Traditional vs Modern Management Accounting: Key Differences Explored

Traditional vs modern management accounting represents the evolution from manual, historically-focused financial processes to automated, strategic systems that provide real-time insights for decision-making. While traditional management accounting emphasizes cost control and historical reporting through methods like standard costing and variance analysis, modern approaches integrate technology, predictive analytics, and strategic planning to drive business performance and competitive advantage.

After two decades of helping small and mid-sized businesses navigate their financial operations, I’ve witnessed the dramatic shift from paper ledgers and quarterly reports to cloud-based systems providing instant financial insights. A 2023 Strategic Finance Magazine survey of 505 U.S. financial managers found that companies using modern management accounting practices alongside traditional methods report 25% faster decision-making and improved competitive positioning. This comprehensive guide explores exactly how these approaches differ, which might serve your business best, and how to leverage both for maximum impact.

What is traditional vs modern management accounting?

• Traditional management accounting relies on historical data, manual processes, and periodic reporting focused primarily on cost control and compliance
• Modern management accounting leverages technology, real-time data, and strategic analysis to support forward-looking business decisions
• The key difference lies in timing: traditional methods report what happened, while modern approaches predict what will happen
• Modern systems integrate with other business functions, providing holistic insights that traditional methods cannot deliver
• Choosing the right approach impacts everything from cash flow management to strategic planning and competitive positioning

Understanding Traditional Management Accounting Methods

Traditional management accounting emerged during the industrial revolution, designed for stable business environments where competition was limited and change occurred slowly. These foundational approaches focused primarily on internal cost control and compliance with accounting standards rather than strategic decision-making. The methodology centers around historical data analysis, with financial reports typically generated monthly or quarterly, providing managers with retrospective insights into business performance.

The core philosophy of traditional management accounting rests on the principle that past performance accurately predicts future outcomes. This assumption worked well in predictable business environments but struggles in today’s dynamic marketplace where customer preferences, technology, and competitive landscapes shift rapidly. Traditional systems emphasize financial metrics almost exclusively, often overlooking non-financial factors that significantly impact long-term business success.

Traditional accounting techniques

Standard costing represents one of the most fundamental traditional techniques, establishing predetermined costs for materials, labor, and overhead as benchmarks for performance evaluation. This method, dating back to the 1920s, remains central to management accounting practice because it aligns with generally accepted accounting principles and supports financial statement preparation.

• Variance analysis compares actual costs against predetermined standards
• Budget preparation creates annual financial targets based on historical data
• Cost allocation uses volume-based drivers like labor hours
• Monthly reporting cycles provide periodic performance updates
• Departmental focus maintains organizational silos

Variance analysis serves as the primary control mechanism in traditional systems, comparing actual costs against predetermined standards to identify deviations. When actual costs differ from standard costs, management performs detailed analysis to determine root causes, categorizing differences into price variances, efficiency variances, and volume variances. This systematic approach helps identify operational inefficiencies and cost overruns, though it provides limited insight into underlying business drivers or strategic implications.

Exploring Modern Management Accounting Practices

Modern management accounting practices emerged in response to the limitations of traditional methods and the demands of increasingly competitive business environments. Unlike traditional approaches that focus primarily on cost control, modern practices emphasize value creation and strategic positioning. The transformation involves integrating financial and non-financial information to provide comprehensive insights that support both operational efficiency and strategic decision-making.

Research shows that 53% of organizations now use AI and analytics for cost management, but only 3% have completely replaced traditional methods. This suggests most companies are taking a hybrid approach that combines both traditional and modern techniques. The evolution toward modern management accounting gained momentum in the 1980s when accounting practitioners faced criticism for failing to adapt to changing business environments despite radical shifts in competitive dynamics.

Technology integration in modern accounting

Modern accounting practices leverage advanced technology to automate routine tasks and provide real-time financial insights that were impossible with traditional methods. Cloud-based accounting platforms such as Xero, QuickBooks, and Sage eliminate the geographical and temporal constraints of paper-based systems, enabling access to current financial information from any location.

• AI-powered anomaly detection identifies unusual transactions instantly
• Automated bank reconciliation reduces manual work by 80%
• Real-time dashboards display key metrics continuously
• Predictive analytics forecast cash flow needs
• Integration APIs connect accounting to all business systems

The U.S. accounting software market was valued at $6.09 billion in 2024 and is projected to grow at 6.3% annually through 2030, driven by demand for automation and real-time data access. Artificial intelligence and machine learning capabilities embedded in modern accounting software enhance accuracy by detecting anomalies, automating reconciliations, and predicting financial trends.

Key Differences Between Traditional and Modern Approaches

The fundamental differences between traditional and modern management accounting extend far beyond the technology used, encompassing philosophy, scope, timing, and strategic orientation. Traditional management accounting operates under the assumption that business environments are relatively stable and predictable, leading to emphasis on standardized processes and historical performance metrics. Modern management accounting recognizes the dynamic nature of contemporary business environments and emphasizes adaptability, real-time information, and forward-looking analysis.

