Author: Complete Controller

Finances are always a hot topic because it is how our world runs. Long gone are the days when people would overspend their cash leading to a bleak financial future, right? Or does this still happen? 

Regardless, it’s important to understand the fundamental process of opening an account where money works for you. A certain required balance in a savings account would bring you more money effortlessly on the agreed term! You must have figured it out; we are talking about the high-interest rate bank account. Financial advisors regard saving as education since it teaches self-discipline, cultivates the rational sense of managing finances, and expands the vision—people who practice this lead to the road to success.

Higher yield accounts pay you comparatively higher interest than traditional saving accounts. This is because the Central bank determines the interest rate. The increase in interest rate is due to slow inflation and safeguard the currency. As a result, the interest rate is typically greater than 0.50%.

You should secure these funds inside a financial institution, savings, credit, or credit union account. Nevertheless, it’s wise to figure out how to make more than all the 0.25% to 1% interest these institutions shall provide on their standard bank deposits by investing most of your money in higher-yielding products.

1. Shop for the top rates

Thanks to technological advancement, we have been given multiple bank and credit union alternatives on the palm. However, opening a high-interest account separate from your standard bank is essential if you wish to exceed inflation.

As a financially literate individual, you ought to evaluate the profit you may acquire from the savings account with multiple banks. Then, conduct a comparative analysis to determine the best financial institution to invest in. Afterward, analyzing the market value of the return of high-yielding accounts potentially gives a clear picture.

2. Identify the optimal institution suiting your requirements

Once you have collected the varying interest rates from a prominent financial institution, sit down and make an unprecedented decision on which one to invest in. Fortunately, if you have discovered the higher and more reasonable interest rates at your primary bank, you must initiate the process.

The final step in this journey is measuring any charges for the account requirements at your chosen bank.

Is the minimum balance required for the account? Is the marketed interest rate restricted to proportions within a specified range? Are there any unavoidable charges?

3. Complete the account application

It’s time to fill out the application for your high savings account after you’ve picked which bank to employ. It requires 10 minutes. Moreover, you are mandated to supply the institution with

• Full name
• Address
• Phone number
• Email address
• Social Security Number (SSN)

Nevertheless, if you aspire to open a joint account with your spouse instead of an individual, you must provide identifying information for the second candidate. However, you’ll probably be required to do myriad queries concerning your background. Your application will be approved in most cases if you respond to questions correctly.

4. Fund your new account

Transference from another bank is the most common practice to finance a new savings account. Some may offer you to unlock a report immediately and then finance it. Other banks may allow you to submit a physical check or digital deposit of a review or perhaps even pay the initial payment with a credit card.

Furthermore, you may have to wait a few days to open your account at some banks and credit unions.

5. Establish beneficiaries

It’s time to choose who will possess your bank account amount if you die or pass away. Every single account allows you to name a principal beneficiary, and many also let you name additional beneficiaries. However, who you select as beneficiaries for this account is entirely up to you and your circumstances.

6. The applicant should link any additional transfer accounts

Once you set up a transfer of your initial investment, you must have one outside bank account associated with this new savings account. Most financial organizations allow you to join several external bank accounts. It is beneficial if you bank at multiple locations. Commence when you think of other charges you’d like to link for transfers, available when needed. In addition, the setup takes two days.

7. Abide by the terms and conditions provided by your bank

Note whether you must determine the minimum balance following the federal restriction of no more than six withdrawals every statement cycle. Sometimes, accounts are entirely free with no strings attached. Others have a more complex strategy for avoiding monthly fees that you can use.

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

A bad attribute witnessed in the history of humans is the vicious cycle of overconsumption that ultimately leads to overspending. Nevertheless, the urge for instant gratification has added fuel to the fire. The lack of financial illiteracy has birthed a black hole in our lives that strongly gravitates toward our wealth and leaves us with a hopeless end. Even with accessible financial information, we cannot excel in every economic arena. A financial advisor can help here who would assist you in changing the way you manage money. This article has piqued your interest. You have been persuaded to find a financial advisor; however, this one question, how to pick one, has stumbled upon you. No worries; this article is here to provide you with valuable information. Let’s begin!

