A presentation about setting up and operating a corporation

1. Setting Up, Managing, and Operating a Corporation 1

3. Sole Proprietorship- Slides 5-7

4. Partnerships- Slides 8-10

5. Franchise- Slides 11-13

6. Corporations Slides 14-22

7. Shareholders and Stockholders- Slides 23-25

8. How to Set Up a Corporation – Slides 26-27

9. Articles of Incorporation – Slides 28-30

10. Bylaws- Slide 31

11. Company Handbooks- Slides 32

12. Groups & Teams- Slides 33-44

13. Outsourcing & Backsourcing- Slide 45

14. CEO- Slides 46-54

15. Agent of Service- Slides 55-57

16. Board of Directors- Slides 58-60

17. Secretary- Slides 61-70

18. Secretaries- Slides 76-77

19. Accounting & Financing- Slides 78-131

20. Human Resources- Slides 132-143

21. Information Technology- Slides 144-159

22. ERP- Slides 160-171

23. Operations & Logistics- Slides 172-180

24. Sales & Marketing- Slides 181-191

25. Legal Department- Slide 192

26. Closing- 193

27. References - 1942

28. Table of Contents 3

30. The main reason for incorporation of the production company is limited liability.

31. No business is worth losing everything you own

32. Incorporation will lead to a more successful company

33. Small business owners can incorporate as well as other business owners4

35. Examples would be: a word processing service out of your home- a website- a restaurant- your own car repair center

36. Usually fits the needs of the community

37. 72% of businesses in America are sole proprietorships 5

39. Being your own boss

40. Pride of ownership

41. Leaving a legacy

42. Retention of company profit

43. No special taxes6

45. Limited financial resources (in most cases but not all)

46. Management difficulties

47. Overwhelming time commitment

48. Few fringe benefits

49. Limited growth

50. Limited life span7

52. Two or more people legally agree to become co owners of a business

53. Make up 8 % of businesses in America8

55. More financial resources

56. Share management and pooled/complementary skills and knowledge

57. Longer survival

58. No special taxes9

60. Division of profits

61. Disagreements among partners

62. Difficult to terminate 10

64. A franchise can be a sole proprietorship, a partnership, or a corporation.

65. Examples of a franchise: McDonald’s, 7 Eleven, Holiday Inn, etc… 11

67. Personal Ownership

68. Nationally recognized name

69. Financial advice and assistance

70. Lower failure rate12

72. Shared profit

73. Management regulations

74. Coattail effects

75. Restrictions on selling

76. Fraudulent franchisors13

78. Corporations can fit into more than one category

79. Two most common types of corporations are S corporations and C corporations14

81. S Corporation- a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships. 15

83. Domestic corporation- does business in the state in which it’s chartered(incorporated)

84. Foreign corporation- does business in one state but is chartered in another. About 1/3 of all corporations are chartered in Delaware because of its relatively attractive rules for incorporation. A foreign corporation must register in states where it operates.16

86. An open (public) corporation- sells stock to the general public. General Motors and Exxon/Mobile are examples of public corporations

87. Quasi Public corporation- chartered by the government as an approved monopoly to perform services to the general public. Public utilities are examples of quasi public corporations17

89. Nonprofit corporation- one that does not seek personal profit for its owners

90. Multinational corporation- a firm that operates in several countries18

92. More money for investment

93. Size

94. Perpetual life

95. Ease of ownership change

96. Ease of drawing talented employees

97. Separation of ownership from management19

99. Double taxation

100. Two tax returns

101. Size

102. Difficulty of termination

103. Possible conflict with stockholders and board of directors

104. Initial cost 20

106. Stock can be privately held or publicly held

107. Privately held stock is usually only offered to a few individuals

108. Publicly held companies can publicly trade or sell to many or a few individuals.

109. Can be closely held or widely traded

110. Stock decisions must be included on the Articles of Incorporation when applying for corporate status.21

112. Non profit corporations are non stock corporations

113. A for profit corporation may be a non stock corporation for several reasons: The corporation may be closely held or owned by a few individuals who have no interest in selling shares The corporation may be formed for a single short term purpose The corporation may be set up as a non profit with members instead of shareholders 22

115. Shareholders are the owners of a company. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly(they won’t lose anything more than the investment in stocks- they can’t lose any personal belongings).

116. Shareholders can not lose anything other than their investment in the company. 23

118. The right to vote on matters such as elections to the board of directors. Usually, stockholders have one vote per share owned, but sometimes this is not the case

119. The right to propose shareholder resolutions

120. The right to share in distributions of the company’s income

121. The right to purchase new shares issued by the company

122. The right to a company’s assets during a liquidation of the company.24

124. Deciding between privately held or public stockholders is up to the owner

125. Companies typically provide all the necessary proofs to shareholders to show that they are investing at a right place25

127. Register as a foreign corporation in your actual home state after incorporating in Delaware if that is where you choose to register

128. Consult an attorney specializing in this area 26

129. Six Steps to Getting Started Create the corporation’s Articles of Incorporation Determine which type of corporation you want to create. Consider registering your corporation in Delaware File those Articles with the Secretary of State of the state in which you choose to be headquartered Submit a check with the Articles of Incorporation. Processing fees for this service vary by state Register as a foreign corporation if you will be doing business in any states not designated as your home state. 27

130. Articles of Incorporation Articles of Incorporation are a document filed with a U.S. state by a corporation’s founders, describing the purpose, place of business, and other details of a corporation– also called a charter. 28

132. The names of the people who incorporate it

133. Its purposes

134. Its duration (usually perpetual)

135. The number of shares that can be issued, their voting rights, and any other rights the shareholders have

136. The corporation’s minimum capital

137. The address of the corporation29

139. The names and addresses of the first directors

140. Any other public information the incorporators wish to include30

142. Director’s authority

143. Duties and responsibilities of officers, and the length of their service

144. How stock is issued (private of public)

145. Other matters, including employment contracts31

147. Policies, Practices, and Procedures for each employee and each department

148. Mission Statement

149. Ethical Guidelines32

151. Teams: Individuals generating positive synergy through coordinated efforts. Several individuals whose individual efforts result in a level of performance that is greater than the sum of those individual inputs.33

153. Formal group: Groups defined by the organization’s structure, with designated work assignments establishing tasks. The behaviors are stipulated by and directed toward organizational goals.

