The Reality Business

Archive for August, 2010

Financial transactions and distribution are some of the critical issues of managing the immense responsibility and monitor. Some factors that influence the allocation of funds and management at different levels and categories. Development of individuals and businesses, and depends on several factors, mainly the allocation of capital and a good data recovery costs. Stipulations of a certificate of certified financial planning and the increasing demand of CF planner CFP exam prep make it to be chosen by the candidates as the course for further education.

Certified Financial Planner certification or CFP certification, CFP courses and CFP exam prep is a very important development and financial planning. All types of applications around the correct positioning and sufficient supply of financial issues. Financial Planning Certificate as the layers is very powerful and responsible travel to areas of professional and financial subordinate CA.

Certified financial planning certificate CFP certification and CFP exam prep is devoted to a thorough knowledge and skills in a financial plan for the client, taking into statement the target group. Certified Financial Planner offers a variety of functions such as planning for the management of social security benefits, pensions, real estate and tax planning, insurance planning and risk planning.

Last in the socket could be considered a CFP certification certified financial planner applies for CFP exam prep desires the following management and technical plans are different:

Investment
Regulation on the supervision and related issues

As a financial advisor for the client
to receive the benefits of a certificate in financial planning are enormous and could, given the rich spike in a key race as financial advisor and consultant to clients and get the ideal benefits and progressive career. Some of these are shown below:

Financial Planning Certificate is a guarantee certificate course and move forward so reliable that the author of the practice of licensing CFP courses, financial planners receive certification as a financial consultant.
Level 4 Diploma in Financial Planning certified financial planner study as a unit comprises CFP courses an integral part of financial security is an important bourgeois in reducing the burden by the end of the course and provides a superior level for the report of the continuation and completion certified financial planning certificate.
It creates a strong sense of financial planning and basic certified financial planner study facts with accredited training and well covered major financial planning certificate. It creates a sense of basic understanding of financial planner certification.
The evidence produced in the online database CFP courses, to address the broader scope of the review with a solid preparation and confidence to deal with review duplicates are analyzed and show the results of the examination before Justice granted then online.
The value of CFP courses is the holder of the Certificate of Financial Planning degree relates certified financial planner study, the range of career opportunities recognized self-produced and great to excel as a successful career mortal with a respective expected.
It is simply to go with the understanding of mutual funds or sell some guidelines so that it was a tragic decision and might also serve as a financial planner.The immense knowledge of foresight and a good distribution and storage of records prior to the implementation of this change of career and make a one-of-a-kind feature in you for being a different and skilled Certified Financial Planer.

Acquisition provides CFP certification great importance with respect to race and education in knowledge and also opened up broad prospects for elimination opportunity and financial concerns are still awake and now tread, an individual or a company, all certified financial planner looking to maintain that increasing demand for certified financial planning certificate. For more info visit http://www.financialplannerprogram.com

Find more Tax Course articles from search form.

The term dominance is often used for power perceived as legitimate by the social structure. Power can be seen as evil or unjust; indeed all evil and injustice committed by man against man involve power. The exercise of power seems endemic to humans as social beings.

The use of power need not involve coercion (force or the threat of force). At one extreme, it more closely resembles what each day English-speakers call “influence”, even though some authors make a distinction between power and influence – the means by which power is used (Handy, C. 1993 Understanding Organisations).

Power manifests itself in a relational manner: one can't meaningfully say that a particular social mortal “has power” without also specifying the role of other celebrations in the social relationship (for a discussion of this concept see Simmel’s work on ’subordination’ and ’superordination’).

Because power operates both relationally and reciprocally, sociologists talk of the equilibrise of power between celebrations to a relationship: all celebrations to all relationships have some power: the sociological examination of power concerns itself with discovering and describing the relative strengths: equal or unequal, stable or subject to periodic change. Sociologists usually analyse relationships in which the celebrations have relatively equal or almost equal power in terms of constraint rather than of power. Thus ‘power’ has a connotation of unilateralism. If this were not so, then all relationships could be described in terms of ‘power’, and its meaning would be lost.

Even in structuralist social theory, power appears as a process, an aspect to an ongoing social structure.
One can sometimes distinguish primary power: the direct and individualized use of force for coercion; and secondary power, which might involve the threat of force or social constraint, most likely involving third-party exercisers of delegated power.