What Does the Financial Advisor do?

In this unpredictable life, a financial advisor serves as a safety net. They protect you from financial setbacks and help you turn your financial wellness and objectives into reality. It allows an individual to lead a financially independent life.

Furthermore, financial advisors provide their clients with expert advice based on market research and recommend the correct services to meet their requirements. 

1. Most importantly, can you afford the charges of a financial advisor?

Robo-advisors are inexpensive and provide automated suggestions on investment management. According to financial experts, you must proceed with the excellent notion if you can save at least 20% of your annual income. If you do not have adequate funds to pay their fees, no financial advisor will be interested in working with you.

2. All that glitter is not gold

An organized, shiny, and luxurious office does not demonstrate the expertise of a financial advisor. In addition, they may add up various titles to appear impressive, but analyze if they are registered or licensed with the regulatory authority. Some titles are easily purchased for marketing purposes and are not granted by a regulator. It’s imperative to look over this matter and not solely rely on a title to determine their competence.

3. Now, ascertain your individual needs

Why do you need a financial advisor? What type of advice do you seek? When finding a suitable fit for your objective, it’s essential to determine the need. There are at least eight kinds of financial advisors.

• Investment advisor
• Certified financial planner
• Financial coach
• Broker
• Financial Consultant
• Wealth advisors
• Portfolio and investment managers
• Robo-advisors

Once you have figured out the category, it will allow you to decide to pick the right financial advisor. 

4. Look into their qualifications

Competent financial advisors appropriately embody their industry knowledge and use soft skills to interact effectively with their clients. A good way to interpret their capability is to assess their qualifications. A professional financial advisor will be satisfied to show you their certification to prove their relevance and legitimacy.

5. Analyze their market depth

In a talk with an experienced financial advisor, we asked what people generally look for when selecting a financial planner. He responded, “People find out and evaluate our market depth before working with us. They figured out how many clients we had previously handled and their success ratio. How did our advice help them, and did they achieve their financial goal? Thanks to the internet, the world is evolving, and people are getting more informed.”

As a responsible individual, you must consider the experience of a financial advisor before deciding on one.

6. Does your potential financial advisor have the heart of a teacher?

Did you guess the name? David Ramsey! Yes, we quoted this attribute after conducting thorough research. And this point makes sense. If your financial advisor doesn’t understand your needs, this can result in a disaster. He must possess the heart of a teacher and answer your questions patiently. Also, consider these questions: Does he resonate with you? Comprehend your requirements and give advice tailored to that. Is he capable of building a long-term relationship with your most important thing?

7. Utilize your negotiation skills

Don’t accept the fee stated as a gospel; conduct your market research. Communicate with them if you believe you should pay a relatively higher minor. Make them comprehend your demands and leave room for theirs, too. However, it depends on your negotiation skills and how you manage it and do not perceive it as a verbal fight.

You ought to actively research and find what is best in your interest. The outcome is, however, rewarding and substantial. Finding an advisor is not a piece of cake. It mandates countless efforts and verification. To prevent fraud and give them access with a joyful heart, you ought to seek them out.

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.

1. Experience

Find out how long the fund manager has been in business. Is he able to furnish references? What credentials does the advisor possess? Check out the type of counsel you’re dealing with. Is it a big or little office? Will several employees work for you, or will you only deal with one person?

2. Do it yourself or not?

Wrong judgments regarding sophisticated financial items like investments, mortgages, and life insurance can cost you a lot of money. Do you have a basic understanding of these complex financial products? Then, it’s a good idea to get advice from a financial counselor.

Furthermore, financial product suppliers have a responsibility of care. They are not authorized to sell you a sophisticated product that does not suit you under the Financial Supervision Act.

If you want to buy a product like this without guidance, the vendor will put you through a knowledge test. With this, he determines whether you have sufficient knowledge to plan.

3. Choosing the type of advisor

Banks and insurers are primarily providers. They supply financial products. They can also act as advisers or mediators if you inquire about their possibilities. Do you do business with them? Then you must show the costs of the product and the advice separately. Usually, employees of a provider only advise on products from that provider.

