Author: Complete Controller

Fraud can affect any business, whether on a small or large scale. All companies must learn to identify frauds and scams. Fraud is a serious issue that brings a company down business. Fraud occurs when an individual or company is dishonest or commits any illegal act that results in profit for them but loss for the business.

Here are some tips you should know to protect your organization and business from fraud.

• Keep your information personal

Your personal information, such as user ID, passwords, and PINs, link closely to your fortune. Change your pins and passwords periodically and keep all this information safe and confidential because this information allows you to get money from the bank. Do not open up about personal information to anyone.

• Transfer money carefully

The most common and frequently committed form of fraud is impersonation. An institute may contact you claiming that they work for you or represent themselves as workers of any other company to get money from you. Be sure to verify their real identity by contacting the related organization to check their authenticity. They can contact you by email, message, or sometimes through a direct call. In this case, do not trust caller ID on your phone because these fraudsters are also hackers. They can use technology to make it appear to be calling from a government organization or a legitimate business.

• Online security system

Online banking is trending nowadays with a rise in online trading and transactions. The Internet now has become a popular platform for fraudsters and scammers to trawl for easy victims. Fraudsters send emails or use websites, which are their easy and most common tricks to catch their prey and get information about it. Your online practice can play a role in reducing the risk of financial fraud. Make sure that you have updated and latest operating system. Also, protect your devices by using the most up-to-date antivirus software.

• Don’t get attracted by high returns

The expectation of high returns for the money you invested is sometimes too reasonable for you to be true. Most of the time, fraudsters prey on the greed of investors who seek quick and high returns. These schemes cause unregistered investments and commodities. First, find out who you are dealing with, and then invest only with authentic and licensed brokerages and financial planners. If your investment is showing constant high returns, even in market downfall, immediately ask any trustworthy independent investment expert to review the reports and financials of the organization where you invested your money.

• Don’t write checks

Fraudulent can use information from your checks to take all money out of your account because checks contain all of your personal and bank information. If they insist you write a check, do not take your whole checkbook with you. It is preferable to use a credit card for payments.

• Only donate money to trustworthy and well-known organizations

Usually, frauds start after a natural disaster, such as earthquakes or tornadoes. Give money to only healthy organizations. If you are giving money to a lesser-known organization, check their official website to see how much of the money you donate goes to them and how much goes for salaries. If you cannot find this information, you should give it to another charity.

• Know your employees properly

Observe and listen to your employees because this will help you determine how much fraud risk is in your employees. The management team must get involved with employees and know more about them. If an employee lacks appreciation from the owner or shows anger towards management or the boss, this could take him to commit fraud as revenge. Listen to your employees and ask them about the issues they face related to their job or office. Knowing and listening to employees and engaging them in conversation is essential.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Believe it or not, accounting is integral in steering a business to success. From managing the cash flow and balance sheets, the purpose of accounting is to keep you up to date with the financial happenings of your organization. Whether you are a small, medium, or large-sized business, you cannot overlook the need for accounting. Unfortunately, even today, in 2021, when we are going through the digital revolution, many companies are still stuck with performing accounting functions on paper or excel sheets. It’s about time to change that; evolve to make your accounting hassle-free, efficient, and more fruitful.

If you are wondering whether or not you need to switch to accounting software, then here are a few factors that would help you determine the importance of accounting software for your business:

Better Cash Flow Management

One of the most significant issues businesses suffer with is cash flow management. Without proper cash flow management, you cannot analyze, plan and predict your business’ growth or downfall. If you have to take appropriate measures to manage your business’s upcoming downside or upside, it is crucial to ensure you have proper cash flow management in place. Achieving this through traditional means can be tricky since human errors are unavoidable. But, with accounting software in place, you can easily track your cash flow management, gain insights into the cash flow, plan your business’ growth, and much more. Since accounting software calculates the transactions for you, you can focus more on the analytics and planning function instead of on the calculation. You have already achieved role growth within your organization at this point!

Increase in Productivity, Reduction of Errors

Traditionally, companies use various accounting methods to keep a check on the basics. If you manage ledgers, you will have to create balance sheets, T-ledgers, etc., to check if the result matches. You will have to do it all over again if it doesn’t. It is tedious, time-consuming, and can reduce your organization’s overall productivity. Welcome to the new age where all of this happens with the click of your mouse. Accounting software generates your ledgers, balance sheets, account receivables and payables, and hundreds of other sheets automatically and simultaneously. Step out of the frustration of going through hundreds of books yearly to make the final balance sheet!

