Published on: 30 Apr 2014
It’s amazing how much you know. Whether you’re fully qualified or part qualified the professional exams with ACCA and CIMA are very comprehensive and as such anybody who has passed exams has proved that they have the ability to learn, comprehend and explain various technical topics.
As we progress through our studies we soon start to take certain things for granted. Take debits and credits for example. Ask any qualified accountant which side debits and credits go and they will tell you (hopefully!) without even thinking.
I was recently teaching a group that were new to the joys of double entry. Some of them were initially finding it a bit of a struggle to remember which side the debit and credit went.
A couple of quick memory techniques for anyone starting out on double entry bookkeeping which will help you remember that debits go on the left and credits on the right:
Think of the Australian rock band AC/DC or the electrical system AC/DC and then remember that A/C’s = D’s and C’s [Accounts = Debits (on the left) and Credits (on the right)].
2. The driving reminder.
WARNING – I’d only recommend that you use this is you’re from one of the countries that drive on the left such as the UK, Australia, Hong Kong, Bangladesh, Malaysia and South Africa (there are other countries that drive on the left but for brevity sake I won’t list them all here!)
If you think that you Drive on the left but Crash on the right then it should help you remember that you Debit on the left but Credit on the right.
Again, it’s probably not worth using this memory technique if you’re from one of those countries that drive on the right!
Published on: 25 Apr 2014
I’m lucky enough to be teaching in Asia at the moment. The students are great and I’m convinced they will pass their exams (if any of them are reading this then good luck in the exam!)
I’m staying at a lovely hotel and this morning in the shower I was reminded of marketing and the 4 Ps. The shower gel that is provided by the hotel is a well known international brand and I’ve bought it myself before.
What was different about it though when comparing the product (one of the 4 Ps) as purchased by the hotel and the product when purchased by me as an individual? The aroma and texture was exactly the same whereas the packaging was different. The key difference being how the packaging was designed in terms of the ease with which the gel could be poured.
Whether it was me but the version I personally bought appeared to dispense the gel a lot quicker than the hotel version. The hotel version took a lot more effort to get the gel out.
It’s maybe my imagination but if the design of the packaging that is on the public product is in fact different then it would encourage me to use it up quickly and buy a replacement. The packaging on the version that the hotel was using however would “discourage” guests from using a lot of gel and hence save the hotel the cost of replacing the gel as quickly as with the “standard public packaging”.
I’m not sure whether this was a deliberate policy of the shower gel manufacturer but if it wasn’t then maybe they should be considering it…
Published on: 20 Apr 2014
It’s Easter weekend and in many countries around the world people celebrate by giving each other chocolate Easter eggs.
There could be some worrying news though for people who enjoy eating these chocolate eggs as well as anyone who enjoys eating chocolate in general.
The price of chocolate is rocketing and in the last year alone cocoa prices have risen by 20% and it seems that the price rises will continue.
So, what is causing the increase in chocolate price?
The answer is that it is a simple case of supply and demand.
In December, the International Cocoa Organisation said there could be a 150,000 tonne deficit in the amount of cocoa beans produced in 2014.
There is a significant lead time in cultivating cocoa crops so the supply of cocoa will remain relatively static. In addition, the supply problems are being compounded by prospects of an El Nino weather pattern which can result in crop damaging dry winds in some of the leading cocoa growing countries in West Africa such as Ghana and the Ivory Coast.
Demand on the other hand is surging.
According to Euromonitor the value of chocolate consumption in major emerging markets such as Asia and Latin America will grow at more than double the rate of the world average in the next 5 years.
It’s estimated that consumers in the Asia Pacific region will eat 1.096 million tonnes of chocolate by 2018. This represents a 27% increase from 2013 and compares to a 5% increase in Western Europe (the biggest current buyer of chocolate) over the same period.
So in conclusion, there are supply problems, rocketing demand and higher chocolate prices seem inevitable.
What better excuse therefore is needed to buy that extra chocolate bar now before prices rise?
Published on: 17 Apr 2014
When I was younger I can remember queuing with friends to get the latest album by my favourite group. At the risk of showing my age though it’s been a long, long time since I last did that.