The scope of analysis represents another critical distinction between these approaches. Traditional management accounting focuses primarily on internal operations and financial metrics, with limited consideration of external factors such as customer behavior, competitive positioning, or market trends. Modern approaches integrate internal and external information sources to provide comprehensive business intelligence that supports strategic decision-making.

Cost management strategies comparison

Cost management strategies reveal fundamental philosophical differences between traditional and modern management accounting approaches. Traditional cost management focuses primarily on cost reduction through standardization and control mechanisms, operating under the assumption that lower costs automatically translate to improved profitability.

1. Traditional approach: Minimize all costs equally across departments
2. Modern approach: Optimize costs based on strategic value creation
3. Traditional timing: Annual budget cycles drive decisions
4. Modern timing: Continuous optimization based on real-time data
5. Traditional focus: Internal efficiency metrics
6. Modern focus: Customer value and competitive positioning

A 2020 study found that 41.75% of large U.S. companies have adopted Activity-Based Costing, which is significantly higher than previous adoption rates. Activity-based costing provides more accurate cost information by tracing costs to the specific activities that drive resource consumption, then allocating activity costs to products based on their actual consumption of those activities.

Performance Benefits of Modern Management Accounting

Modern accounting practices provide significant advantages that directly translate to improved business performance across multiple dimensions. The real-time nature of modern systems enables faster decision-making that can mean the difference between capitalizing on opportunities and missing them entirely. When market conditions shift or unexpected challenges arise, organizations using modern practices can assess their financial position immediately and adjust their strategies accordingly.

Saudi Aramco’s digital transformation journey demonstrates the power of modern management accounting. The world’s largest oil company replaced multiple traditional systems with a unified intelligent platform connecting all operations. Results included a 25% improvement in operational efficiency, 30% reduction in maintenance costs, and strategic decision-making time shortened from weeks to days.

The integration capabilities of modern systems provide comprehensive business intelligence that traditional approaches cannot match. Rather than maintaining separate systems for financial, operational, and customer information, modern platforms create unified dashboards showing how different aspects of business performance relate to each other. This integration enables managers to understand the financial implications of operational decisions and the operational drivers of financial performance.

Final Thoughts

The evolution from traditional to modern management accounting represents a fundamental shift in how businesses understand and manage their financial performance. While traditional methods still provide value for basic cost control and compliance, modern approaches offer the real-time insights, predictive capabilities, and strategic integration necessary for competitive success in dynamic markets.

My experience working with thousands of businesses has shown that the most successful organizations don’t completely abandon traditional methods but rather integrate them with modern technologies and approaches. The key lies in selecting the right combination of traditional discipline and modern innovation to match your specific business needs and competitive environment.

Ready to transform your management accounting from a historical reporting function into a strategic competitive advantage? The experts at Complete Controller can help you design and implement the perfect blend of traditional and modern accounting practices for your business. Contact us today to discover how our cloud-based financial services can provide the real-time insights and strategic support your business needs to thrive.

Frequently Asked Questions About Traditional vs Modern Management Accounting

What is the main difference between traditional and modern management accounting?

The main difference lies in timing and scope. Traditional management accounting focuses on historical data and internal cost control through periodic reporting, while modern management accounting provides real-time insights, integrates external factors, and emphasizes strategic decision-making through predictive analytics and automated systems.

Can small businesses benefit from modern management accounting practices?

Yes, small businesses can significantly benefit from modern management accounting. Cloud-based solutions have democratized access to sophisticated tools previously available only to large corporations. Small businesses can now access real-time financial data, automated reporting, and predictive analytics at affordable prices without large upfront investments.

Should companies completely replace traditional accounting methods with modern ones?

Not necessarily. Research shows only 3% of organizations have completely replaced traditional methods. Most successful companies use a hybrid approach, maintaining traditional practices for compliance and basic cost control while implementing modern technologies for strategic decision-making and competitive advantage.

What are the most important modern management accounting techniques to implement?

The most impactful modern techniques include real-time financial dashboards, activity-based costing for accurate product profitability, predictive analytics for cash flow forecasting, and integrated business intelligence systems that connect financial data with operational metrics.

How much does it cost to transition from traditional to modern management accounting?

Costs vary based on business size and complexity. Cloud-based solutions typically range from $20-200 per month for small businesses to several thousand for larger organizations. The investment often pays for itself through improved efficiency, reduced errors, and better decision-making capabilities.