4. Decide on the horizon and psycho type

Point of no apparent importance. And the significance here is oh so fabulous. It would seem, what is there? After all, no one has a goal to invest at a loss, regardless of the horizon. So it is, but misunderstanding one’s horizon leads some people to losses.

For example, a person wants to invest in stocks but expects a positive return in a month. And, without waiting, he sells at a loss, gets disappointed, and forgets about the stock market, like a bad dream.

5. Expand your horizons and knowledge about the world

I’m not talking about economic or financial models (I have never used them in practice), but more superficial things. Well, for example, my favorite story with Intel. You use a computer with an Intel processor and know it’s good company.

6. Develop critical and systemic thinking and the skill of working with information

Critical thinking is the ability to question any incoming information. It is also an understanding that any information not confirmed by facts is just shaking the air. It is the ability to verify data in original or reliable sources or with one’s hand. This skill helps to get closer to the truth in case of conflicting information. This filter allows you to separate valuable information from background noise and fakes.

7. Have confidence in what you buy and think about the future

I see an iron principle for any investor: there is no certainty in choosing a business and no peace in case of a drawdown. I’m not talking about speculators and traders who earn according to entirely different rules. What will serve as your source of confidence is up to you. My source in the statement is that business is a system. If I see a stable and promising strategy, I will buy it. The system can be expressed in historically effective results (Facebook), a systematic approach to doing business (Danaher), and competitive advantages (ISRG).

8. Calculate the yield in dollars

Calculating the yield is necessary for whatever your denomination is. Depending on the denomination, your product could be more or less than the dollar.  

9. Do not think that there is a secret

What a sin to conceal, I once thought. There seemed to be a person, course, or book that would teach me how to invest. Someone is looking for the secret of how to love, get a good job, or not get sick. All of us are united by the search for the magic button “happiness” (“loot” in the case of investments).

10. Admit mistakes

I don’t even know if I should add something here. It’s probably easier to tell a personal story. I started learning about investing at the end of 2017, after the liquidation of the business. I was attracted by the opportunity to diversify investments qualitatively.

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.

Assets and Liabilities

Assets are anything that can be sold and is worth at least some money: an apartment, a car, a house in the country, deposits, stocks, bonds, etc. Assets may or may not bring returns. You can put up with this (as in the case of the apartment you live in) or increase the return on assets (as is the case with finding better investments). Your debts, loans, credit cards, and other financial obligations are liabilities. You can’t sell them and get cash for them. The more liabilities you have (in the form of consumer loans), the closer you are to bankruptcy.

Loan Repayment Rules

So you have a clearer picture of all financial obligations. You may close some of them with the sale of assets. If this is not possible, let’s see what can be done with loans using various ways to get rid of debt. Several options are available here.

• Snow avalanche method

The Snow Avalanche Method is the most accessible and understandable way. Its essence is to be the first to close the debt with the maximum interest rate; that is, you should direct all additional money first to its repayment. Then, focus on the next highest-rate loan and close it. Thus, we first repay the most expensive loans to service. Economically, this is the most efficient way.

• Snowball method

It consists of paying off loans from the smallest in terms of debt to the largest. When the minimum debt is closed, the amount intended for payments begins to be used to repay the following loan. Here’s what you need to do.

Sort the debts by the total debt amount – from minimum to maximum. This sorting of obligations is a different feature: we sort not by interest rate but by debt.

• • Start making the lowest possible payment on each debt.
  • Estimate how much you can contribute above the minimum payment on the first, smallest debt.
  • Start paying off your first loan by making the minimum required payment plus additional money until you pay off the entire debt.

As soon as the first debt is repaid, add the additional money (the minimum and other payments you made paying off the first debt) to the minimum payment on the second debt and start paying off the second debt on the list.

Refinancing

The procedure allows you to combine several loans. Refinancing can be done at the bank where you took one of the loans (or opened a credit card) or at any other that agrees to give you a new loan.

Restructuring

Restructuring differs from refinancing in that the procedure concerns one loan and takes place in the same bank with which you already have a valid agreement. It is possible if:

• • Your income has decreased significantly – for example, you have lost your job, or your salary has been reduced
  • You went on maternity leave or paternity leave
  • You have lost your ability to work and cannot earn money due to an injury or illness.

