getting-started-with-these-accounting-basics

Getting Started With These Accounting Basics

Writen by Khieng Chho

So you’re starting a new business but don’t have any accounting background whatsoever. There’s no need to worry. Understanding the basics of accounting does not require an Einsteinish IQ.

For the short of things, accounting is the process that involves the recording, categorizing, analyzing and reporting of financial information. Accounting procedures vary depending on how large your business is or how it is structured; but one thing is the same — all companies require some way to keep track of their funds.

To avoid hassles, some firms just hire accounting experts to build and monitor their financial books. There are some that also use software that’s widely available in the market, like CheckMark MultiLedger, MYOB Accounting and QuickBooks to keep their accounting records in check.

How does basic accounting work?

Accounting is all about creating balance between your debits and credits. Using a method called double-entry accounting, accountants normally make use of a ledger to record all the money, no matter how small, that goes in and out of your company. These numbers are written on a balance sheet, which can pretty much sum up your company’s financial state.

This basic equation is usually present in all accounting records:

liabilities + capital (equity) = assets

What does a basic accounting cycle contain?

Since accounting is a periodic activity, meaning, it happens either monthly, quarterly, biannually or yearly, depending on your needs, there has to be a set process to keep things running smoothly.

1) Recording - Enter data about daily transaction in sales, cash received and cash disbursed ledgers.

2) Post credit and debts in the general ledger - Keep your general ledger up to date by inputing all accounts payable, accounts receivable and equity and other expenses and accounts

3) Adjusting the general ledger - Not all ledger entries are carved in stone. There are items like accrued interest, taxes and bad debts that do not get recorded in daily journals. Adjusting the entries will help balance all expenses with revenues for every accounting period.

4) Close the books - After all costs and sales figures are accounted for, net gains should be immediately posted on your equity account. Before a new accounting cycle starts, costs and revenue should reach a zero balance.

5) Prepare and release financial statements - Companies come up with financial reports at the end of every accounting period, which contain statements of capital, income statements, cash-flow data, balance sheets and others, to sum up all the activity for the given period.

The key output of an accounting procedure is the financial statement. Businesses often use this to gauge how well their company is doing at present and how much they can afford to spare for expansions and improvements in the future. Financial accounting statements also help owners realize where to place lids on costs and when to start spending, based on past experiences. They also make it easier for businesses to qualify for loans, if ever they need one, and to report their financial standing to the IRS.

dont-compromise-with-your-needs-take-a-bad-credit-personal-loan

Don’t Compromise with Your Needs, take a Bad Credit Personal Loan

Writen by Peter Cliv

Most of the personal loan products offered by the lenders in UK are unsecured and therefore the credit history of the borrower is something the lenders can not afford to ignore. As a result, a borrower with an unimpressive credit record usually finds it hard to obtain a personal loan from prime lenders in UK.

The sub-prime lenders, however, have some personal loan products ready even for those with bad credit record. Though they like the borrower to offer something as collateral, they do not make it a precondition for obtaining a bad credit personal loan. Even unsecured personal loans are available with them. However, the terms and conditions of such loans are strict. One has to pay a higher rate of interest and the repayment term is usually made short by the lender.

The interest rates of secured bad credit personal loan are low and the repayment term is long. However, secured bad credit personal loan takes a little time for disbursal due to assessment of the collateral and the resultant paperwork.

A secured or unsecured bad credit personal loan can be put to various uses by the borrower. In fact, flexibility of use it the most significant feature of such a loan product. You can use it to meet your holiday expenses, consolidate your debts and improve your credit rating, pay your medical bills, finance the education of your child, buy a vehicle or renovate your house.

Any application for a bad credit personal loan should be preceded by a study of the interest rates offered by the best online lenders UK. This will help you choose the best deal for yourself.

future-of-cash-back-schemes

Future of Cash Back Schemes

Writen by Joanne Elizabeth

When the cash back schemes were first launched, the cynics among the marketing strategists proclaimed that there was no future for them and that they would be consigned to the dustbin of history very soon. Something like that never happened however. Instead, they have gained immense popularity with the consumers of all classes.

It is worthwhile, therefore, to examine the causes of this popularity and try and make a prediction on the future of these schemes.

