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evolution of bank - Complete Controller

The term “Bank” is associated with the concept of commercial banking. It originated in Germany though few people link its origin with the Italian word “Banca” or French word “Banqui.” The word means to own a bench to keep, lend, or exchange money in the market by money changers or money lenders. Before 1640, there was no such concept of banking. People used to practice keeping their money in the temple of Babylon as early as 2000 B.C. Chanakya has mentioned the existence of powerful guilds. They used to receive deposits along with advanced loans and in return letter of transfer was issued. Jain scriptures have said the names of two bankers famous for building Delaware Temples of Mount Abu. This temple was built during 1197 and 1247 A.D. Check out America's Best Bookkeepers

First Bank:

  • “Bank of Venice” is known to be the first bank and was established in 1157 in Venice, Italy. The prime reason to start this bank was to provide financial help to the monarchs.
  • In England, “Bankers of Lombardy” were well-known, but contemporary banking started with the collaboration of English Goldsmith after 1640.
  • In India, their first bank, “Bank of Hindustan,” was initiated by Alexander & Co. in 1770. It was started when the English agency house failed in 1782 in Calcutta.
  • In the true modern sense, in 1806, the first bank was established in Bengal named “Bank of Bengal.”
  • A merchant banker is the first person who evolved the concept of banking. He used to conduct trading in merchandise using deposit money of others to make a profit. It was essential to have transmittals from one place to another to execute trade activities. For this purpose, “hundis” (letters of transfer) were issued to remit the funds. Such type of merchant bankers in India is known as “Seths.” Check out America's Best Bookkeepers

Next phase:

Goldsmith was the next stage in the growth of the banking sector. In this type of business, special measures were taken against the theft of jewelry and gold. If that individual proves to be an honest person, traders in the district started to leave their precious metal and other financial expenses in his care. As more and more people adopted this approach, Goldsmith began to charge a nominal fee when he used to take care of bullion and money.

 

Goldsmith issued a receipt for goods delivered as proof. Subsequently, silver and gold had no symbols of the holder, so Goldsmith started circulating them. Goldsmith used to provide the receipt to the holder along with an equal amount on-demand, so the Goldsmith’s receipt was a check at that time. This check was a standard of exchange and a resource of payment. Check out America's Best Bookkeepers

Money Lender:

The next step in the evolution of the banking sector was “moneylender.” Goldsmith noted that withdrawals of coins were less in number as compared to the deposits. To deal with this situation, Goldsmith started to give coins on loan, and in return, they began to charge a fee in the form of interest.

Therefore, “Goldsmith-money-lender” became, in theory, the first bank that performed two significant functions of the modern banking system. The first one was ‘accepting deposits’ while the second function was related to advance loans based on interest payments.

The banking sector has evolved into a multi-scale financial body that deals with everything from deposits, investments, lending, financing, and many more services. Understanding the evolution of the banking sector is of the utmost importance when learning finance. It shows how this evolution took place at a micro-level and now at a macro level. Today, banks are global realities that record billions of transactions each day. Even though the fundamental concepts of banking have not changed since its early inception, modern technology and individuals’ needs have exfoliated to a complex framework. A bank’s primary functions are still the same as they were almost a thousand years ago; it safeguards an individual’s finances and acts as a lending institution for debtors.

Check out America's Best Bookkeepers 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. Check out America's Best Bookkeepers

A person needs to keep their personal and financial life on track.  However, it is not something that is counted as exciting. Keeping track of the finances can be very dull at times, and this is precisely why most people avoid dealing with it until all that clutter gets out of control.

According to the experts, there are a few important points that might help you decide whether a credit union is the right choice or not. What is the big deal with a credit union?  Are credit unions that different from banks?

The answer to these questions is “yes.”  However, a person should never take anyone’s word for it!  According to writer Devan Goldstein who works for NerdWallet. Check out America's Best Bookkeepers

Typically, a bank and a credit union offer a similar type of services like inspection and checking of accounts/savings accounts along with private loans and more. Even though they are mostly similar, yet they have their difference. Credit unions are non-profit organizations, are cheaper to afford as they have better rates and fees, have their customer service centers. In contrast, banks charge a lot more but can offer more advanced products along with up-to-date technology.

So what is the best place to put your cash?

Banks:

  • Are “For-profit”
  • Have a high rate of fees as compared to their interest rates.
  • FDIC will insure up to $250,000 of your funds in a bank.
  • Limited emphasis on private interactions.
  • Lager banks will have a considerable number of branches spread all across the reign, whereas smaller banks will have a limited number of branches.
  • Banks, mainly the large ones, will typically be faster when it comes to rolling out new technological advancements.

