Jul 15

Welcome to my financial advice blog

Hello Everyone and welcome! Money affects every aspect of our lives, doesn’t matter whether it is in your personal or professional life, finance is there in some capacity. Being able to navigate your way around the financial world is actually quite important even in our daily lives. You need not be an expert but if you know the basics, you can improve your financial situation. If you have any great tips, feel free to share them.

Nov 21

Outsourcing Business Bookkeeping Makes Financial Sense

There are 2 ways of bookkeeping, either do it yourself or hire a specialist to do it for you. Either way, it really is essential that your books are accurate and kept up to date. Unless you already have experience of accounting or businessbookkeeping, I would recommend you hire someone who knows what they are doing.

 

One of the primary advantages of outsourcing the bookkeeping is that it is very cost effective.  The beauty of this system is that you are not paying for a fulltime employee or spending your own valuable time doing it yourself, you only pay for the time spent doing your books. The thing is, most people might think of contracting out work with exploitation of workers from emerging markets, however, this is not the case, if you are using a UK based accounting firm, they will only be employing people who are familiar with British accounting and tax regulations. It is therefore good practice to make use of one of these excellent firms.

 

If you do not already have information on a British accounting firm, you can find out about them online. There are plenty to choose from and whether you are a single trader or a firm who employs several thousand people, there is a great bookkeeping firm to help you. There are a variety of firms out there to help you, they can offer a variety of services from simple bookkeeping to payroll to taxation and virtually everything else to do with business accounting. How much you will be charged depends very much on the services you decide to choose.

 

If you can, try to get some recommendations from friends or acquaintances as word of mouth is actually the best way of finding great services. If you can’t, spend some time researching firms that you think you might like to use, look at it as an interview and see what their strengths and weaknesses are before you decide. Try to narrow your choices down to about 4 and go from there.

You can find out a great deal online and you can read reviews from current or past customers. Try to keep an open mind and use your own judgement. Remember that any firm worth its salt will be happy to provide you with satisfied customers. If you wish to be really thorough, you can go through the Financial Ombudsman to see whether there have been any complaints and whether they were upheld or not.

 

Most good bookkeeping firms will be straight with you as to how they hire their staff and whether they will be using foreign outworkers. However, it is always a good idea to ask so that you know how they operate. Some companies will offer a free 20 minute consultation for new customers, this can be a very useful way of finding out for yourself whether this is the right firm for you to trust with your business’s books.

 

 

The accounting part is just one aspect of business bookkeeping however, it is one of the most important because without having all the right information to keep the accounts, you will not know how much tax will need to be paid, how much tax relief your business is entitled to and also whether you have made a profit or a loss.

 

Small to medium sized businesses who do not need the services of a large accountancy firm could find the right solution with a specialist bookkeeping firm. These smaller firms are still able to ensure that your business accounts are kept in order, make sure that your tax bill is correct and see to it that staff payslips are done on time. By outsourcing you are saving your business both time and money. Finding the right firm to look after your accounts will give you the time to get on with your own work. It also gives you the confidence to know that you will not be having trouble with HMRC.

Oct 28

The Financial Ombudsman Is There To Help

In the UK the financial ombudsman is there to handle complaints both by individuals and businesses against financial institutions where a solution cannot be found between the parties involved. It is virtually unheard of in other parts of the world so is therefore pretty unique to Great Britain.

It is quite simple to make a complaint to the financial ombudsman, you can do this by calling the helpline, writing a letter or via their website. It is free to contact them and they have a neutral stance on financial matters so you know that if your case is taken on, it will be handled fairly.

 

Before making a complaint, it is very important to be both responsible and fair. Make sure that you have given the bank a chance to investigate your complaint and offer a resolution before taking it to the ombudsman. It is often noted that complaints occur due to misunderstandings which can be resolved if the bank has a chance to address your concerns.