Sources

• Balance Scorecard Institute. “ABC Analysis and Performance Measurement.” www.balancedscorecard.org/abc-analysis
• CFI (Corporate Finance Institute). “Management Accounting Techniques.” www.corporatefinanceinstitute.com/management-accounting
• Chenhall, R.H. & Moers, F. (2023). “Traditional vs. Contemporary Management Accounting Practices.” Strategic Finance Magazine.
• Complete Controller. (2024). “The Rise of Management Accounting.” www.completecontroller.com/evolution-of-accounting
• Finprov. (2024). “Modern vs Traditional Accounting Comparison.” www.finprov.com/accounting-comparison
• Grand View Research. (2024). “U.S. Accounting Software Market Size, Share & Trends Analysis Report.” www.grandviewresearch.com
• Inspire London College. “Management Accounting in Modern Business.” www.inspirelondoncollege.com
• Institute of Management Accountants (IMA). “Traditional vs Contemporary Practices.” www.imanet.org
• Investopedia. “Management Accounting.” www.investopedia.com/terms/m/management-accounting
• Logix ERP. (2025). “Integrating Modern Accounting Systems: Why Cling to the Old Instead of Embracing the New?” www.logixerp.com
• Pulse Accountants. “Traditional vs Modern Accounting Methods.” www.pulseaccountants.com
• Rankin, R. (2020). “The Predictive Impact of Contextual Factors on Activity-based Costing Adoption.” Journal of Accounting and Finance, Vol. 20(1).
• Small Business Administration. “Manage Your Finances.” www.sba.gov/business-guide/manage-your-business/manage-your-finances
• Strategic Management Accounting Review. “Performance Measurement and Analysis.” www.strategicmanagement.org
• Wikipedia. “Management Accounting.” www.wikipedia.org/wiki/Management_accounting

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Cryptocurrency is continuing to take the world by storm as a payment option. It is new enough that many still do not understand it or know whether they should invest in it or use it. Before you engage in crypto trading, it is essential that you have some knowledge, a digital wallet, and an online exchange platform to use for trading one cryptocurrency with another. You should also understand the types of crypto trading platforms and the concept of trading them before you decide whether to get involved in cryptocurrency trading. Here are four cryptocurrency exchange platforms and how they work.

Conventional Cryptocurrency Exchange

On conventional cryptocurrency exchange platforms, trading essentially follows the stock and commodity exchange markets’ trading mechanism. The conventional cryptocurrency exchange is a platform where trading is conducted among the buyers, sellers, and an intermediary source based on the current market price of any cryptocurrency.

For each transaction, the middleman charges a certain percentage commission. The fee can be in the form of currency, or it can be in cryptocurrency. Online platforms, such as Coinbase’s GDAX, Bittrex, Binance, Kraken, and Shapeshift, are few conventional cryptocurrency exchange platforms. For example, if one wants to convert a cryptocurrency into any foreign currency, they can easily utilize the conventional cryptocurrency exchange platform to do so securely.

Direct Trading Exchange

The direct trading cryptocurrency exchange is directly traded and cuts out the middleman, unlike the conventional cryptocurrency exchange platform. Such online exchanges trade directly, and there is no concept of a middleman. The buyers and sellers trading without an intermediary and the seller determines their own cross-currency equivalence and does not use the absolute market price.

Cryptocurrency Brokers

Cryptocurrency broker platforms act much the same as brokers within the stock exchange. These sites facilitate trades between the buyer and seller. These platforms are web-based portals and applications for cryptocurrency exchange and are convenient to users. Using a cryptocurrency broker site or app allows the buyer and seller the convenience of having access to trade via smartphones, tablets, a laptop, or a desktop. These websites and apps play the identical role of a stockbroker, and the prices are already fixed before the purchase or trade of the cryptocurrency.

Cryptocurrency Funds

The cryptocurrency fund platform allows buyers and sellers to exchange through a pool of funds. Professionals manage these pools to facilitate the purchasing and selling of cryptocurrency through the pooled fund. These pooled funds platforms are primarily meant for investors who want to purchase cryptocurrencies and hold them for a long period.

Other Information on Cryptocurrency Exchange

While like the stock exchange, cryptocurrency exchange platforms are not part of the stock exchange. How the trades are made are similar but not done in the same arena or on the same platforms. It is suggested that an amateur or a fresh entrant should initiate their first cryptocurrency trade through a cryptocurrency fund since the trades are handled by a professional. Until you are a professional yourself in cryptocurrency exchange, you should always seek a professional. A novice can also use Coinbase, a cryptocurrency exchange platform known to be easy to understand and user-friendly. The only limitation is that it only trades in Bitcoin, Ethereum, and Litecoin.

Bitcoin is becoming rarer as it was frantically erratic in 2017. At that time and since then, bitcoin either helps you become filthy rich or incur a massive loss. It is suggested that while trading in cryptocurrencies, that you trade in a variety of cryptocurrencies such as a mixture of Bitcoin, Ethereum, and Litecoin. Though Bitcoin has been a cryptocurrency that has made many a lot of money, there is little in circulation, and it is rare to trade in it today. Therefore, it is suggested that if you are looking to get into cryptocurrency trading, you look into all the options and find the one right for you.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

2020 was quite peculiar in a lot of ways. Who would have thought that a global pandemic could put the entire economy on hold? Millions of people were forced out of jobs; it changed how we function and forced numerous companies to innovate to continue working and keep businesses open. We do not have to highlight the massive disruption after the pandemic.

Despite all hardships, we can all agree that 2020 was also the time when the world came together as one and helped each soul in whatever way seemed possible. Companies offered work from home to their employees, which has brought a significant change in the way we look at office life. Who knew you could manage everything so well, work hard, get the tasks done, spend time with family, and still have enough for yourself? Here are some of the benefits of working from home.

