Answers to Questions submitted to Accountant, RCC

Thanks for the questions you have submitted. I have combined questions that have a similar request for information. Hopefully, you will see your answer in the Q& A below:

Q: How did you know that you wanted to go into the accounting field? I am considering many options, but I am not sure what is right for me.

A: Your question is typical for students who may not have the experience to make a lifelong decision. One thing you may want to consider is what kind of interests or courses make you feel most comfortable. You may want to talk with a counselor or teacher about your interests, or perhaps parents or other club leader. In most cases, someone will be willing to talk to you about what kind of future you want. For me, I knew that math was an interesting subject and I discovered through my teacher that the field of accounting could work for me. I must admit that sometimes I was intimidated by the math material we were covering in class, but I discovered that there was always help available in terms of tutoring or meeting the teacher after class. Also, I had to make sure I did my homework daily, and not let it pile up. 

Q: Last month you mentioned competitors. How can you ever be sure your information is leading to the right decision?

A: Part of the challenge in the workplace is making the best decision based on the information you have available. Every company would like a guarantee that they will make a successful decision, but that will not happen. However, good financial information leads to good decisions. I feel a sense of accomplishment from knowing that the work of my department is helping the company exercise good judgment.

Q: I was always good in math in grade school, but high school seems to be harder. My aunt is an accountant and she thinks I could be the same. Did you ever have trouble making an adjustment to high school?

A: Surprisingly, many of us in the workplace have had to make adjustments. Sometimes in high school, we may simply have to learn to prioritize our study time and, in some cases, learn the value of asking for help before it is too late. I remember sometimes studying the night before a test, knowing that I should have started earlier, before waiting until the last minute. Many schools have someone that can help a student learn to better manage their time. My suggestion would be to check with a counselor, teacher or other adult close to you. Also remember that in the workplace, we all have to manage our time, so take advantage of the chance to form good habits early!

December 2008

Last time we were together, I mentioned we would take a look at societal trends and how they affect the accounting field.  Let's take a look at a global trend in exporting, as illustrated in a news article:

http://www.herald-review.com/articles/2008/10/17/ap-state-il/d93sav8g0.prt

Because we live in a world that has global opportunities that seemed unimaginable only a few years ago, accountants are helping their companies to assess and maintain their value by the use of financial reports that allow the examination of new opportunities and the avoidance of unprofitable circumstances.

As companies enter new markets, they must be especially careful to accurately forecast the financial return they can be expected to realize.  Another consideration is to determine if any segments of the company are no longer profitable, in addition to whether the past financial return is no longer adequate.  All of these considerations are the results of good financial reporting and management, of which you may be a part one day.

I hope this has helped as you explore this exciting field.

November 2008 Issue

Last month, I shared with you how my accounting department has undertaken the task of identifying costs in preparation of determining new strategies for certain products. You may recall that I mentioned how a change in government regulations caused us to review our plans. In this month’s installment, I want to take a news article and use it as an example of how changing market conditions, especially the changing usage level of an item, can cause companies to rethink part of their operations. Keep in mind that as companies consider changes, they have asked for accounting information that summarizes revenue and costs.

Let’s talk about this article: ‘AT&T hangs up on pay phone business’

http://www.usatoday.com/money/industries/telecom/2007-12-03-att-pay-phones_N.htm

Now that you have read the article, I want to draw your attention to some key phrases as I illustrate the role of accounting information.

‘The rapidly shrinking pay phone business’ – It takes good record keeping to determine whether usage levels are rising or declining. If there is a decline, a decision needs to be made as far as how to reverse the decline, or whether it is profitable to do so. 

‘Before it becomes unprofitable’ – The potential for profitability will be evaluated by comparing cost, expected revenues and other factors. Accounting information is used to make a forecast so that appropriate decisions can be made before it is too late.

‘The pool of pay phones has decreased from 2.6 million to 1 million’ – This trend has probably been monitored over the past few years. The need to take action now is probably based on a failure of AT&T to find a buyer for this part of their business. The failure to find a buyer probably stems from the potential buyer’s accounting department determining that there was no profitability to be had after a purchase.

‘AT&T shares rose 7 cents to $38.28 Monday’ – Accounting information leads to management decisions that affect shareholders and their perception of how well the company is performing. The stock share rose because shareholders see additional value when AT&T concentrates more on its money-making activities, no longer sinking funds into something that it about to go sour.

Next month we will look at societal trends and how they keep accounting professionals busy.

October 2008 Issue

In this month’s installment, I want to talk about accounting in reference to business planning. One of the fundamental uses of accounting information is the planning of new strategies; how much it will cost, comparison of different strategies, how much are customers willing or able to spend, where will the money be found, and the pricing levels that support the perception of the product.

During the past week, my department has been assigned the task of determining the revenue growth potential of a line of products that is expected to face growing competition from a number of potential competitors because of a change in governmental regulations.

The line of products has costs in different areas that must be determined and examined. One of those costs is represented by research and development. Another cost involves marketing activities; travel, presentation materials, market studies, all being components of what will be measured.

As my department began its work, it was necessary for us to assemble and discuss the various financial measurements we would use and who would be responsible for each component of our overall task.

This brings to mind one of the essential qualities for success in the workplace; the ability to get along with others and collectively work toward a solution. In some cases, there is no clear solution, and the work may involve collaboration of different departments, each doing their part so that the company can move forward in being profitable. As the work progresses, teamwork and the ability to get along, even when we disagree on certain details, is very important.

During your time in school, never underestimate the value of being involved in activities that help you learn to interact with others in a way that benefits your school or community. You will find it very helpful to discover that people working together can accomplish more than one individual.

Take time to think about some of the activities at your school. If there are no activities that interest you, then at least think of how to connect with others who may be able to help you. If you need tutoring in a subject, find someone, maybe your favorite teacher, to help you find where the tutoring sessions meet or some other means to find help. Never think you are the only one who needs clarification of the assignment, I find the need to ask questions on a daily basis!

I am looking forward to sharing more with all of you next month.