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Overhead Expense Reduction

See Also:
Predetermined Overhead Rate

Overhead Expense Reduction

As a general precursor to Overhead expense reduction, Group Purchasing Organizations, Co-ops and Consortiums always lead to lower prices because they aggregate spends and create buying power. This may be true for smaller spends but as spends get larger ($100,000+ annually), you will often do better on your own when a supplier can customize a program to your specific purchasing patterns and needs.


Download eBook 28 Ways to Improve Your Business's Cash Flow


Category Specific Expertise

In reducing overhead expenses, expertise in purchasing for one cost category or in the request for proposal process will produce similar results in another cost category. What expertise in purchasing really means is an understanding of the unique data requirements and what drives supplier pricing to achieve the best results. You may use the same process in different categories. But without the category specific information, the results may not be the same at all.

Category specific information includes changes in the industry, contract nuances, and benchmark data.

Stay Loyal to The Supplier

Loyalty to a supplier always translates into the best value for your company (value = price + service) as well as the best opportunity to reduce overhead expenses. Quite often, long time loyalty leads to complacency from both the supplier and the purchaser. Industries and companies change over time and vendors providing operating supplies and services are no exception. Modest price increases year after year may seem acceptable when in reality the market may have changed, and the cost should actually be going down year after year. Compounding increases add up over the years.

How To Reduce Overhead Expenses

There are three things that you can do to reduce overhead expenses:

  1. Lower Costs with Incumbent Suppliers
  2. Ask Vendors to Help Manage Spend
  3. Create a Competitive Environment for Each Category

Lower Costs With Incumbent Suppliers

Ask your incumbent suppliers what you can do that will result in lower costs from them. Lower Cost can lead to a smaller Overhead-Rate which ultimately can lead to a reduction in overhead expenses. Work with your vendor as a team member – not as an adversary. If you can change a process or an ordering habit in your organization that reduces your vendor’s expense, then your vendor should reward you with lower prices which can lead to reduced overhead expenses.

Ask Vendor to Help Manage Spend

Ask your vendor to help you manage the spend. A proactive approach must be taken to reduce overhead expense. Are you leveraging the vendor’s platforms for ordering and managing information? Or can they track purchases by department and provide invoices already allocated to departments to ease the work of your Accounting Department? Can they inform you if employees do not follow established business rules (e.g., buy-off contract)? Do they have the technology to prevent your employees from buying off contract without proper approval?

Create Competitive Environment for Each Category

Create a competitive environment for each category. Let your team and vendors know that there are no “sacred cows“. Have someone other than the supplier’s daily contact manage the expense review process. This enables greater objectivity and keeps personal relationships out of the process. Then give suppliers all of the information they need to sharpen their pencils and minimize their risk. The more they know about your usage and requirements, the better. Customers who inspire confidence and minimize the suppliers’ risk are rewarded with the most aggressive pricing. Reducing overhead expense requires an understanding of both your personnel, as well as the vendor’s.

When you know your overhead and how much you need to reduce it by, you can add real value to your organization.

The CEO's Guide to Improving Cash Flow


Overhead Expense Reduction

Originally posted by Jim Wilkinson on July 24, 2013. 

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Payroll Accounting

See also:
Commission Accounting
PEO Arrangement Compared to Outsourcing Payroll
Direct Labor
Pension Plans
Federal Unemployment Tax Act (FUTA)

Payroll Accounting

Payroll Accounting is the function of calculating and distributing wages, salaries, and withholdings to employees and certain agencies. It is generally done through different documents such as time sheets, paychecks, and a payroll ledger. Payroll Accounting also involves the process of issuing reports to upper management, so that they are able to make informed decisions about the company’s labor-cost data.

Payroll Accounts

Below are some payroll basic accounts that are used in association with accounting payroll entries as well as a description of each one and the relevance towards payroll.

Assets

Cash is the petty cash account which is used to empty the accrued payroll account when the payroll is distributed to the company’s employees.

Liabilities

Accrued Payroll represents a liability calculated by taking the gross pay and subtracting all deductions, or the amount that is due to the employees.

