Benefits Of Personal Finance Software

In this age of information, keeping track of your finances does not mean an archaic jumble of ledgers, calculators, and papers filled with calculations in chicken scratch. Now everything can be taken care of on your computer through personal finance software.

Personal Finance Software: Organize Your Finances :

Your finances are complicated. You have money coming in and money going out. You have bills and investments as well as multiple bank accounts. Personal finance software will keep everything organized for you. Depending on the software you use, it may be able to separate portions of your finances into various categories for you. For example, Quicken 2005 separates your checking accounts from your savings accounts and allows you to track your investments all at the same time.

Organization saves time. Taking a few minutes to input your purchases and paychecks eliminates those hassles associated with staying on top of your finances. Rather than rifling though bank statements and bills for hours, everything is right here in the program. As long as you put each purchase and paycheck into the software, your checkbook will automatically be balanced. Some programs also feature functions that will create a budget for you; yet another time saver.

Personal Finance Software Knows Where Your Money Is :

In order to keep more of the money you make, you must know where it is. Personal finance software gives you the power to know where each penny is at a glance. Some will even create reports for you that detail where your money goes each month. This feature will help you locate the leaks in your budget and reduce your expenses every month.

The overview personal finance software gives you is one of its main benefits. It allows you to take off the blinders and truly assess your financial situation. With this new-found view of your finances, you will be able to effect changes like never before. The old adage applies; you have to know where you are before you can get to where you want to be.

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Benefits Of Personal Finance Software

In this age of information, keeping track of your finances does not mean an archaic jumble of ledgers, calculators, and papers filled with calculations in chicken scratch. Now everything can be taken care of on your computer through personal finance software.

Personal Finance Software: Organize Your Finances

Your finances are complicated. You have money coming in and money going out. You have bills and investments as well as multiple bank accounts. Personal finance software will keep everything organized for you. Depending on the software you use, it may be able to separate portions of your finances into various categories for you. For example, Quicken 2005 separates your checking accounts from your savings accounts and allows you to track your investments all at the same time.

Organization saves time. Taking a few minutes to input your purchases and paychecks eliminates those hassles associated with staying on top of your finances. Rather than rifling though bank statements and bills for hours, everything is right here in the program. As long as you put each purchase and paycheck into the software, your checkbook will automatically be balanced. Some programs also feature functions that will create a budget for you; yet another time saver.

Personal Finance Software Knows Where Your Money Is

In order to keep more of the money you make, you must know where it is. Personal finance software gives you the power to know where each penny is at a glance. Some will even create reports for you that detail where your money goes each month. This feature will help you locate the leaks in your budget and reduce your expenses every month.

The overview personal finance software gives you is one of its main benefits. It allows you to take off the blinders and truly assess your financial situation. With this new-found view of your finances, you will be able to effect changes like never before. The old adage applies; you have to know where you are before you can get to where you want to be.

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Personal Finance Budgeting Basic and Budgeting Elements

 

Having sound Personal Finance Budgeting has many benefits. Budgeting properly will help you plan for and reach your financial goals and dreams as well as eliminate financial stress.

 

Financial budgeting is a necessary administrative task that if done well can help keep away debt anxiety, overwhelm as let you know exactly where you are so you know what you need to do to make your balance sheet look more positive.

 

If you don’t like budgeting you can always use personal finance software that enables you to make budgeting quick, fun and easy.

 

Figuring out how to budget your personal finances successfully is an essential and important tool to removing financial stress then.

 

Budgeting to tips to help you reach your goals.

 

1.            Round up every financial statement you have. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense and record all of your areas of money coming in.

 

2.            Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, auto insurance, retirement or college savings and everything you spend money on.

 

3.            Break expenses into two categories:

 

•             Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, cable and/or internet service, trash pickup, credit card payments and so on.

 

•             Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out and gifts to name a few.

 

4.            Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. Also, make necessary adjustments to expenses.

