We are surrounded by all sorts of marketing. It is a cornerstone of the world we live in. Marketing has made a tremendous impact in our world. Everything we do has some form of marketing aspect to it. Thanks to marketing, we are able to make a distinct decision of what sort of clothes we wear, what kind of shoes to buy, and what kind of products to use. Not only does marketing help us make decisions on the better product(s) or service(s), it also helps business to promote themselves and generate more revenue. We play a big role in the world of marketing, probably more than we are aware of it.
Before we talk about impacts of marketing, we must understand what marketing is. So, what is marketing? In basic terms, marketing is a study that shows consumers why should you choose one service or product over another. The general definition of marketing is the action of promoting and selling service(s) or product(s). It is a research and advertisement procedures to generate sales for the business. Businesses’ goal is to find the right marketing method to have the most influence on the consumers. The key to doing that is by finding the right marketing message and the best way to educate the customers about the product(s) or service(s) offered. The procedure requires the creation of product or service concept, finding the right audience (who is most likely to purchase the service or product), promoting and moving it through the appropriate selling channels. Many businesses confuse marketing with advertising, whereas there are some key differences.
Marketing is identified best with four different factors: product, price, promotion, and place. They act as pillars that determine marketing success. If one pillar is weak or missing, the entire marketing scheme is deemed to fail. Starting from products, where the company must undertake steps before the final decision of if the product is ready selling. The first stage of creating the product is the “ideation stage,” where the idea of the product is created. Afterwards, marketing departments test the new product prototypes with a focus group and survey them to determine interest levels and potential customers. When it is determined that the interest level is high, the marketing procedures take the business to the next step, which is to sell a limited quantity of products and track the sales level. If the sales turn out high, usually the product is released on a national level. Before the product(s) or services(s) enter the market, companies must come with a decision of type styles, sizes, flavors, and/or scents they should be sold on and the usage of packaging designs. Ultimately, consumers are much input in these decisions. After all, it is consumers who are paying to keep the business alive.
Price points are also tested through the surveys and focus groups. Companies use the data to find the optimal price that is going to maximize the revenue and still compete with other companies. One way the price is set is by setting the price at a comparable level to the competitors and analyze if the company will be able to recover the cost and still make a decent profit. If the business is introducing a new product to the market, there are no other competitors, so focus group studies come in benefit to figuring out the best price the consumers are willing to pay. Pricing a product bit higher may cause the sales to drop exponentially, often time resulting in business failure.
Promotion is essential because it is the way people really get to know about the business. Promotions come in all sorts of ways, with new and creative way are being added time after time. Examples for promotion may be a brochure, television commercials, social media advertisements, and many other ways. Promotions usually have two purposes, which are to generate leads for sales representatives and initiate an actual sale. Often after time, new ways to promotion are invented. Businesses try to take full advantage of advertisement as much as they can. According to CBS News, in the article “Cutting Through Advertising Clutter,” by Caitlin Johnson, Walker-Smith says that compared to back in the 1970’s, where the individual was exposed to 500 advertisements a day, we are now exposed to as much as 5,000 advertisements a day. It is important to find the best way to advertise to get most attention rather than putting ads everywhere.
The place is also an important factor in marketing as it determines the best target area for distribution that would beneficial for the business. Distribution is extremely important, because it is how customers receive service(s) and/or product(s), and the transactions to take place. The place will also answer questions about how and where the product should be sold. The goal of a business is to generate more revenue that is more than the costs. The goal can be achieved by selling to the right people who are willing to buy, and location of the right audience is important in determining that.
The ultimate goal of marketing is to gain attention from the target market, making an influence on customer’s decision, and giving customers with a low-risk and easy-to-take actions. The marketing process requires the four factors and determining how to make options for customers that is a low-risk factor. Of course, marketing may take expensive, and takes considerable amount thought and effort. There still stands the chance of the marketing strategy to fail and for the money that was spent to go to waste. However, marketing is essential for a business to become successful, and it gives customers the clear distinction between they are paying for.
