CPAnet - Accounting Zone

For Good Cash Forecasts, Use the 80/20 Rule @cfopub

"At this gut-check moment for corporate decision-makers, one tactic to boost their confidence is to demand better cash forecasts from their treasury department. How ironic, then, that the same economic instability that’s producing the angst also works against effective forecasting. Knowing what sales will look like next month or whether the credit markets will thaw soon is, for the moment, uncomfortably elusive.  The irony doesn’t end there. Treasury departments haven’t been exempt from the depletion of human and monetary resources that has plagued almost every corporate function...."
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Source: CFO.com

On Executive Pay, Simpler Is Better @HarvardBiz

"Back in 1990, Michael Jensen wrote a landmark HBR article arguing that "It’s Not How Much You Pay CEOs, But How." He wanted boards to adjust pay according to company performance as shown by stock price. V.G. Narayanan’s recent post in this debate goes a step further, arguing that executive pay should be tied aggressively to a company’s specific strategy..."
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Source: HarvardBiz Blog

Should You Write Your Own Promotion Plan? @HarvardBiz

"A promotion plan for an employee is usually the responsibility of the promoter, not the promotee. That’s because a promotion means a role with greater responsibility — managing a new project, replacing someone who has left, or expanding a current job with more staff or tasks. The need for that new or bigger role is decided by the higher-ups as part of solving a business problem in line with the company’s goals.  Since it’s not typical for the goals of the organization to be set by an employee, we know your boss is playing some kind of game by making you guess what it will take to get promoted..."
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Source: HarvardBiz Blog

Steps to Creating Dual-Career Ladders at Your Company @HRTools

"In order to set up an effective dual-career ladder program at your company, you need to make sure your dual-career ladders are as valuable as management career paths.
Steps to Take 1. If you’re interested in setting up a dual-career ladder program for your employees, there are some steps you can take to get started:Look at your company’s environment and see what types of tracks are currently available—Almost all organizations have a management track, but you should look at what additional tracks you could potentially offer your employees..."
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Source: HR Tools

A New Financial Foundation

"Over the past two years, we have faced the most severe financial crisis since the Great Depression. The financial system failed to perform its function as a reducer and distributor of risk. Instead, it magnified risks, precipitating an economic contraction that has hurt families and businesses around the world. We have taken extraordinary measures to help put America on a path to recovery. But it is not enough to simply repair the damage. The economic pain felt by ordinary Americans is a daily reminder that, even as we labor toward recovery, we must begin today to build the foundation for a stronger and safer system..."
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Source: The Washington Post

FASB Accounting Standards codification will launch July 1

"The Financial Accounting Standards Board (FASB) has voted to approve the FASB Accounting Standards Codification as the single source of authoritative nongovernmental U.S. Generally Accepted Accounting Principles (GAAP) to be launched on July 1, 2009. The Codification will be effective for interim and annual periods ending after September 15,2009, which means that preparers must begin to use the Codification for periods that begin on or about July 1, 2009. All existing accounting standard documents are superseded. All other accounting literature not included in the Codification will be considered non authoritative..."
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Source: AccountingWeb

The Regulatory Rumble Begins

"In America and Europe, new rules are already running into stiff resistance-mostly from regulators themselves...

"You want to move at the point where people still have the memory of the trauma," Tim Geithner explained recently when asked about financial regulation. Aware that the crisis is moving into a new phase, with the emphasis shifting from firefighting to working out how supervision should be restructured, America’s treasury secretary wants to seize the moment. He plans to unveil a comprehensive regulatory overhaul by mid-June. Barack Obama has said he wants to sign the changes into law by the year’s end.
In Europe, too, the pressure is on. "There’s no room for more delays," José Manuel Barroso, president of the European Commission, said on May 27th when he unveiled a blueprint for reform of financial supervision. He announced plans to form two new grandly named institutions: a European Systemic Risk Council, which is supposed to provide early warning of possible risks, and a European System of Financial Supervisors, which would be a super-committee of regulators from across the European Union...."
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Source: CFO.com

CFOs have to build teams and play on them. It isn't easy.

"Aside from the occasional coaching stint, most CFOs’ Little League days are long past, but the lessons learned on those distant summer evenings may hold the key to their future success. Two such lessons — learning to take a leadership role on a team and to collaborate with other team members — are critical for any finance executive who aspires to advance. Whiff on those and the result can be career stagnation. CFOs face two distinct team challenges: they must lead the finance team as well as play on the senior management team, where the dynamics can be fraught with tension as members compete for resources, the CEO’s favor, and even his job...."
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Source: CFO.com

It May be Time to be Your Own Boss

"I had been on the corporate ladder for a while. I wanted more variety in life." And thus, ten years ago, John Stallabrass left his life as a finance director at listed companies for the more exciting, uncertain existence of an interim manager. He will probably keep at it for ten more. "I’m still doing it and still enjoying it," he says. Although current financial conditions could be described as anything but boring, the prospect of being their own boss is enticing more finance executives. Rising pressure, pay freezes, investor ire and a bulging workload are just a few of the reasons they choose to step off the traditional corporate ladder. (Widespread restructuring, of course, is also giving many a push.)..."
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Source: CFO

Faint Pulse Detected in IT Spending Plans

"The rate of expected decline in capital equipment and software purchases eases for the first time in a year, Goldman Sachs says. Large-company spending on information technology, in a free fall since mid-2008, may be showing signs of bottoming out, Goldman Sachs said in a report released last week. Total IT expenditures - including not only capital purchases but also salaries, services, depreciation, and occupancy - will continue to contract at an increasing rate during the next 12 months, a panel of 100 multinational Fortune 1,000 companies told Goldman in mid-April...."
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Source: CFO