CFI.co Blog - Page 12 of 47 - Business, Finance, Economics

Did you know that experts expect Bitcoin’s value could multiply to twenty-five times its current value within the next decade?

Cryptocurrencies are growing in popularity around the world every day. This is making many people want to know how valuable they will be in the future. When making investment decisions you shouldn’t act on impulse and should instead make decisions that are based on logic and strategy.

This is why it’s important to know whether banks are going to matter in the future. To make you make sense of the future of money, we’ve created a guide of the top financial tips about banking and cryptocurrencies.

Why Banks Are Important Today

Banks are able to store currencies and provide consumers with security. When you open a bank account and deposit money, you can rest assured that your money is safe. This is because banks are FDIC-insured.

They’re also able to keep records of your transactions. This oftentimes includes things like processing activity from credit and debit cards.

If you’re traveling internationally, you’ll never have a problem taking money from your account in different currencies. All you need to do is withdraw cash from an ATM.

Those who want to buy a house usually need help from banks so that they can get mortgages. New business owners also need banks if they want to get lines of credit to get financing for making investments.

Where Traditional Banks Fall Short

The financial crisis of two thousand and eight showed consumers that the world’s banking system has weaknesses. This inspired many people to develop new ways to work with finances such as Satoshi Nakamoto, who invented Bitcoin.

One of the reasons Bitcoin has soared in popularity is that it didn’t need to incorporate traditional banking into its process. Here are other ways that banking falls short.

Lack of Accessibility

You’re out of luck if you want to visit your local bank teller during the weekend because they’re only open on weekdays. Banks also make it difficult for those who need to make big transactions. Instead of doing this online, you have to go in person to visit a branch.

Inclusion

Traditional banking systems are set up to reward those who certain groups and people. These people receive incentives such as soft loans, longer payment durations, and better interest rates. This unfair system is exclusive and ineffective.

Problems with Security

Skilled con artists can easily hack banking websites and mobile apps. This is why so many people get money stolen from their bank accounts. Traditional banking systems are also vulnerable to fraud and embezzlement.

Not only is this a problem for consumers but it’s also an issue for insurance companies that offer fraud protection.

Higher Feed and Slower Transaction Speeds

Traditional banks have many unnecessary fees and taxes on transactions. Most banks charge their customers for withdrawing cash from ATMs that are out of their networks. It’s also common for banks to charge high fees on international transactions and wire transfers.

Banking systems also run on ineffective digital systems. This means that they have slow protocols, which means it can take a long time to send and receive money.

How Cryptocurrencies Are Better Than Traditional Banking

There are many ways that cryptocurrencies function more effectively than traditional banking systems.

Many people choose to use cryptocurrencies to make transactions because they are more efficient and have lower transaction fees. Here are more top ways that cryptocurrencies can make traditional banking obsolete.

They Are Decentralized

There is no third party that controls cryptocurrencies. This means that there are fewer human interactions involved in making transactions, which means that they are less biased.

Since anonymous identification numbers are all that are used for making transactions, it’s safer and more reliable to do business with cryptocurrencies than with banking.

Fewer Concerns About Security

Those who understand the importance of financial planning are probably concerned by traditional banking’s lack of security. Cryptocurrencies, on the other hand, operate on blockchain technology. This means that their systems are nearly impossible to hack.

The Ability to Make Smart Contracts

One of the greatest benefits of cryptocurrencies is that they let people create smart contracts. These smart contracts don’t need humans to create or process them because computers do all of the work. This means that they are reliable and easy to create.

Fast Transaction Speeds

It’s possible to process many more transactions by using cryptocurrencies than it is with traditional financial systems. This is because there are many protocols that traditional banks need to use to make transactions. By using cryptocurrencies, it’s possible to make transactions that are almost instantaneous.

Why the World Still Needs Banks

Even though the age of cryptocurrency is changing how people handle their money, there are still many reasons why to believe in the importance of banks.

People still need to use traditional banks to do certain kinds of investment banking. This is because it’s not possible to use cryptocurrencies to do things such as underwriting and overseeing acquisitions. This is a type of work that humans need to do.

It’s also not possible for cryptocurrencies to mimic the vital operations of central banks. This means that there is nobody to set interest rates or control inflation.

Make Use of Top Financial Tips in the Cryptocurrency Era

If you’re worried that banks will become obsolete because of the rise of cryptocurrencies, remember that there are many important things cryptocurrencies can’t do that banks can do. People still need banks to offer things like loans and mortgages. It’s also important to have a central bank to keep control of inflation and set interest rates.