 

5.            Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.

 

Of course if you use personal finance software you will find this task as simple as entering in the figure into a pre made spreadsheet with all the categories listed for you. This eliminates thinking on your behalf and will save you heaps of time.

 

Using software, especially for someone who doesn’t have much knowledge about intricacies of accounting and finance, will be beneficial for you in the following ways:

 

• Speed: All you have to do is to enter the data about your income and expenditure and it will sort out your expenses and create plans for your future personal finance. Good software will even calculate your taxes.

 

• Bill payments: Some programs are integrated with the internet and your bank so that it will pay your bills automatically. This is the best way to pay your bills on time and avoid late fees or discontinuation of services.

 

Remember a stable financial future starts with good personal finance budgeting. If you are like most people who hate the thought of being trapped within a budget get yourself a good financial software program that will make the exercise more enjoyable.

 

 

 

Discover more about personal finance budgeting here.

How do you make your life better? get more control? protect your family? Create a personal financial plan. Start here!

Learn Accounting :Understanding Basic Accounting Controls

Tampa, FL March 27, 2009 – Whether you operate a large multi-national corporation or a small local restaurant, understanding some basic accounting controls will go a long way towards creating more reliable financial results and rendering you a better night’s sleep. Basically, accounting controls are operational, financial, or technological mechanisms used by businesses to ensure or encourage a particular behavior or result. Internal controls give owners and managers some degree of assurance that people are doing what they are supposed to be doing and that material mistakes, accidental or otherwise, will be detected prior to going out the door. For example, segregating responsibility for check writing from the responsibility for reconciling monthly bank statements helps to control against improper check disbursements. In the example above, segregating such duties may be difficult in small businesses with limited staffing capabilities. However, alternate control mechanisms, such as manager or owner review of monthly bank reconciliations, can be implemented to partially mitigate such risks.

It’s no surprise that internal controls frequently come at a cost. As such, the number and strength of the controls within any given internal control structure is usually a function of the owner or manager’s resource capacity and risk tolerance level. As such, it is important to conduct a general risk assessment of the business process or function that you are looking to control in order to focus your efforts most effectively and gain the most bang-for-your-buck as they say.

First, let’s talk about some higher-level control concepts that should be present across most accounting processes to set the stage for more detailed transaction or process-level control mechanisms. One of the best ways to standardize behavior and set expectations is to create formal written policies and procedures to govern the actions and activities within your business or department. In accounting, such policies and procedures are frequently summarized in an Accounting Manual, which specifies the who, what, when, and how of common accounting procedures and activities. Another control concept, illustrated in the earlier example, is known as segregation of duties. Optimally, no single individual should have the responsibility or ability to initiate, authorize, process, and record a given transaction (i.e. they shouldn’t have end-to-end responsibility). Segregating such duties decreases the chances of errors, intentional or otherwise, going undetected.

Next, let’s look at some common accounting functions and give some examples of common internal controls specific to each. It is important to note that these are only examples and any good internal control system should be customized to the needs and risks within your organization or department. Below is a list of some common accounting areas, their functional objectives, and some common internal controls suggestions.

Accounts Receivable, Credit, & Collections - To ensure that all funds intended for the organization are received, promptly deposited, properly recorded, reconciled, and kept under adequate security. • Formally document policies and procedures governing accounts receivable, credit, and collection processes detailing timelines, responsibilities, actions, responsibilities, etc • Require credit reporting on all customers prior to credit issuance • Require periodic review of key customers to ensure ongoing credit worthiness • Establish limits of authority for credit issuance and terms (system or otherwise) • Limit system access to alter credit limits and/or terms only to appropriate personnel • Require manager approval for adjustments to and/or write-offs of A/R balances • Sequentially number credit memo adjustments to A/R balances • Require periodic reconciliation of the General Ledger to the Cash and A/R subsidiary ledger balances along with managerial review of this reconciliation • Reconcile bank statements to the General Ledger on a regular basis • Set-up lock-boxes for receipt of customer payments in order to limit the handling of checks and other forms of payment • Establish a central point of contact for incoming mail, preferably someone without the ability to post cash and/or adjust customer A/R balances in the system • Create summary reporting to be reviewed by management on a periodic basis, such as A/R aging, credit memos by customer, credit memos by employee, write-offs by customer, write-offs by employee, etc. • Limit access to alter or create records in the customer master file to appropriate parties • Batch receipt input data is compared to control totals and differences are investigated and resolved • Mail account statements to customers • Maintain support files in a secured area and restrict to appropriate personnel