154. Informal group: Alliances that are neither formally structured nor organizationally determined. 34

155. Five Stages in Groups Forming Storming Norming Performing Adjourning 35

157. Smooth processes

158. High performance

159. Successful results

160. Satisfied employees 36

162. Work Teams provide services, negotiate deals, coordinate projects, offer advice and make decisions37

164. Self Managed Work Teams

165. Cross Functional Teams

166. Virtual Teams38

168. Share ideas or offer suggestions on which work processes and methods can be improved

169. Rarely given authority to unilaterally implement any of their suggested actions39

171. Tasks include: planning & scheduling of work- assigning tasks to members- collective control over the pace of work- making operating decisions- taking actions on problems- working with suppliers and customers

172. Select their own members

173. Members evaluate each other’s performance40

175. Examples would be: a task force- committees composed of members from across departmental lines- the large task force IBM created made up of employees from across departments in the company to develop its highly successful System 360

176. Allow exchanging of information- developing new ideas- solving problems- and coordinating complex projects41

178. Early stages of development are time consuming

179. Members must learn to work with diverse and complex individuals

180. Building trust is not easy42

182. Collaborate online using communication links wide area networks- video conferencing- or emailing whether a room apart or continents apart

183. Do everything other teams do such as: share information- make decisions- complete tasks- include members from within or outside of the organization43

185. Three factors differentiating virtual teams from face to face teams are:The absence of paraverbal and nonverbal cues Limited social context Ability to overcome time and space constraints 44

187. Outsourcing- the subcontracting a process, such as product design or manufacturing, to a third party company- the transfer of a business function to an external service provider- contracting work to an outside supplier

188. Backsourcing- the bringing of services back into the organization after they have been outsourced. 45

190. Highest ranking officer in the organization

191. Reports to the board of directors

192. Responsible for everything

193. Delegates responsibilities

194. Sets the overall strategy for the company

195. Responsible for management46

197. Appoints other managers to assist in carrying out the responsibilities of the organization

198. Held accountable for organizational performance47

200. Motivates employees

201. Carries out strategic plans and policies

202. Top CEO’s are paid about 10 ½ million a year

203. Should have education in business-communication and/or law

204. Has total authority to hire & fire with checks and balances or course 48

205. Chief Executive Officer (CEO)’s Two Major Functions Direct and execute all activities of the association either directly or through delegated authority Provide leadership in these and other areas: the creation of strategic, tactical, and financial plans; developing goals and measuring performance to the approved goals; organizational development; liaison to the public, government, affiliated organizations, and other stakeholders; develop member services and member development; the development of the association’s staff 49

207. Advises the Board

208. Advocates/promotes organization and stakeholder change related to organization mission

209. Supports motivation of employees in organization products/programs and operations

210. Visionary/Information Bearer

211. Ensures staff and Board have sufficient and up-to-date information

212. Looks to the future for change opportunities

213. Interfaces between Board and employees

214. Interfaces between organization and community

215. Decision Maker

216. Formulates policies and planning recommendations to the Board

217. Decides or guides courses of action in operations by staff50

219. Oversees operations of organization

220. Implements plans

221. Manages human resources of organizations

222. Manages financial and physical resources

223. Board Developer

224. Assists in the selection and evaluation of board members

225. Makes recommendations, supports Board during orientation and self-evaluation 51

227. Provide leadership in the development of the association’s statement of vision, mission, and goals, and the corresponding strategies, plans, and budgets to achieve them

228. Ensure the development of priority plans, performance measurements, management controls, and critical success factors

229. Review approved plans and budgets as part of the annual planning and budgeting cycle and present recommendations to the board of directors and/or the appropriate committee

230. Develop and provide appropriate policy recommendations for consideration by the board

231. Ensure that an annual plan and budget are prepared for and presented to the board of directors52

233. Present a written report to all board meetings

234. Develop and maintain an effective staff organization which provides appropriate policy and program recommendations for consideration by the board and its committees, and which delivers services, programs and information beneficial to the members

235. Hire, reward, discipline, terminate, and set the remuneration of, all association employees except for him/herself, in accordance with policy and/or approved budgets

236. Identify, document, and articulate the needs of members to geographic sub-units, committees, and other forums which exist to serve member needs53

238. Maintain the necessary contacts to keep abreast of emerging issues of significance to the association management profession

239. Act as the spokesperson for the association

240. Serve as ambassador for the association to relevant organizations in Canada and internationally

241. Perform such other duties as are prescribed in writing from time to time by the board of directors

242. Typically a non voting director and officer of the association

243. May be a non-voting ex officio member of all committees, councils, task forces, and other member forums appointed or established by, and accountable to, the board of directors

244. Usually the representative of the association as the employer of paid staff and solely responsible for establishing compensation and benefits, and the hiring and release , of the association's employees54

246. Also called the registered agent

247. Mandatory

248. Must be named in the Articles of Incorporation

249. Can be the owner

250. Can be anyone in the organization who agrees to take on the responsibility55

252. Summons

253. Complaints

254. Subpoena’s

255. Order to show cause writs

256. Notice to quit premises

257. Other legal documents56

259. Must deliver the summons of complaint to the defendant

260. Could be an outside law firm

261. Could be someone in the legal department of the corporation57

263. Must (or usually) consists of an odd number of members

264. Activities and duties are determined by the powers, duties and responsibilities delegated to it or conferred on it by an authority outside itself

265. The responsibilities and/or duties are typically detailed in the organizational bylaws58

267. The board acts on behalf of the organization’s full assembly

268. The full assembly usually choose the members of the board

269. In a stock corporation the board is elected by the stockholders59

271. Governing the organization by establishing broad policies and objectives

272. Selecting, appointing, supporting, and reviewing the performance of the CEO (no termination without just cause- post conditions in handbook)