Federal Income Taxes Withheld

This account serves as a deduction from the gross pay or payroll account. It is an accumulation of payroll taxes as a percentage amount which is due to the U.S. Government. Payroll tax rates differ from business to business.

Federal Insurance Contributions Act (FICA) Taxes Payable

The FICA Taxes Payable represents a liability that is due to the U.S. Government. It is then used to fund institutions like Medicare and the Social Security Administration.

Insurance Withheld

Insurance withheld is another deduction from the gross pay and represents a contribution to the employee’s insurance provided by the employer.

Note: Other voluntary payroll deductions and withholdings can be present like bond or stock withholdings that a company would use for investments on the employee’s behalf. Other deductions include union dues or pension funds that the company may hold for its employees.

Expenses

The payroll account is the gross pay that is calculated by a payroll accountant (i.e. the salary payment or the hourly rate times the number of hours worked).

Payroll Accounting Journal Entries

This is a typical accounting payroll example of journal entries when a company is calculating and distributing the payroll.

Account                           Dr.               Cr.

Calculation:
Payroll                           xxxx

Federal Income Taxes Withheld                       xxxx

FICA Taxes Payable                                  xxxx

Union Dues Withheld                                 xxxx

Bond Withholdings                                   xxxx

Accrued Payroll                                     xxxx
Distribution:
Accrued Payroll                   xxxx
Cash                                                xxxx

Payroll Accountant Duties

Oftentimes, companies outsource their payroll accounting to specialized firms. These firms can perform the same function for a much lower cost than if the company generated them in-house.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


There are six major job functions that the payroll department or specialized company must perform throughout the year, including the following:

1)  Compute gross pay (hourly or salary)

2)  Compute the total amount of deductions (FICA, taxes, etc.)

3)  Calculate the total amount due to employees i.e. the gross pay minus the amount of deductions.

4)  Authorize the amount of payments due to employees.

5)  Distribute the payroll once authorized.

6)  Issue reports to upper management concerning labor-cost data.

Accounting Payroll System

In the past, accounting payroll systems consisted of two journals. The first is the payroll journal. Then, the second is the payroll disbursements journal. Companies used the payroll journal to accrue for salaries and wages towards employees as well as government obligations withheld from the employee’s paycheck. Thus, companies used disbursements journal to pay off these accumulated accruals when they became due.

But thanks to computer systems like Peachtree and Quickbooks, they have combined both of these journals into a payroll ledger. Furthermore, you can outsource these payroll functions at a lower cost and efficiency for a company.

Guide to Outsourcing Your Business's Bookkeeping and Accounting


Payroll Accounting

Originally posted by Jim Wilkinson on July 24, 2013. 

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PEO or Outsource Payroll

See Also:
Advantages of a PEO
What is a PEO?
How to Select a PEO
Professional Employer Organizations FAQ’s
Service Department Costs

PEO or Outsource Payroll

Do you have a PEO or outsource payroll? Under the PEO Arrangement, there is a co-employment relationship in which both the PEO and the Business Owner have an employment relationship with the employees. Contractually, the PEO and the Business Owner allocate and share many of the traditional employer responsibilities and liabilities. For example, the PEO assumes responsibilities and liability for employment related matters such as Payroll and Payroll Taxes, Employee Benefits, Human Resources Management, and Safety and Risk Management. As a result, the Business Owner can concentrate 100% on growing their Business.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


Outsourcing is a contractual arrangement, absent an employment relationship, with a vendor (and its supervised personnel), for services, either on the customer’s premises or off-site at the vendor’s location, to perform a function or run a department that was previously staffed and supervised by the customer directly. Furthermore, examples include: Payroll Processing, Financial Auditing, Agent of Record Services, and Legal Services.

Today’s Professional Employer Organization (PEO) is a “hybrid” of all of the honorable characteristics of the Staff Leasing Business Model. In addition, combine it with all of the efficiencies of the Outsourcing Business Model.

