UK Debt Consolidation

In a recent post, UK personal debt, we looked at why UK debt had fallen for the first time since records began. Nevertheless, personal debt is still over £1.45 billion. Within this debt are many overburdened with debt from a variety of sources from personal loans to credit cards and store cards. Debt consolidation is a way to integrate all loans into a single payment. There are pros and cons to these schemes. It may be suitable for people in certain situations. But, it is good to get impartial advice before undertaking such a scheme. Unfortunately, financial literacy in the UK is often quite poor. I feel personal finance would make an excellent subject to be taught at school.

Owing money to several organisations can be confusing and worrying. It isn’t always easy to juggle the repayments so people think of Debt Consolidation as one of the solutions. Debt consolidation is putting all your debts with one company – the consolidator pays off your other debts and you owe the consolidator the total debt.

Technical Words and Terms

• If you owe money you are a Debtor – you have debts to pay
• You owe money to your Creditors.
• In the eyes of the lender you are the opposite to them, you owe them money so they see you as their debtor and the debt you owe them as an asset.
• Interest is the money you pay to owe someone else as if you have their cash they don’t have the cash and can’t use it.
• Charges are extra costs you may be asked to pay.
• Exit penalties are costs you may be asked to pay to change the deal you have.

Pros Of Debt Consolidation.

• There may be some comfort only having to answer to one creditor.
• The overall interest rate may be lower than the rates you are paying on other debts..
• You may be given longer to repay your debts.
• You may get hostile creditors off your back in exchange for new ones..
• You may be able to get an interest holiday on some credit cards.
• It may help you get new credit from a new supplier – if that is a good thing
• The debt consolidation deal may lead to a lower principle amount to pay back.

Con’s of Debt Consolidation

• You may pay more in interest in total over a longer period and at a higher rate of interest.
• There may be penalties from some lenders and you may also incur charges for the transfer. These can increase the overall cost significantly.
• You may need to provide security for the overall debt.
• One default may be chased more aggressively than if the debt remains spread over several lenders.
• Your credit rating may suffer if the debt is large.

Alternative to Consolidation

• Talk to the citizens advice bureaux and your creditors.
• Pay off the problem debts first – those who are close to legal action and those with high interest rates.
• If you have equity in a house consider extending your mortgage rather than a second mortgage to a consolidator.
• Look at a compromise with your creditors – some repayment may be better than none. Some may give you interest reductions or holidays depending on the reason for none payment.
• Ask for a salary advance and work it off
• Declaring Bankruptcy.
• Try avoid getting more debt particularly the wrong sort of debt. You do not see poor bankers and lenders only poor customers.

Finance accounting outsourcing is advantageous for accounting firms

Is it that the approaching tax season is giving you chill in your spine? It is an obvious thing that you would feel the work pressure during tax season. Maintaining accounts, checking of balances and tallying totals with the finance documents are some of the important tasks that you will have to do before filing taxes. There is a strict need to manage all these accounts because the slightest mistakes can create so many barriers of problems for you. Finance accounting management is the most important task that has to be handled with utmost care.

Usually, it is the outsourcing services that come to rescue those accounting firms that have an excess of workload. Outsourcing is all about giving some part of the finance accounting work or the entire one to an outsider company that do the work for you. The outsider company has an especially skilled accounting staff that is trained in managing the finance accounting work. In fact, the increasing amount of workload on businesses and accounting firms has established a special place for outsourcing in the business market. Business ventures have been on a constant look out for outsourcing companies at the time of tax sessions.

Accounting outsourcing service guarantees better quality of service. It is because the companies handling outsourcing services concentrate thoroughly on the accounting work. Many accounting firms or business ventures outsource different accounts related tasks, such as generating accounts, financial statements, invoice generation, trial balances, pay roll processes, checking credit card accounts, profit and loss account and lots more. Outsourcing these services will save your money that would have been wasted in hiring a proper staff for managing such accounting tasks.

Hiring a trained staff will cost you like diamonds. It is because just paying the salary does not end the matter. House rent allowance, bonus, accidental expenses, overtime charges and many other things are meant to accompany the salaries. If you outsource your finance accounting work to other company, then a lot of money can be saved. The money saved can be invested in other related field and you can earn more rewards that you are earning now. This money can also be used for enhancing the performance level of other departments, so that you can achieve your targets well in time.