273. Ensuring the availability of adequate financial resources

274. Approving annual budgets

275. Accounting to stakeholders for the organizations performance 60

277. Reports to the board of directors

278. Organizations are required by law to maintain certain records for several purposes including:

279. Accurate recollection of decisions

280. Determination of eligibility to vote

281. Continuity of policies and practices

282. Accountability of directors and officers61

284. Ensuring that accurate and sufficient documentation exists to meet legal requirements

285. Enable authorized persons to determine when, how, and by whom the board’s business was conducted

286. Records minutes of meetings

287. Ensures accuracy and availability

288. Proposes policies and practices62

290. Performs other duties as the need arises as defined in the bylaws

291. Accountable to the Board of Directors63

293. Minutes: Accurate minutes of meetings are taken and approved and should include:Date, time, & location of meeting List of those present and absent List of items discussed List of reports presented Text of motions presented and description of their dispositions ‘ The secretary signs a copy of the final, approved minutes and ensures that this copy is maintained in corporate records 64

296. Bylaws: The Secretary ensures that an up to date copy of the bylaws is available at all meetings66

298. Meetings: The Secretary participates in Board meetings as a voting member. Provides items for the agenda as appropriate67

301. Note 1:The definition and duties use the word "ensure" to convey the intent that accountability for the specified responsibilities lies with the Secretary but it is not necessarily the Secretary who carries out the activity. Indeed, we expect that many of these responsibilities will be delegated to board committees, staff, or others including experts retained for a specific purpose. The word "ensure" is not intended to imply any additional source of legal duties beyond those that are required by law.69

304. Considered entry level positions but play a major role in the daily operations of an organization

305. Besides performing clerical tasks such as typing, photocopying and faxing secretaries conduct research and prepare large scale reports among other things mentioned (next slide)71

307. Performing clerical duties

308. Schedule meetings

309. Organize paperwork and electronic files

310. Manage projects

311. Creating spreadsheets as necessary

312. Composing correspondence within the office

313. Managing a database and developing presentation or reports using publishing software and digital graphics72

315. Open., scan, read and distribute mail

316. Compose official correspondence for supervisors signature, disposes of routine correspondence

317. Screen phone calls; provide information or refer callers to appropriate staff members; answer inquiries

318. Receives visitors; answer inquiries personally or refer to appropriate official (s) 73

320. Independently researches, assembles and summarizes material, information and data for administrative board or commission consideration and action; takes and transcribes dictation of confidential, technical and legal material requiring a high degree of accuracy; records and transcribes proceedings of meetings and conferences74

323. Human Resources

324. Information Technology

325. Operations and Logistics

326. Sales and Marketing

327. Legal76

331. Buying and selling goodsand services

332. Acquiring insurance

333. Paying employees

334. Using supplies78

336. Head of Accounting Department

337. The executive who is responsible for financial planning and record keeping for a company

338. Delegates responsibilities if necessary

339. Professionally qualified accountant

340. Many CFO’s have a Master of Business Administration but no qualified accountancy qualification such as Certified Public Accountant status

341. Hires the employees in the Accounting Department

342. Answers to the CEO79

344. Tax Accountant

345. Director of Accounting & Financing/Controller

346. Chief Financial Officer

347. Financial Planner/Budget Specialist

348. Cost Accountant

349. Financial Planning Manager

350. Financial Planner/Budget Specialist

351. Administrative Assistant (a secretary)

352. General Accountant

353. General Accounting Supervisor

354. A/R Clerk

355. Payroll Manager

356. Payroll/Tax Clerk

357. Former IRS employee

358. Auditors

359. Certified management Accountant

360. Private Accountant

361. Public Accountant

362. Certified Public Accountant

363. Certified Internal Auditor

364. A bookkeeper80

365. Accounting and Financing 81

367. Help managers evaluate the financial condition and operating performance enabling well informed decisions to me made

368. Report financial information to people outside the firm such as: Owners Creditors Suppliers Investors The government 82

369. Five working areas of accounting Managerial Accounting Financial Accounting Auditing Tax Accounting Government and non profit accounting 83

371. Concerned with measuring and reporting costs of:

372. Production

373. Marketing

374. Cost accounting

375. Preparing budgets

376. Checking if units or departments are staying within budgets

377. Designing strategies to minimize taxes84

379. Information goes to:

380. Prospective owners

381. Creditors & Lenders

382. Employee Unions

383. Customers

384. Suppliers

385. Government agencies

386. General Public 85

388. Information usually contained in the company’s annual report

389. Information must be accurate

390. Financial Accounting Standards Board defines the set of generally accepted accounting principles accountants must follow86

392. Ensures that proper accounting procedures and financial reporting is being carried out within the organization

393. Examine the financial health of an organization as well as operational efficiencies and effectiveness87

395. Tax accountant: an accountant trained in tax law and responsible for preparing tax returns or developing tax strategies

396. Taxes are the price we pay for roads, parks, schools, police protection, the military, and other functions provided by the government.

397. Federal, state, and local governments require submission of tax returns that must be filed at specific times & in a precise format88

399. Tax Accountants must continually monitor tax laws89

401. Governments require an accounting system that satisfies the needs of their information users.

402. The primary users of government accounting information are citizens, special interest groups, legislative bodies, & creditors.90

404. GASB sets the government accounting standards

405. FBI, IRS, Missouri Department of Natural Resources, & Cook County Department of Revenue are a few government agencies offering career possibilities in accounting.91

407. Contributors want to see where there money is being spent92

409. Bookkeeping: the recording of business transactions

410. Bookkeeping is important in financial reporting but accounting goes far beyond the mere recording of financial information

411. Accountants classify and summarize financial data provided by bookkeepers, and then interpret the data and report the information to management as well as suggest strategies for improving the financial condition and progress of the firm93

413. Accountants are important in financial analysis and income tax preparation94

415. Dividing all of the firm’s transactions into meaningful categories such as: sales documents, purchasing receipts, & shipping documents

