Being overseas education agents, you should always be sure that you are financially strong. Overseas education agents can achieve organizational effectiveness by ensuring a financially healthy organization. Good finances represent a stable and thriving student agency business.
We now know the fact that good financial performance is crucial for you as overseas education agents to fulfill your overall objectives. In addition, it’s essential to understand how you can create a strong economic base for your organization by avoiding bad accounting practices. The only way forward is by defining and forming good accounting practice.
Accounting practices have always been the lifeblood of a successful business, even for overseas education agents. It communicates the financial structure of overseas education agents to the outside world. Similarly, accounting assists an education agent in assessing the assets and liabilities, cash flows and keep track of day-to-day transactions.
Accounting practices don’t have a definitive rule; they are based on the rules, regulations, and policies of a particular sector. Generally Accepted Accounting Principles(GAAP) is one of the most widely used accounting principles by an education agent.
More than the methods of accounting you choose what matters the most is how you are using these accounting practices. Good accounting practices help you as an education agent to grow bigger and better. Poor accounting practices, on the other hand, can bring overseas education agents down.
Tilman J. Fertittaonce said, “Don’t ever let your business get ahead of the financial side of your business. Accounting, accounting, accounting. Know your numbers.”
Size of an agency effect’s its choice of accounting practice. Smaller overseas education agents can manage their finances easily, but a bigger education agent requires a more detailed accounting structure to bring all the financial information together. Some of the most used Accounting practices by overseas education agents include:
Financial accounting is the form of accounting practice that is used by most education agent as a medium to communicate the financial performance of your agency to the outside world. Different external stakeholders use this information to determine how much financially stable and secure the agency is. The financial information is published to relay the information to their external stakeholders through financial statements like balance sheet and income statement.
Management accounting focuses on regulating internal financial activities of overseas education agents. Managerial accounting, as some may call it, is all about analyzing business costs and operations to prepare internal financial reports, records, and accounts that assist managers in making decisions to achieve agency goals. Additionally, it uses bookkeeping and general accounting to evaluate everyday transactions of the business. This accounting practice helps overseas education agents to keep track of day to day operational, financial transactions, understanding daily office financial and identifying immediate changes that are required. Management accounting involves preparing budgets, handling taxes, managing assets, and developing strategic plans.
State or federal jurisdiction regulate the operation of all business. As overseas education agents, you should be aware of the rules and regulations of your state/region and stay updated about various policy changes that take place to avoid state prosecutions that might create a negative impact on the image of your business. You should be aware of your tax obligations at all time, in fact, make it one of your priorities to meet the tax requirements as prescribed by the local authority. Failure in doing so may result in fines and other financial reparation for your agency.
We now know about the different accounting practices that are used by an education agent. You should be able to identify the right method that can be used in your organization to achieve your goals as an agent.
Maintaining a good account is very important. Especially keeping track of your expenses. A small agency could do this quickly and personally, but for larger agencies, they need to devote a separate department just for handling accounts. Bookkeeping is a good option for you to record your agencies daily transactions like bank deposits, withdrawals, and other debit & credit transactions. However, doing all these things manually by yourself can be a big hassle. You could avoid this by using a tool like Agentcis to keep track of your incomes and expenses.
Some of the biggest financial scandals in the world are a result of bad accounting practices. One such example is Lehmann Brothers, one of the most prominent institutions in the American banking sector. Lehmann brothers had a major downfall in 2008 after they were unable to recover the huge mortgage they had provided. Another similar example is of AIG, an insurance giant, who had a terrible run and faced a major credit crunch; as a result, it had to take a two years credit from US Federal Reserve in 2008. Many other bad practices have shaken the most prominent businesses operating in the biggest economies, in some cases even to the point of insolvency.
Basic yet Important tips to avoid bad accounting practices:
- Constant and consistent evaluation:
To prevent bad accounting practice, you as an education agent should constantly and consistently evaluate and reevaluate your financial performance. Bring changes in your accounting practices if required and make sure you meet all the required accounting standards.
Keeping It Simple
Maintaining simplicity in your books of account helps in the smooth operation of your business. Bookkeeping need’s to be simple in order to communicate it to the stakeholders effectively. Complex accounting creates confusion in the minds of different stakeholders of your agency. In fact, make it so simple that even a non-specialist can understand it.
Hiring right Professionals
Best way to avoid a bad accounting practice is hiring professional to look after your account. Expert advice helps in maintaining stable and secure finance for your agency. The accountant should be aware of the nature of work of your overseas education agents as well as the financial externalities associated with your agency.
Using the right technologies
Technology has made accounting much simpler for an education agent. Different software and application help overseas education agents keep track of your expenses. Similarly, it helps to stay connected with clients, manage inflow and outflow of money. Selecting the right technological tools enables an education agent to create complex financial reports with just a click of a button saving time and ensuring efficiency.
Always remember it’s you who decide which accounting practice suits your agency. Being an education agent you must make sure you make the right choice, follow the correct method and prioritize accounting because it is the veins through which money flows. A single cut in this vein can cause devastating consequences. Accounting practices can be a boon or a curse. Thus be wise, make the right choice and avoid bad accounting practices.