CFI is a great resource for those who want to find out about finance and banking trends. If you have any questions feel free to contact us. And if you’d like to receive financial tips from CFI don’t forget to sign up for our newsletter.

Investment Banking

Investment Banking vs. Retail Banking? What’s the Difference

ByCFI.co

Whether you prefer to bank online or at a physical location, there are a few differences between retail and investment banking. The investment banking world deals with high prices and high levels of competition. Retail banks are generally volume-driven.

In fact, the investment banking market is expected to reach just south of $140 billion in the next few years.

Regardless of the amount, both provide necessary financial services for customers big and small. Curious to know more about the differences between the two? Continue reading for an overview of the key differences between them.

Retail Banking

When you picture a physical bank, you’re most likely picturing a retail bank. These retail banks provide a way for the general public to conduct their everyday banking needs onsite. Some of the basic services offered at a retail bank include:

Checking accounts
Savings accounts
Certificates of deposit
Personal lines of credit
Mortgages
Auto loans
Credit cards

The main services utilized at a retail bank generally relate to checking and savings accounts to deposit and withdraw funds. Retail banks also allow consumers to build their credit via credit cards or auto loans.

While physical branches do exist, more and more retail banks are moving online.

Investment Banking

Investment banking falls under the corporate banking umbrella. It generally serves a different clientele. They focus on an institutional client base as opposed to individuals.

Investment banks serve institutional needs and provide advisory services related to capital markets. Some of these areas include:

Equity markets
Bond markets
Portfolio management
Mergers and acquisitions
Equipment lending
Syndicated loans

Investment bank services operate on a larger scale in terms of complex transactions.

Main Differences Between Them

In terms of financial services offered, some of the main differences between the two can be broken down as follows. A few differences relating to retail banks include:

Catering more toward the general public
Managing lesser sums of money
Granting access to individual services

A few services for investment banks include:

Catering to larger institutions
Handling complex sums of money
Providing corporate services

These may be overly simplified summations. However, both types of banking handle a variety of finance-related transactions. Some are at the consumer level, and some are at the corporate level.

When to Choose an Investment Bank

For corporate mergers or startup company IPO launch preparation, investment banks and bankers are heavily involved.

Whether it’s a public company or a private one, choosing the best investment bank can make all the difference. This helps to obtain a successful financing deal, valuation, or initial public offering.

Having the right team behind a transaction will help. First and foremost, it helps determine whether a deal gets completed. Investment banking teams exist to help companies navigate through the complex and often unwieldy process of something like an IPO. They are trained to manage complex projects with transparency and efficiency.

The operations of a team of investment bankers could be divided into three functions:

Financial advisors
Mergers and acquisitions
Research

Operations of Investment Banking

A normal bank facilitates transactions at an individual customer level. Investment banks facilitate transactions for businesses and institutions. The transactions themselves are more unique when it comes to investment banking, thus bringing in the need for specific teams to complete said transactions.

Financial advisors provide a strategic outline of short-term and long-term business goals. They also provide a thorough understanding of industry trends and global markets.

Investment banks also facilitate mergers and acquisitions, which involve estimating a company’s valuation. The process ultimately ends in price negotiation and facilitation of the acquisition itself.

The Role of Research

Investment banks also have research divisions that provide investment advice for clients. The research branch is able to advise clients by keeping on top of knowledge in areas such as:

Credit research
Fixed income research
Macroeconomic research
Quantitative analysis

Research teams are highly knowledgeable. A good research team is well-sought after by companies during the process of financing a deal.

To Summarize

There are many differences between the operations of retail banking and investment banking. One of the key differences to remember is the type of client to which services are offered.

Retail banking, in general, exists to offer financial services to individuals. Investment banking is geared toward commercial or corporate use.

Investment banks exist to expand products offerings and increase market shares. They work as intermediaries between financial markets and organizations. Responsibilities also include:

Helping issue shares of stock
Counsel during the pre-underwriting stage
Counsel during securities distribution stage
Examination of financial statements
Organizing prospectus information for potential investors

Retail banks provide customer service and financial advice on a more individualized level. Retail banks also provide underwriting services for products such as home mortgages and auto loans. Retail banks provide a way for the average customer to deposit cash, withdraw funds, and extend credit.

An Investment in Banking

From mergers to everyday cash deposits, banking systems today accommodate a wide range of clients and services. The world of banking saw many changes as a result of the global pandemic. Markets shifted from previous patterns. Previously in-person transactions moved online.

However, both investment banking and retail banking do have one commonality that remains the same. They exist to serve their clients and their clients’ success.

If you found any of the above information helpful, be sure to check out any of the additional articles we have listed in our Banking dropdown. We offer plenty of resources for businesses and individuals alike.

