Joy Olivia Miller

Archive for June, 2011

If you go online and you will find hundreds of thousands of articles written on automobiles, and if you pick up nearly any newspaper you will find at least one article concerning the auto industry, or some new type of car that is going to be coming out next year. These are one type of automotive articles we find in the news, and in magazines, but if you are well versed and have a lot of experience in the automotive sector or haps you could write articles on the automotive business industry itself.

Indeed, over the years I have written over 550 articles on this subject, and of those nearly 200 are on the business side of the auto industry. These articles have been well received, and I would recommend that any article author that wishes to sell articles involving economics, the future, and the business of our automobile nation to consider the following things.

First, accuracy is the most important factor, so you must check sources. Just because you read a lot of articles in the newspaper, or page through magazines like Road and Track, or Car and Driver, or read articles in the Wall Street Journal about the automotive sector does not mean you know what you’re talking about. Most of these articles are focused on specific subcategories of niches.

Even if you’ve recently read a book such as; “The End of Detroit” or have clippings of articles over the last couple of years from “Investor’s Business Daily” on the automotive industry, this won’t make you an expert. And if you don’t check sources you are liable to get something wrong or incorrect. You must remember that things change very fast. What might’ve been observed last year is no longer the case.

In fact, within the last year the automotive industry has been turned upside down and nothing is as it was. I hope you will please consider this when writing your automotive articles, for the automotive industry.

I’m not really sure how debt consolidation and consolidation companies got the bad reputation that they did. However, it really is undeserved. If a few companies ran scams that were disguised as consolidation, or didn’t help their customers through the process, that should not reflect on the entire industry.

In order to figure out whether a company is honest or not, you should use common sense. Don’t only talk to a few people. That does give a good idea of the company, but also do some internet research. Make sure that there are no tales of fraud online. Also, call the company and make sure that there staff is competent. It shouldn’t be that hard to figure that out. Just ask a few questions and note what they ask you. If they ask you nothing but whether or not you want a loan and then give it to you, then you’re probably dealing with fraud. And if their offer sounds too good to be true, as the saying goes, then it probably is.

Otherwise, once you have a number of possibilities, you should look at their offerings to decide which one is the one that you will give your business. There are a number of critical services that these companies offer that you should look at when you are making your decision.

First, and most important, is the interest rate offered and the amount of time over which you are able to pay off your debt. In this case, you are far more likely to get a good rate in a company that specializes in debt consolidation rather than a regular bank. This is because these companies have a large amount of experience in taking care of and lending to those who might not have the best credit.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

A good financial advisor puts the client’s interest first – understand their need, have an intelligent understanding of their situation, and works hard to achieve what they hope to gain financially in a given time period. He or she must be honest, trustworthy and demonstrates a sense of ownership to the client’s business and their finances, as if losses that may be incurred would be a personal loss to them as well. With these values intact in your financial planner, you can rest assured that your net worth is well taken cared of.

There are four major areas by which to gauge how qualified and competent financial advisors are:

1. Credentials – The eligibility of a financial planning professional in the United States is reviewed and affirmed by the Certified Financial Planner (CFP) Board of Standards Inc. The certification the board issues is the recognized standard of excellence for financial planners. This certification ensures that the financial planner met the CFP Board’s requirements in terms if education and experience, and that they adhere and abide by the CFP Code of Ethics. Do your background checking and online searches, beginning with the Financial Planning Association (FPA) database at fpanet.org.

2. Experience – Look for a financial planner with at least four years experience in the field of professional financial advisory. This length of service and exposure in the financial industry should be enough for your financial planning professional to know how the industry works, established his or her network of contacts and became well-versed in putting the client interest first. Casually check the financial planner’s expertise and knowledge in areas where he or she services financial planning: portfolio structuring (individual clients), taxation (small to medium businesses), benefits package (large businesses and corporations) and other related financial issues as it relates to your situation. If possible, get a financial advisor who has successfully worked on a client with a profile or need that is similar to yours.

3. Compensation – Some investments and finance experts view the source or bulk of the financial advisor’s income as the determinant on where his or her loyalty and focus lies. As such, it is wise to hire fee-only financial advisors, who do not receive commissions from investments and financial products their clients purchase. While it is not entirely prohibited to sell or have interest in the purchase of some properties or assets, an individual who services financial planning needs of another person and have direct access on how to fulfill those needs need (read: doubles as a sales agent) may have a questionable credibility when it comes to providing you with realistic investment options.

