Archive for December 2010

Finance dept. in Japanese companies (vol.2)

As discussed previously, most of domestic Japanese companies require more than two weeks to close monthly report due to the attention on accuracy rather than timeliness. The business insight is also merely discussed but just analysis of the actual figures is discussed.
These circumstances are generated from tax accounting requirement. Most of Japanese companies are very conscious about the tax requirement and the accounting books are mostly based on tax accounting policy.
Of course management reports with business insights are prepared, but by various operating divisions and not organized or integrated.
Finance dept. is expected to organize them but sometimes there are some discrepancies between the finance and other operating divisions.
Therefore an integration of management reporting is required under one-voice controlship.

Yoda Accounting Office is ready to assist you to establish your business in Japan or invest on Japanese companies. Please feel free to contact us through the form.

Finance dept. in Japanese companies (vol.1)

Finance department in Japanese companies are not always same as the ‘finance’ department in other countries.

Finance functions are almost same such as book keeping, collecting money from customers, paying money to suppliers and reporting to the management.

Most of Japanese (especially domestic) companies pay attention on accuracy and tax-oriented accounting. Monthly closing sometimes require more than two weeks, that is because such accounting method does not allow accruals for tax reasons.

Another difference is FP&A function. Most of Japanese companies’ finance consist of financial accounting and treasury, but not FP&A.

Such business analysis and planning function is provided by a corporate planning section, or planning section even in sales section or other operational sections.

It is important how to establish the relationship between finance and such corporate planning sections in terms of analysis in financial point of view.

Yoda Accounting Office is ready to assist you to establish your business in Japan or invest on Japanese companies. Please feel free to contact us through the form.

To see the future (vol.1)

I was in a subway train yesterday morning.

A train behind us was cancelled due to a mechanical trouble, then our train was also delayed to adjust the interval.

Announcements were telling the status of the delay and apologizing.

The trouble shooting has been much improved while there was no announce or it was unclear a few years ago.

One thing I found, however, was that they told us what the cause was and the status, but not the forecast of the recovery.

Passengers may understand the situation if they know the cause, but it is not enough to make a decision what they do next.

If you are in a hurry, you have to make a decision to get off the train and choose an alternate route, or to remain in the train to wait for the recovery.

In order to make the decision, you may want to know how late the train will be, and how soon it is recovered.

It is same for the financial management of companies.

It is hardly usual that a business goes as planned. It is important for running a business to know not only the past(=actual) but also the future that what the year-end will be, or when and how much the profit will be, etc.

If the information is available, you will be able to make a decision to go, or to take a certain action.

Finance sometimes means the figures in the past or closing, but more importantly, whether it is useful for future decision making.

Exhibition Eco products 2010

I visited an exhibition  “Eco products 2010“(link Japanese only) at Tokyo Big Sight on December 10th.

Many companies apply the exhibition following the recent trend of ecology. Most of visitors were students or consumers with free entry fee, and the organizers of each companies are mostly CSR depertment to respond such consumers’ interest.

The most major topic at the exhibition was EV (electric vehicle). Free trial ride was available.

I rode Mitsubishi MiEV.

An EV is still to be improved in terms of cruising range and the price, but I am admired that the EV now becomes developed enough to run on a public road.

A mobile phone, which used to be a luxury item for limited people, have been widely spread. I believe the time will come soon when an EV will also be widely spread just like a mobile phone.

Cost down – sales price down – wide spread – fixed cost down for further cost down, is a basic cost down cycle, which is to be expected soon.

Our office supports a project to convert a regular gasoline car to an EV “100 Zero“.

We believe this project will accelerate the cycle above with converting a regular car to lower-cost EV while a brand-new EV is still expensive.

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