BlackLine commissioned independent global research firm Censuswide to survey over 760 institutional investors across the world to establish their attitudes to financial risk, due diligence and reporting. The findings reveal the financial practices that raise red flags for investors, as well as the factors they rely on to make informed investment decisions.

According to the survey, creative accounting, where companies exploit financial loopholes to present figures in a legal though misleadingly favourable light, was identified as a major concern for the global investor community. Not only do the majority of investors believe that these tactics are commonplace at their portfolio companies, but 91% believe that more large companies will resort to these techniques over the next 12 to 18 months.

Worryingly, 83% of investors surveyed also agreed on the likelihood of a global recession in the next 12 to 18 months, meaning businesses will need to work even harder to outstrip the competition. However, companies should think twice before trying to manipulate their figures; a quarter (25%) of investors singled out evidence of creative accounting as the factor that would make them least likely to invest in a company.

“In many ways the international business landscape is more complex, uncertain and challenging than it was a year ago. Companies are therefore under increasing pressure to perform and retain a competitive edge,” said BlackLine CEO Therese Tucker. “However, businesses cannot afford to have the integrity of their financial data questioned at a time when investors are evidently becoming more stringent about unnecessary and unwarranted financial risks.”

In fact, inaccurate reporting and poor financial controls raise alarm bells for a large number of global investors. Less than 1% of those surveyed say they will invest in a company with poor financial controls without taking some form of corrective action first, such as imposing changes on the company or its management team.

A third of investors (33%) say risk of internal financial fraud or financial non-compliance make them less likely to invest. Meanwhile, a quarter (25%) are put off by consistently late filings, with a slightly higher portion less likely to invest in companies that make adjustments post reporting (29%).

These red flags are encouraging investors to take a much closer look at the numbers, highlighting the importance of accurate and transparent financial data. When asked what the most important considerations were when deciding whether to invest, a company’s financial growth forecasts (46%), access to real-time snapshots of company finances (42%) and key metrics within financial reports (46%) came out on top. This suggests that while investors are forward-looking, they also need a clear and realistic view of current financial data in order to make informed decisions.

“It’s likely that investors will increasingly want to look ‘under the hood’ of their portfolio companies, to ensure they are getting a transparent and accurate view of their finances,” continued Tucker. “The ability to access, and more importantly analyze, data in real time will not only be vital for driving business competitiveness, but also for maintaining investor trust.”

The full findings are outlined in ‘The New Age of Increased Investor Due Diligence’.

At least that is according to CompTIA, one of the world’s leading tech associations. Below, Jessie Dean of Oakmount Partners Ltd, an investment consultancy firm from the UK, discusses the complex tech-scape in the US.

True, San Francisco in California and the wider Silicon Valley area still provide the greatest number of vacancies and opportunities for Brits looking for career opportunities in the US, but it is North Carolina who CompTIA seems to think is serving expats with the best options. More specifically, the cities of Raleigh and Charlotte — both of which are part of the ‘Research Triangle Region’, an area known for its excellent tech and scholarly institutions.

Great plains instead of great beaches

California is the land of dreams. It’s everywhere, thanks to the success of Hollywood, in popular culture and imagination. Long stretches of golden coast; redwoods a thousand years old, and great cities packed with our favourite celebrities. North Carolina is different. If the average Brit was asked to conjure up images of North Carolina, it would probably represent something like a large red barn, isolated in an expanse of large overgrown agricultural fields.

So what is attracting the attention of CompTIA, and of British tech expats?

The shift back east is largely due to the quality of life that North Carolina can provide, and the greater disposable income that it provides.

True, San Francisco, Silicon Valley (that includes San Jose, Santa Clara, and Sunnyvale) still pay the best wages. The median salary for an IT worker in San Jose is over $122,000 per annum. But the cost of living in this area is a whopping 43 per cent higher than the national average.

The same IT worker might stand to make somewhere between $83,000 and $88,000 in the Research Triangle, but the cost of living in North Carolina is actually below the national US average — for now. What this means is, even with the pay cut, a job in North Carolina will land you more money in your pocket at the end of the month to spend on whatever you want.

[ymal]

Big Tech and finance investment is soaring in North Carolina

The shift to North Carolina isn’t all about walking away with more money. Big Tech itself is investing in new areas, including IBM, Cisco Systems and even possible Amazon and Apple. There is also an increasing number of companies who are expanding their operations into North Carolina from the finance and consultancy sector. Including a number of big and increasingly digitised firms such as Wells Fargo, Accenture and Bank of America. The allure comes from tax breaks and other regional benefits — such as the wealth of talented students from the increasingly influential universities: powerhouses such as UNC Chapel Hill and Duke University. North Carolina is also a grand place to acquire local cost-conscious start-ups.

Is California’s time in the sun at an end?

San Francisco is one of the most expensive cities in the world. Living space is extremely limited — with the City located on a small peninsula out into San Francisco Bay. The local government won’t even build upwards, in the form of skyscrapers, as they do not want the views to be spoiled by the City’s less lofty residents. It is becoming hard to ignore that many of the positive factors about living in California — the weather, the good colleges — are now counting against it.