Better Work-Life Balance

Most remote jobs come with a flexible schedule, meaning that you can start your work and end it whenever you want while staying back at home and managing other things in life. Whether it is dropping the kids at school, attending online classes, hitting the gym, running some errands, or just staying at home for other chores can all be balanced when you work from home.

Location Independence

One of the best factors and considerable benefits of working from home is having access to jobs with better opportunities that are not limited by geographic location. Now, having no set job location means fully remote workers can travel and live as digital nomads and keep their meaningful careers. People who require constant movement from one place to another because of their job can also benefit from a remote job that they can continue from anywhere without worrying about travel expenses and wasting time.

No Commute Stress

The Auto Insurance Center states that commuters spend more than 100 hours commuting and 41 hours in traffic every year. The extreme commuters face a longer commute time of 90 minutes or more. Wasting your time on traveling is a downside of going to work and coming back home. According to multiple research pieces, more than 30 minutes of daily one-way commuting is associated with anxiety and increased stress levels. Some even state that commuting 10 miles to work every day is linked to health issues. They are:

• Elevated blood pressure
• Higher cholesterol
• Increased risk of depression

When you ditch traveling, you support your mental and physical health. Spend more time with your friends and family instead.

Recruiting Trends for 2021

Companies have already started to feel the impact of COVID-19 quite well in 2021, and it will affect the year’s hiring strategy, which is why companies have some significant hiring trends to look out for in the year 2021.

Now that the entire world knows that employees can take their work home, they are not left with enough excuses to stop them. Before the pandemic, people were asked to get done with their work in time and at work. It grew tiresome for most, which dropped productivity. At the same time, WFH has increased productivity and efficiency. The companies have allowed their employees to continue working from home and came up with some recruiting trends for 2021. Let us discuss them in detail.

Emphasis on Digital Recruitment

Video conferences on Zoom and Skype have become a primary means of communication. In-person job interviews came to a halt. Companies were asked to put a little more emphasis to hire on digital recruiting strategies, which is continued in 2021.

Insights from LinkedIn states that 81% of talent experts agree that virtual recruiting will remain even post-Covid-19 & 79% of talent experts say virtual recruiting will also soon become the new normal.

Virtual recruiting involves an expansion of using:

• Social media recruiting
• Video conferencing for meetings & interviews
• Gamification
• Digital screening and assessment tools
• Artificial intelligence

With this hiring strategy, companies will need to pay attention to virtual candidate engagement and create a strong candidate experience online.

Remote Job Opportunities

2020 has proved all those wrong who believed that remote jobs are not mutually beneficial. Employees have more flexibility and seek roles outside their local area. Companies can expand their talent pool and try reaching out to a more diverse group of job applicants. It is essential also to regard your candidate’s mental health – the majority prefer a permanent remote job, which should not be a problem for companies anymore.

Flexibility

How we work and have flexible work schedules is extremely important for applicants over the past year. 2020 has proved that providing people with the ability to work from home and a little flexibility is possible and practical. Most employees proved to be productive when WFH. Some companies and industries have already started offering candidates this option since remote work has become normal in 2021.

We are all looking forward to this new year as recovery and relief from the novel virus as the country reopens. Expect business technology and compliance shaped by talent acquisition instead of the other way around. As recruiting companies, we have the chance to make a profound impression, so we must strive for the betterment of the economy worldwide.

Conclusion

The Corona Virus has changed the way we live and how we travel. Covid19 has brought ominous feelings about the future. Who would have even guessed that the industries and the world would have to face a crisis as severe as the pandemic in such a brief time?

The insidious virus has cast a pall of fear, gloom, and demise throughout the world, leaving regions and countries without strategies and ways to deal with the pandemic. The local and international health organizations and the governments are taking responsible actions and responding at differing speeds to spread the deadly Corona Virus.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

If you check your spam tray, you are likely to find hundreds of messages from supposed banks or online stores that will ask you to verify your account, threatening that it could be canceled. Other messages can tell you that you have won a prize and you must provide your bank details to receive it. In short, there are hundreds of ways criminals seek to get your personal information online.

This type of fraud is known as phishing, a modification of the English word fishing (fishing) because what they are looking for is to function as bait to try to catch a victim. What happens with these messages is that they contain links to fraudulent sites or have software that will allow criminals to access information on your devices. Once you arrive at these sites, they are usually almost identical to those of your bank or store in which you have previously purchased, so you enter your data without worrying without knowing that in minutes you will be victims of a robbery.

What is Phishing?

It is a cyber breach in which hackers contacted targets via email, telephone, or text message. They pose themselves as a legal institution to drag attraction to theft their sensitive data. Personal information includes identifiable details, banking, credit cards, and passwords. After that, they access important accounts with the help of that stolen information. As a result, the digital platform owner will suffer from identity theft and financial loss. Legally, a phishing lawsuit enforced a Californian teenager who made the restrictions of the American website online. He stole sensitive information with this fake site and reached the credit card details to steal the money from their accounts. There other cybercrime techniques such as Vishing (voice phishing), smishing ( SMS phishing ), etc.

