Wise Accounts Blog

In a volatile market you want to make sure your liquid assets don't go down the drain.

My daughter wants to run a mud-cake business. When I enquired she said she wanted to become filthy rich!

My duck farm went bankrupt because I had too many bills.

A debt collector summons a customer about a one year old unpaid bill. "What have you got to say for yourself?" The customer sheepishly replies: "Happy birthday?"

Were you nervous about asking the paymaster for an advance on your wages? "No, I was calm and collected."

The deceased millionaire rewarded Santa by putting a Claus in his will.

The new accountant got fired because he thought Dun & Bradstreet was a downtown intersection!

Husband: "The bank rang me to say the new check account I opened for you is overdrawn!"
Wife: "Can't be - I still have another 24 blank checks in my book!"

Husband: "The check you wrote to the department store came back!"
Wife: "Great! What can we spend it on this time?"

A banker is considered a good artist when she can draw interest.

Bill: Australia is a land of untold wealth!
Tom: Why, have you been peeking at my tax return?

Bill: I made a bet with the guy who does our laundry and won a bundle.
Tom: I guess you're not hard pressed for cash!

Bill: I never worry about money!
Tom: Why not?
Bill: What's the point of worrying about something you don't have?

Bill: I plan to beat the inheritance tax!
Tom: How?
Bill: I'm going to die broke.

Wife: Let's go to sleep honey - it's late.
Husband: Sorry, I'll stay up a bit longer. I'm reading a mystery.
Wife: That looks like our tax return.
Husband: it is.

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Doing your bookkeeping on the net? What a novel idea! What would get people to do that?

In an ever mobile society where being connected is more important than where you are, online accounting does make sense and is in fact closing a gap.

Being in touch with your records regardless of where you are can save you getting in trouble if you default on a payment because you couldn't remember the date or the amount.

If you operate a business or an association there could be a need for several persons to update receipts and expenses from different locations in a timely fashion. Setting up a virtual network and deploying some elaborate software can be time wasting and expensive. These features are a given with an internet-based application.

Internet bookkeeping does away with several levels of threats like hard disk breakdown, the theft of your laptop, computer viruses and so on. If you use the internet for internet banking the next logical step is to use the internet to access your accounting records even from an iPhone.

This concept feeds into the overall idea of cloud computing where people no longer want to maintain their own computer operations but instead shift to farms of dedicated servers with backup storage and non-stop power supplies.

Curiously for those of us old enough to have been using computers in the 1970's that is where it all started from! In those days all you had was a terminal hooked up to a mainframe. Then in the 1980s the IBM PC revolution hit. People demanded more and more flexibility in their reports and were re-manipulating their information in a Lotus 123 spreadsheet. It looks like after 40 years we have gone full circle... history has a habit of repeating itself.

Aside from what the pundits are trying to tell us the marketing emphasis is this: "just like instant coffee and microwave ovens - It's all about convenience." If you use the net to check the news, download music, read your email, send your resume and whatever else, the next logical steps is to use it to keep your financial records also.

What about privacy? Many services use your email address as identification. They send you your password to that address to make sure it is not a dummy token but indeed can reach you. Apart from that one point of contact they know absolutely nothing about you - neither do they want to. You can change your email address at will.

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The first uses of the early computers were various accounting systems for banks, insurance companies and mutual funds. Imagine running one of these businesses today without computers... Yet the awkward situation is that young people don't seem to care about keeping a tab on their finances.

Life has a way of catching up with you if you live carelessly - especially in the domain of finances. Few people grasp the concept of compounded interest (interest paid on interest). It works wonders for those who save and it spells disaster on those who borrow.

Little streams make big rivers. People at large do not grasp that small changes in the management of your money can trigger sizeable consequences over time.

The modern mantra is "whatever feels good - just do it!" self-gratification is everywhere and it's all about lack of discipline. "Today let us drink and be merry for tomorrow we die."

Why should only the taxman be privy to your state of affairs when you have to lodge your tax return? There is much valuable information to be found in poring over your personal finances. You might be disappointed with your job, frustrated with the neighbourhood you live in, jealous of your friends' lifestyle - but still the buck stops with you.

The way you handle your finances says a lot about the direction you're taking for your life. If you set goals it will channel your resources and you will have to make some strategic decisions about where to spend and where not to spend.

Unlike time which flies through your hands, money can be saved for a rainy day. The ability to store up cash for a worthwhile goal is the mark of a determined person who is prepared to hold on to achieve something worthwhile.

A cash flow forecast is a great tool for planning where you want to be financially this time next year. And guess what? If you don't plan to reach a given financial target you are very unlikely to bump there by accident.

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Some folks think that accounting is best left alone to accountants. I beg to differ. Your financial position says a lot about where you are going. It works the same for an individual or a business. In fact astute, financially minded people consider their estate like a business.

Wise Accounts has a clever report called "Source and Application of Funds". It determines from one financial year to the next where money has been released and where money has been siphoned out.

The subtle balance in your finances between what you owe and what you own may not be changing daily in a striking fashion. Looking at it in the right timeframe though will expose some trends you need to be aware of.

Financial matters have the knack of creeping up on you in discreet ways. If you fail to pick up the trend early enough it can be quite overwhelming to correct the situation.

You think you are cruising nicely on your way to financial freedom when unknown to you something behind the scene is nibbling away at your savings. There are scores of deceitful hidden costs lurking behind various transactions which over time will rob you of your hard earned cash. Other times you are the culprit by indulging in things you could do without for the sake of convenience and impatience.

The only way you will be able to find out soon enough is by keeping your personal accounts up to date. Don't wait for the end of the financial year to realise if you made a profit or a loss this year - you need to know that today!

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In medieval times people would sell themselves as slaves to avoid poverty and dying of hunger.

Today people mortgage their lives for an ever so elusive lifestyle. All because of marketing propaganda which indoctrinates the weak that unless they have this, that and the other they are nobody on the status scales.

If the cost of housing and cars doubles every ten years while your purchasing power goes backwards because of inflation and competitive foreign labour something will snap.

In past generations people would save for 20 years to buy a house or a car or both. In that time they had plenty of time to decide whether they really wanted it, whether the sacrifice was worth it, whether they would indeed reach their goal or whether they should make other arrangements.

Today the popular wisdom is: I want it and I want it now. Here comes the age of credit; how to enslave your future for the glitter of the ephemeral.

Because all people can see are the monthly payments (never mind how many payments there are...) as long as it fits in the monthly budget - let's go and buy it!

This is the very thing that fans inflation because in a world where people pay cash for everything there is a limit to much people are willing to pay and can pay for everything from houses to cars and clothing, etc...

In a world where everybody has access to credit that limit is lifted. What then takes place is a race for greed on the part of suppliers who can charge more and more as long as the new model supersedes the current model because of (useless) new features. Furthermore appliances are designed to break down within five years when they could last twenty years - just avoid saturating the market.

People were told it's OK to buy on credit if what you buy increases in value - that is housing... yet in the last 5 years we have seen that there is a limit to this also. A housing bubble is about to burst or at least deflate like a lead balloon.

You have situations where the collateral value of an asset is less that the amount of the loan. If you borrowed to buy shares that calls for a margin call. In residential real estate the banks are feeling a bit fidgety. No wonder they are not using the cash recently printed by reserve banks to offer more loans but rebuild their balance sheet instead...

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