Author: Complete Controller

Many are the people who, at least once, have had to face a financial crisis, either because of unemployment or health problem or simply because they overpaid and lost control of their debts, which now drown them.

According to a basic financial rule, the payment of your debts should not be greater than 30% of your net income since otherwise, you could fall into a situation of insolvency.

Have you been indebted at some point in your life?

If you are in debt and this has become a situation that overwhelms you, causes stress, and you lose sleep, do not despair because getting out of debt is not easy. Still, you can always overcome discipline and planning with discipline and planning them. The most important thing is that you recognize that you are in a debt problem and do not wait for your accounts to be sent to a collection agency.

And is that being indebted is not always bad. However, it sounds strange; there is also good debt and is what you allocate to increase your assets, for example: buying a house, remodeling your home (which gives more value), the acquisition of a car, etc.

There is no universal plan to get out of debt, and the strategy should be under your situation, so in Protect Your Money, we want to make some recommendations for you to take the one that best suits you:

List your debts

Take out your account statements and make a list of all your debts. Write the name of the card, the total balance of the debt, the interest rate, the minimum payment, and the payment deadline. For this, we can suggest two formats:

1. Place first the debt with the highest balance and then the rest in descending order. Concentrate your efforts on paying the highest debts, pay more than the minimum, and the other destiny accounts at least the minimum payment. Do not stop making monthly contributions to keep up to date.
2. Order them according to the highest interest rate. In this way, you will dedicate the largest amount of money to liquidate the most expensive debt. Without a doubt, this is the best strategy in financial terms since you will first settle the debt that generates the most interest.

Create a budget

The first step to take control of your financial situation is to know how much money you spend, to then define the amount you can spend to pay your debts. First, make a list with the total amount of your monthly income, then fixed costs (rent, tuition, gas, electricity, telephone, etc.), and finally variable costs (transportation, entertainment, clothing, shoes, etc.).

Establishing a detailed budget that accounts for all your expenses, however small, will also allow you to determine where you can cut them. The most advisable thing is that you start by reducing the tastes and unnecessary expenses, without this, you will stop having a good time, it is not that you do not spend, just do it in moderation. For example, you can reduce the number of times you go to the movies or eat, cancel pay television or reduce your mobile phone plan.

Pay more than the minimum

To get out of this complicated situation as soon as possible, you must allocate as much money as possible to the payment of your debts, and it must be enough to cover the minimum payment and a little more.

Consolidate your debt

This option allows you to group your debts into a single account. Check which bank offers you better conditions (CAT, lower interest rate, etc.) and ask you to transfer the balance of several credit cards to a single plastic, in addition to having greater control of your payments, this will allow you to save commissions annually. Not all financial institutions offer this benefit, so ask at the bank of your choice if you manage the program and under what conditions.

Save the cards

If your goal is to stop borrowing, avoid using credit cards at all costs. Leave the plastics stored in a safe place, or if possible, destroy them to eradicate the temptation to use them and get used to making all your purchases in cash.

Restructure your debt

Compared to consolidation, the restructuring seems at first glance more advantageous because the creditor institution can reduce the amount of your debt and even eliminate the interest generated by it. However, the downside is that it will leave bad records in your credit history, so it will always be better to settle the total of your debts.

Request a fixed payment plan

This option allows you to “lower” the amount of the payment you must make each month; the benefit is that the interest on the debt will no longer generate interest. This facilitates the debt payment in a much shorter period than if you only made the minimum payments. Usually, the Financial Institutions handle terms that go from 6 to 60 months. It is important that once you establish this plan with your creditors, do not use your cards again, since otherwise, you will increase the amount of your debt, and you could fall back into an insolvency situation.

Make your card your best ally

Credit cards are one of the best credit options if you know how to handle them since they allow you to finance up to 50 days without paying a peso of interest. In addition to this, they offer you some benefits such as generating points with which you can pay your annuity, obtain airline tickets or have travel insurance. In addition, they allow you to pay for services with your home, thereby saving you the transfer to a branch.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

When starting a business, you may consider taking on a partner to divide the business’s burdens. However, if you decide to take on a working partner, you have to figure out how to divide the business, and you need to figure out what qualities to look for in a partner.

It is better to foresee from the beginning how to resolve possible conflicts that may or may not be resolved than to have to resolve them when the relationship between the partners is confronted. In that sense, another important aspect is to define well from the beginning the responsibilities and areas of action of the partners.

If we take a look at the big companies, the business history is full of examples like Yahoo!, Google, Burger King, Ben & Jerry, Hewlett Packard, Harley Davidson, and Procter & Gamble in which the charisma and symbiosis of the founding team were determinants for the growth of companies. 

In the same way that there are examples, taken to the big screen also, of companies where the friendship of a group of friends who founded a startup broke apart, as happened with Apple or Facebook. And it is not always easy to choose the right business or financial partner. So here are seven tips that should be considered when choosing a business partner.

Knowing what each one is worth or what they really can or do contribute

Napoleon is credited with the maxim that ” man is like a number: he only has value for his position. ” However, friends and enthusiasm there is when it comes to entrepreneurship, reality shows that each partner has a value and that no partner is worth.

It is important to know the value that each of the partners brings, what they will contribute and what they cannot ask for, their areas of expertise or contacts. Not all partners have to do the same or are worth the same. Changing people is complicated, and partners must accept each other as they are and be aware of their virtues and shortcomings. They must know each other, and they must interpret the behaviors around them depending on how each one works to avoid surprises.

Have confidence and delivery in what needs to be done

No matter how beautiful they paint it, undertaking it is not easy. When you embark on an associative project, you have to park fears, the “just in case,” the repairs raised before embarking, and once you have embarked, you cannot measure or cover your back or not surrender body and soul to draft. Without blind delivery, there is no trust, and without trust, there is no possibility of reaching a promising future.

If you do not trust your partners, you will be more aware of the ghosts than the business, and you will make wrong decisions. Or, as Churchill said, ” I spent more than half of my life worrying about things that were never going to happen.”

