Author: Complete Controller

Annuities Can Be Complex

There are numerous different types of annuities, which can cause a lot of confusion among consumers. Is a single premium instant annuity right for you? A variable-rate deferred payment annuity? An indexed fixed annuity? It might not be easy to sort through the various elements of each annuity, especially when one insurance company’s fixed indexed annuity differs from another’s.

Holders of annuities and other insurance products, for example, are frequently subjected to a mortality and expense (M&E) risk charge. It compensates the insurance for any losses incurred by unforeseen events, such as the annuity holder’s death.

Your Upside May Be Limited

When you buy an annuity, you’re sharing your risk with the rest. You’re paying a charge to the insurance company that sells you the annuity to manage that risk. You might not make more money from an annuity than you put into it or as much as you could have made if you put your money somewhere else, just like you might not make more money from homeowners’ insurance if your house doesn’t burn down.

You Could Pay More in Taxes

Several potential annuity disadvantages relate to taxes.

Ordinary income vs. capital gains

An ongoing criticism is that annuity income is taxed as ordinary income, subject to 22% to 35% marginal tax rates for middle-income households. However, this disadvantage of annuities is not as severe as it may appear.

Traditional 401(k) and IRA payouts are likewise subject to regular income taxation. (Roth 401(k) and Roth IRA distributions are tax-free since you put money into them with money already taxed.) When these are sold, they are taxed at long-term capital gains rates. The essential comparison applies to nonretirement investments held for more than a year.

No step-up in the cost basis

Here’s a step-up basis when you leave them investments like stocks, bonds, mutual funds, and real estate. Even if you paid $10,000 for an investment, if it is worth $20,000 when you die, the IRS considers your heirs to have paid $20,000. They won’t owe any taxes if they sell it right away for $20,000. They will only pay tax on $5,000 if they sell it for $25,000 two years later, and that money will be taxed at their long-term capital gains rate. Tax penalties before age 59½

It’s difficult to read an article regarding annuities without hearing about the drawback of the 10% early withdrawal penalty, but most themes don’t explain when it applies. You may have misled yourself into believing that pulling any money out of an annuity contract before the era of 5912 will result in a 10% penalty tax. It’s not that easy, and the punishment occurs far less frequently than you might assume.

Expenses Can Add Up

The total cost of an annuity might be obscured by fees, reducing the amount it pays out. 17 Before you acquire an annuity, know how much you’ll have to pay for all the features you want. While a mortality and expenditure charge is always required, some fees are only applicable to types of annuities. Other costs are only charged if you add optional features to your annuity.

The following are common annuity expenses you should be aware of:

• Expense fee and mortality
• Fee for administration
• Charge for contract maintenance
• Fee for subaccount
• The premium tax imposed by the state (in seven states and Puerto Rico)
• Fee for transferring investments
• A “surrender charge” is a contingent deferred sales charge.
• The primary safeguard
• Cost-of-living adjustment/inflation protection
• Rider for long-term care
• Rider for lifetime income
• Check the fee disclosures for any annuity you’re thinking about buying. To learn how costs for similar annuities differ, compare them.

Guarantees Have a Caveat

The insurer’s financial soundness determines the annuity’s guarantees. Because the FDIC, like bank accounts, does not protect annuities, you should examine the insurance company’s financial strength ratings with AM Best and Standard & Poor’s before you buy.

If the insurance firm that supplied your annuity fails, few possibilities are. Another insurance firm might take over and make the changeover smooth. You may have to rely on the coverage provided by your state guaranty association if another insurance carrier does not take over.

Inflation Can Erode Your Annuity’s Value

Any investment loses value due to inflation. If you obtain an 8% return on your investment and inflation is 2%, your real return is only 6%. If you get 1% on a certificate of deposit (CD) but inflation is 2%, your real return is -1%. Similarly, given long-term historical average inflation rates of over 3%, your annuity payout is unlikely to keep up with your spending if it is not adjusted for inflation.

The Bottom Line

Apart from marketing, there’s a reason Stan the Annuity Man has a column, a website, a podcast, a YouTube channel, and multiple books: When it comes to annuities, there’s a lot to unpack. An annuity prospectus can be the length of a short book and contain a lot of strange jargon, so it’s understandable that people avoid reading them and don’t completely comprehend these arrangements.

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.

What steps should be taken to increase the level of motivation in your company? Here are some essential strategies.

1. Be open

As a manager, you need to create an open work environment where you can involve employees in the planning and decision-making process. Employees should feel like full-fledged participants in discussing decisions, plans, and other important moments in the company’s activities.

