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Showing posts with label financial software. Show all posts
Showing posts with label financial software. Show all posts

Friday, January 11, 2013

6 reasons to use budget software for your business


By Jack Meyers

Believe it or not, there are still those out there running a business using pencil and paper to track assets and accounts. You'd think that by living in the 21st century, these methods would be all but extinct. Still, there are those out there who would rather put great strain on themselves rather than make life simpler by learning a new program. The cost of the software alone is worth the investment when you think about the time it will take to finalize your end-of-year business reports. 

1. Tax preparation- At the end of the year, printing a report of tax information could take mere seconds rather than calculating columns by hand. As long as the data is entered on a regular basis, all the information you need can reduce the time you spend on taxes exponentially. The 1099s you may have for contract labor can be printed out quickly for distribution regardless of how large your company is. 

2. Asset tracking- Various reports showing assets and liabilities can be obtained with just a click of the mouse. This can be greatly beneficial to a company that needs a report in order to secure a bank loan. Instead of sifting through one stack of paper after another or a folder full of spreadsheets, any report can be selected and printed with ease. 

3. Budget creation- By regularly entering the income and outflow of money, the business could develop a budget by seeing the numbers of what is being spent and where. Many people react differently to a spending report if they see how much of the pie chart it consumes. It's a great method to determine what costs need to be cut from where.

4. Quick and easy- If your accountant or yourself enter receipts and check stubs on a daily basis, the whole process could be completed quickly. This will also provide accurate reports if you are curious as to how well a particular aspect of your business is doing in terms of sales at any given time. 

5. Accuracy- An argument can be made about data only being as accurate as those who enter it. The same can be said about the mathematical abilities of those who write down and constantly erase numbers. The truth is, people are more likely to mistake hand-written details over those that are digital. It doesn't take a college degree to enter in the same information in a budget program such as Quickbooks versus writing them down in a ledger. 

6. Redundancy- Most of the popular budget programs such as Quickbooks allow a user to save backups on a regular basis. This is best if the backups are located on a separate location other than the primary computer such as a flash drive or a server. Backups can be set to happen daily, weekly, or even after every use. The argument that information can easily be lost is usually made by those who don't know the program. A fire can destroy paper easier than data.

Although many people are set in their ways, it is time to crawl out of the dark-ages and into the digital future. A great deal of these people will complain how they don't have time for enjoying life, but yet they will not do anything to improve their situation. These people can't be forced into using a budget program that could alleviate days or even weeks worth of work. They just need to work into it themselves.

Author Bio:

Jack Meyers is a regular contributor for www.nannybackgroundcheck.com. As a detective he wants to spread the knowledge of terrible things that can happen when people don’t fully verify the credentials of a caregiver or any employee. He also writes for various law enforcement blogs and sites.

Wednesday, April 20, 2011

Benefits of Using Microsoft Excel for Financial Analysis

Microsoft Excel does the algebra for you, and the charting, and the graphing and the statistical analysis. All that is required for analyzing financial data using excel is a few minutes to enter the data into s spreadsheet and a little knowledge about which excel tools can be used for financial analysis. This article will discuss some of those software tools and illustrate how they work.

Excel regression and statistical analysis

Regression analysis takes a set of dependent and independent variables such as sales figures and adjustments in marketing budget over 12 months and then calculates a deviation for each of those variables around the mean i.e. average dependent variable. As the independent variable changes i.e. marketing budget, the sales values may fluctuate up or down around the mean which may also rise or fall.

From the above information, excel can then calculate P-Values, betas and alphas can be found using excel which help determine the strength of the correlation between variables in addition to the magnitude changes in the independent variable are matched by the dependent variable. All these results can be charted, plotted and graphed using the regression function in Microsoft excel with just a few minutes of data inputs.