4. Character – Many financial handbooks forget to include character as an important factor in determining the competence and success of a financial advisor, yet this could prove to be the most important gauge of all. Observe the individual’s corporate and personal values. Does he or she listen to you when you lay down your financial concerns, including the drama that goes with it, if any? Does he or she seem impatient, cuts you off and appears as a smart-Aleck? Ditch the guy or gal right away to prevent you from future problems. On the other hand, if the financial planner is accommodating, listens well, empathize and sympathize, you may have a gem of a financial planning professional.

Yogyakarta or Jogja is well-known as the city of education since it has many reputable universities and schools and other facilities that support learning environment. Thus, most people from all over Indonesia are interested to continue their study in this city. For students who come from another city, they commonly rent a room in a boarding house or hire a house with their friends from the same city, or stay with their relatives.

Surely for ‘migrant student’, learning to be independent is a must because they are now away from their parents’ supervision. It means they have to manage themselves for example managing their time, keeping their companionship on the ‘track’, and also managing their financial.

For some rich students, it is not easy to manage financial thing since they feel free to spend their money without any ‘buy this…’ or ‘don’t buy that one…’ from their parents. As a result, in the end of month their money frequently runs out. The living cost in Jogja is low and it makes the price in Jogja cheap compare to other cities. So, some of them like to spend their money to go shopping to buy either books or clothes, to travel some areas in Jogja, or even to have some entertainment here.

On the other hand, students who have insufficient money are usually more careful to spend their money to make them survive until the end of the month. Some of them cook their own food and go to the college by foot and bicycle to be economical. They sometimes look for a part-time job to help their financial.

Finally, managing money is important for ‘migrant students’ in order to make them learn how to be independent and also how to be responsible in handling and spending money. It is useful then if they have list of ‘urgent needs’ and ‘wants’ so they can have priority by keeping in mind the main thing they have to buy.

When I was a college student, I got an ‘A’ in my Accounting 101 and 201 classes. Then I entered the “real” world and almost SUNK the family business because I had no idea what I was doing with the “real” accounting. You see, the examples in the college text book used financials that were correct. That means, the dollar amounts in the accounts could be trusted, and were assumed current and accurate.

The “Real” World…

Well, when I took a swing at entering my accounting data I made a big “Slinky knot” mess out of my Peachtree accounting file. Ooops. I didn’t learn how to FIX my accounting in college. That would have been useful! I learned what I know from falling in holes and climbing out of them.

As a business consultant, I see lots of financial reports. Most of them have a few “Slinky knots” in them…accounts that are just wrong. The data in those accounts are the result of mistakes in data entry. In my consulting work, I start by helping my clients get to KFP – a KNOWN Financial Position. Let’s get the accounting correct. That’s the first step. From there, we can see the impact of operational, marketing and sales behaviors. The good news is that you can always improve your financial situation once you know what it is. I am kind of like Super Nanny. I show up, we work together to clean up the accounting and we put simple systems, routines in place to help you stay at a KFP.

Sometimes, we clean stuff up and then it gets messy again. Just like Super Nanny, I go away after my consulting visit. It is up to my clients to maintain the systems we put in place. I can always come back and I often help over the phone. However, the key to staying at KFP is your willingness to learn enough about the accounting systems to enter data properly and to fix things when they get balled up.

If you are the owner of a very small shop, you might be the Financial Manager of your company (as well as the Service Manager and Marketing Manager and Salesperson, etc.) That’s the way it goes. If you dream of being a bigger shop, take heart that every big company was once just your size. The way out…is through. Take responsibility and do a good job as the Financial Manager. Quit looking for a magical solution (accounting fairy?) who will handle the accounting for you. Learn how to do it yourself and document your basic procedures. This will help you hand off the accounting duties successfully.

In larger shops, sometimes the accounting duties get handed to…

• The Financial Manager

• The Office Manager

• The owner’s wife, mom, daughter (other relative)

• The Bookkeeper

• The Secretary

• The “Girl in the Office”

Whatever YOUR title, if you are the one who is responsible for the financial information at your company, I am here to help you. The following are a few tips and tricks for finding and fixing the “Slinky knot” messes in your accounting program.