Technology

Clever Campaigns: 4 Marketing Tactics Your SaaS Brand Hasn’t Tried

ByCFI.co Blogger

The SaaS industry is experiencing a boom, and forward-thinking companies can develop an exceptional profit margin with the right product.

SaaS

For your SaaS business to stand out from the crowd and generate a huge ROI, it must develop an engaging marketing strategy.

As the sector is rife with competition, you’ll need to focus on promoting your software, increasing confidence in your brand, and setting your business apart from its rivals.

If you’re ready to create a clever campaign, check out these four marketing tactics your SaaS brand might not have tried.

Rev-Up Your Revenue with Referral Marketing

It is foolish to overlook referral marketing, as it is the online equivalent to word-of-mouth advertising.

Your company must encourage as many customers as possible to recommend your product to their friends, family members, or professional network in-person or via digital platforms, such as LinkedIn or email.

The more recommendations your current customers make, the more leads you could generate each month and the bigger your business’s annual profit margin.

As a referral will come from a person they know, a prospective customer is more likely to trust your brand and place an order.

Encourage customers to refer your brand by introducing a customer referral program or providing access to a premium feature for a successful referral.

Dropbox is a great example, as the company promises to provide its users with extra storage after successfully inviting friends.

The innovative tactic helped the brand grow from 100,000 users to 4 million in 15 months.

Promote Your Insurance Policy

Modern consumers expect SaaS companies to provide fast, stable, and effective software.

The last thing they will want is for a product to let them down when they need it, which is why they will want to buy from a dependable company.

Promoting your business insurance coverage will give customers peace of mind that you can recover their lost income or pay for a lawsuit following a service outage.

The right insurance policy could help your business financially recover from a serious business error, defense fees, or a business interruption.

Simplify the Sign-Up Process

A long sign-up process for a SaaS product will cause prospective customers to feel frustrated and bored.

Make sure you don’t lose an order by simplifying the sign-up process on your website. For instance, reduce the initial steps to maintain a customer’s interest and help them place an order quickly.

Remember, some customers might not feel committed to buying your product, and a lengthy sign-up might give them more time to think twice about placing an order.

Minimize Software Options

More products equal more customers, right? Wrong. While you might believe a vast array of products will increase sales, too many options may confuse your customers or provide too much to consider.

Rather than missing out on many orders, minimize your software options to simplify your customers’ choices. This will ensure they find the exact product for their requirements and budget, and they won’t need to study different packages to avoid making a mistake.

Banking

Here’s What to Do to Keep Your Retail Bank’s Customers Happy

ByCFI.co Blogger

Many of today’s average retail banking customers are considered “digital natives,” or people who have grown up and gotten acclimatized to the ubiquitous presence of technology. It is now like second nature for many customers to use their bank’s core technologies to pay their household bills, settle their loan payments, or transfer for personal and business purposes—all in just minutes, using only a computer or a mobile phone.

retail banking

Banks have taken notice, and many have gone the extra mile and shifted into more digitally driven retail banking models. This likely holds true for your own bank and its retail banking program. However, the fight to hold on to your market share won’t be an easy one. There’s no guarantee that you’ll keep all your retail banking customers loyal to your brand, or that you’ll attract as many new customers as you hope to, just because you’ve undergone a digital transformation. Like-minded financial institutions have attempted to do the same, which makes it a pretty tight race to the top of the retail banking industry.

Knowing just how stiff the competition is, what can you do to satisfy your current retail banking customers—and better yet, how can you get them to recommend your bank to others? To answer that question, here are five useful tips to strengthen your retail banking efforts.

Open Up Different Touchpoints for Retail Banking

Some of your retail customers may still choose to go the traditional route and settle their banking transactions over the counter. However, a large chunk of them will want multiple touchpoints with your banking ecosystem, for example through their smartphones, tablets, laptops, and even wearables. One way that you can keep them satisfied is to invest in technology that makes instant, round-the-clock omnichannel banking easy for you to handle. Consider onboarding a digital banking platform that will allow you full dexterity when managing your retail customers’ banking journeys across multiple channels.

Make It a Breeze to Open New Retail Banking Accounts

How do you win over a new crop of retail banking customers who are deciding between your brand and another brand? The answer lies in making sure that their first experience with your bank—i.e., opening an account—is a simple and pleasant one. Revisit your current customer enrollment processes to streamline them and remove redundancies, without compromising on your know your customer (KYC) and customer due diligence (CDD) standards.