Then there is also the massive problem of homelessness. In some of the City’s poorer boroughs, such as Tenderloin, huge gangs of homeless openly inject with needles in broad daylight; take hallucinogens, and make some roads impassable at night. All of these factors, above and more may account for the fact that, according to CompTIA, more residents left San Francisco than any other city in the last quarter of 2017.

The current shift of power also has echoes in the not-too-distant past of America’s history. Boston was once a the ‘traditional tech centre’, and is now the 17th most desirable destination for tech expats, despite the City being within the commuter belt of Harvard, MIT, and other world-famous and prestigious institutions. A typical salary in tech for a Boston employee is a much lower $94,000 than in Silicon Valley, but the costs of living are still 35 per cent above the national average. Other ghosts of the past include Washington DC and Baltimore.

Though it is worth remembering that San Francisco still has plenty of vacancies for engineers willing to pay the high costs of living. So California’s role to play in tech is far from over. The balance will not shift overnight, and it was always inevitable that some other location would come to challenge it in time. For now, it is still wise for British expats to heed the old advice, to “Go west, young man”. Just not as far west as was typically expected.

Business Insider recently  released their picks for the Top 30 Most Influential Women in the UK's tech arena, and thereby showcasing that women are occupying some of the most important and impactful roles in the UK's most innovative companies. 

This represents a huge step forward in the efforts for equality at work - the tech industry in the UK harbours some of the country's most forward-thinking companies which have the potential to transform our lives for the better in countless ways. The fact that the women occupy such a variety of important roles within the industry can only bode well for the future of women at work, and showcases the success that women leading from the front in industry can generate.

However, the wider industry still has some work to do: in their roles as entrepreneurs, technologists, and investors, women continue to face inequality and sexism, whether implicated by conscious or unconscious biases. In 2017, 83% of all UK VC funding was allocated to startups whose founding teams were exclusively male, according to Diversity VC.

Hephzi Pemberton, Founder of Equality Group, commented on the increasing number of women in tech, and what must be done to ensure continued growth: "It is fantastic to see so many women step into these high-profile positions and deliver incredible results. They represent role models to working women everywhere, and it is my hope that they will encourage other institutions and industries to consider the value of their female staff and their contribution to the sector. 

"Study after study has shown that diverse teams improve financial results with the higher the percentage of women in management positions, the greater the returns. This is because more diverse companies can attract, develop and retain a broader talent pool and because of this, are able to serve niche markets with a better understanding of their customers. It also allows companies to tailor their approach to every facet of society, improves their image, staff satisfaction and net income. Ultimately, diverse businesses do better and all companies should strive for diversity, not simply to meet implemented targets, but to reap the rewards that increased diversity will enable."

It's best to look for other sources that can help you reach your business goals, so take a look below at some of the alternative methods of fundraising you can do.

Consider the Assistance from Angel Investors

These retired business gurus or successful entrepreneurs can be your ticket to salvation when you need funding. They are people who take a keen interest in your work and activities, making them huge supporters who want you to succeed and grow. Also, they can offer their advice and business expertise to make you a better player in the market.

Not your Average Loan 

When people think about loans, they consider personal or business ones, but no one would ever expect to get funding from your inheritance money. Some owners have a lot of money coming in but the probate process gets delayed and drags. That's why loans for heirs can be very appealing when you want quick funding for your startup or company. You get a considerable amount of the money entitled to you, and you can pay the debt off when the courts finally issue your money.

Have You Thought About Crowdfunding?

This is a good way to utilize the digital world to your benefit. There are several reputable platforms with different investors that can provide you with the money you need if your business activities pique their interest. Countless investors are on the lookout for decent companies that offer something special and useful to the community, so investing in your company can be beneficial for them, too.

So, if you are looking for such crowdfunding, arrange a Meeting of investors and venture capitalists at a club. This will be really fruitful for you

You Could Go for Factoring and Invoice Advances

This can be very handy when you find a provider that can front you some money on the invoices that you’ve already billed out; it's good for companies that constantly provide products and services to customers, and you will pay it back once your customers have paid the bill in full. It's a simple method that keeps your business running and projects operating without waiting for long periods of time for consumers to pay up.

Consider CDFI Assistance When Nothing Else Works

This stands for Community Development Finance Institutes. They are private financial organizations that deliver affordable lending options, making it very easy and advantageous for many businesses that are in need of quick funding to save them from tight situations. Many businesses don't get a chance to thrive or grow because of restricted money-raising methods, so this can be the answer to their capital needs to fund their business.

Managing your finances can be a little tricky, but with the right mindset and the willingness to find better and reliable sources for funding, you can make a huge difference in your company's success. You can't just sit there and wait for your company to crumble; choose the right path for you and get the best funding that suits your needs and goals.

It’s estimated that 81% of finance teams are currently undergoing finance transformation, yet research by Gartner reveals that seven out of 10 finance transformations fail.

This article, authored by Laura Timms, Product Strategy Manager at MHR Analytics, based on the new finance analytics guide from MHR Analytics, will reveal the benefits of adopting analytics to supercharge your efforts and help ensure that your finance transformation is a successful one.