Bankruptcy

Bankruptcy is the incapacity of the debtor recognized by the court to fully satisfy the requirements of creditors for monetary obligations and mandatory payments.

As a borrower, you can initiate a procedure if:

• • You know that you will not be able to fulfill your obligations on time (lose your job, become seriously ill, etc.), regardless of the amount
  • The main advantage of bankruptcy to eliminate the debt burden is writing off all debts by selling the property. You would not have to pay the remaining debt even if the proceeds from the sale of the property were not enough to pay all the creditors’ claims. At the same time, creditors cannot demand the debtor pay more than he owes. They cannot take only housing and necessities.

Collectors

A long delay on a loan can lead to the bank’s transfer of the debt to a collection agency. At the same time, fines and penalties will continue to accrue for late payments on the loan.

If you still have to communicate with collectors, then remember that when speaking with a debtor, the law requires them to:

• • Introduce yourself (name the surname and name, organization and its contacts)
  • Confirm their authority by submitting documents on the transfer of debt
  • In no case use violent actions against the borrower

Collectors can call you twice a week and at a strictly allotted time. Disturbing debtors are prohibited from  8:00 PM to 8:00 AM on weekdays only.

Most importantly, the faster you pay off your loan debt, the quicker you will get rid of the obsessive attention of debt collectors.

Total

Let us briefly formulate the main ideas of the article. It is necessary to understand that you can manage your assets and liabilities.

To do this, they must first be known and taken into account.

If there are assets, the yield is lower than the loan’s interest; you can use them to pay off liabilities (except for the financial security reserve fund).

There are several options for optimizing the credit burden or getting rid of debts: early repayment, refinancing, restructuring, or bankruptcy.

Communication with collectors must be within the framework of the law, according to which they can call you no more than twice a week and at a strictly allotted time.

Do not fall for the bait of fraudulent lawyers who offer you to get rid of all debts for 30-50% of their value.

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.

Setting up and running a business is a tough job. It involves significant challenges and hurdles that need to be crossed to stabilize a business. A business can be run in two ways: as a sole proprietorship or as a partnership. Both have their pros and cons.

A sole proprietorship is when a single entity runs the business and can enjoy all the profits. Also, this entity alone endures the losses as well. Running a business this way can seem incredibly beneficial but has some significant disadvantages. The owner is the only one responsible for the liabilities of the company; in case a business fails to pay off the debt, the creditors have the potential to seize their assets. It is also exceedingly difficult to attract investors and raise capital; when the owner dies, a business fails. Due to these reasons, many people consider running a business under a partnership to avoid these problems, but even a business partnership has flaws!

There are different types of partnerships, such as general, limited, and limited liability, each with advantages and disadvantages. As this article covers the burdens of a business partnership, the cons of each have been highlighted!

General Partnerships

General partnerships provide equal rights and responsibilities to all partners. Each partner has the right to act on behalf of the whole business.

Ambiguous Authority

A disadvantage of a business partnership is that the authority limits are vague and unclear. Even though the responsibilities are divided among the partners on the outside, both partners seem to have authority. It can lead to situations where one partner may sign an agreement, and the other must live by it even if they do not want to. When two partners disagree on a common thing, it gives rise to arguments and instability in a business.

Risks of Instability

With a business partnership, high risks of instability get attached to a business. If one partner files for bankruptcy or dies, the company becomes unstable, resulting in dissolution. The case worsens if a profitable business suddenly shuts down because a partner has retired, quit, died, or filed for bankruptcy.

Lack of Flexibility

When there is no agreement about transferability, the default rule is that without the consent of all other partners, a person’s stake is not transferable. It is a significant hurdle in achieving transferability. Also, if partners argue over the transferability issue, the process stops.

Risks of Management Disputes

Management disputes are bound to occur without a written agreement regarding which partner will oversee what aspect of a business. A general, unstructured partnership is more likely to end up in chaos. It is not an issue in a limited partnership but something that must not be overlooked in general partnerships.

Taxation Problems

Even though a business gets subjected to income tax benefits with partnerships, some serious taxation issues emerge. Each partner must pay tax like sole traders by submitting a yearly self-assessment. It can get worse if the business is very profitable, as higher taxes are imposed on people if it generates more than a specific number of profits.

