Entries Tagged 'finance' ↓
December 21st, 2009 — finance
What is an SME?
- · SME is a shorthand for Small Medium-sized Enterprises and fits into European Community definitions for support purposes.
- · SME’s have less than 250 employees, lower turnover and assets than €50 million.
- · Micro businesses have less than 5 employees but are also SME’s.
- · SME’s can be sole traders, partnerships, companies or some other variations.
Home Based SME’s
Home-based businesses tend to be cheaper to run and more flexible than conventional businesses.
Home-based businesses are popular because costs are lower and commuting is not an issue. You have the freedom and flexibility to work the hours you choose in an environment that you create.
If you are a regular Ebay trader, sell handicrafts or earn money from internet blogs etc you are probably, already an SME and therefore need to understand some issues. Depending on the nature of your business it is a good idea to check with some of the following:
* It is vital you advise HM Revenue & Customs and check to see what your income tax and VAT position is.
* Your mortgage lender or landlord/freeholder – your mortgage or tenancy agreement may prevent you from using your home to run a business.
* Your insurer to see if you need to take out extra insurance.
* The Valuation Office Agency (VOA), to see if you will be charged business rates and the Local Authority planning department if you need to make structural changes to your home
* The Health & Safety Executive or your local authority to find out the health and safety aspects of running a work at home business and how to do a risk assessment.
* Free advice is available in most parts of the UK from Business Link
What Records Must a New Business Keep?
· It is commonsense and a legal requirement to keep full and accurate records of your income and expenses from the start.
· Keeping good records helps you complete your tax returns easier and quicker, pay the right tax and avoid paying unnecessary interest and penalties.
· You should keep invoices and receipts to show what you have bought or sold relating to your business.
· If you are employing others, you must keep records of their wages and tax and National Insurance you have deducted and paid to HM Revenue & Customs (HMRC).
· Keep bank statements and all financial records especially if you don’t have a separate business account.
· You must be able to show clearly what you have spent personally and what is spent on business.
· When you use cash keep till receipts and a record book to keep track of it all.
Tips for Starting A Business
· Have a system and procedures to work on your business.
· Get a cash book or use a good software package that will prompt you to keep good accurate records.
· Have a day book and note everything down as it is easy to forget costs or issues when you are very busy ‘doing your business’.
December 8th, 2009 — finance
1. If it looks too good it probably is – only go in to investments you understand – buyer beware.
2. Keep an eye on all your savings to be sure they are still giving you the best deal and remain appropriate for your circumstances.
3. Diversify your investments and savings. Spread the risk with different providers in different markets and products.
4. Make investments that compound your returns interest on interest mounts up over time and you are not investing for a quick buck.
5. If the return is higher than government bonds there is likely to be a risk The bigger the return the larger the risk.
6. The risk is most obvious when the investment is volatile but still exists before it becomes volatile.
7. Question any ‘low risk investment’ advice that offers superior returns.
8. Do not copy friends or follow the crowd because it seems to be the thing to do. A desire to conform can make for bad investment decisions.
9. Drip feed your investments rather than buying all at the same time to get the benefit of pound cost averaging
10. Do not rely on FSA regulation for a product or company it is only an indicator.
11. If the sums are material use a professional advisor or investment manager who should have experience of minimising risk and exposure to fraud.
12. Listen to advisers particularly if they offer cautious, contrary advice about an investment you want to make. They may know some thing you don’t.
November 5th, 2009 — finance
On-Line Shopping Rights
Are you shopping early for Christmas and using internet suppliers? If you buy on-line your rights are a bit different to those you get when buying from a shop.
Delivery Issues
Always check the promised delivery times on the web site. If no delivery time is given then delivery should be within 30 days. If your goods are not delivered within this time you are legally allowed to cancel the order and get a full refund if you have already been charged.
If goods have been personalised or built specially to your requirements you can not automatically cancel the order.
Items lost in the post should be replaced or a refund given by the supplier after the courier or Royal Mail have been given two weeks to trace the first delivery.
Under Distance Selling Regulations you have a 7 day cooling off period after receipt during which you can return unopened items for full refund including initial delivery charges (but not returning costs).
Good Practice
- Print a hard copy of your order with the site reference. If the purchase is large save a copy of the terms and conditions after checking them.
- Deal with reputable suppliers who have a bricks and mortar presence in addition to web sites. They must give you their full geographical address (a PO Box is not enough) no later than at the time of delivery of goods
- Always check there are secure payment facilities Https and golden locks are signs to look for.