How to protect yourself from phishing?

Fortunately, it is remarkably simple to do so. The golden rule is never to enter links that appear in an unknown email and much less those that request to enter your private information. If you receive a message that you think is suspicious, go directly to the page of your bank from the search engine or communicate by phone. This way, you avoid the risk of going to a fake page. There are other very important tips:

• Remember that banks never send urgent emails derived from security processes. Nor do they send emails where they request our passwords and passwords for any reason.
• Please pay attention to the address that appears in the address bar, and make sure that it corresponds to that of your bank. Sometimes these links send you to identical pages, but the address of the bar does not correspond. They are usually addressing sites where one can create a personal web page or free web hosting.
• Verify that the page is secure and check what security certificates you have. Confirm that the Internet address begins with https: and that at the bottom of your browser, there is a lock icon that indicates that the page is safe to transmit our data in it. Otherwise, your information will travel publicly. Verify what encryption protocol this portal has (it must be at least 128 bits) and its certificates.
• Never carry out transactions in cybercafes or other public computers as your information may be recorded. Nor through free Wi-Fi networks because someone else could be seeing your information.
• Always use a firewall as well as programs that verify the non-existence of spyware (spyware) on your computer.
• Have strong passwords (with more than eight characters, other than dictionary words, including uppercase, lowercase letters, numbers, and symbols).
• Change your access codes frequently.
• Remember that your password must be unique for each website, and it must be secure.
• Usually, hackers send emails by masked. They appear when they send emails through the recipient business. You should update your account within a specific time duration. Otherwise, the bank will not send a message for your data through email. Then, it will suspend your account. Also, financial institutions typically offer account numbers or other private information within the emails. Only make sure either it is coming from a reliable source or not.

 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Throughout our life, we ​​will need to earn money. And that’s something they do not teach us in any school. They do not teach it to us in any university, either. They only give us knowledge of all kinds throughout our lives, and this knowledge is usually of very little use to earn more money than the average person.

Knowledge and qualifications can help us get a job, so we would be making money with the first way to do it, which is the one used by the vast majority of the population. And this way of earning a living can become very dangerous because if one day it disappears, we are left with nothing.

The 3 Ways you can earn money throughout your life

1. First way: Exchange time for money

We talk about working for someone else, which is choosing to offer our time in exchange for money. There is nothing wrong with looking for life in this way because empires are assembled thanks to the fact that a person in a business can find people who join his company and who work for him.

In the absence of people willing to exchange their time for money, it would be very difficult for us to maintain the figure of the entrepreneur.

Of course, this way of making money is very risky from an investment point of view. That is, an investor is taught that he cannot put all the eggs in the same basket because if the investment goes wrong, he is left with nothing. And that happens with paid work. We put all our time and future into a job. We charge debts because, in the next months, they will compensate our time with payroll. We plan for the future with the expectation that we will receive a check from our employer.

In other words, we have bet everything on this investment. If tomorrow closes the company, there is a restructuring of the workforce or, simply, your boss decides to fire you, the problems in your life begin, and you have to look for another place where you can exchange your time for money again.

2. Second way: Invest money to earn money

Sounds good. Many who use the exchange of time for money save to be able to move to this form. Only a few, the truth, because the truth is that most fail to save anything by not having a financial plan. That is, people adapt standard of living to maintain the level of their income.

However, to earn money this way, you must have gone through the first form. We talk about using money we have to generate more money, either with investment in the stock market, investment in real estate, etc.

3. Third way: Multiply the time to multiply the money

But how? If we all have the same time. On the one hand, it is here where we can use leverage, which is the main feature of the people who earn the most money. We can use the time of other people, the resources of other people, and the contacts of other people. We could also call to create a scalable model, which is that with the same time and effort, we can increase our income.

Who wishes to do a struggling 9 to 5 job to pay expensive rent in New York or when you can earn money online well? The office will be anywhere when you open your laptop. As a result, the majority of people are leaving their jobs to do remote work. The report of Global Workplace Analytics and Flex Jobs reveals that the remote working ratio increased by 195% in 2005, and this rate grew by 50% in 2020. All of this possible due to the easy access to making money online. The statistics also further indicate that remote working trends enhance the rate of female entrepreneurs. As a result, the wage gap has closed. The useful advantage of earning money online is that you can work from home or any corner of the world.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The phenomenon of flipping houses can be quite a temptation and hard to resist. However, not every venture results in a profitable outcome. Every real estate agency or house-flipping hopeful must adhere to a prudent process of flipping if they want to yield a positive return on their investment. Before deciding to invest and flip houses, there are three situations one must carefully consider to obtain and increase market intelligence of the county in which they are currently residing: death, divorce, and downsizing. Here the concept of downsizing implies downsizing of employees through layoffs or workforce downsizing. This should not be confused with the concept of downsizing in the context of real estate, where downsizing refers to downgrading your existing house to a less expensive home.