Deliver Innovative New Products That Fit Your Customers’ Life Stages

Next, look for ways to bolster your bank’s product development for its retail banking offerings. Sticking with the same lineup of generic-looking account offerings, and failing to communicate what kind of customer they’re actually for, will result in the stagnation of your retail banking program. Try innovating your roster of products to include distinct perks, for example rewards points for thrifty customers. You can also enter into a bancassurance agreement with an insurance carrier to give young, health-conscious, or especially pragmatic customers additional insurance benefits with their account. If your products can truly resonate with your retail customers’ needs and values at specific stages in their life, you’ll have an edge over your competitors.

Improve the User-Friendliness of Your Retail Banking Platforms’ Interfaces

Given how often retail banking customers turn to their banking apps and websites, it helps for a bank to invest in enhanced user experience (UX) for these channels. When you do this for your own retail banking channels, aim for simple, streamlined, and intuitive UX that makes it a pleasure to transact through your bank’s system. Your customers may consider leaving your bank if your interfaces are confusing, tiresome, and difficult to navigate. The opposite also applies: you’ll cultivate a loyal following among your retail customers if they can associate your brand with great UX.

Offer Multiple Options for Customer Care and Engagement

Gone are the days of relying only on telephone hotlines to address customer service concerns. You should expect your customers to want to reach out to you through multiple mediums, for example through email, chat, and even social media. You’ll be able to decongest the high volume of retail banking requests and increase the efficiency of your customer care by employing technologies like automation and artificial intelligence. Automate and use chatbots for relatively simple process flows while letting your customer care team resolve more complex problems. If you can already anticipate that your customers want speed, accuracy, and thoroughness in the resolution of their concerns, be proactive when it comes to strengthening your customer care.

Final Words: Customer Satisfaction Plays a Big Role in the Success of Your Retail Banking Program

Your retail customers account for a huge part of your bank’s existing clientele. The happiest of them will serve as effective brand ambassadors for your bank, especially to new customers who are still deciding on a provider. Make it a priority to improve upon your retail customers’ satisfaction, and you’ll be able to take your retail banking program to new heights.

Business

5 Ways Partnering with the Best Bank Will Boost Business Growth

ByCFI.co

Did you know that 82% of businesses fail because of cash flow problems? That’s right; not because of management issues or unfair laws, but stalled cash flows. In times of financial turmoil, only a reputable bank can get your business out of the doldrums. It’s unfortunate that most business owners don’t quite understand the importance of having a reputable bank as a partner. In fact, about 26% of small business owners don’t have separate accounts for their business. This begs the question, is partnering with a bank really good for business growth and prosperity?

To answer this question, we’ll be highlighting a few ways teaming up with the right bank can take your business to greater heights.

1. The Right Banks Enhance Your Professional Image

Having the right bank as your partner helps enhance your corporate image. Investors associate specific banks with high-level and successful businesses. Partnering with such banks will automatically put you in the big leagues, or at least give off the perception.

What’s more, a separate business account is a clear indicator that you’re open for business. Failing to separate your business from personal affairs is a huge turn-off for clients and investors. Not only is it unprofessional, but also makes your business look illegitimate or temporary.

Having your business name on checks and financial statements shows that you’re here to stay. Avoid giving off the wrong impression by using your personal account for business transactions.

2. It Offers Commercial Loans

Unexpected financial emergencies or shortfalls are common in all businesses. As mentioned above, this is what brings most businesses to ruin. Thankfully, banks offer business loans that can help businesses fill in financial gaps.

You can use business loans to buy equipment, pay suppliers, or even fulfil payroll. You can even use the loan to buy real estate property and expand your business. Commercial banks will be more than happy to give you a loan provided you meet their qualification criteria.

Small businesses are the biggest winners because of small business loans from the government. The United States Small Business Administration has developed various loan programs for small businesses. They can access these loans through commercial banks and get the funding they need.

The SBA guarantees these loans, meaning that businesses with less than stellar credit scores can apply for these loans. However, the first step is to partner with a commercial bank to get the green light.

3. It Keeps Your Money Safe

The biggest benefit of partnering with a reputable bank for your business is that they offer a safe place to store your business cash. Banks offer both checking and operating accounts for your business.

A checking account will hold money that your business will use for completing payroll and paying payroll taxes. An operating account, on the other hand, holds money that finances the business’s daily operations. This may include paying suppliers, rent, or energy bills.

These different types of accounts help you manage business finances in check. It also keeps your money safe from theft or fraudulent transactions.

4. Banks Offer Lines of Credit

Sometimes your business needs financial help, but taking out a large loan means paying hefty interest and other fees. If you want to sidestep interest, you should consider opening a line of credit. A line of credit allows you to borrow a specific amount and repay it when you get payment from your client.