Finance strategy that’s aligned with future business needs

Transformation is more than simply hitting a financial goal. It’s about being able to respond to the current and future needs of the organisation – something that can only be achieved when finance is connected to the wider business.

Unfortunately, with all of the demand that finance teams receive, it can be easy to fail to recognise how financial activity translates into everyday business.

This can lead teams working introspectively, which can quickly translate into silos, with poor communication of information, lower levels productivity and consequently a less valuable finance team.

To prevent this from happening, the financial strategy needs to be aligned with activity across the business, and analytics provides the platform to do exactly that.

Using a data warehouse, data from across the organisation can be synced to give finance teams real-time insights into how changes in one area of the business will impact the course of action they take.

This means that finance teams are able to steer away from getting caught up in metrics like historical spend and industry benchmarks, and are instead grounded in how the finance strategy relates to the unique needs of their business.

Using a data warehouse, data from across the organisation can be synced to give finance teams real-time insights into how changes in one area of the business will impact the course of action they take.

1. Focus on high-value tasks

According to Gartner, 56% of companies are in the evaluation phase of adopting AI to automate accounting & finance processes. By 2020 it’s estimated that 31% of companies will have actually implemented this into their business and 26% in “operating” mode, where AI is actively used in accounting & finance processes.

But what does this mean for finance transformation?

Well, AI technology is providing a platform that is changing the role of finance teams at a rapid pace. Through automating tedious financial processes, finance teams no longer have to spend their time buried in spreadsheets.

Everything from cash disbursement, revenue management and general accounting could be automated through leveraging analytics – in fact, it’s estimated that up to 40% of financial activity could be automated, and another 17% mostly automated.

Research goes on to reveal that for an accounting team with 40 full-time employees, with an average salary of £60,000 would save around 25,000 hours and nearly £72,000 that would have otherwise been wasted on team members carrying out repetitive tasks.

This time saved can instead be spent on higher-value tasks that facilitate business transformation and allow finance to act as a trusted strategic partner to the business.

2. Understand where to allocate resources

Sometimes it can feel like finance are caught in the middle, with demands left, right and centre of the business. And with eloquent justifications from each department explaining why their project should be prioritised, it can leave finance teams stretched under the pressure to please everyone.

Analytics works to hand back the power to finance teams.

Through interactive dashboards that display performance across the business, finance teams are able to easily identify the key value drivers of financial growth.

This means that they’re able to present stakeholders with “the facts” and justify financial activity, only spending resources on activities that generate the most financial value, whilst cutting unnecessary costs.

On top of this, finance teams can look internally to see what they’re spending their own time and resources on. This can help them to define their list of roles and responsibilities as a department to ensure that they don’t get caught up in low-value tasks.

[ymal]

3. Make faster, more reliable decisions

At the core of any finance transformation is the need to adapt finance practices to meet increasing business demand.

Despite this, many finance teams are still relying on outdated methods to carry out financial processes.

Relying on spreadsheets to communicate and understand what’s going on in the wider business is a common theme amongst finance, but using manual methods alone leaves room for human error.  In fact, research shows that nearly 90% of spreadsheets contain errors, and this can make it tricky to make decisions with confidence.

This approach also means that teams are often forced to spend hours analysing data and pulling reports. This can lead to lags in getting all-important insights, which delays decision making and can result in “in hindsight” discussions with stakeholders.

Analytics works to streamline financial processes to provide teams with fast and accurate insights at the touch of a button. Through real-time data and automation of once tedious processes, teams can see bumps in the road way in advance and have greater confidence in their decisions.

Sources:

https://emtemp.gcom.cloud/ngw/globalassets/en/finance/documents/trends/cfo-journal-new-digital-workforce.pdf

https://www.gartner.com/en/confirmation/finance/trends/new-digital-workforce

https://emtemp.gcom.cloud/ngw/globalassets/en/finance/documents/insights/hallmarks-of-winning-finance-transformations.pdf

https://www.gartner.com/en/confirmation/finance/insights/finance-transformation

https://emtemp.gcom.cloud/ngw/globalassets/en/finance/documents/insights/defining-the-scope-of-fpa-analytic-support.pdf

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Deloitte-Analytics/dttl-analytics-us-da-3minFinanceAnalytics.pdf

[2] https://www.mckinsey.com/business-functions/operations/our-insights/new-technology-new-rules-reimagining-the-modern-finance-workforce

https://www.blackline.com/blog/account-reconciliations/3-audit-benefits/?ite=1192&ito=1771&itq=b820f4c8-2db4-44be-bdbf-1230cc9fa177&itx%5Bidio%5D=522393

[1] https://emtemp.gcom.cloud/ngw/globalassets/en/finance/documents/trends/cfo-journal-new-digital-workforce.pdf

[3] https://www2.deloitte.com/gr/en/pages/finance-transformation/topics/finance-transformation.html

https://openviewpartners.com/blog/finance-transformation-the-art-of-getting-more-from-your-finance-team/#.XSxsDuhKiUk

https://www.gartner.com/en/finance/insights/finance-transformation

It’s been an interesting three years since the 2016 referendum, with the next ten years promising more of the same. Below, Erica evaluates Boris Johnson’s Withdrawal Bill and its implications for UK businesses as well as the society we live in.