 

Credit unions:

  • Credit unions are not-for-profit organizations.
  • Often pay higher interest and charge significantly low rates.
  • NCUA will ensure up to $250,000 of your funds in a credit union.
  • Focus a lot more on personal interactions.
  • Credit unions will usually have fewer branches as compared to banks. Nevertheless, some of them contribute to a free branching network that allows their clients to visit physical sites of a partner credit union.
  • Even though individual credit unions are tech-savvy, occasionally, they tend to lag behind banks, when it comes to the implementation of new technology.

What Credit Unions and Banks Offer

The National Credit Union Administration backs money in credit unions, while funds in banks are insured by the Federal Deposit Insurance Corp, though the outcome is almost the same; both the organizations will ensure the amount of $250,000 per individual, per possession category. Banks use the broad ATM and branch system; credit unions have cooperative networks of shared branches and ATMs’ as well.

The customer service of credit unions is often better and more responsive. They also offer better interest rates on deposits and lower rates on their loans, along with the lower overall fee.

The Main Difference: What Happens to Profits

So how a credit union organizations works? Banks and credit unions are both similar kinds of financial organizations providing almost comparable services to their customers. However, credit unions are a non-profit organization, while banks are for-profit institutions. This single difference between these two is the foundation for others. When an organization exists mainly to produce a profit, its core procedures will always be organized around generating maximum profits.

A credit union exists to serve people who are stuck in the bond of association, which can be determined by their geographical region, boss, involvement in another association, faith along with other similar factors.

The primary purpose of the credit union is to help the community by providing financial solutions to its associates with the most promising terms that are easy to afford. Unlike banks, a credit union, do not offer accounts to their clients along with large amounts of dividend to a small group of owners. A credit union will instead offer minor dividends with reduced loan rates, fewer fees, and other rewards to a larger group of members. In that sense, a member of the credit union is both client and owner.

 

Check out America's Best Bookkeepers 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. Check out America's Best Bookkeepers

As data sharing increases, the development of the global open banking system is setting the outline for security and consumer protection. With the changes in EU finance guidelines, the (OBWG) Open Banking Working Group, which was established in United Kingdome in late 2015, to not only fulfill the standards set by the government but to discover how to push banking into the present era further. Opening doors for new banking models that will help the customers to manage, borrow, save, invest, and lend their money in better, safer ways as compared to before.

 

What is Open Banking and How It works?

In these recent years, the United Kingdome banking has taken many significant steps towards improving their customer service and satisfaction by minimizing cost for customers while reassuring fair bank competition. The present Account Switch Service, which is also known as the Seven-Day Switch service, was introduced in the year 2013, to help encourage customers to change their providers by comparing their services with each other. This idea didn’t work out as they planned, as only two percent of banking customers were able to take advantage of this. Identifying that a lot more needs to be done, Open Banking is a more complete/ broad plan that provides its patrons with even superior control over their financials. In the open banking system, data will be transferred over protected APIs so that client can manage their finances more effectively. This will allow the 3rd party developers to create helpful tools that a person can efficiently utilize.

Most medium and small size enterprises and businesses are using commercial software system for their bookkeeping purposes. Still, these enterprises have to manage a big part of their business data physically. Working with API banking service providers will allow clients and businesses to manage all of their banking data in real-time. It will also provide them with precise and up to date info regarding the finance market.

This will allow a customer to save and compare their accounts with each other’s and will be able to use modified resources for making better banking-related decisions. It will also allow customers to improved loan terms as 3rd-party lenders. An attempt of such kind will take years to apply. According to the recent news, the Open Banking system is set to be fully implemented by the end of 2019.

 

Open Banking in Other Markets

The use of APIs is an effective cost sufficient system that is becoming increasingly common by banks all across the world. Advanced banking actions taken by the United Kingdom government shows the dedication and commitment they have towards their country and financial market. For example, the Open Banking system has been extremely successful in Germany since 2010. It is now working with the majority of German banks to produce an environment that supports 3rd-party claims for clients.

 

 

Open Banking in The United States

 

In the United States, financial companies such as Mint founded the idea of free financial applications. This idea combined many bank accounts and credit cards to offer their customers a broader financial view along with the ability to compare numerous banking products with each other to see which is better.

 

Some banks of the United States, like J.P. Morgan, have become uncertain about the sharing of banking data for reasons that include data overloading servers. However, but their unwillingness to collaborate with the banking community can also be a well-planned strategic move. The implementation of the Open Banking system will help lessen such problems and recover teamwork along with reestablishing fair competition among the banking industry.

 

 

Open Banking as the Footing for Future Growth

The Open Banking system is reinforcing technology in the modern-day financing system and is a huge footstep a brighter future for both banks and customers. The system will encourage fair competition between financial service providers, secure data sharing, and providing customers with options that will help them manage their finances better.