Political Concept:
Political power (imperium in Latin) is a type of power held by a mortal or group in a society. There are many ways to hold such power. Officially, political power is held by the holders of sovereignty. Political powers are not limited to heads of states, however, and the extent to which a mortal (such as Joseph Kony, Subcomandante Marcos, or Russell Means) or group (such as an insurgency, terrorist group, or multinational corporation) holds such power is related to the amount of societal influence they can wield, formally or informally. In many cases this influence is not contained within a single say and it refers to international power. Political scientists have frequently defined power as “the capability to influence the activity of others” with or without resistance.

Within normative political analysis, there are also various levels of power as described by academics that add depth into the understanding of the notion of power and its political implications. Robert Dahl, a prominent American political scientist, first ascribed to political power the trait of decision-making as the source and main indicator of power. Later, two other political scientists, Peter Bachrach and Morton Baratz, decided that simply ascribing decision-making as the basis of power was too simplistic and they added what they termed a 2nd dimension of power, agenda-setting by elites who worked in the backrooms and away from public scrutiny in order to exert their power upon society. Lastly, British academic Steven Lukes added a 3rd dimension of power, preference-shaping, which he claimed was another important aspect of normative power in politics which entails theoretical views similar to notions of cultural hegemony. These 3 dimensions of power are this day often considered defining aspects of political power by political researchers.

A immoderate substitute view of the source of political power follows the formula: information plus dominance permits the exercise of power. Political power is intimately related to information. Sir Francis Bacon’s statement: “Nam et ipsa scientia potentia est” for knowledge itself is power, assumed dominance as given. Many will know that unless someone with dominance heeds, there is no political power. The kingmaker is not the king.

It is stated democracy is the ideal method of informing those entrusted with authority.They are ideal healthy to use dominance without ignorance to maximize political power. Those who exercise dominance in ignorance are not powerful, because they do not realize their intentions and have tiny control over the effects of using their authority.

Post-modernism has debated over how to define political power. Perhaps, the ideal known definition comes from the late Michel Foucault, whose work in Discipline and Punish (and other writings) conveys a view of power that is organic within society. This view holds that political power is more subtle and is part of a series of societal controls and ‘normalizing’ influences through historical institutions and definitions of normal vs. abnormal. Foucault once characterized power as “an action over actions” (une action sur des actions), arguing that power was essentially a relation between several dots, in continuous transformation as in Friedrich Nietzsche’s philosophy. His view of power lent credence to the view that power in human society was part of a training process in which everyone, from a prime minister to a homeless person, played their role within the power structure of society. Jürgen Habermas opposed himself to Foucault’s conception of discourse as a battlefield for power relations, arguing that it should be doable to achieve consensus on the fundamentals rules of discourse, in order to establish a transparent and democratic dialogue. Thenceforth, he argued against Foucault and Louis Althusser that power was not immanent to discourse, and that philosophy could be totally distinguished from ideology.

Sovereign Power- Source Of Taxing Power
What differentiates membership of the Say from that of other associations is its compulsory nature and the fact that all other organizations and activities within the frontiers of the Say are, in the last resort, subordinate to it. The modern Say is a territorial society, divided into Government and subjects, claiming within its allotted physical area, supremacy over all other institutions. Sovereignty is, the most important constituent element of the Say and there can be no Say without a Sovereign power.

The sovereignty of the Say is unlimited internally as well as externally. It is original and absolute power and it can't be divided. Division of sovereignty means destruction of sovereignty. Sovereignty represents the unity of the State, and the sovereign Say is one which is externally free and internally supreme. If Sovereignty is not absolute, no Say exists, if sovereignty is divided, more than one Says exist. There can be no legal power at the back of the sovereignty of the Say and no legal check on its scope.

Bodin defined sovereign power as “the supreme power over the citizens and subjects, unrestrained by law.” Hugo Grotius defined it as “supreme political power vested in him whose acts are not subject to any other and whose will can't be overridden. ”Sovereign power according to Jenks, is “an dominance which, in the last resort controls totally and beyond appeal the actions of each individual member of the community.”

Development Of The Concept:
The term “sovereign” is deriver from the Latin word “superanus” which means ‘supreme’. The notion is modern and its emergence is connected with the rise of the modern nation-State. But it does not mean that the ancient and medieval ages had no intent of such a notion. For the ancients it simply meant “statement of the fact that there must be an eventual control, someone with the last word in any case of the dispute, healthy to make final adjustments in the sharing of responsibility and power; and that the State, and no other social force, must exercise this final authority.

The middle ages knew nothing about the doctrine and practice of concerted final authority. The political form, then, was feudalism, based on individualized dependence and allegiance within many small groups. Feudalism was the antithesis of unified authority. There was open conflict between the spiritual and temporal authorities and if anybody, under the circumstance, could claim final authority, it was the Church and not the State.

