How to build accountability into your corporate culture

What is a “Culture of Accountability?”

A culture of accountability is a work environment where people demonstrate a high level of ownership to think, respond, and proceed in a manner necessary to reach business goals. Accountability in business is directly related to higher performance.

Why Should Your Company Have a Culture of Accountability?

In many companies, employees are working across time zones and different departments to achieve their business goals. Creating a culture of accountability in the workplace is a multi-dimensional and multi-layered issue in this fast-paced business world.

Building an accountability culture makes a powerful impact on your business goals and success. Accountability helps you ensure that your employees show up for shifts, know what their roles are, and meet deadlines. This structure makes every employee responsible for fulfilling their duties and automatically makes a positive impact on business growth.

Why Is It Important To Build A Culture Of Ownership And Accountability In The Workplace?

When employees take ownership of their work, they treat the business they are working for — and its state of well-being — as if it were their own. They take more care with decisions, because they see the business as a part of themselves. They also tend to be more driven and motivated, looking for creative ways to improve the quality of their work. Critically, this mindset is infectious, and the more powerful your culture of ownership becomes, the more successful your business will become.

People who don’t take ownership are more likely to simply go through the motions and do the minimum that’s required because, ultimately, the result doesn’t matter to them. Unfortunately, this mindset is also infectious, and if left to fester you can quickly see large parts of your workforce rotting away.

How does ownership and accountability connect to trust in the workplace?

Trust is built on confidence that your teammates are striving towards the same objectives that you are. It’s the comfort that comes from knowing that everybody really cares.

Thinking about delegation and micromanagement helps you to identify whether or not you have trust in your workplace. If you don’t feel that your teammates will do the right things and come back with results, then you’re lacking in trust. Low trust translates to poor productivity, and you end up devoting extra time and energy following up and managing details you shouldn’t have to. If you don’t feel trusted, you’re less likely to take initiative because you’re already afraid of the criticism that’s coming your way.

Ownership and accountability build trust. And trust encourages employees to take ownership. Trust reinforces accountability because when you know that you’re trusted, you don’t want to squander that by letting your teammates down.

An example of responsibility vs. accountability

Consider this real example of how large companies often operate. Imagine the CEO of a big multinational organization has a critical meeting coming up with the government representatives to discuss tax rates for the following years.

The CEO intends to demonstrate the company’s contribution to the country and asks one of his executives to take care of collecting the data and preparing the presentation. The executive sends the task to a subordinate, the middle manager who forwards it to the trainee saying: “you have all the information in the database, just put it in the slides”.

Everybody fulfills their tasks: the trainee prepares the slides and sends them on time to the middle manager. The manager confirms that everything is in line with the information in the database and sends it to the executive who forwards the slides to the CEO.

Only at the last step, while preparing for the meeting, does the CEO realize that the indicators are lower than expected. At this point, nobody is able to explain the difference and there is no time left to dig into the details.

Of course, presenting such disappointing results, the company does not manage to negotiate the desired deal.

How do company results change in an accountable team?

Imagine what could have happened if the organization promoted an accountability culture. If not already included in the briefing of the delegated task, the trainee would ask about the goal of the analysis. While analyzing the data, she quickly realizes that the numbers are not in line with the expectations.

As she has been working directly with the customers and documentation, she knows that the contribution for the past quarter should have been much higher.

The trainee calls the accounting department to discuss the issue and together they discover a reporting mistake that has affected the data. They fix the mistake on the spot and the trainee sends the correct slides to the manager.

The manager – surprised to learn about the challenges that this task uncovered – contacts the accounting department to discuss how they can prevent such mistakes in the future. The executive, in turn, shares the conclusions with other related departments to ensure that the same improved quality standard is implemented across the organization.

After delivering the presentation to the government, the company manages to negotiate a beneficial deal for the taxation terms.

This example demonstrates how an accountable organization can not only increase their chances of achieving individual results but also work on process improvements to increase the overall quality standard across the entire company.