Tax Filing Made Easier & Effective

For small to medium-sized businesses, tax filling is a major hassle. Keeping track of your revenue and its sources and aligning them with the various tax types is a mammoth task. With accounting software, filing taxes becomes not only easy but effective. Most accounting software today is built in compliance with the tax regulations, which means this software can automatically format invoices and data to adhere to the taxation rules. You won’t have to re-do everything at the end of the fiscal year. Practical, easy, and hassle-free!

Safety & Security of Your Data

One of the major concerns for businesses has always been to keep their financial data secure, whether from internal or external threats. If you manage your accounting via traditional methods, you know how prone your data is to leakage. One slip and your financial data fall into the wrong hands. With accounting software, you have the liberty of sharing your financial data only with your trusted allies. Whether cloud-based or server-based, your data is secured and recoverable in case someone destroys it.  

Data Maintenance, Invoices & Tracking is Easier

Lastly, with accounting software, you can send digital invoices to your customers that track and update automatically. You don’t have to manually debit or credit your statements after every payment. This automation makes it easier for you to generate invoices, track your account payables and receivables, and maintain your overall financial standing.

To Choose or Not to Choose, that is the Question

With the manifold benefits accounting software offers, it is time for businesses to adapt to the digital revolution. If you want your business to boom, you must focus on growth instead of maintaining ledgers and sheets.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

While many businesses are still pondering whether they should opt for accounting software, a vast majority already have, especially after the 2020 COVID pandemic. Since millions of companies worldwide shifted to online platforms, cloud-based accounting software became an obvious choice. Today, many online businesses are utilizing the power of accounting software to automate their accounting process and make their cash management more effective and less tedious. But it doesn’t end there; many see this as just the beginning. The industry of accounting software is evolving more and more with each passing day. The more businesses utilize this software, the better they are being made to meet the expectations of complex business models.

As the dependency of businesses on internet-based accounting software increases, the software continues to evolve, introducing quicker and more efficient ways for data keeping and data analysis, thus minimizing the risks associated with accounting and bookkeeping.

Whether you are a part of the digital accounting realm or still in the queue wondering whether you should adopt automation and technology, you need to know that the industry will soon take a paradigm shift. In 2021, experts expected that almost 47% of online businesses would opt for accounting software. Are you surprised? Don’t be! Here are some more updates about the accounting software industry that will give you an idea of how quickly this industry is evolving:

Automation & Harmonization

While automation might be a familiar word to many, harmonization is a new term referring to integrating multiple software to create seamless processes that produce the desired results with little to no effort. Imagine running numerous online businesses with various software programs such as an eCommerce-based platform, an inventory management system, and customer relationship management software. How would you merge the data to give you the desired analytics? It is tedious and probably one of the primary reasons businesses run away from accounting software. This lack of user-friendliness is precisely why most accounting software companies are now focusing on solving this issue by introducing harmonization. Harmonization means that by the end of 2021, most accounting software will be compatible with most mainstream software such as WordPress, WooCommerce, etc. This compatibility will significantly reduce the stress of merging data from multiple sources.

Artificial Intelligence (AI) in Accounting Software

Since 2019, most software houses have focused on introducing artificial intelligence to make them more efficient and capable of understanding the requirements. Of course, the accounting software industry is no exception. Robotic process automation (RPA) and artificial intelligence are now being used in most top-of-the-line accounting software to make them capable of understanding and processing repetitive tasks, ultimately reducing the efforts and stress of the accountants. By the end of 2022, this will probably become a norm in the accounting software industry.

Forecasting, Analytics & Data Management

For any business, it is imperative to have appropriate tools to measure, predict and plan its outcomes. Today, most accounting software comes equipped with tools that create charts and analytics of your data, such as the number of units sold, cost per unit, profit per unit, and the like. In addition, in 2021, most accounting software can also create and forecast your future goals and milestones by utilizing your data, making it easier for you to set up your plans accordingly.

Should You Choose an Accounting Software?

