Save on Airline Tickets with Advanced Purchases

Significant savings can be obtained by booking airline tickets in advanced.  A 2012-published survey by Egencia found that advanced purchases of airline tickets to several destinations could result in savings from 11% to 47%.  Purchases were at least 22 days in advance compared to near term travel purchases.  Click here to read the data in this survey (PDF file).

In Priceline (click here), I found that I could save from 31% to 87% if I purchased round-trip tickets from Baltimore to 4 destinations (Boston, Chicago, Denver, and Miami) four months in advance rather than a few days in advance.

However, special factors, such as advanced bookings to a destination when a seasonal or

well-publicized event is happening during the desired travel dates, might reverse this finding to where a purchase price is higher than lower for an advanced booking.

I also found that there was no material difference in purchase price whether through Priceline or directly from the airlines at their websites.   But, using Priceline is very convenient because several airline prices are shown in one search, from which the best price can be chosen.  Otherwise, each airline has to be searched separately.

No airline consistently had the lower price.   Airlines recognized as being low price carriers did not have more “lowest” prices than other airlines.  There was great variability between the airlines in who offered the lowest price.   Also, there was often a wide range between the lowest price and the highest price.

According to the Aberdeen Group report entitled “Travel & Entertainment Expense Management – Reducing Processing Costs & Improve Policy Compliance”, travel and entertainment expenses, on average, account for between 8% and 10% of total operating expenses.  The report provides several recommendations for a more efficient and effective management of a company’s travel needs.  As this report and the above data on advanced bookings suggest, policies and procedures related to a company travel needs can lead to significant cost reductions.  (Click here to read the Aberdeen report.) (PDF file.)

Determine Marketing Effects on Retail Sales Using a Control Chart

Small retailers should consider the use of a control chart to help determine whether a marketing campaign, such as offering discounts or gift cards, has any effects on sales.  Control charts can be used to show where a statistically significant variation from a normal pattern of events exists.  Daily sales totals are an example of a normal pattern of events.  If the daily sales totals increase by a statistical significant amount above the normal variation in sales from day to day, at the same time that a marketing initiative is implemented, the increase is likely due to the marketing initiative.  If no significant variation is seen, then the marketing initiative likely has had no effect on increasing total sales.

Control charts creation and use do involve some complexity, and therefore time is required in learning about and dealing with the complexity.  Certain aspects of the use of control charts and how best and how not to apply them can be beyond the abilities within a small retailer’s shop.  However, I believe other uses of control charts, for example, in charting daily sales against statistical significant limits variability for sales, could be within the resources that a small retailer might want to expend.  One reason for this is that accounting software, such as QuickBooks, can easily export daily sales data to Excel.  Once in Excel, a control chart, based on that daily sales data, should be relatively easy to create, after the initial understanding of how to do so is learned.

I did some Internet research to find a few websites that provide introductions to a basic use of control charts, using Excel to create control charts, and how control charts can be used with daily sales data to show effects, or lack of effects, of an external factor, such as a marketing camping, on the sales data.

This link (click here) takes you to a CPA Journal article that provides a basic definition of a control chart and what can be shown on a control chart.  Data points falling outside of the upper and lower control limits show that likely something is affecting the data other than normal variation. 

This link (click here) takes you to a ProfTDubYouTube video that demonstrates how to create a control chart in Excel.

This bizmanualz site (click here) uses a series of weekly sales data to demonstrate the various computations that are used in creating the average line, the upper and lower control limits, and the moving range average.  Graphs are used to show how these computed values are used on a control chart to reach conclusions about the graphed data.

Two websites show well how a control chart can demonstrate that graphed data is being affected by external factors.  Click here to go to a BPI Consulting site.  Go to the bottom to see how a control chart shows that on-time airline arrivals and departures have improved as of a certain date due to changes made by the airlines. That several consecutive data points fall on the same side of the average line indicates a non-normal variation.  The biamanualz site above provides more on this consecutive rule.  

The second website (click here) has an article written by Australians Phil Cohen and Onno van Ewyk that provides a clear explanation of how data points on a control chart might show unusual affects on the data.

My blog article here focuses on one use of a basic control chart – to show how daily (periodic) sales might be affected by an external event such as a marketing campaign.  Many more uses of control charts exist.  Their uses to show information about processes is only limited by the number of processes that exist and the need to gain some insights about those processes.