Let’s look at some ways to make accountability part of your business world:

• Be reliable and consistent. Simply put, do what you say you’re going to do. And, expect the same of others. The path to accountability is through consistency, predictability and follow-up. As leaders, we need to be accountable in terms of providing interim guidance throughout the project and not just at the end.
• Communicate your expectations clearly. Don’t assume someone can fill in the gaps. For people to succeed, they need to know what the successful completion of a project looks like. This includes key metrics, dates, costs, etc. It’s important to give team members the opportunity to ask questions to get a full understanding before starting their projects. It’s then that they can take full ownership.
• Empower employees. Once everyone understands the expected results, they should be empowered to get the job done. They should have adequate resources and structure to allow them to succeed. They shouldn’t have to circumvent process or continuously fight upstream as a means to achieve successful outcomes.
• Foster collaboration and mutual accountability. Ensure everyone knows what major initiatives are on each other’s plates. It’s amazing how effective a business can be when people talk to each other and hold each other accountable.
• Create a learning environment. It would be nice if everyone completed everything right on the first attempt. That’s just not realistic, though. Rather than overreact when someone drops the ball, try to create an environment where people learn from mistakes. Likewise, take responsibility for your own decisions, good or bad, to model the behavior.

Using your engagement survey to measure accountability

There are multiple ways we can utilize data and feedback to build a culture of high accountability.

First, we can ask questions in our engagement surveys to measure feelings of accountability at the individual, department, and organizational level. Using Culture Amp’s analytic features such as demographic filtering and the heatmap, you’ll be able to identify whether specific departments or groups of employees are struggling with accountability.

Second, surveying is a two-way communication tool. We are inherently communicating the behaviors and outcomes that we seek through the types of questions that we ask. Thus, if we ask employees about their perceptions of accountability, we will drive home the types of behaviors that are important and central to our workplace culture.

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BASIC ACCOUNTING SKILLS EVERY PROFESSIONAL ACCOUNTANT MUST HAVE!

The world of knowledge is infinite, which means that there is no end to learning, unlearning and relearning new skills that are in sync with the changing times. The same is in the case of accounting, where managerial accountants need to have varied basic accounting skills and need to keep themselves abreast of the new developments in the domain.

Interpersonal skills:

There is a misconception that an accountant’s work involves purely number crunching. But along with strong quantitative skills, an accountant should also possess great interpersonal skills such as empathy, client management, negotiation skills, etc. Being an accountant, they have regular meetings with several clients, colleagues and professionals. Hence, good interpersonal skills are vital to the success of an accountant.

Taxation

Taxation is a very volatile and dynamic subject. It requires advanced knowledge, which is only possible through rigorous reading and strong experience. It is an accountant’s responsibility to help and navigate their customers through taxation procedures in the most ethical and hassle-free way.  An accountant should have an in-depth understanding of various taxes, tax income limits, taxable items, tax rates, etc.

Analysis

To become an ace accountant, he/she also needs to conduct variance analysis, price and volume analysis, product profitability, cost analysis, life-cycle cost analysis, capital budgeting, strategic planning, forecasting, allocation, etc. to ensure the best allocation of resources and achieve management goals.

Accounting basics

An accountant should know how to prepare financial statements and accounting reports for planning, controlling, budgeting and decision-making.

Accounting skills to list on your resume

If you’re working toward a degree in accounting, the next thing on your mind should be preparing your accounting resume for a job in the field. Whether your goal is to be an accountant or to work in business management, an accounting degree can be the crucial key to helping you find success.

There are three main types of accountants; tax accountants, auditors, and industry accountants. Each of these different types of accounting careers has very different job responsibilities, and different skills that are needed to succeed. Tax accountants are just what it sounds like, accountants who do taxes. Audit accountants perform audits on companies, internally or externally, to ensure that proper financial and accounting practices are being performed, and that the financial statements of an organization are correct. Industry accountants work in public or private sectors for individual companies handling their overall finances.

Accounting skills.

There is a distinct difference between hard skills and soft skills in the workforce. Hard skills are the specific tasks and abilities you need to be able to do to in order to perform your job functions, and perform them well. Hard skills translate to the tasks you’ll need to be able to do day in and day out.

Performing accounts payable and receivable functions. This is an industry accounting function that boils down to writing checks and managing the budgets for your vendors. It means working with department heads to understand what the vendors do, establishing budgets with departments, and working directly with the vendors to send them their checks when they submit invoices. Skills in accounts payable and receivable are extremely relevant for those in industry accounting and is a great skill to list on your resume

Managing vendor accounts. Accounting departments in industry accounting are often responsible for managing all the vendor accounts that need to be paid. This means loading them into whatever software system you use, making sure they’ve delivered their goods or services, and more. On your resume it’s smart to list that you have direct experience in working with vendor contracts, tax documentation, and invoices. All of these elements are used by accounting departments every day, especially in industry accounting.

