Credit policy
Credit gives the customer the opportunity to buy goods and services, and pay for them at a later date.
Advantages of credit trade
* Usually results in more customers than cash trade.
* Can charge more for goods to cover the risk of bad debt.
* Gain goodwill and loyalty of customers.
* People can buy goods and pay for them at a later date.
* Farmers can buy seeds and implements, and pay for them only after the harvest.
* Stimulates agricultural and industrial production and commerce.
* Can be used as a promotional tool.
* Increase the sales.
* Modest rates to be filled.
Disadvantages of credit trade
* Risk of bad debt.
* High administration expenses.
* People can buy more than they can afford.
* More working capital needed.
* Risk of Bankruptcy.
Forms of credit
* Suppliers credit:
* Credit on ordinary open account
* Installment sales
* Bills of exchange
* Credit cards
* Contractor’s credit
* Factoring of debtors
* Cash credit
* Cpf credits
Factors which influence credit conditions
* Nature of the business’s activities
* Financial position
* Product durability
* Length of production process
* Competition and competitors’ credit conditions
* Country’s economic position
* Conditions at financial institutions
* Discount for early payment
* Debtor’s type of business and financial positions
Credit collection
Overdue accounts
* Attach a notice of overdue account to statement.
* Send a letter asking for settlement of debt.
* Send a second or third letter if first is ineffectual.
* Threaten legal action.
Effective credit control
* Increases sales
* Reduces bad debts
* Increases profits
* Builds customer loyalty
* Builds confidence of financial industry
* increase company capitlisation
Sources of information on creditworthiness
* Business references
* Bank references
* credit agencies
* Chambers of commerce
* Employers
* Credit application forms
Duties of the credit department
* Legal action
* Taking necessary steps to ensure settlement of account
* Knowing the credit policy and procedures for credit control
* Setting credit limits
* Ensuring that statements of account are sent out
* Ensuring that thorough checks are carried out on credit customers
* Keeping records of all amounts owing
* Ensuring that debts are settled promptly
* Timely reporting to the upper level of management for better management.
Stock
Purpose of stock control
* Ensures that enough stock is on hand to satisfy demand.
* Protects and monitors theft.
* Safeguards against having to stockpile.
* Allows for control over selling and cost price.
Stockpiling
This refers to the purchase of stock at the right time, at the right price and in the right quantities.
There are several advantages to the stockpiling, the following are some of the examples:
* Losses due to price fluctuations and stock loss kept to a minimum
* Ensures that goods reach customers timeously; better service
* Saves space and storage cost
* Investment of working capital kept to minimum
* No loss in production due to delays
There are several disadvantages to the stockpiling, the following are some of the examples:
* Obsolescence
* Danger of fire and theft
* Initial working capital investment is very large
* Losses due to price fluctuation
Rate of stock turnover
This refers to the number of times per year that the average level of stock is sold. It may be worked out by dividing the cost price of goods sold by the cost price of the average stock level.
Determining optimum stock levels
* Maximum stock level refers to the maximum stock level that may be maintained to ensure cost effectiveness.
* Minimum stock level refers to the point below which the stock level may not go.
* Standard order refers to the amount of stock generally ordered.
* Order level refers to the stock level which calls for an order to be made.
Cash
Reasons for keeping cash
* Cash is usually referred to as the "king" in finance, as it is the most liquid asset.
* The transaction motive refers to the money kept available to pay expenses.
* The precautionary motive refers to the money kept aside for unforeseen expenses.
* The speculative motive refers to the money kept aside to take advantage of suddenly arising opportunities.
Advantages of sufficient cash
* Current liabilties may be catered for.
* Cash discounts are given for cash payments.
* Production is kept moving
* Surplus cash may be invested on a short-term basis.
* The business is able to pay its accounts timeously, allowing for easily-obtained credit.
* Liquidity
23 Juni 2009
Managerial or corporate finance is the task of providing the funds for a corporation’s activities. For small business, this is referred to as SME finance. It generally involves balancing risk and profitability, while attempting to maximize an entity’s wealth and the value of its stock.
Long term funds are provided by ownership equity and long-term credit, often in the form of bonds. The balance between these forms the company’s capital structure. Short-term funding or working capital is mostly provided by banks extending a line of credit.
Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value. In investment management – in choosing a portfolio – one has to decide what, how much and when to invest. To do this, a company must:
* Identify relevant objectives and constraints: institution or individual goals, time horizon, risk aversion and tax considerations;
* Identify the appropriate strategy: active v. passive – hedging strategy
* Measure the portfolio performance
Financial management is duplicate with the financial function of the Accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm.
23 Juni 2009
Questions in personal finance revolve around
* How much money will be needed by an individual (or by a family), and when?
* Where will this money come from, and how?
* How can people protect themselves against unforeseen personal events, as well as those in the external economy?
* How can family assets best be transferred across generations (bequests and inheritance)?
* How does tax policy (tax subsidies or penalties) affect personal financial decisions?
* How does credit affect an individual’s financial standing?
* How can one plan for a secure financial future in an environment of economic instability?
Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.
Personal financial decisions may also involve paying for a loan, or debt obligations.
23 Juni 2009
An entity whose income exceeds their expenditure can lend or invest the excess income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary pockets the difference.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensators of money flows in space.
A specific example of corporate finance is the sale of stock by a company to institutional investors like investment banks, who in turn generally sell it to the public. The stock gives whoever owns it part ownership in that company. If you buy one share of XYZ Inc, and they have 100 shares outstanding (held by investors), you are 1/100 owner of that company. Of course, in return for the stock, the company receives cash, which it uses to expand its business; this process is known as "equity financing". Equity financing mixed with the sale of bonds (or any other debt financing) is called the company’s capital structure.
Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments and methodologies, with consideration to their institutional setting.
Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.
23 Juni 2009
An entity whose income exceeds their expenditure can lend or invest the excess income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary pockets the difference.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensators of money flows in space.
A specific example of corporate finance is the sale of stock by a company to institutional investors like investment banks, who in turn generally sell it to the public. The stock gives whoever owns it part ownership in that company. If you buy one share of XYZ Inc, and they have 100 shares outstanding (held by investors), you are 1/100 owner of that company. Of course, in return for the stock, the company receives cash, which it uses to expand its business; this process is known as "equity financing". Equity financing mixed with the sale of bonds (or any other debt financing) is called the company’s capital structure.
Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments and methodologies, with consideration to their institutional setting.
Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.
23 Juni 2009
Stop Dreaming Start Action ? What is the mean?
Amount of people who have dreams, delusion and desire to savor success, but many of those stop at dreamer level. Yesterday they dreamed, today dreamed, and tomorrow they still dreamed without real action. They failed to change what is in their mind into reality because they do not act.
Amount of people who have academic degrees and cumulative knowledge have their career less than ordinary people and even worst. Why? Because they lost in the action. Lot of knowledge that is not practiced, there is no obvious use. The knowledge when practiced will give a real impact. Action change the dream into reality.
Action is the thrust of what that change is in the mind only to become a reality. Without action, all the clever ideas, expertise and ingenuity will only be potential. Actions that make all of that into a thrust (Something that we approach the goal). Through this action, the resources we have will be useful
The question, what makes some people pushed to act and the other trapped in the No Action Talk Only alias?
What makes you do and not do something?
Why you choose to sport in the morning?
Because you motivated
Because you want your body healthy.
Then, why at a time you choose to sleep again in the morning? Because you lazy. Due to lack motivation to do the other. Read this article at Joko Susilo’s Blog to become motivated especially to do Action on monday that some people think monday is a bad day.
Why people can be motivated or even become lazy? What is the motivation and laziness could we manage? Or that we are governed by our mood?
What we call the laziness and motivation is a part of emotion. Emotions in many cases appeared to affect us more. For example, we know that right back to bed in the morning is not good for health and food acquisition. Similarly like smoking and not do activity like sport. We know that bad but we do not as if the power not to do things such as these.
Conversely, we know that regular exercise is good, that to increase sales volume, we should visit more often, but we are reluctant to do so. We thus choose not to do what we know is good. If so, it is very crucial is the ability to manage our personal emotions. If we can when we can set the lazy (for relaxation and rest) and when we should be motivated to do something, everything is much easier. If we can always pull out of feeling lethargic and otherwise afford the motivation to meet us, we certainly will be the King of Action.
We see that the people who work in various areas are consistent in the act. They act when needed, set aside the feeling lethargic and reluctant. Those successful in various fields are always motivated to work. They can take their time to work best. They act consistently, seeing the emotional ability to manage, so always in a state of motivated.