Other statistical analysis can be performed by adding in the Excel data analysis feature and some of the analysis this particular excel toolpack can achieve are the following:

• Covariance: Measures average deviation from the mean
• Correlation: The relationship between two variables
• Descriptive statistics: Includes a wide range of calculation that describe data
• ANOVA analysis: Analyzes and contrasts two information categories
• Ranks and Percentiles: Descriptive statistics that categorize and organize variables

Histograms, scattergrams, pie graphs and bar charts

By entering data into a spreadsheet in excel one is making possible the conversion of that data into graphical display which can lead to a potential host of other benefits. There are several types of graphical and pictorial display of data that can be accomplished using Microsoft excel including the aforementioned charts, graphs and plots. Each graphical display allows the information to be displayed in a different way such that relationships and changes to the variables over time can be observed. A few of the benefits of these excel tools are the following:

• Improves presentation
• Aids analysis of information
• Helps financial decision making
• Communicates financial ideas

Descriptive statistics

Summary statistics take numerical data and reconfigure it into analytical metrics. For example, if one has a list of weekly customer counts for an annual or 52 week time period, that data can be summarized using a number of excel tools. For example the weekly client count can be organized by rank from highest to lowest or lowest to highest. Some of the descriptive statistics made possible through Microsoft excel include the following:

• Moving average: Changes in the mean over time
• Standard error or t-test: Summary of standard deviation using square root
• Standard deviation: Used to determine range of movement of variables
• Skewness: A non-normal distribution of data after being plotted
• Range: The low and high ends of a data distribution
• Mean, median and mode: average, middle and most frequent numbers
• Count: Total value of data

The above descriptive statistics can assist in determining potential future client counts, averages, fluctuations over time and fluctuation levels. While alone descriptive statistics might not be as useful in making financial decisions as with the aid of other excel tools, they do summarize data in a form that can be analyzed more easily.

Microsoft excels data analysis tools can be applied to financial data of many types. For example, product sales, costs and expenses, price movements, taxes etc. can all be measured, plotted and analyzed using excels analysis tools. What's more, the financial data of more than one business can be compared for assistance in determining market conditions and other in house vs competitor financial data.

In summary, Microsoft excel organizes, analyzes and calculates using financial data using the software's built in metrics and features. These tools can benefit a business in a number of ways. For example, the resulting statistics may assist a business manager determine how to adjust a budget, or which clients to spend more money advertising to. Also, the financial analysis may demonstrate how much a companies worth changes over time thereby informing the manager and/or owner as to whether valuation is to volatile or stable for the business climate.

Excel also analyzes data using pictorial displays that can assist a financial analyst determine percentage distributions, proportions and relations between financial products and variables, changes in financial data over time, accuracy of the software analysis outputs and possible causes for changes in data values. In other words, Microsoft excel organizes, present and analyzes financial data in such a way that further analysis, insight may be gleaned, and decision may be made from the resulting analysis.

Source:
1. Albright, Winston and Zappe. 'Data Analysis and Decision Making with Microsoft Excel' Albany, NY. Duxberry Press.

Tuesday, February 22, 2011

Financial Software: 'Stuff Every Investor Should Know'

'Stuff that every investor should know' by Geoffrey Considine is an informative glance at the world of 'Quantext Portfolio Planning' (QPP). Quantext Portfolio Planning is an investment management software developed by Geoffrey Considine of Quantext Inc., who believes it to be a financial software application that investors should know about.

Geofrrey Considine is a financial writer at seekingalpha.com and touts his financial analysis software as helping to improve asset allocations within an investment portfolio for more optimal money management. This article will discuss Considine's portfolio management software in terms of what it does, its validity and performance. Moreover, this article will review what Geoffrey Considine believes every investor should know. (1) in terms of defining Quantext Portfolio Planning and its effectiveness as a risk management software application.

Investing with Considne's 'Quantext'

Quantext Inc., has two portfolio planning software applications, one for retirement planning and one for portfolio planning. These two software packages called Quantext Portfolio Planner (QPP) and Retirement Portfolio Planner (QRP), run between $104-$184 and have detailed outlines that are available through Quantext Inc. for free prior to purchase. It is evident from the software description in the 'Personal Portfolio Management' section of the Considine's software that it is fundamentally centered around risk management. Thus, the software might be most useful as a tool for investors with specific investment and risk criteria.