Apart from saving on monetary matters, another advantage of finance accounting outsourcing is that the outsourcing firms are skilled in doing the work speedily. These companies understand the need of getting things done at a faster pace. It is because of this that you get your work done in the half time, as your in-house staff is going to take. Outsourcing is surely advantageous for you. Finance accounting outsourcing is meant to shed off the excess workload regarding the maintenance of accounts.

Eight Features of a Great Accountant

As an experienced general manager what I look for in my accountant has evolved over many years. I have learned that oftentimes the right accountant knows more than I do and that this knowledge can make a vast beneficial impact on the performance of the business.

I take for granted that a good accountant should at a minimum be a Certified Public Accountant (CPA). A CPA standing should be verified and is the best evidence you can get that an accountant knows debits from credits and has a reasonable mastery of:

Financial reports Accounting Standards Business Concepts Financial Control Issues Taxes and Regulations

A CPA is also a credential that speaks to ethical values and a commitment to the public interest.

Good CPAs are easy to find, but if you're really serious about building a great business it's worth the extra effort to find a great CPA. Great CPA's all have the following qualities:

Have a wealth of business experience. Experience with other businesses in your sector is even better. Think strategically about your business options. They should offer suggestions on how to grow your business next year and not just compile reports from last year. Help you execute a tax plan that legitimately allows you to keep more of what you earn. This extends past the taxes that the business pays and includes the income taxes paid by the investors and principals. Are candid and direct in their conversations and communications. It is easy to find an accountant to meekly agree with your decisions but you want someone to tell you when they think you are heading down the wrong road and why. Help you protect your business from embezzlement, fraud, and dishonest employees through good financial controls and procedures. They should also help you implement internal procedures to more quickly detect any errors or omissions. Provide an objective perspective about your business performance. Your sales manager will overestimate sales and the operations manager always fails to add in one-time expenses so you need a clear and accurate picture to make informed decisions. Save you money and increase your profit by helping you identify "best" practices. This is where their experience gives them actionable insight into the business. Be involved in the business community. They should have contacts that can help you grow your business and form strategic alliances.

A face-to-face interview provides the opportunity to know if there's a "right fit" for your business. In addition to all of the above, the chemistry between your personalities needs to match. And don't get lazy and fail to check their references. He or she should have a history of working with successful companies. It is reasonable to think the accountant had a part in that success.

So how do I find my accountants? A referral is a good place to start but I have never run into someone who didn't describe his or her accountant as "great." Along with interviewing the referral candidates you should perform an outside search. Since changing accountants has a high level of pain, it makes sense to take your time and do it right the first time.

UK Self employed Accounting Software and Self Assessment Tax Returns

In the UK anyone receiving earned income which is not taxed under the employers PAYE system is technically self employed. Anyone who is self employed and running a business in the UK must register that business with HM Revenue and Customs within 3 months of starting that self employed business and failure to do so can lead to penalty fines.

All self employed businesses must keep records of the financial transactions and submit these accounts annually to HM Revenue and Customs in the format of the self assessment tax return which are supplementary pages included in the self employed annual tax return.

Different standards for accounting by self employed business are applicable compared to the accounting requirements of a limited liability company and consequently much simpler Accounting Software can be applied. Accounting Software for a limited company invariably requires a double entry system of accounting that produces not just a profit and loss account but also a balance sheet. The Accounting Software has to deal with business bank accounts, debtors and creditors and produce reconcilable results.

While advisable for self employed businesses to maintain a separate bank account it is not an essential requirement. The Accounting Software used by anyone self employed should keep accurate records of fixed assets although it is not essential that this Accounting Software also produces a balance sheet. With these factors in mind Accounting Software for the self employed can be much simpler and greatly advantageous if that Accounting Software also produces the numerous and sometimes onerous burden of HM Revenue and Customs tax returns and working papers.

Self Employed Accounting Software Requirements

Accounting Software for anyone Self Employed does not have to be double entry. The Accounting Software can be a single entry system which makes the value of using Accounting Software based upon excel spreadsheets feasible and due to the simplicity highly desirable. Such Accounting Software being excel based is fast and easy to use, utilising all the benefits and advantages excel offers. Accounting Software that is also highly visible at the click of a button. Accounting Software on a database hides the financial transactions that the Accounting Software has to query to retrieve the required information. It is this element of an Accounting Software database that often requires some technical accounting knowledge to operate efficiently. Accounting Software written on excel spreadsheets is, due to its visibility, much easier to use and understand and requires little or no accounting experience.