 

Many financial complaints are due to minor errors which when pointed out are sorted to both parties satisfactorily however, if you find that this is not the case and you can show that you have offered the financial institution every opportunity to fix the problem, the ombudsman should be able to offer resolution. If you make phone calls to the bank, make a note of the time and who you spoke with. Get a proof of postage if you write and keep emails for future reference. This is all proof that you have afforded the business an opportunity to make right your grievance.

 

When making a complaint to the business in question, make it as factual and detailed as possible. Put it in writing and keep a copy. If you are not comfortable writing formal letters, get some help from family or friends or an organisation like the Citizens Advice. If you are making your complaint by phone, make a list of the points you want to make and be sure to get the name of the person you speak to, write it down so you have a record. Try not to get annoyed, keep your cool, be polite and remain calm. You will get a lot further than if you lose the rag and start being abusive towards the employee who is not actually responsible for your complaint, do try to remember that point!

 

Finance word cloudHowever you make your complaint, make sure that you have essential information such as your policy or account number, your customer reference or any other details that are individual to you and will help identify you with the business. Have copies of documents to back up your grievance so that these can be taken into account. Don’t expect a miracle solution, it takes time for the business to investigate your particular situation and most will be keen to resolve the matter quickly and without fuss. The business has actually got 8 weeks to resolve your grievance before you can take it to the ombudsman so make sure you use this time wisely and productively.

 

In some circumstances you can approach the ombudsman directly, if for instance you do not know who to approach in the financial institution. The financial ombudsman will be able to contact the right person on your behalf but this is a rare occurrence and should not be your first port of call.

 

The financial ombudsman has the power to decide whether or not a financial institution has handled your complaint properly or not and will if necessary, force the business in question to put right what it has done wrong. This is the main reason why it is so important to have as much in the way of facts and data before approaching them so that you have the proof that your complaint has not been taken seriously enough.

Oct 10

How A Business In The UK Can Recover Debt

If you own a business in the UK, eventually you will have to deal with debt recovery. You will have some customers that may have problems paying their bills. Sometimes you have a few customers who just do not pay attention to paying their bills, and they start to avoid you. What can you do about them? There are some options that you can take when you are trying to recover debt from delinquent accounts.

It is always good to keep communications open so that you are aware of what your customer’s financial situationBusiness finance is. This does not mean that you just write off small debts because those can add up and eat into your profits. For larger debts, you should be proactive and find out what the customer has not paid. If the debt was due to a dispute over products that you had delivered, the dispute must be resolved first. If the client has a problem with cash flow, you can work with them to develop a payment plan where you can collect partial payment on a set schedule.

You should always be diplomatic when you approach a customer for payment. You want to explain the steps that you will take to collect the money before you take any legal action. See if any agreements can be reached. Keep in mind, however, that you should always protect your bottom line. Customers who are worth keeping are the ones who respect their suppliers enough to pay their bills on time. The customers who do not put first priority in their payment to their suppliers may not be the best customers to keep.

Assess your business’ current financial situation. If you can reschedule partial payment of the debt, at least you can recover some money and still preserve the good relationship with your customers. This also depend if the customer’s financial problems are temporary. If the problem appears to get bigger and bigger, you may need to take further action.

When negotiating a payment schedule, you are in a better position if the customer still values your goods and services. You will also have a stronger position if each business transaction is backed by a clear set of terms and conditions. For example, if you are the supplier of certain goods, there may be clause that says you are entitled to remain the owner of the merchandise until you receive full payment. If the customer wants to avoid bad publicity from the possibility of your taking legal action against them, they will be more willing to negotiate with you. They know that if you take action and it leads to their filing for bankruptcy, it will impact their ability to get credit in the future.

You are entitled to collect interest on any overdue debt. A credit period and interest rate should be spelled out in your contract. The Late Payment Of Commercial Debts Act of 1998 allows you to charge interest at the base rate set by the Bank of England plus 8% from the end of a 30-day credit period. The base rate is adjusted every six months.

