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Thursday, December 13, 2018

How To Set A Sales Price For Your Product Or Service

How To Set A Sales Price For Your Product Or ServiceFixing the selling price can be based upon a value basis or a cost plus basis with either basis subject to modification according to market conditions. Not exactly scientific and true in all cases but the most profitable businesses tend to be managed by accountants while the best sales growth companies have a sales oriented manager at the helm.

Value basis is used to set selling prices according to the amount the customer will pay for the product and the value of products or services being provided. A strong influence when using a value basis are the benefits a customer will derive from purchasing the product from each business compared with alternative suppliers and the general market rate for that type of product.

Using a value basis that prices products above the general market level requires support and a marketing strategy to demonstrate to the market place the benefits and advantages a prospective client receives. Pricing a product or service below the accepted market price requires to be supported with ensuring as wide an audience as possible is aware of the bargain prices and the reasons why a lower price is being offered.

To establish the most profitable level at which selling prices should be pitched it is important to conduct market research to determine the general level of pricing within the product area. Also list the benefits and advantages within the context of other competitive products of the specific products being offered to enable the business to use these factors in support of the price structure adopted.

To maximum level at which value basis prices can be set is dependent upon the value the target customer places on that product or service taking into consideration the quality, service, availability and benefits provided.

Cost based pricing is a financial accounting calculation based upon fixing a gross profit margin that the business requires given the expected sales volume and fixed overhead or operating costs to produce a net profit. Normally a sales price set using a cost basis would be the amount paid for the product plus an incremental percentage.

Cost based pricing usually occurs in areas where competition is often working on the same cost basis and by selling similar products and services the volume of sales is sensitive to competitive prices. Market research should establish the range of competitive prices.

There are a number of influences that impact on setting the selling price of a product in addition to the cost and competition. Sales location, added values, buying policy, operational costs and others all require factoring into the calculation. Business size also has an influence as small business accounting is less sophisticated than accounting and financial control in larger businesses.

The tow single most important factors in setting the selling price of a product or service to generate the highest profit margin attainable are the competition and the original cost of the product.

In many cases the existing competition has already set a price for the product. Each business has to decide whether to accept this price according to the expected volume and the gross profit margin generated or charge a higher or lower price with the consequential effect on sales volume.

The purchase price paid drives the competitive edge. Larger business have greater opportunities to buy in larger quantities and obtain cheaper prices and many high volume businesses will search to source products from overseas markets to obtain even cheaper products.

If the purchase price paid by competitors is low then that cost must be either matched by adopting similar business practises or the products sold into a niche area of the market where more flexible prices can be obtained at the required volume to generate the gross margin required to cover fixed operating costs and achieve the target net profit.

Different prices can be set for different customers to exploit higher profit margins where possible and achieve higher volumes in market conditions where the price has a major influence on quantities bought. A manufacturer will often set different prices for each customer dependent on volumes purchased and the negotiation skills of the client purchasing function.

Market conditions often determine a range of pricing policies including offering quantity discounts for higher volumes, cash discounts for faster settlement, lower than normal prices to allow a market to be penetrated and established more easily and higher than normal prices in situations where supply may exceed demand. The accounting software or bookkeeping system employed should identify gains and losses due to different pricing structures.

The levels of supply and demand may change over time and a flexible pricing policy to take advantage of these changes is desirable. It is an economic fact that when demand exceeds supply prices will increase and when supply exceeds demand prices go lower. Failure to react quickly has a major impact on the total gross margin attained.

The overriding decision to be taken on setting selling prices is the amount of gross profit generated by the sales volume of those products in relation to current business policy and fixed operating costs and profit requirements that business needs to achieve and demonstrate through the accounting figures produced by the final bookkeeping reckoning...

From an accounting point of view the sales volume and price of each product should be calculated to determine the previous gross profit margin attained and planned for the future. The actual or forecast gross profit margins must cover the fixed operating costs of the business or remedial action taken to ensure the business is profitable. Setting prices is a combined decision of the sales and accounting function.

Monday, December 10, 2018

How To Make The Most Of The Fcnr Account Today

How To Make The Most Of The Fcnr Account TodayIndian residents who have travelled abroad and retained the status of an NRI can opt for any of the NRI accounts to invest their foreign funds. For termed deposits, these individuals can opt for the NRE or the NRO fixed deposits, in addition to the FCNR account.