Instead of hiding behind closed doors and enjoying their power, leaders should be among employees, communicate with them, and encourage them on the value of their work and their thoughts, opinions, and suggestions.

2. Develop a culture of collaboration

Try to have your subordinates use “collaboration” and “teamwork” when discussing corporate culture.

 With the help of business games, you can increase their desire to contribute to overall success. The organization of such events and the allocation of funds should be a priority for management.

Such events give the participants a chance to establish or strengthen their relationships and highlight the positive results of cooperation.

3. Set goals

Setting goals for employees helps not only to monitor their level of motivation constantly but also to increase it. Studies show that goal-setting alone improves employee performance by 12-15%, even without financial investment.

Setting objectives for employees allows you to keep track of their motivation and will enable you to boost it.

Because it takes a long time—not a week, but at least a year and a half—to achieve most of the goals set for individual employees or the entire workforce, frequent discussions become a necessity, especially for those who are stimulated by frequent rewards.

But this in no way means that the manager should hand out goals and assessments to the right and left without considering the employee’s opinion.

4. Communicate more often

Employee motivation is not something that can be adjusted once and rest on it. It’s not enough to hang a slogan on the office wall about what an incredible culture you have. If you want to have a highly motivated staff, motivate them to interact with employees face-to-face more often.

During these face-to-face meetings, ask each of your subordinates a simple and honest question:

Do you feel passionate about work?

Based on your responses, look for patterns that indicate, for example, departments that are overburdened or areas that need more resources.

While leaders should strive to get their questions answered, Sanchez advises taking the lead in such conversations with employees. They should be able to communicate with their superiors frequently about their concerns, difficulties, and objectives. Regularity is crucial in this situation. The manager can analyze changes in employee motivation over time and work through past problems by meeting with them weekly.

5. Collect reviews

Personal conversations will give you a lot of food for thought. But company leaders should go a little further and find a way to collect additional employee feedback – anonymously or not.

Many conduct company surveys to monitor employee sentiment. But before you start bombarding your team with long and tedious surveys, try Brooks’ tips for conducting effective surveys.

Ask more. “Reviews should be only the first freshness! Brooks says. “Don’t wait a whole year to discover what your employees thought and felt last summer.”

Be brief. If you ask many questions, you will have to put in much more effort to analyze the data. In addition, this will affect the number of people who want to take part in the survey.

Do something with the information you receive. It may seem obvious, but in Brooks’ experience, most companies fail at this stage. “Since you asked, go ahead!” he says.

Even if you collect feedback through a form on a website or anonymously, employees may fear losing their jobs if they are entirely honest.

But Kim Scott offers a tactic to get around this problem and allow employees to speak their minds more freely.

Do not ask for feedback on this or that person. Instead, ask for feedback on the problem. Talking about a specific project or its outcomes or a form of communication will help the other person feel more confident, and both of you will be able to look more objectively at the root of the 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.

There is a logic credit card companies are always looking for more people to use their services. Credit cards are a huge source of income for issuers. Issuers promote millions of dollars for purchases made by their customers, and they often raise billions in return. The Federal Reserve revealed that as of June 2017, the total credit card debt in the United States was $954.2 billion. Here’s a look at how they make their money.

Credit Card Companies Pay Merchants

When you consider all the billions of daily transactions made collectively by people using Visa, commercial fees, also called transaction fees, are a huge source of revenue for credit card companies. Credit card companies charge savings of approximately 2.3 % to 4.0 % on every credit card purchase. If, for example, you use Visa to pay $75 for a bag of groceries, the store you made your purchase from receives $72 from Visa and the other $3 from your credit card issuer and Visa.

Accumulate On Balance

Bank cards are accumulative or profitable. It means that interest accrues on the balance of your funds – and often, they are comparable to deposit rates. You can save on both debit and some credit cards, which allow you to store money on them at interest. True, the annual maintenance fee for such a card sometimes amounts to more than 2500 dollars. Calculate how much you will earn interest on the balance, and make sure that it will cover the cost of annual maintenance. Banks sometimes set a lower limit on card purchases, such as 3600 dollars a month, which is how considerably you must pay to earn income. The interest rate on such cards may vary depending on the balance in your account. For example, for amounts up to $280,000, you can be charged 12.1 % per annum, and for everything above, only 4.2 %.