Guide to Outsourcing Your Business's Bookkeeping and Accounting


If you’re interested in becoming the trusted advisor your CEO needs, then download your free How to be a Wingman guide here.

PEO or Outsource Payroll

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PEO or Outsource Payroll

Originally posted by Jim Wilkinson on July 24, 2013. 

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Single Member LLC Definition

Single Member LLC Definition

A Single Member LLC definition is a limited liability company with one member. It’s a type of entity that has caught on across the United States. It was created to satisfy emerging needs from the rapidly changing business world. One example of this is the owner/member requirements of limited liability companies. The owners are often not required to be individuals, citizens, or a specific type of business. This gives more flexibility to single member limited liability companies as well as conventional limited liability companies.

One LLC variable that varies from state to state is whether a husband and a wife can own a single member LLC. Some states allow this, while others prohibit it. As you can see, many questions and possibilities arise when forming this type of entity. If you are unsure, then seek professional advice to make sure that you are fully protected and acting within the law.

Why File For a Single Member LLC

LLCs have been very widespread since their invention. There are many different advantages of having an limited liability company. One of the broad advantages is the flexibility of taxes. Determine whether you want your LLC profit to flow-through to your personal income or whether it will be taxed as a corporation. The limited liability that this structure offers its members is another large advantage. LLCs’ liabilities are separate from the members as long as the corporate veil stays intact. One more significant benefit of limited liability companies is the ease of formation and lack of upkeep. LLCs have less stringent requirements than corporations and are faster, cheaper entities to form.


Download The CEO's Guide to Increasing Profits


Things to Consider First

If you’ve decided that an LLC or single member LLC is right for your business, then consider the following questions:

  • Will you be reinvesting a majority of profits into the business? If so, consider opting to be taxed as a corporation.
  • Are you going to do business internationally?
  • Is the single member LLC for you?
  • Are there multiple owners? Is your operating agreement thorough enough?
  • What are your state’s laws regarding LLCs?

The CEO's Guide to Increasing Profits: 5 Steps to a Profitable Business


See also:
Corporate Veil

Originally posted by Jim Wilkinson on June 6, 2014. 

Single Member LLC definition

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Mining the Balance Sheet for Working Capital

Mining the Balance Sheet for Working Capital

Let’s face it… There has been significant liquidity in the marketplace over the past couple of years. Debt and equity capital has been relatively easy to find and commercial banks have been very willing participants as capital providers; however, many of the commercial banks have admitted that this robust marketplace is a prolonged cycle and not a permanent or semi-permanent marketplace shift. By definition as a cycle, what goes up must come down.


Download The CEO's Guide to Keeping Score


Asset Based Lending Versus Commercial Bank Cash Flow Lending

Already, many of the commercial banks are starting to whisper about declining portfolio quality and tighter credit standards. This has been attributed to issues regarding the subprime mortgage market, rising energy costs, and other economic factors. These issues have resulted in some companies experiencing a weaker balance sheet and a decline in cash flow results.

As banks start to tighten their credit standards, many companies may find they have less access or no access to working capital from commercial banks. Banks may elect not to renew certain loans that come due. Also, companies that have tripped a covenant or are in a technical default may find that their commercial bank is not as patient and will ask to refinance that loan.

So, how can a company still access adequate working capital in a changing bank marketplace? One way is to go about mining the balance sheet assets through an asset based, working capital line of credit.

Comparison

Asset based lending is more common than ever and has become for many companies a more aggressive way to grow their business. Asset based lenders look beyond a company’s cash flow and balance sheet ratios to leverage the business assets for working capital purposes. They also provide an ease of doing business and typically have less restrictive operating covenants than commercial banks.