So, Stop DREAMING Start ACTION !!!
Article : Setyo Hajar Dewantoro
Picture : infowit
23 Juni 2009
Internet marketing, also referred to as i-marketing, web marketing, online marketing, or eMarketing, is the marketing of products or services over the Internet.
The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.
Internet marketing ties together creative and technical aspects of the Internet, including design, development, advertising, and sale.
Internet marketing also refers to the placement of media along different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. In 2008 The New York Times working with comScore published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found the potential for collecting data upward of 2,500 times on average per user per month
23 Juni 2009
Marketing is an integrated communications-based process through which individuals and communities discover that existing and newly-identified needs and wants may be satisfied by the products and services of others.
Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to buy or sell goods or services.
The Chartered Institute of Marketing, which is the world’s largest marketing body, defines marketing as "The management process responsible for identifying, anticipating and satisfying customer requirements profitably."
Marketing practice tended to be seen as a creative industry in the past, which included advertising, distribution and selling. However, because marketing makes extensive use of social sciences, psychology, sociology, mathematics, economics, anthropology and neuroscience, the profession is now widely recognised a science, allowing numerous universities to offer Master-of-Science (MSc) programmes. The overall process starts with marketing research and goes through market segmentation, business planning and execution, ending with pre and post-sales promotional activities. It is also related to many of the creative arts. The marketing literature is also infamous for re-inventing itself and its vocabulary according to the times and the culture.
Seen from a systems point of view, sales process engineering views marketing as a set of processes that are interconnected and interdependent with other functions, whose methods can be improved using a variety of relatively new approaches.
23 Juni 2009
Online advertising techniques have been dramatically affected by technological advancements in the telecommunications industry. In fact, many firms are embracing a new paradigm that is shifting the focus of online advertising from simple text ads to rich multimedia experiences. As a result, advertisers can more effectively engage in and manage online branding campaigns, which seek to shape consumer attitudes and feelings towards specific products. And just what is the critical technological development that is fueling this paradigm shift? The answer: Broadband.
In March 2005, roughly half of all American homes were equipped with broadband technology. By May 2008, broadband technologies had spread to more than 90% of all residential Internet connections in the United States. When one considers a Nielsen’s study conducted in June 2008, which estimated the number of U.S. Internet users as 220,141,969, one can calculate that there are presently about 199 million people in the United States utilizing broadband technologies to surf the Web.
As a result, all 199 million members of this burgeoning market have the ability to view TV-like advertisements with the click of a mouse. And to be sure, online advertisers are working feverishly to design rich multimedia content that will engender a “warm-fuzzy” feeling when viewed by their target audience. As connection speeds continue to increase, so will the frequency of online branding campaigns.
23 Juni 2009
From Relationship Marketing to Customer Relationship Marketing
The concept of relationship marketing was first coined by Berry in 1983. He considered it to consist of attracting, maintaining and enhancing customer relationships within organizations. In the years that followed, companies were engaging more and more in a meaningful dialogue with individual customers. In doing so, new organizational forms as well as technologies were used, eventually resulting in what we know as Customer Relationship Marketing (CRM).
The main difference between RM and CRM is that the first does not acknowledge the use of technology, where the latter uses Information Technology (IT) in implementing RM strategies.
The essence of CRM
The exact meaning of CRM is still subject of heavy discussions. However, the overall goal can be seen as effectively managing differentiated relationships with all customers and communicating with them on an individual basis. Underlying thought is that companies realize that they can supercharge profits by acknowledging that different groups of customers vary widely in their behavior, desires, and responsiveness to marketing.
eCRM
As the internet is becoming more and more important in business life, many companies consider it as an opportunity to reduce customer-service costs, tighten customer relationships and most important, further personalize marketing messages and enable mass customization. Together with the creation of Sales Force Automation (SFA), where electronic methods were used to gather data and analyze customer information, the trend of the upcoming Internet can be seen as the foundation of what we know as eCRM today. We can define eCRM as activities to manage customer relationships by using the Internet, web browsers or other electronic touch points. The challenge hereby is to offer communication and information on the right topic, in the right amount, and at the right time that fits the customer’s specific needs.