Charged Fees

A significant number of card users do not pay their bills in full each month. The unpaid balance on the customer’s credit cards begins to bear interest at up to 12 % or more, which the credit card company collects. Credit card companies are approaching such people with offers that start at attractively low rates but proliferate with late and overdue payments. A 2018 National Bureau of Economic Research (NBER) study published by Hong Ru and Antoinette Schoar suggests that credit card companies may deliberately target people with less educated backgrounds and, therefore, lack financial sophistication and make poor financial decisions. More educated people tend not to use these types of accounts.

Similarly, issuers exhibit irrational thinking through reward programs. Less-educated people tend to receive credit card advertisements that promote higher rewards than those offered to more educated individuals. They come with cool backplates. Not surprisingly, the 2011 Demos study found that households in which someone was unemployed for at least two months in the three years before 2010 were 15.2 % more likely to have card debt than households in which all adult residents had jobs. The same study found that families under 16 were 17.5 % more likely to be in debt than families with no children or children over 18. Finally, the study found that college-educated respondents were 21.8 % less likely to be saddled with debt than those who were only educated in high school. Lending companies know that they get more than half of their profits from less educated clients.

Credit Card Return

Credit card keys mark various fees in addition to their late fees. Some companies include annual prices that customers pay each year to keep their accounts open. These yearly fees vary by the credit card company, with more premium companies charging fees that can stretch into the hundreds of dollars. You pay for the purchase in the store, and the bank returns part of the cost to you. Why does he do it? As a rule, the store pays the bank a commission for each customer who comes to buy. Therefore, the bank does not spend its funds but receives more active users of cashless payments. Another cost, called the book value, is charged when customers transfer debt from one card to another. The fee that receives the debt is assessed. Most companies extract a 2.9 % commission on the transferred balance. Lastly, but not definitively, credit card companies add a 2.5 % to 5.4 % cash handling fee when customers withdraw cash from their credit card accounts.

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.

Accounting has two branches: financial accounting and management accounting. Financial accounting gives diverse stakeholders an accurate and fair picture of a company’s financial status.

On the other hand, management accounting strives to give managers both qualitative and quantitative data to assist them in making choices and so optimize profitability. This sample aims to help you grasp the key differences between financial and managerial accounting.

Comparison table

Basis for comparison	Financial Accounting	Management Accounting
I mean	Financial accounting focuses on the preparation of an organization’s financial statements to provide financial information to stakeholders.	The accounting system that provides managers with relevant information to develop policies, plans, and strategies for the effective conduct of business is called management accounting.
Is it necessary?	Yes	No
Information	Only monetary information.	Monetary and non-monetary information
Task	Provide financial information to outsiders.	To assist management in planning and decision-making by providing detailed information on various issues.
Format	specified	Not specified
Time limit	The financial statements are organized at the end of the reporting period, which is usually one year.	Reports are prepared in conformity with the needs and requirements of the organization.
user	Internal and external sides	Only internal control.
Reports	Summarized statements of the entity’s financial position	Complete and detailed reports regarding various information.
Publishing and Audit	Required to be published and verified by legal auditors	Neither published nor verified by statutory auditors.

 

Definition of financial accounting

Financial accounting deals with preparing financial statements for external parties such as creditors, shareholders, investors, suppliers, creditors, and customers. It is the most refined form of accounting in which financial data is appropriately recorded and reported to offer users relevant and vital information.

Going concerned, materiality, comparison, implementation, conservatism, consistency, accrual, historical costs, and other assumptions, concepts, and conventions underpin financial accounting. The balance sheet and income statement comprise the financial information. Cash flow statements are created in compliance with the relevant law’s criteria.

Financial accounting reports are typically generated for one reporting year so that the user can analyze the company’s financial status, profitability, and performance over time. Internal management, as well as external stakeholders, receives information for forecasting, planning, and decision-making.

Definition of management accounting

Management accounting, often known as management accounting, is accounting for managers that aids in formulating policies and the prediction, planning, and control of an organization’s day-to-day business activities. Management accounting collects and analyses both quantitative and qualitative data.

Management accounting isn’t just about giving financial or cost information. Instead, it takes pertinent and material data from economic and cost accounting to aid management in budgeting, goal-setting, and decision-making, among other things. Accounting can be done on a weekly, monthly, quarterly, or annual basis, and there is no specific format in which it should be recorded.