The religious wars of the sixteenth century destroyed the unity of the Church and on the ruins of this destruction, built the modern State. The triumphant monarch either gradually destroyed or absorbed all doable rival intermediaries between himself and his subjects, including the Church. Sovereignty came to be regarded as one of the essential attributes of the State, incarnate in the Kong, the head of the State. His dominance was final to define and pronounce the law. The emergence of the modern State, thus gave a new meaning to the term Sovereignty.

Later, people began to realize that the King was a part of the governmental organisation and, accordingly, an agent rather than a master, and, as such, he possessed subordinate and delegated authority, which could be revoked at the will of the master, the people. It was a oppose against absolute monarchy. The revolutions followed this prefabricated the people sovereign and transferred to it, all the attributes of the old monarchy of divine right. The Say in its corporate capacity, as thus endowed with all the attributes of sovereignty which the monarch previously possessed. The activities of the Say were not only limited to protection, administration and dispensation of justice, but it became an organizer of economic life, an educator, an agent in practically each aspect of collective existence. This meant an ever-increasing mass of legislation and a great increase in the importance of the Say as supreme law-maker, thus reinforcing the dogma of the sovereignty, by giving it a much wider field of application.

In the modern constitutional law, it is frequently stated that a legislature is “sovereign within its powers”. This is, of course, pure nonsense if sovereignty is supreme power for there are no “powers” of sovereign body. There is only unlimited power which sovereignty implies. But if sovereignty is merely a legal phrase, for legal dominance pass any sort of laws, it is not entirely ridiculous to say that legislature is sovereign in respect of certain subjects for it might then pass any sort of laws on those subjects, but on any other subjects. Parliament, as a creature under the Constitution, not being sovereign-law-making body, is not a constituent body. The Constituents (the people) as political sovereign are a different body. Both the Parliament and the Constituent Assembly, alike, as the representative institutions, reflect the different modes of the exercise of sovereign power for different purposes, within their prescribed limits of authority, as the delegates of power from the People( the constituents) while the Situs of Sovereignty, remains undivided in the People i.e., the Constituents.

As the purposes differ, the nature and the modes of exercise of sovereign power by the Parliament, as the Peoples’ delegate, under Parts XI and XX, differ. The exercise of Power by the Parliament under Part XI is ordinary legislative Power, within the prescribed limits of authority. The exercise of Power by the Parliament under Part XX, being special in nature, is extra-ordinary, in its mode of exercising the law making Power within its prescribed limits of authority. Considering, the special nature with reference to the mode of exercising the breathtaking power, under Part XX, the unenumerated power to amend Part III under Art. 368 of Part XX, the exercise of which by any organ in the state, is expressly forbidden under Art.13(2), as an incident of the Peoples’ exercise of sovereign power of retaining Fundamental Rights under Part III, in the process of exercising the Rights of Self-Determination, the unenumerated power to amend Part III under Art.368 of Part XX can't be construed as one same with unenumerated ordinary legislative power, under Entry 97, List I, Schedule heptad read with Art.248 of Part XI as is held in the decision of Golak Nath v. The Say of Punjab

All governmental organs and institutions owe their origin to the constitution and derive their powers from its provisions. These organs and institutions enjoy only such powers as are conferred on them and function within limits demarcated by the constitution. Parliament is no exception and unlike British Parliament, can't claim unlimited powers. It must function within its limits and its actions are subjected to judicial scrutiny. It is given the power to amend the constitution, but the power to amend must be exercised within the bounds of the constitution. Besides conforming to the procedure ordered down for this purpose, the power to amend should not be exercised so as to destroy or abrogate the basic structure or framework of the constitution. Sovereignty cannot, therefore, be located in Parliament.

In a sense the constitution might appear to be sovereign as it is the supreme law of the land. However a document can't be the sovereign. The people of India, according to the Preamble, have given to themselves this constitution. The source of the constitution is the people of India will continue to be governed under the constitution so long as it is acceptable to them and its viands promote their aims and aspirations. It is true that the constitution was adopted by the constituent assembly which was not directly elected by the people. But that does not necessarily mean that the constituent assembly as it came to be constituted, did not project the feelings of the people. The fact that the constitution has been in operation foe more than fifty years with a number of general elections from time to time is an evidence of the people having accepted the constitution in its present form. Following the course of Indian history and the pattern of Indian politics, it might be stated that, unlike the Western society, it is the elite of the Indian society rather than the people themselves who have set the tone for the reformation of the society. Besides the fact that the Preamble provided that the people of India have enacted and given to themselves the constitution and its continued acceptance by the people over the years leads to no other conclusion that the binding force of the constitution is the sovereign will of the people of India. If at any stage of history, the people find the constitution is not serving the needs of the Indian Society, the people of India may, if necessary, set in motion machinery which provides for a system suited to the aims and aspirations of the people. It might therefore, be rightly observed that the sovereignty lies with the people of India.