When a new restaurant opens, the management of the restaurant will determine if it stays open or hit bedrock. Statistics often show that three out of every four restaurants fail in the first year. This indicates that having a restaurant is a very hard business to manage. From all the restaurants that open, only a few make a long-term success. Lacking a good business model and poor management is a big factor for the closings of restaurants. It is imperative for the owner to know how to manage restaurant’s finances, everyday problems, and customer service for the restaurant to keep their doors open and have a long-term success.
Managing restaurant finances are crucial. Biggest problems many new restaurants deal with have something to do with financing. Borrowing money without thinking about the long run can drive the business down the road. The key factor managing finance in any business is to know what to spend where. Knowing where the money is going gives a clear visual on the restaurant financial system, and keeps the business flowing like it is supposed to. However, it is also important to have a clear adequate planning for a time of emergency, so whenever an unsuspected problem arises, the planned procedures can prevent them from escalating. A financial plan example is to always save a percentage of the monthly revenue in some sort of safe. Having a small percent of the total revenue can add up, and when the restaurant is in dire need, withdraw the money to help the restaurant recover, and get the restaurant running normally again, if not better.
Marketing the restaurant is also important. Beginning of every restaurant, it is important to tackle on key factors of marketing for successful business. Customers, of course, would love to try a new place, so it is important to give an impressive first impression, so the word of mouth plays into a factor of attracting more customers. Over time, marketing may not be needed as much as the beginning of the business depending on the success rate, but it is important to remind the customers to come back and relive the enjoyment the food gave. Maybe offer the customers to come try new food that was added to the menu. It is important to have a list of regular customers because they will act as the backbone of the business. Building a solid social media profile certainly helps. A lot of people are online these days, and social platforms like Facebook, Snapchat, Instagram are populated with people looking at what is going on in the world. It is a perfect opportunity to drop some posts so they aware of the restaurant existence and the great reviews by the food critics. Giving specials sale on holidays and/or special occasions always drive more customers to the restaurant. Meal combos also tend to appeal to customers to get their all-in-one choice, making it easier for the customer to choose from. Catering service is also a good way to expand the customer base. These methods of marketing have the potential to increase sales and as well as customers.
Maintaining the restaurant menu should be one of the top priorities. Customers often return because they really liked a meal from the menu and they are tempted to try it again. As the restaurant grows, it is sometimes hard to stick to the menu. It helps to determine the demands for certain items on the menu. Updating a menu is a great way to remove the items that are not favored by customers and replacing it with something new. It gives customers the opportunity to try new things. Reviewing the menu also gives the owner the chance to update prices that suits best for the restaurant.
Good customer service is important because not only will it most definitely make the customers happy, also the customers would gladly come back for another meal. To give every customer the best service possible is a key factor for good customer services. It is important to develop the skills of handling customer complaints and showing customer appreciations. Building a team of well-trained staff is also important. Investing in staff members can help improve customer service. Building a strong clientele always puts the smile on customers’ face when they hear the name of the restaurant they got the best service from. It helps as a good marketing strategy. Nothing is more effective in terms of advertisements than the word-of-mouth. There are many ways to appreciate a customer’s visit. One way would be to give various seasonal promotions or combo specials. Happy customers always make the best portraits of the restaurant. The basic rule of good customer service is that the customer is always right.
Keeping the restaurant updated with the society is important. One way to stay updated about the trends and society is by watching how other restaurants do. Noticing other restaurant mistakes can help avoid it. Taking note of a successful business and what did they do to achieve the success can help the restaurant tremendously. Television shows like Kitchen Nightmare by Gordon Ramsey is a great way to keep the own restaurant on the check and developing new skills of handling restaurant issues.
Restaurants can be a stressful business to get into. It requires courage to open a restaurant and patience to maintain it. No matter what business, a good management is always required, and a restaurant or a food service business is no different. Just like any other entrepreneurs, restaurant owners are vulnerable to fails. Only the strong entrepreneurs can take the fall and learn from it, however, the one who gives up, loses everything.
