Stop Bad Financial Habits And Choose A Fresh Start

People are often influenced to give unsolicited advice to others about the easiest way to manage finances. Even though of the will make sense, the majority of these are very generic in general. You must exercise caution when you assemble a monetary strategy out from this information, though it’s important to create a precise and consistent plan.

Nevertheless, you happen to be still left together with the unanswered question. How would you prevent the decline of funds on stuff that are of no use, and yet approach managing your individual finances?

The Situation: A lot of people, including you, don’t fully understand how important it is to save cash with regard to their future. Figure out how to save first then spend, not the other way around. While this is superior to no savings in any way, it is definitely not the correct way to build an excellent savings plan.

Steps To Managing Your Individual Finances Well.

Listed here are some important tips that you can consider if you wish to reduce costs for the future. These techniques have helped a lot of people be successful at taking better proper care of their finances.

Put 20% Of The Earnings Into Savings

In case you are to be successful in the foreseeable future, carry out the opposite of just what the average person does. As opposed to saving whatever remains, save first and spend afterward. Even if you are expecting a reduced check than normal, be sure to save 20% out from each and every single check that you receive. Make sure to deposit this money once you receive money. You will have learned a vital lesson, and saving the amount of money than enables you to work your way down taking good care of everything, bills first.

Saving money assists you to create a healthy financial habit that will help you to budget your money efficiently for the rest of your way of life. You could possibly feel much less stressed about finances when you know that you have an urgent situation fund available.

Don’t Complicate Matters

It is obvious the iPhone 7 is great. Your buddies and colleagues have purchased it,but the iPhone 6 plus is one that you simply bought a few time ago. While many of these new gadgets are fun and exciting to have, you undoubtedly don’t need a new phone unless your old phone is dying. You must never buy it unless you really want an iPhone 7.

Can that new phone do something that your particular old model can’t do? It is essential to sometimes treat yourself with luxuries, just make sure this really is something great rather than some of those undesirable habits one does repeatedly. Additional money is the best money to pay, not the 20% you will be saving.

Cash Over Credit

Maybe you are from the opinion the charge cards in your wallet should be used, not hidden away. Often we start off with good intentions buying only small things likely to pay them off at the conclusion of every month. $50 here or $25 there can’t hurt, and you can always pay it off following the month. That brand of thinking gets people in trouble quickly, plus they rack up a pile of debt.

Using cash whenever you can will help you to curb this tendency. Don’t make use of credit card unless it’s a crisis situation. Alternatively, it is possible to change it out having a debit card, and that is a significantly better option!

Keep in mind that becoming a rock star at personal finance doesn’t have to be hard. It requires breaking undesirable habits and creating new, healthier ones.

Source by Donna Gain

The post Stop Bad Financial Habits And Choose A Fresh Start appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/stop-bad-financial-habits-and-choose-a-fresh-start/

Best Tips to Avoid Squandering Your Inheritance

When you receive an inheritance, it is important to figure out what will you do with that money. If you do not plan properly on how to spend that money, it will slip out of your hand within no time. If you have already got the cash, or you are about to inherit the money, here are some five tips for using it properly.

Don’t Rush Your Decision

People generally do not allow the money for a cooling-off period, after receiving the cash. This is one of the worst mistakes that people usually do. They are always in a hurry of spending the money without thinking twice. You can save the money either in a money market account or savings for at least two months in order to plan your options. You can also put the money into a short-term deposit for saving it, because you have to pay penalty if you withdraw it before time.

Assess Where You Are

If you analyse your present financial situation, you can get an idea about your future move. You can plan to start a college fund for your children, add the money to your retirement savings or keep it as an emergency fund. Make a goal in life, so that you can achieve it with the help of your inheritance.

Be Realistic About Your Inheritance

A sudden chunk of money will you lead to towards a changed lifestyle. The things like a new car or a luxury vacation that you could not afford before will now seem to be very tempting. You have to be careful to control your temptation and save your money for future needs.

Establish Boundaries

It is evident that when you receive an inheritance, many people come with a try to have a share in the money. Bank or financial sales people may call you so that you invest your money in their products. You may also be asked to make a huge donation by any charitable organisation. So, it is very important to set boundaries and prepare yourself for saying no to the people.

Be Proactive

You may need some professional help to figure out how to save your inheritance. It is absolutely fine to hire a financial advisor, but do not make your decision solely as per his guidance. In the end, it will be you who will take the final decision. Do some research and set your goals before taking professional’s help.

Thus, though an inheritance is like a blessing to you, but along with it comes responsibility. Plan properly to make sure that your money lasts for a longer time.

Source by Rajesh B Sanghvi

The post Best Tips to Avoid Squandering Your Inheritance appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/best-tips-to-avoid-squandering-your-inheritance/

The Purpose of Adware

Adware is a type of software that could be installed on a computer with consent from the end user. This software may monitor internet usage in order to display advertisements from third parties. It is often packed inside of legitimate downloads. The main purpose of these applications is to provide the end user with advertisements. It could also be downloaded freely typically with consent from the user.

Adware could be integrated with software in such a way that it cannot be removed or bypassed. It is not a virus and it may or may not be detected by anti-virus scanning programs. It is not distributed the same way that viruses are spread. It could actually be attached with something that the end user actually chooses to download. Often you could find adware embedded in free downloads that may do more than the stated purpose of the software.

Adware could be considered a form of direct marketing. Banners, toolbars, and pop-up windows could be used to provide advertisements to the end user. Other forms could make changes to your browser homepage or even take some control over your system with the intent of generating sales for a third party. Revenue from advertising could be generated by targeting advertisements towards the end users computing habits. Revenue could either be earned by the vendor or the vendor’s partners and associates. Adware is used by shareware programmers with intentions of making money from a product, other than attempting to sell it to the user. There are numerous companies such as Web3000, EverAd, and Aureate that offer to display banner ads in exchange for a portion of the revenue from banner sales.

Adware is basically small advertising software that could be included within a larger computer program or a file that you have downloaded from the internet. Often it is poorly written and may pose a threat to your computer system. It is similar to spyware however it does not necessarily transmit personal information. There is always the possibility of adware being bundled with spyware to collect personal information. Ultimately adware is not good for your computer for many reasons and it could pose a threat to the security of your computer system.

Source by Paul RJ Wilson

The post The Purpose of Adware appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/the-purpose-of-adware/

How Many Bills or Invoices Are Sent Out Each Year and to Whom Are They Sent?

The summary information below from Billentis and Postfinance illustrates the typically billing flows, in percentage terms, in these two major market sectors (B2C and B2B) and according to whether a company is large, medium-sized or small.

B2B Billing/Invoicing

Large companies (250+ employees) -11.6% to other large companies, 1.7% to medium companies and 2.5% to small companies (total of total=15.8%).

Medium companies (50-249 employees) -10% to other medium companies, 7% to large companies and 1.3% to small companies (total of total=18.3%).

Small companies (1-49 employees) -7.5% to other small companies, 0.1% to large companies and 8.3% to medium companies (total of total=15.9%).

B2C Billing/Invoicing

Large companies (250+ employees) -43.3% of all billing to consumers.

Medium companies (50-249 employees) -5% of all billing to consumers.

Small companies (1-49 employees) -1.7% of all billing to consumers.

Although bills can be sent from one consumer to another (C2C), this is a relatively small market (estimated to be less than 1% of all bills). The two large sectors are therefore between businesses and their consumers (B2C) and between businesses (B2B). The B2C and B2B market is close to 50/50 but the B2C market is slightly larger in transactions but quite a lot smaller in terms of transactional value. Let’s look at these two markets in a little more detail individually.

The B2C market

As the above information shows, large businesses send out the greatest proportion of B2C bills (43.3% of all bills). Medium sized companies send out only 5% and small or micro companies only 1.7%. In the UK as an example, the estimated total volume of bills is around 5 billion per annum. This means that large companies with more than 250 employees send out 2.165 billion bills. Given that the UK adult working population is around 26 million, this means that each consumer gets 80 bills a year on average, from a large organisation of one form or another or around 7 bills a month. They get a further 1.5 bills from medium and small companies, making an average of 8.5 bills a month in total.

As a different example, in the US, the estimated total volume of bills is around 42 billion per annum. This means that large companies with more than 250 employees send out 18.18 billion bills. Given that the US adult working population is around 130 million, this means that each consumer gets 140 bills a year on average from a large organisation of one form or another or around 11.5 bills a month. They get a further 2.5 bills from medium and small companies, making an average of 13 bills a month in total. The higher average consumer bill volume versus the UK may be explainable by two major factors. Illegal workers in the US are not counted in the adult working population figures and the US has Federal and State based system businesses, making for less truly national “super-billers”. For example, in a large utility may bill a large % of the UK population for its gas and electricity needs (a task that may involve a hundred utilities in the US). This makes the average bill volume artificially higher than it may be in reality, perhaps by as much as 15%.