Have a spirit of sacrifice

As in sport, any business project also involves personal, family, and sometimes business sacrifices. If one of the partners is unwilling to sacrifice himself, it is not worthwhile to embark on something that will demand a lot, more than what one can normally give, and that will generate misgivings among the rest of the members. Therefore, in business projects, there is a lot of teamwork.

Know how to communicate and make yourself understood

It is not enough to send an email and then justify that “I already warned.” In a business venture, there must be communication between the partners. The freedom to express their position with total confidence, without the first change, is a rupture.

Without dialogue or confrontation of ideas, it is difficult for the union of the partners to make the force. For this, we must stop emails and promote face-to-face meetings and draw up the corresponding minutes so that there are no doubts about the decisions.

Search for persistence and creativity

The partner has to evolve with the business, undertake, adapt to the market, meet consumers’ new demands and needs, innovate, and be creative.

All this requires a constant, continuous, and persistent activity that requires the member to be a fighter and must provide new and different ideas to think and do like the most.

Take responsibility and demand commitment

If you are not committed to the project, if the partner does not focus on life placed on it, it is difficult for a project to move forward, and even more so if that commitment is not linked to responsibility.

One has to know what obligations one assumes and the burdens each day one is forced to endure. Without responsibility, there is no viability.

Knowing how to risk

Not everything is written in the Excel business plan or the commercial strategy of the PowerPoint. A partner has to make decisions, and it is not easy to do it or always leads to their success. But who does not make decisions, does not walk, does not walk, and in a business, you can never stand? Many decisions involve risks, and without risk, one is not a businessman, not any person is worth to risk, and not any risk is valid.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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 no doubt that one of the most important decisions of our finances is to decide how we manage savings. Investment funds represent one of the many financial products that help those building their savings account.

There are as many types of investment funds as there are investment strategies. Their fact can mean that the saver feels overwhelmed and undecided when it comes to subscribing shares, not knowing how to make an accurate decision in many cases. Here are four steps to help you choose an investment fund for your savings.

Determine savings and investment goals

The prelude to the investment is saving. The purpose of all investments is to increase wealth. We must keep in mind what sense is given to both saving and investment. Associating these concepts with a material and concrete objective will help us to maintain consistency and discipline.

Do we want to buy a car or other property of a lasting nature? Are we saving for an event in the future? In short, each euro must have an assigned destination engraved. The minimum objective to preserve savings (maintain capital while we decide what to do with it) will overcome inflation.

The objectives must be concrete (the more concrete, the better). Just as it is necessary to quantify the objective, translate it into a monetary figure. After their, a temporary period must be established to achieve it. The objectives must be realistic in terms of amount and term.

The investment term is an important factor in selecting the type of investment fund most adapted to our financial needs. Therefore, both the objective and the deadline are two key aspects of any investment.

Set the maximum risk to assume

Establishing the risk profile involves having to do introspective work since it depends largely on a psychological factor inherent to each saver.

Concepts such as age, income, family situation, and other personal issues influence when defining our profile as an investor. But in short, every saver knows where he has their psychological cap. If not, there is a trick that works very well:

When we are clear about the maximum level of risk, we can assume without suffering serious economic and emotional damage; we can choose the objective of profitability.

Profitability and risk are two concepts that are intimately and related. The higher the return, the greater the risk. There will always be the case in the investment world. Beware of those who promise high profitability with little risk.

Therefore, the level of risk is established first, and then the best return adapted to that level will be sought. Doing it in reverse is a serious mistake.

Pre-select investment funds related to you

After the introspection work, we will have to carry out the research work. Luckily, some fundraisers make their tasks much easier. In addition, as soon as the saver is clear about the objective, the time horizon, and the risk, it will be much easier to find the ideal savings product.

Now is when the star question comes, fixed income, equities, or a mixed fund?

Neither fixed income, nor variable income, nor the combination of both types is good or bad by themselves; everything depends on the economic situation and our profitability and risk objectives.

We must inform ourselves how much the fixed income is performing in general terms and if their profitability is consistent with our objective. That being the case, we would not have to assume a greater risk unnecessarily.

Unfortunately, the fixed income in recent times is not giving a good return, thus being necessary to include a percentage of variable income to the portfolio to achieve the monetary objectives in the marked horizon.

One thing that should be clear, the variable income is not suitable for short-term objectives. Due to the volatility it presents, it can ruin our investment strategy. Therefore, as we get closer to the end of the savings period, we must choose a more conservative investment philosophy.

If the variable income can lose 10% in a year and our time horizon is two years, will there be material time for the investment to recover? It is unlikely. Their type of asset works very well for longer horizons; however, you can incorporate a percentage into any portfolio to give it an extra return without losing sight of the risk profile.

In short, we must inform ourselves of the risk and profitability of each category of investment funds. In their way, we can limit the universe of these products to the preselection of funds related to our strategy.

Read the DFI of the pre-selected fund carefully

The Document of Fundamental Data for the Investor (DFI), formerly called a simplified informative brochure of the fund, is mandatory delivery to the investor before subscribing to the investment fund’s participation.

Their document summarizes all the relevant background information, which the saver must know to make an informed investment decision. Once an investment fund has been pre-selected, it is necessary to make sure that it fits our needs through their document.

When the saver has their information in their knowledge, they can decide to manage their savings and choose the right investment fund. The next step is to execute the subscription of shares in the selected investment fund.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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 are some advantages of renting and leasing, and they have different fiscal effects depending on how you handle them. Here are the advantages, differences, and fiscal effects of renting and leasing.

Renting

The fees paid are only reflected in the profit and loss account for the amount of the installments. But they will not be visible in the company’s balance sheet since it does not appear as an asset of the company.

They are operations subject to VAT and like financial leasing. Only payments are posted to the company’s income statement are 100% deductible for corporate tax purposes.

The landlord/owner will be responsible for the repayment of the property. Depending on whether or not it has an option to purchase, the taxation of the operation will be determined. In case of not offering the possibility, the fees are fiscally deductible expenses. 