Commercial Banks

Commercial banks typically underwrite and grant credit by emphasizing in the following order:

1) Balance Sheet Strength/Cash flow

2) Management/Guarantors

3) Collateral/Assets

Asset Based Lenders

Asset based lenders assume there is some fundamental weakness to #1 above (at least by commercial bank standards) and then flips the above equation upside down. The result is asset based lenders typically underwrite or grant credit by emphasizing in the following order:

1) Collateral/Assets

2) Management/Guarantors

3) Balance sheet strength/Cash flow

By emphasizing the value of a company’s assets as security and collateral for a working capital line of credit, an asset based lender has greater patience and tolerance for the bumps in the road and inconsistencies in the marketplace that many companies will face on a regular basis. Asset based lenders typically will provide a revolving line of credit against accounts receivables and inventory as collateral. Many asset based lenders will also provide term loans against equipment and possibly real estate.

Obviously, asset based lending is not the answer for every company’s need for working capital. It’s because not all companies generate these types of assets. Companies selling at retail or on cash terms don’t typically generate commercial accounts receivable, which is the asset that most asset based lenders leverage as the base for a loan; however, if a company is involved in manufacturing, distribution and many of the service industries, then chances are they would generate the types of assets favored by asset based lenders.

Benefit of Asset Based Lending

The benefit of this type of lending is that the loan availability can grow as a company’s assets grow and, therefore, is not as restrictive as traditional commercial bank cash flow lending – especially in rapid growth situations. Since asset based lenders rely primarily on the company’s collateral versus its cash flow results, they embrace greater credit risk. They also accept inconsistent cash flow results versus commercial banks.

So as the marketplace changes and as commercial banks start to tighten up, remember that accessing adequate working capital may be as simple as mining the balance sheet through asset based lending.

The CEO's Guide to Keeping Score


See Also:
Categories of Banks
Working Capital from Real Estate

Originally posted by Jim Wilkinson on July 24, 2013.

Mining the Balance Sheet, Balance sheet for working capital

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Accounting Fraud Prevention Using Quickbooks

See Also:
Accounting Depreciation
Account Reconciliation
Cash Flow Projections
How to Develop a Daily Cash Report
Future of the Accounting Workforce

Accounting Fraud Prevention Using Quickbooks

A small business owner typically cannot afford to hire enough people to have proper separation of duties to gain the internal controls needed to prevent accounting fraud.

Using Internal Controls

Stephen King, CEO of GrowthForce, says that, “Internal controls can help reduce the risk of fraud, make it easier to train and manage staff, and help your company run efficiently by having solid processes and control activities in place.” The place where most companies encounter fraud is in their own company, so it’s critical that every company sets up internal controls and continues to update them as changes occur.


Download eBook The CEO's Guide to Reducing Fraud


Prevent Accounting Fraud

Every business owner can achieve accounting fraud prevention by taking these simple steps:

1. Open the Bank Statement Yourself

Every small business owner should receive the unopened bank statement. Then they should review each check for authorized payee and signature and approve electronic payments. Only after they do the above should they give it to the bookkeeper.

2. Don’t Let Your Bookkeeper Reconcile the Bank Account

The person who pays the bills should never reconcile the bank account. That’s how they cover their tracks. If you don’t have someone else to do it, then this is an easy function to outsource.

3. Close the Prior Accounting Periods

QuickBooks now has a way to lock down the prior periods. Once you produce a financial statement, that period should be “closed”. As a result, this reduces the risk of hiding a fraudulent transaction in a prior year.

4. Attach Scanned Images to Each Accounting Transaction

Most fraud occurs from check tampering. For example, the bookkeeper changes the payee to themselves. Prevent accounting fraud by scanning the bill and linking it to each accounting transaction inside QuickBooks. Thus, this makes it harder to fake a bill.

5. Set Up Username for Each User

QuickBooks now has an audit trail report which can never be turned off; however, if your staff login as “Administrator,” then you have no idea who made what entry. Set up a username for each user that way you can track who did what and when.

6. Restrict User Access

QuickBooks Enterprise Solutions has the ability to restrict access per user per screen. Make sure you have separation of duties between authorization, record keeping, and custodial responsibilities for each accounting transaction.

No system of internal control should be built on trust. The best accounting practice is to separate out the following functions: authorization, record keeping, and custodial responsibility for assets in each accounting transaction.