In terms of value, there are no accurate figures relating to the average bill size or amount. However, it is estimated that the average “ticket” in the B2C market is around £65 to £75 (or $75-$95 in the US).

The B2B market

As the above information also shows, large businesses send out the largest proportion of B2B bills (11.6% of all bills) to other large companies but medium-sized companies (employing 50 to 249 employees) send out almost as many at 10% and even small companies account for 7.5% of the total. However, the picture is complicated further by the additional B2B billing that is done between Large, medium and small companies. Hence, in aggregate, large companies send out 15.8% of all bills (11.6%+1.7%+2.5%).

Once again using the UK as an example, this equates to 790 million bills. In the US this would be 6.64 billion bills. Just to complete the picture, medium-sized companies in aggregate send out 18.3% of all bills and small companies in aggregate send out 15.9%. Although this makes the B2B transactional volumes very similar, in aggregate the medium-sized companies send out proportionally the most bills.

In terms of value, accurate figures relating to the average bill size or amount are even harder to come by, as companies have very high variations from very low amounts (such as £15 0r £25 for example) to very high amounts (running to thousands or hundreds of thousands in some cases). In addition, there are no formal records kept in terms of average B2B invoice amounts. However, it is broadly estimated that the average “ticket” in the B2B market is around £1500-£2,000 (or $1250-$2500 in the US).

The penetration of ebilling

Once again, definitive figures are difficult to find when it comes to the penetration of ebilling. However, in the B2C market, it is large companies that have made the most progress, led by utilities and telecommunication/mobile phone companies typically. Here, the estimates are that penetration has been in the range 7-9% in Europe, and a little less (6-8% in the US). In medium-sized companies, these numbers are reported to be less than a third of these figures or only 2-3% penetration and in small companies, considerably less than 1%. This leaves a lot of upside potential to switch to ebilling of one form or another across all three organisational size levels.

In the B2B market, it is apparent that accounting software and separate specialist billing software has made some significant inroads into large companies. However, this has largely translated into accounting system driven invoices (or email based invoices with PDF attachments, which are but fully digital bills of course) and as often as not, this has therefore become an additional channel to paper-based invoices, with many organizations reluctant to eliminate physical invoices too quickly. There are also many additional complexities in the B2B market when it comes to billing. This includes integration with purchase order systems, dealing with credit noting, bill line-item dispute handling and multiple decision-maker issues for bill sign-off. This is not to mention the accurate and legal handling of taxation issues. All of this means that the decision to take up ebilling in the B2B space usually involves quite high up-front capital expenditure (on new or changed software), long integration times, changed internal processes and the need to cover monthly fees (e.g. software maintenance and per user etc). There are alternatives to this approach but as yet, interest and take up has been very low.

Summary

A lot of bills are sent out every year in any country with a reasonably well-developed economy. However, it is important to understand that the B2C and B2B markets are very different in terms of transactional volumes, average “ticket” sizes and needs. It is also important to recognise that volumes vary greatly in large, medium and small companies, and their relative interest in making their invoicing practices more efficient will often be very different. This means that the potential for electronic billing take-up is still very high (perhaps as much as 95% of all bills are still not fully digital) but the route to increase overall levels of ebilling take-up needs to be carefully planned for each market segment, in order to be successful.

Source by Jon Warner

The post How Many Bills or Invoices Are Sent Out Each Year and to Whom Are They Sent? appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/how-many-bills-or-invoices-are-sent-out-each-year-and-to-whom-are-they-sent/

Security for Your Patients’ Electronic Records

You need to keep your patients’ electronic data secure to meet both HIPAA and Meaningful Use requirements, but of course beyond that, it is the right thing to do. Your patients entrust you with sensitive information that could be used by criminals to wreck their credit and to provide private medical information to employers or others that they didn’t want made public.

An objective for Meaningful Use requires doctors to protect electronic health information created or maintained by the certified EHR technology through the implementation of appropriate technical capabilities. They don’t specifically state what those “appropriate technical capabilities” are so that you can choose the appropriate ones for your practice now, and as technology changes, you can change with it.

The HIPAA Security Rule lists four types of safeguards you must implement. They are administrative safeguards, physical safeguards, organizational standards and policies and procedures. Part of the administrative safeguard is a security risk analysis. This isn’t something you do once and you’re done; it is ongoing and must be revisited at least annually. It isn’t something you can just delegate to your EHR vendor. You can find details in the Guide to Privacy and Security of Electronic Health Information from healthit.gov. Especially look at Chapter 4.

Cyber security, or security through the Internet, is an important part of mitigating risk. In order to send electronic claims, e-prescribe, send C-CDAs to your patients’ portals, and use the Infobutton to obtain educational material, Internet access is required.

Good hosting facilities protect your data with secure firewalls such as Cisco Adaptive Security Appliances (ASAs) and with Virtual Private Networks (VPNs). Safe practices include using anti-virus software and limiting the websites your staff members can access to only those that are necessary for the software to function and for claims to be sent. Good hosting facilities will load the latest software and firmware updates for all digital devices.

In your office potential threats can come from email and other websites onto your PCs and your server, if you host your own software. Email can carry viruses and phishing attempts. Phishing, according to TechTarget SearchSecurity, is “a form of fraud in which the attacker tries to learn information such as login credentials or account information by masquerading as a reputable entity or person in email, IM or other communication channels.” Ransomware can be hiding in a link or attachment in an email. Ransomware is malware that stops you from using your computer until you pay the ransom. It can encrypt files or stop certain applications from running. There is no guarantee that paying the ransom will correct the problems it created. Websites can be sources of viruses and other types of malware.

How can you avoid these threats? Teach your staff members not to click on anything that looks suspicious whether it is an attachment in an email or a link. Keep your anti-virus software up-to-date. Load updates to your operating system and to your firmware on digital devices. Give users only the access they need to do their work. Limit surfing the web and other non-work activities to keep your data, PCs and network safe.

Source by Susan Jones

The post Security for Your Patients’ Electronic Records appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/security-for-your-patients-electronic-records/

Reversionary Property – Investment Without the Risk

Reversionary property is a good medium to long term investment. Though non-income generating, reversions are superior when it comes to capital appreciation. Easy and virtually free from investing risks, reversionary property investments also offer potentially high returns. And since it is almost impossible for property prices to fall by half their present value, it makes good business sense to invest in reversionary property.

In reversionary property investment, you simply purchase a residential property from a homeowner at a highly discounted price. A reversionary property can be bought for around half of its value, depending on the age of the vendor and the location and characteristics of the property. Payment is either in a cash lump sum or in monthly installments. The homeowner continues to live in the property as a tenant rent-free and with full legal rights to remain in occupation until his death or until they voluntarily vacate. Then the ownership of the property reverts to the buyer.

Since the homeowner continues to live in the home as if it were his own, he is still responsible for the general upkeep and maintenance of the property such as utility bills, building insurance premiums and capital tax while he continues to occupy the house.

Reversion investments are basically a bet on the life expectancy of the homeowner. The buyer pays the monthly reversionary annuities until the homeowner dies.

Reversionary properties are of two kinds: tenanted, which means that the homeowner lives in the premises, and untenanted, whereby the vendor does not live in the property. In this case, the buyer can use the property or rent it out. Payment can either be in a lump sum, in monthly annuities or a combination of both. Usually, institutional investors, affluent individuals and those looking for a holiday home in the future would greatly benefit from reversionary property.

Investment in reversionary property is beneficial to both the homeowner (vendor) and the buyer. For the vendor, it is as if he is granted a lease that will last until the end of his life. He is released from the responsibility of big-ticket payments on his property such as major works and land tax. He also receives additional income in the form of the cash lump sum or monthly annuities, which could greatly supplement an elderly person’s pension. More importantly, he does not have to sell his own home or move out, thus increasing his stability and peace of mind.

For the buyer, investment in reversionary property is an excellent opportunity. Not only is the property available at a huge discount, most of them are studio flats, apartments, villas and commercial establishments located in prime areas. Since most of these properties were initially purchased as a retirement house, they are often located in a major city or in the quiet countryside.

