (Assets), what a company owes (Liabilities) and what a company is worth (Equity) at any given point in time. This is a PERPETUAL report, where all balances are ongoing.

3) The Income Statement – A report indicating a company’s performance (Profit or Loss) over a given point in time. This is a PERIODIC report, where the net of all balances get transferred to the Equity portion of the balance sheet at a cutoff date (usually the end of the year). These reports are often compared to previous periods to measure growth over time.

Finally, there is what some would call the most informative report of all.

4) The Statement of Cash Flows. This report lets us know how we managed our cash during any given period. This is important because having less cash on hand at the end of a given period then we had at the beginning does not necessarily reflect poor performance. We may have paid down on debt or invested in future growth. Having more cash may also not reflect better performance, as we may have collected on receivables long in arrears.

So the question is “how” do we make sure these three reports accurately let us know what is and is not working?

Always make sure we are comparing Apples to Apples. Maintain a consistent system of recording transactions. With today’s software programs this is easy to do:

5) Make sure every vendor and customer has a default income or expense account attached to it.

For example: Fed Ex is always a Small Parcel Shipping expense. Before a new Customer or Vendor is put into the system, it is vital that someone (the Controller) take responsibility to approve what that account will be. In this way a uniform system is in place. Controllers can periodically print Vendor and Customer reports that list the corresponding default accounts.

6) Make sure all new Vendors and Customers are listed in the system in a uniform way.

For example: If the vendor or customer is an individual, set a policy that all are entered last name first. Otherwise the nightmare begins where we have to print three customer ledgers just to know what is or isn’t owed.

7) Be on the same page as the people who will need this information.

Make sure the chart of accounts is set up so that the year-end tax returns or audits do not require hours of expensive outside labor. This can most easily be done by consulting with your Independent CPA firm and asking them how they would like to receive the information at year-end. This includes depreciation schedules, loan amortization schedules, payroll reporting, and monies paid out or received for the direct benefit of ownership, such as health plan benefits or pension costs.

8) Constant review:

The Controller should set up a month end review of the General Ledger with the person that makes general journal entries to ensure that payroll entries, month end entries and bank reconciliations are done in a timely fashion. The Controller should also set up a weekly review of the Account Receivable Aging and Account Payable Aging reports with the people responsible for receivables and payables respectively. In some companies this could be 5 people, or departments, if a company has different people handling general ledger, billing, collections, purchasing and payments. In smaller companies one person may do it all.

By recognizing these 8 essentials, every small business owner can have peace of mind that together with his Controller or CFO, it will be easy to identify what is or isn’t working, and can now start the process of creating an action plan to address areas in need of attention.

For example: If there are great fluctuations in available cash, check to see if certain vendors are constantly being paid late or if certain customers are paying late. Have credit and payment policies in place. Remember that time is money. If we don’t get paid when expected, then we have to borrow and we pay finance fees. Of course, we can pass those finance fees on to our customers as late fees, but we then run the risk of the customer going elsewhere. We can also pay our vendors late, but then our goodwill with vendors will be damaged and they may decide to stop doing business with us. Some vendors may even offer discounts to us if we pay early that we are not taking advantage of. Vendors and customers respect working with “what you see is what you get” people.  The key here is sticking to a policy, creating a procedure that matches the integrity of the policy and maintain a system that checks the integrity of each procedure.

A professional Strategic Planning Consultant can guide you through the initial process of setting up an accounting system with policies and procedures that work. Once done, a dedicated Business Coach can work with you to make sure the intent behind the system is actualized. Abe Rotbart, founder and CEO of Creating8 is available for both. To contact Abe click here.

Written by Abe Rotbart. © Creating8, Inc 2014. All rights reserved.

The business of CBT

How many of us deal with “stories in our head” that limit our production? Should business consider having Cognitive Behavioral Therapists available for their employees? Here is an interesting perspective.

novoltd

Image    Mental health problems are common in the workplace. Stress in particular represents an extremely significant problem for employers with, at any one time, around one in six workers experiencing depression, anxiety or other stress related problems .

Cognitive Behavioural Therapy (CBT) in one form or another has been around since the 1950’s, but has, in recent years, become more widely used and recognised. The underlying concept behind CBT is that thoughts and feelings play a fundamental role in our behaviours, a natural response is the avoidance of the situation that causes such thoughts and feelings in the first place. CBT is effective in supporting individuals overcome such maladaptive behaviour.

I have always associated therapy as an assist to overcome personal mental health issues such as addiction, phobias, OCD and eating disorders, and never really considered how this approach to reprogramming our mind and therefore our actions, can be applied in…

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The 8 Faces of A Great Business Leader by Thomas Oppong

Want to share this. Thought this was a very concise and right on article about leadership that can be applied to all aspects of life. Plus it does have lucky # 8 associated with it.

The role of a Leader in the business world encompasses every kind of position or job description. Whether you’re the boss or a simple clerk in the company, you can apply the principles of leadership in your own department or even in disciplining yourself. Undoubtedly, being a leader is essential in running your own business. It is believed that great leaders breed success. Average leaders expect nothing but mediocrity.

To become a leader and entrepreneur at the same time requires a lot of things. You need to be the general of your own army not just someone passively standing and drinking coffee. A leader does not only commands but sets an example. Leadership is an active process of doing things thereby motivating others to work.

He/she is creative, perseverant, patient and goal-oriented. There are many attributes you can think of when talking about being a leader. But what really is…

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