The Personal Porfolio Management Software information downloads by Quantext illustrate the statistical techniques and models used by the software to assess portfolio asset allocations. Of particular emphasis is what is Considine's adaptation of the 'Monte Carlo simulation' that assess possible portfolio outcomes using 'realistic' numerical portfolio performance inputs such as yield and volatility. This is explained on page 26 of Quantexts PPM user guide available at its website.

When the Quantext software objectives are clearly defined, and accepted statistical and quantitative inputs are entered into the model, the output becomes an investment report that illustrates expected returns for given portfolio allocations, time-lines, risk levels etc. One of the goals of QPP is to minimize risk while maximizing earnings, thereby creating a positive relationships between investment risk and reward.

Quantext validity and performance

An investor only needs to look at the performance of portfolios that properly use QPP to see how well quantitative investing does. The fact of the matter is the market is not 100% quantitative, so quantitative asset management is a tool only and not a solution. Having said that, Considine's Quantext makes use of and relies on determining statistical probability using three well known variables i.e. Standard deviation, beta, and R squared.
It also uses what Considine refers to as Monte Carlo Modeling, which uses assumed market volatility trends to assist in forecasting a portfolio's performance. In other words, given a certain range of input variables regarding market performance, QPP measures individual portfolios against such for more optimal yields. Considine explains his methods in the following linked to article about Monte Carlo Simulation. Some of the variables used in Quantext's portfolio planning are the following:

• Probability metrics
• Investment risk calculations
• Beta correlations
• Standard deviation
• Monte Carlo Simulation
According to the software validation tests performed by Quantext, a testing of Quantext Portfolio Planner led to a 180 basis point advantage per year over what is described as 'naive diversification'. The benefits of using the software are thus advantageous in the long run and more evident with larger valued portfolios. Quantext software may be particular useful for fund managers, financial advising firms, and financial services companies seeking to enhance and fine tune their bottom lines with competitive performance.

Summary

Investors should also know there are free risk probability calculator(s) and Monte Carlo simulators are available on the internet and other software applications such as with a Microsoft Excel add in. These calculators may be just as helpful as Quantext's software for a fraction of the price or no cost. It is important to realize how valuable risk assessment in investment management actually is. Additionally, some fund managers oversee asset allocations that specifically make use of, and are designed around quantitative investment selections. One such group of funds is appropriately called 'Quant Funds' ,

Quantitative risk assessment tools refine and narrow risk probabilities to fine tune's one portfolio for a more statistically predictable retirement income and/or portfolio performance. This can be helpful if one is looking for this kind of preciseness. However, if the software does not contain realistic inputs that match market trends and volatility, output numbers will be less useful. Thus, knowing which input variables are used in Monte Carlo simulations are just as important as other variables such as time, monthly and annual investment contributions.
Sources:
1. http://www.quantext.com
2. http://www.amazon.com/review/R28RBY66KQ1GVH