Shared profits

When a business runs under a partnership, the losses must be endured by all the partners, which reduces the impact of losses. In the case of profits, even though profit must be shared among the partners. It can be a problem for people who put in more effort than other partners and do not receive the deserved outcomes. Without much effort, partners can benefit from one partner’s hard work.

Limited Partnerships

It is a type of partnership that is like the general type in many aspects. The difference lies in the fact that in a limited partnership, there must be at least one general and at least one limited partner, which plays the role of a silent partner.

Termination of Partnership

One of the significant threats to a business in a limited partnership is that when one of the partners dies or retires, the partnership is terminated. It makes a company unstable and can lead to a business shutting down.

Excessive Taxation

When a business is run under a limited partnership, the chances of excessive taxation are high. Only a little can be done to save a company from excessive taxation if it is run under a limited partnership.

Unprotected Assets of a General Partner

The general partner remains under threat as their assets are unprotected. If a business fails to repay the business debt, the general partner’s assets can be sold by a creditor.

Limited Liability Partnership

Limited Liability Partnership or LLP combines a partnership and a corporation. In such a partnership, no other partners are held accountable for the actions of other partners. The share is decided, and an agreement is signed, which helps in the smooth running of a business, but even this type has some disadvantages.

Complexity and High Taxation

The formation of LLPs is complex, so many states do not allow the formation of such companies. The conditions will enable the building to impose heavy taxes, making it difficult for a business to run smoothly.

Legal Recognition

Many states do not recognize these types of businesses as legal entities and self-employment taxes are imposed on the partners. Also, these types of companies are not given the same credibility as the other businesses.

Reviewing each partnership type’s cons is best before setting up a business under a partnership. Until or unless a plan is drawn up for how each of the legal matters will be handled, a partnership must not be chosen. It reduces the risks of a business getting dissolved or completely chaotic!

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

While they already face the problems of arrears and mismanagement, SMEs today face new financial problems. In particular:

• The volatility of the foreign exchange market
• The fluctuation of commodity prices
• Interest rates

SMEs are more fragile than large companies and present a particular sensitivity to financial risks. This greater exposure to risks is explained first by their size. Less structured SMEs underestimate their working capital requirement (WCR) and neglect the debt recovery part.

The Financial Risk goes Beyond Simple Debt Collection

Interest rates, dollar prices, commodity prices, etc. The instability of the financial markets represents a significant risk for one in three SMEs. They are, however, rare to act to protect themselves from it. The reason? The solutions proposed are still unknown and raise many reservations for a large part of the 60,000 failures recorded yearly concerning small and medium-sized enterprises, which are more vulnerable to financial risks than large companies. 

Large companies have integrated the risk culture linked to the financial markets. It has put them at the heart of their overall development strategy. Small businesses suffer the most from these risks due to their ignorance of existing solutions or distrust of a universe perceived as opaque, speculative, and complex.

Insufficient Preventive Strategies

Many SMEs have implemented preventive strategies by reducing their debt to avoid interest rates, diversifying their offers, or forming partnerships to diversify risks. However, these measures have their limits. Solutions to transfer all or part of the risk to a third party, offered by banks and specialized brokers, can be particularly attractive for entrepreneurs. Among them is the futures contract, which consists of the SME buying an asset at a fixed price for delivery and subsequent settlement. This asset can be traded on a futures market or over the counter. Another possible solution for small businesses is to bet on the future value of an underlying asset.

Whatever strategy the company chooses, it is advisable to favor simple products with a precise mechanism. The objective for the entrepreneur is to opt for a strategy to protect against the level and volatility of future prices and to apprehend the financial consequences of erroneous anticipation. Efforts have been made at the national level through different programs to facilitate SMEs’ access to the equity and bond markets. Despite this, many SMEs are reluctant to use so-called “hedging” instruments, perceived as complicated or expensive. Yet the financial risks are currently very evident in the context of high global volatility. SMEs have every interest in preventing these risks.