Reversionary property is definitely one of the least troublesome and safest way of investing in property. It is best for those who would like to have a holiday home when they retire. For sure, the property is well-maintained by the homeowner, since he still considers it his home despite the fact that ownership has been transferred. By investing in reversionary property, one is sure to acquire a well-maintained, valuable home in the near future.

Copyright (c) 2008 Parmdeep Vadesha

Source by Parmdeep Vadesha

The post Reversionary Property – Investment Without the Risk appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/reversionary-property-investment-without-the-risk/

Bank Proof of Funds Through Borrowed Funds

A bank proof is the short form for saying bank proof of funds; and it is often what people are referring to in import/export trade when they say you need a POF. This is a bank document providing evidence a party has the capability and cash assets ready to use for a transaction. It is frequently prepared in the form of a bank, security or custody statement. The purpose of the financial document is to ensure that the funds for the transaction are accessible and genuine.

Additionally, a proof of funds is a form of vetting used to determine if a party has the wherewithal to engage or complete a transaction. The requesting party may ask that a bank, security or custody letter be provided showing cash or cash denominated assets worth at least the value of the transaction is readied. This can come simply in the form of a bank statement, escrow statement if you had funds at an escrow, a bank letter stating readiness, or a verification of deposit showing funds on deposit are able to satisfy demands for reserves, down payment, contingency funds, etc.

There are times when a broker may be performing a back to back transaction where a buyer and seller are lined up and the broker needs to engage them through a third party contract. In order to engage the seller or the buyer the broker may be required to show bank proof of funds. Once achieved the broker may be able to take down a contract with each side and close. The only money exchanged in the transaction would be that of the end buyer.

There are also times when a party needs to collateralize a cash account as security for financing, cash not currently in their possession.

For both the broker transaction and the financing scenario getting access to lease funds, where one can actually borrow funds for a limited term, like any asset, is the key to success. The cost of getting a leased proof of funds costs a fraction of the costs of going out and getting a capital partner, whom is likely to take at least 50% of the profits of the transaction.

Getting a lease bank proof of funds makes sense…

There are investors and asset holders whom allow parties for a reasonable fee, usually 1-3% per month, to use their capital for lawful proof of funds purposes. In many cases a borrower may rent, or lease funds for 12 months or more at greater discounts in order to provide cash collateral guarantees against loans, import/export shipments, or other financial obligations.

While it is always cheaper to use your own money, if you don’t have it, it makes good financial sense to borrow it. The accessibility of borrowed proof of funds cash accounts is easier than that of private or institutional borrowed money. The asset holder of the lease money makes certain their funds are minimally at risk, are never moved from the established borrower account, and often ensures through bank undertakings the money will be guaranteed protected from liens or encumbrances past the contracted term.

This makes the underwriting process and timing to get access to the cash accounts very quick and light. Usually the process is as easy as opening a regular business banking account where the borrower only needs show they have a clean background history, show their purpose and use the borrowed funds is not criminal, and provides the regular business documentation banks require in order to know their client when opening a bank account.

The trade off for the lightness and speed of these transactions is of course in fees, but usually they are not as hefty as private hard money or bridge money, nor is collateral required.

Providing a bank proof of funds does not ever need to get in the way of closing a legitimate deal, especially when money is available through lease funds.

Source by David R Andersen

The post Bank Proof of Funds Through Borrowed Funds appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/bank-proof-of-funds-through-borrowed-funds/

How to Turn 75 Lyoness Loyalty Dollars Into $800 Cash Payouts

What are Lyoness Loyalty Dollars?

Lyoness Loyalty Dollars accrue for Lyoness Members whenever they make purchases of gas, groceries or goods at participating retailers. There are currently 367 major retailers in the US which qualify. Although Lyoness allows a certain % of every transaction to be immediate cash back, savvy members allot all of their Lyoness benefits into their Loyalty Account because of the long term payout potential.

For example, BP Arco is a participating merchant with Lyoness. A Lyoness member would determine their monthly gas budget and order brand new, guaranteed BP gift cards through Lyoness. Lyoness will credit 2% of this purchase to the Member. 1% of the purchase may go to the Cash Account or Loyalty Account at the Members request. The remaining % will automatically be credited into the Loyalty account. The question is, why wouldn’t a Member take as much as possible in cash?

The simple reason is this: Accepting the Cash is “right now money” that is the exact value that was earned through loyalty shopping. $75 Cash = $75 Cash. Loyalty Dollars have the potential to grow and compound through a payout system which can turn $75 Loyalty Dollars into over $800 cash.

How can Lyoness Loyalty Dollars grow?

$75 Loyalty Dollars create an Accounting Unit (AU). An AU is generated and placed in the Shoppers Matrix. This is where the magic happens. The Shoppers Matrix is populated by Accounting Units created by Lyoness Members’ shopping. Every unit must be followed by two units. As these units stack, they generate payouts. Without going into minute detail, every AU in the system followed by 70 equally distributed AUs can generate payouts upwards of $800. The units following the original unit may be yours, or they may be owned by someone else. But every unit has to be placed somewhere, and the more units that are generated and stacked, the more potential payouts to each Member.

How are Lyoness Accounting Units earned?

Loyalty Dollars are earned by shopping, and then converted into accounting units. These AUs may stack and convert into payouts.

When a Lyoness Member that you have referred (Refer a Friend) earns an accounting unit, it is automatically placed in your Shoppers Matrix. These AUs generated by others may also stack along with your own and convert into payouts.

Earning AUs as a team

When you generate AUs that are placed in the system, it may help not only your own Shoppers Matrix, but also your Referred Members Shopping Matrixes as well. All the units must stack as they are earned. So the true benefit of Lyoness Membership is the sum of the combined group of earned Accounting Units stacking and generating payouts for everyone.

This payout program for loyalty shopping through Lyoness is mutually beneficial. It creates a unique opportunity for friends and families to help each other financially by simply rerouting their normal gas, grocery and goods shopping through Lyoness as a group.

How Long Does it Take to Earn a Lyoness Accounting Unit?

It is dependent upon how much is spent, how often and at which merchants. For example a business making a Vistaprint purchase through Lyoness will earn 2% Cash Back and 5% Loyalty Bonus, totalling 7% in benefits. Therefore, a single $1,074 purchase by a business owner at VistaPrint through Lyoness could earn one AU (if all benefits were directed to Loyalty).

The real secret to maximizing Lyoness Membership benefits is by being a loyal shopper at every opportunity, planning for compounding benefits over 2-5 years, and sharing the Member benefits with other people.

Source by Lisa Maeda

The post How to Turn 75 Lyoness Loyalty Dollars Into $800 Cash Payouts appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/how-to-turn-75-lyoness-loyalty-dollars-into-800-cash-payouts/

Ten Easy Steps to Development! Then Why Is It So Hard to Do So?

1. Adopt an effective policy matrix in which to prioritise the allocation of finite resources.

Such prioritization is best guided through a broadly based participatory process of program identification and selection, a full appreciation of the resource envelope within which prioritization choices must be made, and by the effective monitoring of measurable outcome indicators. For most developing countries the focus is on economic growth and poverty reduction incorporating strategies for meeting the Millennium Development Goals agreed with the UN General Assembly. This widely adopted approach may be largely reflective of the requirements for participation in the IMF’s Poverty Reduction and Growth Facility (PRGF) program. However, as countries have progressed there has been a corresponding evolution of country strategies to reflect more private sector promotion, infrastructure development and economic growth. However, in a number of countries there are only limited considerations made on realistic sector resource constraints to facilitate meaningful budgetary processes in respect of public investments. Some argue that without significant fiscal space, it is near impossible to establish a meaningful policy matrix. Often, in the case of developing countries the monitoring of budgetary outputs and outcomes is weak or non-existent. Given these observations, it should not be surprising that there is little coordination between sector plans, and that the investment programs serves as much a laundry list as it does a rational theme for meeting development objectives within a clear consistent national development framework.

2. Implement an effective budget planning and preparation process which has a strong bottom-up dimension, participation from a broad variety of stakeholders and is fully cognizant of the relationships between budgetary resource allocations and outcomes. A budgetary process that fully reflects forward linked recurrent charges to investment and that is diligent about ascertaining debt sustainability.

This in turn implies the adoption of a functionally based multi-year fiscal framework that properly incorporates the national development objectives. Further it requires the corresponding coordination of Government Ministries, Departments and Agencies and their effective participation in the budget preparation process. The implementation of the budget requires the approval of the legislature. Such approval should only come after vigorous debate to assure that fiscal policy is sound and that the budget is consistent with policy objectives.

