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Accounting Applications

Presented by:

Jacqueline BellMatthew Cleary

Sean HealyYuanhan Hu

Case 1

Colleen Sauer • Corporate Resource

Accounting Manager

• Oversees accounting for:• Facilities• Supply Chain• Legal Dept.• Finance Dept.• Executive Dept.• Human Resources

APS Accounting

Product measured by megawatt hours

Inventory method = FIFO

Arizona Corporation Commission sets pricing

Computer automatically tracks inventory and

ledgers

DL tracked through HR ledger

Labor divided by capital and operating expenses

Overhead automatically charged to its own ledger

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Profitability• 11 Main Power Plants• Include Nuclear, Natural-Gas, and

Coal• Solar and Renewable Energy projects

began in 1996• Regular Profit Analysis Reports• Utilize most profitable plants to fill

demand• Variables:

• DM prices• DL wages• Seasonal demand• Plant efficiency

Work Order Management System

Direct feed to general ledger

Tracks all labor

Materials applied to specific job

Utilize Oracle’s Hyperion software

Tracks actual vs. master and flexible budgets

Tracks variances

Reforecasts

BudgetingCosting

Managerial DecisionsHead count layoff within divisions to cut costs and increase profitability

Outsource some HR functions to external company

Regular trending reports based on employee activity performance

Performance Evaluations

Individual employee sets goals and tracks progress

Managers collaborate and rate employee performance

Monthly evaluations

Goal system at all levels of company

Raises and bonuses tied to ratings

Case 2

Mary Healy

• Former VP of Corporate Finance

• Former VP of Investor Relations

Capital Investments

Project sales in underdeveloped areas

Determine costs

Set long-term hurdle for investment

Analysis based on projections

Corporate perspective

looks at countries as markets

Strategic placement of stores

Can weather short-term losses for long-term profits

Does not use equity to finance investments

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Costs• Profit and Loss Reports (P&L) from

store level to national level• P&L based on sales volume• DM and DL as percentage of sales

volume• DM ordered based on predicted sales

volume• Overhead like health insurance is

allocated• Product profitability based on sales

volume• New customers vs. existing

changing order to new product• Analyzed at regional level

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Budget and Analysis• Different systems for different levels• Store level analyze P&L Reports• Corporate level analyzes cash flows

• National/Regional markets• Analyzed monthly

• P&L Reports for administrative departments

• Distinct Financial Reporting Department

• Supply Chain Department forecasts food costs and tracks throughout year

Managerial DecisionsHundreds of new stores open annually

Likes to invest in underdeveloped areas for long-term potential profit

Less profitable stores close regularly

“Natural pruning of the base”

Performance Evaluations

Benchmarks based on store sales

Store sales compared to others in same area

Bonuses based on performance (financial/nonfinancial metrics)

Many different metrics used to evaluated individual performance

Set personal goals with manager

Metrics include: increase in income, increase in equity, profitability

Suggestions

Improve quality of employees to improve efficiency

Engage employees in suggestions and decision-making

Strengthen post-sale service to increase customer retention

Questions?