Let’s say you have a line of credit of 10,000 pounds. The bank allows you to withdraw any amount not exceeding 10,000 pounds. You then pay back the amount when your business receives payments for pending bills.

Lines of credit allow you to borrow only the amount you need, not a large loan that attracts hefty interest fees. Over time, you can save a bundle in interest fees; money that you can use to grow your business.

5. They Provide Debit and Credit Cards

Did you know that commercial banks offer debit and credit cards for businesses? That’s right, businesses can apply for debit and credit cards with their checking or operating accounts. You can use this credit card just like you would your personal one.

A business credit card can help you manage short-term expenses and keep your business running. It also helps you manage costs, spread cash flow, and make timely payments. The best part is that it comes with incredible rewards to help save you money.

However, it’s worth noting that business credit cards are only for business use. Using it for personal reasons violates the terms that the banks stipulate. This could result in dire consequences for your business account.

6. They Offer Priceless Advice

All business owners face the monumental task of managing their business’s finances. However, this is easier said than done, given the unpredictable nature of business. Banks can step in to give business owners valuable advice on how they can maintain cash flow and boost their profits.

The right bank can offer crucial advice on taxes, insurance, payroll management, and even retirement accounts. If you partner with the best bank, you can get insights into business growth strategies to take your business to the next level.

They will also help you set up digital payment methods that are automatically reflected in your business account. This will help streamline payments and ensure consistency between transactions and your bank account.

7. They Offer Workshops and Seminars

Banks frequently hold seminars and workshops where business owners can learn about money management and growth in their industries. They also learn about solid financial strategies and how to expand their networks. These events are a great avenue to learn and grow your business for increased profitability.

Bank Partnerships for Accelerated Business Growth

Partnering with a reputable bank is one sure-fire way to spur business growth and increase profit margins. However, you need to find a trustworthy bank that aligns with your goals and vision. Open a business bank account today and propel your business to greater heights.

Check out our wealth management section to learn how you can make good use of the profits you earn from your business.

Conferences

The UAE sits among the top 20 economies for FDI in the world: Annual Investment Meeting (AIM 2022) kicks off today (29 March 2022)

ByCFI.co Blogger

International participations of more than 174 countries demonstrate global economic recovery post Covid-19

Expo 2020 Dubai, UAE, 29 March 2022: Held under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, Ruler of Dubai, the Annual Investment Meeting (AIM 2022) was inaugurated today (Tuesday, March 29th, 2022) by HE Abdulla Bin Touq Al Marri, UAE Minister of Economy at the Dubai Exhibition Centre, Expo 2020 Dubai where it was attended by representatives of official delegations and participants from more than 174 countries.

The strong response on the first day of AIM was a barometer of the global economic recovery post Covid-19 as well as the UAE’s global position as a hotspot for investments across the investor spectrum.

Day one of AIM focused on the latest trends in foreign direct investment (FDI) and its growth prospects in emerging markets and the importance of attracting foreign investment driven by a progressive mix of legislation and flexibility in emerging markets.

AIM 2022 presented a platform for decisions makers, officials, investors, entrepreneurs, experts, analysts and academics who gathered under one roof to discuss FDI challenges, potential and growth.

Participants in AIM 2022 had the opportunity on day one to hold meetings, make contacts and share expertise with peers from all over the world. A variety of sessions were held on the first day.

The first day of the three-day event brought together investors, venture capitalists and financial institutions under one roof to participate in discussions, debates and much more.

Day one started with a debate focusing on ‘Investments in Sustainable Innovation for a Thriving Future’, as dignitaries, delegates and the keen-minded alike converged at the Dubai Exhibition Centre.

“Investments in future come at a time when the global investment landscape is changing rapidly thanks to an array of factors such as post pandemic trends, economic priorities and digital revolution; but one fact remains unchanged, FDI plays a significant role in the continuing efforts to achieve economic growth and prosperity,” said HE Abdulla Bin Touq Al Marri, UAE Minister of Economy.

The Vice President of Colombia, HE Dr Martha Lucia Ramirez kicked off the debate as she highlighted the need for “sustainable innovation” and an improvement in the global supply chain, focusing on a more “integrated” solution.

Shifting focus across the region, HE Rebeca Grynspan, Secretary General, United Nations Conference on Trade and Development (UNCTAD) expressed her concern on the lack of development and aid provided to developing countries. “In the developed world recovery went up to 30 per cent but in developing countries only 20 per cent. Developing countries are lagging behind in terms of investment in very important sectors.”