A study of the customer behaviour has shown that they all like to go for cheap and discounted things (it is a different matter though that discounts can sometimes actually be an eye-wash). While there was a scope of an eye-wash in the traditional shopping, there is hardly any in e-commerce. The reason is obvious: the customers can compare the rates of hundreds of merchants at one site and make out what is what. Tough competition among merchants also ensures that the consumers get real discounts on the purchases they make. The chief cause of popularity of the cash back schemes, we can conclude safely therefore, is the discount factor.

Some of the cash back portals have also started schemes which allow the customers to save money for the education of their children. Others have gone even further, and have launched schemes that will allow the customers to save money for their retirement period.

Yet another reason of popularity of the cash back schemes and portals is the fact that you get a sign up bonus when you register for the first time with a cash back portal. You can become a member in minutes and then utilise the services as many times as possible.

With so many features and advantages, it seems the cash back schemes are there to stay for a long time. Perhaps they will become even more attractive for the consumers in future due to the innovations introduced every now and then.

make-money-the-right-way

Make Money the Right Way

Writen by Brad Homer

Do what you love. Do it legally. Provide real value. Enhance your life as you work in a profession that fills you up instead of sucking the life out of you. Lots of people work in jobs they hate due to a feeling of obligation and a lack of hope. You can make your dreams come true, but doing that usually involves working in a field that provides value to others and at the same time is enjoyable to you.

Working a job that doesn’t renew your spirit and or put a smile on your face in the morning is a slow death. Life is too short for that. If you are working a job that drains you, sit down and have a heart to heart talk with yourself. You’ve really got two options: find a way to love or at least tolerate the job you’re currently working or switch to a new job that will really light your fire. Things to consider are your current skills and interests, but under no circumstances should you underestimate what you can achieve. If you can believe it and feel good about it, you can do it. If you don’t currently have the skills, you’ll acquire them. If you need something to facilitate doing your new job, you’ll acquire that too. Blind faith will work miracles in your life if you just get your logical mind out of the way long enough to let it.

An illogical concept that can really gum up your prospects is the idea of scarcity; the idea that there’s a finite supply of things to go around - and if you don’t take yours, maybe you won’t get any. There is an infinite supply of things in the universe. There is an infinite supply of opportunities. They are created by what you think and what you feel. Take responsibility for the potential of your own greatness and kick some butt out there. All the money you could ever want and need is yours - you just have to believe in yourself.

unsafe-ewallets

Unsafe e-Wallets

Writen by John Gibb

Ever since the Internet was introduced a the new revolutionary medium of information exchange, more and more companies, like eBay, MSN, Yahoo and recently Google have drawn the attention of the public to new online ways of keeping money circulating through the World Wide Web. By marketing or planning to introduce online payment tools, such as PayPal or the extensively discussed GWallet, software engineers focus on designing systems that will ease the experience and increase the safety of online purchases. In fact, very few of today’s Internet users have not at some point in time saved their personal credit card information into an online server in order to enable faster retrievals and buy products or services with just a few clicks.

From the days the first credit card was introduced as a payment method, to today’s worldwide usage rates of online payment systems, people have always seemed curious to be able to try these new and convenient methods of conducting business. Quickly, the old-fashioned face-to-face interaction with the merchant has been replaced by online stores, which offer great varieties and accommodate the needs of consumers to compare prices before conducting their online purchases. But, as more and more instances of fraud are daily reported, people today seem less excited and more reluctant to trust unknown dealers and provide their personal data to invisible data banks. Common threats like identity fraud and online credit card scams further frighten consumers and increase their insecurity in relation to the fragile safety of contemporary online purchases. This new unsafe online reality has undeniably altered the Internet environment that many businesses have decided to use exclusively for their operations. As corporate executives have witnessed their sales figures dropping and their profit margins reducing, they have exercised additional pressure to banks issuing the credit cards, which in turn have requested insurance companies to protect them, as well as the final consumer, against scammers and hackers.

Bringing people back to the old notion of a more direct, personal exchange has had both positive and negative outcomes. While the original cash payment is still something used when one visits the grocery store or the local pharmacy, the usual method of paying for an airplane ticket or a new bathroom vanity has been to use a plastic credit card. Depending on the amount of money needed to perform a particular purchase, people have been selecting the most convenient payment method to cover their financial needs. But while this was once only a matter of convenience, today the process of selecting to use the e-wallet choice or actually issuing a check for a new couch has been developed into a matter of deciding to take an unnecessary risk. Thus, it is essential for contemporary consumers to understand the forces that drive consumption patterns as well as to explore the various existing mechanisms so as to eliminate online threats. Being aware and staying informed is no more a matter of choice, but a necessity.

nco-financial-services

NCO Financial Services

Writen by Kristy Annely

One of the financial services that is available to businesses and corporations is the business process outsourcing (BPO) service. This service offers businesses and corporations with a system wherein they can maintain contact with their clients with regard to various matters such as credit collection, technical support, and other means. Companies that provide this service usually put up a contact center where agents are hired to maintain the client-vendor relationship between the companies that use this service and those that buy from them.