Accounting Software written on excel spreadsheets makes an ideal solution for the self employed businessman. Good financial records are the key to the success of any self employed business and especially to the value of Accounting Software. A quality Accounting Software package is an essential component of your business to identify potential problem areas and capitalise on success to drive the business forward.

Accounting Software and HM Revenue and Customs Returns

Different types of Accounting Software are available for the Self Employed and some of this software has been specifically designed to cater for the precise size and requirements of the self employed business. There are basic Accounting Software packages available for the self employed business that is not vat registered and have no employees. Standard Accounting Software packages for the self employed business that is vat registered. The vat threshold limit at which businesses are liable for vat is £61,000 up to April 2007 and subject to possible changes after that date. Advanced and more sophisticated Accounting Software for the self employed who also employ staff are available with integrated payroll software included in the Accounting Software packages.

The best Accounting Software will not only produce your self employed financial accounts but also produce the HM Revenue and Customs returns. Accounting Software that has automated the vat returns each quarter, Payroll Software that completes the time consuming P11 employee deductions working papers and simplifies the P60 year end certificates and P35 employers' annual paye return.

And most crucially Accounting Software that automates the Self Assessment tax return.

Accounting Software and Self Assessment Tax Returns

The Self Assessment tax return is a complex document for the initiated. It doesn't have to be, for a small business with turnover under £15,000 the self assessment tax return can be completed by entering totals of self employed sales, expenses and net profit on page one. For larger self employed businesses more complex calculations are required. Capital Allowances, balancing charges, base periods and expense analysis are beyond many self employed. Self employed businessmen are experts in their field of operations and often require help with these accounting based elements that an accountant or Accounting Software can provide.

The best Accounting Software can take the simple lists of financial transactions and by clever use of formulae built into excel spreadsheets transform the year end experience by automating the production of the self assessment tax return. It isn't impossible, if a calculation can be made mathematically then a quality Accounting Software package can automate the process using formulae within excel to produce the calculations and offer the Self Employed businessman an automated Self Assessment Tax Return.

A function that Accounting Software can do at a fraction of the price an accountant might charge for this service. Accounting Software for the Self Employed should produce the Self Assessment tax return as the end product. The Self Assessment tax return is the Self Employed end product of his financial endeavours and therefore the Self Assessment tax return has to be the end product of any quality Accounting Software.

Accounting Outsourcing ensures quality work at less cost

Outsourcing is a boon for all those accounting firms or other business houses that are lying under the burden of heavy workload. Are you really worried about the wastage of money or the losses that are being incurred due to neglect of important departments of your firm? Now, you don't have to waste your time in worrying anymore about the overload of work. Outsourcing has been declared as a life saver for the firms. All you just have to do is give your work to other companies and pay them for the timely completion of work.

Accounting firms gets really busy at the time of tax season. In fact, they keep on getting work even before the approaching tax season. Generally, this is the time period when a lot of paper work is being done and minute observation is required. The slightest mistake can cause problems and entire hard work would go waste. Accounting outsourcing has become mandatory for all those accounting firms who want to pay attention to profit generating aspects. The idea of accounting outsourcing has been developed to lessen the burden of accounting firms, so that they can manage their task well in time.

The services of outsourcing have been highly beneficial for every business owner. Generally, accounting outsourcing deals with giving the work related to maintaining trial balances, profit and loss accounts, balance sheets, generation of invoice, checking credit card accounts and pay roll processes are some. All these accounting documents are required to be handled with extra care because slight ignorance can lead to major problems in tax calculation. And if you are not able to file the taxes properly, you might end up having tax raids. To be on the safer side, one should go for accounting outsourcing without any hesitation.

For some of the advantages, accounting outsourcing has been favored by most of the accounting firms. One of the best advantages of accounting outsourcing is that your work gets to complete on time. Usually, the accounting firms might get entangled in some other work and these important issues might get delayed. The accounting outsourcing firms lays great emphasis on the client's work and completes them within the deadline. Another advantage is that you get to save on so many dollars that would have gone wasted in paying as the salaries of hired staff, house rent allowances, bonuses and many other add-ons.