Legislation also allows you to collect on “reasonable debt recovery costs” if you incur them in your attempt to collect on overdue debts. However, this is usually enforced only if the case reaches the courts. If you do plan to charge interest and recovery costs on overdue debts, the best thing for you to do is to clearly have this written in your statement of terms and conditions, on your invoices, customer statements, and any financial document that you send to your customers.

You can use a solicitor to collect the debt for you. A lot of times, customers pay up more promptly if a solicitor comes knocking on their door. Solicitors deal with a high volume of debt collection and know how to go about this efficiently.

You can also use a reputable debt collection agency to help you collect overdue debts. A debt collector will handle the collection only if there is no dispute over the amount owed. They are effective in pursuing late payments.

You can use a factoring company to collect debt. This is where you can get partial payment of the debt from the factoring company when the customer is invoiced, then get the balance when the debt is collected. The factoring company collects payment directly from the customer. This is an option only if the debt is not disputed.

For their services, third party debt collectors will charge you a percentage of the total debt collected. That is the cost of your debt collection.

Before you sign a contract with a third party debt collector, ask about their approach. You would not want to alienate your customers by sending out someone who practices aggressive debt collection techniques. Legitimate agencies should be registered with the Credit Services Association. Make sure that you only use firms with an ethical reputation because you still have to protect the integrity of your brand.

Sep 24

There Are Different Types Of Mortgage

There are  lots of   kinds of mortgages  readily available to  our home buyer, and  along with  various mortgage  items, there are various ways in which interest on the  home loan is  computed and  paid back. It can be  mortgage-xsextremely  complexed and  tough to  choose which mortgage  finest  matches a home  purchaser’s  certain financial  scenarios. The  kind of mortgage that will be most suitable will  likewise  depend upon  your home buyer’s future plans for the  home; whether they  mean to sell within a  brief period of time, whether they  plan to rent out the property (most standard  home loans do not  permit the home owner to  lease the  home and so a  specific mortgage for  property managers is required).

Lots of people  choose to  obtain a fixed rate  home loan so that the interest rate is  dealt with at a particular  portion of the loan for the entire length of the  home loan period. This  makes sure that the borrow  understands  precisely what he or she must pay each month and it is much easier to budget for the  home loan repayments. This  kind of  home loan is therefore the most popular for this reason and about 75 % of all  home loans taken out are  dealt with rate type mortgages. The mortgage period can be ten years, fifteen years  and even thirty years. The advantage of this type of loan is that the borrower knows  precisely what she or he  have to  pay back  monthly for the set  period. The disadvantage is that these  kinds of  home loans  typically have a higher interest rate than other  home loan products and because the interest rate is  repaired for a set  variety of years, if  because time the interest rate goes down, the home owner is stuck making higher payments than might be  offered with other  home loan  items.

An Adjustable Rate Mortgage or ARM  normally has a set time period at the start of the loan ( normally a year or two) when the interest rate is  repaired and often at a lower rate than the current market  rate of interest.  Nevertheless after this period the interest rate changes with the market rate  therefore repayments after the initial introductory period  will certainly be higher. With a one year adjustable rate  home loan, the interest rate  modifications each year after the initial fixed rate  duration. This type of  home loan  brings a lot more risk as the borrower does not know from one year to other  exactly what the interest rate will be and  as a result  exactly what  his/her monthly  payments will be. This makes budgeting for the mortgage  payments much harder.  Since this  kind of  home loan  lugs an  extra  danger,  our home  purchaser can usually borrow more money and so  pay for a more expensive  residence.  Frequently caps are put in place so that the  rate of interest can not go up or down  outdoors  particular parameters. There are also  3 and five-year adjustable rate mortgages.

For those considering reselling or refinancing within a  brief period of time, a two-step mortgage might be a  much better  alternative. This type of mortgage has a fixed interest rate for the  preliminary  stage of the loan  and afterwards another  rate of interest for the remainder of the loan period. The interest payable  will certainly be  identified by the  present market rates and so the home  purchaser  runs the risk of the interest rate going up after the initial fixed  duration. But if the  obtain is planning on selling the  home before this  change date then this might be a  great  alternative to secure a  home loan at a low  rate of interest.