Wednesday, February 16, 2011

Financial Software Review: 2008 Microsoft Money

Microsoft Money essentials is the latest in a long line of evolving personal finance management software produced by the well known software giant Microsoft. If the company name doesn't give this software credibility the software itself does. Loaded with a compendium of great, easy to use features that have both utility and function, Microsoft Money essentials can help one effectively organize, plan and manage one's finances in several key areas.
Advantages of Microsoft Money Essentials 2008
One of the best features of The 2008 version of this software is the free trial. This allows one to try the software without risk for 60 days to see if it is the right financial management software for one's needs and goals. If one doesn't like the software, simply cancel the agreement before the free trial offer expires and no financial obligation should becomes due. Some of the other features Microsoft Money Essentials 2008 offers are the following:
• Organize multiple finance functions in one digital location
• Prepare financial statements and documents for lenders
• Affordable Software
•Improves and/or maintains record keeping
• Helps develop financial discipline
• Tax preparation
Depending on which version of the Microsoft Money Essentials software has, one will be able to do all the above and more as the software is able to export data to both Tax Cut and Turbo Tax both of which are well known tax preparation software packages.
Cost, System Requirements and other considerations
Compared to one of its main competitors Quicken Basic, Microsoft Money Essentials in its most basic format costs $10.00 less at $19.99. Like Quicken, there are premium versions of the software that offer more features and benefits for a higher price. However, overall, the Microsoft prices are significantly lower than Quicken.
The system requirements for Microsoft Money Essentials is available on the Microsoft money website but in a nutshell, the software is not too demanding in terms of operating system, and processing speed. Pretty much any computer that was manufactured as a Pentium II or higher has a good chance at running Microsoft Money Essentials with relative ease.
Microsoft has been producing and coding financial software for several years now and the Money line of software has gone through several generations of improvements. A user of this software can be assured the software is designed to be relatively user friendly, easy to install, and functional.
Even the earlier versions of this software were quite functional and easy to use with features such as mortgage amortizations calculators, loan interest calculators, checkbook record keeping etc. Microsoft Money Essentials 2008 takes old and important features to the next level with enhanced features, improved benefits and updated Internet interactivity.
If a user takes full advantage of the features and benefits provided in this software package they may find themselves with highly organized and well presented personal financial information just mouse clicks away. Individuals who are seeking to also manage their home based business can take advantage of Microsoft Money Plus home and business, a part of the Essentials product line that includes small business management software features in addition to all the great benefits of the standard Microsoft Money line.
Microsoft Money Essentials 2008 is essentially a complete personal and depending on which version of the software one has, business finance organization software package. The price is reasonable across the board and can be well worth it if one is disciplined enough to use the software properly. The benefits include functional and user friendly features for financial presentation, calculation, budgeting, expenditure tracking, bill arrangement and more. For individuals in need of a new and improved way to manage personal finances, Microsoft Money Essentials 2008 may be worth the time and effort required in checking out the free trial.

Thursday, February 10, 2011

Personal Finance Software: Microsoft Money vs Quicken

Both Microsoft Money and Intuit Quicken are leading financial software providers in terms of U.S. market share. The two software packages both come in three primary versions from the most basic to the premier, each with additional functions and features not necessarily available in less expensive versions. Furthermore, both Microsoft Money and Intuit Quicken have a small business management component to their software packages. The two products seem to be competing with each other as their product designs and packages illustrate.

Microsoft Money advantages

• More affordable than Quicken: At $19.99, $29.99 and $49.99 for the essentials, deluxe and premium versions, Microsoft Money software out values Quicken's starter, deluxe and premier finance software packages for PC's at $29.99, $59.99 and $89.99.

• Microsoft engineering: It's probably worth mentioning Microsoft has some of the best and brightest software engineers and programmers in the World. It is quite likely the Microsoft's talent pool, experience in the industry and management know how has had a positive influence on the evolution of 

Microsoft Money software over the years.

• Since Microsoft also designs operating systems such as Windows, it is also beneficial from a functionality and integration perspective that Microsoft Money is made by the same company as many popular operating systems. This can lead to smoother and more familiar features, styles and formatting.

Intuit Quicken advantages

• A primary advantage of Quicken is that the same company also makes tax preparation software and small business management software. The advantage is exporting and transporting data from one file in one software, to another file in another software can be enabled by similar design features. An example of this is the exporting function of quicken to Turbo tax which is also an Intuit product.

• Quicken credit card: A unique differential advantage quicken has to Microsoft Money is the Quicken credit card. This card allows card holders to download financial records and history quickly and easily into the Quicken software without a lot of hassle. In effect, the Quicken credit card allows card holders to consolidate accounts with account record keeping at home.

• Another advantage of Quicken is the company really tries to add value and has some partial success doing so with the add on features. For example, Quicken allows users to print their own checks, download financial data directly from financial institutions and pay bills online through Quicken's bill payer service.