Amongst all the different options available, the FCNR account makes for a favourable options. Apart from its beneficial features such as the FCNR interest rates, tax benefits and other similar benefits her are some of the factors you can consider when opening this account:

The interest rates that are offered by the FCNR account depends on the foreign currency invested. Therefore, certain foreign currencies can earn higher FCNR interest rates as compared to others. Currencies such as the Pound Sterling, US Dollar, Yen and Euro can be invested in this account, depending on the currency you earn in.

Only authorized banks can offer the FCNR account to NRIs. By offering this NRI account, the bank would need to offer FCNR interest rates in compliance of the rates offered by the Reserve Bank of India. Therefore, it allows an account holder to plan and strategize his savings for the future when investing in this account.

Interest rates on FCNR term deposits are deposited after the end of first financial year. The interest is normally compounded on a half-yearly basis subsequently. An account holder can easily plan his financial requirements on the maturity period of the termed deposit. If there is no requirement of the funds on maturity, it can be reinvested for a new term.

FCNR accounts are protected against the volatile conditions of the forex rate risks. Since the funds that are invested in this account is maintained in foreign currency, it is maintained in accordance to the invested foreign currency. In other words, the principal amount and the FCNR interest rates are transferred with almost no loss in the currency exchange.

The interest earned in this deposit is exempted from the income tax. Therefore, applicants can easily invest in this account, without any worry of tax deductions.

In accordance to the facilities provided by this account, two or more NRIs can be joint account holders. However, no joint account from the local country is allowed.

Through this account, the principal amount and the interest that is earned is freely repatriable. Therefore, the account holder can repatriate the funds from this account to depositors country of residence without any restrictions.

Normally, the duration for the FCNR account is given at a minimum of 1 year with a maximum of 3 years.

Account holders can take a loan against this termed deposit. The loan can be in the form of a rupee loan, with the funds of the FCNR account held as collateral. Foreign currency loans are also permitted to the account holder, on condition that the loan would be repaid on maturity of the termed deposit.

Author Bio :- Neha Sharma is a finance student who loves to write during her spare time. She has considerable information about the FCNR interest rates. Through her work, she has provided valuable information on how to make the most of the FCNR account today.

Sunday, December 9, 2018

How to Make One Million Dollars in One Year

How to Make One Million Dollars in One YearThere you have it. The question just about every poor and middle-class person in the world would love to know. Do the rich people want to know? The truth is, most of them know already. They have either already done it or know what it takes and are still working on it. The only thing is the answer cannot be given in words but in experiences.

In order to make one million dollars in one year you must first become the type of person who can make one million dollars in one year, and to become that person is not easy enough for most people to accomplish due to mental laziness or lack of passion and desire.

It is not your skill or talent that will make you one million dollars in one year. It is something internal, something of the mind. It is something you must learn through time and experience. It is ultimately the people you allow to influence you and how you influence other people. Can you contribute or find a solution to what the masses need?

Money, dollars, pounds, lira, yen or dinero is made from paper but it originates to you from the hands of people. The only way to create one million dollars in a year is to either steal it wrongfully or to create a solution for people. Either way is possible and equally as difficult or easy. First you must create the solution, then set a price they are willing to pay, and finally create enough ways (it is very important to use multiple mediums to reach others) to reach enough people to accumulate the profit goal you have set, in this case one million dollars.

Its a fact that many people make one million dollars in a year. Its a fact that many people have gone from being broke to making one million dollars or more in a year. Its also a fact that a handful of internet marketers have sold 1 million dollars in less that a day. Now I should mention that the planning to make 1 million in a day took several months combined with the experiences learned from years. What determines how fast you are able to accomplish this task is how much you are willing to change and how much you are willing to give both of yourself and to the betterment of others.

You may have heard the saying If you keep on doing what youre doing, youll always get what youve always got. How true. And in words there is no better way of explaining how you can make one million dollars in one year.

Some people can change on cue while others never change. The best way you can begin change is by consciously desiring to change and improve so that you are able to accomplish your desired goal. Success is not a destination but a journey and the man or woman who wants to make one billion in a year will find out how and follow the same path that powerful leaders and the mega rich have followed in the past.

Consider what you really enjoy. Consider how your hobbies or interests can help others and then create the ultimate solution to peoples problems. The rest is just marketing and proper persuasion. Easier said than done, but easier than what most people give themselves credit for.