The CEO's Guide to Reducing Fraud


Originally posted by Jim Wilkinson on July 23, 2013. 

accounting fraud prevention using quickbooks

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The Future of the Accounting Workforce

See Also:
Accounting Income vs Economic Income
Accounting Fraud Prevention using Quickbooks
Accrual based Accounting
American Institute of Certified Public Accountants
Auditor

The Future of the Accounting Workforce

Firms who are hiring new accountants or accounting majors have to understand where the newer generations are “coming from,” as a Boomer (born 1946-1964) might say, to target a style that will bring out the next generation’s (the Millennial Generation’s) strengths and maximize their effectiveness. This involves discarding biases and preconceived notions and enjoying our generational differences—and similarities! The future of the accounting workforce is dramatically shifting as we learn more about the different generational preferences and work ethics. The rapid spread of information, more technology, and a culture that is changing faster than ever before will continue to shape the future of the accounting workforce.

A Shift in the Accounting Workforce

There is a shift in the accounting workforce occurring as Baby Boomers continue to retire and Millennials take over management roles in companies. Millennial workers grew up in a technology-driven world. The way we do business has changed dramatically over the last 2-3 decades. As a result, they often operate under different perspectives than older workers do. Companies across North America that recognize that the differentiator is their people will emerge as winners in the battle for talent; therefore, they’ll design specific techniques for recruiting, managing, motivating, and retaining them.

Another thing we are seeing in this accounting workforce shift is outsourcing the bookkeeping of the accounting department.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


Retirement of Baby Boomers

A notable demographic shift began in 2011 when the oldest Baby Boomers (b. 1946) hit the United States’ legal retirement age of 65. As Boomers continue to retire members, Generation X will take roles in middle and upper management, and, Millennials will take management positions in the workforce. That process has already begun since some members of Millennials in their mid 30s (if we use 1982 as the beginning of the Millennial generation).

Convergence of 3 Generations in 1 Workplace

Other scenarios that will become commonplace will include experienced Boomers reporting to Millennials, members of all 3 generations working side-by-side on teams, and, Millennials calling on Gen X clients. And, all this is going to happen while 3 generations (the Boomers, Gen Xers, and Millennials) continue the process of finding a way to get along in an uncertain workplace.

This has made all the more interesting given the gap between these two generations. For example, Gen Xers complain that the Millennials are indulged, self-absorbed, and overly optimistic, while Millennials charge that Gen Xers are cynical, aloof and don’t appreciate fresh ideas and idealism.

The Generational Gaps

A survey of 2,546 HR professionals (mostly Gen Xers with all 3 generations represented) across all industries (“Millennials at Work”) was conducted between June 1 and June 13, 2007. The results indicated that there were pronounced generational gaps in communications styles and job expectations in the workplace:

  • 49% of employers surveyed said the biggest gap in communication styles between Millennials workers and other workers is that Millennials communicate more through technology than in person
  • 25% said they have a different frame of reference
  • 87% said that Millennials feel more entitled in terms of compensation, benefits and career advancement than past generations
  • 73% of hiring managers and HR professionals ages 25 to 29 (Millennials) share this sentiment

Some of the examples of this behavior provided by the employers taking the survey included the following:

  • 74% said Millennials expected to be paid more
  • 61% said Millennials expected to have flexible work schedules
  • 56% said Millennials expected to be promoted within a year
  • 50% said Millennials expected to have more vacation or personal time
  • 37% said Millennials expected to have access to state-of-the-art technology
  • 55% said that Millennials have a more difficult time taking direction or responding to authority than older generations of workers did/do

Generational Preferences: Generation X and the Millennials

So, what is the answer to this frustration? Simply that the 3 generations, especially the Gen Xers and the Millennials, begin to understand and respect each other….

Generation X

There are 51 million members of the Generation X (also known as the “latch-key kids”). These Gen Xers:

  • Were born between 1965 and 1976
  • Accept diversity
  • Are pragmatic/practical
  • Are self-reliant/individualistic
  • Reject rules
  • Mistrust institutions
  • Are politically correct
  • Use technology
  • Are able to multitask
  • Are friend-not family oriented

Gen Xers want a casual/fun/friendly work environment that allows them to be involved, offers flexibility and freedom. They also want an environment where they can continue to learn.