Whether you are running an online or offline business, you are spending way too much time, effort, and money on your accounting practices. Switching to accounting software will save you money and time and make your entire business process seamless. From creating a sale to recording the expenses incurred, the accounting software will record and manage the data for you and give you a wholesome picture of the entire operation, making it easier to plan your next move.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Cloud-based accounting software has made it significantly easy for businesses to manage their accounting operations. With your data saved on the cloud, it can be accessed at all times, allowing you to manage your business remotely. It also makes cash flow management easier, helping you track your sales, generate invoices, manage all expenses, and record payment receipts, all with a one-window operation. In addition to data recording and managing, accounting software also helps analyze the financial condition of businesses and provides proper insights for a clearer view of business standing. Moreover, accounting software also minimizes the risk of error in recording your financial statements, thus contributing towards adequate cash flow management and saving leakages in your business finances.

Why Is QuickBooks Important?

Among the many accounting software platforms available across various industries, QuickBooks is regarded as the most top-rated software as it offers outstanding features, a straightforward interface, and multiple integrations. From managing payments to recording income statements and balance sheets and managing an organization’s payroll, QuickBooks offers a one-stop solution for all accounting needs. Most experts recommend using QuickBooks to manage the accounting functions in small and medium-sized businesses as it reduces the cost and minimizes the risk of errors.

Benefits of Using QuickBooks for Payroll

One of the essential functions QuickBooks performs for SMEs is managing the payroll software. QuickBooks ensures that your employees are paid the right amount of money at the right time, and you can quickly generate pay slips. QuickBooks software for payroll management automates payroll management. Here are some of the top benefits of using QuickBooks for payroll management.

• Easy Processing of Payroll: Manage everything from; how much is to be paid to an employee, when payroll is due, how to transfer the salary to the employee account, and how you generate pay slips. These tasks can be a massive hassle if you manage them manually. With payroll bookkeeping software, you can conveniently do all of this through a series of clicks alone. All you need to do is enter your employee details, package details, and other taxation details, as well as the day when the payment is due. QuickBooks also ensures accuracy and avoids potential errors that you could cause if you manage the payroll manually.
• Keep Tabs on Employee Benefits: In addition to basic salary packages, companies also promise varying benefits such as health insurance, paid leaves, fuel allowance, car, and other benefits. Managing the expense of all of these benefits can be quite a hassle, but with QuickBooks, this management can be effortless. The software includes a simple wizard that allows tracking of all such company benefits.
• Record Employee Information: QuickBooks Payroll Management can also help record important employee information and easy processing. Be it the employee attendance, time off requests, or uploading of performance sheets, the QuickBooks payroll management function allows easy recording of all the employee data, thus aiding in a better data recording.
• Easy Payroll Tax Preparations: The taxation season is one of the biggest nightmares for any accounting department. QuickBooks payroll management makes it easy to fill and submit state and federal taxes. The software offers simple functionalities that simplify the electronic filing of taxes while minimizing the potential for miscalculations and missed deadlines leading to tax penalties.
• Compliance with Government Regulations: The QuickBooks software is automatically updated with all the federal and state regulations, thus ensuring that the finance of a company, particularly the payroll and employee benefits, complies with the state/country restrictions.
• Improve the Accuracy of Payroll: Another critical benefit of managing your payroll with QuickBooks is no risk of error in manually recording employee data and rolling out payroll every month. Late payments, miscalculations, and under-deductions can all cause significant disruptions in the company’s finances, thus disturbing the financial roadmap of the company.
• Go Paper Free: With QuickBooks, you can get rid of manual bookkeeping, recording receipts & invoices, as well as other paper recordings of data. Paper-free booking is eco-friendly and saves costs in many ways by eradicating printing, shredding, and additional paper costs.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Running a business comes with its fair share of hassles and perks. While a business owner might have several added benefits from banks and other organizations that non-business owners don’t have, the hassles on business owners’ plates are no less. There is a lot to do to run smoothly, from managing the business operations and client relations to keeping the finances in check.

Finance management is one of the most crucial tasks for any business. Many SME owners mistake handling the finances either by themselves or ultimately not looking into the financial planning and depending entirely on hired accountants. In either scenario, the business can face quite a brunt if the finances go wrong.

However, proper financial management will not only keep your business afloat even when the revenue goes low, or the global economy gets a hit like the covid-19 pandemic. Here are top finance management tips to keep your business finances in order.

