Monthly Archives: October 2017

Communication in Modern Business

Businesses all across the globe spend a significant fraction of their revenues in establishing effective communication systems to ensure hassle free communication with their clients/customers. Both within and outside the organization, business communication plays a crucial role in determining the success or failure of the firm.

An Overview of Communication Expenses in Current Era

The cost of communication for an organization in today’s business has become expensive, owing to the boom in different types of technology and the increasing base of companies in several countries. From the starting days of telephones to the current world of web conferencing, video conferencing and VoIP, communication methods in businesses have evolved to a great extent. Now, the greatest challenge for large corporations is not that they have to provide PCs to their employees, but a far greater challenge is to manage the overall communication cost-effectively. Information communication technology is now an integral aspect of business management. It forms a vital link between all core functions of the business, be it manufacturing, operations, marketing, sales, advertising, logistics, or the supply chain.

High Cost Factors in Modern-day Businesses
If we leave aside communication technology, there are some other vital and more expensive costs related to communications. Costing related to traditional and conventional meetings have increased to a large extent in the recent years. Travel costs, hotel rentals and catering services for businesses have shot up tremendously in this decade. Arranging business meets of hundreds of thousands of employees is certainly possible for large-scale companies but for the SMEs, it is not always a cost-effective method to conduct multiple meetings in several hotels, with clients and employees, given the high costs involved in doing so. The need of cost-effective business communication solutions has become increasingly important now owing to the harsh economic conditions that have been in existence since the past couple of years. The current situation is:
Business managers especially associated to finance and accounting face the challenge of allocating budgets to the business communication strategies.
Information technology managers in a company have been facing serious challenges to limit spending on technology and communication costs.
Limiting High Costs in Communication Tools
Irrespective of the fact that you have a home office or a multi-national firm, here are some steps you can take to limit the communication cost in modern business.
Significant costs can be saved by decreasing the frequency of traveling for business meets in hotels. Using web conferencing or video conferencing is an ideal option. It also saves time of the professionals in traveling.
Online conferencing has hosts of benefits. Innovative technologies in web conferencing have made it possible to conduct live polls, question answer sessions and easy sharing of files and folders. This technology is of vital help for interacting with colleagues situated thousands of miles away.

Why You Should Have a Walking Meeting

Did you know?
According to CNN Money, Steve Jobs believed in the power of walking meetings. A quote from his biography says, “taking a long walk was his preferred way to have a serious conversation.”
I can tell you straightaway why I agree with Steve Jobs when he says that walking meetings are better? New scenery, fresh air, direct sunlight, an excuse for re-energizing, and all this accompanied with a few melting calories. I’m sure you are impressed too!
This new wave has taken corporates by storm. It is the concept of not working out after work, but while working. And the focus is directly on seated, indoor meetings, which are slowly becoming obsolete and are being taken over by walking meetings.

You may argue that it is not possible to use the whiteboard to chalk down notes, or jot down important points while you walk.

These may be valid points, but I’m sure you carry your mobile with you all the time. And, if the point made is really important, then use the stylus and write in short, or type it and save it as a draft. But using smartphones too much is also not recommended. The best way would be to carry a small diary and write the points.

The point made above should not deter anyone from conducting walking meetings, because the advantages are way more beneficial than the drawbacks.
» Walking outside the workplace energizes people and makes them active while the different environment encourages new ideas and creativity.

» Walking while talking to each other not only enhances a positive working spirit, but also lowers hierarchical work distinctions due to which people feel more at ease.

» Walking helps in burning calories and stimulating the flow of oxygen around the body. It perks up brain function and also increases problem-solving capability.

» This type of meeting allows employees to work without interruptions and helps maintain confidentiality.

» Walking meetings can save office resources and make the workplace energy-efficient; as the participants are out, their computers can be shut down.
Let’s take a look at some tips to remember before, while, and after conducting a walking meeting.
Before the Meeting

If you have decided to schedule a walking meeting for the first time, inform all the members who will be attending the meeting beforehand. I’m sure everyone is aware of this point, but this time you have to inform them that it will be a walking meeting and not a seated one, and be ready to get a few raised brows and eager inquiries.

You have to chalk out the complete plan in advance. Keep the group small. Only invite those who are really concerned with the topic of the meeting. If you invite a large group, then all of them might not be able to listen to each other or the speaker.