1. Diversity of thought is key to long-term success moving ahead

Narrow bands of interest and self-interest don’t create a vibrant society, nor a thriving business. Diversity has to include different thinkers, different ethnicities, ages, gender, problem solvers. Those companies, authorities and organisations who can’t embrace and harness this will become moribund. And rightly so.

2. Digital and real-world complementarity is critical

At the moment we have no idea what any post-Brexit trade deals will look like. Developing aligned business models and associated revenue streams is vital. With entertainment, retail and business services moving increasingly online, reducing trading frictions by evolving new digital services and products from real-world trade is vital. And for those only online, there is a rich opportunity to consider how an IRL leisure or experiential offering can enhance your bottom line.  After all, there is space in abundance available in every single UK high street.

3. Environmental responsibility – get with the programme

In the current Withdrawal Bill, climate and environmental alignment with the EU has been shifted to future trade agreements. That might be fine to discuss then, but your clients and customers will be expecting it from you now. This is not an option.

Responsibility has to be taken at every step in the commercial process and, increasingly, will be an influencing factor in every personal purchasing decision. Get your supply chain to sign up to sustainability/ethical mandates now to gain early mover advantages and positioning to enable trade within even the strictest global environmental trade frameworks. Sustainability should be as important to your business and as measurable as profitability.

[ymal]

Sabzproperty has a highly skilled technical team of professionals at work with a strong desire to ensure client satisfaction through excellent service delivery. We have a vibrant and engaging property market which offers a large property inventory accrued by competent property agents and developers from different neighborhoods. This has attracted teaming property audience over the years and has birthed the responsive value rewarding network we have today.

4. Uncertainty is the new certainty

Nothing is certain over the next few weeks… who will be in power?  The next few months… in or out?

So you need to understand what deep uncertainty means for your business, your customers and your own personal circumstances. Be prepared to pivot, to take advantage of short term opportunities, to revel in the unexpected. What could this uncertainty allow you to unlock in your relationship with your past/present clients? Where will it allow you to find future clients? What could you develop with or for your competitors? And where might you find new buyers in differing marketplaces you had not looked to before?

And if you are not in the D2C world – look out of the window to ask what you can sell to that person walking past? Thinking the unthinkable has to be part of your new strategy.

5. Tough trading breeds new opportunities

The British are inventive people. Everyone who lives in this wayward nation contributes to its determinedly individualistic approach. We lead the world in creativity – in fact it makes up £101.5bn GVA, the second-highest sector in the economy. In times of economic retrenchment and difficulties that may lie ahead, there will be the potential for green shoots to force their way through, for businesses to grow and develop in unlikely sectors and unexpected ways.

In the 2007/8 recession, people delayed big-ticket purchases and cut back on eating out. This saw a rise in small spends - cupcakes, lip-sticks, feel-good treats. Home baking and entertainment surged with businesses that could supply this ‘batten down the hatches’ mood benefitting. The emergence of shows like The Great British Bake-Off first screened in 2010 after 18 months in development and production captured this back-to-basics mood. Now a highly profitable global tv format sold across many countries, it illustrates how there are opportunities in even the most trying economic circumstances.

As the next few weeks and months unfold, focus on these five points in both your business and personal dealings. Keep your mind alive to opportunities, inventive thinking and potential pivots. Living with uncertainty is something we’re all getting used to within our own lives, the UK economy and planet as a whole.  So embrace it and turn it into positive actions build a commercially inventive road ahead.

About Erica Wolfe-Murray:

Cited by Forbes.com as ‘a leading innovation and growth expert’ Erica Wolfe-Murray runs innovation studio, Lola Media Ltd. With creative head and FD experience, she focuses on auditing intellectual assets/IP to evolve new products & services from a company’s existing business. 

She is also the author of ‘Simple Tips, Smart Ideas : Build a Bigger, Better Business’ aimed at the UK’s 10m+ micro business & freelance sector to help build greater commercial resilience in this dynamic but often ignored part of the economy. 

Yet, our working days are getting more demanding and the time we must juggle both our personal, and professional lives seems to be even more restricted.

Maintaining a positive work-life balance is a key factor for employee happiness. Because of this, and in order to better work around personal lives and work demands, dynamic working, which was once a somewhat unfamiliar term, is now a highly sought-after workplace benefit. Below Derren Bevington, Business Director at Michael Page Finance, explains further.

Dawnconsultancy offers full range of dynamic consultancy including Dubai offshore company in UAE, providing best innovative financing solutions to help troubleshoot any business problem with ease.

In fact, in previous research, we found that 66% of professionals working in banking and financial services would like to see flexible working hours offered by their employer and 53% also listed work from home options in their top three desired benefits. However, only 26% of those surveyed had actually been given the option to work from home.

Why is it important?

A recent study conducted by Michael Page shows that millennials expect flexible working to be offered as standard in the workplace and not as an additional benefit. However, this doesn’t mean that those who fall outside of this age group don’t equally enjoy the benefits of dynamic working or want them to be included as part of their working life. The ability to plan work around personal life events allows individuals to better organise their time, take care of their physical and mental wellbeing, and ensures that they are in the best position to manage a productive work schedule. As we are in a candidate-short market, it is important good people are retained. Being able to adapt to the changing motivations of employees to drive forward retention in later years is key.