The Role of Accounting in Business and Why It’s Important

The term accounting is very common, especially during tax season. But before we dive into the importance of accounting in business, let’s cover the basics – what is accounting? Accounting refers to the systematic and detailed recording of financial transactions of a business. There are many types, from accounting for small businesses, government, forensic, and management accounting, to accounting for corporations.

Why Is Accounting Important?

Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions.

There are three key financial statements generated by your records.

The income statement provides you with information about the profit and loss

The balance sheet gives you a clear picture on the financial position of your business on a particular date.

The cash flow statement is a bridge between the income statement and balance sheet and reports the cash generated and spent during a specific period of time.

It Helps in Evaluating the Performance of Business

Your financial records reflect the results of operations as well as the financial position of your small business or corporation. In other words, they help you understand what’s going on with your business financially. Not only will clean and up to date records help you keep track of expenses, gross margin, and possible debt, but it will help you compare your current data with the previous accounting records and allocate your budget appropriately.

It Ensures Statutory Compliance

Laws and regulations vary from state to state, but proper accounting systems and processes will help you ensure statutory compliance when it comes to your business.

Accounting Vs Finance: Which Should You Study?

The popularity of FAME subjects (finance, accounting, management and economics) comes from their vital role in the world of business, particularly those first two letters of the acronym: accounting and finance.

The primary difference in the battle of accounting vs finance is that accounting has a relatively narrow focus, while finance is wider-ranging, covering an array of specializations in the world of business, economics and banking.

Accounting vs finance

At undergraduate level, it’s possible to take a joint accounting and finance degree, in order to gain a more general knowledge of both accounting and finance professions. However, those who study further will usually specialize in either one or the other, in order to gain more advanced expertise in one particular field.

What do accounting degrees cover?

An accounting degree will provide a foundation for specialized accounting careers, as well as many other related careers. Accounting careers typically involve analyzing and utilizing financial information in order to evaluate a business’ financial position. This can involve anything from basic book-keeping to managing balance sheets and income statements. Accounting careers often have a large focus on past records and present reports, involving the creation and analysis of these records, and now often also extend to encompass planning, controlling, decision-making, stewardship, accountability and more

What do finance degrees cover?

A finance degree, on the other hand, is a great starting point for careers in financial services, across business, banking and consultancy sectors. According to US salary data gathered by PayScale, finance careers also have the potential to be slightly more lucrative than most accountancy routes. This is due to the fact that finance careers typically focus on the management of current and future figures of a business or organization, as opposed to just the recording of past and present income and expenditure. This means that those in finance careers often have the added responsibility of predicting and analyzing the potential for profit and growth, assessing monetary resources, utilizing accounting statistics and reports, and also looking externally for future funding options.

Offshore Income and Filing Information for Taxpayers with Offshore Accounts

U.S. citizens, resident aliens and certain nonresident aliens are required to report worldwide income from all sources including foreign accounts and pay taxes on income from those accounts at their individual rates.

There are many legitimate reasons for holding offshore accounts, including convenience, investing and to facilitate international transactions. By law, U.S. taxpayers are not permitted to use offshore accounts, such as foreign bank and securities accounts as well as trusts, to avoid paying tax.

In most cases, affected taxpayers need to fill out and attach Schedule B to their tax returns. Part III of Schedule B asks about the existence of foreign accounts and usually requires U.S. citizens to report the country in which each account is located. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets, if the aggregate value of those assets exceeds certain thresholds that vary depending on filing status and whether the taxpayer lives abroad. Additional filing requirements apply to those with foreign trusts.

Separately, taxpayers with foreign accounts whose aggregate value exceeds $10,000 any time during the year must file a Form 114, Report of Foreign Bank and Financial Accounts (FBAR) electronically through FinCEN’s  BSA E-Filing System. The FBAR is not filed with a federal tax return and must be filed by June 30 each year.

The reporting requirements of the Form 8938 and FBAR differ. More details on who most file and the specific type of assets that must be reported for both forms can be found on the IRS.gov.

Failure to report the existence of offshore accounts or pay taxes on these accounts can lead to civil and criminal penalties.

For the Form 8938, the penalty may be up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a potential maximum penalty of $60,000; criminal penalties may also apply.

For the FBAR, the penalty may be up to $10,000, if the failure to file is non-willful; if willful, however, the penalty is up to the greater of $100,000 or 50 percent of account balances; criminal penalties may also apply.

Taxpayers with undisclosed accounts should consider options available under the expanded streamlined filing process or the Offshore Voluntary Disclosure program.