On the other hand, if there is a purchase option, the deductibility of the fee will depend on whether or not there is reasonable doubt that the option is executed. But, in general, renting operations do not usually include a purchase option, so it allows the use of rapidly depreciating goods without any fiscal limitation.

Financial Leasing

The interest on the lease is 100% deductible, so all the amounts paid in interest will have to be recorded in the income statement during the year.

The part of the paid installments that corresponds to the recovery of the asset’s cost will be considered tax-deductible. According to the official amortization tables, it does not exceed double or triple (for SMEs) the maximum coefficient of linear repayment of the goods. This happens in all cases except if the leased assets are not depreciable such as land or plots.

The accounting amortization will be made based on its useful life, and fiscally it will be double its maximum coefficient during the first years and reversing these amortizations in the future. This implies deferring the payment to subsequent exercises. It will appear in the profit and loss statement as for financial expenses, which is the amount that will be reduced by the amortized amount each year. 

Of the annual fee, one part corresponds to interest for the amount financed. These two amounts will appear in the profit and loss account and the balance sheet as accumulated Amortization. In this way, taxes to be paid will be reduced since the benefits obtained appear before taxes.

To capitalize on assets, it is often advisable to use leasing. This increases the value of the asset, net worth, and liabilities of the company.
The tax advantage of leasing is that a liability account can be opened for “deferred tax” for an amount equal to the depreciation allowance for the year. In this way, the amount in corporate tax is postponed and will be paid in future periods.

Why Is Leasing A Good Financing Method for Freelancers, SMEs, Startups, and Entrepreneurs?

When a large initial investment of tangible assets is needed, it is advisable, but the necessary financial resources for its acquisition are not available.

The goods that are usually financed are:

• Furniture.
• Vehicles.
• Computer or technological equipment.
• Machinery.

Main advantages:

• It allows SMEs and freelancers to obtain goods that entail a high investment without making a large initial outlay, as would be the case of the purchase.
• It is 100% fundable.
• In addition, we can prove the good during the leasing period by not having made the purchase. If this does not meet our needs, you can change it or, on the contrary, pay the current residual value.
• It is a way to maintain the option to update those assets when necessary without losing all the initial outlay or the entry of a loan.
• Their conditions are usually flexible and adaptable to the client.
• The deductions and deductions that can be made are 100%, except in cases of real estate.
• Its amortization can be accelerated, unlike rents, and thus pay fewer taxes during the first years.

Factors to consider if you are going to choose this method of financing:

• In many cases in which the tenant ends up not acquiring the property. If you are clear that you will not be interested in your final purchase from the initial moment, it is better to opt for renting.  With this method, you will have lower lease installments.
• Study the components of the quota carefully. At the cost of recovery that forms the basis of the fee, you must add the interest and the possibility of including the risk premium.
• You should also consider the minimum period of the contract and the associated clauses as product reviews, penalties in case of non-compliance, etc.
• If the tax advantages (deductions and accelerated depreciation) are the main reason we opt for this type of financing, it is better to study well if it suits us. 

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

Many of us have heard the saying, “Teamwork makes the dream work,” and it holds true. The question is, are you an excellent team player? Every professional should ask this question whether you’re a CEO, middle manager, an intern, or a college graduate. Teamwork is a crucial component to individual and business success.

The power of teamwork should not and cannot be underestimated. It is the cornerstone on which all successful businesses are built. But, as a manager, taking teamwork for granted is the biggest mistake you can make. If you did, you’d end up with a dysfunctional team and an eventual disaster.

If you’re wondering why teamwork is essential at your place of business, here are some of its benefits.

Cohesive Work Environment

Teamwork fosters a friendly work environment where leaders are not to be bosses but rather work together with members as a team. This helps build strong bonds between the members and improves work efficiency.

Getting all employees to work together allows tasks and responsibilities to be divided between smaller, more manageable chunks for faster completion. Teamwork also promotes the idea that the person with the skills works on the task more suited to their capabilities.

Higher Morale

How many times have you seen people enjoy their work in your career? Chances are, there aren’t many. People often lack the charisma and the motivation to work, and the only thing holding them to their seats is the money they get by the end of every month. However, studies have shown that people prefer to work in offices with a better environment than those with better salary packages.

People feel better about themselves when they work together as a team. It helps motivate them through the idea that no matter how difficult the task may be, they are not in this alone. When teamwork is a priority in your office, employees in your company would feel:

• They have something unique to offer
• They can contribute to successful results
• Their work is being valued

The boost in morale among employees makes the business better in every aspect.

Better Learning Opportunities

When people work together, they share each other’s successes and failures, and through that, they also learn from each other. Teamwork creates a supportive environment where skills and information are constantly shared among peers, and learning never stops. The best part is all this happens without undue risks.

For instance, when things go awry, different people work together to achieve a goal and make the situation better. Also, everyone learns what not to do the next time. Teamwork shows people how to get things done more effectively the first time around.

Encourage Flexibility

Since people are working and communicating together, teams enable different perspectives to be considered and allow the business to respond to change faster. For instance, if one employee is tasked with solving a problem, everyone comes with a solution of their own, each with their own merits.

There might be some ideas that overlap each other, but still, there would be plenty of options. These options allow the teams and the organization to use minimal resources and work with flexibility. This is called reactive innovation, where employees innovate faster by working together.

Less Managerial Interference

When employees work together, they gain a sense of self-monitoring, which is usually not present when they work by themselves. This self-correcting behavior removes the need for a manager to supervise them and stay involved constantly. If you’re a manager where people are working in teams, it can leave you more space to focus on other aspects of your business.

Better Quality of Work

As a business manager or CEO, your primary concern will always be with the quality of work being done by your employees. Of course, this is what you expect from your employees and maybe something that causes sleepless nights for you. However, with teamwork, every member comes with the best they have to offer. As a result, the outcome offers better product quality with consistency. Why? Because you’re no longer relying on one individual anymore.