An example of such a company is the NCO Financial Services Company, which offers a wide variety of services to its clients. It is the aim of this almost eighty-year-old company to reduce client operating expenses, increase cash flow, and improve the efficiency of their client companies. NCO Financial Services has a wide network of contact centers in various countries wherein they operate. The major services that they offer fall under three major categories: Finance and Accounting, Customer Relationship Management, and Back Office.

The Finance and Accounting units deal mainly in resolving deficient customer relationships, which include the collection of past due obligations. Under this category are specific services, on of which is the Accounts Receivable Management Unit. This unit will be able to help your business collect past due obligations and correct delinquencies in payments of your clients. Other services under the Finance and Accounting unit are the Portfolio Management and Collection Units.

NCO Financial Services also ensures that the customer relationship is maintained through its Customer Relationship Management Unit, which ensures that your clients will have access to technical support and the right information with regard to their transactions through both inbound and outbound calling campaigns. This service can also provide a platform for your company to increase your sales, as outbound calling campaigns increases the awareness of your products.

The Back Office Unit will be able to help your company in your order-processing needs when it comes to the sales generated through the outbound calls. In addition to this, NCO Financial Services will also help you in the delivery of payments to your companies and even in litigation if problems are encountered with regard to the payments.

Businesses have a number of needs to fulfill with regard to maintaining customer relationships; it is then very comforting to know that there are systems and organizations that are available such as the NCO Financial Services. NFO Financial Services can help businesses with these needs by providing effective business outsourcing services.

is-my-money-safe-on-the-soundness-of-our-banks

Is My Money Safe? On The Soundness Of Our Banks

Writen by Sam Vaknin, Ph.D.

Banks are institutions wherein miracles happen regularly. We rarely entrust our money to anyone but ourselves - and our banks. Despite a very chequered history of mismanagement, corruption, false promises and representations, delusions and behavioural inconsistency - banks still succeed to motivate us to give them our money. Partly it is the feeling that there is safety in numbers. The fashionable term today is “moral hazard”. The implicit guarantees of the state and of other financial institutions moves us to take risks which we would, otherwise, have avoided. Partly it is the sophistication of the banks in marketing and promoting themselves and their products. Glossy brochures, professional computer and video presentations and vast, shrine-like, real estate complexes all serve to enhance the image of the banks as the temples of the new religion of money.

But what is behind all this? How can we judge the soundness of our banks? In other words, how can we tell if our money is safely tucked away in a safe haven?

The reflex is to go to the bank’s balance sheets. Banks and balance sheets have been both invented in their modern form in the 15th century. A balance sheet, coupled with other financial statements is supposed to provide us with a true and full picture of the health of the bank, its past and its long-term prospects. The surprising thing is that - despite common opinion - it does. The less surprising element is that it is rather useless unless you know how to read it.

Financial Statements (Income - aka Profit and Loss - Statement, Cash Flow Statement and Balance Sheet) come in many forms. Sometimes they conform to Western accounting standards (the Generally Accepted Accounting Principles, GAAP, or the less rigorous and more fuzzily worded International Accounting Standards, IAS). Otherwise, they conform to local accounting standards, which often leave a lot to be desired. Still, you should look for banks, which make their updated financial reports available to you. The best choice would be a bank that is audited by one of the Big Six Western accounting firms and makes its audit reports publicly available. Such audited financial statements should consolidate the financial results of the bank with the financial results of its subsidiaries or associated companies. A lot often hides in those corners of corporate ownership.