It is important to remember that Generation X grew up in a very different world than previous generations. Divorce and two income families created “latch-key” kids out of many in this generation – which led to traits of independence, resilience, and adaptability.

As a result, it is commonplace to meet Gen Xers who don’t want “someone looking over their shoulder” in a work (or social) environment. They want and are comfortable giving immediate and ongoing feedback, work well in multicultural settings, and take a pragmatic approach to getting things done.

Work Ethic of Gen X

Gen Xers have redefined loyalty after seeing their parents face layoffs and experiencing the recessionary period in the early 1980s when jobs were scarce and job security was poor. As a result, they are committed to their work, to the team they work with, and to their boss, but not necessarily the company they work for. Unlike the Baby Boomer generation which would complain about their job but accept it, Gen Xers send their resume out and accept the best offer they can find.

But that does not mean that Gen Xers do not take their employability seriously. Their career choices are flexible, and they are willing to move laterally, stop and/or start over in their careers. Instead of a career ladder, they have more of a career lattice.

Since Gen Xers dislike authority and rigid work requirements, a hands-off relationship is necessary, coupled with giving ongoing feedback on their performance (it is best to keep them informed of your expectations and the measures you will be using to evaluate their progress) and encouragement to be creative and show initiative in finding new ways to get the job done (in fact, Gen Xers work best when they’re told what the desired outcome is and then told to achieve it). They prefer to work “with” you, not “for” you, and are eager to learn new skills because they want to stay employable.

This is really different from the way to treat Millennials…

The Millennial Generation

Millennials (there are 75 million of them!) are also known as the “Internet Generation.” They:

  • Were born between 1977 and 1998
  • Celebrate diversity
  • Are optimistic/realistic
  • Are self-inventive/individualistic
  • Like to rewrite the rules
  • Want a killer lifestyle
  • Have an irreverence for institutions
  • Are able to multi-task at a rate faster than any prior generation
  • Are nurtured/nurturing
  • Treat friends as family/love family

Unlike Gen Xers, Millennials want a structured, supportive work environment, personalized work, and an interactive relationship with their bosses. This group is technically literate like no one else since technology has always been part of their lives. They are typically team-oriented, work well in groups, are accomplished multi-taskers, and are willing to work hard with structure in the workplace.

They acknowledge and respect positions and titles, and want a relationship with their boss. But this is something that many Gen Xers are not comfortable with, given their desire for independence and their preference for a hands-off style.

Millennials believe that their success will be linked to their ability to acquire as wide a variety of marketable skills as they can, and are looking for mentoring, structure and stability in the firm they work in. Thus, they like to be managed and coached in a very formal process. For example, they like set meetings and a boss who acts like their boss. They also like lots of challenges. Effective management of Millennials requires that you break down their goals into steps and give them the necessary resources and information they’ll need to meet the challenge. In fact, successful managers often mentor Millennials in groups since they work so well in team situations. They use the opportunity to act as each other’s resources or peer mentors.

Understand the Trends that Molded Millennials

To understand the Millennials, it is important to understand the trends of the 1990s and 2000s that molded their behavior:

  • Focus on children and family in the early 90s
  • Scheduled, structured lives as a result of parents and teachers micromanaging their schedules and planning things out for them
  • Multiculturalism – kids growing up in the 1990s and 2000s had more daily interaction with other ethnicities and cultures than ever before
  • Terrorism, Heroism and Patriotism – The bombing Federal Building in Oklahoma City the Columbine High School killings and, the terrorist attacks on September 11, 2001, and the heroes who emerged from these dark days, all affected them and galvanized their sense of patriotism
  • Parent Advocacy – the Millennials were raised by involved parents who did, and often still do, intercede on their behalf

These trends coupled with the consistent messages their parents gave and the school system reinforced had a profound effect on the generation as a whole. Messages they received included:

  • Be smart—you are special
  • Be inclusive and tolerant of other races, religions, and sexual orientations
  • Connect 24/7
  • Be interdependent—on family, friends, and teachers
  • Achieve now
  • Serve your community

Work Ethic of Millennials

All of this has translated into a generation of employees with a different work ethic that is different from their Gen X colleagues/bosses.

