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Four Things to Expect From an Investment Outsourcing Provider

Outsourced Investment ManagementIn order to provide a fully implemented investment solution, a company needs to have fully diversified investment strategies which involve having a variety of fiduciary solutions. Non-profit organizations for example will find that leveraging the services provided by investment outsourcing providers will prevent them from having to incur costs related to internal resources as well as other financial constraints that come with in-house financial management practices. Even for a company that hopes to gain strong absolute returns, outsourcing their non-profit objectives which may include seeking top-performing managers and looking for alternative strategies is best and effectively acted upon by an investment outsourcing provider. In the current economic environment, poor performance is a potentially lethal state to be in. Having a provider who understands the challenges faced by organizations in their fiduciary duties as well as one who has the capabilities needed to shoulder the fiduciary responsibility for the organization is crucial. At the same time, an outsourced investment provider will also act as a gatekeeper in managing investment risk by managing cash flows of spending. In other words, the ability for the outsourced investment provider to make discretionary investment decisions based on his pool of knowledge and resource will help him to develop effective strategies in asset allocation, provide meaningful advice, stay current in regulatory requirements and select performing investment managers in fast-moving markets.The scope of work that an outsourced investment provider has to offer, in essence, describes the job of such a provider:Strategic Planning and OversightIn order to offer sound financial advice and implement programs that will help you achieve your financial goals, an outsourced investment provider needs to be well-versed in administrative details and in asset/spending models. It requires an understanding of standards and guidelines that control the markets in which your organization operates in. They will also be in a position to oversee and coordinate the implementation of financial programs by serving as part of the support and advisory team during these implementations. This level of responsibility requires proficiency in the duty of care with the ability to read and understand financial statements and accounting practices.Alternative Investment StrategiesIn order to effectively incorporate alternative investment strategies to an organization’s focus, sophisticated approaches are required. Professionals who have expertise in traditional and alternative investment strategies are extremely important. What are some of these strategies that you want to ensure that the outsourced investment provider has in his portfolio? Experience in diverse debt investment experience which includes distressed debt and debt arbitrage are some examples. A provider experienced in absolute return strategies for example, will know the structure risk exposure relative to public equity market investments. Experience in private markets involves experience in managing capital calls to private funds. Private investment fund are considered an integral part of asset allocation.End-to-end ImplementationIn order to assume the level of liability that comes with transitioning from a consultant to a full-time outsourced investment provider, an extended learning curve that takes into account the complex and diversified portfolio of the provider is needed. These added responsibilities also require the discipline to build and maintain an effective and diverse investment program. It takes important day-to-day decisions of tracking, monitoring and administering details. All these end-to-end implementations must be carried out in a timely fashion and cost-effectively using a rebalancing policy that also needs to be development by the outsourced investment provider.Value-Added Administrative ServicesOne of the top-most reasons why investors take the outsourcing investment approach is the variety of responsibilities that a provider is able to handle. If this is done in-house the overheard costs and the resource intensive approach and strategies required would be overwhelming for most organizations, especially small and medium-sized enterprises. Smaller institutions in particular need to have focused attention on profitability and growth. Customer care and the integration of new investment products and services also takes a lot of time and resources. In order to focus on these core elements which ultimately make or break a company, it is vital that such businesses outsource their administration to ensure that they adhere to the laws and regulations of the state which, if neglected, can cost the company time, money and goodwill – all vital to the success of today’s more accountable and transparent tax exempt institutions. Outsourced investment providers that provide such value-added services play a large role in freeing up a company to improve profitability and enter new markets, whether public or private.Some other outsourced value-added services that a provider may offer can include human resource, corporate support, business development and information technology. The benefits of these value-added services however should be realized without negatively impacting on core elements of the business. When it comes to Human Resource for example, any value-added outsourced HR solutions provided by the investment provider need to be more about the organizational requirements and should be tailored to reflect these needs as opposed to what is happening in the larger economy. Implementing alternative solutions that make more sense for a business will be more beneficial to the business in the long run as opposed to trying to model it to fit a business as a result of pressure from the local or larger economy.Leveraging an outsourced investment provider’s expertise however is not to be taken lightly. You need to make it clear at the outset, what are your objectives. You also need to be flexible since it may require working in a way that will fit your provider’s model or level of expertise. Establishing a structure where the investment provider resides between the layers of the investment committee and managers specialized in their particular areas is key.When the investment provider manages risks at the portfolio level, it is easy for individual managers to focus on their work and leave the diversification decisions to the provider. Such an investment program should be run like a business where costs are kept under control, policies in spending are reasonably regulated and the program is kept on track in fulfilling its objectives.In the end, the question is not whether or not to outsource, but what to outsource. Knowledge and knowledge-management has changed hands and is no longer home-grown. It can now be outsourced to more experienced providers which re-energizes an organization and challenges it to think beyond its resources. Outsourcing investment providers lie at the heart of all of this in assuming non-core functions and value-added services that help redefine an organization helping it grow beyond its in-house limits.BiltmoreMoney.com has the pleasure of working with nonprofits to make their mission go farther.