Critical Differences Between Financial Accounting and Management Accounting

The following principles clarify the critical distinctions between financial and managerial accounting:

• Financial accounting is the division of accounting that keeps track of an organization’s financial data. Management accounting is the domain of accounting that records and reports an organization’s financial and non-financial data.
• Financial accounting is used by both the company’s internal management and external parties, whereas the company’s internal management only uses management accounting.
• Financial accounting must be disclosed to the public, whereas management accounting is intended for internal use and kept private.
• The financial statements only contain financial information. On the other hand, management accounting includes both monetary and non-monetary data such as the number of employees, the number of raw materials used and sold, etc.
• Financial accounting follows a predetermined format, whereas Management Accounting does not.
• Financial accounting is concerned with providing customers with information about how a company’s business operates. In contrast, management accounting is concerned with providing information to help them evaluate performance and plan for the future.
• Most financial accounting is recorded for a specific period, usually one year. On the other hand, management accounting is kept according to the needs of the management, such as quarterly, semi-annually, or annually.
• For auditing purposes, financial accounting is required for any organization. On the other hand, management accounting is optional because there is no editing involved.
• Statutory auditors must audit and report financial accounting information, unlike management accounting, which does not require data to be published or audited because it is solely used internally.

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.

Management accounting varies from traditional accounting (financial) accounting in that its data are meant for internal “use” rather than for external users (states, banks, and corporate partners).

Management accounting is nothing more than a management information support system. The ultimate objective of management accounting is to help the manager make the right decisions. Therefore, if a simple (financial) accountant must strictly follow the reporting forms and instructions, then a management accounting specialist is free to choose the forms, methods, and techniques of analysis. The main thing for him is to correctly capture the essence of the economic processes taking place at the enterprise and give timely advice to the manager.

Strictly speaking, accounting (both financial and managerial, and in general, any) is an information system for collecting, analyzing, storing, and providing information about accounting to interested users to make the right economic decisions based on data.

Management accounting can be defined as providing financial information to managers to assist them in critical areas of management:

• planning
• control and regulation
• measurement of enterprise performance indicators
• making managerial decisions

Management accounting can also be defined as “attracting attention.” Managers need to know when things aren’t going according to plan rather than listening to something they already know or expect. Managers have limited time. It is impossible to control everything, so the management accounting system must highlight those areas where adjustments are required. This approach is called “management by deviations.”

Production accounting and management accounting

It’s essential to know the distinction between production and management accounting. Production accounting is, in fact, a subset of financial accounting. Production costs are estimated to estimate the value of inventories in the production accounting system, which meets external reporting requirements. In contrast, management accounting’s task is to prepare appropriate financial information for enterprise officials, which is necessary for making the right decisions.

We will look at both production accounting (which is a subset of financial accounting) and management accounting in this management accounting course. The curriculum of Management Accounting 2 is primarily concerned with topics of management accounting.

Management process and the role of an accountant in the management process

The following factors are included in the management process:

• Preparation

Accountants assist in the planning process by giving information for decisions on the production and sales of a specific type of product, price, and investment. In addition, the accountant is an essential part of the budgeting process, which is the financial plan created to implement various managerial decisions.

• The command

Accountants prepare reports on the execution of estimates in which the actual outcomes are compared to the projected results for each responsibility center as part of the control process (division, segment). Managers can review activities that deviate from the plan with the help of reports.

• The ability to communicate

Accountants can help with communication by building and maintaining a sound reporting system. Estimates, for example, bring plans to the notice of managers who oversee putting them into action. Furthermore, the information contained in the forecast can be valuable for coordinating the work of managers, as they learn not only about their requirements but also about the constraints that other department heads confront.

• Inspiration

Budgets encourage management to meet their objectives. Accountants’ estimates and updates on the execution of those estimates significantly impact employee motivation. On the other hand, budget performance reports inspire employees by providing actual results versus defined goals.

Impact of the changing environment on management accounting systems

Changes heavily influence management accounting systems in the business environment. Most firms have recently seen a cost structure change, in which costs have increased that are not directly tied to increases in output volume, making it difficult to trace such costs to specific products or services precisely. These changes in the cost structure necessitated a review of existing management accounting systems and an analysis of the feasibility of integrating new systems that emerged in the late 1980s and early 1990s.

According to experts in today’s globally competitive environment, companies are increasingly competing on the quality of goods or services, the timeliness of their delivery, reliability, after-sales support, and customer happiness. Even though these variables are critical to competitiveness, management accounting systems did not report on them until recently. Traditional management accounting systems are primarily concerned with financial results. However, in response to a changing environment, management accounting systems are beginning to place a greater emphasis on collecting and recording non-financial quantitative and qualitative data on those basic parameters required to compete more effectively in the market, and that is used to support the organization’s strategy. There has already been a shift in how financial indicators are viewed as part of a more extensive set of fundamental parameters, from their use as the foundation of a management accounting system to their perception as part of a broader set of basic parameters.