The United States is home to many global vehicle and auto parts manufacturers and known to have one of the largest automotive markets in the world. In the year of 2016, United States Light vehicle production reached almost twelve million passenger vehicles, with reaching sales of 17.5 million units. The United States is also the second largest market for sales and production of vehicles. Billions of dollars are invested in America’s automotive industry, which indirectly if not directly employs hundreds of thousands of Americans.
Since 1982, when Honda opened the first U.S. plant, major automotive production companies in Europe, Korea, and Japan has produced vehicles in the United States assembly plants. From conducting researches and tests to operating in American engine and transmission plants, most of world’s leading automotive companies have their presence in U.S. manufacturing. Historically, automotive industry accounts for about 3.5 percent of U.S. gross domestic product. In 2016, on average of more than 940,000 people were employed by the motor vehicle and parts manufacturers. General Motors (GM), Free Carriers (FCA), and Ford have more than 200 assembly plants, distribution centers, and manufacturing facilities. This resulted in the employment of 232,000 U.S. workers across thirty-two states. In the early 1980’s, international automakers invested over $75 billion in more production facilities and research and development in America. This investment produced jobs for 130,000 Americans.
Automotive is the beacon of innovation in the United States. Initiating new research and developments are a factor in transforming our world to an extent that was only a science fiction a decade ago. The competition and the opportunities are constantly pushing the companies to adapt to the 21st century, and even to think ahead of time. In the year 2016 alone, 2.1 million new light vehicles were exported from the United States to almost every country around the world, valued at $57 billion, with additional exports of parts. The additional automotive parts valued approximately $80 million. Used vehicles were also exported from America in $5.5 billion in value and exported medium and heavy-duty trucks valuing almost $5.5 billion.
With the production of cars, the raising concern is the gas that is adding to the carbon footprint. Carbon Dioxide emission is a serious factor in global warming and we are experiencing it right now. Fossil fuels are essential to operating a car. The only way to minimize our carbon footprint was to use a hybrid car. However, Elon Musk, CEO of Tesla Automotive, successfully marketed Tesla Model S, a fully electric car that can easily be an alternative to any hybrid or a fuel car, if it were not for the price. Tesla Model S base price is $62,700. The car has a premium look and has very good range compared to a lot of electric cars as well fuel cars. Also, the Model S is integrated with autopilot capable hardware and software, for the car to be driven without the driver using the steering wheel. Elon Musk promised the fans of Tesla a new and affordable car, the Tesla Model 3. This model is minimalistic, yet have the premium feel, and most importantly, fully electrical. Model 3 is available for pre-orders and expected to be released in the year of 2019. The elegant designs, affordable pricing, and environmentally friendly concept make the Model 3 very attractive to the customers. The car is also designed to work in autopilot mode, like its predecessor Model S.
Fossil fuels are limited, whereas electric cars can use electricity as renewable energy. As battery cost reduces rapidly, the cost of electric cars is also becoming more and more affordable. Elon Musk has already given the fans a glimpse of the Tesla electric trucks in his recent show. Electric charging ports are already taking over the local gas stations. According to Jeffery Rissman in his article post titled, “The Future of Electric Vehicles in The U.S., Part 1: 65%-75% New Light-Duty Vehicle Sales By 2050,” at Forbes, electric vehicle sales in America are projected to increase by 75% because the scarce gasoline prices are going high, while battery costs are declining. Morse Law states that computers are subjected to double their power while their prices become lower and lower over time. Not only the energy source of the cars is being changed, the technological side of the cars are being developed as well. For example, the traditional way to ignite a car transmission is to use a key. However, apps are being developed from Tesla, that is able to, not only do remote ignition to the car but also drive the car autonomously to the phone holder. The app also gives the owner a remote look at the battery status, as well as unlock car doors. Tesla is developing a way to go completely physical keyless. Model 3 interior designs are completely simplistic. There is nothing much more in the Model 3 than just a touchscreen with most of the car controls and a steering wheel.
The automotive industry is constantly developing and changing. Thanks to large investments, the automotive transportation is being pushed to the edge, and just like any other industries that are under development, seems technology have most of the hands on the future of automotive. It is a bit humorous to think that technology is making the world more like toys. Imagination is a bridge that revolutionizes everything in our lives. Who knows, maybe in the next twenty years, the flying cars that live in the realm of our imagination could be the reality that we live in.