416. Keep information organized and manageable

417. Recording financial data from the original transaction documents into record books called journals

418. Bookkeepers record all there transactions into two places( the journals and ledgers) 95

420. Requires the work of the bookkeeper and the accountant

421. The first three steps are continualAnalyzing and categorizing documents Putting the information into journals Posting that information into ledgers Preparing a trial balance Prepare the financial statements (including balance sheet, income statement, and statement of cash flows) Analyze the financial statements and evaluates the financial condition of the firm Note: Computers and accounting software have simplified this process considerably 96

423. Financial information & transactions can be recorded by hand or by computer

424. Accounting software packages include programs that handle tasks involving:

425. General ledgers

426. Sales processing

427. Accounts receivable

428. Purchase orders

429. Accounts payable

430. Cash flow analysis

431. Inventory control

432. Tax returns (tax accounting software)

433. Tax planning (tax accounting software)97

435. Business Vision 32 (Softline)

436. BusinessWorks (Best Software)

437. Small Business Manager (Microsoft/ Great Plains)

438. M.Y.O.B. (M.Y.O.B. Software)

439. Oracle Small Business Suite (formerly Netledger)

440. Peachtree Complete Accounting 2004 (Best Software)

441. QuickBooks for the Web (Intuit)

442. QuickBooks Pro 2002 (Intuit)

443. Simply Accounting (ACCPAC International)

444. Vision Point 2000 (ACCPAC)98

446. ACCPAC Advantage Series Corporate Edition (ACCPAC International)

447. ACCPAC ProSeries (ACCPAC International)

448. Accountmate (Softline)

449. BusinessVision 32 (Softline)

450. SYSPRO (SysproUSA)

451. MAS 90 & MAS 200 (Best Software)

452. Navision (Microsoft)

453. Solomon (Microsoft)

454. SouthWare Excellence Series (SouthWare)

455. TRAVERSE (Open Systems)99

457. ACCPAC Advantage Series Enterprise Edition (ACCPAC International)

458. ACCPAC ProSeries (ACCPAC International)

459. Axapta (Microsoft Software)

460. Epicor (Epicor Software)

461. e-Business Suite (Oracle)

462. Great Plains (Microsoft)

463. SYSPRO (SysproUSA)

464. MAS 500 (Best Software)

465. Navision (Microsoft)

466. Solomon (Microsoft) 100

468. ACCPAC Executive Series (ACCPAC)

469. Axapta (Microsoft)

470. Epicor (Epicor)

471. MAS 500 (Best Software)

472. Great Plains (Microsoft)

473. Lawson Enterprise 400 (Lawson Software)

474. One World (J.D. Edwards)

475. Oracle Financials (Oracle)

476. PeopleSoft (PeopleSoft)

477. SAP R/3 (SAP)101

479. older technology

480. Proprietary technology

481. Lack of support

482. Lack of adequate size customer base

483. Lack of distribution channel

484. Poor performance on a local area network

485. Bugs

486. Missing modules

487. Missing key features

488. Lack of capital102

490. The product must have underlying technology

491. The product must have a good company & leadership behind the product

492. The product must have strong financial reporting capabilities

493. The product must have a sizable customer base

494. The product must have a well developed & knowledgeable VAR channel103

496. The product must have a well developed offering of third party add on products

497. There should be a minimal number of missing features

498. There should be no significant problems (such as missing modules, etc) 104

499. Articles to Read on Accounting Software 1. 10 Step Blueprint for Evaluating and Selecting Entry Level Accounting Software2. 25 Step Blueprint for Evaluating and Selecting Mid-Range to High-End Accounting Software3. Listing of 50 Key Features4. Feature Table5. ASA Power Rating Based Upon 350 Key Features6. A Discussion About Evaluating Accounting Software 105

503. Although hiring professionals to do the job- knowledge is power and if you know every aspect of your company your organization will be more successful

504. Before owning a place such as McDonald’s the owners are required to know everything from making an ice cream cone to bookkeeping. The same should apply for owning your own corporation.

505. Chapters about accounting – sample balance sheets & income statements will be attached to the paper accompanying this power point. 108

506. Important Accounting and Bookkeeping Terms managerial accounting Accounting used to provide information and analyses to managers within the organization to assist them in decision making. certified management accountant (CMA) A professional accountant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accountants. financial accounting Accounting information and analyses prepared for people outside the organization. annual report A yearly statement of the financial condition, progress, and expectations of an organization. private accountants Accountants who work for a single firm, government agency, or nonprofit organization. public accountant An accountant who provides his or her accounting services to individuals or businesses on a fee basis. certified public accountant (CPA) An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants auditing The job of reviewing and evaluating the records used to prepare a company’s financial statements. independent audit An evaluation and unbiased opinion about the accuracy of a company’s financial statements. certified internal auditor (CIA) An accountant who has a bachelor’s degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors. 109

507. Important Accounting and Bookkeeping Terms tax accountant An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies. government and not-for-profit accounting Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget. bookkeeping The recording of business transactions. journal The record book or computer program where accounting data are first entered. double-entry bookkeeping The concept of writing every business transaction in two places. accounting cycle A six-step procedure that results in the preparation and analysis of the major financial statements. ledger A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place. trial balance A summary of all the data in the account ledgers to show whether the figures are correct and balanced. financial statement A summary of all the transactions that have occurred over a particular period. fundamental accounting equation Assets _ liabilities _ owners’ equity; this is the basis for the balance sheet. balance sheet The financial statement that reports a firm’s financial condition at a specific time. assets Economic resources (things of value) owned by a firm. 110

508. Various Accounting and Bookkeeping Terms liquidity How fast an asset can be converted into cash. current assets Items that can or will be converted into cash within one year. fixed assets Assets that are relatively permanent, such as land, buildings, and equipment. intangible assets Long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value. liabilities What the business owes to others (debts). owners’ equity The amount of the business that belongs to the owners minus any liabilities owed by the business. retained earnings The accumulated earnings from a firm’s profitable operations that were kept in the business and not paid out to stockholders in dividends. income statement The financial statement that shows a firm’s profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, and the resulting net income. net income or net loss Revenue left over after all costs and expenses, including taxes, are paid. revenue The value of what is received for goods sold, services rendered, and other financial sources. cost of goods sold (or cost of goods manufactured) A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale. gross profit (gross margin) How much a firm earned by buying (or making) and selling merchandise. 111