House  purchasers can  likewise decide to  opt for an interest  just mortgage  where  she or he only pays back the interest on the loan  monthly. The  concept loan amount is not paid back at all  throughout the  home loan period  therefore when the  home loan  ends, the borrower still owes the full capital  quantity of the loan. This has the advantage of lower  regular monthly repayments,  nevertheless at the end of the mortgage period, the  property owner  have to  discover a way to  repay the original loan  quantity,  normally  with the  methods of some  financial investment  item such as life insurance or an endowment policy.  Nevertheless, if the investment  item  has actually not performed well or  the marketplace as a whole  has actually suffered, the  property owner  could not get enough funds from the  financial investment vehicle to repay the loan. This  held true with  lots of peep mis-sold endowment policies in the 1980’s and 1990’s.  Generally borrowers are  offered the  alternative to have an interest  just mortgage plan for a set period at the start of the loan  however then after this time, the home owner  have to  begin  repaying the  concept loan as well as the interest and so repayments will rise steeply.  Generally this type of mortgage has a  greater interest rate than a  conventional  payment mortgage because of the interest  just period at the start.

Sep 02

Make Sure You Have A Properly Drawn Up Lease

Being able to understand what makes a particular property valuable and having the ability to estimate the approximate value of that property will give you the opportunity to make a profitable investment. Over the last few business-finance-graphs-and-charts-with-calculator-xsyears, there has been a rise in the approach of purchasing a building that is structurally sound but requires a bit of TLC and a bit of landscaping. This is a great way of buying a relatively cheap property to do up and either sell on or rent out. However, commercial property is not quite so straightforward.

 

For example, take 2 commercial buildings which were built at the same time, in the same area and have virtually the same features. You would think that they were worth a similar amount of money but you could be mistaken. One key factor will determine a difference in value and that is, the lease or leases. Landlords who have experience in renting properties will know how important it is to attract and keep good tenants and avoid or ditch the bad ones. With commercial premises just having a good tenant is not really enough. Commercial properties will actually have several different types of leases for each tenant and this one feature can have a huge effect on the value of the property.

 

One of the main reasons an investor will choose commercial premises over residential premises is down to the types of lease that can be offered. Residential properties will have fairly standard leases whereby the tenant has many rights. Commercial properties on the other hand have very different leases which are far more complex and individualised. For instance, if the tenant is renting commercial space to use as a clothing store, they will require a certain amount of floor space which will have been accurately measured for the lease and they will also want a access to a certain amount of car parking space outside the building. The clothing store will be responsible for their own equipment, decoration, cleaning and so on. Often, depending upon the lease, they will also be responsible for repairs and maintenance, unlike a residential property where the landlord is legally responsible for the upkeep of the building.

 

On the subject of leases, it is very important for an investor to appreciate the importance of having a very good lease agreement drawn up. An investor buys property to make a profit and the more money the property can make, the more it will be worth. That being the case means that a regular steady income has to be in place at all times but this needs to be offset by the amount of direct management that is required so you need to do your sums well beforehand. Be aware that the length of lease can become a major factor particularly if you have a poor quality tenant. Commercial property leases normally include a right to renew with the same terms or terms which have been modified and agreed in advance. This can be a double edged sword, on the plus side, a valuable tenant who does not want to or can’t relocate can be able to remain in place following a negotiation in terms and rent. On the down side, a not so good tenant can be difficult to dislodge and a group of poor tenants can reduce the value of your building.

 

When looking for a new property to purchase or plans to rent out space in an existing commercial property, remember that the most profitable leases are not necessarily those that are paying the most. A tenant who pays a high rate but only has a short time left on their lease and does not intend to renew is not nearly as valuable as a long term tenant who pays less. Another thing worth mentioning here is subleasing, this can be useful but you need to know all the details and be aware of what is going on so that you can retain at least a modicum of control over our own building as the tenant doing the subleasing may not be as experienced in property leasing and management.