3. Develop effective and fully functioning institutions that are well capable of addressing policy, regulation as well as execution across all sectors reflected in the budget and key to meeting service delivery requirements, and across all districts of the country.

The absence of effective or appropriate institutions can lead to informal institutional arrangements to fill in the gaps. Such informal institutional arrangements can lead to abuse through patronage and corruption.

4. Effect an effective and comprehensive public finance management legal and regulatory framework that holds public officials accountable; one that has the clarity to guide the practice of public finance management in an unambiguous way; promotes transparency; and has the basis to establish auditable standards against which sub-optimal practice can be readily defined and offences sanctioned.

Such a legal and regulatory framework must meet these objectives as well as be flexible to properly accommodate reform efforts. This is achieved through a proper hierarchy of constitution, laws and decrees, regulations, manuals and circulars with a clearly defined chain of corresponding officers empowered to issue such regulatory instruments.

5. Introduce distinct political administration structures with clear assignments of roles and responsibilities between national and local institutions for service delivery and infrastructure development.

This must be backed by clear and transparent arrangements for the collection of revenues by the local communities, a transparent vertical and horizontal allocation of funds and transfers from the Central Government to the local communities and the accurate and timely tracking of such flows.

In many developing countries local authorities remain weak as institutions and there is still little clarity in the distinction of the roles and responsibilities of the assemblies from the local executive Authorities. In many developing countries traditional councils present another level of sub national government which introduces another challenge to transparent resource allocations and clear roles and responsibilities and singular lines of accountability.

6. Ensure sound budget execution process that operates within the context of a clear and consistent legal and regulatory framework that ensures budget implementation in the context of transparency and accountability.

The budget execution process requires effective revenue administration, debt management, cash management, predictable and timely budget releases, effective budgetary control, functioning establishment and commitment controls, sound expenditure management, regular and timely reconciliation and in-year expenditure reporting. It requires comprehensive documentation recording and record management and public access to budget estimates, budgetary and financial reports. The budget execution process occurs across the financial administration network which in many developing countries remains weak.

7. Operate a sound procurement system that is fair, economically efficient, transparent and accountable and is properly linked to the budget through the appropriate use of procurement plans and commitment control systems to ensure a procurement programme that properly reflects the budgetary intent; and achieves value for money.

8. Introduce effective internal controls, checks and balances that ensure that regulations and procedures are implemented in practice; that fiduciary risks are identified and effectively managed and regular internal audit reporting is disseminated to the accounting officer and the supreme audit institution. There must be timely and complete follow up on internal audit findings.

9. Introduce regular, timely and accurate financial reporting, premised on effective reconciliation procedures that provide an effective basis for management decisions and guidance.

This requires the implementation of universal accounting standards as well as a chart of accounts that is fully consistent with the budget classification. Financial reporting and management is greatly enhanced by automating recording, control and reporting of accounting and financial transactions.

10. Emphasize strong independent audit fully competent to operate and with adequate resources to achieve full audit coverage and be effective and effective parliamentary oversight.

This requires a supreme audit institution that provides regular and timely audit reports and is diligent about tracking follow up on the audit findings. Parliamentary oversight is a crucial element of assuring budgetary implementation consistent with the fiscal policy and compliant with the appropriations act.

Author: Ron Quist, CEO idilmat

Source by Ron Quist

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source http://blog.bigfinancial.co.uk/ten-easy-steps-to-development-then-why-is-it-so-hard-to-do-so/

Should You Finance That Computer?

So you’re browsing in an electronic store or on the internet at computers. Maybe you have been in the market for one or maybe you just stumbled along them by chance. Either way, you have eyed a computer system that is just too good to be true. It has everything you’ve ever wanted in a computer. It is chock full of memory on its larger than life hard drive, it has all your favorite programs preinstalled, and it even has the large screen you’ve always wanted. It is truly the cream of the crop when it comes to computers.

What’s the problem? What else but the price. Something so luxurious is bound to be expensive and far above any price you’d be willing to pay. In the event that something is beyond what you can afford, there are other options. You could ask your parents or a friend for the money, you could sell a kidney to pay for it, you could charge it to your credit card, or you could finance.

When you finance a purchase, you are essentially borrowing money to pay for it. It is almost like you are leasing it until it is paid for and then you can keep it. For example, let’s say this computer is $1,000 and you can only afford $500. You can pay $500 and finance the rest, or you can finance the entire purchase. This allows you to take home the computer today instead of having to wait until you have saved enough money at which time the computer might be outdated.

Before you make such a big decision, you need to understand why it’s such a big decision and what effect it can have whichever way you go. When you finance a purchase, you are charged interest. This is where they get you. When you buy a house, you might get anywhere from a 5 to 8 percent interest rate. This is not the case with consumer purchases. I know someone who financed a computer for about $600 and got a 28% interest rate. That is enormous! If they only paid $20 a month, a few dollars above he minimum required, they would be paying between $10 and $14 a month in interest for the first year. If they pay it at the minimum until it’s paid, they will have paid hundreds of dollars in interest!

This interest rate is even more than some credit card rates. If you just have to buy it now, check your credit card rate and compare it to the rate they give you and go with the lesser of the two. Better yet, save your money, put it into an interest bearing account such as a CD, and let it accumulate even faster. You will save a LOT of money.

Source by Samantha Asher

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source http://blog.bigfinancial.co.uk/should-you-finance-that-computer/

The Future of Currency Is Digital

Would we be better off without paper money and coin? Some say yes, and some say no and the debate rages on. Government tax collectors would prefer only electronic or digital money – it’s easier to control and easier to keep taxpayers honest – but are those gains worth the drawbacks? I mean what’s wrong with cash – you can spend it anywhere, you can pay your babysitter, go to a garage sale, or stop at a lemonade stand – all of which are part of our underground economy by definition and harmless uses of transferring money.

Then there are the illegal things, no one uses digital money because it leaves a trace, so you cannot use it to buy things you are not allowed to buy or that someone else is not allowed to sell. Does it thus, make sense to get rid of the money that allows illegal transactions, shut down the entire underground economy and if we do, will our society and civilization be better or worse off for that solution? Let’s discuss this shall we?

Yes, a digital currency would be similar to regular currency and really we are almost there already anyway. If we go to “digital units” and change the paradigm to cover the needs of people who contribute who are not rewarded fairly now, then we will get more of what we reward, as is the famous axiom. A technocrat would enjoy this conversation and the thought of micro-managing the exact worth of every job, but technocrats are not so good at considering their own created unforeseen consequences as they pave the road to hell.

The reason humans use money now is simply because things and choices are more complicated than they were in the past when our species were only hunters, gatherers and traders. Let me explain; you see, if I make hammers and you need one, but you only have cattle, then you cannot cut off the tail of your cow to buy my hammer, so instead you give me $11 and you can sell your cow in the future for $1100 and give me the one-percent of it so you can build a new barn.

Money and currency is nothing more than units of trade thus, make things easier, that’s why it exists, but I do not like the bashing of currency, digital or otherwise, where many believe it is the root of all evil. I respectfully disagree. Please consider all this and think on it, as this topic does affect your life.

Source by Lance Winslow

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source http://blog.bigfinancial.co.uk/the-future-of-currency-is-digital/

Swedish Credit Union – Scam or Not

Today on the internet we see numerous entities selling Swedish Credit Unions. The presentation is obtain what is basically a bank inexpensively and operate it offshore using a Panama Financial Services Company which does not let you operate as a bank. Will this work, theoretically yes. Practically the Swedish Credit Union will break down when it comes to the correspondent bank. What is usually done is an ordinary bank account is opened with a bank that has correspondent banks. Please bear in mind the fees to open a correspondent bank account usually are in the $200,000 + range. When your Swedish Credit Union starts pumping through 40 or so wires a week the correspondent bank, the bank that you have is using, will think their customer bank is operating as a correspondent bank and find some excuse to cut them off if they do not drop your account. Remember they want people to pay $200,000 to have a correspondent bank. Having the wires go through a Panama Financial Services Company mitigates the situation some since the credit union name does not appear in the wires. If one were to say process 3 or 4 wires a week with say three or four checks and the wires and checks were all made out to the financial services company, not a credit union, the scenario would probably have a reasonably long life. Of course you now really don’t need the credit union.