509. Various Accounting and Bookkeeping Terms Financial forecasting: A forecast of the expected financial position and the results of operations and cash flows based on expected conditions– a prediction about how things will develop Financial reporting The process of preparing and distributing financial information to users of such information in various forms. The most common format of formal financial reporting are financial statements and financial statements are prepared in accordance with rigorously applied standards defined by professional accounting bodies developed according to the legal and professional framework of a specific locale. Accounts Payable: a file or account that contains money that a person or company owes to suppliers, but has not paid yet (a form of debt). When you receive an invoice you add it to the file, and then you remove it when you pay. Accounts Receivable:: one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. The total amount owed to a company due to debts arising from sales on credit or on account. Order Entry: The first part of data processing to enter an order or pickup in the computer system. A computerized relational database that, at a minimum, generates, schedules and maintains estimates, sales orders, and backlogs. Invoices may also be created automatically if linked to Accounts Receivable. More advanced order entry systems are usually fully integrated with the accounting system. Procurement: The combined functions of purchasing, inventory control, traffic and transportation, receiving, inspection, store keeping, and salvage and disposal operations. The accounting dictionary will need to be read and the one online can be found at http://www.ventureline.com/Glossary_A.asp I have not covered all terms but ones which will need to be known. I strongly suggest knowing as much as possible about each department. 112

510. Various Accounting and Bookkeeping Terms operating expenses Costs involved in operating a business, such as rent, utilities, and salaries. statement of cash flows Financial statement that reports cash receipts and disbursements related to a firm’s three major activities: operations, investments, and financing. cash flow The difference between cash coming in and cash going out of a business. depreciation The systematic write-off of the cost of a tangible asset over its estimated useful life. first in, first out (FIFO) An accounting method for calculating cost of inventory; it assumes that the first goods to come in are the first to go out. last in, first out (LIFO) An accounting method for calculating cost of inventory; it assumes that the last goods to come in are the first to go out. ratio analysis The assessment of a firm’s financial condition and performance through calculations and interpretations of financial ratios developed from the firm’s financial statements. 113

511. Sample Fiberrific Balance Sheet and Income Statement SAMPLE FIBERRIFIC BALANCE SHEET ➀ Current assets: Items that can be converted to cash within one year. ➁ Fixed assets: Items such as land, buildings, and equipment that are relatively permanent. ➂ Intangible assets: Items of value such as patents and copyrights that don’t have a physical form. ➃ Current liabilities: Payments that are due in one year or less. ➄ Long-term liabilities: Payments not due for one year or longer. ➅ Stockholders’ equity: The value of what stockholders own in a firm (also called owners’ equity. SAMPLE FIBERRIFIC INCOME STATEMENT ➀ Revenue: Value of what’s received from goods sold, services rendered, and other financial sources. ➁ Cost of goods sold: Cost of merchandise sold or cost of raw materials or parts used for producing items for resale. ➂ Gross profit: How much the firm earned by buying or selling merchandise. ➃ Operating expenses: Cost incurred in operating a business. ➄ Net income after taxes: Profit or loss over a specific period after subtracting all costs and expenses, including taxes. 114

512. Fiberrific Statement of Cash Flow FIBERRIFIC STATEMENT OF CASH FLOWS ➀ Cash receipts from sales, commissions, fees, interest, and dividends. Cash payments for salaries, inventories, operating expenses, interest, and taxes. ➁ Includes cash flows that are generated through a company’s purchase or sale of long-term operational assets, investments in other companies, and its lending activities. ➂ Cash inflows and outflows associated with the company’s own equity transactions or its borrowing activities. 115

513. The Income Statement The formula used to prepare an income statement is as follows: Revenue – Cost of goods sold= Gross Profits Gross Profit – Operating expenses= Net Income before taxes Net Income before taxes – Taxes = Net income (or loss) 116

514. Key Financial Statements of a Business Balance Sheet - reports the firm’s financial condition on a specific date Income Statement - summarizes revenues, cost of goods, and expenses(including taxes), for a specific period of time and highlights the total profit or loss the firm experienced during that period Statement of Cash Flows - provides a summary of money coming into and going out of the firm that tracks a company’s cash receipts and cash payments 117

517. Complicated part is determining what is included in the asset account and what is included in the liabilities and owners’ equity accounts

518. Sample’s provided simplify and explain the process 118

519. Three Categories of Assets Current Assets are items that can or will be converted into cash within one year. Current assets include cash, accounts receivable, and inventory Fixed Assets are long term assets that are relatively permanent such as land, buildings, and equipment Intangible assets are long term assets that have no real physical form but do have value. Patents, trademarks, copyrights, and goodwill are examples of intangible assets 119

524. Leverage (Debt) Ratios

525. Profitability (Performance) Ratios

526. Activity Ratios 123

528. Types of liquidity ratios:Current ratio: a ratio of a firm’s current assets to its current liabilities. Can be found on balance sheet Acid – test ratio: measures the cash, marketable securities (such as stocks and bonds), and receivables of a firm, compared to its current liabilities 124

529. Liquidity Ratios Current Ratio Current ratio = Current Assets divided by current liabilities 600,000 divided by 228000 = 2.08 Acid Test Ratio Acid-test ratio= Cash + Accounts receivable + Marketable securities divided by Current Liabilities 125

531. Types of Leverage Debt Ratio:Debt to owners’ equity ratio measures the degree to which the company is financed by borrowed funds that must be repaid 126

534. Profitability (Performance) Ratios Basic earnings per share (basic EPS): helps determine the amount of profit earned by a company for each share of outstanding common stock. Basic earnings per share = Net income after taxes divided by number of common stock shares outstanding. Another reliable indicator of performance is obtained by using a ratio that measures the return on sales. Firms use this ratio to see if they are doing as well as the companies they compete against in generating income from the sales they achieve. Diluted earnings per share (diluted EPS) ratio: measures the amount of profit earned by a company for each share of common stock, but also takes into consideration stock options, warrants, preferred stock, and convertible debt securities, which can be converted into common stock. For simplicity’s sake this power point will only discuss the basic earnings per share (EPS). 129

