Posts Tagged ‘Financial’

Accounting is Dead! Long Live Accounting!

Sunday, November 6, 2016

Accounting TrendsAccounting has been around for thousands of years, albeit in differing guises. As the society around it has changed, so has accounting. We no longer record information on clay tablets via hieroglyphics, and have even recognised that calculators are more useful than an abacus. But that doesn’t mean accounting should not keep on changing.

In a recent article by Rob Nixon (read it here) he points out three trends happening right now in accounting that will change the way accounting functions. While Nixon expands on these points in his article, in summary they are:

  1. Cloud computing – 24/7 access to real time data. Accountants can move from number-cruncher to information analyst
  2. Providing solutions – sending information to clients and stakeholders via newsletters, videos etc to keep them connected and informed.
  3. Data analytics – big data means loads of information that can supplement the traditional income statement, balance sheet and cash flow statement. The opportunity now exists for deeper analysis of trends and risks.

Accounting is changing, has changed, and we need to adapt to ensure we can meet the opportunities and challenges of this brave new world.

If you would like further information on how Avondale Business School can help your organisation, contact Warrick Long:

E: Warrick.long@avondale.edu.au

P: 02 4980 2168

Fraud in Your Organisation

Sunday, October 11, 2015

Workplace FraudLate in 2014 BDO released their 2014 Fraud in Not-for-profits survey (read it here), which yielded some very interesting results. While one would like to imagine that the moltruistic nature of NFP’s means they are immune from fraud, this would be misguided, and in fact the evidence shows otherwise.

Unfortunately fraud in any organisation is a fact of life. KPMG’s most recent fraud survey of all organisation types was completed in 2012 (read it here), and a quick summary of their findings show that:

  • A total of $372.7m was lost to fraud, with 86% being in the financial services sector
  • There were 194,545 incidents in the 12 months
  • The average loss per organisation experiencing fraud was $3.08m
  • 47% of incidents were due to deficient internal controls.

The typical villain in the KPMG survey is:

  • Male (3 times more likely than a female)
  • An employee
  • Acting alone
  • No known history of fraud
  • Earns close to $110k per year
  • Typically motivated by greed/lifestyle or personal financial pressures.

Many organisations that the ABS InfoLink goes out to would be regarded as NFP, so let’s compare the KPMG all organisations survey to the more recent BDO NFP survey.

BDO found that frauds have been decreasing, but the average size ($22,904) and total amount ($3.2m) has increased. And surprisingly, 70% of those experiencing fraud had suffered it previously. Naturally organisations with a higher turnover are more likely to experience fraud. The average duration of the fraud was found to be 14 months.

The key risk factors for fraud amongst the NFP community are poor internal controls and poor segregation of duties. Cash theft is the most common type of fraud, followed by kickbacks/bribery and fraudulent personal benefits.

The typical villain in the BDO NFP Fraud Survey is:

  • Paid employee
  • Non-accounting role
  • Over 50
  • Acting alone
  • Motivated by financial pressures and maintaining a lifestyle.
  • The higher value frauds were motivated by people with gambling issues.

What is fascinating is that 54% of the victim organisations did not report the fraud to police. Only 63% terminated the employee, and 53% did not recover any of the funds.

The three key factors in reducing fraud were found to be external audits, an ethical organisational culture and strong internal controls. Frauds were typically discovered by tip-offs and internal controls.

No matter what type of organisation you are, fraud is a very real and present danger. Having strong internal controls is the most effective way of reducing fraud. Unfortunately, just because you may be an NFP, does not mean you are exempt. The Avondale Business School can advise your organisation on effective internal controls and managing your fraud risk – find out how by contacting Warrick Long at the Avondale Business School.

E: Warrick.long@avondale.edu.au

P: 02 4980 2168

How to Open The Donor’s Chequebook

Monday, April 13, 2015

Not all donors are motivated to give by the same strategies – no surprises there. What is surprising is how many charities do not bother to vary their donor appeals to accommodate these different motivations.

Donor MotivationResearchers at the Kellogg Institute have compiled a summary of their various investigations of donor motivations into a guide for charities on how to structure marketing to donors in order to maximise returns. Drawing on the experience of commercial organisations, which recognise it is important to vary the marketing approaches according to their specific target markets, the researchers developed the following four questions to ask, the answers to which guide your organisations marketing program:

 

  1. Is the potential donor powerful or powerless?
  2. Is the potential donor committed to you organisation or a newcomer?
  3. Does the potential donor value independence or relationships more?
  4. Is the potential donor feeling like resources are abundant or scarce?

The full report (Read it Here), while giving excellent detail and suggestions for developing your marketing strategies, also provides a summary infographic based on these questions that gives suggested strategies based on the answers. This is an excellent quick guide for any entities that seek funding from donors, including churches, schools, and aid agencies.

A challenge for your organisation is to think about whether your marketing strategy is focussed or haphazard? The Avondale Business School can advise your organisation on being effective in these areas – find out how by contacting Warrick Long at the Avondale Business School.

E: Warrick.long@avondale.edu.au

P: 02 4980 2168

Need to Cut Costs? Try This…

Sunday, September 14, 2014

Cost CuttingImproving the bottom line of a business is actually very simple as it means impacting just one of two areas:

  1. Increasing revenues, or
  2. Decreasing costs.

I said it was simple, not easy! But when times are tough (and when aren’t they?) and you need to reduce your cost of doing business, Brett Hay, a consultant with Expenses Reduction Analysis, says there is a simple 7-step process that can cut costs 10 – 15%. You can read a more detailed description of the process here, but in summary point form, the 7 steps are:

  1. Analyze your costs
  2. Where possible, rationalise your purchases
  3. Benchmark your spending
  4. Talk to your suppliers
  5. Beware of buying in bulk
  6. Manage your people
  7. Monitor your success

Maybe now is the time to start reviewing your costs and seeing how much your bottom line can improve.

If you would further information on how Avondale Business School can help your organisation, contact Warrick Long

E: Warrick.long@avondale.edu.au

P: 02 4980 2168