Make An Error-Free Decision When Hunting For Insurance Brokers

We've heard plenty about the importance of insurance but who can you trust to recommend the best policies? Not everyone has your best interests at heart and something as important as insurance can't be left to chance.

You can choose to go with a broker or an agent. What matters is that they work on your behalf to get you the best insurance coverage. With more people becoming aware of the importance of being protected against lawsuits, natural calamities and theft, the number of insurance companies has mushroomed in recent years. This means the quest to sift the good from the bad has become even more important.

Expertise is an absolute must as is certification and license. Insurance has legal ramifications so if your agent or broker doesn't help you understand what each type of insurance can do for you or if he doesn't tell you how a particular choice can spell doom, you'll end up paying a hefty price. In fact, such is the important of insurance coverage that even fledgling businesses think to get covered.

For some, finding a good broker or agent means finding policies with the lowest cost and going with the professional who gave them that quote. They don't bother to find out if the coverage actually benefits them as long as money can be saved. This is a wrong and potentially disastrous way to go about agent-hunting because saving money now does not guarantee saving money later. What should be done instead is to get hold of an agent with lots of expertise and then get him to find coverage.

Depending on what you need insurance for, seek referrals from sources who deal in that field. For example, if it's health insurance you need, speak to a healthcare provider. They have connections with related insurance companies and will be able to point you in the right direction.

As for qualifications, all insurance brokers must be licensed by the Australian Securities and Investments Commission and accredited by NIBA (National Insurance Brokers Association). You may choose to deal directly with the insurance company too but that would mean doing the legwork yourself. As you probably don't have the time or the mind to take on the job yourself, it's far easier to rely on a professional. Just stay up-to-date on the process and understand the finer details of different types of coverage.

When interviewing brokers or agents, certain questions can reveal how competent they are. Queries about their track record in the past five years, how satisfied their customers are, their reputation (not only that of the providers they work for), and the financial foundation of the company represented are important. Be aware that there'll be sales pitches tossed at you so know when someone's making tall claims by running a check on the internet and speaking with people who've used their services before.

There are numerous insurance providers and even more brokers that it's not difficult to feel swamped. Not having much idea about insurance as a whole only makes it trickier. The guidelines outlined above will, hopefully, serve to remove some of the burden you feel when 'shopping' for an insurance agent and may guarantee you find someone you can completely trust.

How To Monetize Your Accounts Receivable

One of the primary reasons that most businesses fail in the first 2 years is cashflow management or more precisely the lack of cashflow. Your business may have a large number of orders on the books but if your clients take 45,60,90 or even 120 days to pay it could put your entire operation in jeopardy.

In the past what a business owner would do is go to their local bank and ask for a line of credit to tide them over until their clients paid. While most banks did provide this funding all of that came to a screeching halt in 2008 when the banking sector collapsed and even Fortune 500 companies had a hard time accessing working capital to fund their operations.

If you have these accounts receivable that are mounting and no cash to work with there is a distinct possibility that your growth could stop entirely. There is hope though in the form of accounts receivables financing.

This type of financing sometimes referred to as "factoring" will let you assign the ownership to an accounts receivable factoring company in exchange for cash upfront. While each of these companies have their own respective niches they offer a similar service.

You should have no issues finding these factoring companies by going online and performing a simple search. What you need to look for is transparency in the company, this is a business relationship you are forming and need to be sure that the finance company is doing everything by the book.

Now that you have created a list of prospective firms you must look at the rates they are charging for their facilities. There will be a range that could be from 2-50% depending on what is being financed. What makes this type of loan different from the ones at your local bank is your credit does not matter at all. The accounts receivable factoring company is going to look at the credit worthiness of the organization that has bought goods or services from you. This is truly appealing since the majority of the businesses who need loans are relatively new and do not have an established track record.

Once the accounts receivable factoring company has completed their due diligence on the credit worthiness of the company that owes money on the invoice they will make an offer to provide a loan. This cash can be deposited within 24 hours if you accept the terms. As mentioned earlier you want to find a firm that is very transparent with their fee structure so you know exactly what you are getting for your money. After you accept the terms the cash is deposited into your account to do whatever you wish and the lender will collect payment discretely from your clients.

Companies need access to this working capital and without this accounts receivables financing a considerable number of businesses would fail.

9 Benefits of Companies Outsourcing Their CFO

All businesses need financial consulting, however not every business can afford to hire a full-time Chief Financial Officer (CFO). As a result, small and medium-sized businesses are increasingly turning to expert outsourced CFO services. Here's how an outsourced financial consultant can benefit your company:

1. Cost Reduction

Outsourcing a qualified accounting professional to handle your CFO services can help your company save a lot of money. You'll be getting expert services without having to add additional personnel and technological resources. This can help reduce your company's overall operation costs.

