Hello, everyone.
This is Enta.
In a recent news report,
I saw an article that said...
I think a lot of people know what this is, but to explain what it means...
There are two sites, A and B.
We will manage costs at both the AB and on-site locations and move the project forward.
The project at Site A wrapped up as scheduled, and we made a profit of 1 million.
Project B is running a deficit of 1 million less than planned.
Large companies generally prepare monthly financial statements.
We carefully track our costs every month and manage our cash flow effectively.
That makes it easy to see that next month is going to be rough.
And when Company B is on track to end the month in the red, the costs (expenses) incurred by Company B are recorded in Company A’s books.
That way, B's deficit will disappear, and it'll look good, right? It's a wash!
Naturally, the cost for Site A will be as originally planned (cost price).
If you do this, you won't be able to determine the actual construction costs, and the cause will remain unclear.
In the case of large companies, in particular, since they have shareholders, such practices are considered fraudulent accounting.
Simply put, it means there’s one shared budget, and expenses are managed in detail within that budget. (It all comes down to the same thing, though...)
So, while the bottom line is what really matters, that’s not exactly an option for major companies, and
It's a serious problem because it could lead to violations of the Financial Instruments and Exchange Act or the Commercial Code, as well as false statements and tax evasion.
It's not limited to major companies, but they almost always do this kind of thing! lol
As far as I know, I think 99% of them do it. (This is just my personal opinion.)
It varies from large to small. (Isn't "small and medium-sized" a given?)
While some operations at major companies generate exceptional profits, there are others where they have no choice but to take on enormous losses. (I think that’s the case.)
For us subcontractors, there are construction sites that are simply beyond our comprehension—as if ordained by a higher power!!!
What should we do to wrap up that project?
From the very beginning, we have no choice but to assign the work to another site and make adjustments there.
Because senior management, who know nothing about what’s actually happening on the ground,
"Hey!! Why did you take that shot?!?!?"
That's why it turns out that way.
Even if it’s a project that salespeople and construction supervisors at each branch think is “unavoidable,” it doesn’t matter to upper management...
And as for the site side, will they pay from another site, and what will the project name be on the invoice...
Even if I told upper management the truth and sought their advice, I don't think they'd be able to say anything.
If we don't do that, the branch's construction manager will keep getting disciplined and having their pay cut, and eventually there won't be anyone left lol.
In a world like this, someone has to take responsibility (Poison)
What if you were in a position like that?
To be honest, if there are no repercussions for reclassifying costs, I don't think it's a big deal.
I used to do that, too.
Or rather, I was the one who got swapped out, lol.
The reason is that when I'm reassigned to another site, I check with the person in charge of that site.
Then they usually don't like it.
It's because profits at my worksite will drop and my performance evaluation will suffer.
That’s actually just common sense, isn’t it?
However, in my case, I had agreed to the transfer as part of the welcome offer.
That's because even if we reassign staff, the branch's overall profit won't change, and,
I figured that, after all, even if a green, young employee like me were to get recognized, it wouldn't really matter anyway, lol (how cocky of me).
At my workplace, things always seemed to be either break-even or slightly in the red.
I didn't really care, but maybe because of that, I was the guy who was way out of the running for company awards lol
There was a news article recently about a major general contractor switching contractors, but to be honest, this is something that happens all the time.
Since most small and medium-sized contractor firms—especially the smaller ones—operate on a year-by-year basis anyway, the idea of switching contractors is completely out of the question.
Anyone who categorically insists, “That’s not true!” regarding this matter is highly suspect.
I think it’s easier to file accurately and pay my taxes on time, so I don’t think switching tax returns will have much of an impact. (Though I may not be fully informed on this.)
These days, I don't bother with tax-saving strategies because they're pointless. (There's no need to defer taxes.)
Since the company only has one budget, we just have to make do with it as we go here and there.
What do you all think?
So, how about your company?
See you later.