Anyone can go from rags to riches. Are you ready to become the next millionaire?

Saturday, December 8, 2018

How to Find Good Jokes Anywhere

How to Find Good Jokes AnywhereHow do you keep a blonde in suspense? Anyway, there is a whole bunch of ways to find good jokes for just about any occasion. It is really just a question of who your audience is going to be. Canon printer geeks go to conventions, politicians go to their lobbyist. Get it? Politicians/ lobbyists well theres no accounting for taste. So, head for the people that you want to make fun of. Most people have a pretty good sense of humor and are ready to laugh at themselves.

What are 10,000 lawyers buried up to their heads in sand? Not enough sand. Of course books are always a good place to look. But really, finding a good joke is about being in the right place at the right time. The best jokes really just sort of happen. Not all of us are Robin Williamss types that can write the stuff.

The real trick to finding a good joke is finding the right place and audience to tell the joke. A joke intended for somebody facing 10 years in prison is not the joke to be telling a Rabbi on the mount. Oh, did you hear about the Priest the Monk and the Rabbi who went into a bar? This is for Blonde ahreaders that are still thinking about the first eight words at the start of this article. Oh, and that is all of the fingers on your right hand and all but the pinky and wedding ring finger on the left hand.

So, where were we? Audience, the type of people you are around will dictate the type of joke you get. A mens locker room will get one type of joke while a bridal shower will get another type of joke. What did Jesus say to the little short guy after he banked his golf ball off of a tree, two bids and a squirrel for a hole in one? Nice shot Dad.

Poking fun also works well if a little competition is going on. If there is a wide perception about a group of people, regardless of how big that group happens to be, there are likely going to be jokes floating around about that group. Competing schools for instance; what happened when Joe, the football player, transferred from UCLA to USC? The GPA for both schools went up. And now, to complete the running gag for blondes, the answer to; how do you keep blondes in suspense is.

Thursday, December 6, 2018

How To Choose Accounting Software For Big Business

How To Choose Accounting Software For Big BusinessWhen deciding to go for accounting software, it must be understood that the best accounting software is the one that performs the entire core accounting functions quickly and accurately. All additional features are secondary to the basic functions. Never forget, it is the rigid rules of accounting that makes the software so consistent throughout.

The most comprehensive financial accounting packages incorporate in-depth financial reporting information and are managed by teams of qualified accountants supported by accounts clerks, bookkeepers, and substantial input from automated data sources. At the other end of the scale a self employed sole trader might use accounting software themselves and produce a set of financial accounts for the year in an afternoon.

Different accounting standards are required from accounting software dependent upon the purpose of the company and client needs. Double entry bookkeeping automated through a database system and arranged in financial modules would normally be the choice of public companies. Single entry bookkeeping would not be an acceptable accounting solution for a large corporation due to audit requirements and statutory obligations.

The Double entry concept works on the principle that for every Debit, there has to be a Credit. accounting software comes in handy to prepare Trial Balance, which demonstrates the accounting accuracy of the involved transactions. The Trial Balance has a Debit and a Credit side.

To find out if the transactions have been recorded properly or not, the sum total on Debit side should equal the Credit side. If the tally is accurate, it indicates that the transactions have been accurately recorded.

Single entry bookkeeping does however have its place in the market place for the smaller less complex businesses who maintain financial control through a close intimate knowledge of every financial transaction. The main objective of a sole trader is more likely to be the production of the tax accounts and complete the periodic and annual tax return forms.

The most sophisticated level of accounting software reflects the accounting data with various financial modules for accounts receivable, accounts payable, stock control, general ledger and fixed assets. These accounting modules may also be integrated with non-accounting functions such as production and dispatch functions and also divided into separate modules within the accounting function.

In larger companies the sales daybook and data entry of sales turnover would often be the responsibility of one department. The accounts receivable function might be split with a specialist credit control function within that accounting module. A further division may also include sales administration and customer records. Accounts payable would normally be multi-functional of the purchasing department, purchase invoice accounts department and a legal function for overdue payments.

accounting software for smaller companies is commonly a system of data entry of prime transactions which include sales income, purchase expenses and cash and bank transactions. The prime entries of these documents are to a database. The accounting software automates the double entry accounting principles and produces both accounts receivable, accounts payable and general ledger databases.