HE Vera Songwe, Under-Secretary-General, United Nations and Executive Secretary, Economic Commission of Africa started off by congratulating Dubai on a “fantastic EXPO” and further added on the “peculiarities” that the African continent faces post pandemic.

“All the ecosystems that support the investment is available in Abu Dhabi that boasts a strong and flexible platform not to mention the easiness of starting businesses. Just plug the business into one of the ecosystems in Abu Dhabi,” said HE Rashed Abdulkarim Al Blooshi, Undersecretary, Abu Dhabi Department of Economic Development.

The debate concluded with the President of the Republic of Tartastan, His Excellency Rustam Minnikhanov, as he highlighted how AIM was progressively gaining traction every year.

“The Annual Investment Meeting is a great platform for us to present investment opportunities for our region, exchange best practices with foreign partners, and make new contacts. Today we heard some informative and engaging discussions and expert opinions addressing a highly important topic of “Investment in Sustainable Innovation for a Thriving Future,” he said.

News of the event has quickly spread with technology and sustainability-driven companies and firms endeavouring to network at AIM 2022. With an hour dedicated to networking over lunch after the debate, high network individuals and company representatives can bolster their corporate framework and build relationships that could help boost business.

“We are looking forward to meeting global startups and entrepreneurs at AIM 2022 and providing them with the market knowledge to propel their startups and take them to the next level and give them not only scalability but the right amount of scaling. Additionally, this is a good opportunity to partner with governments and VCs too create co-investment opportunities to support the UAE startup ecosystem,” said Varis Sayed, Chief Executive Officer at Fincasa Ventures.

Currently, the UAE sits among the top 20 economies for FDI in the world, increasing by 4% year on year. The UAE has set an example by combating every challenge and turning it into an opportunity. Furthermore, the nation has developed its economic sectors to achieve qualitative shifts to a newer and more sustainable economic model, cementing itself as one of the top global economies in the world.

Conferences

Annual Investment Meeting 2022

ByCFI.co Blogger

Investments in Sustainable Innovation for a Thriving Future

Dubai Exhibition Center, EXPO 2020 Dubai 29 – 31 March 2022

AIM 2022

Initiated by the UAE’s Ministry of Economy and under the patronage of HH Sheikh Mohamed Bin Rashid Al Maktoum, the Annual Investment Meeting is the world’s leading investment platform, which creates a regional and global economic transformation by providing investment opportunities, upholding solidarity, and developing strong economic relations among countries, investors, startups, SMEs, and all other stakeholders in the global investment arena. The 6 pillars of AIM strive to support all economic sectors by opening numerous opportunities to the world as a dynamic roadmap to economic recovery. The 6 pillars are FDI, SMEs, Startups, Future Cities, FPI, and 50 Projects Initiative.

Register Now

Accounting

Why Should You Automate Invoice Processing?

ByCFI.co Blogger

Businesses and organizations process more than a billion invoices annually, and studies show that this number could increase four times by 2035. Fortunately, the growing adoption of procurement technology can help chief procurement officers, suppliers, and accounts payable teams handle this number. Currently, 89% of U.S businesses have adopted digital-first strategies, which include automated invoice processing.

Electronic invoicing is part of AP automation that has proved to be a viable solution to the many challenges associated with invoicing. Outlined below are a few reasons why businesses should take advantage of artificial intelligence in their invoicing processes.

1. Time-saving

Before the inception of accounts payable automation, the typical invoicing procedure was as follows:

The supplier starts by generating the invoice
The supplier then sends the invoice to the buyer
The buyer prints the invoice
Buyer enters and reviews invoice data
The buyer approves the supplier’s invoice and writes a check
The buyer mails the check to the supplier

Along this process, expect some back and forth between the supplier and buyer if the invoice has discrepancies. That said, the entire accounts payable process may take between 30 and 90 days, including room for errors in the cycle.

Contrastingly, with automated invoicing solutions, approval takes minutes without human intervention. Automated invoices eliminate the lengthy process, reduce errors, and thus eliminate the possibility of late payments. A study by Atradius shows that 87.6% of Western European businesses and 90% of U.S businesses report regular late payments due to past-due invoices.

2. Saves on cost

The Institute of Finance and Management estimates that businesses spend between $1 and $21 for invoice processing. These estimations were done by dividing the cost of maintaining accounts payable staff by the number of invoices processed within a given period.

Similarly, an Ardent Partner study estimated the average cost of automated invoice processing to be $11.57. This includes overheads, labor costs, and technology. Switching to automated processes reduces printing costs, labor expenditures, mailing overhead, and possibly late fees.