Banks are rated by independent agencies. The most famous and most reliable of the lot is Fitch-IBCA. Another one is Thomson BankWatch-BREE. These agencies assign letter and number combinations to the banks, that reflect their stability. Most agencies differentiate the short term from the long term prospects of the banking institution rated. Some of them even study (and rate) issues, such as the legality of the operations of the bank (legal rating). Ostensibly, all a concerned person has to do, therefore, is to step up to the bank manager, muster courage and ask for the bank’s rating. Unfortunately, life is more complicated than rating agencies would like us to believe. They base themselves mostly on the financial results of the bank rated, as a reliable gauge of its financial strength or financial profile. Nothing is further from the truth.

Admittedly, the financial results do contain a few important facts. But one has to look beyond the naked figures to get the real - often much less encouraging - picture.

Consider the thorny issue of exchange rates. Financial statements are calculated (sometimes stated in USD in addition to the local currency) using the exchange rate prevailing on the 31st of December of the fiscal year (to which the statements refer). In a country with a volatile domestic currency this would tend to completely distort the true picture. This is especially true if a big chunk of the activity preceded this arbitrary date. The same applies to financial statements, which were not inflation-adjusted in high inflation countries. The statements will look inflated and even reflect profits where heavy losses were incurred. “Average amounts” accounting (which makes use of average exchange rates throughout the year) is even more misleading. The only way to truly reflect reality is if the bank were to keep two sets of accounts: one in the local currency and one in USD (or in some other currency of reference). Otherwise, fictitious growth in the asset base (due to inflation or currency fluctuations) could result.

Another example: in many countries, changes in regulations can greatly effect the financial statements of a bank. In 1996, in Russia, to take an example, the Bank of Russia changed the algorithm for calculating an important banking ratio (the capital to risk weighted assets ratio). Unless a Russian bank restated its previous financial statements accordingly, a sharp change in profitability appeared from nowhere.

The net assets themselves are always misstated: the figure refers to the situation on 31/12. A 48-hour loan given to a collaborating firm can inflate the asset base on the crucial date. This misrepresentation is only mildly ameliorated by the introduction of an “average assets” calculus. Moreover, some of the assets can be interest earning and performing - others, non-performing. The maturity distribution of the assets is also of prime importance. If most of the bank’s assets can be withdrawn by its clients on a very short notice (on demand) - it can swiftly find itself in trouble with a run on its assets leading to insolvency.

Another oft-used figure is the net income of the bank. It is important to distinguish interest income from non-interest income. In an open, sophisticated credit market, the income from interest differentials should be minimal and reflect the risk plus a reasonable component of income to the bank. But in many countries (Japan, Russia) the government subsidizes banks by lending to them money cheaply (through the Central Bank or through bonds). The banks then proceed to lend the cheap funds at exorbitant rates to their customers, thus reaping enormous interest income. In many countries the income from government securities is tax free, which represents another form of subsidy. A high income from interest is a sign of weakness, not of health, here today, there tomorrow. The preferred indicator should be income from operations (fees, commissions and other charges).

There are a few key ratios to observe. A relevant question is whether the bank is accredited with international banking agencies. The latter issue regulatory capital requirements and other defined ratios. Compliance with these demands is a minimum in the absence of which, the bank should be regarded as positively dangerous.

The return on the bank’s equity (ROE) is the net income divided by its average equity. The return on the bank’s assets (ROA) is its net income divided by its average assets. The (tier 1 or total) capital divided by the bank’s risk weighted assets - a measure of the bank’s capital adequacy. Most banks follow the provisions of the Basel Accord as set by the Basel Committee of Bank Supervision (also known as the G10). This could be misleading because the Accord is ill equipped to deal with risks associated with emerging markets, where default rates of 33% and more are the norm. Finally, there is the common stock to total assets ratio. But ratios are not cure-alls. Inasmuch as the quantities that comprise them can be toyed with - they can be subject to manipulation and distortion. It is true that it is better to have high ratios than low ones. High ratios are indicative of a bank’s underlying strength of reserves and provisions and, thereby, of its ability to expand its business. A strong bank can also participate in various programs, offerings and auctions of the Central Bank or of the Ministry of Finance. The more of the bank’s earnings are retained in the bank and not distributed as profits to its shareholders - the better these ratios and the bank’s resilience to credit risks. Still, these ratios should be taken with more than a grain of salt. Not even the bank’s profit margin (the ratio of net income to total income) or its asset utilization coefficient (the ratio of income to average assets) should be relied upon. They could be the result of hidden subsidies by the government and management misjudgement or understatement of credit risks.