2. Quality of Services

With an outsourced CFO, you can be assured of quality services because he is a professional who has worked with different industries, and understands what works across the board.

3. Allows Better Focus

It's very important for businesses, especially small ones, to concentrate on their core competency, and let professionals handle what they don't understand. If dealing with the financial aspect of your business isn't your specialty, outsourcing CFO services can help to concentrate more on what you know best.

4. Overall Efficiency

When it comes to meeting deadlines, as well as other requirements of different projects, an outsourced CFO is generally more efficient compared to a hired one. This is because he has experience with almost all financial situations, and you can only expect the best from him.

5. Assistance in Getting Financing

Bookkeepers do a wonderful job, but it's usually an outsourced Chief Financial Officer (who is a certified public accountant), who has to present suitable financial statements to a lending body for financial approval. With his experience, the CFO will be able to identify the strengths and weaknesses in your company's income statement and balance sheet, and can equip you with the financial information that the bank may need. Many times, such CFOs will introduce your company to banking sources that match its lending requirements, and thereafter, assist you throughout the financing process.

6. Developing Budgets

Every business, regardless of size requires a revenue and expense management plan in order to successfully grow. An outsourced CFO can help you as the business owner to develop a model that demonstrates what needs to be done to attain a desired gross or net profit, or meet a sales goal.

Every company owner can attest to the fact that without a budget, it's difficult to run the business efficiently, leave alone managing it to become profitable. Therefore, the CFO can work with you to come up with plans that can help you identify the sales level that should be reached to attain break-even profitability, or know when it's sensible to hire additional employees.

7. Managing Cash

Small companies would love to be able to have sufficient cash to run their everyday operations, however, most of them lack the tool to help them forecast their liquidity needs. When you outsource a CFO, he can build a model that forecasts your cash-flow requirements both in the short and long term. In addition, he'll be able to help your company in prioritizing its cash-flow needs.

8. Assist in Complying with Tax Regulations

Several business owners usually disregard the consequences of failing to pay taxes to the federal and local government on time and in full. In addition, they pay the wrong amount of taxes because of wrongly entered transactions in the ledger. Accurate tax returns can't be prepared without proper financial statements.

Outsourcing CFOs can come in very handy for such businesses because they'll ensure that financial statements are prepared accurately, and in a timely manner. Consequently, they'll be able to assist you in navigating and complying with various tax regulations.

9. Upgrading Accounting Software

An outsourced CFO is familiar with a huge variety of software packages. As a result, he can weigh the gains of getting more powerful accounting software against the package's cost, in order to know if the purchase makes sense. However, that basic software you have in your office may not suit every business type; certain companies for instance, those that deal with manufacturing, have significant inventory management requirements, and need more sophisticated software. An outsourced CFO can offer you very valuable advice regarding which accounting software is right for your business.

As you've seen above, companies have a lot to gain from outsourcing CFO services, such as cost reduction, efficient services and cash management. Besides, you'll get more time to concentrate in the day-to-day running of your business.

An Approach To Interest-Only Investing For Your Living Expenses

During retirement some people want to restrict their income only to interest income from their income-based investments. They like the security of principal that such investments have. So how might they arrange their portfolio to make this feasible over a long retirement horizon?

What such interest-based investors want to avoid is 'dipping into principal'. But preserving principal is done in two ways.

First way to preserve principle:

Here, preserving principal means not withdrawing it - just taking its interest earnings. Several investments offer interest-only payments. Examples are:

* Certificates of Deposit (CDs)

* Deferred fixed annuities, and

* High quality bonds (ideally near maturity)

These are all very secure investments. All interest taken is taxed as income.

You can get CDs with terms from a few months up to 5 years. As an example, you can buy a 6 month CD, wait the term, and then take its earnings and reinvest the principal again.

You can find deferred fixed annuities that allow you to withdraw up to 10% without incurring a surrender penalty (if you're over 591/2). Just take only the interest earned - which will be under 10%.

Near term bonds pay coupon interest for your use, and at maturity pay their face value which you can reinvest again.

Ideally you should compile a mixture of these investments for your 'interest-only' portfolio. With enough principal, you can consider laddering each of these investments to help preserve higher interest payments over long term investing.

The second way of preserving principal:

Preserving principal also means preserving the purchasing power of that principal. Inflation erodes the purchasing of a dollar and therefore will erode the purchasing power of your dollar-denominated investment principal. Inflation requires your principal, from which you're earning interest, to increase in terms of the number of dollars that make it up. And if your principal increases - and interest rates remain the same - the amount of interest earnings you withdraw will maintain its previous purchasing power too.