Conclusion

Teamwork is essential. It doesn’t matter what kind of business you might have. Building teamwork in your workplace doesn’t have to be an uphill battle. It can often feel like an activity. If you want people in your organization to work as a team, get them involved in recreational activities like games where working together is the only way to find success.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

If you are thinking about starting a business or have fully formed your business plan, here are factors to consider when developing a business idea.

50 and 50

First, pinpoint the differentiating factor between your business or brand and the rest of the market.  This will develop your relevance in your market and among your target audience. relevance in your target audience.

Remember that developing this awareness is only 50% of the process.  While this 50% seems to be the easiest part of the process, invest time and research your market to develop a comprehensive idea that can be realized.  It may be frustrating and require you to start over several times, but do not get discouraged.

While this is idea is fundamental for your business, the most important thing is to know how to develop that business idea into a product or service.  Unfortunately, this is where many entrepreneurs can lose motivation. The remaining 50% consists of taking your ideas and transferring them to a tangible product, from pencil and paper to Word and Excel to a marketable product or service.

Know your idea

Once you have determined your differentiating factor, another important part of the process is having full knowledge of your business idea. That is to say, understand your brand or new product carried and its DNA.

Be sure to research and find out everything related to your idea in terms of industry and market, production and materials, and platforms and marketing.  If an obstacle appears, you must know how to respond and react based on your research.  You are the face of your idea, so you must understand all aspects of your idea to represent and market it well.

Know your audience

You should not only know your idea fully, but you should do it with your target audience in mind. Understand what they do, how they do it, and when they do it.  This will help you continue developing your idea and understanding how it becomes part of their lives and provides them with solutions.

Remember that people change, and so do their tastes and needs, so your idea must be adaptable.  Business models are not static because they move and flow with people. Therefore, your idea should be adaptable as well. 

The market

Analyze what your product or business idea would look like in the market, and ask yourself the following questions:

• How would it sell?
• Who would be your direct and indirect competitors?
• What would be the price to the general public?
• Will it be sold in a store, supermarket, or maybe via the web?

These questions should have a clear answer, so keep in mind that a business idea must take into account external factors, including production and distribution.

The motivation

Motivation is fundamental to growing your idea into a revenue-generating business. Taking it from inception to profit requires perseverance, work, and dedication. Every day will bring new and different challenges, which you must face with a lot of passion and motivation.

 Finding motivation depends upon the entrepreneur, so never stay still.  Know, look, analyze, and question your ideas and processes to not lose your motivation.  Similarly, profitable businesspeople often attain success because they are passionate about what they do. They love what they do, and in their love, they find current opportunities in the market. On the other hand, many of them experience failure of an idea at least once, which is why you must not become discouraged.  A simple idea can be good enough and original enough to become a profitable business.

In summary

• Your business idea must be accompanied by clear market goals and objectives.
• It has to have a differential value.
• You must understand the business model and how your idea enters the market.
• The differentiation must be the added value to the market.
• It must be profitable and sustainable.
• Your idea must be liquid, that is, moldable and adjustable to your audience and the market.
• It must be an idea developed and maintained with passion, dedication, and motivation.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

When owning and operating a business, you offer either a product or service and, in some cases, both. When you are developing your business, you must understand the fundamental differences between a product or a service and what your business will offer. Here are five key differences between products and services.

Tangible Vs. Intangible

This is the main difference. You can perceive a product with your senses: you see it, you touch it, you smell it, and, in some cases, you even hear it, or you taste it. But, on the other hand, a service you cannot perceive. Or maybe you can perceive the service of a hairdressing salon?

At this point, maybe you would say to me: “I can perceive my haircut,” then I would answer: “Yes, but you can only perceive it after having ‘consumed’ it.” The difference between the tangible and the intangible comes at the time of the sale, not the purchase, which makes the services more difficult to sell.

This is why the services must use tangible elements to convey sensations and ideas before the purchase and make the client imagine what it will be like to consume that service. For example, following the hairdresser case, these could be photographs of other customers wearing their cuts or even short videos showing the processes. Even the atmosphere of the room and the staff’s presentation gives an idea of ​​the quality of the service.

Involvement Vs. Acquisition

As we saw in the previous aspect, services only become tangible until they are consumed. In other words, services do not start if there is not a client.

This difference is what makes a restaurant service and not a product. And the ingredients, the chefs, and the tables are there whether you are there or not, but only when you ask what you are going to eat, that dish materializes. At the same time, a package of fries in a dispensing machine will be where you buy it or not.  

This means that a key aspect of most services is that they are made to order. Of course, there is a menu in the restaurant, but that dish they are going to make is just for you. The same applies if you send to make a suit, go shopping at the supermarket or visit the doctor.

In this sense, products can learn something from services and involve personalization to a greater or lesser degree. It can be something as simple as the possibility of choosing between several types of packaging, colors, or shipping methods.

Homogeneity Vs. Heterogeneity

The products tend to be mass-produced, while the services are provided individually. Therefore, products are easier to standardize and evaluate before the sale, while services, circumstances, people, and other factors can affect the final product.

Therefore, services need to standardize their processes as much as possible and have a “Plan B” if any irregularity arises. It doesn’t sound very easy, but to give you an example, it’s the same thing that Domino’s Pizza does with its promise to deliver the free pizza if it takes more than 30 minutes to arrive (which rarely happens).

On the other hand, if there is a failure with a product, there is always the possibility of returning it. For this reason, in addition to doing exhaustive quality control, the companies of products must take care of after-sales, which enter the processes of return, guarantee, support, etc.

Storage Vs. Perishable

The products can always be stored, inventoried, and preserved for a while, while this is not the case in services. For example, if you stop selling a hotel room for a day, that is a sale that you can never recover.

In this regard, it is important to consider, both for the companies of products and services, calculate how sales behave over time and have plans to solve the seasons of less activity.