Management of a hotel can be extremely stressful, but just like any other business, hotel management is extremely important. The standards the guests look for when booking into a hotel is to feel comfortable, safe, and secured. Personally, if I were to book a hotel for at least a night, I would check online for ratings to determine where I would get the best service for my money. If a manager wants to become successful in running a hotel, it is his or her responsibility to live up to, or even exceed, guests’ expectations.
The hotel environment must be friendly. A smile can go a long way. Investing in training the staff members is important in making the perfect environment for the guests. When a guest arrives, the expectation is a warm welcome. First impressions matter. Making the hotel look clean and tidy can make the guests feel they are getting way better than what they are paying for. It is all about quality. Relaxing and enjoying the experience is what the guests look for when they are booking in. A good manager would know the best places to invest for the hotel to be favored by anyone who visits. The services the hotel provides should be absolutely marvelous. Guests expect for well-timed, and consistent services. Communication is essential for successful management. Communicating effectively can accomplish tasks in a timely manner. Before guests book in, they usually would want to look for more information to make sure they are making the right choice. Having knowledgeable staff reps can help the guests with any information that is requested, and help the guest to make decisions about booking in.
Knowing how to manage different departments is important without a doubt. Flexibility is the key. It is imperative to be knowledgeable of what each department is responsible for. The best way to know the responsibilities and the amount of time required to complete a task are to do the task once. Having the experience of accomplishing a task in certain department gives the manager the mindset of the task duration and task essentials. For example, the manager should work front desk to see what kinds of complaints are being reported and how it is handled. Doing a cleaning service will give the manager an experience of how the rooms get cleaned and how long it takes to clean rooms. Spending time with the maintenance manager can give the manager an insight of what is going on to keep the hotel steadily running.
Investing some time with staff members can give the manager a clear insight of how the department works in a typical day. Spending time with the staff can also improve the relationship between staff and the manager would be well respected. Not only does the hands-on experience gives knowledge of different departments, it also helps to put the staffs’ day into perspective, allowing the manager to better handle complains and concerns of the staff. Staff relationship is important. Improving staff relationship with the manager can boost the quality of the service the guests receive. Respect is something that is valuable and can play a big factor in setting the standards for the hotel. It is important to reward the staff members from time to time. Hotel staff members are working hard every day to keep the hotel running without trouble. Incentives for their hard work are always appreciated and motivates the staff to keep up the good work. The staff members are also human and human love being appreciated. Showing respect will earn the manager respect, and staff members will happily work in the hotel knowing they are appreciated for their service.
Marketing is also in the hands of the hotel manager. If the manager is mindful of the marketing strategy, the hotel rooms can get booked up faster than expected. It is important to think of the season when marketing. Different seasons have their specialty and using that specialty to strategize can help boost the marketing campaign. Hotel marketing requires thought process, so it is a good practice to plan ahead several months for the upcoming seasonal deals or promotions. A beautiful and simplistic website can let people know of the hotel. Bringing us back to the point that usually prior to booking, the guests like to do research on best hotels around, and having a website can provide all the information for potential guests. Having good ratings can bring up the status of the hotel. Creating profiles for the hotel in many traveling agency websites is a great way to display the interior of the hotel and the type of services offered. It is also a good idea to build a positive relationship with nearby establishments. Not only the local establishments can provide a recommendation to travelers, but they can also add to the services offered by the restaurant. For example, a manager can make deal with a local spa to give a small discount for the guests of the hotel. Not only it will bring more guests into the hotel, but it also means potential customers for the spa. Setting up a loyalty program that gives customers incentives or discount of some sort is sure to lure the guests back to the hotel time after time.
A hotel management requires various multitasking skills and flexible compatibility. A manager must develop the skill to prioritize the tasks. For a successful hotel management, the manager must know how to switch from place to place. It is the job of the manager to ensure the guests are having a safe and comfortable stay while they are in the hotel. It is the responsibility of the manager to manage all different departments to keep the hotel clean and well maintained.