So, for emphasis, under comparable interest rates in the future, you'll need more principal to produce larger 'interest' withdrawals to cover the same living expenses to offset inflation's effect. It's those living expenses that will increase with inflation.

They only way to make your principal grow is by creating an 'equity-growing' portfolio. Such a portfolio is invested to grow as fast, or faster, than inflation. Hopefully, you'll be able to grow it sufficiently to offset inflation's deterioration of the principal of your 'interest-only' portfolio. Then every few years you can transfer some of your equity-growing' portfolio to increase your interest-only principal to offset inflation's damage to its purchasing power.

A mixed approach to growing your principal:

Of course, you could simply not withdraw all your interest from your interest-only investments and leave some to increase the principal over time. But then you're reducing your income for living expenses now in hope that in the future you can take the same fraction of interest earnings from a bigger principal amount. That's an approach to offsetting inflations purchasing power's deterioration on your interest income.

But this approach makes you seek higher interest rates to offset your fractional take on your earnings - and that may undermine the risk level of your interest earning principal. Breaking your money into two portfolios each with its complementary objectives - one for absolute security, the other for investment growth - keeps the risk allocated and recognized where it exists.

Save Tax With A Furnished Holiday Home

Owning a second home is an attraction for us all as an investment but also for stable income stream.

Firstly, let us gain an understanding of how a Furnished Holiday Home differs to a normal buy to let property investment:

• It can be a static mobile home i.e. a "caravan"
• A purpose built holiday home (we are seeing many more of these sites being built - no tax for tax mitigation)
• A normal residential property can be bought and then run as a holiday home. Must be fully furnished
• Must let property for 105 Days
• Must be available for let for 210 Days
• Cannot let for longer term lets of more than 155 days during the year
• Must be in the European Economic Area

Comparing the Tax Benefits

Capital Allowance

The ability to write down depreciation of the assets against income tax

• Buy to Let: No, only running expenses
• Furnished Holiday Let: Yes. This is attractive as an additional expense when capital spend/make improvement you make plus normal running expenses

Inheritance Tax

The ability to use Business Property Relief (BPR) i.e. pass on the asset free of inheritance tax.

• Buy to Let: Inheritance Tax may be payable as it is not a business
• Furnished Holiday Let: It is a business asset, can claim 100% BPR i.e. No inheritance tax payable

Income Tax (CGT)

Profits on rents after running expenses are taxable

• Buy to Let: Yes, payable
• Furnished Holiday Let: Yes, payable

Capital Gains Tax

Payable on both types of property (after allowances).

• Buy to let: Yes, payable at 18% (basic rate taxpayers) and 28% (higher rate tax payers)
• Furnished Holiday Let: May benefit from Entrepreneurs' Relief when selling your holiday let as it is as a business asset. CGT on business assets is 10% for the first £1m of gains rather than 18%-28%.
• Roll-over Relief: May be able sell your furnished holiday home and roll over capital gains into another "business" furnished holiday let and not pay capital gains tax

Council Tax

Buy to let: Tenant will pay

Furnished Holiday Let: off settable as an expense apart from periods of longer term let

What to watch out for

In a recent test case Pawson (deceased) v HMRC [2012], HMRC attempted to block 100% business property relief on the property claiming that no service was being provided by Pawson. In short, it was not being run as a service business holiday home. A Tribunal overruled HMRC sighting the regular turnover of guests, on-going services for cleaning, bedclothes, television, telephone etc. in the cottage made it a holiday business allowing BPR and not an investment subject to IHT.

Our view

A great opportunity to save tax and own a holiday property. Make sure it is commercial service for paying guests, brochure, on holiday let websites, local guide in the property, provide towels, water, etc.

You can stay there yourself for long periods as well as letting to your family and friends (at market rate though).

Worth considering as an alternative to buy to let.

Definitely worth considering for efficient inheritance tax planning.

Civil Liability of Debt Collectors - What This Liability Includes

Okay, so we have all, or at least almost all of us have been in this situation: As soon as you turn twenty one to apply for a car loan or, you decide that you want to share your passion for fashion to the world and you apply for a bank loan, and you get approved. Upon approval, you will use the funds received for your intended purpose which was for that dream car, or to open your own shopping boutique.

That feeling of excitement and happiness rushing all over makes you feel on top of the world because you are getting that extra push knowing that someone is giving you a chance to achieve your goals. You then are directed to read the fine print which includes the stipulations and binding agreements you are held to for the term of the loan. When you're first, second and third payments come in and you are paying them as scheduled things are all good and well. But then, the fourth payment comes in at a time when you have to pay say three, or even four bills in conjunction to that loan bill.

