What is coming from Bank of England?

Uncertain rates from Bank of England

Well a question no one in the world can answer satisfactorily is, what is coming from Bank of England? If you have a mortgage and lots of other debts it is good news for you. The Bank of England Policy committee has voted in favour of keeping the rates on hold. On the other hand if have a savings account forget about an increase in your earnings.

The Bank has held off popular investor belief that rate rise would certainly come in the New Year. The economic storm has forced the Bank to put on hold the rate rise till 2018. That is really a great shift from the earlier 2016 rate rise. The inflation indicators also expect the earliest to be early 2018. Well does anybody in the Bank know about what next? A big No as the dipping oil prices and the volatile labour market makes predictions really difficult. This will trickle down to bank earnings and ultimately the people who save. So this is the right time to avail loans and invest your money rather than keeping it in the bank. That is what the economy indicates. The consumer inflation targets of the bank which is 2 % will now only be reached by the end of 2017. So happy days for people with Loans and people who want a loan. What it augurs for the future? The prediction is difficult.


The Success Of Human Resource Department



The success of human resource department

The human resources department (HR) is a core component of every business success. It is mandated to select, manage and reward the human resource. Motivated staff means a happy customer hence increase sales. This department has seen changes over the years especially with the advancement of technology. The human resource department of the 1950s is different from what we have today. Even with the change, the common factor of the past and present human resource department is working towards the success of the business. Then how do you know the department is performing?

It should contribute in attaining all the goals of the business.

Every business should have targets, whether quarterly or annual targets. For these targets to be realized, every sector of the business should contribute. The human resource should align all the personnel towards achieving the targets.  A marketing initiative should not be left to the marketing department alone, but every member of the staff should play a role. The human resource manager has to play a big role of interlinking every department towards the marketing initiative.

All personnel should feel part of the business.

It is the work of the human resource manager to see the need of every staff is taken cared. That mean, the human resource department should be a place where personnel are made to feel like they own the business. If you own something, you give your best to make it better. Personnel who feel a sense of ownership will always work towards the growth of the business. If the staffs are demoralized, not performing, then the human resource department is failing on its work.


The question about Profit

The Profit Question

I was pondering over a point that how can we measure Profit. Is it clients? or is it the turnover? Well friends one of the prime objectives of starting any business is to make profit. If you are not sure or if you don’t know whether you are making profit or not, I think you have defeated the purpose of starting that business. If your intention is not to make profit are you running a charity?

Anyway coming back to the topic, How will we come to know if the company is making profit or not? If company says we have got high-profile clients, does it necessarily mean that the company is making profit? If a company says we have got an outstanding brand, does it necessarily mean that the company is making profit? What if you find out that the company has got motivated employees? The walk in together, they walk out together. They take lunch breaks together. They eat together. They even kill themselves together. Well what I mean is they go out for smoke breaks together. Does it necessarily mean that the company is making profit? What if the company directors are millionaires? Does it tell, whether company is making profit or not? How about the company that operates in prime location? Does it necessarily mean that the company is making profit?

Friends, none of these can be used as a yard stick to know if a company is making profit or not. Only way or the most effective way to know that a company is making profit or not is by simply preparing basic financial statements and reading and understanding it.

Core of Finance Management – Profit or Bottom Line


The core of finance management is the ability of every employee in the organization to understand the impact of every decision they make; and to take only those actions that will strengthen the Bottom Line.

If you think your decision has the power to affect the Bottom Line of your organization, then you are a Finance Person. Many non-finance managers, they think they are not finance person. Wrong!

For example let us say a salesman wants to sell a pen for $10 and he approaches a potential client and says Sir, this is the best pen in the world and we are selling it for $10.And the customer would say well that is a very good pen, I am sure I will need it but I need 100 pens but my budget is only $800. This means the salesman has to decide whether to sell the pen for $8 or say no to the deal. The decision the salesman is going to make is not a salesman’s decision. It is a finance decision.

When an HR manager is being approached by an employee for a promotion, a hike in salary or for bonus the decision the HR manager is going to take is not going to be just an HR managers’ decision. It is going to be a finance decision, because if she decides to give bonus and increment the salary then it is going to impact the Bottom Line of that organization.

When the Admin manager is asked – How much stationary do you want for the next financial quarter? If she has got already much stationary lying in the cupboard and still she goes and orders more it is going to affect the Bottom Line of the organization. If she knows how stringently they should be using the stationeries and cut down on printing and paper and other small things, it is definitely going to have a positive impact on the Bottom Line. So those decisions are not just Admin Managers’ decisions. They are finance decisions.

When the management asks the Warehouse Manager – How much inventory do you need for the next month or next financial quarter? This will depend on how much they have in the inventory and how much they can sell by coordinating with the Sales Manager. Finally the Warehouse manager will come up with a number. The number he is going to come up with is not just a Warehouse manager’s decision. It is a finance decision. If he goes on and orders more stock than it is required then money will be lying in form of inventory or stock in the warehouse.

Let us take example of retail. If a particular shirt is not been sold for some time and the Retail Manager decides to put a tag 10%, 20% or 50% discount. The Retail Manager is not just taking a Retail Manager’s decision. He or She is taking a finance decision.