Accounts Payable, Purchasing – To ensure that funds are disbursed only upon proper authorization of management, for valid business purposes, and that all disbursements are properly recorded. • Formally document policies and procedures governing accounts payable and purchasing processes detailing timelines, responsibilities, actions, responsibilities, etc • System access to create, edit, or delete purchase orders is restricted to appropriate personnel • Ability to add, modify, or delete vendor records in the vendor master file is restricted to appropriate individuals • All new vendors or major modifications to vendor information require manager approval • The vendor master file is periodically purged of old and obsolete vendors • A three-way match between the invoice, PO, and receiver must be present before payment is released to the vendor • Adjustments to A/P balances (credit notes) require managerial approval and is restricted to appropriate personnel • Check stock, signature plates, etc are appropriates secured and access is restricted to appropriate personnel • Dual signatures are required on all manual check disbursements • Positive pay account maintained at bank • Check sequences and gaps are investigated • Bank statements are reconciled to the general ledger regularly and reviewed by management • Major supplier statements are reconciled to the A/P subsidiary ledger • Support files are maintained in a secured area and restricted to appropriate personnel

Payroll – To ensure that payroll disbursements are made only upon proper authorization to bona fide employees, that payroll disbursement is properly recorded and that related legal requirements (such as payroll tax deposits) are complied with. • Formally document policies and procedures governing payroll processes detailing timelines, responsibilities, actions, responsibilities, etc • Access to add, modify, delete records from the employee master file is restricted to appropriate personnel. Modification to significant data (i.e. salaries, etc) requires managerial approval. • Payroll is disbursed manually with picture ID only on an annual basis in order to validate that paychecks are for bona fide employees (i.e. not ghost employees) • Support files are maintained in a secured area and restricted to appropriate personnel

Fixed Assets – To ensure that fixed assets are acquired and disposed of only upon proper authorization, are adequately safeguarded, and properly recorded. • Formally document policies and procedures governing fixed asset-related processes detailing timelines, responsibilities, actions, responsibilities, etc • Assets are appropriately secured • Book to physical reconciliation is conducted annually to validate condition and existence • Access to the fixed assets register is restricted to appropriate personnel • Asset disposals and write-offs require managerial approval above certain levels • Asset acquisitions must be approved in advance of purchase • Pre-numbered asset tags are affixed to all fixed assets • Asset valuations are periodically reviewed by management for continued relevance • All supporting paperwork must be obtained prior to entry into the fixed asset register • Support files are maintained in a secured area and restricted to appropriate personnel

Inventory – To ensure that inventories are received and/or shipped only with proper authorization and documentation, properly recorded, and appropriately safeguarded. • Formally document policies and procedures governing inventory-related processes detailing timelines, responsibilities, actions, responsibilities, etc • Inventories are appropriately secured • Book-to-physical or cycle counts are conducted periodically to validate condition and existence • Inventory will only be received with valid support paperwork (i.e. PO) • All inventory receipts must be verified for quantity and condition against the bill of lading and the packing slip and recorded on pre-number receiver forms or a log • The receipts log is reviewed and reconciled to system receipts by management on a daily basis • Support files are maintained in a secured area and restricted to appropriate personnel • Inventories are periodically marked to market to ensure proper valuation • Inventory write-offs require management review and approval • System access to process inventory adjustments is restricted to appropriate personnel • All inventory shipments must be accompanied by a valid order • Periodic managerial review of open work orders, inventory aging reports, etc • All shipments are recorded in a shipping log, which is reviewed and reconciled to the system shipments by management on a daily basis