[ymal]

How to introduce dynamic working

What’s important to remember is that flexibility in the workplace is defined differently by everyone; what works for one person may not work for another. The key to success is to ensure that it is tailored to the individuals in the workforce and that they have the option to choose what is important to them.

Flexible working does not mean fewer working hours. It is a way to show employees they are trusted to do their job no matter the time or location they choose to work in.

Flexible working does not mean fewer working hours. It is a way to show employees they are trusted to do their job no matter the time or location they choose to work in.

These are my top tips for implementing flexible working successfully:

• Facilitate home access - the ability to work from home or a remote location can significantly improve productivity. Workers in these industries are usually comfortable with reviewing their emails first thing in the morning or responding to queries well after 5:30. In fact, the ability to sign in during a commute can amount to a lot more getting done, well before the rest of the team have even signed in.
• Establish flexibility champions - these individuals should be from right across the business, to demonstrate how they make it work best for them. This employee may be someone who takes a longer lunch break but comes in an hour early to compensate. Alternatively, it could be a parent who comes in later so they can drop their kids off in the mornings. Some companies have also enabled some of their employees, particularly those who live further distances from the office, to leave early as a means of making an earlier train but encourage them to log back in once they get home.
• Highlight great performance - this should happen for both employees in the office and those who on occasion work dynamically. However, if there is a noticeable improvement in an individual’s performance after adopting a dynamic working schedule, be sure that it is known across the company.
• Agree weekly deliverables - regardless of flexibility requirements - work from home, longer lunches, or later start times - every employee needs to know their KPIs and daily responsibilities to ensure they are working effectively. When dynamic working is introduced, this becomes increasingly important to ensure employees know what is expected of them.
• Consider job sharing - where it is feasible, perhaps two employees would work better on a part-time basis sharing the responsibilities of a single role on a week to week basis? Job sharing is a workable solution if two colleagues or new starters are only able to work restricted hours during the week. The key consideration for this working arrangement is to ensure each employee is effectively communicating with the person they are handing the job over to, this is so they are aligned in the requirements for the following day.

Ultimately, it’s important to define what dynamic working means in your business before implementation and ensure this is communicated to everyone in the company. The secret to maintaining a flexible working approach is to always make certain it remains adaptable to everybody’s needs. This working arrangement should be adjustable to the ever-changing schedule of people’s lives and encourage employees to produce their best work.

According to Dominic Buch, Co-Founder and Managing Partner at Caple, in order to support that growth, many CFOs will be expected to examine and recommend suitable funding solutions.

Finding an appropriate form of finance is more complex than it used to be. For most of the twentieth century, business lending was based on the value of a company’s assets such as property, stock or invoices.

To help firms access funding, finance directors have therefore developed a good understanding of how lenders would assess their company’s physical assets.

However, today, companies are more likely to be investing in intangible assets such as data, software or a strong brand than tangible ones.

This investment in intangible assets has spurred growth and innovation. But using them as collateral to borrow against remains difficult. Although value is built in intangible assets, finance is raised against tangible ones.

Without a new approach to funding, finance directors, especially in asset-light sectors such as professional services, technology or media, may struggle to find suitable funding for their business.

The growth of the intangible economy

As most finance directors would recognise, companies now build and grow through investment in intangible assets, alongside a continued focus on human capital.

We can see this from the businesses that succeed today.

Airbnb is valued at $35bn because of its network and data, not because it owns apartments. Google has become a global behemoth because of its algorithms.

These companies are valued so highly because of their intangible assets, including the skills of the people that develop them.

The same is true of many smaller but growing businesses too. Service-based businesses contribute around 80% of UK GDP and more than £160bn in annual exports.

For instance, growing financial firms, technology companies and media businesses rely on intellectual property and brand to stand out from their competitors.

But because financial standards have not kept pace with these changes, finance directors may struggle to accurately value their asset and their business.

The challenge accessing capital

Intangible assets present a challenge to traditional lending models based around recoverable security such as property or machinery.

If a company with physical assets goes out of business, a bank can recover its money by selling those assets. Lending decisions can therefore be centred around the value of the assets, rather than the performance of the business.

Intangible assets are less transferable, they cannot easily be recovered and sold to a new owner.

As a result, businesses with intangible asset bases find it more difficult to access debt finance, regardless of the strength of its operations and the associated cash flows.

When asset-light service-based businesses sector are such a vital part of the UK economy, this puts a brake on growth.

How unsecured lending can help

Traditionalists will say equity funding through venture capital or private equity is the solution. Often that holds true.

However, as finance directors will know, third party investment, does not suit every sector, firm or business owner. It also dilutes ownership.

Instead, asset-light companies can now benefit from unsecured lending, based on an understanding of the future cash flows generated by the business, rather than the value of physical assets.

Working with external advisers such as an accountant or business advisor, finance directors often play an important role in helping their business access the right funding.