Financial Fix Tips and Tricks…

• It’s probably YOU. I often hear something along these lines, “That number wasn’t there yesterday. It must be a QuickBooks problem.” That weird dollar amount in your financial reports probably has a very simple explanation. Somebody, maybe you, entered that information. In every accounting software program, there are debits and credits. Sometimes the debits and credits are not visible from the data entry screen. You will have to do some digging. Follow the flow of information from the entry point to the Income Statement (aka Profit & Loss or P&L) and/or Balance Sheet. (In my lengthy career, there have been only 2 cases where the accounting program was corrupt. Chances are…YOU are the problem. J Start trouble-shooting from that assumption.)

• Stay current with your financial reporting. I recommend a WEEKLY review of the Balance Sheet and Income Statement. Some contractors I know get daily reports. That’s great! Once a year at tax time is just not going to cut it. Get to KFP and run the financial reports at least once a week. It is so much easier to find and fix a mistake that happened in the last few days than trying to track down something goofy from six months ago. Also, you can fix the mistake in the current month. That is better than having to re-open a previous month and adjust it. Once I “close” a month, I don’t like to open it again.

• Go line by line down the Balance Sheet and Income Statement and look for “weird” things. If you are just getting started with this process, I can help. Or, your accountant may help you learn what’s “weird” and what’s right. What a great opportunity for him or her to add value to your relationship. KFP means that every account is RIGHT. It reflects what you have in Assets, what you owe in Liabilities and what you own in Equity. The Sales account should equal what you have sold for that period of time. The Expenses should reflect what you have expensed for that period of time. The financial reports should be current and true. Here’s a list of “weird” things that may need some fixing…

o A dollar amount that is positive when it was negative last time (or vice versa.)

o A negative Asset. (Unless it is Accumulated Depreciation or Amortization. Those numbers are “contra” accounts and serve to reduce the value of the associated assets.)

o A negative Liability.

§ Pay particular attention to your Payroll liabilities. I recommend using a Payroll service like ADP or Paychex. The number one reason: The service handles the liability so you don’t have to. The service will tell you what the cash requirements are to pay your team and Uncle Sam. They will do the tax payments for you. The Journal Entry to enter Payroll is much easier if you don’t have to keep track of the appropriate liabilities and payments. I attached a sample JE for entering Payroll. Follow the flow of debits and credits. You could create a sample transaction for your Payroll procedure and reference it every time you enter Payroll.

o A negative Sales account (unless it is the Customer Refunds or Discounts…contra accounts.)

o A negative Expense account. Now, an account may look weird but be right. For instance, if you enter a rebate for your Insurance it will show up as a negative expense for that month. Drill down and make sure.

o An account that is very different from last week or last month. If all of a sudden your Advertising expense went from about $2,500 per month to $300,000 this month, drill down. Something may have been miscoded.

o Have your accountant help you make the weird things right with an appropriate Journal Entry or reversing entry.

o Find out how it got weird, if you can, and update the data entry procedure. Written procedures are KEY to staying at KFP.

o If you don’t know how it got weird, at least get it to right. If it is a small dollar amount, create an adjusting entry and watch to make sure it doesn’t get weird again. If it does…look through the previous week’s transactions for that account to find the entry. This is forensic accounting!

o If you do this once a week, YOU will get intimately familiar with the accounts and the dollar amounts. You will become an expert in what looks right and what looks “weird” and how to fix the weird stuff.

• Run a transaction register report and look for the debits and credits. Different accounting programs call this report by different names. Look for the detail trial balance or the General Ledger journal to find the “guts” of every transaction. Double entry accounting is based on the universal law of “what goes around comes around.” If something goes up, something else goes up or goes down by that amount. Debits and credits are the mechanics in the accounting system that cause the dollar amounts to go up and down…and the Balance Sheet to stay in balance. There are debits and credits behind every data entry screen. You can also affect accounts directly by creating a Journal Entry. I attached a “cheat sheet” of Debit and Credit rules. I reference this several times a week.