Channels through which companies can communicate with its customers, are growing by the day, and as a result, getting their time and attention has turned into a major challenge. One of the reasons eCRM is so popular nowadays is that digital channels can create unique and positive experiences – not just transactions – for customers. An extreme, but ever growing in popularism, example of the creation of experiences in order to establish customer service is the use of Virtual Worlds, such as Second Life. Through this so-called vCRM, companies are able to create synergies between virtual and physical channels and reaching a very wide consumer base. However, given the newness of the technology, most companies are still struggling to identify effective entries in Virtual Worlds. Its highly interactive character, which allows companies to respond directly to any customer’s requests or problems, is another feature of eCRM that helps companies establish and sustain long-term customer relationships.
Furthermore, Information Technology has helped companies to even further differentiate between customers and address a personal message or service. Some examples of tools used in eCRM:
CRM programs should be directed towards customer value that competitors cannot match. However, in a world where almost every company is connected to the Internet, eCRM has become a requirement for survival, not just a competitive advantage.
Different levels of eCRM
In defining the scope of eCRM, three different levels can be distinguished:
This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfillment.
These services include order tracking, product configuration and customization as well as security/trust.
These are extra services such as online auctions and online training and education.
Self-services are becoming increasingly important in CRM activities. The rise of the Internet and eCRM has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. An example was Ford’s plan to sell cars directly to customers via its Web Site, which provoked an outcry among its dealers network. CRM activities are mainly of two different types. Reactive service is where the customer has a problem and contacts the company. Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive a contact the customer himself in order to establish a dialogue and solve problems.
Mobile CRM
One subset of Electronic CRM is Mobile CRM (mCRM). This is defined as “services that aim at nurturing customer relationships, acquiring or maintaining customers, support marketing, sales or services processes, and use wireless networks as the medium of delivery to the customers. However, since communications is the central aspect of customer relations activities, many opt for the following definition of mCRM: “communication, either one-way or interactive, which is related to sales, marketing and customer service activities conducted through mobile medium for the purpose of building and maintaining customer relationships between a company and its customer(s).
eCRM allows customers to access company services from more and more places, since the Internet access points are increasing by the day. mCRM however, takes this one step further and allows customers or managers to access the systems for instance from a mobile phone or PDA with internet access, resulting in high flexibility. An example of a company that implemented mCRM is Finnair, who made it possible for their customers to check in for their flights by SMS. Since mCRM is not able to provide a complete range of customer relationship activities it should be integrated in the complete CRM system.
Implementing and integrating CRM solutions
Several CRM software packages exist that can help companies in deploying CRM activities. Besides choosing one of these packages, companies can also choose to design and build their own solutions. In order to implement CRM in an effective way, one needs to consider the following factors:
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Create a customer-based culture in the organization.
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Adopt customer-based managers to assess satisfaction.
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Develop an end-to-end process to serve customers.
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Recommend questions to be asked to help a customer solve a problem.
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Track all aspects of selling to customers, as well as prospects.
Furthermore, CRM solutions are more effective once they are being implemented in other information systems used by the company. Examples are Transaction Processing System (TPS) to process data real-time, which can than be send to the sales and finance departments in order to recalculate inventory and financial position quick and accurate. Once this information is transferred back to the CRM software and services it could prevent customers from placing an order in the belief that an item is in stock while it is not.
Failures
Designing, creating and implementing IT projects has always been risky. Not only because of the amount of money that is involved, but also because of the high chances of failure. However, a positive trend can be seen, indicating that CRM failures dropped from a failure rate of 80% in 1998, to about 40% in 2003. Some of the major issues relating to CRM failure are the following:
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Difficulty in measuring and valuing intangible benefits.
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Failure to identify and focus on specific business problems.
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Lack of active senior management sponsorship.
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Poor user acceptance.
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Trying to automate a poorly defined process.
Privacy
The effective and efficient employment of CRM activities cannot go without the remarks of safety and privacy. CRM systems depend on databases in which all kinds of customer data is stored. In general, the following rule applies: the more data, the better the service companies can deliver to individual customers. Some known examples of these problems are conducting credit-card transaction online of the phenomenon known as ‘cookies’ used on the Internet in order to track someone’s information and behavior. The design and the quality of the website are two very important aspects that influences the level of trust customers experience and their willingness of reluctance to do a transaction or leave personal information. As the use of the Internet, electronic CRM solution and even the existence of e-business is rising, so are the efforts in order to further develop the systems used and increase their safety for customers in order to further reap the benefits of their use.
23 Juni 2009
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