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.

From 2016 to 2017, crypto startups raised funding in two ways: with the help of venture capital or through ICO (Initial Coin Offering) – cryptocurrency crowdfunding. The main difference between these methods was not in technical features but in the investors’ approaches. Venture capital funds carefully analyzed business models and looked closely at startup teams. Funds and angels asked the founders of the newly minted questions like: Is there enough demand for the product? Is the MVP (minimum viable product) ready? Can the startup team turn the idea into a business?

What is an ICO?

An Initial Coin Offering (ICO) is a way to raise and raise investments for projects related to cryptocurrencies. The team creates its blockchain-based tokens to distribute to early investors as part of the ICO. The initial coin offering acts as crowdfunding: users receive tickets that they can use (immediately or in the future), and the project gets development funding. This model became popular in 2016 when it was used to fund the development of the Ethereum network. Since then, hundreds of projects have resorted to ICOs (especially during the boom in 2018) with varying degrees of success. Although the name of such crowdfunding is reminiscent of an initial public offering (IPO), the two methods are entirely different ways of raising funds.

ICOs can be a possible alternative to traditional tech startup funding. IPOs are usually applied to existing businesses that sell their shares, which provide partial ownership of the company, to raise funds. In turn, ICOs are used as a fundraising mechanism that allows companies to attract investments for their project at the earliest stages. When ICO investors buy tokens, they do not acquire ownership of the company. Often, new entrants struggle to get investment without any functioning product. In blockchain technologies, well-known firms rarely invest in projects that have only one whitepaper.

Moreover, the lack of regulation of cryptocurrencies prevents many investors from taking blockchain startups seriously. However, this practice applies not only to startups. Some existing companies choose to launch a reverse ICO functionally like the regular one. In this case, the business already has a product or service and offers tokens to decentralize its ecosystem. Alternatively, they can also use ICOs to attract a broader range of investors and capital to form a new blockchain-based product.

How ICOs work

You can organize initial coin offerings in different ways. Sometimes the project team has a functional blockchain that will evolve over the upcoming months and years. In this case, users can buy tickets immediately sent to their addresses on the blockchain. If the project does not have its blockchain, tokens are issued on an already existing network with a good reputation (for example, Ethereum). After the launch of the new chain, users will be able to exchange their tokens for new ones. Most often, tokens are issued on a blockchain with support for smart contracts. The Ethereum network is used for this since many solutions use the ERC-20 token standard. There are now over 200,000 different Ethereum tokens, although not all of them started with an ICO.

In addition to Ethereum, other popular blockchains can also be used for this purpose, such as Waves, NEO, NEM, or Stellar. Given the flexibility of these protocols, many organizations do not plan to migrate to another platform, preferring to continue working within the current one. This approach allows them to leverage the network effect of the existing ecosystem and gives developers access to means that have already been tried and tested. The rules for conducting an ICO are announced before the direct collection of investments. The team can determine the duration of the offer or set a hard cap – a limit on the number of tokens sold. The project may also introduce an allow list in which users must register before participating in the ICO. Users then send funds to the specified address. Most payments are accepted in bitcoin and Ethereum due to their popularity. Buyers deliver a new address to receive the tokens, or the tokens are automatically sent to the address from which you created the charge.

Differences between ICO and IEO

An Initial Coin Offering is like an Initial Exchange Offering (IEO). The fundamental disparity between them is that the IEO is placed not only by the project team but in cooperation with the cryptocurrency exchange. The partnership with the exchange allows users to buy tokens directly on the exchange platform. This can be beneficial for all participants in the process. When a reputable deal supports an IEO, users can expect the project to be subject to strict scrutiny. The team behind the IEO benefits from a lot of attention, and the exchange benefits from the project’s success.

Security token offerings were once referred to as a new type of ICO. From a technological point of view, they are identical, tokens are created and distributed in the same way, but these are entirely different approaches from a legal point of view. Due to some legal uncertainty, there is no consensus on how regulators should qualify ICOs (more on that below). As a result, the industry still does not feel any meaningful regulation. Some companies decide to use STO to offer shares in tokens. The issuer of tokens registers its offer as an offer of securities with the relevant government authority, which equates this type of asset to traditional securities. In addition, it can help them avoid some client uncertainty about the project’s legal status.

