Posts Tagged ‘Personal Finance’

Three time-saving banking features

Online and mobile banking offer quite a bit more than bill pay, PDF statements and a summary of recent activity.  Some of the best time-saving features aren’t as well known, such as:
  1. Alerts.  It’s common knowledge that it’s a good idea to frequently monitor bank activity for errors and fraudulent activity.  I have signed up for e-mail alerts whenever there are international, Internet, phone or mail order purchases made with my debit card, as well as when purchases and ATM withdrawals exceed a certain amount in a given day.  For a credit card I use once a century, I get e-mails whenever charges exceed $0.01.  Alerts don’t completely replace my manual monitoring, but are more effective than daily booting up my computer, mistyping my password, re-entering the correct password, entering my PIN, selecting the checking account, perusing the recent transactions, and trying to remember what that $100 charge at the electronics store was for.
  2. Mobile Deposit.  Sign the check, open the mobile app, enter the amount, take a picture of the check, and it’s done!  Wow!  That was so much easier than finding a deposit slip, filling it out, driving ten minutes to the bank, waiting behind two cars in the drive-through teller line, and opening that pesky vacuum tube canister!
  3. Bank Feeds.  Today’s personal finance and business accounting software can connect to bank accounts and import transactions on a daily basis, and that’s just the beginning.  Xero, the software I use for my personal finances, easily creates and automatically classifies transactions based on a predetermined set of rules.  It’s been a much better experience than the poke-your-eyes-out manual data entry that I used to do!
What online or mobile banking features make your life easier?

Who says IT doesn’t matter?

In an MBA class I’m taking at UNLV this semester, one of my assignments was to read the article IT Doesn’t Matter by Nicholas G. Carr, which was published in the Harvard Business Review in May 2003.  The title, which certainly provides some shock value, may be misleading without further explanation.  Carr doesn’t imply that IT is unimportant in an organization, but rather that it should not be considered a strategic resource. The most interesting part of the article is Carr’s argument that IT, as an infrastructural technology, is becoming a commodity just like the railways in the mid 1800s and electric power in the early 1900s.  As a commodity, IT becomes something that every business has and provides no competitive advantage. I’m not saying that Carr is wrong, but I have a hard time comparing IT to commodities like railroads and power plants.  Unlike other commodities, IT continues to evolve rapidly.  For example, the graph on page 10 of the article measures the number of host computers on the Internet as a means to compare it to other commodities.  In the changing world of IT, would this be better measured by smartphones, tablets, or another new device in a few years? The article made me ask myself, “does IT provide a competitive advantage to an accounting firm?”  I think it does – perhaps not so much the hardware and software themselves, but more in the way that they are used.

The Importance of Accountability in a Personal Budget

Many years ago, I was involved in an organization in which I and other volunteers received a weekly allowance to cover various expenses such as transportation and meals.  In one of our meetings, the president of the organization announced that some of the volunteers had come to him and complained that the allowance wasn’t sufficient to cover the expenses (I was not one of them).  He told us that he would consider increasing the amount of the allowance for those who would provide a detailed accounting of their expenses proving a need for a higher allowance.
At our next meeting about a month later, the president said that nobody had presented a list of expenses, so he assumed our allowances must have been sufficient. I could see the embarrassment in the faces of the others in the room.  With the task of keeping track of their expenses, those people probably paid more attention to what they were spending money on and realized that many of those expenses weren’t really necessary. I’ve been to many seminars and seen TV shows about making a personal budget, and while they may offer some good money saving tips and show how to make a fancy budget spreadsheet, I’ve found many of them lacking in the emphasis of accountability.  An ideal spending and saving plan doesn’t provide much of a benefit without the ability to compare actual expenses to budgeted amounts. Without organized financial records in place, people are left wondering, “where did all the money go?”  They might make a guess on how much they spent during the past year on clothing, gasoline, or food; but from personal experience, I know those estimates are usually way off.  By the way, I don’t think having a year-end spending statement from a credit card company counts as being financially organized. The best way to organize personal finances is to use a good computer program (I use QuickBooks, and here’s why) that puts together all of a person’s financial information, including  bank, investment, loan, and credit card accounts.  I began doing this a few years ago, and since then, I’ve been able to solve the riddle of “where all the money goes.”

One Idea for Learning QuickBooks Better

Sometimes, business owners, accountants, and bookkeepers have asked me the simple question, “How can I learn QuickBooks better?”  A satisfactory answer to their simple question can be complicated, however.  My response is that it depends on how the person best learns.  I suggest that attending training seminars might work best for some.  For others, reading the manual could be helpful.  The follow-up question I am asked is usually, “well, how did you learn it?” My interaction with QuickBooks early in my accounting career (which consists almost entirely of working in accounting firms) was primarily in printing simple reports from client files to use as workpapers for preparing tax returns.  When clients started asking “how do you do this and that” in QuickBooks, I realized that I could use more practical experience myself, so a few years ago I purchased QuickBooks Premier Accountant’s Edition to use at home as my own personal finance software. Some might consider this a crazy idea.  There are certainly less expensive software packages out there that are better designed for personal finance rather than running a business (Quicken, for example).  However, I accomplished my personal objective of learning QuickBooks better.  With my frequent use of QuickBooks at home, entering transactions and reconciling accounts became second nature for me.  Although I don’t regularly use some business functions like inventory and sales tax with my personal file, I had the opportunity to experiment with them at home. So, that is how I learned to use QuickBooks, and I’m passing the advice along to any newly hired bookkeeper or accountant who also wants to become more comfortable with QuickBooks.