To elaborate on the last two points: a bank can borrow cheap money from the Central Bank (or pay low interest to its depositors and savers) and invest it in secure government bonds, earning a much higher interest income from the bonds’ coupon payments. The end result: a rise in the bank’s income and profitability due to a non-productive, non-lasting arbitrage operation. Otherwise, the bank’s management can understate the amounts of bad loans carried on the bank’s books, thus decreasing the necessary set-asides and increasing profitability. The financial statements of banks largely reflect the management’s appraisal of the business. This is a poor guide to go by.

In the main financial results’ page of a bank’s books, special attention should be paid to provisions for the devaluation of securities and to the unrealized difference in the currency position. This is especially true if the bank is holding a major part of the assets (in the form of financial investments or of loans) and the equity is invested in securities or in foreign exchange denominated instruments. Separately, a bank can be trading for its own position (the Nostro), either as a market maker or as a trader. The profit (or loss) on securities trading has to be discounted because it is conjectural and incidental to the bank’s main activities: deposit taking and loan making.

Most banks deposit some of their assets with other banks. This is normally considered to be a way of spreading the risk. But in highly volatile economies with sickly, underdeveloped financial sectors, all the institutions in the sector are likely to move in tandem (a highly correlated market). Cross deposits among banks only serve to increase the risk of the depositing bank (as the recent affair with Toko Bank in Russia and the banking crisis in South Korea have demonstrated).

Further closer to the bottom line are the bank’s operating expenses: salaries, depreciation, fixed or capital assets (real estate and equipment) and administrative expenses. The rule of thumb is: the higher these expenses, the worse. The great historian Toynbee once said that great civilizations collapse immediately after they bequeath to us the most impressive buildings. This is doubly true with banks. If you see a bank fervently engaged in the construction of palatial branches - stay away from it.

All considered, banks are risk traders. They live off the mismatch between assets and liabilities. To the best of their ability, they try to second guess the markets and reduce such a mismatch by assuming part of the risks and by engaging in proper portfolio management. For this they charge fees and commissions, interest and profits - which constitute their sources of income. If any expertise is attributed to the banking system, it is risk management. Banks are supposed to adequately assess, control and minimize credit risks. They are required to implement credit rating mechanisms (credit analysis), efficient and exclusive information-gathering systems, and to put in place the right lending policies and procedures. Just in case they misread the market risks and these turned into credit risks (which happens only too often), banks are supposed to put aside amounts of money which could realistically offset loans gone sour or non-performing in the future. These are the loan loss reserves and provisions. Loans are supposed to be constantly monitored, reclassified and charges must be made against them as applicable. If you see a bank with zero reclassifications, charge off and recoveries - either the bank is lying through its teeth, or it is not taking the business of banking too seriously, or its management is no less than divine in its prescience. What is important to look at is the rate of provision for loan losses as a percentage of the loans outstanding. Then it should be compared to the percentage of non-performing loans out of the loans outstanding. If the two figures are out of kilter, either someone is pulling your leg - or the management is incompetent or lying to you. The first thing new owners of a bank do is, usually, improve the placed asset quality (a polite way of saying that they get rid of bad, non-performing loans, whether declared as such or not). They do this by classifying the loans. Most central banks in the world have in place regulations for loan classification and if acted upon, these yield rather more reliable results than any management’s “appraisal”, no matter how well intentioned. In some countries in the world, the Central Bank (or the Supervision of the Banks) forces banks to set aside provisions against loans of the highest risk categories, even if they are performing. This, by far, should be the preferable method.

Of the two sides of the balance sheet, the assets side should earn the most attention. Within it, the interest earning assets deserve the greatest dedication of time. What percentage of the loans is commercial and what percentage given to individuals? How many lenders are there (risk diversification is inversely proportional to exposure to single borrowers)? How many of the transactions are with “related parties”? How much is in local currency and how much in foreign currencies (and in which)? A large exposure to foreign currency lending is not necessarily healthy. A sharp, unexpected devaluation could move a lot of the borrowers into non-performance and default and, thus, adversely affect the quality of the asset base. In which financial vehicles and instruments is the bank invested? How risky are they? And so on.

