Home / Understanding of accounting / Understanding of accounting

Understanding of accounting

Understanding of accounting

Business people should have understanding of accountancy. For doing so, they are required to develop clear concepts as to four building blocks of accounting:

 

  • Double entry system
  • Accountancy equation
  • Accountancy principles (Generally accepted accountancy principles)
  • International accountancy standards

We discuss the first two building blocks in the third chapter, the third in the second chapter and the last one is focused in the appendices.

Exploring Future:

You can’t carpentry, you know, if you only have a saw, or only a hammer, or you never heard of a pair of pliers. It’s when you put all those tools into one kit that you invent.

corss functional team

Cross-functional team-an integrated business approach:

In today’s competitive global business arena, business is treated as an integrated approach. Teamwork, as an integrated approach, is essential for survival and success in business. A team is a group whose members influence one another toward the accomplishment of an organizational objective (s).

Giant organizations and multinational companies over the world like British petroleum, general electric (GE) etc. Hewlett-Packard (HP) etc, apply cross functional team approach in their routine and non-routing business activities. let’s take a broad look at cross-functional team approach in the following section:

What is it?

A Cross-Functional Team is composed of people with varied levels of skills and experience brought together to accomplish a task. As the name implies, cross-functional Team members come from different organizational units like marketing, manufacturing, accounting, finance, engineering, sales human resources and so on. Cross-Functional Teams may be permanent or ad hoc. Cross-functional teams lead organizational change and innovation.

When to use it:

  • to solve a problem that impacts on multiple parts of the organization.
  • To improve a work process that crosses organizational lines.
  • to coordinate ongoing processes or activities that cross organizational boundaries.
  • to accomplish task that requires a breadth and depth of knowledge, skills and experience.

How to use it:

  • Select team numbers who have a optimal mix of skills and expertise.
  • Clarify the objectives and outcomes of the team.
  • Identify the roles and responsibilities of team members
  • Use the knowledge of the entire team to determine strategies and solutions to accomplish objectives.
  • Determine timelines and actions to accomplish objectives
  • Provide team members with access to training in teamwork skills such as communicating, listening, and facilitating.
  • Understanding of accounting
  • Periodically evaluate the functioning of the team.

The emergence of teamwork:

To be successful, it is mote important for an organization to be cross-functionally to be successful, it is more important excellent. A corss-0functional team will usually be responsible for all or some segment of a work process that delivers a product or service to a customer either external or internal to the firm. The work process requires input from several functional areas, therefore group collaboration is essential. When managed properly, cross-functional teams provide flexibility, control, and speed coupled with multi-disciplinary knowledge.

Field of application:

There are several applications in which cross-functional teams may be used. some concurrent engineering applications include product research, design, development, re-engineering, manufacturing and redesign, In these cases the majority of a product’s costs are committed very early in the design and development process. Therefore, companies apply cross-functional teams at the onset of a project to ensure that all of the key functional prospective are able to give input into the original concept design. some other popular applications for cross-functional teams are to develop total quality management; to study a production problem; to sell company products; to overhaul company procedures; to purchase necessary material of the corporation; to solve a process problem; and so on.

How cross-functional teams can be successful?

Cross-functional teams are an essential element in obtaining a competitive advantage in today’s high tech and rapidly changing world market. Effective cross-functional teams do not just happened without special training and preparation. A firm cannot just throw individuals from diverse functional backgrounds and experiences into a group and expect high productivity. Effective teams are made effective through training and dedication to the teamwork concepts. even though almost all manufactures now utilize cross-functional teams there is a vast difference between the companies that have successful cross-functional teams and those that do not. A successful teamwork can be obtained by following most of the proceeding concepts and best practices.

British Petroleum (BP) -a practical focus on cross functional team:

Since discovering oil and gas in the Andrew field in the North Sea 1974, British Petroleum (BP) had been working in vain on developing it economically. A team composed of people from a wide range of disciplines from both inside and outside BP’s North Sea group was formed. This team began to broaden its thinking and reconsider every aspect of the problem. Instead of looking only at technology for the solution. They looked at BP’s relationship with its contractors. This “alliance” approach resulted in the project’s coming in $116 million below estimated cost and begin completed more that 6 months ahead of schedule.

A hypothetical example:

An automobile company is going to launch a new car in the market. for doing so, the company forms a cross-functional team. The team includes skilled and experienced people from several departments namely: engineering, cost accounting, marketing, sales, manufacturing, purchase and finance. Each of their roles in the team is important for the success of the organizational goal. Engineer and cost accountants perform the task of cost configuration, purchasing executive monitors how much raw materials need to be purchased. manufacturing executives will ensure the manufacturing of quality cars at lowest possible cost. marketing managers will pursue long-term strategy target the customers and how to penetrate the market. Sales executive ensure target sales in accordance with marketing strategy. Financial manager will allocate funds according to budgets costs. If the team members are dedicated to the broad organizational goal and work together to achieve this the company can successfully attain its goal of Understanding of accounting.

Note to the readers:

 

Students will take caution that cross-functional teams are applied not only in case of launching a new product but also for exiting products. In that case, cost accountants and engineers will accomplish the task of value analysis. in many organizations, production, engineers and accounting department work together, which is called operations management.

Source: The following sites were accessed on 10th June, 2005

  • www.1000ventures.com.business_guide/
  • Crosscuttings/corss-functional_terms.html
  • www.sabrehq.com/cutting-edge/cross-functional-terms.html
  • www.humtech.com/opm/grtl/ols/ols3.cfm

Understanding of accounting

 

 

 

 

 

 

 

 

 

 

 

 

 

Save

Save

Save

About Accounting

Leave a Reply

Your email address will not be published. Required fields are marked *