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.

It’s easy to get mixed up between suspense and cleared accounts. Both may be minor, and their value may be determined by their owner’s balance sheet or accounting records. A temporary report can be referred to as an interoffice account or a clearing account.

The primary distinction between suspense and a clearing account is that the clearing account is reset to zero. Accounting remains until a specific relevant account is discovered and delivered. Deferred accounts, on the other hand, are temporary accounts.

Suspense account

Transactional items are the numeric or financial items in a pending account. When transactions are completed and coded wrongly, they can’t be processed right away. Missing account numbers for loans, deposit transactions, or checks issued on a depositor’s account without the depositor’s necessary confirmation or signature are examples of such circumstances.

Suspicious accounts are questioned, examined, and then removed the next day. The provisional account’s total balance is determined at the balance sheet date and cannot be recorded as “Other Assets” or “Other Liabilities.”

You may see their account balances, which may contain monetary values. Furthermore, banking regulators monitor and reconcile pending accounts regularly. When obsolete temporary storage objects are assessed as uncollectible, they are written off and documented as losses in the relevant authorities’ or inspection reports.

When you don’t know where the money should go, you can use awaiting account to deal with the uncertainty. Pending accounts are sometimes known as a general ledger because they include ambiguous or unclear transactions.

Checking account

Clearing accounts are straightforward accounts into which you can deposit cash received as a clearing amount before the funds are validated, verified, and deposited with your bank. A clearing account is used to record transactions temporarily until they are transferred to a permanent account. You can also use settlement accounts to pay off outstanding debts.

The amounts or costs are sometimes deposited in a clearing account, and the payments are then transferred or transferred to a more appropriate statement. Infinite expenses and refunds are also verified via clearing accounts. Both figures are entered as soon as feasible to ensure that the accounting is as precise as possible.

In each case, checking accounts are utilized to keep track of the current revenue and expenditure. For example, a company might put construction funds into a checking account until the project is finished. You will deposit the total construction cost into the relevant permanent account after completion. Furthermore, revenue and expenditure items are recorded on time, ensuring that the general ledger is constantly updated.

Comparing suspension and clearing accounts

Suspension and clearing accounts are temporary accounts that you can use to shift further transactions to a more appropriate account, such as an income or expense account. Since clearing accounts preserve transactions for subsequent use or transfer and provide reliable accounting information records, they all have fundamentally different functioning principles and functions.

Liquidation accounts are utilized for several purposes, and any residual amounts are cleared or explained. The primary goal of earning an account is to ensure that it has been cleaned and that the remaining value is still legitimate. Clearing accounts are most effective in the following situations:

• Money that hasn’t been deposited into a bank account before the New Year
• Payment cancellations must be cleared in some cases
• To be removed, you entered an invalid amount
• Wages must be retained and always cleared

Closing current and temporary accounts

Both pending and cleared accounts are “empty” regularly. It implies that everything about one account is switched to a zero-balance account. According to standard financial accounting, you must liquidate these temporary accounts after the fiscal year. Clearing accounts are more likely to close.

Accounts that have been suspended can be closed at any moment, not just on a set schedule. A checking account used to pay utility bills, for example, might be closed monthly. Daily cash receipt accounts can be closed daily. Waiting accounts operate uniquely. Until the uncertainty is resolved, the sum reported in the pending account stays there.

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.

The concept of budget

Budgets are one of the most critical planning instruments that firms use to optimize their future growth and development in the face of unpredictability. It promptly facilitates the accounting and financial implementation of action plans (usually one year). By its job of “writing the future,” the budget also serves as a stabilizing agent. It offers a framework within which operators can behave, reducing the inevitable environmental disturbances.

Budgeting is a collaborative process that encompasses all aspects of the business and serves as a coordinating factor in the annual planning process. Budgeting also allocates corporate resources to each service or department based on the general management’s objectives. Before allocating resources, you must establish the various tasks of the multiple benefits to ensure that their separate operations are consistent.

Budget control: a unique management tool for performance reports?

Budgetary control cannot be the only method used to manage government agencies. Setting off-budget performance measures can thus balance the financial weighting in terms of service quality approach and internal and external stakeholder satisfaction. There are a few more indications that need to be set.

The general management should review the budget variance indicators and another set of external indicators every month. Combining budget targets and business results can the performance approach be fully justified.