Founded in 1989 by Deam Kamen, FIRST, also known as, For Inspiration & Recognition for Science & Technology, gives the opportunity to the students from their early ages to make a close connection with the developing technological realm. FIRST provides multiple grade level programs that challenge competitors to become creative, use critical thinking to generate new ideas, and integrate various skills into their projects. From children of kindergarten to the high school seniors, FIRST’s programs are designed so all grade level can benefit. With new annual challenges, competitors are put to the test to cope with the timeframe to build a unique and strategically designed robot that has the potential to earn the team the winning title. Thanks to FIRST, not only does the competition gives the competitors a thrilling experience, it also builds their profile in the technological area. With the rapid recruitment of engineers, especially computer science majors, a chunk of investments and effort goes into programs that inspire the younger generation to create something new for the world.
Dean Kamen, the founder of FIRST, is an inventor, and an entrepreneur. His passion for science and technology led him to develop programs for young engineers. Kamen’s primary goal for creating FIRST is to spark the beacon of excitement and create the mindset of innovation in future engineers. Over the past 25 years, FIRST has become the globally recognized program for engagement of youth into the career pathway of Science Technology Engineering & Mathematics (STEM).
One of the programs FIRST provides is titled “FIRST Robotics Competition,” the highest ranking program offered for the high school students only. This year, the competition titled as “FIRST Power Up.” This season, the event consists of the competitor playing arcade game that is physically designed to be played via team robots. I am currently apart of team 7168, Team Infinity, that is planning to compete in the upcoming competition. This competition challenges us to build a complicated robotic system that can be used to compete. However, to build a compatible robot, there are many behind the scene challenges that my team must face. FIRST promises that to compete no experience is required. The goal of FIRST is to help the competitors to learn along the way and build experience.FIRST gives about ten-week timeframe to finish the robotics project to each team from the day of seasonal competitive event announcement. Building a complex robot to compete in ten weeks is difficult, even for experienced teams. The key to this is active time management and thorough planning. FIRST pushes to develop time management skills out of the competing teams. Without well-thought planning, the robot may not be finished on time, resulting in discontinuance of the team to compete until the next season starts. It is important to stick to the plan. Another responsibility FIRST robotics pushes to the teams is raising funds. In the FIRST website, one of the recommended ways to build a competitive robot is to raise funds. FIRST robotics also provides the rookie teams with grant titled FIRST Fundraising Toolkit. Financial responsibility is important, not only in FIRST robotics but also in real life applications. Without being financially responsible, the financial stability of an individual is volatile and is subject to crash. Management is also important. FIRST wants the competitors to build a team of at least ten, and manage the team and the strategy effectively to be competitive in the upcoming event.
FIRST is globally recognized, making it a great opportunity for companies to market their brand. FIRST, competitions are broadcasted nationally and internationally. Sponsors can market their company or themselves. In most parts, companies ideally sponsor promising teams with funding, and in return, the teams promise to put the company logo on the robot while competing. Some teams blog about their activity, some may post on social media platforms. A team with well-generated traffic in their online profile is a clean and effective platform for company advertisement. Companies usually try to find ways to promote their business, and FIRST robotics team sponsorship would be a great way to gain more customers. It is a small loss for a potential of higher rewards. Some also donate to the team as well to aid them to compete.
The engineering career is one of safest career to invest in because the world is basically built by and continues to be built by engineers. FIRST robotics made complicated engineering concepts into a fun competition for the purpose of instructing the minds of youngsters. FIRST Robotics encourages the younger generations to become critical thinkers, innovators, and enhance skills along the way. FIRST fosters the value of teamwork and shows how important it is to work in a team. Working with ten hands is more effective than one. FIRST promotes gracious professionalism, to work effectively, to emphasize other’s values, and show respect to the team and the community. Technology has become an essential part of our daily lives. With more development along the way, technology makes our daily lives easier. The science fictions are brought to life, thanks to engineers. Robots are everywhere, from the keystrokes I am pressing to type this essay in a desktop computer, to a car in the street that drives fast effortlessly. The industrial revolution was made possible by robots and FIRST has found a way to inspire the future engineers to carry on the legacy of building to a world similar to Utopia.
