What Should HR Do When a Manager is Dating a Direct Report?

by Rachel Bolsu @ Namely: Blog

Thu Mar 08 01:30:00 PST 2018

8 HR pros weigh in on how they would handle this case of love at work.

Payroll records

by Steven Bragg @ Articles - AccountingTools

Tue Mar 27 12:00:00 PDT 2018

Payroll records contain information about the compensation paid to employees and any deductions from their pay. These records are needed by the payroll staff to calculate gross pay and net pay for employees. Payroll records typically include information about the following items:

• Bereavement pay
• Bonuses
• Commissions
• Deductions for pensions, benefits, charitable contributions, stock purchase plans, and so forth
• Direct deposit information
• Gross wages
• Hours worked
• Manual check payments
• Net wages paid
• Salary rates
• Vacation and/or sick pay

The information in payroll records have traditionally been stored on paper documents, but can also be recorded as electronic documents.

Payroll records can be considered a subset of the information stored in human resources records, which can contain considerably more information than items pertaining to just employee pay and deductions.

The time period over which payroll records must be retained will depend upon government requirements. The Internal Revenue Service typically states a required retention period in each document it issues dealing with payroll issues. In general, wage calculations should be retained for two years, while collective bargaining agreements should be retained for three years.

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The chart of accounts most suitable for a small company

by Steven Bragg @ Articles - AccountingTools

Mon Mar 26 16:31:00 PDT 2018

A smaller business can dispense with many of the more specialized accounts and instead use an abbreviated chart of accounts. By doing so, it can greatly simplify the chore of recording business transactions. The following list of accounts may be adequate for compiling an income statement and balance sheet under a double entry bookkeeping system. However, please note that there are nearly always special accounts used in some industries, which are not mentioned in the following list. The basic accounts are:

Assets

• Cash. Includes the balances in all checking and savings accounts.
• Accounts receivable. Includes all trade receivables. It may be necessary to also have an "Other Receivables" account for other types of receivables, such as advances to employees.
• Inventory. Includes raw materials, work-in-process, and finished goods inventory.
• Fixed assets. Can be subdivided into multiple additional accounts, such as machinery, equipment, land, buildings, and furniture.
• Accumulated depreciation. One account is generally used to compile the accumulated depreciation for all types of fixed assets.

Liabilities

• Accounts payable. Includes all trade payables due to suppliers.
• Accrued expenses. Includes all accrued liabilities, such as for wages and taxes.
• Sales taxes payable. Includes all sales taxes billed to customers, and to be remitted to the applicable local governments.
• Notes payable. Includes the remaining balance on all loans payable. For tracking purposes, it may be easier to create a separate account for each loan payable.

Equity (assumes a corporation)

• Common stock. Includes the amount originally paid by shareholders for their stock.
• Retained earnings. Includes all cash retained in the business from profits, which have not been distributed to shareholders.

Revenue

• Service revenues. Includes all sales related to the provision of services to customers.
• Product revenues. Includes all sales of products to customers.
• Repair revenues. Includes sales generated by repair work and the sale of spare parts to customers.

Expenses

• Cost of goods sold. This includes at least the material cost of items sold, and at a more sophisticated level, can include the cost of direct labor and allocated factory overhead.
• Salaries and wages. Includes the cost of all salaries and wages not already included in the cost of goods sold.
• Rent expense. Includes the cost of rent for building space, vehicles, equipment, and so forth.
• Utilities expense. Includes the cost of heat, electricity, broadband, phones, and so forth.
• Travel and entertainment expense. Includes the cost of travel, meals, housing, and related expenses incurred during employee travel on company business.
• Advertising expense. Includes advertising and other marketing expenses.
• Depreciation expense. Includes the expense related to depreciation. This is a non-cash expense.

Non-Operating Revenues and Expenses

• Interest income. Includes income on all invested funds.
• Interest expense. Includes interest paid and accrued on debts owed by the company to lenders.
• Gain on sale of assets. Includes any gains on the sale of assets.
• Loss on sale of assets. Includes any losses on the sale of assets.

It is best to consult with a CPA who understands a company's industry to see if any additional accounts should be added to this list. In general, however, the preceding chart of accounts should be sufficient for a small company.

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Expense accounting

by Steven Bragg @ Articles - AccountingTools

Mon Mar 26 16:24:00 PDT 2018

Expense accounting involves the proper recognition and recordation of a consumed expenditure or an incurred obligation. This process is critical to recognizing expenses in the correct amount and reporting period. The following activities are needed in expense accounting:

Consumed Expenditures - Occurs when a supplier invoice is received or cash payment made in exchange for goods or services.

1. Decide whether the amount is to be treated as an expense or asset. If the item can be consumed over multiple periods, it is likely to be treated as an asset.
2. If an expense, recognize it within the correct expense account, such as direct materials, supplies, or utilities.
3. If an asset, record it in either the prepaid expenses account (for short-term assets) or a fixed assets account (for longer-term assets).
4. If a prepaid expense, monitor it each month and charge it to expense as consumed.
5. If a fixed asset, charge a consistent portion of it to depreciation expense in each month, until it is fully consumed.
6. If no invoice has been received or payment made, there may still be an obligation to pay a supplier. If so, create a reversing journal entry that records an accrued expense in the current period, and reverses it in the next period. Doing so ensures that the expense is recognized in the correct period. When the invoice is received or payment made in the next period, it offsets the reversal, resulting in no net entry in the following period.

Incurred Obligations - Occurs when a business takes on an obligation to pay a third party.

1. Decide whether there is a probable obligation and the amount can be clearly determined. If so, record a liability. The offset to the liability is a charge to expense.
2. Review the obligation in later periods to see if the amount has changed. If so, adjust the liability and the offsetting expense.

The expense accounting noted here is used in an accrual basis accounting system.

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Throughput definition

by Steven Bragg @ Articles - AccountingTools

Tue Mar 27 15:19:00 PDT 2018

Throughput is the number of units that pass through a process during a period of time. This general definition can be refined into the following two variations, which are:

• Operational perspective. Throughput is the number of units that can be produced by a production process within a certain period of time. For example, if 800 units can be produced during an eight-hour shift, then the production process generates throughput of 100 units per hour.
• Financial perspective. Throughput is the revenues generated by a production process, minus all completely variable expenses incurred by that process. In most cases, the only completely variable expenses are direct materials and sales commissions. Given the small number of expenses, throughput tends to be quite high, except for those situations in which prices are set only slightly higher than variable expenses.

For operations, throughput can be increased by enhancing the productivity of the bottleneck operation that is constraining production. For example, an additional machine can be purchased, or overtime can be authorized in order to run a machine for an extra shift. The key point is to focus attention on the productivity of the bottleneck operation. If other operations are improved, the overall throughput of the system will not increase, since the bottleneck operation has not been enhanced. This means that the key focus of investment in the production area should be on the bottleneck, not other operations.

For financial analysis, throughput can be increased by altering the mix of products being produced, to increase the priority on those products that have the highest throughput per minute of time required at the constrained resource. If a product has a smaller amount of throughput per minute, it can instead be routed to a third party for processing, rather than interfering with the bottleneck operation. As long as some positive throughput is gained by outsourcing, the result is an increased overall level of the throughput for the company as a whole.

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