535. Profitability (Performance) Ratios Return on sales: calculated by comparing a company’s net income to its total sales. Risk is a market variable that concerns investors. The higher the risk involved in an industry, the higher the return investors expect on their investment. Return on sales = Net income divided by net sales Return on equity: measures how much was earned for each dollar invested by owners. Return on equity= Net income after tax divided by total owners’ equity Note: These and other profitability ratios are considered vital measurements of company growth and management performance. 130

536. Activity Ratios Activity Ratios measure the effectiveness of a firm’s management in using the assets that are available. One of the activity ratios is the inventory turnover ratio. The Inventory turnover ratio measures the speed of inventory moving through the firm and its conversion into sales. Inventory sitting idly in a business cost money. Inventory turnover = cost of goods sold divided by average inventory 131

538. Human resources management: the process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals.132

540. Hiring

541. Promotion

542. Termination

543. Compliance (Personnel regulatory requirements)

544. Training

545. Benefits

546. Payroll

547. Performance assessment133

549. Requirements

550. Pay Grade (pay range)

551. FLSA status

553. Employee handbook

554. Benefits

555. Training134

557. Employee Demographics

558. Gender

559. Ethnicity

560. Age

561. EEOC Report:

562. EEOC category

563. Gender

564. Ethnicity135

566. Pay rate

567. Benefits

568. Medical, dental, vision

569. Retirement (401K)

570. Vacation

571. Sick leave

572. Family Medical Leave Act (FMLA)

573. Taxes

574. Federal

575. State

576. Local

577. Federal Insurance Contributions Act (FICA)

578. Medicare136

580. Will establish and enhance a world class human resources team

581. Should have at least a Bachelors Degree in Human Resources or business administration or related field

582. Experience desired but not required (depending on the CEO’s and owners wishes)

583. Must be able to define and implement a labor relations strategy that will ensure a positive and productive work environment

584. Challenges HR leaders CHRO faces:

585. Workforce demographics and global talent trends

586. Corporate scandals and intensifying regulatory challenges

587. Rising costs of health care and pensions

588. Technology innovations enabling new ways of working

589. Increasing globalization

590. Endless pressures to boost workforce137

592. virtual teams

593. contingent workforces

594. telecommuting

595. job-sharing

596. flexible hours

597. workforce diversity 138

599. Organizational and Performance Conductor: How do businesses get the best performance from their employees? Organizations are increasingly complex and performance improvements can be required from departments involving:

600. operations across geographic boundaries

601. virtual teams

602. contingent workforces

603. telecommuting

604. job-sharing

605. flexible hours

607. Compliance and Governance Regulator: CHROs must work directly with their boards on employee issues directly related to the critical areas of:

608. risk management

609. regulatory compliance

610. ethics

611. integrity Additionally, they are expected also to assist with a wide range of board-related issues, such as board member selection and orientation, executive compensation and succession planning. 139

613. Shortages in people trained to work in the growth areas of the future.

614. A complex set of laws and regulations involving hiring, safety, unionization, and equal pay requiring organizations to go beyond a profit orientation and be more fair and socially conscious

615. Retraining of certain employees

616. Increasing number of single parent and two income families resulting in demands for job sharing, maternity leave, and special programs

617. Challenges in Human Resources

618. Shift in employee attitudes towards work

619. Continuous downsizing

620. Increased demand for benefits being tailored to the individual

621. A decreased sense of employee loyalty

622. Recruiting employees from a diverse population

623. Selecting productive employees

624. Hiring competent workers

625. Training and Developing Employees

626. Management development

627. Diversity in Management Development140

629. Networking

630. Attracting and Keeping the best employees

631. Pay Systems

632. Compensating Teams

633. Fringe Benefits

634. Scheduling Employees to Meet Organizational and Employee Needs

635. Job Sharing Plans

636. Promoting and Reassigning Employees

637. Termination of Employees

638. Retiring Employees

639. Laws affecting Human Resources

640. Effects of Legislation141

642. Recruiter

643. Employee Relations Manager

644. Compensation and Benefits Manager

645. Employee Relations Specialist

646. Administrative Assistant (a secretary)

647. HR Coordinator

648. Human Resource Assistance

649. Human Resource Administrator

650. Director of Human Resources

651. Human Resource Manager

652. Compensation Analyst

653. Staffing Specialist

654. Coordinator of Human Resources

655. HR Assistant

656. Payroll Specialist

657. Workforce Planning Specialist

658. Human Resources Cordinator

659. Recruiter

660. Human Resources Specialist

661. Human Resource Benefits Administration

662. HR Generalist

663. More or not as many as mentioned on here – depending on CHRO’s and CEO’s decisions142

666. The development, installation, and implementation of computer systems and applications.

667. A major facilitator of business activities in the world today144

669. Head of the Information Technology Department

670. Expertise in computer science, software engineering, and/or information systems

671. Many CIO’s hold a Master of Business Administration or Master of Science in Management as well as a technical background

672. Must also have leadership capabilities, business acumen and strategic perspectives as well as technical skills

673. Delegates responsibilities and answers to the CEO145

675. ERP implementation and migration

676. Instructional Technology

677. Infrastructure and Networking

678. Administrative systems design and development

679. Excellent references

680. Demonstrate superior communication skills

681. Education in business management and Information Technology 146

682. Information Technology Top Seven Occupations Computer software application engineers Computer support specialists Computer software systems engineers Network and computer systems administrators Network systems and data communications analysts Desktop publishers Database administrators Note: the corporation will rely on the Chief Information Officer and CEO to decide which will be necessary within the IT department. Each department will need a secretary 147

684. Performing high speed, high volume, numerical computations

685. Providing fast, accurate, reliable, and inexpensive communication within and between organizations, any time, any place

686. Storing huge amounts of information in an easy-to-access, yet small space

687. Allowing quick and inexpensive access to vast amounts of information worldwide at any time

688. Enabling collaboration anywhere, any time

689. Increasing the effectiveness and efficiency of people working in groups in one place or in several locations148

691. Facilitating work in hazardous environments

692. Automating both semiautomatic business processes and manually doing tasks

693. Facilitating interpretation of vast amounts of data

694. Facilitating global trade

695. Enabling automation of routine decision making and facilitating complex decision making

696. Can be wireless, thus supporting unique applications anywhere

697. Accomplishing all of the above much less expensively than when done manually149

699. Collects, processes, stores, analyzes, and disseminates information for a specific purpose

700. Includes inputs (data, instructions) and outputs(reports, calculations)

701. Processes the inputs by using technology such as PCs and produces outputs that are sent to users or to other systems via electronic networks.