Different Forms of Business Communication

Communication is a process which is a must for exchange of useful information between two individuals. In fact, it is the best way of learning new things that are important for business development in all kinds of organizations. It is possible to communicate with the other person in multiple ways and modern-day employees working in diverse sectors need to be fully aware of these ways of improving the overall way of functioning of their firm. Given in the next section are some of the different forms of communication in business which are globally used.

Main Types of Business Communication

Internal Communication
Internal communication is the type of communication in which interaction takes place within a corporate house. There are formal as well as informal channels of internal communication. Upward communication, downward communication and horizontal communication are considered to the major types of internal communication.

Upward communication
In upward communication, the information is passed on from the junior level employees to the management of the company. This enables the employees to participate in the company’s business and policies and give their valuable inputs. This kind of communication can help the employees gain confidence, and understand the functioning of the organization better.

Downward Communication
On the contrary, in downward communication, the flow of information is from the top-level management to the subordinates. This type of communication enables the organization benefit from the managerial expertise and experience of the top level management. However, the management should make sure that downward communication does not take away the employees freedom of expressing their views on certain aspects. So, giving some powers to the employees in spite of having downward communication is essential for growth of the organization.

Horizontal Communication
In the case of horizontal communication, we see an interaction and collaboration between people employed at the similar posts or communication between to departments or sections. This helps them get their queries solved and gain knowledge from their colleagues. Interaction between workers must be promoted by the top management for exchange of ideas and new concepts.

External communication
External communication is when the company employees or officials get in touch with people outside the organization for the purpose of business expansion. The main advantage of such type of communication is that the management gets to know what are the expectations of the customers/clients in the market, and what the competitors are offering. With this information, the existing product range can be improved and new products can be developed and introduced.

Communication by Letters
Letter communication is a widely used technique to communicate with the outsiders. This makes the outsiders understand the points which the company management wishes to convey easily. Moreover, the company can have a copy of the letters with them as a proof of communication with outsiders.

Smart Business Analytics

The growth of a business depends on the accounting profit earned in a financial year. That makes it imperative for any business to track and calculate it. Here, we have provided the formula for calculating accounting profit along with explanation about certain related accounting terminology.

TAGGED UNDER: Accounting


In mathematical terms, profit is defined as ‘the difference between the cost price and the selling price of a product where the selling price is greater than the cost price’. But in the bigger picture where business and investments are involved, account profit is best described as the surplus amount which remains after settling all the expenses incurred in the business growth and development.

Accounting profit does not include opportunity costs which is included in calculation of economic profits. If we consider areas of business, when there is a surplus earned on the amount that includes the secondary costs (inclusive of administration expenses, finance expenses, establishment expenses and salaries), the profit is termed as gross profit. Hence, accounting profit is the difference between income received and payable expenses within the defined accounting period.

Before we understand about how to calculate the formula for accounting profit, there are some terminologies that need to be understood.

Capital amount (CA) = Assets (Fixed + Current) – Liabilities (Current + Long term)

This capital amount is inclusive of the profit earned sans the drawings/expenses incurred from the capital. Now the calculation is done on basis of accruals or matching concept. The gross profit earned on a capital precisely includes all the costs which includes the amount indebted to trade creditors. The accruals or matching concept ensures that the expenses incurred in the profit calculated to earn the profit should match. Say, for instance, you have 10 pencils and sold 8 of them. So you cannot make a profit and loss account with the cost of all 10 pencils when you still have 2 in stock. If you do not follow this concept in business, the accounting profit earned will be lower than it actually would be.
So net profit/accounting profit is calculated as:

Accounting profit = Gross Profit (Gross sales/revenue) – Expenses incurred in earned gross profits (Operational + Miscellaneous costs).

Gross profit, which is reported on upper portion of income statement in balance sheets, is calculated by deducting the cost of sold products from the total sales revenue. The sales revenue also includes purchase discounts, and interest generated from investments. The second profit that follows up is the operational profit which can be calculated by deducting operational expenses from gross profit. Operational expenses include commissions, advertising expenses, hourly wages, equipment maintenance charges and freight loading charges. Net profit or the accounting profit forms the last section of the income statement.