Implement Appropriate Bookkeeping Practices

The most important rule for the finance management of any company is implementing appropriate bookkeeping practices. Whether you have hired an accountant or a simple bookkeeper or your business is small, and you tend to handle the finances yourself, you must follow standard bookkeeping practices to keep a regular record of your business. Record all transactions in time and keep the payment receipts, invoices, and bills in a document. Don’t leave the payroll management or transaction tracking for the last/closing week, as that can land you in hot waters. While doing all that, ensure you have proper accounting software to help you make projections and record data efficiently. You can also conveniently integrate efficient bookkeeping software with your CRM & ERP, syncing your orders, transactions, and payments.

Always Keep Your Business & Personal Accounts Separate

Another rule of thumb is always to keep your business and personal accounts separate. Separation of business and personal accounts is necessary because it gives a professional outlook to your company and makes record keeping easy. If your business model is B2B, you might frequently have recurring clients making payments. Asking them to make payments to your account can make them quite skeptical and harm your business revenues. Mixed business and personal finances can also lead to over-taxation or tax evasion. Both can be pretty damaging to your financial standing as well as your reputation.

Prioritize Your Repayments & Debts to Avoid Soaring Interest Rates

Most businesses operate on credits and pay a minimum or no interest if they make payments on time. Alternatively, business owners also obtain investment capital from investors, sometimes on the terms of paying back with interest. If the business revenue plunges, the rising interest rates can be a big problem for business owners and even lead to bankruptcy. It is essential to prioritize your debts to avoid this situation. You must know which debts to pay first. Start with the taxes and payroll and then make full or partial repayment of the most significant amount of money owed to one creditor. You should do this because the sooner you pay, the more substantial amount, the lesser the interest rates, and the better for your business eventually.

Formulate Your Budget Conservatively & Stick to It

When formulating your budget, do so with a conservative approach. Don’t let your incoming revenue blind you to increasing your budget. A miserly approach is better than ending up broke or bankrupt in a few months as a business owner. Allocate your budget to the various departments of your business wisely, and keep the revenue contribution factor of each department in your mind. Of course, this doesn’t mean you discriminate among the employees of your departments. However, it would be best to plan your expansions, advertisement spending, and employee benefits according to your budget. A pro tip – don’t forget to add petty cash allowance to your budget.

Strategize Business Expansion on Conservative Financial Projections

Expanding your line of products or services is an excellent approach and doing so in the early phases of business also helps you penetrate a broader market. However, it would help if you did so with conservative financial projections. Often, enthusiastic entrepreneurs study market trends and dive straight into expansion plans when they see an opportunity, putting their all into expanding towards the particular option; this can be a dangerous move. While taking calculated risks is a good approach, making sure your calculations are correct and considering both scenarios is essential.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Believe it or not, your company’s accounting system is probably the heart that pumps the required financials to the rest of the departments. While accounting may seem tedious to most of us, it’s essential to maintain and run a company’s unparalleled financial structure. Before the advent of computers, accounting was a much more difficult job to pull off, keeping ledgers and sheets on paper and reconciling a year’s data by literally going through every page of hundreds of registers. Thankfully, with time, accounting systems evolved. Today, we have automated and cloud-based accounting systems that avoid spending too much time on simple calculations and focus more on the actual work.

Unfortunately, many companies are still skeptical about using automated or computerized accounting systems. If you are among them, then here are a few benefits that would compel you to switch to improve your company’s overall accounting process:

Cost-Effective & Less Time Consuming

As established earlier, the traditional ways of accounting consume a lot of time while producing minimal results. Employee morale goes down, and companies suffer due to the lack of productivity and timeliness. Resolve this issue with an automated accounting system. With a computerized accounting system, you won’t have to manually record numerous transactions or calculate the balance now and then. For instance, if you send an invoice through the system and the customer pays, it will automatically add cash to the ledger, minus it from accounts receivable, and add it to the profit and loss sheet. The entire process is automated. 

Builds Perspective with Increased Financial Visibility

The second crucial thing an automated accounting software can do is give you graphs, charts, and a lot of other regularly updated data. With this data, you and your stakeholders can quickly view financial information and make decisions. In a traditional accounting setup, this is nigh impossible. Stakeholders and management would wait for months to get the final outlook of their accounts. Accounting teams would make monthly balance sheets by taking the balances from ledgers and t-accounts. With an automated system, everything is regularly and automatically updated.

Lesser Chances of Errors, Precision Guaranteed

Another major problem with traditional accounting methods is that a minor error in numbers can cause ripples in the entire financial structure. One additional zero in a transaction would make the balance as the whole go off. And, to find and rectify this error would be impossible, considering employees would have to go through hundreds of transactions. With an automated accounting system, since the calculation is done automatically and not manually by a person, the chances for errors reduce to almost zero. If there is an error, you can search for the data and rectify it. You won’t have to manually check thousands of transactions to find the error.