702. Information Systems also include people, procedures, and physical facilities and it operates within an environment

703. Not necessarily computerized although most of them are

704. Information Technology:

705. The collection of computing systems used by an organization

706. The technological side of an information system including: hardware, software, databases, networks, and other electronic devices

707. A subsystem of an information system150

709. The organization’s collection of information systems, their users, and the management that oversees them.

710. Difference in Computers and Information Systems

711. A computer provides effective and efficient ways of processing data and a necessary part of an information system

712. An information system involves much more than computers. The successful application of an IS requires an understanding of the of the business and its environment that is supported by the IS. For example, to build an IS that supports transactions executed on the New York Stock Exchange, it is necessary to understand the procedures related to buying & selling stocks, bonds, options, and so on, including irregular demands made on the system, as well as all related government regulations151

714. Information Technology 153

715. Information Technology 154

716. Information Technology 155

717. Information Technology 156

718. Information Technology 157

721. Who will build, operate, and maintain the information systems

722. How much IT

723. How important is IT

724. Globalization

725. Ethics and social issues

726. Transforming the organization to the digital economy159

729. ERP is a way to integrate the data and processes of an organization into one system

730. A process or approach which attempts to consolidate all of a company’s departments and functions into a single computer system that services each department’s specific needs.

731. It is a convergence of people, hardware & software into an efficient production, service and delivery system that creates a profit for the company.

732. A company –wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores

733. Typically has modular hardware and software units and “services” that communicate on a local area network

734. The modular design allows a business to add or reconfigure modules while preserving data integrity in one shared database that may be centralized or distributed

735. Has an integrated Accounting System

736. Usually ERP systems will have many components including hardware and software, in order to achieve integration

737. Most ERP systems use a unified database to store data for various functions found throughout the organization161

740. Most cover several functions although a few cover only two functions (ex QuickBooks: Payroll & Accounting)

741. Today’s ERP systems can cover a wide range of functions

742. Examples of modules in an ERP which formerly would have been stand- alone applications include: Product lifecycle management, Supply chain management (ex purchasing, manufacturing and distribution), Warehouse Management, Customer Relationship Management (CRM), Sales Order Processing, Online Sales, Financials, Human Resources, and Decision Support System.163

744. Manufacturing: engineering, bill of materials, scheduling, capacity, workflow management , quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow

745. Supply chain management: order to cash, inventory, order entry, purchasing, product configurator, supply chain planning,, supplier scheduling, inspection of goods, claim processing, commission calculation

746. Financials: general ledger, cash management, accounts payable, accounts receivable, fixed assets

747. Project management: costing, billing, time and expense, performance units, activity management

748. Human Resources: human resources, payroll, training, time and attendance, rostering, benefits164

750. Data Warehouse and various self service interfaces for customers, suppliers, and employees

751. Access control- user privledge as per authority levels for process execution

752. Customization- to meet the extension, addition, change in process flow

753. Note: This varies from each organization and more or less can be expected165

755. Different vendors have different types of processes

756. Crucial organizations perform a thorough business process analysis before selecting an ERP vendor and setting off on the implementation track

757. The analysis should map out all present operational processes, enabling selection of an ERP vendor whose standard modules are most closely aligned with the established organization

758. Redesign can then be implemented to achieve further process congruence.166

760. Linking each current organizational process to the organization’s strategy;

761. Analyzing the effectiveness of each process in light of its current related business capability

762. Understanding the automated solutions currently implemented

763. ERP implementation is considerably more difficult in organizations structured into nearly independent business units, each responsible for their own profit and loss, because they will have different processes, business rules, data semantics, authorization hierarchies and decision centers.

764. For more on ERP it is advised to consult with an ERP specialist167

766. http://en.wikipedia.org/wiki/Enterprise_resource_planning168

767. Enterprise Resource Planning 169

769. Enterprise Resource Planning (ERP)

770. Manufacturing Resource Planning (MRPII)

771. Customer Relationship Management (CRM)

772. Human Resource Management System (HRMS)

773. Financial System

774. Some major system vendors are:

775. Oracle

776. SAP

777. IBM170

779. Consult with a professional

780. Microsoft Office Ultimate

781. Already discussed the accounting software programs

782. Each executive and others will need a Blackberry phone from AT&T

783. Barcode Planet

784. Dolphin 9900 Mobile Computers from Honeywell

785. Other products from Barcode Planet

786. 1-888-875-7373

787. http://www.barcodeplanet.com/honeywell/dolphin-9900.htm171

789. Operations extend from the performance management of a group of design engineers or building in quality feedback loops to the precise prediction of production and delivery performance (production of a show or movie). Supply chain management and the design of information architectures for e-business are also a part of operations management.

790. Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers.

791. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and occasionally security.

792. Logistics is a channel of the supply chain which adds the value of time and place utility172

794. Production Management:

795. The term used to describe all the activities managers do to help their firms create goods.

796. Production Management & Operations Management includes the creation and managing of goods and services using the factors of production-land, labor, capital, entrepreneurship, human resources, and knowledge 173

798. A specialized area in management that converts or transforms resources (including human resources) into goods and services.