 

Make sure you have the leases drawn up by a specialist lawyer and make sure that you read them properly before using them. Retaining a good solicitor could save you a great deal of time, trouble and money in the long term so choose one carefully. Remember that the lease is a legal document so you need to be aware of everything that is in it and what your responsibilities are. Make sure that it includes the specific amount of security deposit, whether it is returnable when the lease expires and also how much can be deducted for repairs or damage. This is important as it can weed out poor quality tenants as well as giving the tenant the incentive to look after the property or part of the property that they are renting. Take a look at the lease from the worst possible case, if a tenant’s business goes bust, is there any protection for you as the landlord to get your rent money? Having your solicitor draw up a lease that suits your needs and that is fair to your tenant will give you the best possible chance of getting a good return on your investment.

Jul 31

At Last, Schools Are Teaching Finance

I have been of the opinion, since my own schooldays, that youngsters need to be taught about money and finances. When I was in school we were not given any lessons in managing money, dealing with bank accounts, taxation or anything even vaguely useful regarding this area with the result that I was very ignorant where finance was concerened. Of course, like everyone else, I knew how to spend it but I earning and keeping hold of it was a whole new experience. With the aftermath of the financial crisis, it is more important than ever that young people are given the information and tools to prepare for life in adulthood and that includes being savvy with money. The students of today will be the decision makers of tomorrow so learning about finances will inevitably help them make good decisions in the future.

 

“Spend a little, save a little, life will be OK.” Manal Chaib, 13, reads out her “money promise” tweet to the rest of the class. “I want to spend so bad,” reads out another pupil.

A year-eight class at Heartlands High School in north London get a taste of lessons in the English national curriculum when secondary schools return from the summer break. With the introduction of financial education, 11- to 16-year-olds will solve money related maths problems and learn about public finances, pensions and how to budget.

In the wake of the debt-fuelled financial crisis charities lobbied hard for this change. In the classroom at Heartlands High School, pupils have mixed feelings.

“It’s probably as important as English and business studies,” says Karim Blake.

Chaib is worried about too much focus on saving. “We are teenagers. We should be able to spend on what we want. You should start worrying when you are 16 … I don’t want to get: ‘You are going to have a rubbish future.'”

Gabby Urbonaviciute is also unsure. “If it was for the whole time, I think it would get boring. Today is fun. Two lessons but not more than that,” she says while filling in a quiz on which celebrity spender she is most like – from “super saver” J K Rowling to “spenderholic” Mike Tyson.

This workshop is being run by MyBnk. Set up in 2007 it has so far helped 80,000 children with lessons on the difference between “needs and wants”, how to save, public spending, banking and enterprise.

Founder Lily Lapenna started the charity after working in international development in Africa and Asia. When she returned to London it was the calm before the great financial storm but Lapenna was already nervous about the build-up of personal debt.

“Credit flowed quickly and easily – overdrafts, credit cards and mortgages. Many of my friends were in debt but living fabulously without a clue of what APR meant nor how it impacted them,” she says, referring to the annual percentage rate (APR) measure of how much it costs to borrow money. “Something didn’t feel right. Sure, we could pay our monthly bills, but what if we lost our job, what would we do if our boiler packed up?”

She started classes for schoolchildren and since the onset of the financial crisis, demand for MyBnk’s sessions has soared. “We need to teach students to manage money. That was not the prevailing attitude pre-crash where thoughts were, they will learn from their parents,” says Lapenna. Click here to read on

Further information

4 essential finance lessons for your children

29 money lessons every high school graduate should know

Jul 16

A Simple Guide To Personal Finance

When we are attempting to understand Individual Finance, the best thing to do is to understand exactly what Personal Finance is not.