Importance of College
Before, a high school graduate could walk away with a high school diploma, and still have decent jobs. Now however, that is not the case. With the evolving society, we live in an environment where higher education is becoming more of a desired qualification. When someone is being hired, one with some sort of degree always has an edge over a high school graduate. Over the decades, the college has become an essential part of our education. Without college, it becomes a struggle to adapt to the evolving society. Jobs that are considered blue collar jobs are now being taken over by robots. It important to continue learning to stay up to date with the modern society. The ones who stopped education right after high school, more often than ever, regret their choice.
Students often struggle to find the right college for them after high school. In some cases, students cannot seem to figure out what to do after high school, because they did not think ahead of time. Some try to find jobs that require only a high school diploma to be hired, and they get lucky if the jobs are not taken over by machines or someone else. College graduates get more opportunities than high school graduates. It is now recommended to attend, if not a university, at least a community college to earn associate degree. It is a much cheaper alternative, and most effective over a high school diploma. It is a small investment and definitely not a bad option. Some students choose to use the two years of community college to get their associate degree and then transfer credits to universities to continue the pursuit of a higher degree. Some students may not even know what to do in life. A college is a perfect place because it will give an insight of oneself and help make the decision of what is best to pursue. The college will help sharpen the minds and give knowledge that an individual never knew existed. Some may say that they will drop out and follow the footsteps of Bill Gates, the founder of Microsoft, or Mark Zuckerberg, the founder of Facebook. However, we must look at them more rationally. They are a small percent that got away with building a business. We hear their success, but we never really get to hear the business failures. If business failures were more visible than successes, the students would make more rational decisions. After all, our economy today is not the same anymore. The global economy makes a real challenge to find a decent paying job, because of the high competition. Businesses are shifting into more digital mechanisms, because there is less cost involved in fixing mechanical errors, than paying for human labor.
College is expensive, and not everyone can afford to pay for semesters of tuition and books. College loans make opportunity for the people who cannot afford college to go and study higher education. College is not a requirement in America like elementary school, middle school, or high school, however, it is highly recommended. As our society develops, more and more jobs require some sort of degree. With this sort of disadvantage, college loan firms are taking advantages of the youth who cannot foresee the real corruption behind the planning of approved loans. College loans put students in debt, and for the most time, they put the students in debt for life. Students debts has taken a rapid rise in the past twenty years, totaling $1.3 trillion, making it the second largest category of consumer debt. Prior to 1972, students could get approved for federal student loans to pay for college, but there were only limited approvals due to the fact money was scarce. The 37th president of United States, Richard Nixon, created the Student Loan Marketing Association, also known as Sallie Mae, under government regulations. The system unclogged the financial institutions to issue loans to more students, so they can go to college. In the 1990s, the government released Sallie Mae to the free market via a compromise between President Clinton, and the congressional Republicans. Privatizing the program gave Sallie Mae freedom to come up with a scheme for profit. Their scheme was a success, and Sallie Mae made a fortune off government fees. Salle Mae used their wealth investing in projects that only benefited them in profits. To prevent competition, Sallie Mae came up with a marketing scheme. Sallie Mae persuaded colleges by paying them to sign up for loans with them rather than government programs. Not only that, Sallie Mae sponsored cruises for financial aid officers. Sallie Mae also tricked students into thinking that they were talking to college loan officers when they were talking to Sallie Mae representatives. The loan schemes make students think they can pay the debt off later, but they also make sure the students overlook the interests to suffer for it rest of their lives.
Colleges are now more important than ever, and there is no denying that. Our global economy is becoming more and more challenging, and without higher education, it is almost impossible to keep up with the competition. The companies scout foreign countries for jobs. It is just pure ignorance to say that foreigners are taking over the American jobs. That statement is simply to cover up the fact that the American citizens are lazy to get a college degree to compete with rest of the world. Of course, college is very expensive, but there are some who are just lazy to apply for scholarships or grants. There are some colleges that require little to no tuition fee, and people still are not taking advantage of that. Loan companies make it, even more, harder for students to benefit from college, and students end up thinking there is no point going to college.