Accounting Software – Do You Need an Accountant?

The traditional role of an accountant is changing. In previous years a small business would class a good accountant as one of the fundamental requirements when starting a business. Their support and guidance towards all matters connected with the set up and launch of a business was perceived as essential in order for a small business to be ultimately successful. The perceived importance of the role accountants play with small business has been increasingly bought into question as the internet has grown and developed. The advice that accountants used to charge for regarding company formation, company structure and VAT registration is now largely available for free on the internet. Furthermore, the rise in online accounting software has made it easier than ever for a small business to keep their company books in good shape. We wanted to explore why more and more small businesses are choosing to use online accounting software and how this has impacted the traditional role of the accountant.Why are business owners using online accounting software?Cost – When the accounting and bookkeeping world was inaccessible to owners of small business the large cost burden of having a professional accountant was seen as simply a core running cost of the business. The cost structures of accountants differ widely from per hour, fixed fees for defined work and some even charge by the minute for telephone calls. Whatever the cost structure having an accountant look after all of you small business financial affairs will be a significant burden to your cost and business profits. Basic software for accounting can be available from as little as 5 a month.Time Schedules – A piece of software can continue working 24 hours a day whereas an accountant has set schedules and opening times. As a small business you will very rarely be working to a 9-5 schedule and therefore having the rigid nature of accountant opening hours can be frustrating. Even more so if a deadline is required that requires an accountants help and you are charged overtime for an accountant working out of hours.Information security – Despite the likelihood of you signing confidentiality agreements with your chosen accountant the fact remains that you are disclosing private information regarding your business strategy and performance to a 3rd party. Whilst there can be advantages to this is the form of gaining 2nd opinion on company performance there is also a risk that this information get into the public domain. Software for accounting allows you to keep all of your confidential information inside the business.Ease of use – Software for accounting has become very user friendly with many products available that do not require the user to have any accounting knowledge at all. This allows tradesman and sole traders to be able to easily to control of their financial affairs.Improved business Performance – There can be real business performance advantages of taking control of the company finances as opposed to outsourcing them.o Accountability – An obvious advantage of taking control of you financial affair is that there becomes greater accountability to deliver. Software for accounting allows small business owners to be much closer to the financial affairs than when they are outsourced.o Collaboration – one of the risks out outsourcing all financial management to an accountant is that it stifles people from within the business talking and engaging about disciplined financial management. Taking control of financial affairs internally within the business increases engagement and collaboration across the business to improve the company’s financial performance.If more businesses are using online accounting software is there a role for traditional accountants?In short, yes, but in a different capacity to how they have traditionally been deployed. Accountants need to focus less on the bookkeeping and daily accounting of small businesses and focus more on the provision of advice that optimises business performance. SME’s are becoming well versed in the many advantages that exist within doing your own accounting via an easy to use, cost effective software package. That said, many small business owners still have a requirement to discuss future business optimisation with a financial planning expert.Software cannot possibly understand a business’s objectives and work with the owners to produce a strategy to optimise performance. Nor can a software package proactively restructure the company books to save tax as the company grows and develops. Once a small business is established they would benefit from advice from an ‘auditor’ regarding business structures, financial efficiency and tax planning. This annual audit ensures that the business is on the right track for sustainable growth and success.Software allows small business to complete their day to day accounting enabling the owners to stay close to their financial affairs at a fraction of the price of an accountant. However, a good accountant can engage with the owner about optimising the business to ensure that the right plan for growth exists. This type of engagement with an accountant can be done as a cost effective fixed fee arrangement which can be easily planned and budgeted for within the company accounts. The answer to whether a small business should have an accountant or accounting software is – they should have both but deployed for different purposes.How do you find the right accounting software for your business?It is critically important that a software product is bought to match the specific requirements of the business. There are many software packages available on the market all aiming at different segments of the SME market. Owners should think about their specific business requirements and then use a tool such as Compare Software for Business to compare the industries suitable software for a product that meets these requirements.