Real Estate Investors or firms look for the three essential circumstances of death, divorce, or downsizing during the process of flipping as described below:

Death

In the case of death, there is a strong probability that the deceased’s successors will want to make a quick decision and liquidate tangible assets. With emotions running high and acting in tandem with rapid selling, the new owners may want to sell the property as soon as possible and at a price below the assessed market value. For example, a property valued at $200,000 could be for sale at $100,000 or $125,000. Therefore, due to emotional stress and panic selling, the owner will accept almost any price to sell the house. At this time, the real estate investment agencies or individual investors should leverage the situation, seize the opportunity, and purchase the property at a lower price.

Divorce

The second happenstance that can enable a house-flipping purchase is when a couple is going through a divorce. Divorce has a significant impact on emotional decision-making, and it is estimated 40% to 50% of couples in the United States will end their marriage in divorce. Once it is finalized, then comes the aggravating process of paying out alimony and dividing assets. At this point, one party inevitably becomes emotional and may decide to sell their property. The husband will take into consideration the amount for alimony and how he will stand fit financially. When considering all unavoidable costs and payments involved in divorce proceedings, the property owner may be increasingly inclined to sell their home immediately.

Consequently, they may be compelled to sell the house at a discounted price and below the assessed market value. Although the process of divorce is private and personal, a well-connected broker will have a network of friends who can supply information that is applicable to the market database.

Downsizing

Workforce downsizing is not a new ordeal in the era of globalization. Whenever the organization or a firm has been vulnerable to an economic downturn, the most common response is to downsize to save costs and maintain the profitability margins. If an employee has taken a mortgage on their house and been downsized, they have two options: either the person can simply call the financial institution and declare bankruptcy or actively try to liquidate assets, including selling their house. If he chooses the latter, he would either contact real estate agencies or put up an advertisement of the sale in the local newspaper or any other medium such as social media platforms.

When thinking about how to obtain properties to purchase and flip, consider searching for properties that are on the market due to a death, divorce, or downsizing.  In many cases, the sellers in these situations will be motivated to relinquish the property and will often do so below the assessed market value. 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The question of when to sell an Initial Public Offering (IPO) is often asked. Indeed, the psychological biases of fear and greed hinder us also make us commit serious mistakes. 

If most private investors lose money on the stock market, they often give in to their emotions.

The Worst Time to Sell

When Guided by Fear

Let us examine the example of the subprime crisis of 2008. Many people were ruined because they gave in to fear by selling their positions in large capital losses. If they had resisted, they would have doubled their capital today.  However, few people have been disciplined enough to maintain their positions. These investors should have continued to finance the best quality actions. This would have allowed them to take advantage of the strong recovery of the stock market since 2009.  The stock market will always go up, but it also consists of a succession of bullish and bearish cycles. It is important to determine approximately what phase we are in to limit errors when we invest.

When Motivated by Greed

Another classic mistake is to be trapped by greed. All stock market investors have the same goal: the lure of profit. They, therefore, tend to make two recurring mistakes:

1. Resell too soon

Many resell their winning positions far too early for fear of losing their small gains. This happens, for example, when you enter a position and everything goes as planned when you buy quality stocks. Their prices are appreciating for good reasons (solid fundamentals, attractive valuation).  After having gained a few percent, you say to yourself, “Well, I’ve already increased my value, so I’ll take my profits.” As a result, you sell, and in the weeks or months that follow, the stock continues to rise strongly. Unfortunately, you have then missed most of the increase in profit.  The important thing when buying stock is to set a goal to sell and stick to it. Using valuation methods, you know the fair price of the stock. As long as that price is not reached and no other fundamentals have changed, you must stay in position.

2. Invest in volatile “casino” shares

If you invest in the stock market, it is because you are willing to accept some risk to grow your capital. However, this risk must be mastered. Most people are impatient to make “jackpot” winnings. It can happen, like at the casino, but remember that you do not control anything.

To quote Warren Buffet, “You only have to buy what you understand.” Many investors laughed at him when he announced that he did not want to own stocks in the Information Technology sectors. When the Internet bubble of the 2000s arrived, technological actions collapsed. Warren Buffet was the only one who could remain unphased. No one can guess how an ultra-volatile action will behave. Investing requires patience. If you cannot wait, put your money on an active management fund or Exchange-traded Fund (ETF).

The Best Time to Sell

To quote Mr. Buffet again, “The best duration of holding a share is forever.” If the fundamentals remain strong year after year, and the profits are only growing, why want to sell?

As long as the business creates wealth, its price will rise. There is, therefore, no reason to part with it. However, there are two main reasons it necessary to sell one’s shares.

Fundamentals have deteriorated

If the basic reasons you had for initially buying the stock are no longer true, you must immediately sell.  It will be necessary to look for what part of your reasoning was wrong to produce this error.  Perhaps the fundamentals were good at the time of purchase but deteriorated. In this case, the first question to ask is simple, “According to the current fundamentals, if I was not already a shareholder, would I buy this stock?” If you hesitate, then the answer is no, and you must immediately sell the action in question.