Need Vs. Trust

In essence, the products are good as long as they satisfy the need for which they were created. For example, if an anti-dandruff shampoo removes dandruff, then it’s good. If a computer works properly, it is a good computer. If a car takes you where you need it and does not have technical failures, then it’s a good car.

In the case of services, that perception of quality is based more on relationships of trust. Whether you hire a computer security consulting service for your company or you ask for an Uber to take you home, it is essential that you feel confident, both in the person (s) who provide you the service and in the processes they perform. Much of customer satisfaction depends on that trust.

This does not mean that trust relationships are not important in product marketing. To believe this and leave the entire responsibility to the product is a big mistake. Product companies should strive to monitor the service around their products, as this is also a fundamental part of the shopping experience.

Conclusion

While it is true that both products and services have different marketing needs, as you see, this does not mean that there are not things that they cannot learn from each other. So, I invite you to analyze what you sell and what marketing actions you can implement to enrich your customers’ shopping experience.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

The Relevance of Modern Management Accounting Techniques

Management accounting techniques have evolved into essential tools that businesses must leverage to navigate complexity, reduce costs, and make data-driven decisions in real-time. Modern approaches like advanced cost analysis, AI-driven forecasting, and non-financial performance metrics are redefining how companies achieve financial success and operational excellence.

Over my 20 years as founder and CEO of Complete Controller, I’ve witnessed how these techniques transform businesses across every sector. A staggering 65% of SMBs using cloud accounting tools report 35% faster financial reporting cycles, proving that modern methods aren’t just theoretical—they deliver measurable results. In this article, I’ll share how you can implement these powerful techniques to gain clearer insights, improve decision-making, and ultimately drive greater profitability no matter your company’s size or industry.

What are management accounting techniques, and why are they relevant today?

• Management accounting techniques are specialized methods for tracking, analyzing, and reporting financial data to support internal decision-making, resource allocation, and strategic planning
• These techniques provide real-time insights into costs, profitability, and performance metrics that traditional accounting methods often miss
• Modern management accounting incorporates AI, cloud computing, and predictive analytics to deliver faster, more accurate financial intelligence
• Unlike financial accounting which focuses on external reporting, management accounting prioritizes actionable data that drives operational improvements
• Today’s techniques integrate both financial and non-financial metrics for a holistic view of business performance

Core Components of Modern Management Accounting Techniques

Management accounting has transformed dramatically from its origins in simple cost tracking to today’s sophisticated analytical frameworks. The fundamental components that drive modern techniques center around cost management, technological integration, and strategic applications that extend beyond traditional financial reporting.

The shift from manual processes to automated solutions has been dramatic. In the 1980s, 85% of cost analysis relied on manual spreadsheets compared to 63% AI-driven automation today. This evolution has eliminated countless hours of tedious calculations while dramatically reducing human error in financial analysis.

The evolution of cost management

Advanced cost management techniques have moved far beyond basic expense tracking to become strategic tools for competitive advantage. These approaches help businesses understand not just what they’re spending, but how those expenditures translate to value creation.

Activity-based costing (ABC) represents one of the most significant advances, allowing businesses to assign costs to specific activities rather than general categories. This precision enables managers to identify which products, services, or departments truly drive profitability versus those that consume disproportionate resources.

• Activity-based costing (ABC): Assigns overhead costs to specific activities and products
• Target costing: Works backward from market price to determine acceptable production costs
• Kaizen costing: Focuses on continuous, incremental cost improvements
• Life-cycle costing: Accounts for all costs throughout a product’s entire lifespan

By implementing advanced cost analysis techniques, companies gain visibility into previously hidden inefficiencies. For example, a manufacturing client of mine discovered through ABC analysis that their lowest-priced product actually cost 15% more to produce than its selling price when all activities were properly allocated.

Strategic cost management

Strategic cost management takes these analytical techniques and applies them to long-term planning and competitive positioning. The focus shifts from merely controlling expenses to leveraging cost structures for sustainable advantage.

The strategic approach requires integration with other business functions. When cost management aligns with product development, marketing, and operations, companies make better decisions about resource allocation, pricing, and market positioning.

A UK chemical company reduced lead times by 40% using world-class manufacturing (WCM) principles paired with real-time cost tracking. This integration of production processes with financial data created a feedback loop that drove continuous improvement in both efficiency and profitability.

Sustainability-centric reporting

Modern management accounting increasingly incorporates environmental, social, and governance (ESG) factors. This shift reflects both regulatory demands and strategic necessity as consumers and investors prioritize sustainable business practices.

44% of North American organizations now use balanced scorecards to align financial and non-financial metrics, including sustainability measures. This integration helps companies track how ESG initiatives impact both operational performance and financial outcomes.

Sustainability reporting frameworks now include:

1. Carbon footprint calculation integrated with cost models
2. Supply chain sustainability metrics linked to vendor performance
3. Circular economy measures that track material recycling and reuse
4. ESG risk quantification in financial projections

How Technology Revolutionized Decision-Making

Technology has fundamentally transformed how management accountants collect, analyze, and present financial data. The integration of AI, automation, and cloud computing has created unprecedented opportunities for real-time insights and predictive capabilities.

The impact of technological advancement extends beyond efficiency gains to enable entirely new analytical approaches. Management accountants now serve as strategic advisors rather than mere number crunchers, using sophisticated tools to uncover patterns and opportunities invisible to previous generations.

Advanced accounting software

Modern management accounting tools have evolved far beyond basic ledgers and spreadsheets. Today’s platforms integrate data from across the organization to provide comprehensive views of financial and operational performance.

Software solutions like Fathom, Futrli, and Power BI create visual dashboards that transform complex financial data into actionable insights. These tools make sophisticated analysis accessible to non-financial managers, democratizing data-driven decision-making throughout organizations.

Key capabilities of modern accounting software include:

• Real-time data synchronization across departments
• Automated reconciliation and variance analysis
• Custom KPI tracking with threshold alerts
• Scenario modeling for strategic planning
• Stakeholder-specific reporting templates

Predictive budgeting and forecasting

Traditional budgeting relied heavily on historical data and manual projections. Modern techniques leverage machine learning to analyze patterns and predict outcomes with greater accuracy than ever before.