Breaking Down Tax Haven

Offshore tax havens benefit from the capital their countries draw into the economy. Funds can flow in from individuals and businesses with accounts setup at banks, financial institutions, and other investment vehicles. Individuals and corporations can potentially benefit from low or no taxes charged on income in foreign countries where loopholes, credits, or other special tax considerations may be allowed.

A list of some of the most popular tax haven countries includes: Andorra, the Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Cook Islands, The Island of Jersey, Hong Kong, The Isle of Man, Mauritius, Lichtenstein, Monaco, Panama, St. Kitts, and Nevis. Worldwide there is not a comprehensively defined standard for the classification of a tax haven country. However, there are several regulatory bodies that monitor tax haven countries, including the Organization of Economic Cooperation and Development (OECD) and the U.S. Government Accountability Office. Characteristics of tax haven countries generally include: no or low income taxes, minimal reporting of information, lack of transparency obligations, lack of local presence requirements, and marketing of tax haven vehicles.

KEY TAKEAWAYS

• Tax havens provide the advantage of little or no tax liability.
• Offshore countries with little or no tax liabilities for foreign individuals and businesses are generally some of the most popular tax havens.
• Investors and businesses may be able to lower their taxes by taking advantage of tax-advantaged opportunities offered by tax havens however entities should ensure they are compliant with all relevant tax laws.

Tax Justice Network list of tax havens

Tax Justice Network’s (TJN) approach aims to be comprehensive, so the list produced in 2007 was a lengthy one. It included OECD countries that offer some tax haven facilities or offshore financial services, even if they do not account for a major part of the economy. This means that the all jurisdictions in the OECD tax haven list are included. These can be referred to as ‘pure’ tax havens: the standard offshore island states which facilitate tax avoidance through low tax rates and secrecy (SOMO, 2006). In addition, TJN also considers OECD member countries with harmful preferential tax regimes as tax havens. According to TJN, countries with a broader economic base have a greater responsibility to end any provisions in their laws which facilitate avoidance of the laws of others, and it should not be only the small jurisdictions that are targeted. Furthermore, TJN extended its tax haven list by performing a reputation test. Various members of the network have proposed countries that they view to be a tax haven. The composers of the list then conducted a reputation test by reviewing tax planning websites and reviewing documentation of tax legislation in the jurisdiction.

Types of Offshore Tax Avoidance

There are many different devices taxpayers utilize to conceal transfers of money or property to foreign entities for offshore tax evasion, including:

• Foreign trusts
• Foreign corporations
• Foreign (offshore) partnerships, LLCs and LLPs
• International Business Companies (IBCs)
• Offshore private annuities
• Private banking (U.S. and offshore)
• Personal investment companies
• Captive insurance companies
• Offshore bank accounts and credit cards
• Related-party loans

Once money or property titles are moved offshore, the taxpayer can manage it with ease using fund transfers. Although this is technically legal, it is incredibly frowned upon by the IRS. The public is also maddened by the recent revelations in offshore tax avoidance; low-income families struggle to meet their tax obligations while the super-rich avoid paying anything at all using offshore tax havens. Small business owners are sometimes crippled by their debt, but huge companies such as General Electric somehow managed a $0 tax bill in 2010.

History of Offshore Bank Accounts

It is an unfortunate fact that Europeans have always been subjected to relatively heavy tax burdens. This was as true on the British Isles as it was on the continent. Europeans were faced with the prospect of watching their hard earned assets and wealth diminish. Every grasp of the tax collector’s hand plundered their wealth. Therefore, the continent was ripe for a solution.

Then a solution came. The small, island nation state known as the Channel Islands came up with an idea. They convinced these frustrated depositors that deposits placed in its banks could be free from scrutiny; hence, the heavy-handed taxation burden. These benefits convinced many wealthy Europeans. Soon this service thrived. Other small jurisdictions took note. They, too, became savvy to the foreign capital-attracting magnet and they began to revamp their banking institutions. A handful of countries adopted sound, pragmatic banking rules and regulations. Thus, they eased the potential concerns of investors and depositors. The Offshore bank was off to a running start!

And soon the term “Offshore banking” became synonymous with any smaller, haven jurisdictions. They offered safe, secure, confidential banking with practical regulations. Soon the rest of the world was “in the know.” They began to look at these havens as viable solutions to their needs. Americans, Africans, Asians, etc., found these Offshore bank accounts quite useful for a myriad of reasons. Unlike their banks at home, these Offshore banks were not regularly subjected to political turmoil or economic strife. Most educated business people knew them the for their political and financial stability and asset protection benefits.