Journal of Finance and Accounting – TanasiJournal

Archive for December, 2009

Some small and medium business (SME) owners try to do their own accounts or they may employee a bookkeeper directly. This can be fine if you are lucky enough to recruit a good bookkeeper directly, however unless you have an accounting background and a thorough understanding of the accounting software involved, it can be difficult to know what questions to ask at the interview process.

Even if you find someone who looks good on paper, unless you know what reports to ask for it can take months to pick up if they are performing or not. Over 50% of clients that come to us have had a bad experience trying to employ a bookkeeper directly. Usually within the first week we uncover things such as:

• Double payment of creditors invoices

• Underbilling of revenue

• Incorrect GST coding usually resulting in underclaiming GST Credits

• Miscalculation of superannuation and payroll tax of employees and contractors

These mistakes can be very costly and sometimes terminal for some businesses.

Here’s 7 ways a professional onsite bookkeeper will save you money:

1. Help you work “on your business, not in your business!”

I know, it’s an old chestnut from that fantastic book E-Myth and which forms the cornerstone to most business coaching strategies. It is the key to being able to grow any business and applies to bookkeeping as with any other part of your business.

If you employ a bookkeeper, you still have to monitor the quality of their work, when they work, when they take holidays, etc. By outsourcing all of your accounting and bookkeeping functions to a professional bookkeeper, all of your accounts duties become their responsibility and you can focus on growing your business, with the confidence that you are receiving accurate reports on your performance and meeting all statutory obligations.

2. An onsite bookkeeper gets to know your business

There are some bookkeeping services that offer to take care of your accounts from their office which could be based anywhere in Australia or as far away as India. This involves transferring source documents either electronically or physically back and forth from your office to theirs. While this can be fine for micro businesses, it can prove difficult once your business begins to grow.

Before you can provide meaningful management reports, you need to know how a business operates and what are it’s key performance indicators. The only way to achieve this effectively is to get to know the company and the people who work within the company. This can only be done by performing the bookkeeping functions at the clients premises.

3. There’s “bookkeepers” and then there’s “bookkeepers!”

There can be a huge difference in skill level of people that call themselves bookkeepers. Just as an apprentice “chippie” and his boss with 30 years construction experience may both call themselves “builders,” people representing themselves as bookkeepers can range from data entry clerks through to qualified management accountants.

A professional bookkeeping firm should be accredited in the accounting software used by your company and they should have qualified accountants to support their bookkeepers to enable them to provide a management accounting level of service.

I hope this gives you some ideas of how using a professional bookkeeper can save your business money.

Are you a homeowner with a secure job and fixed income? Then a home equity loan is your best solution during times when you need some extra cash to meet expenditures such as home improvement or loan consolidation. If you need credit within a short period of time, and if you are certain you will be able to pay off the debt within a certain period and know exactly how much your expenditure is going to cost, then home equity credit line is your ideal solution. In other words, when you are going to borrow for a shorter period to cover emergency expenses, drawing on the home equity credit line is the way to go.

You should always choose a home equity line of credit plan that fulfills your particular financial needs. Before finalizing on the deal, go through the credit agreement carefully. Examine each clause separately and in detail. Consider the annual percentage rate or the APR, which is the measure of the effective interest rate that has to be paid on a loan, taking into consideration other fees. The APR is a more accurate reflection of the true cost of the loan that the borrower has to bear as it tells you the total cost of borrowing. The APR makes it easier to compare lenders and loan options to understand the comparative benefit of different loan products.

Drawing on home equity line of credit proves to be particularly cost effective in a market characterized by rising interest rates. The home equity credit lines are characterized by variable rather than fixed interest rates. The variable rates are generally guided by government indexes such as U.S. Treasury bill rate etc. Follow the publicly available indexes to learn about the fluctuations in the interest rate for home equity credit. The interest rate that the lenders publish in their brochures reflects this value of the index at a given point of time plus a margin of a few percentages. Now there are many such indexes; so make sure of the past records of that particular index used by your chosen lender.

Some lenders however will allow you to switch from a variable interest rate to a fixed rate in the middle of the plan. Some plans also enable you to transform all or a part of your home equity line of credit to a fixed-term installment loan.

If you are planning to consolidate your debts on the strength of home equity credit, it is surely going to be more cost-effective than other consumer debt, not only due to its lower interest rate, but also for its tax-saving features. But in order to make the most of the best possible tax deduction advantages, you have to first itemize the taxes payable.

If you have never refinanced a New Jersey mortgage after bankruptcy, then you probably don’t know a lot about the process. Taking time to educate yourself in regards to the way the lending industry works will be to your advantage. To help you out, here are three things in particular you may not know about refinancing a New Jersey mortgage after bankruptcy:

Lenders Will Be After You

After filing bankruptcy, you might be surprised when a whole slew of lenders come crawling out of the woodwork ready to offer you any loan that you’re looking for. Perhaps you have already received phone calls, emails, or items via snail mail advertising various lending services. While it may be tempting to contact one of these companies, you will be better off soliciting your own lender rather than going with a lender who solicited you. You will especially want to steer clear of anyone asking for credit card information or bank account numbers during an initial consultation.

New Jersey Has Laws to Protect You

To protect borrowers who are interested in mortgage refinancing after bankruptcy, the state recently created the New Jersey Home Ownership Security Act. This act prohibits predatory lending practices and is specifically focused on protecting a borrower’s equity. Even with this law in place, borrowers should heed any warning flags that might come up when working with a lender to refinance a New Jersey mortgage after bankruptcy.

You Need to Be a Smart Shopper

Rates, fees, and lending terms are different everywhere you go. This is why it is imperative that you be a smart shopper when searching for a New Jersey mortgage refinance after bankruptcy. Without making comparisons prior to taking out a loan, you will have no idea whether or not you are getting the best loan available.