The budget will constantly be attacked because of its divisive nature, but not on a worldwide basis. Budget control is still seen as a sign of successful management by many. Traditional and managed procedures are combined in modern budget control technologies. Performance indicators are tied to the overall budget.

Operations managers can then monitor deviations, investigate the root cause, and take immediate remedial action. Financial data visualization tools have evolved to meet this demand and match these expectations in real-time, so they are increasingly being created in French government agencies.

Budget control becomes more accessible and more dependable with software. Examine all the new generation software’s features:

The concept of the asset management plan

Municipalities are increasingly using the term “asset management,” and we haven’t heard it. It is one of the most important topics for the coming years.

A third of municipal infrastructure is in fair, poor, or deplorable condition, according to the 2016 Infrastructure Canada Report. Some infrastructure has deteriorated, such as buildings, community centers, water, sewer, pumping stations, fire stations, libraries, arenas, parks, and other infrastructure that demand significant investment. The infrastructure constructed in the 1950s and 1960s is nearing the end of its useful life. The recuperation of their loved ones is a top priority.

The Role of Asset Management plan in Performance Reporting

Asset management planning is a reliable method to manage municipal assets in an efficient, sustainable, and equitable way. It is easier to make the proper investment at the right time and for the greater good by planning the administration of these wells.

There are numerous advantages to having a solid plan. It enables:

• A better understanding that poor asset condition carries a significant risk of breakage and accident, with the longer the wait for action, the higher the risk. Access to up-to-date information and data to aid decision-making and the availability of tools to prioritize projects within budget constraints while considering associated risks
• Improve contact between legislators and managers, and have better tools for connecting with citizens
• Have information to document investment needs, maintenance operations, and maintenance budgets
• Learn about the importance of mobilizing the entire municipal team to manage assets and divide tasks according to the needs and strengths of everyone

Provide citizens with services that correspond to their ability to pay

Learn about the importance of mobilizing the entire municipal team to manage assets and divide tasks according to the needs and strengths of everyone.

We want to accomplish specific goals and achieve them successfully. We take the time to assess the situation and enlist the help of civic and municipal teams. We asked individuals to imagine themselves in Paris and used their responses. We created a strategic plan that included asset management and maintenance plans that were entirely transparent to citizens.

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.

Closing the books

Closing is defined as the completion of accounting records, collecting supporting papers, and all transactions that potentially affect a company’s balance sheet in the accounting dictionary.

Accounting programs and accounting software allow you to freeze an account and carry it over to the following year.

When is the business account going to be closed?

Aside from freelance labor, businesses have the freedom to determine the end of their fiscal year. When a company is formed, the directors decide on the start and end dates of the fiscal year. Each financial year must be 12 months long. Startups, which may have more or fewer financial years, are exceptions.

Every year, the fiscal year’s end date must be the same. Companies with seasonal events can use this flexibility to determine a more appropriate period than the calendar year. Practical concerns usually dictate the choice not to choose a fiscal year that runs from January 1 to December 31.

All businesses required to file balance sheets with the government are affected by the accounting closure. Although micro-entrepreneurs (previously auto-entrepreneurs) are exempt from this procedure, financial statements must nevertheless be prepared to examine all activities.

Balancing the books and amending tax returns

Taking inventories and accounting for all financial transactions that influenced the company last year is part of closing accounting entries. A balance sheet and income statement can be created using the information in the company’s books. Prepare a tax return that details the company’s net income. It is how taxes are computed, and the amounts vary depending on the tax system used.

The stage of editing these documents is crucial. It is a detailed depiction of a company’s financial situation. Before being deposited in the Arbitration Court’s Register, all these items will be presented to the General Meeting of Shareholders for approval. All records and ledgers are frozen if VSE, SME, or MGE accounting software is closed. After then, you must archive them along with the necessary supporting documentation.

Examine the company’s financial situation at the end of the reporting period

Comparisons between financial years are possible thanks to a company’s accounting records. An entrepreneur can track the growth of his revenue and expenses and their impact on the company’s financial status. It is an analysis that may be done during the year, for example, using BI reports to compare the current quarter’s turnover to the prior years. As a result, the company’s strategy was tweaked during the fiscal year. The box office verifies the strategy decision’s outcome. The keys are then in the hands of entrepreneurs to establish their following objectives and put in place the necessary measures to attain them: investments, recruiting, advertising campaigns, changes in inventory management procedures, and so on.

The close can calculate the profit announced to the manager and publish the balance sheet and income statement at the end of each financial year.