Bank Secrecy – Missing altogether. The Swedish Credit Unions do not have bank secrecy since they are from Sweden which is not a privacy jurisdiction. The Swedish authorities do not have reportage requirement for these companies but rest assured they can conduct an audit or request and require books and records readily because these entities are subject to Swedish taxation at a rate of about 30%. If one failed to comply they could cancel your corporation or credit union if you wish to name it such, or worse even going after you personally for fraud, income tax evasion, etc. Not a comforting thought. I should say the Panama Financial Services Company bank account would be covered by bank secrecy in Panama. If the Swedish Government alleged that you were operating some sort of financial institution like a bank taking deposits and making loans in Panama through this Panama Financial Services Corporation along with a corporation named as a credit union in Sweden, the Panamanian authorities would think you were trying to evade buying a Bank License (expensive licenses) and shut you down. Would they turn records over to the Swedish? That would depend on the allegations and if there was criminal case on file in Sweden for money laundering. If such a case was in the Swedish Criminal Courts I think under the circumstances the records would likely be turned over. Panama would likely deem you to be operating beyond the scope of a Financial Services Company if the Swedish government was complaining about one of their credit union named corporations, I would not think the Panama Government would be standing up for your company.

Legal Structure – The name of this so called Swedish Credit Union is an EKONOMISK FÖRENING. It is an economic association actually and what the sellers of these structures do is name them as a credit union like; ABC Credit Union and sell them for inflated prices as a credit union just because the Swedes allow you to use credit union in the name, it is nothing like the American Credit Union. It is almost an oversight in the law that has been exploited.

Practical Applications – None that we know of. No bank is going to let you push a high volume of wires through the system. The wires will be a dead giveaway to the correspondent banks outside of Sweden and you will be cut off.

Suggestion – Forget this one. It is not really a scam, but it is not really a credit union per se either. It will not work in the banking system so drop this one.

For more information go to: http://www.panamalaw.org

Source by Gissela Martinez

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source http://blog.bigfinancial.co.uk/swedish-credit-union-scam-or-not/

Future Of Human Economics Considered

It goes without saying that a think tank needs a constant flow of new ideas and innovations to be of value to our society and civilization. So, of course, we ask our fellow members to be generous with their ideas. From time to time we also get outsiders from around the work sending in their best mental brain storms. Not long ago, we had someone explain their plan to ditch the money rat race in society, actually to ditch money all together and increase our productivity by some 30%, here is what he had to say:

“I have an idea that could improve the overall efficiency of the world by perhaps 30%. I need help in the part of how to turn capitalism into a non-money using, non-communism structured government. Also how to persuade the government to move to it and think it was their idea in the first place.”

Well, my first thought was; if we can improve efficiency in human civilization by 30%, I am ALL-IN. Indeed, I am a capitalist and love free markets and yet, I must admit I agree that the unit of trade, we currently call a USD (reserve currency) has challenges in rewarding many of the things we need to propel humans into the future. If we could find a way to use (digital units) and give out digital units for things like volunteerism, picking up trash on a daily walk, innovation, mentoring, original thoughts, and other contributions to society we could have “real value” supporting the intrinsic value of the digital units.

Of course, we might be able to use digital currency, a Bitcoin or BlockChain type scheme, the same way as Free-Market Capitalism with a new form of “unit” to trade. This might help us curb the cronyism of socialist elite, Communist regimes and corporate/government incestuous relationships that Adam Smith warned us about. The units of trade could retain value based on “real work” – positive work towards noble endeavors, while the units traded for commerce remain the same. The “goodness” pay would be based on supply and demand, more pay for what is needed, less pay for what is already in abundant supply. The AI decision matrix determines this, not humans?

And really it is the next logical step as AI replaces decision making (executives, analysts, and management) and robotics replaces most labor jobs, and AI + robotics replaces most creative jobs (artists, writers, etc.) and AI + VR replaces teaching jobs.

In many ways we would avoid capitalism, at least the way it’s practiced in reality (crony capitalism), but we also need to make sure that no one games the system – including those controlling it – unfortunately, there is also that problem of human nature. Also the group, government, leadership of the system would have a little too much power and therein reminds us of the quote; absolute power corrupts absolutely, and/or the reality that power brings out and amplifies any character flaws, even those of a benevolent philosopher king.

In many regards Capitalism is becoming less usury driven, due to interest rates being so low and in some places negative rates.

So, here is the $64 Million question – is it possible to change our current monetary system and could we really do it any better – and is it worth the risk to try? Well, either way it is an interesting place to do a mental experiment isn’t it?

Source by Lance Winslow

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source http://blog.bigfinancial.co.uk/future-of-human-economics-considered/

Is LED Lighting Expensive?

Yes the initial Purchase of a LED lamp is far more expensive than the traditional incandescent light bulb we have grown accustomed to for the last 130 years. However purchasing LED lamps should not be regarded as another expense but as an investment, be it for your home or for commercial use, it most probably will be the fastest return on your investment, short of landing a number on a roulette table.

A High Quality LED lamp would set you back in excess of £20, but if I say to you, it will save you the £20 in energy costs within 12 months, would you be interested? And it will return you £20 per year every year for ten years or more, you will be more interested. That’s a return on investment of 1000%.

he latest generation LED lamps provide similar light output to regular 50w Halogen lamps, but burn less than 10% of the power. If you also consider the longevity of up to 50,000 hours, then the rest is simple math.”. For example: If you were to change ten of your regular 50W halogen spotlights with ten equivalent strength LED 9W GU10 lamps consuming 4.4W, you will save over £3000.

A halogen lamp will cost you £2.00. A GU10 LED will cost you £20. Each LED lamp lasts for 50,000 hours as oppose to a halogen which will only last for 2000 hours at best before it has to be replaced. So, over the 50,000 hours you will need 250 (25 x 10) halogens (costing £500 in total) or alliteratively 10 LED Lamps (costing £200). The initial buying price is one thing, the running cost is another. To run each halogen requires 50 Watts, and running a high quality LED Lamp only needs 4.4Watts. Taking into account today’s average domestic electricity price of around 13p/kWh. So over 50,000 hours the cost of running the halogens will be around £3,300 and the cost of running the LED will be £300. That is a saving of over 90%.

In total you will spend £3,800 (£500 + £3,300) buying and running your halogens. If you replace them with LED lamps you will spend only £500 (£200 + £300) in all saving over 85%. The best part its guaranteed, a quality LED lamp, (not the cheap versions) will come with a minimum guarantee of three years, that’s over 25,000 hours continuously on, so even if it fails after the 3 year guarantee period, you will have saved over £1500 pounds on your initial investment of £200.

The answer to the initial question “is LED Lighting expensive?” Then I would have to say no, it is most probably the best investment one can make, especially now that energy cost are on the rise and when saving monthly overheads is key to financial survival. Remember you will also be lowering your carbon foot-print. Less energy used is less carbon emissions.

Source by Jordan Stavrinou

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source http://blog.bigfinancial.co.uk/is-led-lighting-expensive/

Ways to Make Money in the Great Outdoors

Are you a nature lover? Do you love being outdoors, even in the nastiest of weather? Do you feel like you would rather die than work in a cubicle? If so, you may be perfectly set up to find ways to make money living the dream and working outdoors. There are many things you can do to get yourself out in the great wide open and soak up the sun instead of the fluorescent lighting in a stuffy office building.

Sometimes establishing yourself in an outdoor career is tough, but still possible through government organizations like the Forest Service or the Bureau of Land Management. Getting educated in these fields will definitely help your chances, and often these jobs take many years of seasonal work before you develop ways to make money in a full-time career. But, the reward could be great if you have always wanted to be that park ranger or tour guide in a national park.

Other volunteer organizations are often a good way to get your foot in the door as you establish ways to make money out in the open air. Greenpeace, the Peace Corps, or even private groups like the Sierra Club could be your ticket to success. You may get an opportunity to travel to different parts of the globe as well which could be exciting as well. Many of these groups have full paying jobs that can be had by the most dedicated people. If you are also of the right political ilk as the leaders of these groups you will have a greater chance to establish in a career with them.

You can also venture into your own private business endeavor to find ways to make money working outdoors. Maybe you have a love of fishing and already have a boat big enough to charter out and do fishing tours, or have the right plot of land and location for setting up a dude ranch. No matter what the idea, you can definitely do whatever you want to keep yourself outside and make money doing it.

Regardless of which route you take toward finding ways to make money outdoors, always keep in mind no matter how hard it gets you are still not sitting in a stuffy little cubicle. While the money may get thin, or business becomes hard to grow, you can always find that satisfaction in the simple fact that you are where you want to be.

Source by Christopher Mendetta

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source http://blog.bigfinancial.co.uk/ways-to-make-money-in-the-great-outdoors/

About PNC Bank and the Different PNC Bank Locations

PNC Bank is a subsidiary of PNC Financial Services Group, Inc. This is a U.S.-based financial services corporation with assets of approximately $269.9 billion. It has more than five million retail banking customers in the U.S.

