Hire more competent accounting managers.

Posted: August 26th, 2021

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Option C: Hire more competent accounting managers.

Uber Company should hire more competent and effective accounting managers to prevent oversights and accounting errors when making a settlement to the drivers. This is the most crucial technique in the business as it will ensure systematic and detailed recording of accounting information and transactions of the company’s profit margin after deducting drivers’ earnings and interest. More so, competent accounting managers will help track the company’s income and expenditure, ensuring statutory compliance such as tax is made timely and to relevant authorities. Equally, having proficient accounting managers will ensure that financial reports like income statements, balance sheets, and cash flow statements are prepared on a timely basis, thus eliminating recurring errors from one fiscal year to another. Hence, if the company had hired competent accounting managers, the mistakes from the incorrectly-applied commission would not have lasted for more than two financial years.

Furthermore, competent account managers will help the company calculate the drivers’ earnings based on the correct formula. The company reported that it used an incorrect formula as it collected its 25% revenue based on the driver’s total fare instead of deducting taxes and fees.  These are accounting errors that managers would have noted on time to enhance the driver’s trust.  By ensuring proper accurate and timely recording by accountants, refunds of $ 900 per driver because of the accounting error could have been avoided, hence the  $50 million loss to the drivers.  Finally, competent accounting managers could ensure proper disclosure of financial information. The company disclosed in its website that the median annual income for New York City drivers was approximately $90,000, while in reality, only a ten percentile was earned that month. Consequently, the company lost $20 million as a settlement to resolve the charges with the Federal Trade Commission for misleading prospective drivers through inaccurate disclosure. Therefore, competent accounting managers will play a fundamental role in the company’s success since they have a code of conduct to work with that will ensure trust and protect the company against recurrent accounting errors and losses.