Taxing Power
Taxation is the legal capacity of the sovereignty or one of its governmental agents to exact or impose a charge upon persons or their property for the support of government and for the payment for any other public purposes which it might constitutionally carry out. The power of taxation differs from the power of eminent domain, for under taxation the government is required to make and enforce contribution of money or property by the citizen as his share of the burden of support of the government. Property taken under eminent domain is much beyond the owner’s share of the burden of government. Eminent domain takes nit a share of the public burden, but more than a share.

A government can't exist without raising and spending money. Parliament controls public finance which includes granting of money to the administration for expenses on public services, imposition of taxes and authorization of loans. This is a very important function of Parliament. Through this means Parliament exercise control over the executive because whenever Parliament discusses financial matters, government’s broad policies are invariably brought into focus. The Indian Constitution devises an elaborate machinery for securing parliamentary control over finances which is based on the following four principles.

The first principle regulates the constitutional relation between the Government and Parliament in matters of finance. The executive can't raise money by taxation, borrowing or otherwise, or spend money, without the dominance of Parliament. The second principle regulates the relation between the two Houses of Parliament in financial matters. The powers of raising money by tax or loan and authorizing expenditure belongs exclusively to the favourite House, viz., Lok Sabha. Rajya Sabha merely assents to it. It can't revise, modify or initiate a grant. In financial matters, Rajya Sabha does not have co-ordinate dominance with Lok-Sabha and Rajya Sabha plays only a subsidiary role in this respect. The third principle imposes a restriction on the power of Parliament to authorize expenditure. Parliament can't vote money for any purpose whatsoever except on demand by ministers. The fourth principle imposes a similar restriction on the power of Parliament to impose taxation. Parliament can't impose any tax except upon the suggestion of the Executive.

Constitutional Podium Of Taxing Power
The entries in the legislative lists are divided into two groups- one relating to the power to tax and the other relating to the power of general legislation relating to specified subjects. Taxation is considered as a distinct matter for purposes of legislative competence. Hence, the power to tax can't be deducted from a general legislative Entry as an ancillary power. Thus, the power to legislate on inter-state trade and commerce under Entry 42 of List I does not include a power to impose tax on income in the course of such trade and commerce.

There is no Entry as to tax, in the Concurrent List; it only contains an Entry relating to levy fees in respect of matters specified in List III other than court-fees.
In order to determine whether a tax was within the legislative competence of the legislature which imposed it, it is necessary to determine the nature of the tax, whether it is a tax on income, property, business or the like so that the Entry under which the legislative power has been assumed could be ascertained.

The primary guide for this is what is known as the ‘charging section. The finding of the subject-matter of a tax is only to be found in the charging section, the section which creates the liability to pay the tax as distinguished from the mode of assessment or machinery by which it is assessed.

Generally speaking, all taxation is imposed on persons, but the nature and amount of liability is determined either by individual units, as in the case of a poll-tax, or in respect of the tax payers’ interest in property or in respect of transactions of activities of the tax payers.

But, the ‘incidence’ or the eventual burden of a tax does not determine its nature or modify the legislative power relating to it. It is the substance of the levy and not the form that determines the nature of the tax. The study given by the Legislature is not conclusive for this purpose.

Once it is held that a legislature has the power to legislate over a particular subject, its competence is not to be limited by the manner in which the power is exercised. Thus, a taxing statute might be amended by incorporating a supplying in an annual Finance Act. The intrinsic character of the tax is not to be determined by the mode of measurement or the standard of calculation prescribed for assessing the amount of the tax.

So far as the Entries relating to the taxing power are concerned,- “it is wrong to think that two independent imposts arising from two different acts or circumstances were not permitted” by the Constitution. Thus, the same article might be subject to a Central excise duty and a Say Octori duty, or a Say tax as well as a
Ambit Of Taxing Power

If the power to impose a tax is established, the power to collect the same is necessarily implied. The legislature having the power to impose a tax has also the power to prescribe the means by which the tax shall be collected and to designate officers by whom it shall be enforced; the obligation and indemnity of those officers; the means to ensure proper realization of the tax. The method and manner of collection of tax is no criterion for judging the vires of the tax law.
The following powers flow from the power to tax as ancillary powers-
(1) To wage for refund of a tax illegally or improperly collected and to impose restriction upon the right to claim such refund.
(2) To wage for the prevention of evasion of the tax imposed.
(3) To levy a penalty for the proper enforcement of the taxing statute, or collecting any amount wrongly under colour of that statute, whether by way of fine or forfeiture.