Disadvantages of both Intuit Quicken and Microsoft Money

While Quicken seems to have more capacity than Microsoft in terms of providing services and allowing it's users to organize their finances, the fact remains that neither Microsoft or Quicken are full service banking institutions, data entrists or financial planners. They are merely software packages to help organize and analyze information. Microsoft does not appear to attempt to go beyond this role in the same way Quicken does, perhaps out of knowing the limits of the software's capability. However, Microsoft's software is less expensive perhaps in reflection of the less complete service options.

What both Quicken and Microsoft Money fail to tout is the fact that financial institutions sometimes do a great job of preparing and presenting personal financial information all by themselves. All Quicken and Money do are replicate the data and consolidate it for further review and manipulations. This may or may not be and advantage to someone who already has an organized of comfortable financial record keeping system in place.

Microsoft Money and Intuit Quicken are both well marketed, professionally designed, and multi-generational software packages that have been years in the making. They are both produced by experienced software designers and both serve a similar function i.e. organization and presentation of personal and in some cases, small business financial information. Each software has slightly different advantages and similar disadvantages.

The advantages are in the software capabilities, pricing and formatting and the disadvantages are in the actual real life utility of the software i.e. they are both good software packages but neither one performs financial tasks already existing financial institutions such as banks can't and don't already do via financial statements and reports.

Monday, February 7, 2011

How to Find the Right Personal Financial Software For You

Financial software should make your life easier not harder, and it is also ideally useful rather than redundant. If a financial software does not amount to less time spent managing money, with better results then that software may not necessarily be any better than another method of financial management. Of course everyone's needs and goals are different and that is why the following benefits of financial software might be considered when choosing. 
• Helps meet financial goals
• Easy to use software
• Reasonable cost
• Is efficient and facilitates record keeping
• Produces reports and documents useful in loan processes and tax filing
Types of financial software for individuals and households
Financial software can be divided into three types, personal finances, small home based business, and tax preparation. Depending on how complicated one's finances are all, none or some of the three types of software may be useful. For example, if Mrs. J runs a day care out of her home, and also manages the household finances and Mrs. J's household has a lot of tax deductions and tax reporting requirements, Mrs. J may benefit from the organizational facilities of financial software.
If on the other hand, one has a very simple financial life without a lot of complex monetary calculations, decision making and record keeping, then it may simply be a waste of time and/or redundant to bother with financial software at all. In other words, the individual situation will in part determine how useful financial software can be. The three types of software are described more fully as follows:
Financial management software
Financial management software helps organize bills, check book balancing, calculate expenditures and interest, prepare financial summaries for banks, reminds the user when bills are due, records savings etc. This type of software requires information be entered in consistently and accurately for the software feedback and output to be most accurate. Examples of personal financial management software are Microsoft Money and Intuit Quicken.
Small business software
Small business software is designed for organizing the finances of a small business operation. This includes billing, accounts receivable, accounts payable, customer profiles, financial documentation such as invoices, and balance sheets, company financial profile etc. This type of software can be very useful when managing a small business as when responsibility for clients is involved, it is helpful to have reliable and effective software. A commonly used small business software is Quickbooks, however personal business software is included in premium and specific versions of Microsoft Money and Intuit Quicken.
Tax preparation software
Tax preparation isn't something that always has to be done at tax time. Tax documents are accumulated all year round, and documenting tax related finances can help make the process go a lot smoother when tax time comes around. Tax preparation software is designed to replace and supplement the traditional paper filing method of tax reporting as many of these software's enable the user to file taxes directly through the Internet.
Depending on how complex one's financial tax situation is, this software packages may or may not included all the necessary features and tax code resources needed for optimal tax filing. What these packages can do is help facilitate and organize the tax preparation process and in some cases expedite receipt of tax returns. A few samples of tax filing software are Turbo Tax, Tax Act, and H&R Block Tax preparation software.
The above methods are not the only software available to organize finances. One may be content using software available through Microsoft office such as Excel, access and word. Or one may benefit from finding a bank with an excellent online banking service and manage one's accounts online through one or two banks. Or one may choose a custom made financial planning software from an independent programmer.
Whatever one's financial software choice, the key is to feel comfortable with the method that is being used and being able to be stick with it. As with any kind of management, whether it be a kitchen, children, a garden etc. finances are no different in the sense they require attention to detail and effort. Financial software is a tool that helps with that process but doesn't actually do the job, that as with most things, is left to the software user.

