Single Entry and Double Entry Accounting

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Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c
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ENTREPRENEURSHIP MANAGEMENT

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What Is Entrepreneurship?

1. Entrepreneurship—the process where individuals or a group of individuals risk time and money in pursuit of opportunities to create value and grow through innovation regardless of the resources they currently control.

2.  Entrepreneurial ventures vs. small businesses
Entrepreneurial ventures—organizations that are pursuing opportunities, characterized by innovative practices, and have growth and profitability as their main goals. Small businesses—organization that is independently owned, operated, and financed; has fewer than 100 employees; doesn’t necessarily engage in any new or innovative practices, and has relatively little impact on its industry, usually remaining small by choice or by default.

Why Is Entrepreneurship Important?

1.  Innovation—a process of changing, experimenting, transforming, revolutionizing, and a key aspect of entrepreneurial activity.
2.  Number of New Start-Ups
Assuming that some of these new businesses engage in innovative practices and pursue profitability and growth, then entrepreneurship has contributed to the overall creation of new firms.
3. Job Creation
The latest figures show that virtually all new net jobs were generated by firms with fewer than 500 employees.

The Entrepreneurial Process

1.  Exploring the entrepreneurial context
It includes the realities of the new economy, society’s laws and regulations that compose the legal
environment, and the realities of the changing world of work.
2.  Identifying opportunity and possible competitive advantages
3.  Starting the venture
It includes researching the feasibility of the venture, planning the ventures, organizing the ventures, and launching the venture.
4. Managing the venture
It includes managing processes, people, and growth.

What Do Entrepreneurs Do?

1.  Initially, an entrepreneur is engaged in assessing the potential for the venture, and then dealing with start-up issues.
2.  Once the venture is up and running, the entrepreneur’s attention switches to managing it.
3.  Finally, the entrepreneur must manage the venture’s growth.

Preparing to Operate a Small Business:

Writing a Business Plan:
A business plan is a document written by an entrepreneur or perspective owner that details the nature of business, the product or service, the customers, the competition, the production and marketing methods, the management, the financing and other significant aspects of proposed business venture.
It has several purposes:
•  To think in concrete terms about every aspect of business.
•  To able to get financing
•  To measure progress
•  To establish credibility with others.
The plan should describe the match between the entrepreneur’s abilities and the requirements for producing and marketing a particular product or service.

WHAT IS CHANGE?

Organizational change is defined as any alteration in people, structure, or technology. Change is ever present in organizations and cannot be eliminated. Instead, we need to look at the key issues related to managing change.

FORCES FOR CHANGE

There are external and internal forces that create the need for change.

A.  External forces that create the need for change come from various sources.
1. The marketplace
2.  Government laws and regulations
3. Technology
4. Labor markets
5. Economic changes

B.  Internal forces tend to originate primarily from the internal operations of the organization or from the impact of external changes.
1.  Changes in strategy
2.  Changes in the workforce
3. New equipment
4.  Change in employee attitudes

STIMULATING INNOVATION

Innovation is important to organizational success in the marketplace.
Creativity versus Innovation
There is a difference between creativity and innovation.
1.  Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas.
2.  Innovation is the process of taking a creative idea and turning it into a useful product, service, or method of operation.
 
How can managers foster innovation?
 
a.  Organic structures positively influence innovation.
b.  The easy availability of organizational resources provides a critical building block for innovation.
c.  Frequent inter-unit communication helps break down barriers to innovation.
 
Human resources variables are indicative of the important role that people play in innovative organizations.
 
a.  Innovative organizations actively promote the training and development of their employees so their
knowledge remains current.
b. Innovative organizations offer employees high job security.
c.  Innovative organizations encourage individuals to become idea champions—individuals, who actively and enthusiastically support a new idea, build support, overcome resistance, and ensure that the innovation is implemented.

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