Accounting as a Motivator
Accounting can motivate employees because it measures revenues and expenses for a period. These numbers can provide real and obtainable incentives for employees.
For example, many companies pay sales personnel commissions based on a percentage of sales, as reported by accounting. This provides an objective way to reward certain employees. Also, many executives receive hefty bonuses based on net profit and financial statement numbers.
According to research conducted by the American Institute of Certified Public Accountants, "in 2011, CFOs of private companies had on average 54% of their bonuses contingent on meeting financial performance..." (Matejka, 2011).
Another example is a business that has late and delinquent accounts receivable. Accounting reports on receivables can motivate collection personnel who manage late accounts.
Payments received and recognized in the accounting system show real and objective transactions not based on opinions, gossip, or hearsay.
Matějka, M. (2011). CFO compensation survey: Incentives and performance targets following a recession. Retrieved from http://www.aicpa.org/...