Global Financial Crisis

International Monetary Fund (IMF) has encountered multiple crises after the Great Depression. In a recession, the financial condition of SMEs worsens. The loan-taking prices increased, and banks started enforcing many restrictions while lending to SMEs. Also, banks shorten the debt payment time to cope with the risks of the global financial crisis.

Consider and carefully understand the Chinese PR case study.

The statistics of the China Banking Regulatory Commission reveal state-controlled banks lent 2.2 trillion as a total estimation in 2008. The small businesses got only 300 billion in loans, equal to 15% of the total ratio of the state bank’s lending amount. As a result, a maximum of 20% of registered SMEs face massive bankruptcy, while other SMEs still encounter severe capital shortages with the same ratio of enrolled ones. If we compare the state-owned enterprises, SMEs did not get much protection and support from the Chinese government during the pandemic.

SMEs in other states are also facing the same situation. Therefore, all governments must consider the financial status of their SMEs. They should reduce all SMEs’ problems, especially financial ones. So, consider information asymmetry, relationships between banks and enterprises, and internal restrictions within the SMEs’ financial system.

Determinants of SMEs’ Financial Structure

It is beside the dependent variable like total debt and total asset ratio. It has the returns on assets, non-debt tax shields, liquidity that you can measure by a quick ratio, the asset’s size of the firm, tangibility, and strong growth qualities. All of them operate and maintain the profit margin for SMEs

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.

Exploring bureaucracy and its characteristics has been a fascinating subject for many theorists. Max Weber and Rosemary Stewart are two notable contributors whose observations have illuminated the profound impact bureaucracy can have on organizations. Their insights are invaluable for understanding this complex topic!

What is Bureaucracy?

To define bureaucracy, Weber put forward several characteristics which would form an ideal type of bureaucracy.

1. The hierarchy of command is an essential element for any business. Weber believes that every organization should have a hierarchy of command starting from the top-level management to the bottom level of employees.
2. There should be no biases. Every position and level must have a clear set of instructions and expectations related to it. This way there can be no room for questions. 
3. Employees must be rewarded for their work and the achievements they have made for the betterment of the organization.
4. Specialization of work related to the division of work theory

What are Authority Types?

With the characteristics of bureaucracy, he also defined the authority types that exist in our society and, hence, in the organizations. 

1. Traditional: The traditional form of authority existed in the earlier ages, where authority was mainly linked with hereditary power. If a father dies, the power of the authority gets transferred to the son. Such authority still exists in companies with a single owner instead of multiple owners (shareholders). 
2. Rational Authority: This form of authority is linked with bureaucracy, where candidates are selected based on their skills and work experience. Every selection for the main position is made through rules and following a professional channel where impartial decision-making is done.
3. Charismatic Authority: The individual is selected by considering his charisma. If the individual has the charismatic characteristics of making other people do what he wants to get done, he is usually selected as the manager.

Weber believed that one of these authorities exists in all organizations and that bureaucracy can enhance the productivity and efficiency of the company. On the other hand, Rosemary worked and defined the features of a bureaucratic organization. She put forward these points.

1. Specialization: Unlike others, Rosemary focused on describing that the specialization must be of the job and not the employee. It means that when an individual leaves the position, the job must continue, and another individual must be hired to fill the vacancy.
2. Hierarchy: The line of authority and management level must be clear.
3. The system of Rules: A system of rules is present where all the people are aware of the rules and perform their jobs accordingly.
4. Impersonal: All the rules and decisions must be taken using the impersonal decision-making authority following the pre-defined rules.

   Bureaucracy Growth

   Apart from the features, she defined the reasons and causes that give an organization’s bureaucracy growth. Bureaucracy does not exist from the beginning; therefore, these factors give birth to it.

   1. The growth of the organization
   2. Increase in the complexity of the work.
   3. Implementation of the scientific management principle.
   4. Equal and impartial treatment.

In Conclusion

Wow, the field of management has truly benefited from the insightful theories proposed by Max Weber and Rosemary Stewart! Their ideas have truly helped us understand the unique characteristics of bureaucracy within organizations and why it may be necessary in certain situations. It’s incredible to think about the numerous theorists who have contributed to our understanding of bureaucracy and its impact on organizations. Still, Weber and Stewart’s observations truly stand out as noteworthy and valuable.