AI-powered budgeting and forecasting for small businesses can now identify seasonal trends, detect anomalies, and suggest adjustments before problems escalate. This predictive capability helps companies become proactive rather than reactive in their financial management.

For example, Uber Freight saved $10M annually using robotic process automation (RPA) for invoicing and compliance. The system automatically processes transactions, flags exceptions, and learns from each interaction to continuously improve accuracy.

Cybersecurity in financial data

As financial systems become more interconnected, cybersecurity has become a critical component of management accounting. The protection of sensitive financial data is now as important as its analysis.

70% of fraud detection accuracy improvements stem from AI-driven anomaly tracking in accounting systems. These systems can identify suspicious patterns that might indicate fraud or errors far more quickly than manual reviews.

Modern security approaches include:

1. Multi-factor authentication for financial system access
2. Encrypted data transmission and storage
3. Automated audit trails for all financial transactions
4. Regular security training for all accounting staff
5. Integration with management accounting tools to protect financial data

Strategic Applications Beyond Financial Metrics

Modern management accounting extends well beyond traditional financial reporting to incorporate qualitative factors that drive long-term success. This holistic approach provides deeper insights into organizational performance and competitive positioning.

The integration of financial and non-financial data creates a more complete picture of business health and potential. Companies that master this integration gain significant advantages in strategic planning and execution.

Bridging financial and non-financial data

Contemporary management accounting recognizes that financial metrics alone provide an incomplete view of organizational performance. Performance measurement systems now incorporate diverse indicators from customer satisfaction to employee engagement.

The balanced scorecard approach has become particularly influential, organizing metrics into four perspectives:

• Financial perspective (traditional accounting measures)
• Customer perspective (satisfaction, retention, acquisition)
• Internal business processes (efficiency, quality, innovation)
• Learning and growth (employee skills, information systems, culture)

This integrated approach helps businesses understand the relationships between operational activities and financial outcomes. When a retailer tracks how employee training (learning perspective) affects customer satisfaction (customer perspective) and ultimately sales (financial perspective), they gain insights into cause-and-effect relationships that drive success.

Product/service profitability analysis

Modern techniques allow for granular analysis of profitability at the product, service, customer, or segment level. This detailed view helps businesses allocate resources more effectively and make better decisions about their portfolio mix.

Advanced profitability analysis includes:

• Customer acquisition cost (CAC) relative to lifetime value (LTV)
• Segment-specific contribution margins
• Resource consumption patterns by product line
• Indirect cost allocation based on activity drivers

By isolating true costs and revenues at this detailed level, companies can identify which offerings truly drive value. One professional services firm discovered through this analysis that their smallest clients actually generated higher profit margins than their largest accounts once all support costs were properly allocated.

Case Study: Modern Techniques in Action

Theoretical frameworks gain powerful relevance when applied to real business challenges. The following case study illustrates how modern management accounting techniques deliver measurable improvements in financial performance and strategic decision-making.

A mid-sized logistics company was struggling with excessive administrative costs and slow financial reporting. Their traditional accounting system provided monthly statements that arrived too late to influence operational decisions, and managers lacked visibility into cost drivers.

The company implemented a cloud-based management accounting system with these key components:

1. AI-powered expense categorization and allocation
2. Real-time dashboard showing daily revenue and cost metrics
3. Predictive cash flow forecasting with 90-day projections
4. Automated variance analysis highlighting deviations from targets

The results transformed their business operations:

• Monthly financial close process reduced from 15 days to 3 days
• Administration costs decreased by 22% through process automation
• Driver productivity increased 15% through real-time performance metrics
• Cash flow forecasting accuracy improved from ±20% to ±5%

Most importantly, this enhanced visibility allowed management to identify their most profitable service lines and customer segments, leading to a strategic realignment that increased overall margins by 8% within one year.

Compliance and Ethical Considerations

Modern management accounting must balance innovation with compliance and ethical responsibilities. As techniques become more sophisticated, so do the regulatory frameworks and ethical standards that govern their application.

The role of management accountants now includes safeguarding data integrity, ensuring regulatory compliance, and promoting ethical decision-making throughout the organization.

Navigating regulatory and legal risks

Management accounting practices must align with an increasingly complex regulatory environment. From data privacy laws to financial reporting standards, compliance requires systematic processes and controls.

Key compliance considerations include:

• Data protection regulations (GDPR, CCPA, etc.)
• Industry-specific reporting requirements
• Internal control frameworks (COSO, SOX)
• Tax documentation and substantiation
• ESG disclosure requirements

Companies must design their management accounting systems to facilitate compliance while still providing actionable insights. This balance requires thoughtful system architecture and clear documentation of methodologies.

Ethical use of automation

As AI and automation play larger roles in management accounting, ethical questions about algorithmic decision-making become increasingly important. Human oversight remains essential, particularly for judgmental areas.

Ethical considerations for automated accounting include:

1. Transparency in how algorithms make recommendations
2. Potential bias in historical data used for predictions
3. Appropriate levels of human review for automated decisions
4. Fair treatment of stakeholders affected by AI-driven choices
5. Responsibility for errors or unintended consequences

Organizations must develop clear governance frameworks for their accounting automation to ensure these systems enhance rather than undermine ethical decision-making.

Roadmap for Implementing Modern Techniques

Adopting advanced management accounting approaches requires a systematic implementation strategy. Organizations of all sizes can benefit from these techniques when they follow a structured roadmap tailored to their specific needs and resources.

The implementation journey involves both technological changes and cultural shifts. Success depends on clear leadership, appropriate technology selection, and thoughtful change management.

Transitioning to cloud-based tools

Cloud technology has democratized access to sophisticated management accounting capabilities. Even small businesses can now leverage powerful tools that were once available only to large enterprises.

