Responsibility accounting concepts and applications

Accounting

This report is about Internet LAN, Incorporated and the responsibility accounting of each project manager. In this highly competitive global 21st century economy, letting, or more accurately, making managers and project mangers manage through the act of controlling, budgeting and accounting the various aspects of their jobs has become the norm in the private sector. In other words, responsibility budgeting has become the method that has enabled a sense of empowerment for business leaders.

This report quickly describes how the concepts of responsibility accounting influence Internet LAN and the report will also attempt to identify how and where specific managers and project mangers can be held responsible for revenues, costs, or other organizational activities. Undoubtedly, these new responsibilities regarding the accounting have created situations where mangers are forced to use their collective intelligence to create positive outcomes for the business and also creating value by establishing and sustaining mutually beneficial relationships with both internal and external customers and suppliers.

Internet LAN, Inc. installs Local Area Network for Childcare Centers and other small businesses and their projects usually are completed over the course of a few weeks. Internet LAN, Inc.'s project managers are in charge of all aspects of a project which includes negotiating for the needed contractors and specialty employees, specialized software and hardware acquisition and any additional issues associated with each unique project. Responsibility budgeting is therefore a critical aspect of the overall success and profitability of each project because of the many detailed aspects related to the structural, procedural monitoring and reporting of each specific project.

Consider that each project's hardware and software costs need to be favorable and this is just one responsibility of the project manger. When there is an overrun in an electrician's contractor fees or some other issue that is not controlled by the project manger, the project could come in over budget and cause additional cost-control problems.

Poor estimating of an original wiring scheme for example could create delivery delays or a need to push a project's wiring portion into an unacceptable overtime scenario. Thus, any unforeseen delays push costs and the project out of control. This means that responsibility budgeting for the organization requires the project manger to be able to establish deadlines and insure that each project meets its deadlines under or near budget. When this occurs, each satisfied customer usually provides a plethora of positive word of mouth advertising for future projects. Late or over budget projects usually entail the company receiving some verbal or written complaint that stains the company's reputation in the business community.