Some accounting knowledge is usually required to operate a database accounting software system and that financial knowledge is usually available within the company as most companies that use database accounting software also employ a bookkeeper or accounts clerks to input data and in slightly larger small companies also qualified accountants to manage the accounting function.

The need for accounting knowledge in a database system is partially to understand the data entry principles and the relevancy of the rules that need to be followed but essentially understanding of accounting principles is required to understand what is happening ton the information after input. And most important, a qualified accountant has the financial knowledge, training and experience to know what the system should be producing and how to search the database to retrieve that information.

A database accounting software system not only produces high quality financial records but offers numerous financial control alternatives for both junior and senior business management. The accounting function also has the security of producing trial balances, periodic profit and loss accounts, balance sheets and other financial and statements for tax and control purposes.

Author's Bio: 

Joe Coffee is a consultant for the online marketing firm, Web Shepherd. Visit www.accountingandyou.com for tips about leading methods of accounting and small business accounting options.

Tuesday, December 4, 2018

How Small Businesses Can Reduce Risk With Invoice Factoring

How Small Businesses Can Reduce Risk With Invoice FactoringMost U.S. small to medium-sized businesses (SMEs) are still facing challenges when compared to larger businesses. SMEs typically account for half of private sector non-farm employment. During the period from 1993 to 2010, more than half of these SMEs had one to four employees, and 98 percent had less than 100 employees.

Fast forward to now, the smallest firms have had the largest proportionate job losses between Q1 2007 and Q1 2011. According the Federal Reserve Senior Loan Officer Opinion Survey, during this same recessionary period, bank financing fell, and has still has not returned to levels prior to the recession. In 2010, credit standards for large firms actually eased at a faster rate than for small businesses.

SMEs struggle with having enough liquid capital, and even when they are not struggling with paying the expenses necessary to operate their business, they have very little flexibility. This is especially true when customers do not pay invoices on time, which will put your any business at risk.

Today, many SMEs have discovered the secret of accounts receivable financing, which simply is a way by which your outstanding invoices are sold to a third party factoring company. Invoice factoring isn't a loan. Applying for and obtaining bank loans can take an extensive amount of time, often with little payoff. When your business hangs on the line, a delay can make things go awry. In contrast, accounts receivables financing means that the factoring company will take over those outstanding invoices, giving you the cash in advance. Benefits of factoring receivables include the fact that instead of examining your credit, a factoring company typically makes its decision based on the credit-worthiness of the debtors. Then it is much easier for small businesses with few assets and little credit. In fact, most SMEs are surprised at the ease of this entire process.

A factoring company also won't require you to submit tax documents. If you have experience obtaining bank loans, factoring is a breeze. The financing of accounts receivables helps reduce risk because the transfer of these invoices then makes them the property of the factoring company, so passing this risk off can be a huge weight lifted. In essence, accounts receivables factoring benefits small businesses most because it improves cash flow.

No one needs the stress associated with a failing business, and investing time into your business is critical to success, growth and prosperity. If you have unpaid invoices, you will likely have to invest some time into getting them paid. And since time is valuable when you are putting in long hours for your business, why not take the first step towards liquidity.

Monday, December 3, 2018

How Poor Business Ethics Led To The Collapse Of Enron Ethics

How Poor Business Ethics Led To The Collapse Of Enron EthicsThe Enron Corporation was one of the largest companies which sold electricity and natural gas, distributed energy and other services like bandwidth interest connection and provided risk management and financial services to consumers the world over. This company became rich because of its initiative marketing and endorsement of power and communications bandwidth services and risk management offshoots. All these services were supervised by the operations management department but there existed other management departments which carried out half of their functions. Though these functions were purely executive in nature, there was lack of integrity, responsibility, creativity and control. The absence of these ethics led to the bankruptcy of the company. In other words, Enron ethics was ignored by the employees while working.

In an organization, the functions of the operations management department should consist of ethical values, integrity, competence and clear accountability of term papers. But Enron did not abide by these functions which led to its bankruptcy. We may say that the company's employees lacked Enron ethics. As the company's reputation grew in the global world, the competition within the employees rose and hence individual greed also generated in the atmosphere of the company's egotism. Every employee wanted to make it big, achieve a lot within the company, and thus there was high motivation to succeed and earn more. But in such an atmosphere, the tendency to distrust people around is high as each is only concerned about themselves. With the mistrust among the employees booming, highly confidential term papers got used in trade contracts. Thus, trading contracts were made in secret and its admission was also kept undisclosed. Dealings in the finance section grew rapidly without paying much attention towards the company's goals. Hence, the employees had started to ignore Enron ethics.

