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Archive for April, 2011

As we all know, businesses are formed to deliver services or produce products in order to earn a profit. In the 21st century accounting goes beyond the bottom line of black or red – - it includes “green”, too. With the growing green consumer awareness, companies are more than ever expected to align its business strategies with environmental initiatives. Environmentally conscious companies have already discovered that they can generate business strategies to help them reduce their carbon footprint, minimize their environmental impact, make the best use of natural resources, become more energy efficient, reduce costs, and exhibit social responsibility – all at the same time.

Companies who are ready to become an integral part of President Obama’s Green Economy through governmental initiatives will need to expand their accounting staff by hiring accountants who specialize in “green” or environmental accounting.

Green Accounting Definition

The term, green accounting, has been around since the 1980s, and is known as a management tool used for a variety of purposes, such as improving environmental performance, controlling costs, investing in “cleaner” technologies, developing “greener” processes and products, and forming decisions related to their business activities.

Green Management Accounting

According to the EPA, green or environmental management accounting is “the identification, prioritization, quantification or qualification, and incorporation of environmental costs into business decisions.” Green Management Accounting uses “data about environmental costs and performance for business decisions. It collects cost, production, inventory, and waste cost and performance for business decisions. It collects cost, production, inventory, and waste cost and performance data in the accounting system to plan, evaluate, and control.”

Environmental management accounting thus represents a combined approach which provides for the transition of data from financial accounting and cost accounting to increase material efficiency, reduce environmental impact and risk, and reduce costs of environmental protection.

Green or Environmental Accountants

Green accountants are held responsible to identify and track green costs often times working with site, research and development, and production managers when planning their budgets. In the past, such costs were buried in overhead preventing a clear picture of the cost savings and benefits to the product, process, system or facility responsible for the green initiatives.

Green accountants help management recognize that the tax benefits, rebates and lower costs of being environmentally friendly add up to a real bottom-line reward for doing the right thing.

“Public environmental, social and sustainability reporting is the main route through which corporate accountability and integrity can be demonstrated,” claims the London-based Association of Chartered Certified Accountants in its report, “Environmental, Social and Sustainability Reporting on the World Wide Web.”

Off late, many firms have come up in India and in other part of the world to cater to accounting needs of businesses across the world.

What is there in accounting that attracts so many people to jump into the bandwagon? And why is accounting so important? Why do you need accounting services?

The answer to the importance of accounting to you depends on who you are.

Firstly, you could be an individual or an organization having economic transactions with an enterprise. For instance, you could be a supplier of goods or services on credit to the enterprise, a banker who has lent money to them, a customer who wants to buy goods or services from the enterprise, or a contractor who has agreed to build plants and buildings for the enterprise. Any of the above will be interested in knowing whether the enterprise is credit-worthy, and if so, to what extent. Put simply: before you enter into a business deal with these people, you would want to know if there is any chance of your losing your money from the deal because of their inability to pay you.

Secondly, you could be a regulatory agency of the government: the IRS, the SEC or any such agency. Then you would want to ensure that the enterprise

(a) complies with the laws of the land relating to financial transactions, i.e.,

pays the required amount of tax, pays the appropriate dividends out of its

profit, provides for depreciation and bad debts, etc.;

(b) discloses its costs, sales, profits and capital to the general public;

(c) provides data relating to its borrowings, so that future lenders know the

current level of its borrowings.

You could also be an Analyst for a fund that has put its money in the enterprise or a firm of stockbrokers. Your interest could then be to ensure that your clients’ interests are safeguarded. You could even be a judge in a court, having to decide a dispute involving the enterprise. You could be a prospective shareholder or an analyst in a financial newspaper.

If you are any of the above, you will have many questions regarding the financial health of the enterprise that you would wish addressed.

Since the company has to answer so many questions from so many diverse parties, it makes a lot of sense to have one standardized form of collecting and displaying all this information. Any of these parties can pick up a published accounting statement of the enterprise and analyze it, by itself or in comparison with a previous statement of the enterprise, or in comparison with a similar statement of another enterprise in the same line of business, and arrive at its decision.

This makes the life of all these interested parties easy. But why should the enterprise be interested in this information?

Actually, the owners of the enterprise are probably far more interested in this information than outsiders. They would like to know

a) whether the enterprise made any profit during the period, and if so, what are

the dividends they are likely to declare;

b) whether the financial condition is sound, and the future outlook for the

business is bright; and

c) whether the operations are being carried out in an efficient manner, and if

productivity and cost levels are on par with industry standards.

The management of the company would like to have information relating to:

a) setting targets for future periods,

b) measuring the performance of various departments and business units,

c) evaluating the performance against a target set previously, and

d) highlighting areas for improvement and taking remedial action.

For these reasons, data is required about financial transactions of the enterprise. Without standard accounting methods, the task of gathering and analyzing this data is nearly impossible.

And it is for this purpose that experts all over the world try to sell their expertise and help enterprises in compiling standard books of accounts and then generating necessary reports for various parties interested in the enterprise.

Thinking of buying a Hummer or SUV? Think having a large car will help keep your rates down?
Think again.
Larger vehicles are actually likely to cost you more to cover.

Why Big Cars can Cost More

Conventional wisdom suggests that larger vehicles will fair better in an accident, therefore there will be less damage to repair. This is partially true – your car will probably suffer less damage, but many car accidents involve more than just your car.
If you have a large car and you are involved in an accident with another car, your large truck may do more than average damage to the other car, ultimately increasing costs and, as a result, your premiums.

The Most Expensive Big Vehicles to Insure

According to a study by the Insurance Institute for Highway Safety, the five cars linked to the most expensive damage to other cars are the Dodge Ram 2500, the Toyota Highlander, and (in the top 3 positions) Hummer strong and H3 variants. These are particularly large and burly vehicles, and they tend to cripple the vehicles they encounter on the road.

Other Reasons for a High Premium

It’s widely understood that small, fast sports cars cost more to insure, for a variety of reasons. One of those reasons is that drivers of those vehicles tend to be more reckless and have a poorer driving record. The same is true of Hummers, which are known for being frequently pulled over for traffic violations. This translates into higher premiums.

The Exception to the Rule

Although some large vehicles can be especially pricey to insure, it’s certainly not always the case. Minivans are relatively large vehicles, but they actually are among the least expensive vehicles to insure. Sounds contradictory, right? Well, there are two important differences between these vehicles.

Unlike the vehicles mentioned above, the minivan is not likely to inflict as much damage to vehicles it hits. Although minivans are larger, they lack the bulk and momentum from utility-style trucks designed to haul heavy cargo or – in the case of the original Hummer – military weapons like anti-aircraft guns and missiles!

Minivan drivers also tend to be females (who have better driving records as a whole) and drive during the day rather than late at night or early in the morning, which peak hours for traffic accidents.

How to Act on This Information

In short, if you’re looking to keep your car insurance rates low, avoid purchasing one of the vehicles mentioned above, and opt for a vehicle which, on average, tends to produce lower car insurance rates for its drivers. And, of course, drive cautiously and keep your driving record as clean as possible!

If you are absolutely intent on purchasing one of these vehicles, compare car insurance quotes aggressively online. Seeking quotes online will allow you to instantly compare rates between various providers so you can get the best deal possible.

Doing so will save you hours of phone calls and waiting on hold, or waiting in offices, and sorting through agents attempting to sell you policy add-ons you don’t really need.