Complete all stages of the annual closure successfully

The balances of revenue and spending accounts, the closing of ledger accounts, and the termination of journal entries are steps in closing an account. Checking the consistency and consistency of all charges that make up the income statement is part of the income statement balances. This phase allows you to calculate the balance (positive or negative) between the account’s assets and liabilities or profit and loss.

The movement of balance accounts is halted when the main accounts are closed. The total balance for each account is calculated once they are added together. The comparison of the debit and credit columns of the journal (buy, sale, bank, etc.) with the final accounting balance after the inventory is the posting stop in this situation. They must be on an equal footing.

Here are the specific steps you should do every year at the end of the fiscal year:

• Gather all supporting documentation that attests to the presence of each accounting entry and transaction.
• If you haven’t already, keep track of all your entries in a journal. To make reading and typing easier, sort them by month and category.
• Separate accounts payable and receivable to meet the chart of accounts’ requirements.
• Post-sales data and new acquisitions data to summarize your assets and liabilities.
• Do the same thing with your stock.
• Calculate and record depreciation charges, as well as obey the requirements.
• Determine the final tax and record it.
• Go over all your accounting documents with a fine-toothed comb.

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.

The most important lesson I’ve learned is the difference between a leader and a manager – not all managers are leaders, and not all leaders are managers. Adopting short-term goals and systems is one thing; inspiring people to a bigger plan is entirely different. I would say that the most successful people do both.

In other words, the mark of a true leader knows when to lead and when to manage.

So, what is the distinction between leadership and management? Here are the eight most significant differences between being a leader and being a manager, so you can start using your best skills in your work.

1. Influence VS Power

Managers, for the most part, have titles that confer authority. However, if you’ve ever worked for a boss obsessed with results, you know what I’m talking about following the rules and controlling outcomes. You know there’s a big difference between power and influencing people. Not all managers can motivate and influence others, which is an essential hallmark of leadership.

On the other side, some of my company’s most inspiring people include junior developers who come to work every day excited about finding solutions that help our clients. They don’t have a “manager” in their name, but their great ideas and enthusiasm motivate the rest of us to keep our company’s long-term vision in mind, making them incredible leaders.

2. Having followers versus having subordinates

The central part of a manager’s job is to ensure that company policies and procedures are followed. While this is an important role, it does not automatically create a leader. Leadership is more about building trust and respect and, as a result, being perceived as someone worth following.

One sure way to decide if you are a leader is to count the number of people who come to you for advice (excluding your direct reports).

I worked for a software company before starting my own company. One of my coworkers constantly had Coworkers come up to him and ask him questions. He wasn’t a manager, but his work ethic and integrity were admirable. They made people see him as a leader.

3. Instead of focusing on the present, consider the future

I remember the fear I experienced as a child when my parents told me to clean my (reputedly very dirty) room. The only thing that is going me to keep the room tidy is the end-of-week cash payment (about $1)

As I got older, I started thinking a little more judiciously. I intended to put money down for a new bike, but I knew I would need to make a lot more than $1 a week for that to happen. So, I asked my parents to work harder, and after months of hard work doing laundry and dishes, I got home my shiny red bike.

I didn’t know it at present, but I thought as a leader. Managers manage activities to cross them off a to-do list, but leaders are motivated to complete tasks because they can see the big picture. While managers tend to focus on current tasks (cleaning the room to avoid trouble), leaders see the future.

4. Vision of Opportunity for Growth VS Vision of Failure

Since managers tend to obsess over-rules and results, failure tends to become blacker and whiter for them. Being politically aware can be a positive thing, but an overemphasis on right and wrong means that one “bad” move can ruin morale and motivate your team.

More far-sighted leaders may see an opportunity in perceived failures. Losing a significant client or receiving negative feedback from a team member is not a step in the wrong direction but a chance to reevaluate systems and develop creative solutions.

5. Empowerment vs. Efficiency

After all, managers are more focused on improving efficiency. They are looking for ways to save money and time. On the other side, leaders are willing to invest time in their employees’ development.

My basketball coach didn’t have to remain after practice for an hour to assist me in hitting my free throws, but his inefficient approach was more effective in the long run. I got more points as the season progressed because he took the time to invest in me.

The same principle applies in any organization: when we make time as leaders, we can stop thinking we have to develop our team members to delegate more significant and more critical tasks in the future.

Final Thoughts

Leadership may not always seem easy or practical, but a strategic vision (and a willingness to execute it, even if it wastes time) will generate tremendous success and motivation. It is a victory for everyone.

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.