For businesses to succeed, proper tracking is essential. Tracking money is important because it gives the business insight of where the money goes, and how the money can be used to benefit the business. Accounting keeps track, provides a trendline, and displays a potential threat or benefit to the business. Thanks to accounting, business owners have much easier time in making tough decisions about how to improve the business to generate more revenue. Businesses that overlook accounting, pay the price for it later. When dealing with real money, there is not really any room for errors. Money is a fundamental base in a business, the ultimate goal, the oxygen to keep it alive. Without financial stability, the business is deemed to fail.
Businesses typically use two types of accounting that are in existence today. One of them being a cash-based accounting when physical cash is being used between transactions. Another method is called the accrual accounting, where cash is not required to complete a transaction. Often, small businesses such as small local restaurants favor the accounting of cash because it is simpler. The reason being is when cash is being used to complete transactions, the cash can be easily accounted for. Cash counts can be helpful because business owners can easily record incoming cash, and expenses can be recorded at the time it is paid. New businesses find this easier in terms of paying taxes. Even though there are many advantages in cash basis accounting, the accrual accounting has its perks and bigger companies often find the accrual accounting useful.
Accrual accounting comes into play for bigger businesses. Obviously, cash is easier to manage, however, it does not give the company the big picture, and it certainly does a poor job of the business making any plans for the business. In accrual method, sales and expenses are recorded on a regular basis, either physical cash is used or not. Sales in accrual accounting do not require physical money. For example, a business who accepts credit as payment, uses accrual accounting, because, in that situation, the customer is not using physical cash, rather they are using their credit card to pay the price. In an accrual method of accounting, an invoice is generating as a substitute for cash flow. In some cases, accrual accounting is required, especially if the company annual sales exceed $5 million. This method has a downside because accrual accounting makes the business pay income taxes from the revenue, making the tax deduction from the overall money the business received without taking in consideration of the profit.
Both accrual and cash basis accounting have its advantages and disadvantages. It is up to the business owner to decide which method to use in terms of accounting. Some accountment may end up being more advantageous than other depending on the business. Keeping a record of the money is important, but the business decisions are yet to be made. How to manage the money can play a huge role in generating revenue for the business. That is why it is important to find the effective accounting method for the business because money management involves in allocating cost and comparing it with well-produced and sold products. Accounting management helps the business predict the upcoming threat or opportunity, and it also helps to put company budget in place. Proper accounting reports are used to convince the investors to invest in the business. Investors are looking for that trendline, and for the most time, the rising trendline. Investors are not willing to put their money on the table for the business who cannot prove its worth.
Businesses usually prefer automated, and digitized accounting records. Digital records are able to have integrated security measures to protect the information from being in the wrong hands. Physical records are subject to damages. Digital copies can be made to a record to keep the file backed up. Many accounting software comes with the option to add layers of security to prevent it from an unauthorized individual having possession of the records. Sharing of digital records are easier because the data can be transferred electronically almost instantly. Security measures can also add to only let the receiver view the document without changing information.
Accounting makes the flow of money much easier, not only because it shows the business the flow of money within, it also gives the business to do actual calculations of profit, liabilities, revenue, costs, and more. The main reason an individual would open a for-profit business is to generate profit. Profit is the count of money that is left after the total cost deduction from the revenue. Costs may include employee payroll, tax deductions, utility bill, and so on. Often when a new business emerges, it starts with some sort of loan, and the debt can also be factored in as cost. Without accounting, it will be very hard for the owner to make any deduction and may put the business in an unexpected threat.
Without a doubt, accounting in a business is important. Accounting is essential to make business decisions and keep financial stability. Companies who ignore the importance of accounting do not go far until they realize the essentiality of it. Businesses deal with real money, and one slip up may result in a business being put up for foreclosure. Metaphorically, accounting is a doctor’s report of how the business is doing. Without detecting and patching the company flaws and errors, business will surely close sooner than expected.
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