• Look for before-and-after differences. If you are not sure of what is happening at a particular data entry point, try this:

o Run the Balance Sheet and Income Statement.

o Enter ONE transaction. Run the Balance Sheet and Income Statement again and see if you can see where the dollar amounts ended up. (Make sure no one else is in the accounting system while you do this.)

o This is a street smart way to discover the “set up” behind the data entry screen.

• To recode, delete or reverse a transaction? It depends on your accounting program. With a basic off-the-shelf program like QuickBooks, MYOB or Peachtree, you can drill down to the transaction that needs to be fixed and recode it. Or, you can delete the transaction entirely and try again. With a more sophisticated industry-specific program like Successware, Ergos, etc. you may have to enter a transaction that reverses your original transaction and then re-enter the transaction properly.

• Be careful with your initial company set up. That’s where a lot of the behind the scenes accounting is created. If you are entering Service Sales and the dollar amount is showing up as Service Agreement Sales there may be an “item” or other set up instruction that is sending the information to the wrong sales account. Go to Company Set Up or the Items list and do some investigating. Figure out the default debits and credits and which accounts are affected. Update the “set up” and see if that fixes the problem.

• Get bossy with your software support team. Call for help as you need it. If you don’t understand what they are telling you to do, ask again for a clearer explanation. If they want to fix something for you, sit in as they do the correction so you can “follow the flow” of the debits and credits and learn from the experience. The more you know about your particular accounting software the less intimidated you will be by the accounting processes.

• Be assertive with your CPA or tax preparer. At the end of each quarter, take the time to make sure that your financials agree with the financial information your CPA is sending to Uncle Sam. Work together to enter the year-end Journal Entries needed to bring your accounting system up to accurate.

• Learn to trust your intuition. As your understanding of double entry accounting increases, trust your gut feeling that a dollar amount is wrong or “weird.” So often, I help someone fix a “Slinky knot” and they respond, “I thought that might be the problem!” If you have that thought, follow it and see what you uncover.

If it is your responsibility to get the financial “Slinky knot” untangled, take a deep breath and know this: You can do it. You may need some help. Contact me if you feel overwhelmed and we’ll set up a time to visit on the phone. This accounting stuff is just not that hard once you learn the lingo and accounting basics. One of the smartest Financial Managers I know is working with an 8th grade education.

Once you get a handle on them, you can delegate the accounting tasks. It is a blessing to have done the accounting yourself because you will never be held hostage by your bookkeeper (or “girl in the office.”) You can coach someone to be even better than you were at the basic accounting tasks. And you will understand the Balance Sheet and Income Statement so much better for the experience.

We know what is financial management. It’s a personal decision in making wise choices about our cash. Financial management involves a lot of areas. Here, I list out 5 of the most important areas that you should know.

These are the main areas you should concentrate because it is these areas that we either mismanaged our money, or it will enable money to work for us.

The following are the key areas that you should look at:

Cash flow management

This involves assessing your current net financial net worth (what you own minus what you owe). This should generally tell you whether you are on your way to financial freedom or financial disaster.

In short, most financial experts would advise you to keep a high savings and this should be your MAIN PRIORITY in financial planning.

Investment planning

Once you have decided the amount of money you would like to save, you should consider where to put your savings with the aim of getting a higher returns than your normal savings account.

Forget the 2% p.a. interests for saving. You require something more sophisticated than that! At a minimum, you should go for fixed deposits. Otherwise, a good investment program will be nice.

Insurance planning

Insurance planning is required to in ensure that all your properties are protected and that your family members are well protected by having enough insurance coverage.

Tax planning

The topic of tax planning affects everyone who receives income, yet it is an area that is mainly forgotten or forgotten by most individuals. Therefore, this area involves strategies making the most under the local tax regulation in the area of your income, stocks, real estate, and property.

Retirement planning

You are not going to toil your whole life, are you? When old age symptoms begin to kick in or you have reached the mandatory retirement age, you will want to retire. There is no choice.

Therefore, having a retirement plan regardless of of your age is essential! You wouldn’t want to be forced to go back to work due to lack of money!

Estate planning

Having an estate plan or a will shall ensure that your wishes for the future are carried out. In addition, an estate plan or a will can supply financial protection for your family, ensure your property is preserved and keep off dispute among family members.

The above are just 5 of the many other financial decisions. It is important to take note of your above 5 becasue they are mainly responsible for your financial success or failure.