Both by identifying suitable lenders and in supporting the development of the forecasts and business plans central to a credit process based on future cash flows.

When expanding businesses are important for both jobs and growth, we need to do all we can to help fund them.

We need a new approach to lending where finance directors can help their firms access the right growth funding for them.

That may be true, but the rest of the 99.99% of things are quite heavy on the bank account. Between bills, school, food, children, girlfriends, wives, entertainment, and subscriptions, how can anyone keep accurate track of their money? Personal finance is the collective term used for managing your money at home. It encompasses everything from diapers to government bonds. Here are steps one must take to ensure that every cent is accounted for.

Seek Advice

Seeking advice is an invaluable tool for any person that wants to keep their personal financial plan on the straight and narrow. Find an expert you can extract information from and mold your strategies around these insights. If you don’t have access to a professional financial planner, MoneyTaskForce.com is a great tool to keep you up to date on trends and news. Big-time search engines also have their financial sections you can look at. The idea is to get a strong feel of how successful people work with their money.

Set Goals

Every person needs goals. A person without goals is probably not going anywhere. Same goes with money. Money is a means--a proof of value. What you do with it determines your wealth. Having a financial plan is crucial to this. Figure out what your goals are. Do you want that new motorcycle? Do you want to save enough to pay for your child’s college? Do you want to take copy-cat selfies in Bali with friends? None of these things can be responsibly done on a whim. Determine a series of goals and attach timelines to them. Have a short, medium, and long term goal. Short is within the year. Short is that vacation mentioned earlier and whatever other purchases you may take on. Medium has a range of five to ten years. Medium is that motorcycle and your eye on that nice apartment in the city. Long term is looking towards the horizon towards retirement. Having a solid plan to stay afloat during your unemployed golden years is always a good idea.

Set Up A Budget

Your primary tool to accomplish what you want financially is the budget. Your budget is a set guideline as to how much you’re allowing yourself to spend within a given time frame. It can be simple or it can be complicated. Like most things, the answer is somewhere in the middle. The Goldilocks quotient of any good budget means that you’ll be aware and somewhat challenged by the boundaries, yet not completely restricted. Ease of use still plays a factor in a financial plan. It’s not all about spending as little as possible. It’s about understanding your habits, curtailing the unnecessary ones, and rewarding the good ones.

[ymal]

Create Safety Nets For When You Splurge

The tendency for anyone under an extremely strict budget is to accrue a feeling of entitlement. “I’ve been so good with my money, I deserve a night out.” This is dangerous. Anything you feel like you “deserve” is absolutely undeserved in the world of personal finance. That attitude primes you to go overboard and splurge way too much. Set up systems that ensure that you don’t go completely off the rails. A very common and highly effective way to do this is to squirrel away money without you even knowing. Have a relatively small percentage of your paycheck go to a savings account in a bank separate from where you have your checking account. Lose the account number. Lose the pin number. Lose everything pertaining to said account and just forget about it. This means you won’t feel the hit of this savings strategy, and you’ll have something to fall back on in case overdraft fees are in your immediate future. Make it as inconvenient as possible. That means that the only way to access that money is to physically go to a branch, wait in line, and retrieve it in person.

Pay Off Debt

Pay off your debt. It doesn’t matter how much money you have in your pocket, if you’re in debt, someone else owns that cash. Make an effort to pay off all your debt within a certain time frame. Let's say in your early years you took on a lot of debt to get life going the way you wanted it to. Pay extra on all of them, focussing on the ones with higher interest rates. Once the high-interest rate loans are paid off, pay that same amount total, but towards the other loans. For example, if you have three loans that each cost you $100 a month, pay that same $300 total towards the remaining two when one of them is paid off. This ensures that you pay off your debt as quickly as possible. It’s called the debt-paydown snowball effect.

Invest

Lastly, invest. Start investing and getting good at it as soon as you can. You have tons of options ranging from bonds to stocks, to real estate. The sooner you get into the investing game, the more you’ll focus on your long term goals and retirement. It’s never too early to start, but due to the nature of these plans, there is such a  thing as too late. You just have to choose the right one and tailor your plans around it. But be careful. There if you delve in stocks and bonds, there is a gambling aspect that is sewn into the system itself. Your goal is to buy low and sell high, of loan out big to get an even bigger return. Due to the fluctuations in the market, this may not work in your favor. But if you do it right, you’re looking at a lifelong habit of making significant passive income.

Gone are the days where things were primarily cash or check. It’s all card and recurring payments. It’s absolutely necessary for one to be on top of their money. Being financially responsible means the difference between knowing when you’re in the red and somehow finding yourself deep in it. Financial responsibility is the key to getting ahead of the game and making sure that you can live a good, happy, worry-free life for years to come. That is the essence of good personal finance.

In short, this means that in order to continue to be seen as a value-added service or department, finance professionals must evolve to keep up with ever-changing technologies.

Laura Timms product strategy manager at MHR Analytics explores  with Finance Monthly some of the biggest changes we can expect to see in the role over the coming years.

1. From mathematician to business consultant

Traditionally, finance professionals had to rely on historical, internal data to draw insights.