 

Check out America's Best Bookkeepers 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. Check out America's Best Bookkeepers

US banks stand out among those in other countries for the offer of digital channels at the service of their customers, according to a study by Fintech Latam. Do you know all the advantages of using these tools for your banking transactions? Here we’ll explain them to you.

The first thing you should know is that “Digital or online banking” includes all the digital tools that banking institutions make available to users in order to facilitate daily transactions such as balance inquiry, money transfers, opening of savings accounts, CDTS or loan application; among other actions, which can now be performed from a computer or mobile phone.

 

Time saving

 

Especially, the arrival of mobile devices has made the digital channels of the banks take more and more prominence compared to traditional offices. Nearly two-thirds of Americans who have banking services prefer to make transactions from their cell phones, than go to their bank’s office.

This is due in the first place to the saving of time because the use of digital channels avoids having to travel to the bank or wait for the turn to check the balance, make a transaction or a payment. Thanks to the internet you can do this type of operations from any place and at any time. All you need is to have an internet connection and the username and password to enter the transactional channels of your bank.

 

Secure transactions

 

Another great advantage is that many of the banking operations that can be done online have no cost or have a lower cost. This is the case of money transfers to accounts in other cities or balance inquiries. 

Although it wouldn’t seem like it to the naked eye, security is another added value of using your bank’s digital channels. This is because more and more progress is being made in the area to reduce the different security risks in transactions and avoid the transfer of cash from one place to another. Technology such as biometrics, which allows to establish the identity of a person through an analysis of their physical characteristics such as the iris, the voice or their fingerprints, are a great guarantee in this field.

With this technology it is possible to detect if the person who is presented in front of the cell phone or computer is the person or if they are anomalous behaviors such as a photo or video that tries to unlock the service and incur fraud.

In addition, if you must carry out high-value transactions, by doing so from a bank branch, you may be exposed to theft and unexpected situations that may alter your peace of mind. On the other hand, if you do them from your computer or mobile phone, following all the safety recommendations, you will save these inconveniences.

For all the above, digital banking has all the potential to safely carry out all types of financial operations at very comfortable times. Some banks offer several of their services even 24 hours a day, 365 days a year, thus increasing the productivity of people and businesses and leaving them more free time for other activities.


Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services 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 US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. 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.
Bank Statement - Complete Controller

If you are consistent, while operating a bank account where you deposit your hard-earned money and then habitually withdraw that money from time to time, you must maintain a proper record. It is essential to conduct adequate bookkeeping, in your way, for the number of transactions, deposits, and withdrawals that you make. You may get your bank statement and be surprised to find out that the balance shown is different from what your records show. Now, what can you do in this scenario? Check out America's Best Bookkeepers

It is quite evident that you need to accurately compare the two sets of records thoroughly and find the information that is recorded in one but not the other. A similar type of situation may also arise in a business that has multiple accounts. Maintaining a proper and authentic record for all accounts is a considerable concern for any business. All matters are addressed by keeping a record of all banking transactions. These transactions the company has carried out and is set per the date on which the bank cash book shows the balance.

If there are any discrepancies, the business can and should be able to find the reasons to reconcile the correct balances. That is the reason why it is essential and necessary to reconcile your bank statements. It is also necessary to know how to prepare a reconciliation statement known as the bank reconciliation statement. Check out America's Best Bookkeepers

Reconciling Bank Statements

Reconciling bank statements is essential and necessary, as it can further be used to maintain proper bookkeeping or even maintain your accounts. Here are a few steps in which you can reconcile your bank statement.

Checking Account

Writing the balance from your checkbook and the number of the next unused check on the reconciliation form is a good habit. You should then deduct all bank charges from your checkbook and balance the remaining amount to get your adjusted checkbook balance.

Record and maintain the ending balance precisely as it is shown on the bank statement. You can now compare the ending deposits listed on the bank statement and the deposits listed on your checkbook. You can also put a checkmark beside the amount on the bank statement and the checkbook. List all deposits that you have and then bring forward with a checkmark on the reconciliation form. These can then be your outstanding deposits. To reconcile your bank statement, it is necessary to place every item carefully to avoid double counting properly.

What you have entered from your checkbook must also match the items from your bank statement. Some of these items would not have been added from your bank. In the end, you can total all of the outstanding deposits to the bank statement balance. Check out America's Best Bookkeepers

Proceeding towards the end of Reconciling Bank Statements

You can now compare the deposits listed on the bank statement with the deposits listed on your checkbook. It is important to keep putting a checkmark beside the amount on the bank statement and on the checkbook to ensure that you have not missed any item or amount. List all deposits for which you do not have a checkmark on the reconciliation form. These would be called your outstanding deposits. This further means that you have entered them in your checkbook, but the bank has not yet added them to your account. You can add the total of your outstanding deposits to the bank statement balance.

