Archive for September, 2008
Tuesday, September 30th, 2008
At our Collection Agency in London, we are supplied with a wide variety of debts. Many have had had previous attempts at collection. We have tried to give you a few ideas on things not to do.
- Employing an agency that “Guarantees” to collect your money. This will usually result in you paying an upfront fee that will never be seen again
- Assuming “Everything will be alright” Be on top of your collections
- Assuming aggression will get your money paid More likely to lead to confrontation and a long wait to be paid
- Immediately reverting to court action Remember this fact: A CCJ is no guarantee of payment
- Ignoring your debtor’s problem Your client may just have a small issue. Don’t be scared to find out what the problem is.
- Horses for courses Often the worst person to make a chasing call is the Boss.
- Fail to Prepare, Prepare to fail Communicate your credit terms at the point of sale. If you don’t, you are leaving it to chance. Not a good idea.
- Don’t let a current debt become a write off. The only difference between a new debt and a write off, is…time (6-10 months on average)
- Organ grinders & monkeys Don’t fool yourself with the easy option. Chase your money with the person that holds the purse strings
- The last is actually a bit of advice…Get the experts in to do the job!
I’ll leave you with a quote – “Whenever a company produces something internally that others can buy or produce more efficiently and effectively, it sacrifices competitive advantage; focus on what gives your company its competitive edge, outsource the rest.” – Harvard Business School
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Monday, September 29th, 2008
Accounting practices follow certain guidelines and procedures. Such guidelines and procedures are referred to as generally accepted accounting principles (GAAP). GAAP include a combination of legally mandatory standards and commonly accepted ways of calculating financial records. GAAP cover such things as revenue recognition, balance sheet item classification, and outstanding share measurements. The Financial Accounting Standards Board (FASB), the American Institute of Certified Public Accountants (AICPA), and the Securities and Exchange Commission (SEC) provide guidance about acceptable accounting practices.
Although there is some discretion in interpretation of accounting principles, GAAP are based on four general components:
Consistency – All information should be obtained and presented consistently across all periods. If there is a difference in the means of reporting from one period to the next, this must be noted in the financial statements along with a valid reason for the difference.
Reliability – The procedures and results must be able to be replicated by an independent party. This ensures that the business is representing adequate financial records. If procedures and results are not reliable and instead are based on subjective information, they are likely to be disputed.
Disclosure – All relevant information that could influence the understanding and assessment of the financial records of the business should be disclosed in the financial statements. This should include all information that is significant enough to affect assessments and decisions
Comparability – The financial statements and documentations of such in a business must be able to be compared to similar businesses within its industry. This is important so that investors may determin Read the rest of this entry »
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Sunday, September 28th, 2008
Accounting Double Entry
Accounting involves the classification, analysis and dissemination of financial information to those parties who require such information in order to make informed judgments and decisions based on the material.
It is the measurement and control of financial transactions which are, in essence, the transfer of legal property rights, between one party and another, made under binding arrangements. However, transactions that are not financial in nature are specifically excluded since they are regarded as not material.
The double-entry bookkeeping system used in accountancy is the linchpin used by businesses and organisations to record all of their financial transactions. The concept was first introduced in 1494 by the Italian mathematician Luca Pacioli.
It is based on the proposition that a measure of a business’s financial well being and a record of the results of its operations are best recorded by the use of accounts.
Accordingly, each account records an historical log of the changes in the monetary values relating to different aspects of the business. The method originally enunciated by Pacioli is now called double-entry bookkeeping.
The basis for this system is, quite simply, that each transaction is recorded in at least two accounts. It is established upon the supposition that for each financial transaction, there is at least one account being debited whilst, at the same time, at least one other account is being credited. The result of this process is that the total debits of the transaction are equal to the total credits so that the overall net value is zero.
Consider the following scenario. Suppose Mr A sells an article to Mr B, who then pays Mr A by means of a cheque. The bookkeeper working on behalf of Mr A would credit the account called “Sales” and debit the account called “Bank Read the rest of this entry »
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