Third-Party Software Integration

Lastly, with an automated accounting system, you can integrate other software such as inventory management, invoicing, and the like to create an ecosystem of your company’s financial data. When you add an item to the stock, the cost paid and inventory accounts automatically update the ledgers. Similarly, when you send an invoice to a client, it is automatically updated in accounts receivables.

Should You Switch to an Automated Accounting System?

With the advancement in technology, it is becoming easier to regulate mundane tasks and prone to errors in software and applications. Accounting is one such process that requires precision, dedication, and a lot of time to give you the overall financial outlook of your company. Why do it all manually when an automated accounting software can do the job of ten employees alone? Not only this, a computerized accounting software would cost less and be more effective. Any business in today’s world that wants to grasp their accounting process should have automated accounting software to ensure no errors and high accuracy in the numbers.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Contrary to popular belief, earnings management is not the same as managing the hidden business segments of a company. Instead, earnings management refers to practices the companies follow to influence their earnings reported in financial statements. In simple terms, companies use earnings management to better portray a company’s financials, payments, and positions. Also, note that earnings management is part of the accounting process, not financial management.

Why Do Companies Use Earnings Management?

Again, earnings management is a broad term for various strategies used by companies to reduce inconsistencies in their financial statements. In most cases, earnings discrepancies and inconsistencies are common in businesses. However, these factors may influence future investments and a company’s growth, which is where earnings management comes into the picture. Investors are usually on the lookout for stable options for their investments. Companies try to show seamless business operations and financials to gain the trust of their investors. Hence, the need for earnings management occurs.

What are the Different Perspectives on Earnings Management?

There are different approaches used by companies globally for earnings management. Here are some of the commonly followed practices:

Earnings Management Through Accrual Accounting

Accrual accounting records business transactions when profit or loss occurs, unlike traditional accounting, where you record transactions when cash is received or paid. With accrual accounting, a clearer picture of a company’s financial standing is visible, allowing management to decide how to mold it. While most prominent organizations worldwide have practices to ensure their financial data is not corrupted by bias, the administration can still quickly develop the data as per their liking. Since transactions are not recorded as sales and purchases but rather as profit and loss, there is always a gap between distorting information.

Expense Management

Another strategy organizations use to manage their profits is limiting their expenses. By its sound, expense management, in contrast to the revenues, is easy, but it can create long-term problems for an organization. Since such companies are usually focused on reducing their expenses to boost their earnings, the company’s growth is affected. The management is focused purely on cutting costs instead of growing profit, impeding a company’s growth. For example, limiting a company’s growth to its employees might lose loyalty. Since the growth prospect was limited, it will invest in human resources that will move to competitors’ organizations.

Moderating Accounting Principles

In most countries worldwide, there are different accounting rules for similar transactions. For instance, you can record land acquisition as a fixed asset or an expense. This flexibility allows management to adjust accounting principles as per their liking to reduce their costs on paper and show an inflated profit. In most large-scale organizations, these principles are pre-decided, and internal and external audit teams ensure no such alteration occurs. However, it is up to the management of a company to record certain transactions, giving them complete freedom over their choices.

Is Earnings Management Legal?

Generally, there is nothing illegal with earnings management. A company has the right to decide how to portray its earnings. Whether it is a small business or a large one, they can use different accounting methods and strategies to highlight the positive side of their company’s earnings. That is perfectly legal and ethical if they are not omitting information but just rephrasing it. However, with large-scale organizations that are obliged to third-party auditing, earnings management becomes a problem. Since a third-party audit might raise eyebrows on how a company boosts its profit, it tends to get the businesses in trouble. As long as the management uses earnings management within the legal parameters, there shouldn’t be a problem.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A credit score is a three-digit number that can help an institution evaluate your credit history and estimate the risks of lending money or extending your credit. Credit bureaus collect all this information. Credit bureaus are credit reporting agencies that gather and research a person’s credit information and sell it to creditors for a fee so that they can decide who’s eligible to be granted a loan and who’s not.

In the US, there are three major credit bureaus. They assign you a specific credit score based on your credit history. These credit scores are critical to predict if you’ll be getting the loan or not. Credit bureaus don’t decide to grant you a loan; they only collect and analyze your information. The decision is in the hands of the lending organization.