As a result, we cannot say that the problem rose due to the accounting practices only. It is not the financial department which is to be blamed solely. The problem which led to the bankruptcy of the company lay in the operations management department. On one side, Enron was gaining praises from the outsiders and on the other side, it was full of decentralized financial control and decision making structure which gave an illogical and unclear picture of the company's activities and operations. But we cannot say that the managerial performance was poor but the departments were ruining the ethical values and principles of the company. It was the duty of the managers and directors to check whether Enron ethics is being followed in their company or not. If they had supervised properly then they could have escaped from this bankruptcy tragedy.

How much is tax on income, tax percentage rates and income returns

How much is tax on income, tax percentage rates and income returnsHow much tax is deducted from an employee is determined by the level of earnings and the tax percentage applicable to those earnings taking into account personal tax allowances and reliefs available.

Income Tax percentage rates for Employees

All employers in the UK pay employees through the inland revenue tax PAYE system and are required to deduct both tax on income and national insurance contributions from the gross wages. The net wages received are by the employee after the PAYE deductions.

Gross pay is the total amount the employee has earned in that pay period including the basic wages plus any tips or bonuses received but excluding non taxable expenses. The gross pay on which an employee is assessed from tax and national insurance includes taxable benefits received by that employee such as private medical care or the provision of a company car. Non taxable expenses being business expenses the employee has incurred carrying out the duties which are reimbursed by the employer.

Having established the total gross pay the employer calculates how much is tax on income and deducts tax on a cumulative basis taking into account the employee personal allowance indicated by the tax code. Business expenses incurred by an employee which are not reimbursed by an employer may be claimed as a tax relief. Such items might include the difference between the UK allowance on mileage of 40p per mile and the amount paid by an employer is less than 40p and also working from home expenses.

The tax code tells the employer how much is the UK allowance to free pay the employee is entitled to in the financial year. For example a 2008 tax code of 603L would indicate annual tax free earnings of 6,035. That does not mean the employee will not be deducted tax until earnings reach that figure as when calculating the tax on income the employer is required to spread the tax free allowance evenly over the pay periods.

On earnings above the tax free allowance the 2008 tax percentage is 20 per cent up to what is known as the higher earnings threshold which under 2008 tax rules is 34,800 per annum. Gross salary which is above the higher earnings threshold is subject to a 2008 tax rate of 40 per cent.

In addition to the tax on income deducted by an employer under the tax inland revenue PAYE scheme other income is also taxable and declared on the annual tax income returns. Items declared on the income returns would include income from savings, dividend income, pension and trust income, any rental income and self employed earnings. Working tax credits are not classed as taxable income.

Determining how much is tax on income from savings is achieved by applying the income tax percentage applicable after deducting gross earnings from the tax inland revenue threshold limits. If non savings income is less than the 2320 starting rate for savings or if savings and dividend income is the only source of income then the savings income tax percentage is 10 per cent up to the 2,320. If non savings income is above the starting rate then all of savings are taxed at the 20 per cent basic rate.

When earnings exceed the higher tax threshold of 34,800 the income tax percentage on savings increases from 20 per cent to 40 per cent and on dividends from 10 per cent to 32.5 per cent. In effect how much is tax is determined by the highest tax percentage applicable to income.

National Insurance for Employees

While tax on income is calculated on a cumulative basis national insurance contributions are calculated as a percentage of gross salary in a specific pay period under the tax inland revenue system.

Employees under the age of 16 or over the national pension age of 65 do not pay national insurance, they are exempt. There are other circumstances where an employee pays a different rate of national insurance. For example a married woman who is widowed and possess a certificate may pay national contributions at the rate of 4.85 per cent of gross wages on earnings above the primary starting threshold. Employees with a second job where the earnings are above the upper earnings threshold would only pay 1 per cent insurance.

For most people who are employed the national insurance contribution is according to the rates set in table a and the amount payable is 11 per cent of gross earnings about the primary threshold and on all earnings up to the upper earnings threshold from which point the percentage drops to 1 per cent. In 2008-09 the primary threshold is 105 per week.