The fundamentals are good, but the valuation has become too high

If the company you bought is good, but its valuation has become high, it is already good news. Or, if you bought it at a fair price, it means that you have already made a good profit. However, you are not the only one to have noticed the company, and its course has gone well above its fundamentals. It has become overvalued.  Maintaining such a position would be dangerous. When it returns to its average, the fall will be strong and fast. However, it would be a shame to sell it while its price is in a full uptrend. It will, therefore, be necessary to use technical analysis to sell at the best time.

Conclusion

To summarize, you have to sell when:

• The fundamentals of the company have deteriorated. If the reasons you bought this stock are no longer valid, you must sell immediately.
• The fundamentals are still good, but the valuation has become much too high. You have to take advantage of the rise and not sell too early. The sell signal will be given by the technical analysis when the uptrend should end.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Life and what it throws at us affect everyone. There can sometimes be a life crisis, such as the death of a friend or family member, family members falling ill, divorce, domestic violence, or many other crises that can occur. As a leader, you must know how to support an employee going through a life crisis while also managing productivity and the business’s needs. This can be challenging if the employee is affected for a lengthy period.

The COVID-19 pandemic has affected the world in many ways and has changed how the world used to think. People are more concerned and careful regarding their decisions and how they manage themselves in a crisis. The pandemic has altered meetings, studying, traveling, eating, shopping, and working. It is a fact that people must work to earn a living. Many employees cannot survive without working even for a month or two. Workplaces themselves also require a workforce and generally cannot bear employees’ expenses if they do not work.  Here are five ways you can help and manage your employees when they are dealing with a crisis.

Make Yourself Available

An employee dealing with a crisis might be embarrassed or overwhelmed, causing them to be continuously late or miss targeted deadlines. Often, a leader’s first challenge is to identify the warning signs that an employee is going through a difficult time. As a leader, you should maintain a good relationship with your employees to be tuned in enough to notice when something is wrong. You should maintain an environment of compassion and a safe place for employees to open up if something difficult is going on in their lives. If you maintain this work environment, it is more likely that an employee will come to you if something is wrong.

Listen and Offer Solicited Counsel

Most people going through a crisis can look for someone to listen to them speak about it. In many cases, they are not looking for advice or suggestions but rather an ear to listen to them. They may be looking for a sounding board or a safe place to talk about feelings. This open talk can be hard for them, especially if they are dealing with domestic issues and divorce. These subjects are deeply personal and can be scary to talk about, especially to a leader.

You can offer advice or suggestions only if the employee asks for it, otherwise only be there to listen and provide solutions to work while dealing with the crisis. You may need to offer the employee some temporary time off or away from a challenging position to give them the time they need to be fully productive.

Prioritize Health

Remember that your company or business is nothing without people to staff it and make it productive. Though it is a combination of your employees, clients, and stakeholders that keep a company functioning, if anyone on the staff is not functioning properly, it is better to give them the time to come back healthy and strong. Therefore, you have to consider things a bit selflessly. Your employee’s health should be the highest priority and can sometimes leave productivity suffering for the time it takes to get back to normal.

A leader has to think multidimensionally and requires a strategy for employees who cannot work remotely or have to be on the field at all costs. In these circumstances, it is difficult for the leader to decide how to handle these employees. Physical and mental health are among the most important in your company, so all decisions moving forward should be based on everyone’s health first and productivity second.

Check Work Performance

During a crisis, it is still suggested that you keep up with the employee’s performance and be aware of where they are in the crisis’s processing. Employees will appreciate the check-ins and be more willing to be open about progress if you check performance and needs periodically.

Consider Workload

When it comes to an employee in crisis, the workload can be huge in terms of how they work through the crisis. If an employee can function enough to take on a lighter workload rather than completely off, this will be ideal for both the employee and the business. If other team members are willing and able to take on some of the employee’s projects, this could be a viable solution until they are back on their feet full-time.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In the budgeting process, the management aims to allocate capital and financial resources according to the organization’s current needs. For example, in the production department, the manager aims to decide the budgeted cost of production.

After the completion of the production, they address the gaps between budgeted and actual results. Its management can reduce the cost and expenses across all the functional divisions of the origination, which can be essential to increase the overall organizational profits and revenues. Through the budgetary process, a company can achieve organizational goals by effectively managing financial resources. One of the managers who design the budget’s main tasks is deciding on the budgeted sales, overviewing the production and overhead expenses, and the organizations’ capital required to conduct the company-wide operations.

The traditional or classical budgeting system is one of the earliest budgeting processes in which the budget is formulated annually. In this system, the company usually formulates the budget based on the previous year’s budget and, based on certain changes, are adjusted in the new budget. These changes or amendments can be essential to eliminate the company’s issues in its previous budget; therefore, it is referred to as an incremental approach. One of the main benefits of using this system is that it provides a budget limit in the allocation, which means that the company cannot spend more than the allocated amount. For the formulation of the company’s budget, previous financial information of the company and its performance are analyzed, resulting in fewer budget allocation changes.

Weaknesses of the Traditional Budgetary Process

Along with it some of the advantages, this system also has certain weaknesses. One of the main disadvantages is that the company’s strategic plans matter a lot, but these plans are not focused on under this system. It omits the company’s ability to focus on the organizational plans. The system cannot be used when the budgeting system requires major changes to achieve new opportunities as it only focuses on the marginal changes. The system determines a lot of change responsiveness, due to which the company cannot focus on the innovation in their organizational systems.

