Essay on Organizational Priorities and Accounting Procedures: Impact on Business

Introduction

An accounting procedure is systematic or standard that executes functions in the department of accounting (Arnold, 2015). Examples of such systems are the billing processes which details in collecting of information needed to write an invoice. Creation of the invoice and submission to the customers, calculating the employee payrolls and payment of invoices coming from their suppliers.

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A. How do the organization's financial and strategic priorities affect accounting procedures and business decisions?

The Microsoft Company uses two strategies which are revenue recognition and software capitalization. The revenue recognition principle is a guideline in accounting. Where the company's revenues get displayed in the income stated in the order of when it got earned and not by when the collection of the income was collected (Barbara, 2018). The revenues are the return allowances and the collected taxes from customers who are later transferred to government control. Most clients present their invoices after the completion of work, and regulators have a hard time determining what meets the qualification of revenue if all is not yet collected. It can affect accountability. International Accounting Standards Board outlines the standards which have deranged the processes. These standards have provided Microsoft with better earnings and cash alignment for customer contracts. That have been long term affected and has enhanced or made better comparability between the company and its peers. The company has also been able to account its software license revenue as from June 1, 2017, when it adopted the standards. The adoption of these standards resulted in an increase in revenue and early acquiring of income hence perfect running of companies operations as well as paying their employees standard salaries and on time. The standards set help in better decision making and judgment on revenues which has helped the company's growth (Barbara, 2018).

The company also uses software capitalization. These are cost such as software compensation, the testing of the software, and other damage capitalized on Microsoft balance sheet. It helps in accountability. It also helps in calculating the money spends by the company and subtracting it in the revenue to have excellent profits and maintenance of capital to support the growth of the company (Barbara, 2018). It helps in making the right decisions of maintaining and growing the company by having balanced accounts.

B. How might the organization better capitalize on nonfinancial factors?

There are accounting principles that the Microsoft Company uses that are approved by the United States of America government. The most nonfinancial structures that the Microsoft company employ is meeting the laws and requirements that are set. Matching the standards required as well as good practice. Better ways of recruiting and retaining their employees, boosting staff morale, and having a free great relationship with their clients or customers (Jensen, 2019).

The Microsoft Company can take into consideration the effects or impacts of their investments in the environment. The company might produce machinery that is energy saving as well as having an excellent reputation in society by providing quality materials. The Microsoft Company has tried in a considerable way to conserve the environment by using recyclable materials and has also participated mainly in the recycling programs that deal with their products. The company started the Reconnect program in partnership with Del in 2004. They developed centers where people can drop their used computers that get recycled for free (Grauf,2017. Through customer relationship management software has helped the company to learn the value of their customers. The company used this program to analyze their customer's preferences, opinions, and their purchasing habits. The company also issues warrants for their purchased goods. It enables their clients to own their purchases and do whatever they want with them. The company has been fighting the U.S. government over forwarding their warranties. The companies are trying to protect the privacy of other states to the national government, which is excellent for customer relation, trust, and reputation.

C. most significant internal risks to financial performance

Employee loyalty is very crucial in every company, and it is to the Microsoft Company. Ideas can be sold or leased to outside sources by an employee for personal advantages. It can affect the company significantly if an idea comes out before it is put into work so the company patents every thought. The company has a very skilled and intelligent person that can detect cybercrimes and hackers as well as tackling them. The company has invested in high profile personnel and pays them significant amounts of money to maintain them in their company because of other competing companies. The most significant risk that the company's CEO has highlighted lately is the release of warrants to the United Stated government that would breach the laws of the international markets. The orders will help the U.S. government to access the privacy of other country users. The company claims that the release of abstracts will lead to loss of many users which will affect the company negatively financially (Ahmadi, 2018). The matter is in the court, and the company has requested it not to give the government such rights as it will be breaking international laws.

References

Yen, H., White, M. J., Jeong, J., Arabi, M., & Arnold, J. G. (2015). Evaluation of alternative surface runoff accounting procedures using the SWAT model. International Journal of Agricultural and Biological Engineering, 8(3), 64-68.

Lyons, B., & Barbara Tarasovich, CPA, C. G. M. A. (2018). NEW REVENUE RECOGNITION RULES. Strategic Finance, 100(6), 36-45.

Jensen, H. B. (2019). Exploring the Financial and Accounting Reporting Standards and Principles under US GAAP (Doctoral dissertation, The University of Mississippi).

Solanki, S. K., Riethmuller, T. L., Barthol, P., Danilovic, S., Deutsch, W., Doerr, H. P., ... & Grauf, B. (2017). The second flight of the SUNRISE balloon-borne solar observatory: an overview of instrument updates, the trip, the data, and first results. The Astrophysical Journal Supplement Series, 229(1), 2.

Ronen, R., Radu, M., Feuerstein, C., Yom-Tov, E., & Ahmadi, M. (2018). Microsoft malware classification challenge. arXiv preprint arXiv:1802.10135.