No less important is the maturity structure of the assets. It is an integral part of the liquidity (risk) management of the bank. The crucial question is: what are the cash flows projected from the maturity dates of the different assets and liabilities - and how likely are they to materialize. A rough matching has to exist between the various maturities of the assets and the liabilities. The cash flows generated by the assets of the bank must be used to finance the cash flows resulting from the banks’ liabilities. A distinction has to be made between stable and hot funds (the latter in constant pursuit of higher yields). Liquidity indicators and alerts have to be set in place and calculated a few times daily. Gaps (especially in the short term category) between the bank’s assets and its liabilities are a very worrisome sign.

But the bank’s macroeconomic environment is as important to the determination of its financial health and of its creditworthiness as any ratio or micro-analysis. The state of the financial markets sometimes has a larger bearing on the bank’s soundness than other factors. A fine example is the effect that interest rates or a devaluation have on a bank’s profitability and capitalization. The implied (not to mention the explicit) support of the authorities, of other banks and of investors (domestic as well as international) sets the psychological background to any future developments. This is only too logical. In an unstable financial environment, knock-on effects are more likely. Banks deposit money with other banks on a security basis. Still, the value of securities and collaterals is as good as their liquidity and as the market itself. The very ability to do business (for instance, in the syndicated loan market) is influenced by the larger picture. Falling equity markets herald trading losses and loss of income from trading operations and so on.

Perhaps the single most important factor is the general level of interest rates in the economy. It determines the present value of foreign exchange and local currency denominated government debt. It influences the balance between realized and unrealized losses on longer-term (commercial or other) paper. One of the most important liquidity generation instruments is the repurchase agreement (repo). Banks sell their portfolios of government debt with an obligation to buy it back at a later date. If interest rates shoot up - the losses on these repos can trigger margin calls (demands to immediately pay the losses or else materialize them by buying the securities back). Margin calls are a drain on liquidity. Thus, in an environment of rising interest rates, repos could absorb liquidity from the banks, deflate rather than inflate. The same principle applies to leverage investment vehicles used by the bank to improve the returns of its securities trading operations. High interest rates here can have an even more painful outcome. As liquidity is crunched, the banks are forced to materialize their trading losses. This is bound to put added pressure on the prices of financial assets, trigger more margin calls and squeeze liquidity further. It is a vicious circle of a monstrous momentum once commenced.

But high interest rates, as we mentioned, also strain the asset side of the balance sheet by applying pressure to borrowers. The same goes for a devaluation. Liabilities connected to foreign exchange grow with a devaluation with no (immediate) corresponding increase in local prices to compensate the borrower. Market risk is thus rapidly transformed to credit risk. Borrowers default on their obligations. Loan loss provisions need to be increased, eating into the bank’s liquidity (and profitability) even further. Banks are then tempted to play with their reserve coverage levels in order to increase their reported profits and this, in turn, raises a real concern regarding the adequacy of the levels of loan loss reserves. Only an increase in the equity base can then assuage the (justified) fears of the market but such an increase can come only through foreign investment, in most cases. And foreign investment is usually a last resort, pariah, solution (see Southeast Asia and the Czech Republic for fresh examples in an endless supply of them. Japan and China are, probably, next).

In the past, the thinking was that some of the risk could be ameliorated by hedging in forward markets (=by selling it to willing risk buyers). But a hedge is only as good as the counterparty that provides it and in a market besieged by knock-on insolvencies, the comfort is dubious. In most emerging markets, for instance, there are no natural sellers of foreign exchange (companies prefer to hoard the stuff). So forwards are considered to be a variety of gambling with a default in case of substantial losses a very plausible way out.

Banks depend on lending for their survival. The lending base, in turn, depends on the quality of lending opportunities. In high-risk markets, this depends on the possibility of connected lending and on the quality of the collaterals offered by the borrowers. Whether the borrowers have qualitative collaterals to offer is a direct outcome of the liquidity of the market and on how they use the proceeds of the lending. These two elements are intimately linked with the banking system. Hence the penultimate vicious circle: where no functioning and professional banking system exists - no good borrowers will emerge.

aircraft-brokerage

Aircraft Brokerage

Writen by Milos Pesic

Who says only real estate have brokerage? Planes may not be as hot as real estates are but there definitely is such a thing as aircraft brokerage. You might not have thought this to be existent, unless of course, you’re into airplanes yourself. How often do we hear of people looking around for a good airplane bargain, or those that ask us if we want to buy one? And how many times in a week do we see advertisements in the paper about such sale? Who bothers to count?

That is probably one of the reasons why anybody can sell an airplane. There are no special trainings available and no required licenses to secure in order for a person to sell an airplane. Why, even your seven-year old kid can sell your airplane if you’re too busy to do it yourself! The question is, would anyone want to buy it from him?