When transitioning to cloud-based systems, organizations should follow these steps:

1. Assess current processes and pain points
2. Define clear objectives for the new system
3. Select appropriate tools based on specific needs
4. Plan data migration and system integration
5. Develop a phased implementation timeline

For small businesses, budgeting methods for small businesses now include affordable cloud platforms that scale with growth. These solutions eliminate the large upfront investments previously required for advanced accounting systems.

Combining financial and non-financial KPIs

Effective management accounting requires thoughtful selection and integration of key performance indicators. The most valuable insights often come from connecting financial metrics with operational and customer data.

When developing an integrated KPI framework:

• Limit metrics to a manageable number (typically 15-20 total)
• Ensure alignment with strategic objectives
• Balance leading and lagging indicators
• Include both financial and non-financial measures
• Establish clear measurement methodologies

The most successful implementations create a hierarchy of metrics that cascade from strategic goals to operational activities. This alignment ensures that daily decisions support long-term objectives.

Building a security-focused culture

As financial systems become increasingly interconnected, security awareness must extend beyond the IT department to become part of the organizational culture. Management accountants play a crucial role in protecting sensitive financial information.

Effective security practices include:

1. Regular security awareness training for all employees
2. Clear data classification and handling procedures
3. Multi-factor authentication for financial systems
4. Encryption of sensitive financial information
5. Regular security audits and vulnerability assessments

By embedding security consciousness into daily accounting practices, organizations protect both their financial data and their reputation.

Final Thoughts on Modern Management Accounting

Modern management accounting techniques have evolved from basic cost tracking to sophisticated strategic tools that drive business success. The integration of advanced analytics, automation, and non-financial metrics creates unprecedented visibility into performance and opportunities.

As I’ve witnessed firsthand at Complete Controller, organizations that embrace these modern techniques gain significant advantages in decision-making speed and quality. The ability to quickly identify trends, predict outcomes, and allocate resources effectively translates directly to competitive advantage.

The most successful implementations balance technological capability with human judgment. While AI and automation handle routine analysis, experienced professionals provide the context and strategic perspective necessary for truly transformative insights.

Whether you’re a small business owner or a corporate finance executive, modern management accounting techniques offer powerful tools to navigate complexity and drive performance. The key is selecting the right approaches for your specific needs and implementing them systematically.

For personalized guidance on implementing these techniques in your organization, contact our team at Complete Controller. We specialize in helping businesses of all sizes leverage modern management accounting to achieve their financial goals.

FAQ

What is the difference between management accounting and financial accounting?

Management accounting focuses on providing information for internal decision-making and planning, using both financial and non-financial data with a forward-looking perspective. Financial accounting primarily serves external stakeholders like investors and regulators, adhering to standardized reporting frameworks like GAAP or IFRS with a historical focus. Management accounting is more flexible, customizable, and strategically oriented, while financial accounting emphasizes compliance and standardization.

How can small businesses implement advanced management accounting techniques without a large budget?

Small businesses can adopt advanced techniques affordably by starting with cloud-based accounting platforms that offer subscription pricing, implementing in phases beginning with the highest-impact areas, using templates and pre-built dashboards instead of custom development, leveraging free or low-cost training resources, and focusing on a limited set of key metrics rather than comprehensive systems. This gradual approach delivers significant benefits without overwhelming financial or staffing resources.

Which management accounting technique provides the best ROI for most businesses?

Activity-based costing (ABC) typically delivers the strongest ROI for most businesses by revealing hidden costs, identifying unprofitable products or customers, optimizing pricing strategies, and supporting strategic decision-making about resource allocation. Even basic ABC implementation can uncover significant inefficiencies, with manufacturing and service businesses often seeing 10-15% profit improvements through better cost visibility and subsequent operational adjustments.

How is artificial intelligence changing management accounting practices?

AI is transforming management accounting by automating routine data processing and reconciliation, detecting anomalies and potential fraud patterns, generating predictive forecasts with greater accuracy, suggesting optimization strategies based on historical patterns, and enabling natural language interfaces for non-financial managers to access insights. These capabilities free accountants from routine tasks while dramatically improving both the speed and accuracy of financial analysis.

What non-financial metrics should be included in management accounting systems?

Effective management accounting systems should include customer-focused metrics (satisfaction scores, retention rates, lifetime value), operational metrics (cycle time, quality indicators, capacity utilization), employee metrics (productivity, engagement, retention), innovation metrics (new product development, R&D effectiveness), and sustainability metrics (resource usage, carbon footprint, social impact). These non-financial indicators often predict financial outcomes and provide deeper insights into organizational performance drivers.

Sources

• AWS Economic Impact Report. “SMB Cloud Adoption Trends.” AWS, 2024, www.applify.com.sg/industry-perspective/smb-cloud-adoption
• BeezLabs Blog. “Uber Freight Automation Success.” BeezLabs, 2024, www.beezlabs.com/resources/blogs/case-studies-successful-business-process-automation-implementations
• Bernard Marr & Co. “Balanced Scorecard Usage Statistics.” Bernard Marr, 2021, bernardmarr.com/balanced-scorecard-how-many-companies-use-this-tool/
• Chron.com. “Modern Management Accounting Techniques.” Small Business Chron, 2023.
• ConsiliumCA Blog. “Role of Management Accounting in Strategy.” ConsiliumCA, 2023.
• Datamatics. “Supply Chain Management and Logistics.” www.datamatics.com/intelligent-automation/solutions/supply-chain-management-and-logistics
• FinanceJourneys Blog. “10 Latest Trends in Management Accounting.” FinanceJourneys, 2023.
• Investopedia. “Budgeting.” www.investopedia.com/terms/b/budgeting.asp
• Invensis Blog. “Latest Accounting Trends in 2025.” Invensis, 2023.
• NIST. “Cybersecurity.” National Institute of Standards and Technology, www.nist.gov/topics/cybersecurity
• PrinciplesOfAccounting.com. “Modern Management of Costs.” 2023.
• Roztocki, Narcyz. “Adoption of Activity-Based Costing.” SSRN, 2023, citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=1a36f35f5758d6112d52d40fc22cd831dfc5b44a
• Smith, John. “WCM in Chemical Manufacturing.” SSRN, 1999, papers.ssrn.com/sol3/papers.cfm?abstract_id=168908
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• Wikipedia. “Balanced Scorecard.” en.wikipedia.org/wiki/Balanced_scorecard

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.