799. Operations Management includes:

800. Inventory Management

801. Quality Control

802. Production Scheduling

803. Follow up services

804. Creating services/products

805. Other services as well

806. Operations Management transforms:

807. Human Resources

808. Raw Materials

809. Supplies

810. Other resources

811. Operations Management(for a production company):

812. Takes Inputs (information, actors, actresses, CEO’s, etc…), buildings, offices, & computer systems, etc.. and creates services that transform the shows, actors/actresses/camera ppl/etc… into a successful business 174

814. Operations Management in Action Includes:

815. Hiring Specialists who study the latest in production techniques & can set up world class systems

816. Consultants

817. Streamline processes

818. Facility location

819. Internet networking

820. Facility layout

821. Quality control

822. Quality function deployment

823. ISO Standards

824. Measuring quality (satisfaction)

825. Manufacturing processes

826. Materials requirement planning

827. Enterprise resource planning

828. Other services and actions as well175

830. Knowing Modern Production Techniques

831. Just in time Inventory Control

832. Internet purchasing

833. Flexible Manufacturing(production of shows- not flexible to break the rules or act unethical)

834. Lean Manufacturing

835. Mass customization

836. Competing in Time

837. Computer Aided Design and Manufacturing

838. Control Procedures: PERT and GANTT Charts

839. Preparing for the future176

841. Focusing on customers

842. Maintaining close relationships with suppliers and other companies to satisfy customer needs

843. Practicing continuous improvement

844. Focusing on quality

845. Saving on costs through site selection

846. Relying on the Internet

847. Adopting new techniques such as enterprise resource planning, computer integrated manufacturing, flexible manufacturing, and lean manufacturing177

849. Production

850. Inventory

851. Supply chain

852. Processes

853. Strategic Planning178

855. The corporate officer responsible for managing the day to day activities of the corporation and for operations management

856. Highest ranking employee in the Operations Department and is in charge of the Operations Department

857. Monitors the daily operations of the company and reporting to the board of directors and the top executive

858. Responsible or design, development, operation, and improvement of the systems that create and deliver the firms products and services.

859. Responsible for ensuring that business operations are efficient and effective and that proper management of resources, distribution of goods & services to customers, and analysis of queue systems is done

860. Needs to have domain knowledge of the business and industry, understand modern management theories, employ process/quality improvement techniques (business process reengineering, Six Sigma) and quality process standards179

861. Function of a Chief Operating Officer Marshal limited resources as set out by the chief executive officer and board of directors to the most productive uses with the aim of creating maximum value for the company’s stakeholders Lead by developing and cascading the organization’s strategy/mission statement to the lower ranking staff, and implementing appropriate rewards/recognition and coaching/corrective practices to align personnel with company goals Plan by prioritizing customer, employee and organizational requirements Maintaining and monitoring staffing, levels, Knowledge-Skill-Attitude (KSA), expectations and motivation to fulfill organizational requirements Drive performance measures for the measurement of an operation’s performance and consideration of efficiency versus effectiveness, often in the form of dashboards convenient for review of high level indicators 180

863. Marketing is everything you do to reach and persuade prospective customers

864. Sales is everything you do to close the sale and get a signed agreement or contract

865. Marketing: the process of planning and executing the conception, pricing, promotion, and distribution of goods or services to facilitate exchanges that satisfy individual and organizational objectives. Selling and advertising are a part of marketing but marketing involves much more. 181

867. Focuses on the needs of the buyer and the need to satisfy the customer through products produced

868. Marketing guides and controls the entire operation, with manufacturing playing the role of a service activity and supplying the products needed by the customer as relayed to it by marketing

869. Monitors the competition and focuses on the customer

870. Creates new ideas

871. Sets the strategy, plans the attack, and executes

872. Advertising and sells182

874. Primary or shared responsibility for areas such as: sales management, product development, distribution channel management, public relations, marketing communications (including advertising and promotions), pricing, market research, and customer service.

875. Must be knowledgeable in a range or disciplines

876. Must be among many other things- highly analytical (ex- pricing and market research) to highly creative (advertising and promotions)

877. Must have excellent leadership style

878. Must possess areas outside of marketing such as production, information technology, legal, and financing

879. Educational requirements vary but a Master of Business Administration is one degree which will make a good Chief Marketing Officer

880. Experience would be preferred but a educated and talented individual with no experience would do183

881. The Marketing Concept Customer Orientation: Find out what consumers want and provide it for them (note emphasis on consumers rather than promotion or sales) Service Orientation: Make sure everyone in the organization has the same objective- customer satisfaction. This should be a total & integrated organizational effort Profit Orientation: Focus on those goods and services that will earn the most profit and enable the organization to survive and expand to serve more consumer wants and needs. 184

882. Marketing Mix Product Price Place Promotion 185

883. The Marketing Process with the Four P’s 186 Find opportunities  Conduct Research Identify a target market Design a product to meet the need based on research Do product testing Determine a brand name, design a package, and set a price Select a distribution system Design a promotional program Build a relationship with customers

885. Values

886. Attitudes

888. Service

889. Price

891. Telecommunications

892. Bar codes

893. Data interchange

895. Competition

896. Trends

897. Opportunities

899. Disposable income

900. Competition

901. Unemployment187

903. Price

904. Place

906. Attitudes

907. Learning

909. Family

910. Social class

911. Culture

913. Social surroundings

914. Physical surroundings

915. Previous experience188

918. Leads

919. Contacts

921. By region

922. By department

923. By team

924. By salesperson

925. By product

926. By consumer

928. Quarter over quarter

929. Month over month189

931. Historical sales

932. Files of past marketing research, marketing plans, and design awards

933. Sales database

934. Production Records

935. Profit and Loss Statements by Item and Group

936. Marketing Budget

937. Marketing Budget Anticipated Results

938. Other information as well190

941. Environmental protection laws

942. Consumer protection laws

943. Worker safety laws (OSHA)

944. Discrimination laws

945. Union regulations

946. Local laws and licenses (as well as foreign )

947. Incentives

948. Copyright and patent laws

949. Anti monopoly laws

950. Product litigation

951. Other laws as well192

953. Knowledge is power and knowing as much as you can about the corporation you open enables you to run a successful business.

954. More departments might be required such as mailing, administration, and engineering.

955. Other chief officers will be required as well- ex: Chief Technical Officer- Chief Technology Officer- Chief Compliance Officer- etc…. 193

957. Organizational Behavior

958. Wikipedia

959. Numerous Online Sources 194