- Use a credit card for payments £100- £30,000 as the credit card company has liability with the shop if the goods are faulty, not as described or not delivered.
- Paypal is useful for smaller payments.
- Look for voucher codes for discounts and special offers.
- Do not assume web prices are always cheaper. It pays to shop around.
- Get more information from a specialist web site like Online Shopping Rights
- Special Purchases
- The rules for buying cars are a bit different. A trader has to honour the 7 day distance Selling Regulation cooling off period. A person selling the car on the web isn’t tied to this. Also check for guarantees and warranties.
- Distance Selling Regulations are to protect buyers who have not met sellers. If you visit a furniture shop for example then order on line you may loose the 7 day period
- Be careful when buying at online auctions because auctioneers, unlike other sellers, can refuse to accept responsibility for the quality of the goods they auction. Read the conditions of sale with care.
- Finance and insurance products, land and for some reason vending machines are not covered by the same rules. The Consumer Credit act offers different protections in some of these circumstances.
Again check for common sense. One problem is knowing when to stop as there are so many side issues. keep your disclaimers upto date
September 14th, 2009 — definitions, finance
Definition of Gross
- Gross is the total amount exclusive of deductions.
- For example, gross pay, is the total pay before tax deductions
Definition of Net
- Net is the total amount received after subtracting deductions from the gross amount
Difference Between Gross Interest Rates and Net Interest Rates
Gross interest rate is the headline interest advertised by a bank
Net interest rate is the effective interest rate after tax is deducted from the gross rate. It is the rate that will be credited into your account. In the UK, most banks take tax at source.
Difference between Gross Pay and Net Pay
- Gross Pay The headline wage rate.
- Net Pay, this will be your take home pay after income tax and national insurance contributions have been deducted. Other deductions could include union subs and professional indemnity.
Related
September 14th, 2009 — finance
A bond is a type of debt instrument. It is a way for a company or government to raise money by selling, in effect, IOUs.
Bonds work by firms selling a bond for say £1,000. In return the firm agrees to pay back the bond in 10,20 or 30 years time. In the meantime, it will pay interest on this bond of say 5%. The purchaser of the bond, gives the firm £1,000 and in return gets interest payments for the duration of the bond term.
The main difference between a bond and loan is that a bond is highly tradeable. If you buy a bond, there is usually a market where you can trade bonds. This means you can sell the bond, rather than wait to the end of the 30 year period. In practise people buy bonds when they wish to increase their portfolio in that way.
Loans, tend to be agreements between banks and customers. Loans are usually non tradeable and the bank is obliged to see out the term of the loan.
However, instruments such as derivatives and securitisation have made loans more tradeable. Banks are able to pass on the risk of loans to other financial bodies willing to take on the risk.
Related
September 14th, 2009 — finance
There have been some crazy financial conspiracies circulating the internet. Just proving that the internet is a place where anything goes.
1. Financial Crisis started by journalists / democrats who wished to see Barack Obama elected. (think progress)
2. Financial crisis evidence of economic terrorism.
This is patently absurd and and gives the impression the crisis could be precipitated by a few random comments by journalists and oversees terrorist operatives.
In fact the crisis was many years in the making. Starting with economic policies pursued in the Bush, Greenspan era of 2000-2006.
An long boom in houses fuelled by low interest rates and over optimistic analysis of the economy and financial markets. See: Boom and bust in housing markets and subprime crisis for analysis of the long period of policies which led to a boom and bust situation in house prices and mortgage lending.
Once the banks were overloaded with toxic assets and mortgages lenders had no chance of repaying, the underlying fragility of the system meant it was only a matter of time before the markets and banks imploded.
Some have even gone so far as to suggest that the crisis is a result of economic terrorism – with mirky terrorirsts buying and selling to undermine markets. But, this represents only a naive view of the situation. The crisis was based on economic fundamentals not a few foreigners selling shares at the wrong time.
If you are sitting on losses of $600bn, the trigger is almost irrelevant.
September 14th, 2009 — economics, finance
The financial system has taken a real battering with the threat of financial meltdown hanging over markets.
These are reasons for financial meltdown being a real possibility
Credit Crunch – Why banks stopped lending to each other and the impact this had on financial markets and the wider economy
Failure of Lehman Brothers – The failure of $600bn Lehman Brothers pushed the markets closest to bankruptcy that we have ever seen
Financial Crisis explained
Boom and Bust in US housing Market – Why the US property crash, starting in 2006, caused so many problems
Subprime crisis – the problems stemming from the subprime mortgage fiasco in the US was at the heart of many financial problems