3. Improve efficiency

Human error in business processes cannot be avoided. Interestingly, more than 16% and 15% of late payments in the U.S and Western Europe respectively stem from inaccurate invoices. Fortunately, automating invoice processing can improve invoice accuracy, consistency, reporting, transparency, and general accountability.

Improving efficiencies of your finance department frees your accounts payable teams to focus on other important tasks. The business also grows safely, with surety that the digitized system can handle the increasing amount of invoices accurately.

4. Improved compliance

Invoice is among the key documents used as evidence of tax compliance. It also helps validate tax audits, which may be conducted years after a business transaction. Initially, businesses relied on paper documentation, which is most likely to be misplaced. Businesses also had to hire storage facilities and warehouse boxes to store their paid invoices.

On the other hand, copies of invoices are submitted online with automated AP. Original documents can also be submitted to tax authorities with ease. Purchase orders are quickly converted into an invoice, eliminating the risks of manual discrepancies.

Endnote

Invoice management is an important part of financial planning. Members of the AP team can attest that invoice management can take a toll on people, time, and financial resources. Most businesses don’t achieve invoice efficiency for these reasons, affecting business cash flow and bottom line. Shifting to automated invoice processing, saves on cost, and boosts data visibility.

Business

What You Should Know About Executive Recruitment and Working with Recruiters

ByCFI.co Blogger

The executive recruitment process can be complicated and time-consuming, with everything from searching for the right position and interviewing to making the right choice for which executive position will best meet your needs. This process isn’t usually something that’s complete overnight, so it’s important to be prepared for what the process will bring, with tenacity, and focus on what you need.

What You Should Know About Executive Recruitment and Working with Recruiters

If you’re already discouraged, take heart knowing that executive recruiters have been doing this process for years, and they’re ideally suited to offer insight and support that should get you through the recruitment process quickly and painlessly. These tips will help you optimize your executive job search process and get you the right executive position as soon as possible.

What Sets Your Brand Apart?

Before you search for candidates, first look at the market to understand the range of opportunities currently available. Then, focus on your brand. What sets you apart? What might a company love or hate about your resume, your social media presence, and your reputation? Also, look at how you’re already positioned among your fellow candidates.

There could be a wide range of reasons you have negative vibes following your personal profile and online platforms. Whether you’re using a recruitment service or handling the process yourself, be prepared to address any issues. Also, be transparent about why you’re the best candidate for the executive-level position.

The reasoning may not be as logical and obvious as you think. Communicate why you are the quality solution to bring the level of performance, versatility, and high-powered relevance they need. Show you’re excited about the opportunity and what you will do to make a difference.

Is a Recruiter the Best Solution?

The recruitment industry is a billion-dollar industry and rising, with 3-15% of all jobs being filled by recruiters. So recruitment works most of the time. It’s just a matter of whether a recruiter will get you the right solution for your needs and how long that process will ultimately end up taking. To get the best possible options for your needs, you should be upfront about what you’re looking for but also what you’re not looking for.

Beyond setting the groundwork for a successful relationship with your recruiter, keep the lines of communication open and build a relationship with them. It might take a while for the right situation to appear, but if you’re patient, you may find what you’re looking for. There’s really no guarantee that your search will be successful, even if there are positive signs. That’s where the positive attitude, tenacity, and continued professionalism all come into play.

Be Upfront About Employment Flexibility

Flexibility is a key focus for executive candidates. Now, as many as 55% of global businesses offer some capacity for remote work and 18% of workers are remote full-time. There’s still a great deal of uncertainty in the marketplace about remote, hybrid, and in-office work. Your ability to be flexible may be an important consideration, or it may really not matter to you at all.

Regardless of how flexible you will be, you should be upfront with prospective recruiters and employers. As you search for the right executive-level job to meet your needs, address the remote situation, and be clear about your expectations. Think about what you will need the position to be and become both now and in the future. Then focus on that as you work through the recruitment process.

If it’s a give and take, how are you uniquely qualified to fill the position, and how does your need for flexibility fit into that requirement? You’re offering value, but how can you make that aspect resonate with recruiters and employers? They can’t rely on empty promises, so what have you done in the past that proves that you will deliver the level of expertise and true value they need?

Do You Need Focused Help?

A recruitment agency may offer generalized executive recruitment services, or they may specialize. Depending on what you’re looking for, you may be better served by a recruiter who is already experienced in your specialized area. If you’ve tried a more general recruitment service in the past without luck, you might try a more specialized recruitment option, and vice versus.

Simplify Your Recruitment Process

Simplified job applications and a streamlined recruitment process make life easier for everyone involved in the employment situation. Whether you’re proceeding with internal recruitment, you’re using agency software, or you’re using a recruitment service, you need a simple solution that will speed up the process.