After coming to this conclusion, you then call your loan representative telling him or her that you will be a bit late on your payment. The representative then refreshes your mind to that agreement that you signed on a clause that specifically states that all payments must be made on time in accordance to the contract that the consumer (you) signed; or else there will be a high interest amount that must be paid on top of the debt that is already owed. Now what? That deal that you made has a great possibility of lowering your credit score, which in result will make it difficult for you to get any more loans; this in addition to a snowball effect of other misfortunes.

Financial situations such as this and many more are why we have a myriad of laws and acts in place to protect someone from being adversely affected from the outcome of consumer debt. Now, let it be known that these laws and acts are not in place for those who choose to out of wrong reason not pay their bills. As many of us who believes that many of the laws that are intact are there to work against us, truth being, these laws are in place to work for us.

A prime example of such law and acts that are set in place for a financial situation regarding the civil liability of debt collectors comes from the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. This act impends civil liability on debt collectors for certain debt collection practices that are deemed illegal or prohibited. A debt collector who fails to abide by any part of the Act is to be held responsible for actual damages, costs, reasonable attorneys' fees and certain statutory damages set forth in the Act. On the other hand,if a debt collector substantiates their case with proof beyond a reasonable doubt that "The violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error" then the debt collector is not to be held in contempt in any action brought under the Act 15 U.S.C. § 1692k(c).

Congress brought about the FDCPA, or the Fair Debt Collection Practices Act in 1977, 91 Stat. 874. The core intent and goals for this Act being in place was to dispel of any debt collections that some companies may practice in that can be seen as obtrusive. Another goal that the Fair Debt Collection Practices Act is to achieve is to ensure that debt collectors who abstain from such practices are not disadvantaged in a competitive mannerism, and to promote consistent state action to which is to protect consumers 15 U. S. C. §1692(e). The Act regulates interactions between consumer debtors and "debt collector[s]," defined to include any person who "regularly collects... debts owed or due or asserted to be owed or due another" §§1692a (5), (6). Among all other things, the Act "forbids debt collectors from making false claims or accounts as to a debt's character, amount, or legal status, §1692e (2) (A); communicating with consumers at an unusual time or place" likely to be inconvenient to the consumer". §1692c (a) (1); or using obscene or profane language or violence or the threat thereof, §§1692 d (1), (2)". (Heintz v. Jenkins, 514 U.S. 291, 292-293).

This is just a snippet of the laws that Americans have on their side when their debt is getting too out of hand for them to handle. This is not a get out of jail free pass to wipe the slate clear of all debts that one has accrued.

There are forms of action for if one was to get into a financial situation such as this and many more. Getting a loan to launch your dreams can be an amazing thing with risks, but rewards as well.Your job is to do the research, ask all of the questions you need answered, or to take any other measures to be informed to protect yourself from being nipped in the behind from the debt shark. Ask now and you will know no worries of being in debt.

How to Track Expenses and Better Communicate Financial Decisions?

With the economy still in a bad shape and savings rate taking a terrible blow, it is important to know the cash flow position of a company. With the profusion of smart phones in the country there's a huge deluge of apps of different kinds. Some of these apps cater to money management; they work as expense manager and also help in financial planning. It is therefore important that we make use of these apps in order to optimize our cash flow. We bring to you a compilation.

Money management apps: They can help you to manage your money. Many money management apps are currently free and open source. This is important as it will help you handle your money better. It also generates pie-charts which help users in formulating an opinion as to which expenses were necessary and which were wasteful and frivolous. It is also important to note the usage of money management apps also helps you to compile all the financial information in one app, i.e. your multiple accounts associated cards can all be stored in a centralized location.

Money Management app for android: These apps provide for and take care of all the accounting needs right from personal accounting of managing your savings account to alerting when important deposits mature. But the more advanced money management apps for android can also be used by professionals for formulation of budget, creating balance sheets and P/L statements. They can also be used for certification of accounts to pass it over to the shareholders. Using Android apps means you use secure Google SSL connections which give unmatched security of data.

Expense Manager app: These apps unlike the above mentioned apps focus only on compiling data related to the expenses. It therefore generates weekly, monthly and annual reports of the same and also makes the user aware of whether he is breaching set expenses limits. This app also produces interactive bar and pie charts to ensure that the data is presented to user in the best possible way.

Financial Planning app: These are the most advanced apps as they go beyond just offering solutions for earning and expenses, but manage the entire financial department of your house, some of the notable features include income tax, handling of cash reserves, Life insurances, Investment portfolio, and total debt which includes (housing and personal) Investment portfolio, and total debt which includes (housing and personal).