We hope this article has given you a new interest in understanding the importance of having the proper bureaucracy within your business. 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 self-employed do not win the scare. Every quarter, the Treasury knocks on our door, and we must make the corresponding payment. But, in addition, now the declaration of the rent approaches, it is possible that we also must make some payments.

If you fear that the moment will come and the accounts do not come out, pay attention to this post. Today, we are going to teach you how to organize better the finances of your company with these five essential tips:

Do Not Think About Your Income as if it Were Your Payroll

One mistake in being self-employed is to believe that all the incomes from the bills to the bank account belong to him. However, it would help if you remembered that you are only a mere intermediary of VAT. That money does not belong to you; therefore, you should not use it. Otherwise, when it comes time to return it at the end of the quarter, you will have a big problem.

In addition, the income is subject to IRPF, which you must also discount if you want a clearer idea of ​​the money you have earned.

Separate Personal Accounts from Those of the Company

It is highly likely that you only have one account in the bank or, at the most, two: one daily and one saving. However, to efficiently organize the company’s finances, it is convenient to open three accounts: a personal account, an activity account, and a third for taxes. This way, you will have a more realistic vision of the business and avoid surprises with the Treasury.

In the tax account, you must enter the VAT and the IRPF that corresponds to you. If you are self-employed by modules, you can plan and know what amounts you will pay. If you pay indirect estimation, the most advisable thing is to transfer the VAT paid to you from the invoices you are issuing directly to this account. You will also have to set aside 15% as income tax. At the end of the quarter, you can direct the tax charge here so that you will have everything in order.

In the personal account, you will include your payroll. That is, the income you get from your activity, fewer taxes and expenses, and the percentage of savings you want to save. Finally, you must enter the business expenses in the activity account (rent, insurance, communication, telephone, etc.). You can save some extra money to make future investments or face unexpected expenses if possible.

Manage Invoices on Time

Try to keep the accounts up to date. It is crucial to invoice the work now you have finished it. It thinks that delaying the emission of the invoice will only contribute to lengthening the collection even more. That can generate liquidity problems in the medium term. Take care!

On the other hand, having updated accounting is the only way to control the money in your account. Remember that even if you have the help of a professional, you must be aware of your funds to manage the business correctly. So you will not make excessive expenses and know to what extent you can invest or not.

Claim the Money that Corresponds to You

And do it as many times as necessary. The self-employed have few mechanisms to defend themselves against delinquency, especially when the amounts are small. Hence, it is crucial to insist again and again until they pay us what they owe us. Do not be ashamed!

Ask for Help When You Need It

If you are going through a complicated situation and lack liquidity, ask for help. Resorting to the bank or borrowing with high interest is only sometimes necessary. First, visit your family and friends, look for subsidies, and delay the possible payments. For example, you can request a postponement of the social security fee or divide the taxes.

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 owner has several alternatives to cover their backs when taking their floor to the market and avoiding scares because renting is easier. Only a few premises are needed:

