Improving Profitability Through KPI For Finance

In every business, managing finances is a great factor that can contribute to success. One of the ways to handle finance well is through making use of KPI for finance. Experts say when you cannot measure the effectives of a certain program or plan, then that cannot be considered useful to the business operation. Hence, it is important that results of financial plans can be measured. In this way, the company can see whether the said plan is in line with the aim of organizing the business finances.

Key Performance Indicators or commonly known as KPI are now the strategy used by many businessmen to manage their companies. KPIs are tools that the company or organization utilizes to quantify achievements. These are effective means to track progress in accomplishing tasks that are towards the goal of the company.

KPIs would differ according to the aspect of the company being assessed. Therefore, the finance KPIs is not the same as that of the KPIs for marketing, recruitment, or advertising. This is the case since every area serves different purposes and has different goals.

In general, KPIs can come in two ways – directional or quantifiable. The so-called directional KPIs give a simple assessment of a certain area of your operation. It only rates whether an implemented program is successful or a failure. Quantifiable KPIs, on the other hand, are the in depth analysis of a program. Companies, in most instances, prefer quantifiable KPIs as this will provide a better assessment of a specific program or area of the business. Literally speaking, data for quantifiable KPIs come in numbers. But these are interpreted and used as basis for further enhancement of the assessed program.

In the past, the concept of KPI is only applied to the finance aspect of the business. This is because management, as mentioned earlier, put utmost concern to the financial side of the operation. Finances dictate whether the company is successful or not through data of revenue or sales. Aside from profit, other financial indicators include cost, market share, and other money matters. But seen as an effective means of measuring performance, KPIs are currently not limited to financial aspect but also used in other aspects of the business, such as marketing, recruitment, administration, and advertising, to mention but a few.

There are some important matters to consider when coming up with KPIs regardless of what aspect it is intended to measure. Goal and analysis are among these considerations. Goals are used as basis to determine what KPIs are appropriate for a certain area. Analysis, on the other hand, should be noted to improve the productivity of the assessed area of the company.

For the part of the company, what is important is how they are going to use the derived results of the KPIs to their advantage. Improvement should be their target. In fact, they must work to address lapses in their financial operation. KPI for finance is only one of the many areas where companies can improve. Oftentimes though, finance is the first thing that business owners want to deal with because of its effect to the company. Remember that a well-organized set of finances is a good step towards profitability.

Why Early-Stage Startup Companies Should Hire a Lawyer

Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.

The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?

They Know What’s Best for You

Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.

Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.

They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.

Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.

They Contribute to the Increase in the Value of Your Business

Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.

They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.

Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.

Wrapping Up

All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.

Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.

Think Twice Before Getting Financial Advice From Your Bank

This startling figure comes from a recent review of the financial advice offered from the big four banks by the Australian Securities and Investment Commission (ASIC).

Even more startling: 10% of advice was found to leave investors in an even worse financial position.

Through a “vertically integrated business model”, Commonwealth Bank, National Australia Bank, Westpac, ANZ and AMP offer ‘in house’ financial advice, and collectively, control more than half of Australia’s financial planners.

It’s no surprise ASIC’s review found advisers at these banks favoured financial products that connected to their parent company, with 68% of client’s funds invested in ‘in house’ products as oppose to external products that may have been on the firms list.

Why the banks integrated financial advice model is flawed

It’s hard to believe the banks can keep a straight face and say they can abide by the duty for advisers to act absolutely in the best interests of a client.

Under the integrated financial advice model, there are layers of different fees including adviser fees, platform fees and investment management fees adding up to 2.5-3.5%

The typical breakdown of fees is usually as follows: an adviser charge of 0.8% to 1.1%, a platform fee of between 0.4% and 0.8%, and a managed fund fee of between 0.7% and 2.1%. These fees are not only opaque, but are sufficiently high to limit the ability of the client to quickly earn real rates of return.

Layers of fees placed into the business model used by the banks means there is not necessarily an incentive for the financial advice arm to make a profit, because the profits can be made in the upstream parts of the supply chain through the banks promoting their own products.

This business model, however, is flawed, and cannot survive in a world where people are demanding greater accountability for their investments, increased transparency in relation to fees and increased control over their investments.

It is noteworthy that the truly independent financial advisory firms in Australia that offer separately managed accounts have done everything in their power to avoid using managed funds and keep fee’s competitive.

The banks have refused to admit their integrated approach to advice is fatally flawed. When the Australian Financial Review approached the Financial Services Council (FSC), a peak body that represents the ‘for-profit’ wealth managers, for a defence if the layered fee arrangements, a spokesman said no generalisations could be made.

There are fundamental flaws in the advice model, and it will be interesting to see what the upcoming royal commission into banking will do to change some of the contentious issues surround integrated financial advice.

Many financial commentators are calling for a separation of financial advice attached to banks, with obvious bias and failure to meet the best interests of clients becoming more apparent.

Chris Brycki, CEO of Stockspot, says “investors should receive fair and unbiased financial advice from experts who will act in the best interests of their client. What Australians currently get is product pushing from salespeople who are paid by the banks.”

Brycki is calling for structural reform to fix the problems caused by the dominant market power of the banks to ensure that consumers are protected, advisers are better educated and incentives are aligned.

Stockspot’s annual research into high-fee-charging funds shows thousands of customers of banks are being recommended bank aligned investment products despite the potential of more appropriate alternatives being available.