This article also deals with a very basic statistical used of a control chart, such that smaller retailers might be able to use a control chart with available resources.   Much more sophisticated uses of control charts, requiring much more sophisticated computations and statistics, have been developed, which also greatly extend the uses of control charts.

A lot can be found on the Internet about these additional uses of control charts.

Use Government Websites to Help Manage Record Keeping

Federal and state governments have record keeping requirements that small and large businesses are expected to meet.   If record keeping requirements exist, a government website almost certainly will identify, explain, and provide other details about the requirements. 

A good strategy for a company is to establish the correct record keeping policy, which it seems to me means spending enough resources on keeping the records to meet the company and government needs without spending more than the necessary resources.  In establishing this policy, the company should use the Internet to go to the government websites dealing with record keeping requirements in order to clarify with certainly what is needed and what is not needed.    Knowing the requirements at these websites will help to insure that sufficient, but not excessive, resources for record keeping are used.

Many functions in a business operation may, or do, require record keeping.  Some functions such as sales and employing workers have record keeping requirements for all businesses.  Other functions such as transportation, export-import, and safety-related activities have record requirements for those companies involved with the functions.   Regardless of the business operations that exist, government websites will provide the information needed to help optimally manage the record keeping requirements.

Provided below are some links to government websites that demonstrate what is available at government websites.

Sales, revenues, and income.   The Internal Revenue Service has established record keeping requirements related to these business functions.  And, the IRS has websites that explain these requirements. Click here and here to go to two such websites.

Employee records.  The US Department of Labor oversees federal record keeping requirements for hiring, paying, terminating, and other activities related to a company’s employing workers. Click here to go a DOL site from which employee record keeping requirements can found.

In addition to federal record keeping requirements related to income and employees, and other business functions, states may also have additional requirements.  State government websites will have these requirements.  As part of the company strategy to develop an efficient and effective record keeping policy, these state websites should also be researched.

Gift Card Concerns for Small Businesses

Gift cards have become very popular with customers and a successful retailer’s marketing tool.   Point of sales accounting systems, such as the QuickBooks Point of Sales software, make offering gift cards easy for small retailers.  (Gift certificates are included in the use of the term gift cards.)

After the gift card sale, small companies (as well as large companies) need to be concerned with correct accounting and that federal and state regulations are complied with.  Both of these concerns, accounting and compliance, can be easier dealt with successfully by using information found by searching the Internet.

Below are identified some websites that are good sources of information for addressing concerns that small company retailers might have with gift cards.

In 2009, the US Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act (the CARD Act).  A section of this act deals with gift cards.  A Federal Reserve Board (FRB) site provides an overview of how this act applies to gift cards.  Click here go to this FRB site.  Gift card rules in this act do affect how retailers account for gift cards.  For example, a gift card must be good for at least five years from the date of purchase.

In addition to this federal act, states may have rules that are applicable to gift cards.   Rules are usually associated with the states’ unclaimed property procedures.  Gift cards that are not used (redeemed) can represent unclaimed property to the issuing retailer.  Mary Bernard has written a short overview of aspects of unclaimed property laws affecting gift cards.  Click here to read this overview.  Small companies should read their state’s web pages dealing with unclaimed property procedures and how gift cards might be affected.  Searching on the terms unclaimed property and adding your state’s name should bring up a link to your state’s webpage dealing with unclaimed property, from which information on gift cards (certificates) might be found.

Three review articles dealing with gift card issues, including compliance with unclaimed property rules, are excellent sources of information.  The accounting firm Grant Thornton has an article on opportunities and issues for retailers in their use of gift cards.  One section deals with accounting for gift cards.  Click here to read this article (PDF file).  Another article, written by John A. Biek at CCH, delves into tax issues and unclaimed property aspects of gift cards.  Click here to read this article ((PDF file).  The third article, by Michelle Andre at KPMG, focuses on the issues of gift cards with respect to unclaimed property compliance.  Click here to read this article (PDF file).

Data Mining in a Small Company

Company data are some of the company’s most valuable assets.  Such data as customer and vendor lists and financial transactions are collected routinely and are critical to a company’s operations.  The data is used to show how the company is performing financially and in other important ways.  Company changes are based on decisions driven by what the data shows.

A key to company success is making changes based on what the data shows.  A primary responsibility of the company accountant is to analyze financial data for conclusions about needed changes.  Others in the company depend on company data to complete their tasks and to make decisions.