Not only was this data limited in scope, but it failed to give a full perspective of how decisions today would impact the future.

Now, the introduction of predictive analytics has helped moved finance professional’s analysis from asking “why did it happen?” to exploring “what will happen next?”.

Access to in-depth insights will enable finance professionals to track customer data in real-time and evolve from simply keeping of records, to carrying out in-depth analysis of the data.

Gone are the days of working discretely behind the scenes as the “number cruncher” of the business. The future of the role will increasingly see finance professionals using value-added analytics to position themselves as a strategic voice within a business.

Their unique visibility of the holistic position of the business will allow them to analyse and interpret anomalies and trends. This information can then be passed to the internal stakeholders to help them to make value-added decisions.

2. Remote working

The introduction of Cloud computing has taken the reigns off the finance professional.

Previously bound to the place of work or client’s offices, Cloud will work to exchange the cubicle lifestyle for more flexible working, with such roles able to be carried out anywhere.

The enhanced security of Cloud systems will allow finance professionals to unlock and share insights wherever they are, without having to worry about the traditional repercussions associated with handling sensitive data outside of the confines of the office.

Plus, a rise in businesses opting for a single online system, with all data in one place, creates simplicity without the need for multiple bulky applications.

Soon finance professionals will be able to share their analysis with their team at a click of a button and have a real-time view of what’s going on in their business whether they’re at home or on the go.

[ymal]

3. Use of non-financial data

Financial data has long been the cornerstone of the finance professional’s work. It was from this data that patterns were spotted, reports were created and recommendations were made.

But the truth is that financial data alone only tells part of the story. As other types of data become more widely available, this will be increasingly used to further enrich financial insights.

Customer behaviour patterns can be used to detect fraud and suspicious activity, and supplier data can be used to anticipate shipment information so that this can be considered when creating forecasts. Finance professionals can even use internal data such as employee performance metrics to identify the ROI that each employee provides to the organisation, so that they can make recommendations accordingly.

Implementing such data into the review process works to improve top-line revenue and injects further value to financial insights. Research by FSN on planning, budgeting, and forecasting backs this up, with findings revealing that CFOs that make good use of non-financial data are able to forecast with 90-95% accuracy.

4. Highest ever standard of service

The rise of data analytics is facilitating an augmented workplace. In simple terms, we’ll see a rise in tasks that previously had to be completed by people, instead being carried out by machines.

Augmented analytics will allow much of the tedious administrative duties that have long been central to the finance professional’s role to be traded in for a more efficient way of working.

It will work to process data, bring it into context and lead in getting answers from it; giving more time for people to generate deeper insights for the business.

This technology will leverage finance professionals’ expertise, enabling them to focus on providing a higher quality service than ever. This will raise the bar in the industry, with businesses and clients alike recognising the direct impact that such roles have on their bottom-line.

5. Emergence of data-driven roles

The augmentation of traditional roles will see the emergence of data-driven alternatives to traditional bookkeeping and accounting roles.

As data becomes more and more central to the finance professional’s role, and as organisations become increasingly reliant on finance professional’s insights to drive their business strategy, the mutualistic relationship between finance and data will become ever more apparent.

In the near future, all finance professionals will be expected to have some knowledge of data analytics. But leading up to this, we’ll see the emergence of data science hybrid roles that will form out of businesses’ demand for data-savvy specialists.

This means seeking extra training to become proficient in data analytics sooner rather than later will help finance professionals stand out from the crowd and solidify their knowledge before this becomes a necessity.

References: 

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Deloitte-Analytics/dttl-analytics-us-da-3minFinanceAnalytics.pdf

https://www.accaglobal.com/uk/en/member/member/accounting-business/2016/02/insights/data-analytics.html

https://blog.kenan-flagler.unc.edu/macwp-why-does-should-data-analytics-matter-to-accountants/

https://www.ey.com/en_gl/digital/how-analytics-can-help-transform-cfos-from-accountants-to-strate

https://www.accaglobal.com/ie/en/member/discover/events/global/e-learning/leadership-and-management/data-analytics-cpd-skills.html

https://careers.accaglobal.com/careers-advice/returners-to-work/finding-flexible-work/what-exactly-is-flexible-working.html

https://www.forbes.com/sites/workday/2017/08/23/why-non-financial-data-is-a-cfo-game-changer/#3a26278450b4

A default is incurred following multiple consecutive missed payments on a credit agreement that you have entered into. Once you get to between 4 and 6 payments behind the lender may register your account as `defaulted`.  This can occur on most kinds of finance including: credit cards, personal loans, store cards, car finance agreements, home owner loans and mortgage agreements. It basically means that you have not kept to the terms of the credit agreement you entered into with your lender.  One thing you can do to shed a more positive light on your credit profile if you have already incurred the default is to settle it as soon as possible. At least then any lender can see that you managed to pay the debt off - as it will show as `status satisfied` on your credit report.

Negative Impact Of Receiving A Defaults

In most cases you will receive a penalty charge for missing a payment on any credit agreement. If your account goes into` Default Status` it can also have a big impact on your credit rating - limiting any future finance options.  Continuing to miss payments can also result in a county court judgement on unsecured debt and continuing to miss payments on a mortgage or car finance loan could result in repossession of the home or vehicle respectively.  These are the short term impacts, unfortunately the trouble does not stop there because credit reference agencies will leave the default showing on your credit record for 6 years before it can be removed.