The Bank offers different financial services in the many locations. In the retail banking division, you can deposit, money, borrow money, and get investment and cash management services. It has an asset management group. This group offers services to institutional investors and it serves not-for-profit organizations and retirement plans. It offers corporate and institutional banking. It is one of the leading credit providers in the U.S. and one third of the FORTUNE ® 500 companies use this service. It also provides residential mortgage banking for first-time home-owners, for home refinancing, and for other mortgaging solutions. It has a loan portfolio of close to $200 billion. The Bank owns 1/4 of BlackRock. This is one of the largest investment management firms in the U.S. and it offers individual and institutional investors different investment products.

There are 2,550 PNC Bank locations across the U.S. and 6,400 ATMs in 14 states. It is expanding fast across the U.S. It offers additional services such as insurance services and bill payment facilities. You can also do mobile banking and online banking. These options give unparalleled convenience and online banking means you can use financial services even outside the country. The bank has a presence in 19 campuses. In these campuses, students get free VISA check cards, free checking accounts, and international student services such as language interpretation.

Interesting facts are that PNC bank owns PNC Park, the home of the Pittsburgh Pirates baseball team, PNC Field, the home of the Wilkes-Barre/Scranton Yankees baseball team, and New Jersey’s PNC Bank Arts Center. It is based in Pittsburgh, Pennsylvania.

Source by Chutipawn Mahapawnprajak

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source http://blog.bigfinancial.co.uk/about-pnc-bank-and-the-different-pnc-bank-locations/

The Various Types of Financial Tips for Startup Companies

Getting funds is considered to be one of the challenging problems that a business owner has to face while starting a business. Most startup companies require a small amount of money for its initial operation and it may happen that may not have the necessary funds in their hands that they need to launch their businesses. However, lack of money does not mean that you have to compromise on your dream. Whether you wish to follow the conventional route or you wish to try out an innovative process, you should follow a few essential tips to get money for your startup company.

Secure loans offered by the Small Business Administration

The business owners can secure the loans offered by the Small Business Administration to meet the financial requirements necessary to begin their business activities. Two popular categories of loans are 7 (A) programs and 504 programs. The 7 (A) programs can be acquired for buying machines as well as refinancing the current debts. However 504 programs are used for different activities such as construction, renovation as well as purchase of properties or devices.

The SBA plays the role of a guarantor and it allows you to acquire necessary loans, especially when you are unable to possess properties for mortgage purposes. Plus, these funds can be acquired quickly and easily. This quick loan processing is important for the business owners who depend on these funds for all sorts of business requirements.

The borrowers who have poor credit histories such as bankruptcy, late payment, insolvency can secure these funds. In fact, the funds offered by Small Business Administration help them to improve their credit scores to a great extent.

Sell your products beforehand

Selling the existing products is an effective way of increasing financial options that are necessary for starting the business. There are a few companies that have shown the capacity of selling their current products prior to the scheduled time and raising a huge amount of money for their business activities. This type of business methodology allows them to draw traffic to your business website, increase the number of followers on social networking sites and even offer valuable discounts to their customers from time to time.

Make use of the credit card payment option

If you wish to launch a startup company and you do not have a huge amount of money in your hand, then you can use your credit card and you can make payment without any sort of difficulty.

Take help from friends as well as family members

If you find a friend who is willing to spend some amount of money, then you can consider it to be a good way to get necessary fund for your business. Borrowing money from a friend or from a relative is considered to be an alternative financing option for you. You can avoid all types of hassles that are associated with the conventional loan application process. If you approach your closed relatives or friends to offer financial support for your business or if you communicate them about the progress of your business, you have better opportunity to maintain good relationship and to run your business successfully.

Source by Donald Finch

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source http://blog.bigfinancial.co.uk/the-various-types-of-financial-tips-for-startup-companies/

3 Careers for the Future in Finance

Impacted by the digital revolution, the world of finance has deeply evolved these past 20 years and is changing faster than ever before. Reduction of storage costs and the explosion of computing power have made possible finance applications that a decade ago, people only dreamed about. In this fast and complex environment, banks are in strategic need of recruiting young talents with skills that were not necessarily associated with finance in the past. Choosing to prepare for some of the key positions of tomorrow means you will be sought after by top banks when entering the professional world at the end of your studies.

Here are 3 career paths that will be key for employment with the banks of tomorrow:

Blockchain Specialist

Blockchain is the technology that was introduced by the Bitcoin. It was originally designed as a decentralized digital currency. The key behind blockchain technology is that it allows reliable transactions of value between several parties without the need for a central authority. The potential applications to the banking industry are still uncertain. We could see it replace the current system for transferring money between local and global banking entities. The strengths of such a peer-to-peer system could also be used to propagate, between financial institutions, details on each economic agent.That would allow a bank to know very quickly if a particular client can be trusted, and thus greatly reducing compliance costs.

One thing is certain however, this technology will have a huge impact on the industry in the decades to come. Most major banks have invested in research on this technology. As Simon McNamara from RBS has said “I don’t know what’s going to succeed. What I’m certain of is that we are going to see blockchain solutions and peer-to-peer solutions emerging in our industry and we want to be close to that development.” Blockchain specialists will have a strong interest in both computer science and economy.

Data Scientist

This one may be the most obvious. Banks are already recruiting loads of data scientists, and giving them some of the best paid positions in the industry. However, this is only the beginning of the revolution. As the algorithms get more and more sophisticated, the mission of computers will slowly move from applying a strategy to finding strategies by surfing huge amount of data.

Data scientists will design systems that will explore huge databases containing all kinds of data; historical prices, news, and even personal information on clients.; All of which will uncover invisible correlations and unknown relations between objects. It will then be able to run a strategy based on these new findings.

Ultimately, banks will have computers that will learn on their own how to make money from a huge compilation of diverse data. The focus of the competition will be to attain the best data and input it into these computers. This will be the application of machine learning to finance.

A data scientist is a specialist in statistics that also has an interest in computer science.

Financial Psychologist

The most experienced bankers will tell you, short term moves in price are explained in part by human psychology. In order to improve their decision-making process, banks will have to take these human parameters into account.Technical analysis can be seen as a precursor of this discipline, its goal being to capture some human behaviors by spotting recurring pattern in historical prices.

However, more recently, academics have taken a more scientific approach to these questions and interest is growing among bankers.

In the near future, banks will most likely be looking for people able to apply psychology and sociology, among other techniques, to the financial markets. Such “financial psychologists” will need to be specialists in human science and economy.

Source by Jack Tellington

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source http://blog.bigfinancial.co.uk/3-careers-for-the-future-in-finance/

The Emerging Role (Future) Of Accounting

1. INTRODUCTION

Accounting has evolved as human beings have evolved and as the concepts of the accounting subject are directly coined out from its most fundamental principle of conservatism, it is not difficult to see why the style of accounting at every point in time has a direct link with the age. As man has developed from a primitive age to a modern interdependence age, living has advanced from being subsistent as a hunter-gatherer to a knowledge driven globalised world concept of ‘effectiveness turning to greatness’ and all along with this evolution, self accounting with the abacus has developed through stewardship accounting to financial accounting and now managerial accounting; which has a focus on decision making.

The Financial Accounting Standards Board (FASB) of the US which generally standardised and strengthened the globally adopted Generally Accepted Accounting Principles (GAAP) took significant strides in the year 2012 to come together with the International Accounting Standards Board (IASB) in a manner termed as ‘International Convergence’. Such a convergence is expected to gradually harmonise the GAAPs and the IFRS until they become one and the same in a bid to stream line corporate/company reports into a uniform process globally.

1.1 Statement of the Problem

There is no absolute certainty as to what the future holds for the Accounting Profession. It thus seems however, that the future age which definitely would be one of scientific advancement, would move man from greatness to something worthier for the time. Spiritualism, Environmentalism and Developmentalism could be key factors in the future age. This paper is to find out if Accounting itself would be more of a reality providing accurate solutions to financial problems where man’s ability to value natural capital fairly would give rise to a significant asset on the balance sheet in contrast to the industrial age when even man himself was regarded as labour and not being considered as important as the machines he operated.

2. LITERATURE REVIEW

This paper was approached from a content analysis view point – both conceptual and relational. A content analysis is “a research technique for the objective, systematic, and quantitative description of manifest content of communications” – (Berelson, 52). The conceptual analysis was simply to examine the presence of the problem, i.e. whether there is a stronger presence of positive or negative words used with respect to the specific argument while the relational analysis built on the conceptual analysis by examining the relationships among concepts. As with other sorts of inquiry, initial choices with regard to what is being studied determined the possibility of this particular paper.