For these and other reasons, the company’s data is one of its most valuable assets.  The company would be wise to improve the use of this asset by thinking about new ways of using the data it collects and of looking for what may be in the data that provide important decision-making insights, but which has gone and can easily go unnoticed.

Data mining is a method of looking for what may be in the company data that provide important decision-making insights but which has gone and can easily go unnoticed.  Two websites provide good overviews of data mining.   At a Federal Reserve Bank of Boston site, Miriam Wasserman has an article giving examples of data mining use.  The Center for Data Insight at Northern Arizona University has an article entitled “A Perspective on Data Mining” that delves deeper into what data mining is and its use.  Both of these articles are dated but still provide some basics of data mining that continue to be true.  Click here and here (PDF file) to go to these articles.

Although data mining can involve a lot of resources in large companies, Microsoft has developed add-in technology for use with Excel that should make data mining more simple and double for a smaller company.  You can read more about the Microsoft’s data mining product by clicking here.  From this site, you can watch videos on the use of Excel and the data mining add-in.  Whitepapers are also available from this site on Excel and data mining.  YouTube has several videos on using Excel for data mining.  Search on “Excel data mining” at YouTube.

Even with the data mining add-in and it use with Excel, technical challenges requiring sufficient background and perhaps a steep learning curve can still exist.  In such a case, the small company might consider seeking an independent contractor to assist developing Excel for mining of the company’s data and to show unexpected and useful patterns for decision-making.

Risk Management (Online Purchasing as an Example)

A company should be concern with the risks that threatens the company.   Some of these risks occur when a company uses the Internet for purchases.   Although often these risks are small for most purchases, important risks can exist.

The practice of risk management is evolving into a more recognized, systematic (methodical) task within a company.  In a smaller company, the accountant might be the best (only) person to take on this task.  This is a task where a proactive, innovative accountant might add additional value and be recognized for it.

A good approach, it seems to me, to the task of risk management, such that the management is successful, is to recognize where risks exist, to understand the nature of these risks, and then to implement the policies and actions based on this understanding, which minimize the risks.  This approach can benefit from an expert, thorough research of the Internet to find appropriate information to better understand the risks.  This research often leads to recommendations on policies and actions to minimize the risks.

 Provided below are 3 websites that provide excellent information on the risks associated with online purchasing and steps to take to minimize the risks.

A site maintained by the non-profit Privacy Rights Clearinghouse has a list of precautions when purchasing online.  Click here to go to this site and these precautions.

The Bureau of Consumer Protection at the US Federal Trade Commission has a website with information to protect purchasers.  Click here to go to this website and then click “Computers & the Internet” for protections related to online shopping.

The Department of Homeland Security has a site that provides guidance and risks about Internet purchasing from other countries.  Click here to go to this site.

Understanding the information at these three websites is a good approach to implementing policies and actions in your company that will reduce risks related to online purchases.  Identifying these websites demonstrates the value of competent Internet researching in risk management.

Human Resource Management Information Sources

The small company accountant often ends up keeping the “official personnel folders” for the company employees.  And, along with this, comes many tasks that would be done by a human resource department, if one existed in the company.  But, since the company has no human resource department, the accountant is given the role.

Many of the tasks needed, such as payroll, records management, and regulatory compliance, can be well-handled by a skilled and willing accountant.   The accountant can be greatly assisted in this role by a willingness to seek out and use the many websites that have excellent information on the human resource functions and managing the functions.

The following identify some of these excellent sites and provides links to them.

A Wolters Kluwer site provides well-organized and easy to read information covering many functions that are needed in managing personnel.  Click here to go to this site.

The US Department of Labor (DOL) provides extensive information of probable use in personnel management issues and decisions.  Employment law and regulations can be found by clicking here.  DOL provides hundreds of job descriptions and 2010 median pay based on federal government surveys.  Click here to access this information.

Two sites useful for employee benefit-related information are the Employee Benefit Research Institute (EBRI) site and the BenefitsLink.com site.  At the BenefitsLink site, click on “Authorities” in order to find several links to government and other sites providing guidance on employee benefits.  Click here and here to go to the EBRI and BenefitsLink sites, respectively.

These are just a few of the many websites where you can find in-depth information on human resource/personnel management.

Although many human resource tasks can be carried out by the accountant, the accountant and other company leaders need to recognize those situations where the company should seek the advice of more skillful and knowledgeable persons, such as an employment attorney.