Reviewing the old budgetary system will increase the period to review the old budget. Therefore, it takes a much longer time to prepare the budget. The budgetary system did not incorporate any external factors, which makes it inflexible towards organizational change. After the budget formulation, the management cannot change it if any changes are required to overcome errors identified; only fewer changes can be made if required. The system is less focused on motivating employees’ desirable behavior to achieve the organizational objectives.

The viability of the Traditional Budgetary Process

In today’s world, every organization wants to focus on innovation and creativity to gain a competitive advantage in the industry. Innovation and creativity have led to several changes in the business environment and today’s organizations. Today management uses new and innovative approaches rather than old ones as it uses decentralized hierarchy and enhances organization-wide communication. Old approaches like centralized hierarchy and authoritative leadership have been omitted from the organizations.

These approaches were used to address the changing needs of the industry. The organizations have adopted these changes to survive in the market and achieve new growth opportunities. Traditional budgetary systems are not focused on the organization’s flexibility and adaptability towards industrial changes. It cannot be used. Furthermore, the customers’ changing needs and the increase of competitors have also increased the need to focus on new and innovative management approaches and techniques. Therefore, the traditional budgetary system cannot be employed due to its inability to meet the industry’s changing needs. Some of the budgeting processes have been discussed that can be used to meet the changing needs and gain a competitive advantage in the industry.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Last year saw 2020 elections, the BLM movement, suspending of championships, facing a massive economic recession, and of course, the pandemic. The Corona Virus has changed the way we live and how we travel. Covid19 has brought ominous feelings about the future. Who would have even guessed that entire industry and the world would have to face a crisis as severe as the pandemic in such a brief time?

The insidious virus has cast a pall of fear, gloom, and demise throughout the world, leaving countries without strategies to deal with the pandemic. The local and international health organizations and world governments took responsible actions and responded at differing speeds to spread the deadly Corona Virus.

At the macro level, the Corona Virus’s impact on the world’s economies and livelihoods vaulted from serious to catastrophic. The USA’s exact development when claims from unemployment insurance increased to over six million in consecutive weeks. In countries with large informal economies, the government decrees aggravated the crisis by dictating self-isolation, social distancing, and nonessential businesses’ closures. The most impacted industry worldwide was the travel industry, with closures and travel restrictions being upheld in every country of the world.

New Travel Rules

But with the vaccines rolling out in 2021, we have witnessed a return to travel, and the industry is ready to win back its customers. The workers mainly focus on the new normal for travel and how they can entice you to travel. Think of multi-bedroom suites, relaxed living spaces, and full-service kitchens with the flexibility to extend your stay by maximizing your membership travel points and, of course, the comfort of home.

Some of the other 2021 travel trends are the dateless departures meaning that the travel workforce will guarantee you a spot whenever the first tour starts again. Plus, if the dates do not line up, you can rebook without even losing your money.

Another new safety option and travel theme is the travel bubble. Travel bubbles are private and smaller group tours designed to keep one group socially distant from other traveling groups. The travel industry does not want a new couple to give up on their honeymoon, kids not to take a break from their frantic routines, or a family to cancel their long-awaited family vacation again.

How the Travel Industry Has Been Affected

The travel industry is no stranger to adversity and has been seriously damaged by the novel virus. We have all witnessed leadership actions in companies that keep their people above water and focus on long-term growth. Most industry players have tapped into new liquidity sources, instantly acted to retain customer goodwill, and worked effectively with unions. People have started focusing on innovation and making better customer experiences.

There is no doubt that the virus has hit the travel industry pretty hard. With canceled flights and countries on lockdown, the hotel occupancy rates hit zero. The impact of the virus has been predominantly catastrophic for the tourism and travel sector. The statistics on international air travel show how the industry has come to an abrupt halt. However, the suspension is said to come to an end soon enough, and everyone shall get on with the everyday life we knew.

The Travel Industry and the Online Environment

Brands such as Belmond have managed to get their clients’ attention by having virtual events that do not inspire them to travel and offer much fun, festive activities, and information that all serve as mood lifters during this unusual holiday season.

Cultural, Environment, and Community Activism

From battling climate change to supporting the indigenous population through travel, the industry is redoubling its efforts to do good while also doing its job.

Trust Management Efforts

Managing trust involves greater business accountability. The principal at Enterprise Applications Consulting, Josh Greenbaum, was amazed at the unprecedented activism of so many organizations in the wake of US insurrection in January.

Conclusion

People wish to continue traveling again once the restrictions lift – some are ready to do it even before the vaccine is available. China, South Korea, and some countries in Asia have effectively controlled the virus’s spread and have already started seeing leisure and business travel segments recovering domestically.

While Germany and Europe have shown first signs of encouraging travel demand recovery, other geographies, including the United States, have not controlled the spread effectively. Despite the increase in the number of Covid19 patients, there has been an increase in advance bookings and searches. The is nothing that is stopping people from traveling.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.