“There are still plenty of loan and mortgage providers who will consider lending to people who have missed payments or even defaults."

Paul Carley MD of First Choice Finance

What To Do If You Get A Default?

If you miss a payment you need to ensure you get caught up on your debt and not miss any other payments in the future. People have missed or late payments for all sorts of reasons. It may have been an administrative mistake on your or the lenders part part, if this is the case consider setting up an automated payment such as a direct debit.

If you have incurred a default because of a problem with affordability then you need to consider your finance in more detail, if it is a short term cash flow problem, call your creditors and discuss the problem with them, if it is a bigger affordability problem you may consider restructuring your finances with the use of a debt consolidation remortgage or a larger loan to refinance your debts. Extending the debt term could reduce your monthly debt payments but you will normally end up paying more in interest overall.

Can I Get Additional Finance Or A Mortgager  If I Have A Defaults?

If you are having trouble meeting current payments additional debt should be considered very carefully, although you may consider restructuring your existing debts, with the use of a debt consolidation loan or mortgage.  Defaults will have an impact on your finance options - many high street lenders will not approve applications from borrowers with recent defaults.  However some specialist lenders are still offering competitive mortgages for people with recent defaults. Loan to values are restricted to about 80% maximum for clients with between 1 and 5 defaults in the last 24 months, these plans are also subject to credit scoring.

Paul Carley MD of First Choice Finance says; “There are still plenty of loan and mortgage providers who will consider lending to people who have missed payments or even defaults.  However the key is to gather all the facts and figures before you accept any offer of finance. The most important areas to consider are you being able to afford the loan and making sure that the new finance puts you in a better position overall.”

But it is the speed at which the technological advancements have reached that has forced traditionally slow-moving financial institutions to heavily invest to remain relevant to their consumers and remain competitive in the marketplace.

Personal

Banking is one of the oldest businesses in the world, going back centuries ago, in fact, the oldest bank in operation today is the Monte dei Paschi di Siena, founded in 1472. The first instance of a non-cash transaction came in the 20^th century, when charga-plates were first invented. Considered a predecessor to the credit card, department stores brought these out to select customers and each time a purchase was made, the plates would be pressed and inked onto a sales slip.

Once the sales cycle was over, customers were expected to pay what they were owed to the store, however due to their singular location use, it made them rather limiting, thus paving way for the credit card, where customers that had access to one could apply the same transactional process to multiple stores and stations, all in one place.

Contactless

Leisurely spending has changed that much that we can now pay for items and services from the watches we wear on our wrists, but it wasn’t always this easy. Just over a few decades ago, individuals were expected to physically travel to their nearest bank to pay their bills, and had no choice but to carry around loose change and cash on their person, a practice that is a dying art in today’s society, kept afloat by the reducing population born before technology.

Although the first instances of contactless cards came about in the mid-90’s, the very first contactless cards associated with banking were first brought into circulation by Barclaycard in 2008, with now more than £40 million being issued, despite there being an initial skepticism towards the unfamiliar use of this type of payment method.

Business

Due to the changes in the financial industry leaning heavily towards a more virtual experience, traditional brick and mortar banks where the older generation still go to, to sort out their finances, are now in rapid decline. Banks are closing at a rate of 60 per month nationwide, with some villages, such as Llandysul closing all four of its banks along with a post office leaving it a ghost town.

The elderly residents of the small town were then forced into a 30-mile round trip in order to access her nearest banking services. With technology not for everyone, those that weren’t taught technology at a younger age or at all are feeling the effects most, almost feeling shut out, despite many banks offering day-to-day banking services through more than 11,000 post office branches, offering yet a lifeline for those struggling with the new business model of financial firms.

Future innovations

As the amount of digital natives increases year on year, the demand for a contemporary banking service continues to encourage the banking industries to stay on their toes as far as the newest innovations go.

Pierre Vannineuse, CEO and Founder of Alternative Investment firm Alpha Blue Ocean, gives his comments about the future of banking services, saying: “Artificial intelligence is continuing to brew in the background and will no doubt feature prominently in the years to come. With many automated chatbots and virtual assistants already taking most of the customer service roles, we are bound to see a more prominent role of AI in how transactions are processed from all levels.”

Technology may have taken its time to get to where it is now, but the way in which it adapts and updates in the modern era has allowed it to quicken its own pace so that new processes spring up thick and fast. Technology has given us a sense of instant gratification, either in business or in leisure, we want things done now not in day or a week down the line.

Sources:

https://www.sysco-software.com/7-emerging-trends-that-are-changing-finance-1-evolving-cfo-role/

https://www.vox.com/ad/16554798/banking-technology-credit-debit-cards

https://transferwise.com/gb/blog/5-ways-technology-has-changed-banking

https://www.forbes.com/sites/forbesfinancecouncil/2016/08/30/five-major-changes-that-will-impact-the-finance-industry-in-the-next-two-years/#61cbe952ae3e