Your credit score is calculated based on your payment history, length of credit history, recently opened bank accounts, types of credit used, and the amount of credit you owe. Once you form your credit score, it becomes the deciding factor in getting a loan and the interest rate. Your credit score can affect your insurance rates, a landlord’s renting, and prospective employer’s hiring decisions. A problem with any of the issues mentioned above will lower your score.

You can also increase your credit score; it’s not a fast process, but it can gradually lead to progress! There are no quick fixes, but you have to manage them with responsibility over time, like paying bills on time can reduce your debt load. Here are the three ways to increase your credit score:

Prepare a credit file

You must have some active credit accounts or open some credit accounts that will directly report to the major credit bureaus because most credit lenders, banks, and financial institutions report to these significant bureaus. If your credit score is low, this will have a good impression as a borrower; you can start with secured cards or credit builder loans. Also, if you plan on enhancing your already good score, you can go for rewards credit card that doesn’t have an annual fee. Being added as an authorized user on someone else’s credit card can also be helpful, only if they use their card responsibly.

Never miss a payment

Your payment history is one of the most crucial aspects of evaluating your credit scores. Your payment history includes information on selected accounts, such as retail accounts, loan installments, mortgages, etc., which may go for certain public records as well, such as bankruptcies and foreclosures, how many past-due items are on file, and how long.

A long history of on-time payments will help you accomplish the perfect credit score. To achieve this, ensure you don’t miss any loan or credit card payments by more than 29 days. Bills more than 30 days late go to the credit bureaus, which can lower your credit score.

As long as you are careful enough not to overdraft your bank account, you can also set up an automatic payment method for the minimum amount due or subscribe to reminders via e-mail or text. I  will help you avoid missing a payment. If you have trouble paying for a bill, discuss it immediately with your credit card issuer for the available options.

Don’t resort to just one type of credit

A credit score pulls from the number of new credits, including the number of new accounts also the percentage of new accounts versus the total number of accounts. The number of recent credit inquiries except for promotional questions is also considered—new credit accounts and their credit inquiries. The remaining part of your credit score comprises the type of credit you use, such as credit cards, mortgages, auto loans, etc. For example, having only one kind of credit, just credit cards, can negatively influence your credit score. Us ng a variety of credit types can improve your score because it makes you an experienced borrower.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Systematic risk means that the gains or losses arising from potential risks will occur more likely simultaneously for the entire portfolio and not for a particular type of asset. Losses due to general economic conditions are a systematic risk because they simultaneously affect all market companies. For example, when monetary conditions become tighter, interest rates for all companies rise. Therefore, if an insurance company insures firms against the risk of rising interest rates, it will not be able to diversify its portfolio by underwriting a large number of insureds since all firms will incur losses at the same time. Therefore, it is not possible to reduce systematic risk through portfolio diversification.

Unsystematic risk is sometimes also called single company risk. This means that profits or losses in the portfolio of risk objects occur randomly. For example, building fires occur randomly, so the risk portfolio contains non-systematic risks. An insurance company can diversify the risk associated with building fires by insuring many buildings located in various locations. With a sufficient number of potential fire risk objects, an insurance company can predict its losses for any period with a high degree of accuracy and, therefore, determine an adequate size of the premiums.

In general, the risk is understood as the possibility of some adverse event, which entails various kinds of losses (for example, physical injury, loss of property, income below the expected level, etc.). The existence of risk is associated with the inability to predict the future with 100% accuracy. Based on this, it is necessary to single out the main property of Risk: Risk occurs only in the future and is inextricably linked with forecasting, planning, and decision-making in general. Following the preceding, it is also worth noting that the categories of risk and uncertainty are closely related and are often used as synonyms. However, there are specific differences between these concepts.

First, the risk takes place only in those cases when a decision is necessary (if this is not the case, there is no point in taking risks). In other words, the need to make decisions under uncertain conditions gives rise to risk; in the absence of such a need, there is no risk. Second, the risk is subjective, while uncertainty is objective. For example, the objective lack of reliable information about the potential volume of demand for manufactured products leads to a spectrum of risks for project participants. For example, the risk generated by uncertainty due to the lack of marketing research for an investment project turns into credit risk for the investor (the bank financing this investment project), and in case of non-repayment of the loan into the risk of loss of liquidity and further into the risk of bankruptcy. For the recipient, this risk is transformed into the risk of unforeseen fluctuations in market conditions. For each participant in the investment project, the manifestation of risk is individual, both in qualitative and quantitative terms.