Wednesday, February 2, 2011

How to Make The Most of Quicken

Quicken is a personal finance software produced by a company called Intuit which also creates the well known tax and business software packages Turbo Tax and Quickbooks. In so far as expertise and experience goes, Intuit software products such as Quicken are among the most well known within the U.S. market and also among the most user friendly and functional.

Quicken assists in important aspects of home financial planning such as budgeting, check book balancing, investment tracking, expense calculating, calculating etc. The software is an all in one software meaning it combines several financial planning goals and functions into one software package. Depending on which version of Quicken one has, i.e. basic, deluxe or premier, the total amount of features and available software functions varies.

What Quicken can do for you

Quicken can take personal financial information and reconfigure it into a highly organized format that may be useful for several financial goals. If one has the right goals in mind when using quicken, one can benefit from the software's design. What's more, the software can also train one to be better aware and prepared for the following financial tasks.

• Tax preparation: Quicken can transfer data to tax software via through export
• Loan applications: Loan application record keeping and presentation layouts
• Check book balancing and reconciliation: Keep up with payments using digital checkbook
• Bill tracking and paying: Useful bill paying reminders
• Payments and expenditures history and profile: Useful record keeping functions
• Charting an graphing: Assists planning, managing and presenting finances professionally
• Budgeting and financial planning: Helps with overall money management

Advantages of Using Quicken:

If one chooses quicken as the primary tool to keep track of, record and organize one's finances then it can be useful tool for staying on top of bills, balances, liquidity etc. The tools within quicken allow it to export information to Turbo Tax, an individual tax preparation software in addition to being able to print out account histories, portfolio allocations and bill paying features.

Keeping all the above benefits in mind, Quicken may require one to adjust one's financial planning style and technique to meld with software. Essentially, this software will manage financial data if it is entered in thoroughly and efficiently over time. In other words, Quicken's software features such as the checkbook and bill reminders are a digital substitute for paper versions of the same thing. To focus one's financial planning and organization, Quicken may come in handy.

Using the right computer and system requirements

Having the right computer is somewhat cursory but still relevant to making the most from Quicken's software i.e. if it doesn't load or run well, then it won't be optimal. Quicken is available for both PC's and Mac's and has been a major personal finance software in terms of editions, volumes sold, and marketing for a number of years. The software is user friendly in the sense it has a relatively easy to use guided installation process, clearly marked and functional software feature tabs.

The system requirements for Quicken aren't too stringent and can be viewed on the quicken website before purchase. A few of the basic requirements are a Windows 2000 operating system or later, and a Pentium II PC with 300 megahertz of processing speed and a 4 times speed CD-Rom drive.

Benefiting from Quicken's add on features

Quicken is also interactive via the internet meaning it can transfer data, backup data online, and pay bills. This can save valuable computer memory and consolidate banking and finance tasks into and through one software and online software platform. The cost of Quicken software ranges from around $30.00-$90.00 depending on the version and package and can either be downloaded or purchased through brick and mortar companies as a CD software. This cost may be worth it if one feels financial organization provided by the Quicken software can pay back in terms of savings from improved budgeting, tax preparation, and expense accounting.

To summarize, Quicken is an interactive personal financial management software that is produced by an experienced and knowledgeable company in terms of producing financial related software. The software is functional, relatively user friendly and useful but may not be necessary for everyone's financial management needs.

Quicken is a good software if one doesn't know where to start organizing personal finances as it is logically organized and can really help one manage finances, become familiar with online and software based management tools and learn more about the processes involved in organizing finances effectively.

Originally posted 01/07/2008: http://www.helium.com/items/779596-how-to-make-the-most-of-quicken