What I am trying to say here is, if you think your decision has got the ability to impact the Bottom Line of your organization, and then you are a finance person. It is a common mistake that people do by thinking that only accountant and book-keepers are responsible for taking finance decisions. In fact even in large organizations people think finance decision is the responsibility of finance department. But what actually happens in the finance department is just the book-keeping and accounting.

How to fill a W-9 Form

W-9 Form

If you are working independently, W-9 form is a tax requirement. A W-9 form is an internal revenue service (IRS) form, which is used to register you as a taxpayer. It is issued by companies to independent workers, consultants and freelancers. As a self-employed person you are required to fill this form.
It is a self-certification of the fact that the tax identification provided by you to the company you are working for is correct. In the form you are required to certify that you are not subject to back up withholding. Federal income tax has special provision for withholding payment for interest, dividends, royalty, rent or payments from fishing boat operators or stock brokers. However the US citizens and residents who have declared their tax identification and people not notified by Internal Revenue Service are exempt from it.
W-9 form requires careful filling before signing as it is a document IRS uses to certify you as a legitimate taxpayer. Here are a few tips to fill the form easily.
Name Field: First fill out your name. The name should match with the name on your tax returns. Being careful will ensure that there is no mismatch.
Business Name Field: In the next column, you need to fill out your business name. It will be the name of your company, you have registered which may be sole proprietorship, a limited liability company or an S-corporation. If you are using your personal name for the business as in case of freelancers, write your own name.
Business Type Box: Check the box signifying the type of business entity. If you are working alone check sole proprietorship box.
Exemption Boxes: Next are the exemption boxes. In most cases it has to be left blank. These boxes do not apply to consultants or freelancers. You need to pay attention only if you are registered as a corporation.
Address Field: Write down your full address here complete with ZIP code. The address should match the one on your tax return.
The requester field: Write the name of company who has requested you to fill out the form. Include address and telephone number.
The tax identification number: Here you have to fill out the TIN(Tax identification number) which may be your SSN ( Social Security number) if you are a sole proprietor or EIN(Employer identification number) if you are not a sole-proprietor.
Declaration: The declaration is that the information filled by you is correct. In case of furnishing wrong information you will liable to perjury. Sign after carefully reading the declaration.
After filling the form send it to your employer. The best way is to personally deposit it, but in this digital age e-mail is the preferred choice. So, make sure to encrypt the form before sending to avoid data theft.

Weird Chinese Saving habits

Chinese saving Habits

Chinese saving Habits


The saving habits of chinese are quite different when compared to the rest of the world. They have a unique style of starting to save only when they reach around 40. It is weird. But it has its own reasons.

A number of things have influenced this savings pattern. Arguments can be made that the current sociocultural norms in China, the ones that dictate that the working population take care of the dependent population, especially the old-aged section, may have a huge impact on the savings model. But savings patterns of an entire country, especially a country as diverse as China, cannot be explained purely through sociocultural reasons. The economic matters behind this decision, especially high cost of housing and living in urban China, have to be explored.

There are three main factors that contribute towards our understanding of this unnatural savings pattern among urban Chinese youth:

  • The one-child policy implemented in China has an economic impact. The parents are preparing for old age conditions and situations always.
  • The burden of providing the older generation with financial assistance falls on the Chinese youth when they are middle-aged, which might have an impact on the amount of money they can successfully save, no matter how high their expected or current income is.
  • New research  shows that the prevalence of inter-generational residences, and the current high costs of real estate in China has an impact on savings trends. The 2002 China Household Income Project data shows that among working males, aged 30, about half still live with parent(s) or in-law(s). This reduces consumption expenditure among the Chinese youth, thereby increasing the levels of savings in youth. Among the middle-aged, land-owning population, the savings rate observes a fall, due to the high cost of real estate.

Politics and Business

I have been observing the political activities since the Scotland referendum. The capitalistic nature of the economy in nature makes the election business like. It is profit and loss.

The small business community always lands on the losing side. Whoever wins they end up paying more taxes, shrinking their revenue. If there is no clear winner then lord help us. The recent survey predicts that labor and Conservatives both are headed for a stalemate. David Cameron has indicated joining the EU if re-elected and Labour’s Prime Minister hopeful Ed Miliband has indicated rise in taxes. In both cases the community suffers. The smaller parties make the pitch even more queer.

Business and Politics

The Scene looks Gray

The major developments that are likely to surface after the election will be:

  • Political deadlock – This is the worst case scenario. If the predictions go the way, UK is headed for a hung parliament. The smaller players like the UK Independence party are in for a large role to play.
  • Rise in Tax rates – This is imminent. With the burdens of debt across Europe and bailouts, UK population will have to pay for others mistakes.
  • Rise of the Extremists – This can happen. It is real, as it has happened in Greece. This will lead to curb on the market and major reforms, leading into crisis.
  • Structural Problems – Till date UK economy is holding up, but joining the EU will expose it to the structural problems of member countries.

Brace yourself for difficult times ahead. The future is uncertain, but one thing is certain; this May elections will hurt us all.