 

Many people believe that bookkeeping and personal finance are the same, however Personal Finance is NOT Bookkeeping.

On the surface they might seem the very same; they both have something to do with cash. However, the definitions will assist us better comprehend the differences.

 

Based upon this meaning, we see that accounting is the process of analyzing and tape-recording what you have actually currently done with your money.

 

This is why having an chartered accountant is generally not enough when it pertains to your individual finances.

 

Accounting professionals normally don’t issue themselves with personal finance (there are some exceptions to this rule). Unless your accountant is also a monetary advisor or coach, he or she will likely simply look at what you have done with your money at the end of the year and supply you with a report of their analysis.

 

This report is typically your tax return; what you owe the government or exactly what the government owes you.

 

Very seldom does the accountant offer an individual with a Balance Sheet or Earnings Statement or a Net worth statement; all very helpful devices that are required to successfully manage your individual finances.

 

Personal Finance is taking a look at your financial resources from a more pro-active and goal oriented viewpoint. This is what supplies the accountants with something to tape, validate and assess.

 

Consumers, business firms, and governments typically do not have the funds they need to make purchases or conduct their operations, while savers and investors have funds that could make interest or dividends if put to efficient use. Finance is the process of carrying funds from savers to users in the form of credit, loans, or invested capital through firms including banks, developing societies as well as other non-profit companies such as cooperative credit union. Finance can be divided into three broad locations: company, individual and public finance. All 3 include creating budgets and handling funds for the optimal outcomes”.

 

Individual Finance Simplified

 

By understanding the definition of “finance” we can break our ” individual finance” down into 3 easy activities:-.

 

1. The procedure of raising funds or capital for any kind of expenditure = Generating an Income.

A Business gets money through the sale of their services and products. This is labeled ” profits” or ” earnings”. Some businesses will likewise invest a portion of their income to create even more earnings (interest income).

 

An individual acquires cash through employment either for their own business or working for someone else. This money is termed income.

 

A Government gets money with taxes that we pay. This is among the primary means that the government produces an income that is then made use of to construct facilities like roads, bridges, schools, medical facilities etc for our cities.

 

2. Using our cash to make purchases = Spending Money.

Just how much we spend relative to how much we make is exactly what makes the difference between having maximum lead to our individual financial resources. Making good spending decisions is important to attaining monetary wealth – despite just how much you make.

 

3. Getting maximum outcomes = Keeping as much of our money as possible.

It’s not just how much you earn that matters – its how much you keep that actually matters when it concerns your individual financial resources.

 

This is the part of personal finance that virtually everyone discovers the most challenging.

 

Often people who make huge incomes (six figures or more) likewise tend to spend just as much (or even more) ???????????meanings they put themselves in debt which debt begins to accrue interest. Eventually that debt can begin to grow exponentially and can damage any hope they would have needed to accomplishing wealth.

 

Individual Finance made easy.

 

Personal Finance does not have to be complex if you keep this simple formula in mind:.

 

INCOME – SPENDING = What you have left over.

 

For Optimal Outcomes you just have to make more than exactly what you invest and invest less than exactly what you make so you can keep more for you and your household!

 

If you are not actively working to an optimum result you will by default get less than optimal results.

 

It truly is that easy!

 

Now that you understand individual finance and WHAT you have to do, the next step is finding out HOW to do this!

 

The very best means to start is by following these 3 easy steps:-.

 

1. Knowing what you want to achieve will help you choose a pathway and give you incentive to do more to get what you want.

 

2. Have a strategy – that you can follow that will get you to your goals. Knowing how you will accomplish your goals in a step by step plan is invaluable. Sometimes this is much easier with the help of an consultant or a financial coach.

 

3. Use tools and resources – that will assist you to stick to your strategy and not become sidetracked by the things in life that might limit our incomes and make us spend more than we should. Do not try and work all of it out in your head! You will certainly end up with a large headache and your financial resources will certainly turned into one massive dark fog!