It is often thought that the role of the accountant, or accountant in general, only involves “tax time” and when all the real business of the company is done. But this could not be less from the truth. In fact, managerial accountants often wear many hats and are involved in many day-to-day operations. business Accountants help establish plans, businesses, continuous performance measurement, make ongoing profit and loss statements, and others when they know it. working to make a healthy investment of money among various other duties.
Bill Nicholson is a financial analyst for USA’s Chevron, Inc., which is ranked third on the Fortune 500 list. (Fortune 500, 2009) has been with the company for twenty years. Each year, Bill sits with a leadership team specific to his area and puts together a three-year rolling business plan. Business plan based on market conditions (i.e., the cost per barrel of oil will be adjusted). The business plan will be used as a benchmark for all future production, revenue, expenses, capital expenditures, etc., this it is how it is measured. (He conducted a personal interview on January 15, 2009) Once this business plan is established, the game does not stop.
Each month, when the latest numbers come in, Bill updates his sheets with the previous month’s data. The data will then be used to calculate a schedule where metrics can be used to measure performance. With the price of oil so high before 2008, a lot of money was being poured into development, so production numbers were high, revenues were high, and so on. They were all original business plans too! Then oil prices started to fall immediately after they made a business plan for 2009, 2010, and 2011. Many Amendments to this business plan were required because the oil deposit was based above $100 per barrel. Accounts directors must stay on top of market conditions that affect their company, both positive and negative.
When Bill compiles this information on a monthly basis, he compiles it into a profit and loss statement (PLS). PLS will show production, revenues, operating expenses and capital expenses as mentioned above. But it also includes the depletion cost of the pool, which is not money itself, but is similar to how a business includes the loss of a company’s vehicle fleet. As Chevron removes oil from storage, the reservoir is emptied, so there is a loss in price. The PLS costs will also include taxes and credits. Under each head there will be subheadings for various costs. An example of operating expenses where you would have sub-capitals for taxes & licenses, labor companies, businesses, expenses, transportation, distributed systems, etc.
The computer controller is also responsible for letting the company know when it is wasting or saving time. When the price of oil dropped, Bill brought to the attention of the leadership team that a lot of maintenance needed to be done on the wells, which would not necessarily add revenue, but would stop higher costs down the road. and where there was oil, there was now a great abundance of money. After the maintenance is completed, the production of the equipment is in a much greater shape, and the equipment will work more efficiently and effectively during the period where the oil falls. Bill made a very wise choice to bring to the attention of the superiors. Accounting managers must ensure that not only the company’s production, revenues, and expenses are maintained, but also outside elements that can affect these three.
There are various other responsibilities that accountants must undertake for the office. When a resource engineer submits a bill of costs to have a cost element created for the upcoming job, he checks the documents to make sure the cost centers are correct, just as each oil field has its own cost center, and he looks to do it. all other relevant information is present. The book is called upon to run various relationships, spread various spreads, and is called upon by leadership when there are more important decisions. to be done
It is clear that accountants do more than “books”. According to Bill, it is true that around the end of the fiscal year it is almost a bit more busy< /a> and hectic, he is still very busy with performance measuring and keeping an eye on the external forces that affect society. Bill states that he must have a love of numbers when considering a position in accounting. He continues to claim that he also plays with numbers in his spare time, often coming up with various scenarios for calculating personal tax a> Time, or around which they retired the numbers playing. A controller calculating numbers would not only crash. He will be in a position to investigate performance, give advice, and play a key role in the company’s business decisions.
References
Fortunate D. (2009). Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2008/index.html
Nicholson, B. (2009). Personal interview with Bill Nicholson, Financial Analyst, USA Chevron, Inc. on January 15, 2009
