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report on Performance based culture in Accounting to know the company culture in accounting

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Performance based culture in Accounting

Introduction 

This paper explains a very interesting element in relation to accounting transactions and performance based cultural which more strongly connected with the aspect of employees work and managerial actions occurring in the organisation. This paper shares a limelight on the fact how the managerial operations and the performance fashion working in the enterprise effects the accounting results and the financials of the organisation. It also details about the costing aspect and the budgeting the company operations in order to ensure the fact that the balance environment is maintained throughout the organisation. 

 

 

Meaning 

Performance based culture can be defined a situation existing in the environment where the whole organisation which includes all the three levels of the management – Top Management, Middle -Level Management and the Lower Management work under a single format of working. This being following a systematic and a followed approach and a set standard methodology in order to achieve the desires results (Kaplan, & Atkinson, 2015). Performance based culture deals in a complex manner as various elements are required on the table to correlate with each other: - 

1) Manager’s expectation to perform work and his duties to report the same in manner pre-stated and decided.

2) Employee way of working on a pre-stated job profile and measuring the same in perspective of time, quality, standards and the completion of work.

3) Accounting Department which deals in a correlated fashion and work to ensure that the work is being performed and monitored in a way that the expense, in relation to salary as well as performance appraisal are calculated in time and managed correctly. On the more, accounting process needs to understand and establish a well-balanced form which deals with a fact that the costing is well organised and it is not overstated nor understated.  

4) Measurement Levels: - It defines the structure and the grading pattern in detail as to how the work need to be performed, what is the pricing levels, what are the quantity bargains what are parameters to define them (Schaltegger, & Burritt, 2017). How are the targets needs to be achieved as well as the fact how the reporting and the computation need to calculated.       

 

Culture – Other Concepts

In real life as well as in a practical working approach the organisation working and its success closely depends on the fact as to what culture it is following which can be done by following different work format and the form of working. The companies are vast and deals with the massive levels of the operations and business which can be varied form, and therefore, the firm has a different way of working and deciding the accounting impact it makes on the enterprises and how it effects the employees as well.       

 In true considering the ethical format –

This concept provides a massive impact on the aspect that corporates way of thinking and its point of view can majorly impact the recording of the business transactions and can lead to the count of ethic practice and its nomenclature as to how the work need to be progressed and performed (Mintz, & Morris, 2008). Ethics in accounting leads to formulate a corporate cultural to minimize malpractices as well as need to be eliminated and reduce to eradicated.

 

Considering the technology concept, 

The culture having a technology built accounting software and culture lead the organisation to another heath of success. Primarily, because the company ensure that the working is done in a form of automatic format, where the process becomes automated and fast. Further, the errors are reducing and the mathematical errors are scored down to zero level. Moreover, the practices of accounting if invites a road to technology it also leads a road to innovation, an atmosphere of error free accounting. Time saving efforts and also reduces the encumbrances of the monotony of the job.

Organisation and Structure 

– This format deals with a fact that how the organisation structure working helps the overall functioning of the companies working cultural. A system format of a pyramid form as well as ridged format explains the process flow of working dictatorship exists and the role of responsibility and the obligation exist in clear and precise terms. On the other hand, a peer format explains the flow of working in a healthier and a friendlier environment, which leads to a form of peaceful working and a cohesiveness peer working culture. Thus, harmony and a work peace atmosphere exist in the company’s work culture.

 

Importance of the Performance Based Culture 

This form of organisational culture deals with a unique format of responsibility centre, it tries to balance a phenomenon of computing the directionality as well as the correlating performance practicing. In true sense it is a human resource practice support contextual factor. They in true sense this way of working culture in real sense channelizes the skills and the efficiency factor of the employee in a positive and a great potential manner (Langfield-Smith, Smith, Andon, Hilton, & Thorne, 2017). 

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It also ensures that the raw and unskilled form of labour also rejuvenating the labour into a skilled one and provides a unique and a building work matter , which increase the skill pattern. Not only this this form of culture beings to the table a level of involvement in the working environment, a level of consistency in the working environment, a level of adaptability in the working environment, lastly it deals with building a mission with a proper established goals and roles existing in the environment.                 

 

Impact on the Accounting Form Due to the Performance Based Culture

Performance based culture has a two-way effect on the accounting of the organisation: - 

1) In context to Budget formulation

2) In context to variance formulation

 

Budget aspect can be explained as in the matter of fact that the performance level can a fluctuating impact on the accounting and the costing of the organisation. Primarily because it depends on the skilled performed by the employee in relation to the task job given. Thus, the budget made are of the maximum levels in such environment as its difficult to predicate which one has outperformed which hasn’t outperformed (Moya, Prior, & Rodríguez-Pérez, 2015). It can be forecasted but the actual results become difficult to be justified as to how in actual the employee has ensured its true performing levels. In a competitive environment like this it is difficult to judge as to how the task will be performed by the employee and also it comes as a surprise as what was expected and what is the results arrived. Thus, in correct budget can completely disturb the cash management and the cash forecasting done in relation with such elements in the salary and the employee’s budgets. Hence, in such a situation it is always advised that the team of accounting always considered the highest stake in record so that managing at the end or when the actual arrives does lead the organisation in a difficult situation.                             

 

Variance Formulation: -

In the accounting process needs to face a major jolt in context to variations in salaries in form of working which at times becomes a negative aspect of the whole working culture. Mainly because the employee’s expectations and the managers’ report submitted do not co relate with each other at times. It can happen from both ends, the accounting department need to face situations ample of time where the managers fail to submit and process the salary sheet, job cost sheer, time sheet and the efficiency meter correctly which can lead to un overestimation of one of the personnel and the under estimation of the other personnel. Further, it can also de motive an employee who is actually good and an asset to the organisation (Moya, Prior, & Rodríguez-Pérez, 2015). It also blows in the fashion of biased form of working in which the accounting budgets are negatively processed. None the less, this at times also impact the finances and the billing cycle for external clients as well, reason being that on the basis of this the invoice for the clients is also billed and it happens many a times that the revenue received is far less than the employee salary charged after the managers salary sheets are received. Thus, leading to revenue loss to the organisation as a whole. Hence, the form of culture effect the accounting in a two way mode one of expenses aspect if the budgets are not correctly expressed and stated and the other on the revenue parameter where the hours and the efficiency levels are not correctly expressed leading to a massive financial loss situation.           

Conclusion 

 In nutshell, the company culture has a deep impact on the accounting and the financial business practices and recording them in the book of accounts. The companies accounting budgets as well it is finances along with the performance budgeting and performance measurement. It also explains how budgeting impact is affected in the organisation and whether it carries a positive end or a negative end. Other cultures like ethics and its impact on accounting and the dealing of fraud is also explained. The research paper also provides the assurance as to how the technology also supports the accounting and accounting software. Hence, it defines as to hoe the performance based working needs to streamlined as the accounting in the organisation provides positive result to the enterprise as a whole.

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