From a work ethic standpoint, Millennials:

  • Are confident and have a “can-do” attitude
  • Are optimistic and hopeful, yet practical
  • Believe in the future and their role in it
  • Expect a workplace that is challenging, collaborative, creative, fun, and financially rewarding
  • Are goal and achievement oriented
  • Think in terms of the greater good and have a high rate of volunteerism
  • Are inclusive

Millennial Liabilities and Assets

Millennials’ liabilities include a distaste for menial work, poor people skills when dealing with difficult individuals, a tendency to be impatient, a lack of experience, and over-confidence.

Include in their assets the following facts:

  • Multi-task effectively
  • Goal orientated
  • A positive attitude
  • Work well with others

In fact, they work and learn best in teams. They also thrive in a structured environment that offers experiential learning.

What do Millennials Want from Employers?

So, what do Millennials want from their employers? Millennial want their bosses to:

  • Be the leader – specifically to behave with honesty and integrity and to be good role models
  • Challenge them and to offer them challenging, learning opportunities with growth opportunities
  • Let them work with friends and positive people in a friendly environment
  • Respect them
  • Be flexible
  • Pay them well

So, what do we do with all this information? Well, we have been giving lip service to the concept of internal customer service, specifically treating employees with the same respect and attitude we do customers. Thanks to the new generation, that is about to change – at least in successful firms.

This means leadership needs to learn to meet their high expectations, listen to their ideas despite their lack of experience, learn to respond in a positive/respectable manner than a negative one, and embrace their knowledge of technology (and not feel threatened by it). Learn from them.

Ideas for Managing Millennials

Companies such as Procter and Gamble, Siemens and General Electric have set up tutoring for middle-aged executives and or reverse mentoring programs so their executives can better understand new technologies.

Other changes companies are making include offering:

  • Flexible work schedules
  • More recognition programs
  • More access to state-of-the-art technology
  • Ongoing education programs

Guide to Outsourcing Your Business's Bookkeeping and Accounting


Sources
http://www.abanet.org/lpm/lpt/articles/mgt08044.html Generation X and The Millennials: What You Need to Know About Mentoring the New Generations by Diane Thielfoldt and Devon Scheef, August 2004
http://en.wikipedia.org/wiki/Generation_Y Generation Y
http://www.brandchannel.com/start1.asp?id=156 Who’s filling Gen Y’s shoe’s? by Dr. Pete Markiewicz, May 5, 2003 issue
http://www.usatoday.com/life/lifestyle/2006-06-28-generation-next_x.htm The ‘millennials’ come of age, 6/29/2006
http://www.cbsnews.com/stories/2007/11/08/60minutes/main3475200.shtmlThe “Millennials” Are Coming, Morley Safer On The New Generation Of American Workers, Nov. 11, 2007
http://humanresources.about.com/od/managementtips/a/millenials.htm Managing Millennials: Eleven Tips for Managing Millennials, by Susan M. Heathfield,
http://top7business.com/?id=3023 Top 7 Keys to Managing Millennials in the Workplace by Gretchen Neels.
http://www.abc.net.au/news/stories/2007/07/13/1978431.htm Generation Y disappoints employers by Liv Casben
Connecting Generations: The Sourcebook by Claire Raines, published 2003.
Managing Generation Y by Carolyn A. Martin, Ph.D. and Bruce Tulgan, published 2001.
Generation X by Charles Hamblett and Jane Deverson, published 1965

Originally posted by Jim Wilkinson on July 23, 2013. 


Be prepared for how the changes expected in the accounting workplace. But there are a few recruiting strategies that are tried and true – through all generations. Learn what they are in our 5 Guiding Principles For Recruiting a Star-Quality Team whitepaper.

future of the accounting workforce, Generational Preferences

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