2.1 Evolution of Accounting Theory

According to investopedia.com, Accounting Theory in the light of its evolution can be defined as the review of both historical foundations of accounting practice as well as the way in which accounting practices are verified and added to the study and application of financial principles. Accounting as a discipline is believed to have existed since the 15th Century. From that time to now businesses and economies have continued to evolve greatly. Accounting theory must adapt to new ways of doing business, new technological standards and gaps that are discovered in reporting mechanisms hence, it is a continuously evolving subject. As professional accounting organisations help companies interpret and use accounting standards, so do the Accounting Standards Board help continually create more efficient practical applications of accounting theory. Accounting is the foundation of efficient and effective business management and intelligent managerial decision making, without which businesses and trade world-wide would operate blindly and fatally. It is therefore necessary to link how it has evolved to its future role.

2.2 The Origin of Accounting

Luca Pacioli wrote a Maths book in 1494 (ehow) that consisted of a chapter on the mathematics of business. As this book is thought to be first official book on accounting, Luca Pacioli has severally been regarded as ‘the father of accounting’. In his Maths book, Pacioli explained that the successful merchant needed 3 things: sufficient cash or credit; an accounting system that can tell him how he is doing; and a good book keeper to operate it. Pacioli’s theory still holds today, it included both journals and ledgers and it is believed to have popularised the use of the double entry accounting that had been in place since the late 1300s.

2.2.1 The First Change in Accounting

During the depression of 1772, the Accounting profession went beyond book keeping to cost accounting. The theory and the idea were transformed into a method determining whether a business is operating efficiently or using an excess of labour and resources. The new theory of cost accounting allowed a trained book-keeper or an accountant to use the book kept to extract financial reports to show the efficiency represented by such data. This new idea led to the survival of businesses during the depression; business that would otherwise have failed without an intelligent management decision making informed by a cost accounting breakthrough.

2.2.2 The American Revolution/ British Courts Influence

The end of the American Revolution saw the first United States (US) governmental accounting system being created in 1789 and it was established to account for and manage the treasury of the US. The double entry practice and theory were adopted. The British courts ruled that they needed professional accountants to make financial information in relation to court cases. Chartered accounting bodies/ concepts were introduced in Britain (and in the US in particular, the Certified Public Accountant – CPA). In 1887, the first standardised exam emerged with Frank Broaker becoming US’s first CPA.

2.3 Modern Cost Accounting

This was first established by General Motors (GM) Company in 1923 and it developed methods that helped cut its costs and streamlined operations and this remained relevant for over 50 years. The new accounting techniques developed included return on investment, return on equity and GM’s flexible/adjustable budget concept.

2.4 Accounting Concepts and Conventions

This was established in US between 1936 and 1938 by the Committee on Accounting Procedure (CAP) thereby standardising Accounting practices for all companies throughout the US. In 1953, the Generally Accepted Accounting Principles (GAAP) was updated to new standards, CAP became Accounting Principles Board (APB) in 1959 and later in 1973, APB (having suffered from poor management) was replaced by Financial Accounting Standards Board (FASB) with greater powers and opinion for its professional stance.

2.5 International Financial Reporting Standards

FASB issued almost 200 pronouncements between 1973 and 2009 thereby establishing the foundation of Accounting Standards in use presently and is now making current moves to harmonise all accounting principles of GAAP with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB). It is widely believed that development of accounting profession in any nation and around the globe is a mixed effort of both accounting theoreticians and practicing accountants. Thus, the framework of accounting is a harmony of efforts whereby professional accounting bodies are usually in the lead of a path to regulation and standardisation of issues relating to accounting.

2.6 The Nigerian Scenario

In Nigeria, the case is not different from what has already been discussed. Most of the country’s accounting standards (concepts and conventions) were inherited from the British colonial masters. And because the world has indeed become a large global village with globalised accounting bodies supervising and making sure that all member countries are abreast with current Generally Accepted Accounting Principles, Nigeria has also tagged along making several public sector and private sector reforms the most recent and famous of which include the approval by the Federal Government in July 2010 to adopt International Public Sector Accounting Standards (IPSAS) for the public sector and the International Financial Reporting Standards (IFRS) for the private sector as a conscious effort to ensure a uniform chart of reporting system throughout the country by both the public sector and private sector.

2.7 International Convergence of Accounting Standards

This concept is both a goal and a path taken to reach such a goal. The FASB believed that the ultimate goal of convergence is a single set of high-quality, international accounting standards that, companies world-wide would use for both domestic and cross-border financial reporting. To this end, conscious efforts are being made by the FASB and the IASB to jointly eliminate the differences between the ‘GAAP’ and the ‘IFRS’. One such conscious effort was made on the April 5th 2012 when an update report was submitted to the Financial Stability Board Plenary on Accounting Convergence. The ever increasing demand by global capital markets driven by investors’ desire for high-quality internationally comparable financial information is as a result of the usefulness it is expected to immediately provide for decision making and thereafter accurate solutions to problem solving. The IASB was established 1st April 2001 as successor to International Accounting Standards Committee (IASC) and on March 1st 2001 the IASB, which is an independent accounting standard-setter based in London, England assumed the responsibilities for Accounting Standardisation. The IASB is responsible for issuing many accounting standards and pronouncements known as the International Financial Reporting Standards (IFRS).

3. PRESENTATION OF FINDINGS

To give a pictorial view to this paper, two (2) illustrations are used to make presentations (interpretations) of the findings. Illustration.1 traces the Evolution of Accounting; its principles, roles, concepts, professionalism, standardisation and internationalisation. Illustration.2 on the one hand relates Accounting evolution with Human evolution and on the other hand it broadens the understanding of the reader with regards to the subject matter. The reader (user) of this paper easily discovers a past-present-future view of the Role of Accounting and it purports to postulate finally what the future of Accounting could (or should) be. Self Accounting is not a terminology found in the literature of Accounting but is used here to depict any primitive Accounting system which was maintained by traders long before double-entry. Self Accounting, thus, was the past of Accounting when the role of Accounting was merely to have records of Incomes and Expenses, show Liabilities and not necessarily showing Assets and profits as distinguished from the personal or private earnings/estates of a trader. Assets at times might have been recorded as expenses. These are assumable because most businesses operated (and still operate) as sole-ownerships. The Present role of Accounting encompasses; stewardship, financial reporting and managerial decision making. These three provide the nexus of what Accounting is today. The stewardship aspect is so referred to because rich merchants in Europe and the Americas at that time trained their slaves to render book-keeping services. So the merchants themselves did not have to do the tasks. Financial Accounting was developed to give standard to financial reporting especially for the users of such reports who are largely to the businesses concerned. Managerial Accounting evolved to provide records that would aid the decision making process of the managers and owners of businesses. Generally all three roles of accounting as at present assist stakeholders to make good judgments regarding their dealings with businesses. These stakeholders may or ‘may not’ have rights to receive the reports so discussed. The stakeholders include; creditors and government (having rights to receive only financial reports); the shareholders, investors and management (who make use of both the financial reports and the managerial reports); the employee and the management team (who are the users of all the reports: book-keeping, financial reports and managerial reports); and the competitors, resident community and customers – who do not have rights to receive such reports but are able to retrieve financial reports (annual reports) to aid their decisions with regards any business of interest to them.

Having accurate records (reports) support good decision making but sometimes bad interpretation and judgment of the reports and their recorded results may lead to bad decisions taken. The three roles of accounting presently have been the bed-rock with which accounting standardisation of principles and procedures have evolved to date. The Emerging Role (Future) of Accounting then must be anticipated with keen readiness with regards to what should be probable. Illustration.2 would do justice to this concept.