So, you are relocating across the country, and you think that you can handle it on your own. While that might be true, you might be surprised at how fast a regional move can get a little out of hand. When you hire a moving company, you can save yourself stress, and it offers numerous advantages. Here are six reasons you should hire a moving company for your next move.

Cost-effectiveness

Even if it seems costly to hire a moving company, it is generally more economical than you think. With experts handling your move, you do not have to worry about any broken or damaged items because they are insured. Professional movers are also equipped to pack your items safely with high-quality packing materials and pads.

The best moving companies have the necessary equipment and tools required for a secure move. Because the equipment, packing material, and other needs are included in the move, this cuts costs for you to move yourself.

Organized Packing

Professional moving companies can pack your valuables more securely to ensure your items arrive intact. With their experience and expertise in the moving industry, any possible loss is avoided by managing your items with careful packing and handling. Your valuables are placed in proper containers with the best packing materials before moving, increasing the chances of safe arrival at your new location.

 An expert moving company will also unpack, unload, and manage your valuables, giving you more time to settle into your new home or office.

Reduced Disruption

Since professional movers can be handling your move, you can continue working or accomplishing other things that need to be handled for the move. Also, for a moving company, time is money. Therefore, generally, they will make a move as quickly as possible to move to the next job. Therefore, hiring a moving company promotes efficiency in the move and your activities surrounding the move.

Time to Relax

Most people hate moving. Therefore, hiring a professional mover will help you to make a move more relaxing. While you will still have to get things done surrounding the move, you won’t have the stress of packing and moving your items. Having the ability to take a breath while relocating can be an advantage you will appreciate during the move.

No one would claim that a move could be “relaxing,” but if you can take most of the stress out of the move, it can be much easier when most moves are a challenge.

Less Stress

Time to relax and less stress goes hand in hand when it comes to moving and the advantages of hiring a moving company to help with your move. Moving to a new place might be exciting, but it can also be exhausting, especially if you have many things to pack and transport. Because of this, your stress might increase, which might delay you from doing some important things during your move.

One of the advantages of hiring a moving company is giving you comfort and lessening your stress level. As a professional in the field, you must ensure that moving service providers can make your move stress-free. You might even be able to enjoy your moving day if you are not feeling stress about the logistics of the move.

Other Advantages

There are many choices of moving companies, and those choices mean you can find the one that meets the specific needs of your move and your personal tastes. For example, some movers specialize in shorter moves, while others are specifically set up to move long distances.

There are also moving companies that handle removing items from your home, helping you move furniture, or assisting with putting your things in storage. Again, you can hire according to cost or what the company offers to meet your specific moving needs.

Conclusion

Hiring a moving company when you have to relocate can help reduce stress and ensure that your items are secure. They can also make relocation simple and give you time to relax or focus on other things you need to during a 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

When deciding to cancel your credit card, an especially important issue is to know in advance what are the necessary steps to cancel or cancel your card correctly and without complications. 

Whatever the reason, such as theft, loss of the card, or simply because you do not want to have more plastic, you should keep in mind that many financial institutions usually require a series of requirements that must be met before requesting the cancellation of your card, and in this way avoid surcharges to your card, and even liens.

As we mentioned before, there are a series of steps to cancel the card, and the first thing we must do is make sure to pay the balance that we have pending on our card when deciding to cancel it. No matter how small the balance, we must ensure that this payment, because if you start the process before the bank can raise the interest to the maximum allowed or run your balance as default and even take legal action.

Second, you must stop using the card permanently. While you are canceling the outstanding balance of your card, you should not use it. Otherwise, you will never be able to settle the amount owed fully, and you will not be able to cancel it.

Once you have completed the two previous steps, you should contact your card issuer to communicate your intention to cancel the card. This notification can be done verbally, by mail, or by telephone call to the bank. Still, it is always convenient that the procedure is settled in a letter sent by postal mail that includes all your data. In this way, we will avoid misunderstandings since we will have a voucher physical of said communication.

Finally, you will have to confirm that your card’s outstanding balance is zero, for which you could expect the account statement to arrive at your address to see the cancellation of the card reflected or go to the bank to obtain a certificate confirming said card. Cancellation, and carry your card so that in their presence, they proceed to the destruction of it.

For your convenience, you can use the telephones to contact to inform about the cancellation of your credit card.

It should be noted that it is advisable to keep a copy of the contract of the card. Before starting the cancellation, we recommend you read it carefully to know what it says about it because, as we mentioned, some cards require a previous announcement of several weeks or contemplate commissions for cancellation.

In this sense, our legislation contemplates the cancellation or blocking of the card by the entity that issued the card. Law 26/1984, introduced by Law 7/1998, establishes that any parties can terminate the contract unilaterally in contracts of indefinite duration. The client is notified in advance not to cause harm and is derived from a cause duly justified and objective.

Why cancel the credit card?

The reasons why we can (and even should) cancel a credit card (in addition to after a theft or a loss) are many, but respond to two fundamental criteria, a change in the use of cards that leads us to use other products, the change and the output of products linked to the card, which, when they are no longer used, also entail the suspension of the card.

In any case, it is imperative to bear in mind that the cancellation of the card is something fundamental if we wish to have no problems in the future, we must remember that a card does not cancel the card, even if it is unused, it remains fully operational, so can be susceptible to receive charges, and of course to be used, even more, if it is a card with annual maintenance fees will continue to generate and therefore continue to present a cost.

This is tremendously important in the case of linked cards since many of them present free the first year, but the subsequent ones already apply maintenance fees.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.