In Pursuit of Profit
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The word ‘downsizing’ is often accompanied by a cloud of negative connotations, but it is rarely the result of poor employee performance or leadership mismanagement. Instead, downsizing usually results from other factors like an economic slowdown, overcrowded market, plant closure, or manufacturing outsourcing. Downsizing is simply part of running a business, just like managing rapid growth, which means that leadership must plan, manage, and execute it correctly. At the most basic level, managing downsizing requires four steps: developing selection criteria, determining how much notice to give, providing outplacement support to employees that have been let go (where applicable), and protecting employee productivity and morale among retained workers. These activities are typically considered part of HR’s purview, but downsizing has implications that trickle down into other areas of the business. There are numerous bookkeeping implications during downsizing as well.
Remote work has always been an attractive proposition to employers because they can maintain productivity while cutting costs. Prior to 2020 having a remote workforce was an optional decision. Despite the benefits, many companies still chose to maintain employees in-house to foster a positive organizational culture and reduce technology needs. However, the recent pandemic has proven that external factors can influence the workforce at any time. This has necessitated organizations to be ready to manage the challenges that accompany virtual work even if they do not plan to have employees working remotely permanently. Managing a remote workforce creates numerous barriers to “business as usual.” Cultural shifts occur, technology demands increase, security risks arise, performance criteria change, and bookkeeping must keep up as well.
Business owners frequently wrestle with determining which activities should be outsourced to a freelance bookkeeper or accounting company. Budgetary restrictions can limit a company’s ability to outsource financial tasks, as can concerns over delegating duties. In these instances, it often makes sense to offload tasks that will have the greatest ROI first, and then include others later as means allow.
While many industries have their own accounting nuances, churches utilize entirely different principles and practices. As a result, their financial needs are far more complex than many other similarly sized organizations.
Churches and businesses view revenue generation differently, use revenue differently, and report revenue differently. Churches need money to operate; however, unlike businesses, their primary goal is not to generate revenue. Instead, they collect money to pay for operational expenses, fund campaigns, and support their ministries. Furthermore, a church does not have shareholders, so any excess income is not paid out – it is reinvested to advance its mission. This is reported on a “statement of activities” instead of an income statement like a traditional business. |
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7/14/2020