Pure And Speculative Risks

Pure risks are something that we cannot influence by a management decision. They are relatively permanent. Mathematical statistics and probability theory methods are widely used for their analysis and evaluation since their manifestation, as a rule, is stable over time or differs in a specific pattern. They imply the possibility of damage or, at best, “break-even” situations. The outcome can either be unfavorable or leave us in the same position before the event happens. There is no element of gain in any situation. Accidents, fire, theft, or injury may or may not occur. 

Speculative Risks, unlike pure ones, are entirely determined by the management’s decision. They have a chance to win. For example, they are buying shares. Investing can lead to losses, a “break-even” situation. However, this is done because of the prospect of making a profit. These are the risks that we take to achieve some desired result. Pure risks can be insured while speculative ones cannot.

Risk Classification

The CAPM (Capital Asset Pricing Model) divides the risk into systematic and non-systematic. Systematic risk is associated with changes in the situation of the securities market under the influence of macroeconomic and political factors (increase or decrease in the refinancing rate, inflation, changes in government policy, etc.). All companies in each country are affected by these factors.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

One of the answers to the above problems is the so-called anti-budget. This method consists of the fact that you do not plan expenses for a month but, on the contrary, analyze how the previous month went, evaluate how much you managed to achieve your goals, and think about whether you need to correct something in your budget or not. Naturally, you will have to raise your bills for the past month, but it will still be easier to calculate how much you have spent than to predict how much you will spend.

Too Much Work

To make a budget, you need to plan it, and many people do not like to look into the future and predict all the expenses for the next month. These items are food, water, electricity, gas, rent, car expenses, loan repayments, membership dues, periodical subscriptions, etc. However, while most people remember these significant expenses, they forget about auto insurance payments, Christmas gifts, car repairs, dates, birthdays, school trips, and other expenses that are not monthly. Moreover, they immediately give up if they go beyond the standard budget.

The Budget Is Too Restrictive

Sticking to a budget is often like going on a diet to lose weight. You feel that by limiting spending, you are depriving yourself of something. Furthermore, cutting spending in one place allows you to increase it elsewhere eludes you. The budget will enable you to achieve your goals, but at the same time, you may feel disadvantaged – for example, if you want to sit in a restaurant, but the amount you have allocated for dining outside the home has already been used up.

I Do not Want to Swear

Married couples, drawing up a joint budget, sometimes quarrel over it. Furthermore, if spouses want to avoid confrontations, they are unlikely to want to participate in discussions about the budget. Quarrels over money are the leading cause of divorce; therefore, to avoid trouble, spouses do not get involved in budgeting. However, burying one’s head in the sand is hardly a good policy when the financial issue is pressing hard.

Data Overload

If you have many bank accounts and accounts, you have paperwork. This can take you long hours, especially if you do this for the first time. As a rule, budgets are calculated at the micro-level; every cent is considered, but not all of us have time for this.

Steps To Building an Anti-Budget:

1. Select four to five spending items, including essential goals like savings.
2. At the end of the month, calculate the percentage of how much you spent on each of these articles and estimate whether you managed to achieve your goals. Think about which of the articles you took too much or too little time and whether any adjustments are needed.
3. Repeat all of this at the end of next month. When you reach your goals, set yourself more complex goals.

For example, your family decided that 15% of the budget would go to savings on New Year’s Eve. At the end of January, the family reviews all expenses and discovers that 75% of the money went to essential expenses, 25% to restaurants, 15% to entertainment, and 2% to savings. Since the target was achieved only by 3%, a decision was made to cut other budget items. Thus, there are no clear limits on expenses, as in the traditional budget, but everyone understands that they need to spend less on restaurants and entertainment. Next month, you can review the results again, see how the money was spent this time, and make the necessary adjustments.

Conclusion

An anti-budget should not be a substitute for a regular budget. If you are constantly struggling to make ends meet, you should draw up a regular financial plan to the nearest cent because the anti-budget gives you too much freedom. You need micro-level knowledge to make better decisions. However, as soon as the financial problems are in the past, you can go from the macro-level to the anti-budget. In the author’s family of this article, both methods are used. A thorough study of finance at the micro-level allows the author to reduce costs for those items he defines at the macro level, and the general situation at this level is visible.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.