Aircraft brokerage, unlike the real estate business, is not regulated. This means that you have be very careful because even if there are a lot of really good brokers around, you might just end up doing business with those who are not. People engaged in aircraft brokerage without the essential knowledge of the business will just cost you money and gives you a costly experience to deal with.

Of course, there’s always the option to sell the aircraft yourself. But if you are rich enough to be in possession of one, then you probably don’t have the luxury of looking around for potential buyers. You might be able to pocket all the money from its sale, but you’d be losing much more by fooling around with your time acting as your own aircraft brokerage firm.

Aircraft brokerage companies are aircraft brokers and dealers at the same time. And what’s their difference? Brokers are those people that bring the seller and buyer together and profits through commission after a sale is closed. A dealer is almost always a broker himself. He buys the aircraft at about 10-15% less than what the seller sells it for. Some dealers accept trade-ins as part of their marketing scheme.

A good way to “dispose” of that aircraft would be through an aircraft brokerage company. However, because there are no regulations that control the aircraft brokerage business, it is best to spend time in choosing the most reliable firm. The good ones can give you the best offer and can guarantee the buyers of a fair deal as well. If you must decide on doing business with a broker, never entrust your property to someone who does not seem to know much about airplanes and the whole aircraft brokerage business in general. He might just be taking lessons from your airplane and will let you end up with unnecessary expenses.

bank-atms

Bank ATMs

Writen by Eric Morris

Using ATMs is very convenient as it eliminates having to go to your bank if in case you run out of cash since they can be found in various places and they operate on a 24-hour basis. Given this, ATMs are widely used by a lot of people for small bank transactions. Apart form this; banks also offer benefits to people who do electronic banking since this type of banking increases their business. Recently, the convenience of using ATMs has now been extended to people who travel a lot. This is because banks that offer travelers offshore and international accounts also offer ATM services to their clients who may need to keep their accounts open or to transfer money to their relatives back home.

Getting an offshore account

Having an offshore account allows you to access or transfer your money wherever in the world through ATMs. However, not all banks may be able to offer this service so it would be a good idea to open such an account with a bank with a strong international presence. Doing so would also help you reduce ATM fees since using another bank’s ATM machine to access your account will involve additional fees.

Offshore accounts

Another added benefit of offshore accounts is that if you are an expatriate and you still earn in your native currency like American dollars, you will surely be able to save money since you would be earning more than you need to live on, especially in countries with lower standards of living. However, any interest that you earn form your savings may still be taxed when you go home to the United States.

Electronic banking is a convenient way to access and transfer funds because ATMs operate for 24 hours and they can be found in most places. For expatriates and travelers, this convenience has also been made available to them through offshore bank accounts. This is because offshore accounts allow them to access and transfer funds even if they are in a foreign country through ATMs.

bahamas-offshore-banking

Bahamas Offshore Banking

Writen by Eric Morris

The Bahamas is not just a great getaway for tourists. It has, for many years now, been a safe haven for businessmen and for their cash assets. Banks in the Bahamas have been touted as the world’s greatest tax haven for foreign accounts. The islands allow offshore incorporation of business entities and offshore banking for them; and all transactions are regulated and guaranteed by the International Laws on Offshore Banking.

But if you think having an offshore bank account in the Bahamas would mean frequent travels there, think again. While trips to the island paradise are always welcome treats (if not for the expenses they entail), you do not necessarily have to visit the bank to deposit and withdraw money or create an account. The Bahamas banks feature global access through automated teller cards capable of debit and credit transactions. This allows you to transact in stock trading and foreign currency exchanges. You can even have important documents couriered to your address.

To get an offshore bank account, you must apply first for an IBC or International Banking Corporation for your company. You may get help from institutions that specifically cater to this kind of need. The IBC’s are processed in Nassau, Bahamas. Your service provider facilitates the paying of processing fees, certification of the incorporation certificate, and prepares the company memorandum of association and the company articles of association. Once finished and approved, the documents that include brokerage and investment accounts are be mailed to you, as well as a list of banks that you can choose from. You do not have to go to the Bahamas to open an account. Everything can be done for you.

You can manage your offshore account much like the way you manage your onshore bank account, except that in this case, everything will be done through the Internet, mail, or phone instructions.

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