1. Find the ideal tenant: The remedy to avoid headaches is to select the most appropriate tenant. It seems obvious. Find a tenant who takes care of the house as if it were his, who is punctual with the payments and respectful to the community members in which he lives. It is not an impossible mission.
2. Adjust the price: If this is not the first time, you will know about the price fluctuations. However, if this is the first time that you rent an apartment, it will happen that for different reasons, you are emotionally bound, and that will prevent you from seeing the matter. Before putting the condo for rent, make a firm decision. When you are sure to rent, and it is time to decide the property’s price, it is crucial to conduct a market study. Compare data from similar rentals. For this, you can use a startup called Third B that collects all the properties; you can consult data from the cadastre, the Ministry of Finance, sales, and rental data, with a history of the price evolution and information on all services in ​​the property.
3. Complies with the regulations: There is a precise regulation of urban leases in terms of the periods of mandatory fulfillment of the contract and the terms for the tenant to pay the rent. Do not try to filter abusive clauses because it would not be the first time that a judge gives the reason to the tenant. We highlight the variations the law has had in recent years.
4. Better to talk face to face: A rental agreement is not the same as a mortgage but establishes a tenant-owner relationship that lasts several years. You have the mission to offer the impression that you are willing to meet and speak in person with the tenant interested in your home, which will establish a relationship of trust.
5. Consult a legal professional: At this point, it is essential to have the advice of a professional who knows the law well and can defend both parties’ interests. It will help you understand what procedures are necessary, how to rent a flat safely, and what steps to take to deliver keys. Before that, you must make one of the houses if it is not empty. Take photos of the appliances and everything that belongs to you and that you want to keep. In addition, this inventory must be signed by the owner and tenant.
6. Ensure that the floor is in condition: The floor must be delivered in good condition, both clean and habitable. Indeed, the law does not require to provide the apartment clean or all painted, but it is assumed that the owner is first interested in the tenant’s comfort. Nor does the law require the owner to contract light and water supplies, but any facility will be welcome. Typically, in these cases, you only need to change ownership. But providing as much information as possible is good to feel part of the whole.
7. Asks for guarantees: The law stipulates that a month’s deposit is required, but many owners ask for additional guarantees.
8. Make improvements in the home: If the tenant has a disability or is older than 70, if he previously notified the landlord in writing and the works are necessary for the house to be used correctly and according to the disability or age over 70 years, perform adaptation works. However, if, as the owner, you want the house to be in the same condition once the contract is finished, you can demand it. Recording all the information in writing and requiring invoices is essential because they are carried out.

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.

Our relationship with money begins to forge; without realizing it, we learn everything about how our parents handle it. Much of what we know can be good or bad. Neither they nor we are to blame. They did the best they could within their means.

Improving Your Relationship with Money

Being adults is when we begin to put into practice everything we learned. The way we understand what works and what does not, but the worst of the mistakes we can make is to keep doing the same thing repeatedly and expect different results. Here are some tips so you can improve your relationship with money.

Money is medium – It is not the end

Earning money to treasure it or put it to work to accumulate more is not the primary purpose. Money helps you achieve goals and dreams; it should never be the end of having a lot of money. You can also use it as a future investment for the retirement period. Remember that investing real cash in assets will never give you what you want. You should invest your long period’s earned money in different investments.

Learn the meaning of income

Any amount that enters your accounts or portfolio at the end of the month is considered. It includes the income from salary, an ordinary entry, and extraordinary ones such as gifts, bonuses, or donations. When you know the actual value of a payment, you will spend it on valuable things rather than wasting them. The proper use of income will never put you in financial danger.

Learn the meaning of expenses

Everything you spend, from debt payments to liabilities and purchases, are considered expenses. It is money that comes out of your accounts and wallet and that is recovered. Expense management always demands a proper plan with complete financial understanding. First, make a good schedule and set aside your necessary expenditures. Estimate how much money you can save. Then, figure out how much money you will have for savings. If you can manage all these things together, especially your saving purpose, you must cut your additional expenditures.

Money helps to achieve happiness

Money is not happiness. You may not have managed your money well if you do not consider it that way. Money can help you achieve any goal you set. If you want to open a business, buy a car, go on vacation, etc. Everything is completed with money.

Recognize the importance of good administration

Money management is the key to getting rid of your debts and making money yield. It does not matter that you earn little money. If you reach a lot and it is not managed, you will waste it. You will acquire more debts if you make small ones and do not handle them.

Find the enemies of saving

The leading cause you cannot save is that you have found other ways to use your money. Some of them are ant expenses and phantom expenses. They are small and invisible, but little by little, they end up with their salary.

Set financial priorities

Who is happier, the one who has more or the least needs? Many of the purchases are not necessary. Perhaps the media has been responsible for making us believe that we need everything they offer. The more things we have, the more worries and expenses we have.

Regarding savings

No matter how much money you earn and how many debts you have, it would be best to always think about saving and set aside a certain amount of money month by month. It does not have to be much; it should be constant.

About the use of credit

Credit can be your best ally or your worst enemy. It can help you build wealth if it is appropriately managed. You can also sink it into debt if you use it to waste. You can also be a credit card user, but you will have to pay all your bills on time for the best credit history on your credit score. It will make you eligible for any loan amount.

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.