The recruitment process doesn’t have to be painful or time-consuming. Most of the information you should need to make your decision should be easily accessible. So, you should be able to figure out the best solution in a streamlined and straightforward manner. Don’t let the process drag out and don’t make it more cumbersome than it needs to be.

Use Technology to Your Advantage

HR recruitment software and other tools make it fast and easy to search for and process executive candidates. Avoid the headaches, the indecision, and the back-and-forth. The best recruitment software not only streamlines the hiring process but also offers training and onboarding solutions to get everyone up to speed.

If you’re not sure where to start, rely on the sage advice of recruitment professionals. They can usually guide you through the initial steps of the process and assist you in navigating through all the complications that technology, lack of knowledge, and other roadblocks may put in your way. The common goal is to help you get up and running as quickly as possible.

Banking

How Does a Mortgage Work? The Ultimate Guide

ByCFI.co

Between the different types of mortgages and the seemingly endless amounts of mortgage paperwork, buying a home may seem overwhelming. But how does a mortgage work exactly? We have all the answers to that mystery and more.

No home or homeowner is the same, which is why it’s so crucial to understand how to get the best mortgage for you. From how the mortgage process works to some qualification tips, we’ve rounded up all the key mortgage basics. Let’s get started and get you one step closer to your new home.

How Does a Mortgage Work?

A mortgage is essentially a loan taken out from a bank or financial institution to give you funding for a home. You can choose to finance almost the entire home or do a combination of financing and money down.

Whatever money you put down on the purchase comes from your own cash reserves. Money down reduces the amount you have left to pay on the home through your mortgage loan. Your mortgage loan is given with interest rates that may vary or be fixed each month

A mortgage is also considered an instalment loan. This means the payments are paid monthly or bi-weekly in instalments. You’ll pay your principal balance as well as the interest, fees associated with the loan, taxes, and insurance. You may have a mortgage for 30-years, 15-years, or less if you choose.

As the years go by, your mortgage is paid down each month. Once your home is paid off, you’ll no longer have a mortgage and you’ll fully own your home. In the event that you sell your home before it’s paid off, you will need to pay off the loan at the time of the sale.

Failure to pay your mortgage could have serious consequences such as foreclosure. This is why the mortgage qualification process is put in place to ensure you’re in a loan and a home you can comfortably afford. This makes your mortgage less risky for you and your lender.

How to Qualify for a Mortgage

While qualifying for a mortgage may seem overwhelming, it doesn’t have to be. There are a few easy things you can do before you apply to help make the process easier. Creating a budget is a great starting point.

Your budget will help you and your lender determine what loan amount you’re most comfortable with. Start by laying out your expenses and income. Take a look at your down payment amount to see how much you’re comfortable putting down as well.

Next, it’s time to look at your credit and try to reduce any other debt you may have. This is where your budget can help you make a plan for paying off credit cards and reducing your spending. Your credit score will affect everything from your loan terms to your interest rate.

The higher your credit score, the better your interest rate will be. A lower interest rate allows you to pay more of your principal balance. This means more money is spent on interest each month.

Key Considerations When Shopping for a Mortgage

Another key consideration when shopping for a mortgage is how much you’re budgeting for a home. The type of home is also a factor.

A condominium, for example, may have an association fee you pay each month for amenities. This will get factored into your qualification, as it’s a fixed expense you’re responsible for.

If you’re purchasing new construction or a fixer-upper, your loan options may differ as well. When you have a home that needs a lot of work, you may choose to put less down on your home. This will allow you more cash for renovations and repairs.

As you’re going through the application process, look over all the loan options you qualify for. Your bank will need to know your budget, down payment, income, and other factors to help you find the best mortgage for you and your family.

Home Buying Tips

Before you apply for a mortgage, it can be helpful to take a look at your local real estate market. This will help you come up with your ideal home and budget.

You may find your budget gets you more than you think. You may also realize you need to prioritize your wish list.

This is a great time to make a list of what is most important to you in a home. For some, it’s the proximity to a certain school. To others, it’s the commute to work or the number of bedrooms. Your wish list will help you come up with a budget and a target price range as you start to house hunt.

As you start to look at homes, it’s also helpful to get a mortgage pre-qualification. This will allow you to make an offer on a home while knowing what you’re approved for. This helps you know where you stand while also making your offer stronger as a potential buyer.

Getting a Mortgage 101

Wondering how does a mortgage work? You’ve come to the right place. We have wealth management, mortgage, investment, and financial resources to help you make an informed decision.

Your home is likely one of your biggest assets. Read up on mortgage rates, the economy, and the housing market in our wealth management section.