As the service of accounting outsourcing is been liked by huge number of companies and firms, its popularity is increasing with the passing of time. These days, the accounting workload has increased to a great extent that companies are on a constant look out for the staff that can do the work for them at less cost. It is the outsourcing services that help the companies to manage their work well. As the entire cost for managing the accounting work by outsourcing firm is less than the hiring of in-house staff, almost every company is making accounting outsourcing a part of its business. Moreover, no one wants that their work should be delayed or get completed at higher costs.

Developing Strategic Thinkers

Strategic thinking is regarded as an essential core competency for leadership positions. In fact, many organizations already use this competency, among others, to appraise and evaluate the performance of their executives and leaders. Thus, a competency gap in strategic thinking is considered serious, and organizations will attempt to eliminate this gap. This brief article explores the most effective means to develop strategic thinkers.

Let us begin by listing some of the skills, knowledge, and attitudes that are attributed to this competency.

Strategic thinkers:

* Are systems-oriented, that is they think holistically and use the helicopter view.

* Embrace creativity, innovation, intuition, and understand the insight process (Eureka and aha!)

* Think futuristically and embrace visionary thinking

* Act like organizational radars (or antennae) scanning the internal and external environments

* Have a worldly mindset

* Act as explorers, with heighted curiosity and alertness

* Have the ability to keep an open mind to new ideas, and adapt to changing environments

* Have the desire and guts to outwit, beat, and out-run competition

* Are knowledgeable of their industry and experts in their areas of specialization

* Know their finance and risk management

* Have a bit of entrepreneurial spirit

* Are good communicators (good at asking probing questions and listening)

* Know how to inspire and lead teams.

Clearly, the type, weight, and relevance of these competency components vary greatly across industries and organizations. For example, General Electric (GE) has selected five competencies (which GE calls growth traits) to identify areas for development among their top people. The five GE growth traits are:

* Imagination (viewed as an advocate of innovation; has courage to take risks on both people and ideas).

* External focus (understands customer needs, marketplace dynamics, industry trends and the competitive landscape).

* Clear thinking (specifies strategy into actions; makes decisions and communicates priorities).

* Inclusiveness (connects with teams; inspires people to want to perform at a higher level; promotes an environment that recognizes and celebrates individual and cultural differences).

* Domain expertise (gains perspective through varied experiences and build-up of skills; strives to increase knowledge with up-to-date information).

This is how Jeff Immelt, CEO of GE, described the process in an interview with Harvard Business Review (2006): “We came up with a tool that we’ll use as part of Session C, our annual HR review. It’s a matrix that lists the five growth traits and their components. You are rated as green, yellow, or red on each one. Everybody has to have one red because the point is not to pick out winners or losers – it’s to say everybody’s got to work on something. That will guide the development plans for the top 5,000 people in the company this year.”

Now, the important questions are these: How can organizations, as good “gardeners”, cultivate the art and skills of strategic thinking in their future leaders? Is it possible to develop these competencies and, if so, how? What specific management development and training activities should be undertaken by high-potential men and women in order to become better strategic thinkers?

Unfortunately, early literature on this subject is limited. It is typically focused on management development initiatives and the learning aspects of thinking strategically without giving adequate consideration to having in place supportive organizational culture, systems, and structures (Bonn 2001, 2005). In her research on this subject, Bonn argues that strategic thinking needs to be addressed at different, but interrelated, levels: at the individual and group levels and at the organizational level. Organizations that successfully integrate strategic thinking at all three levels will create a critical core competency that forms the basis of an enduring competitive advantage. This integration at all levels, I believe, is absolutely necessary if leaders are expected to practice or cultivate their strategic thinking competencies. Otherwise, all the time, money and effort put into management developmental initiatives will simply be wasted.

Day and Schoemaker (2008) also alerted us to the importance of corporate climate and culture in cultivating strategic thinking. Their research discovered that “three primary qualities distinguish vigilant leaders from those striving for operational excellence. A vigilant leader:

* Focuses externally and stays open to diverse perspectives,

* Applies strategic foresight and probes for second-order effects and

* Encourages others to explore widely by creating a culture of discovery.”