Financial Closing or Reporting– To ensure that financial data is recorded, consolidated, and reported accurately, timely, and in compliance with US GAAP. • Formally document policies and procedures governing financial closing processes detailing timelines, responsibilities, actions, responsibilities, etc • Create and maintain a comprehensive close checklist of all close activities • Closing checklist and binder with all supporting entries should be reviewed and approved by the controller and/or owner prior to close • Segregate duties within the account reconciliation, journal posting, and management review/approval processes • All non-standard, adjusting, and/or manual journal entries require management approval • Establish a budgeting and forecasting process. Use trend analysis (horizontal and vertical) in order to sanity check results. Research and resolve any unusual variations • Ability and/or access to post journal entries is limited to appropriate personnel

Understanding the underlying concepts behind basic accounting controls will allow you and your organization to create an internal control structure, both within accounting and beyond, that enables more effective and efficient operating and financial results. And one more thing it provides…a little extra peace of mind.

For more information on accounting and auditing, please visit The Accounting Nation website at http://www.accountingnation.com.

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Basic Accounts Bookkeeping At Home Saves Assessment Tax

The financial benefits of preparing basic accounts bookkeeping records and producing the self assessment tax return can be overlooked. Starting bookkeeping at home is an option for anyone self employed and is important as the self assessment tax paid each year is typically the highest financial outgoing. Bookkeeping home accounts is worth the effort and does not require a high level of technical accounting or tax knowledge. Sole Trader Basic Accounts Bookkeeping Sole trader basic accounts require the simplest form of bookkeeping. Sole trader basic accounts bookkeeping require little more than retaining supporting documents of sales income and expenses and creating two lists of financial transactions. Producing the basic accounts in the format of an income and expenditure statement is sufficient to complete the self assessment tax forms. An income and expenditure statement is the total sales made during the financial year with the expenses listed by type of expense and deducted to leave the balance as the net taxable profit or loss. Starting Bookkeeping Home Accounts The first stage in starting bookkeeping is to collect together all documentary records of receipts or sales received. Review the documents and if incomplete use other sources of third party evidence such as bank statements and deposits t achieve an accurate total. Stage two to producing the home accounts is a similar process of collecting together the supporting evidence of purchases made and expenses incurred. Again if incomplete examine other potential sources of evidence such as bank and credit card accounts. Bookkeeping home accounts is just that, keeping books at home which is the home accounts. Bookkeeping is a function that many self employed business people can benefit from financially. Basic Accounts Bookkeeping Can Save Accountant Fees A significant proportion of a bookkeepers fee or the accountant fees for small business is the sorting of receipts and listing them in order, in effect doing the basic accounts bookkeeping. Accountant fees are better spent on financial advice and tax matters than producing the basic accounts themselves. The basic bookkeeping task of sorting the sales and purchases documents can produce real savings in the accountant fees. Most accountancy firms would actually prefer to receive their client records in a basic accounts presentation to enable the accountant provides a higher level of accountancy services. Save Self Assessment Tax by Understanding Basic Accounts When a sole trader adopts a positive attitude in preparing the bookkeeping basic accounts other benefits accrue. Preparing the basic accounts increases the perception of profitability and may encourage the small business owner to prepare the bookkeeping more often. By being aware of profitability financial problems may be noticed earlier and low profits will stimulate the competitive nature of sole traders and self employed businesses to improve the financial performance. The self assessment tax liability for self employed people is a major annual issue. Understanding the basic accounts will pose tax questions in regard to capital allowances which need to be claimed in the self assessment tax return. The increase in tax knowledge should maximise tax allowance claims thereby reducing the self assessment tax liability.

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