It’s not because I don’t like music anymore but rather that it’s now so much easier to buy music online.
Things have changed quite dramatically for the music industry when it comes to their distribution methods.
In my youth it was pretty simple. Record companies would distribute the albums via the record shops.
Fast forward several years and over the last decade music has been increasingly distributed online via platforms such as iTunes and Amazon. There’s also the not insignificant impact of illegal downloads of music.
Even if you still want to buy the more traditional CD versions of the albums rather than the digital version, then supermarkets such as Tesco sell the leading CDs at very cheap prices.
The high street music shops have struggled to stay alive. Several high street music shops such as Virgin Megastores, Our Price and Zavvi have all gone out of business.
Students of strategy though would not really be surprised by this as according to Michael Porter’s generic strategies there are two main ways of competing. Namely, cost leadership or differentiation.
In simple terms, cost leadership is where a company can produce something at a lower cost than its rivals whilst differentiation is where an organisation can charge a premium for its product as it’s “different”.
A high street chain of music shops is going to have a significantly higher cost base compared to companies that sell music over the internet. Property costs are going to be significant and will make it impossible for high street record chains to ever win the cost leadership battle.
Whilst it’s not looking good for the big chains of record shops what about the smaller independent record shops? Clearly they could never compete via cost leadership so what about differentiation?
On Saturday the seventh annual UK Independent Record Store Day will be held.
More than 240 stores have signed up to this year’s Record Store Day and tomorrow’s event is aimed at reinvigorating interest in the independent music stores.
At last year’s event people were queuing to get into the shops. Not to buy the cheap music but to savour the atmosphere, talk to people who were interested in similar types of music and to buy some of the more unusual music.
Hopefully this differentiation approach will work as in my opinion it will be a sad day if all the independent music shops disappear and we can only buy the music online or at a supermarket when buying our weekly shop.
Published on: 10 Apr 2014
It looks like whoever was in charge of recruitment at this Museum didn’t do their job properly. The end result is that the museum is now worse off by $500,000.
When the National Agriculture Museum in the Czech Republic was looking for a new Chief Economist they interviewed Vladimir Prokop. The interview obviously went well as Mr Prokop was offered the job and accepted it to become the new Chief Economist of the museum.
One of the key things that should always be done when recruiting people is to ensure that suitable references and background checks are made.
It looks like in this situation though the reference checks weren’t done properly as Mr Prokop had applied for the job with a fake name and far from having a perfect background for a career as a Chief Economist, his background was that he was a convicted fraudster who was on the run from prison.
He had in fact escaped from prison last year whilst he was serving a sentence for stealing 10 million Czech crowns from the Evangelical Church of Czech Brethren.
He continued this approach to life in his new job and stole $500,000 from the museum.
That was not part of the job description of a Chief Economist.
In fact, far from being a Chief Economist he was more of a Chief Escaper as when the police came to arrest him at his office he managed to avoid arrest by running through the museum exhibition halls, jumping down an emergency exit staircase and then hailing a taxi before escaping.
My guess is that when the museum looks to recruit the next Chief Economist they’ll pay more attention to getting the proper references.
Published on: 05 Apr 2014
Wow – it only seems like yesterday that we started our blog and Facebook page and yet here we are this week celebrating 100,000 fans on Facebook so a big, big thank you to all of you that read the blog and follow us on facebook.
Our blog readers really do come from all around the world. Our latest readership report showed that our blog has been read in 180 countries in the last 30 days!
So, thank you, dankie, shukran, do jeh, grazie, gracias, asante, merci (in fact sorry but we can’t do 180 languages but thank you all anyway!)
We’ve also got a little something to give back to you. We’ve got a short 2 minute survey and 5 people who complete it will be selected at random to win a free online ACCA or CIMA course.
If you’ve passed all of your exams or aren’t studying for them then don’t worry as if you are lucky enough to win the free ACCA or CIMA online course prize draw you can transfer the course to the person of your choice.
To complete the 2 minute questionnaire to stand a chance of winning a free ACCA or CIMA online course click here.
Thank you again for all the nice messages you’ve sent us over the years and here’s to the next 100,000 Facebook fans.
Good luck in the draw for a free ACCA or CIMA online course.