Moving towards the final steps of reconciling a bank statement, you can now arrange all canceled checks in numerical order and then compare the canceled checks with those that are listed on the statement and the checkbook. Put a checkmark beside the amount on the bank statement and the checkbook as well. Hence, while you are reconciling your bank statement amount, you might want to list all check numbers without the checkmark. These are outstanding checks that you have written, but the bank has yet to receive them, which means they have not been paid.

Check out America's Best Bookkeepers 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. Check out America's Best Bookkeepers

Choosing a bank for your small business can be a tough decision. Picking the best bank for your specific needs can save a lot of time and money. In this article, we have put together a list of questions to ask yourself before making this important decision.

Starting a new small business is not easy and has obstacles that need to be identified and controlled before everything is complete. Small business owners need to spend more time doing their bank “homework” but often don’t. Choosing the wrong bank can cost time and money. On the flip side, choosing the right bank can mean saving time and more money in your pocket. It’s important to remember; banks are competing for you. Don’t let bank shopping intimidate you, because when it comes down to it, you are the one handing out the final rose. In this article, we will list six questions you should be asking (either yourself or the bank), the difference between local-small banks, and large corporate banks and the pros and cons of each. Check out America's Best Bookkeepers

Questions You Should Be Asking

  • What services do I need and how much do they cost?

This is perhaps the most crucial question and predecessor to everything else. What do you need? Do you need a loan, a credit card, employee checking accounts? Think about all the services you will need your bank to offer to you. Banks are familiar with these types of questions, and often business deals will be offered in “bundles.” Make sure you aren’t paying extra for a service you don’t need. Banks will push the most expensive bundle, so it’s important to know what you need- no more or no less.

 

  • Does your bank offer SBA loans? (Small Business Administration)

SBA loans are federally subsidized loans. The purpose of these loans is to advocate for small businesses while protecting the banks offering them. This could be important because if you’ll need a loan, this could ensure you get the one you need.

 

  • What do your bank’s fees look like?

If you’ve ever used a bank before, you are aware of sneaky hidden fees. I think it’s safe to say we’ve all been there at one point. If not, congratulations! But you’re now entering the world of business banking, where banks consider this their bread and butter. Going back to knowing what services you need- make sure you aren’t paying for a bonus service you don’t need and pay attention to all the details. It’s important to know what you are getting, what you are paying for, and the rules for each account. Get out your reading glasses because it’s time to read that fine print! Check out America's Best Bookkeepers

  • What kind of support do they offer?  

This may seem like a silly question, but if something hits the fan at 3 am on a Saturday night, you’ll be thankful you went with a bank with a great customer support team.

 

  • Does your bank have any kind of transaction caps?

Transaction caps are just what they sound like, caps on your transactions. This means they could block the amount of times you withdraw or deposit a month. This may not be high up on your list but, if it is, it’s important to know that this is a real thing in the world of banking.

 

  • What is your bank’s reputation?

This is the fun part; you get to be a private investigator! Do a little research and see what your fellow small business owners have had to say about these particular banks. Don’t be alarmed at every angry blog post you read about each bank; look for the important ones. It’s like your favorite restaurant, at least one person has written a bad review about them.

 

Small banks vs. Big banks- Pros and Cons Check out America's Best Bookkeepers

Small Local Banks:

Pros: Friendlier, more one-on-one time with loan officers, or bank managers, and often judge good nature and accountability rather than the credit score system. A lot of times, these banks are willing to work with you more when times get tough. You’re a person with a name, not a number in a database with a credit score.

Cons: Smaller, local banks are going to have longer waiting periods on loans and smaller lending authority. Smaller banks are also going to have fewer bonuses and features. This can come in the form of online features, 24/hour support, or little “gifts” here and there for being a customer. Also, expect higher interest rates.

 

Big Banks:

Pros: Big banks are going to be much quicker to pass out loans so that you can expect money in your pocket sooner. They are also going to have more lending authority with lower interest rates on those loans. You may also expect to find a larger line of credit when you apply for a credit card. You can also expect extra little bonuses and features, as stated before.

Cons: As you might have guessed, you are not going to experience the “hometown friendly” feeling as much when you enter a big bank branch. Your credit score is your name and zero sweet-talking big banks. This is not to say you won’t be familiar with your particular branch managers, but they are going to have a lot less power than they would at a smaller bank.

Check out America's Best Bookkeepers 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. Check out America's Best Bookkeepers