Day and Schoemaker urged organizational leaders to set the tone at the top, and to systematically develop initiatives and programs throughout the organization that foster vigilance and cultivate the three qualities they identified. Therefore, organizations should first provide a culture (championed by top management and the board of directors) that supports and rewards strategic thinking instead of punishing or discouraging the behaviors and attitudes listed at the beginning of this section. Specifically, organizations ought to review their structures and systems that might act as barriers standing in the way of strategic thinking. Consider, for instance, traditional annual pay and performance reviews that focus on a predetermined checklist of traits or on individual goals and objectives; such reviews often result in poor morale, a lack of teamwork, internal competition, a lack of inter-departmental cooperation, and dysfunctional silos. Or consider the wide-spread linkage of budgets to compensation, which encourages playing games and short-term thinking to the detriment of the organization’s strategy. I feel strongly that these systems often create fences around and within the organization, act as shackles and blinkers that inhibit creative and futuristic thinking, and encourage managers to wear negative-thinking black hats (de Bono 1999). In fact, such systems encourage and reward managers to think inwardly, to strive for short-term operational efficiency rather than long-term effectiveness, and may drive managers to become more risk averse, conventional, and precedent-oriented.

Consequently, I believe that organizational leaders must start by smashing those barriers, tearing down the fences, throwing away the shackles and blinkers, and controlling the use of black hats. Additionally, organizations must erect radars in various parts of the globe to scan the environment for opportunities and threats. They must also introduce systems and incentives that actually reward exploration, vigilance, futuristic and creative thinking, and the other requirements that encourage strategic thinking. Only then should organizations invest in management training and development programs aimed at sharpening the strategic thinking competencies of those who are identified as future leaders.

In her book, Learning to Think Strategically, Sloan (2006) argued that it is a myth that strategic thinking can only be learned by a few people – it is not an inborn talent, but one that can be learned and cultivated. Sloan highlights the importance of informal learning, prior successful life experiences, dialogue, and the coordination between intuition and analytical thinking. She also covers the cross-cultural aspects of strategic thinking.

Similarly, Goldman (2007) found that “expertise in strategic thinking is not the product of innate ability and pure serendipity. It arises from specific experiences (personal, interpersonal, organizational and external) which occur over 10 years or more”. Goldman’s research revealed ten experiences that contributed to the development of strategic thinking: Family upbringing/education; general work experiences; becoming a CEO; being mentored; being challenged by a key colleague; monitoring results/benchmarking; doing strategic planning; spearheading a major growth initiative; dealing with a threat to organizational survival; and vicarious experiences.

To further improve strategic thinking, Goldman makes four recommendations:

* Include strategic thinking as a formal component of management development programs;

* Require executives to develop the strategic thinking of their subordinates;

* Encourage early participation in strategic planning and benchmarking activities;

* Support activities that incorporate experiential learning; and maximize the benefits of strategic planning sessions.

The informal on-the-job learning methods detailed by Sloan and Goldman are clearly superior to the traditional teaching of strategy through case studies or reading about successful strategists. However, there is a lot to be said for the benefits derived from the interactive team and individual projects and exercises used in some management development programs. We at Meirc Training & Consulting design our training seminars with this interactive approach in mind. There are several off-site programs that are designed with management education and learning in mind. For instance, one such program is the IMPM (International Masters in Practicing Management) as described by Mintzberg (2004) in his book Managers Not MBAs. The program is conducted in partnership with several international business schools in six countries. It is based on the notion of learning being connected to managerial experience, and it uses Mintzberg’s five managerial mindsets: reflective, worldly, analytical, collaborative, and action mindset.

There are, of course, several other programs and techniques specifically aimed at cultivating creativity and strategic thinking. Consider, for example, lateral thinking as advocated by Edward de Bono, or scenario planning sessions as practiced at Royal Dutch Shell Company. Notwithstanding their limitations, these developmental activities were considered effective by many academics and practitioners.

In an intriguing article, Jacobs and Heracleous (2007) suggested that managers can improve their strategic thinking by playing games. These games involve building business models of the organization, a brand, competitors, or the industry, and so forth. According to the authors, these games offer a useful complement to conventional strategic planning processes, and help to open up and orient debate about an organization’s strategic challenges. It will be interesting to see if such strategy games can foster creative and strategic thinking in the same way that teambuilding games were expected to improve team work.