Illustration.1- The Evolution of Accounting in the US (1300 – 2014)

Stewardship (prior 1300)

-Slaves trained to render basic book-keeping

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Double Entry (1300)

-Introduction of Double Entry principles

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Book-keeping improved (1494)

-Financial Reporting begins

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Cost Accounting (1772)

-Managerial Accounting for Decision Making begins

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Double Entry (1789)

-Principle of Conservatism fully adopted

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Professionalism (1850)

-Concepts/Chartered bodies introduced

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AICPA formed in US (1887)

-Providing standards and operational guidelines

-Certification process begins

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Qualifying Exams (1897)

-First standardised exams introduced

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Cost Accounting Revamped (1923)

-Modern cost accounting methods developed by General Motors Company and remained relevant beyond 1973

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Concepts and Conventions (1936)

-Conservatism expanded into other concepts and conventions

-US Committee on Accounting Procedure (CAP) establishes standard accounting practices

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CAP Evolves (1953)

-New standards of GAAP fully established

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CAP further evolves (1959)

-CAP becomes APB (Accounting Principles Board)

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APB evolves (1973)

-Due to poor management and inability to Accounting theory as desired, APB is replaced by FASB

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FASB established (1973)

-Financial Accounting Standards Board replaces APB and makes over 200 pronouncements up to 2009

-The foundation of accounting Standards all over the world further strengthened

↓

Influence from the England (2001)

-IASB established as an independent ‘International Accounting Standards-Setter’ based in London, England

-IASB assumes responsibilities from IASC on March 1st 2001

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FASB and the International Convergence (2012-2014)

-GAAP (established by the FASB) is being considered for merger into the IFRS (established by the IASB)

3.1 Reality Accounting versus the Future Role of Accounting?

What is Reality Accounting and what then should Reality Accounting encompass? Wikipedia.com defines reality as the totality of all things, structures (actual and conceptual), events (past or present) and phenomena whether observable or not. Reality is thus seen as a term that links ideologies to world views or part of them (conceptual frameworks). Reality Accounting is close to ‘Fair Value Accounting’, which is both a basis and theory of accounting. And it seems to be transforming into the Future Role of Accounting. In Financial Accounting, it is easily seen that accounting reflects corporate and economic realities as they are, though it is common sense to know that accounting cannot adequately reflect reality particularly in relation to the technical limitation of double-entry bookkeeping and Fair Value Accounting. As part of the changes emanating from Reality Accounting, a new concept of ‘Natural Capital’ has surfaced. At the Rio+20 Summit on Sustainable Development organised by the United Nations Conference for Sustainable Development (UNCSD), which took place in Brazil on 20-22 June 2012. At the Conference, a Natural Capital declaration was made such that Natural capital is now understood to be comprising of all Earth’s natural assets (soil, air, water, flora and fauna) and the ecosystem services resulting from them, which make human life possible. It estimated that ecosystem goods and services from natural capital are worth trillions of US dollars per year and constitute food, fibre, water, health, energy, climate security and other essential services for everyone.

3.2 The Concept of Natural Capital

Neither the services, nor the stock of Natural Capital that provides them, are adequately valued compared to social and financial capital despite being fundamental to all that exists. The daily use of Natural Capital remains grossly undetected within our financial system. There is therefore the need to use Natural Capital in a manner that is sustainable. All stakeholders, including the private sector and governments must begin to appreciate and account for the use of Natural Capital and recognise the true cost of its economic growth as well as sustaining human wellbeing now and in the future.

3.3 Natural Capital Framework

Natural Capital though treated as a free good but must be seen as part of a global pool of wealth for which governments must act now and wisely to create a framework that shall regulate, reward or tax the private sector for its use. Reliable policy frameworks that can report the value, use and depletion of natural capital must be the intent of any government desirous of making a good start with this new accounting phenomenon. Deeper economic influence is given to accounting under Reality Accounting since all that are regarded as real are only truly real in their consequence and not in their physical. Therefore the value of Natural Capital for instance would be the value ascertained after considering various factors that give rise to such valuation. These factors include the size, presence of mineral resources, location, other natural resources, presence of plant and animal life etc.

Illustration.2- The Emerging Role (Future) of Accounting

HUMAN AGE………….HUMAN EVOLUTION…………………………….ACCOUNTING EVOLUTION

Primitive age………..Hunter – gatherer……………………………..Self Accounting

(Independence)……(Subsistent living)……………………………..(Abacus)

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Colonial age…………Colonialisation…………………………………Stewardship Accounting

(Dependent age)…..(Being efficient)……………………………….(Book-keeping)

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Modern Age………….Technology driven by Industrialisation…….Financial Accounting

(Independence)…….(Being effective)………………………………(Financial Reporting)

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Modern Age………….Technology driven by Knowledge…………..Management Accounting

(Interdependence)…(From effectiveness to greatness)…………(Decision making)

?↓

The Future Age………Technology driven by advancements……..Reality Accounting?

(Efficiency…………….Environmentalism?…………………………..(Not as a tool for decision

based on……………..Developmentalism?………………………….making but providing

Interdependence……Spiritualism?…………………………………..accurate solutions to

…………………………(From greatness to what?)………………….financial problems)

4.0 CONCLUSION

As man seeks greater heights in a modern world full of scientific and research discoveries, Accountants must ponder what the emerging role of their profession must be. From merely providing information on the wellbeing of a business to financial reporting as a corporate responsibility and now decision making managerial approach for future forecasts, what then does that future hold for accounting or how is accounting expected to remain professional and relevant in that future which seems would be molded by environmental and developmental challenges all over the globe. As accurate records and reports have supported good decision making though sometimes bad interpretation and judgment of the reports and their recorded results have led to bad decisions taken, the present roles of accounting, which have formed the bed-rock with which accounting standardisation of principles and procedures have evolved are now facing evident changes.

Under the scope of Reality Accounting, it is clearly observed that concepts such as International Convergence, Natural Capital, Environmentalism, Developmentalism and Fair Value Accounting will sooner than latter set the path for the future of accounting.

This paper is to stimulate academic arguments for or against the subject matter in order to bring to the awareness of accountants about a subconscious change that is already taking place. It is recommended therefore that seasoned researchers should come forth with further ideas, summaries and reviews that can boost a clear pathway for the future of accounting.

REFERENCES

1. http://www.investopedia.com (Accounting Theory)

2. http://www.eHow.com (The History of Accounting Theory)

3. Berelson, Bernard. Content Analysis in Communication Research. New York: Free Press, 1952

Source by Mahmood Omeiza Adeiza

The post The Emerging Role (Future) Of Accounting appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/the-emerging-role-future-of-accounting/

Importance of Financial Stability Ratios

Common ratios to judge the financial stability of a business concern are gearing ratio, current ratio and liquid ratio. Gearing ratio shows the extent of a firm’s reliance on debt to fund its activities. As the proportion of debt climbs (especially if it exceeds 65 percent of total funds for most businesses), the greater the risk of financial distress. This is the downside of financial leverage – It increases the financial risk.

Current ratio measures the number of times the current assets of a firm cover its current liabilities. This is a measure of solvency: the capacity of a firm to pay its debts through the normal cash cycle, selling inventory on credit, collecting debts and paying creditors. This ratio must normally exceed 1:1 and should be closer to 2:1. It should also be noted that an excess of current assets will result in poor asset utilization.

Liquid or quick ratio is a more tighter measure of short term financial stability. It measures the firms ability to pay its current liabilities from its liquid assets. Liquid assets are cash or near cash resources. In practice liquid assets include cash, bank, short term securities and accounts receivable, the assets that be readily converted into cash to meet immediate calls for payment from lenders and suppliers.

Accounts receivables are normally included in liquid assets, as they may be sold to a finance company at a discount for later collection from debtors. This is called debt factoring. Debt factoring is not common in all the countries. Debt factoring is used as a means of managing the cash flow from operations, rather than trying entity’s funds up in accounts receivable. In arriving at liquid assets, the principle exclusion from current assets is inventory. As this may take some months to sell – and then often to credit customers – it can be many months before cash is collected from inventory. Among the current liabilities may be some debts that may not be due for many months. These may be excluded in calculating the liquid ratio. Examples include tax payable and a current portion of long term debt, both of which may not be due for some months. However, such adjustments should only be made if the repayment dates are known and are over six months later than balance sheet date.

One common (but risky) adjustment in calculating the liquid ratio is to exclude bank overdraft from current liabilities. This is not recommended. When a liquid ratio declines towards (or below) the 1:1 level (including overdraft), this is most likely time that the bank will require repayment – on demand. Hence, an overdraft should only be left out of this calculation when the firm is perfectly liquid – When it does not matter anyway!

As these ratios are based on the statement of financial position, they represent only a ‘snapshot’ of the financial stability of the business, taken at one point in time. These ratios can be manipulated by referring payments or delaying purchases until the following period, or by invoicing customers in advance of delivery. Known as ‘window dressing’, such techniques show an improved solvency position at balance sheet date.

Source by Arfan Ul Haq

The post Importance of Financial Stability Ratios appeared first on Big Financial BLOG.

source http://blog.bigfinancial.co.uk/importance-of-financial-stability-ratios/