On the other hand, in exercise of taxing power conferred by exercise of a legislative Entry, the Legislature can't wage for the following, which can't be stated to be ‘ancillary’ to the legislative power in question:
(1) that any money collected by a mortal by a wrong application of taxing law would still be retrievable by the Say as if it were a tax imposed under its legitimate powers, even though the Legislature might penalize such illegal collection.
(2) The result would be the same if the law required the dealer who has recovered an illegal sum which was not retrievable under the taxing law to deposit it with the Say so that the Say might refund to the mortal from whom the money had been illegally recovered, because the stipulation of deposit with the Say is an exercise of the taxing power over a subject which was outside that power.

Constitutional Limitations Upon The Taxing Power
Apart from the limitation by the division of the taxing power between the Union and Say Legislature by the relevant Entries in the legislative Lists, the taxing power of either Legislature is particularly subject to the following limitations imposed by particular viands of our Constitution:
(1) It must not contravene Art.13.
(2) It must not deny equal endorsement of the laws, must not be discriminatory or arbitrary .(Art.14)
(3) It must not constitute an unreasonable restriction upon the right to business.(19(1)(g))
(4) No tax shall be levied the proceeds of which are specially appropriated in payment of expenses for the promotion or maintenance of any particular belief or religious denomination (Art.27).
(5) A Say Legislature or any dominance within the Say can't tax the property of the Union.(Art.285)
(6) The Union can't tax the property and income of a Say (Art.289).
(7) The power of a Say to levy tax on understanding or buy of goods is subject to Art.286.
(8) Save in so far as Parliament may, by law, otherwise provide, a Say shall not tax the consumption or understanding of electricity in the cases specified in Art.287
***********
1. Hoechst Pharmaceuticals Ltd. v. Say of Bihar, AIR 1983 SC 1019.
2. Kunnathat Thathunni Moopil Nair v. Say of Kerala, AIR 1961 SC 552.
3. Kunnathat Thathunni Moopil Nair v. Say of Kerala, AIR 1961 SC 552.
4. Ayurveda Pharmacy v. Say of T.N, AIR 1989 SC 1230.
5. Chandrakant Krishnarao Pradhan v. Jasjit Singh, AIR 1962 SC 204

Find more Tax Course articles from search form.

The lifetime learning tax credit is acquirable to taxpayers who file their return of income and owe taxes.  It is a tax credit, and not a deduction.

Criteria for eligibility

You need to fulfill all of the following conditions in order to be eligible to claim the lifetime learning credit –

You are paying tuition fees and related expenses for your higher education
You are an eligible student.
You are claiming the credit for yourself, your spouse or for a dependent.  So either the parent or the child can claim lifetime learning credit.

If you are planning to continue your education for a long time, this tax credit comes to your help.  A family can claim up to ,000 each year towards this credit.  The credit is limited to 20 per cent of first ,000 of educational expenses.  The specialty of this credit is – it is acquirable for all the years of post-secondary education and thereafter for any number of years.  It is even acquirable for courses taken up to acquire or improve your job skills.  The only condition is you should file a tax return and owe some tax to claim this credit.

Taxpayers with a altered adjusted gross income (MAGI) above ,000 (6,000 for married filing jointly) are not eligible to claim lifetime learning credit.  The limits are increased by ,000 (,000 for married filing jointly) in the year 2008.

If you are enrolled for an undergraduate or graduate degree program or enrolled for a course of instruction to acquire/improve your job skills, you remember for this credit.

How to get it?

The educational institutions have to send details of tuition fees in the form 1098-T to the students as well as to the IRS before Jan 31, 2009.  This statement also includes contact information at the institution in case any student has any question about the form.  Sometimes it might be advisable to talk to a tax consultant for calculations of tax credit.

The lifetime learning tax credit is acquirable for the expenses paid in 2008 for the enrolment during 2008 or for any course beginning before March 31, 2009.  So if you have paid ,800 on December 20, 2008 for a course commencing on March 1, 2009, this amount qualifies for lifetime learning tax credit for the tax year 2008.

Can you claim multiple benefits?

You can't claim the benefits of lifetime learning credit and hope credit.  You have to choose one out of these two.  Generally for the first two years of your post-school education, you should go for hope credit.  However for subsequent years you have to go for lifetime learning credit.  A family can claim both these credits for different family members in the same year.  However the family can't exceed the limit of lifetime learning credit for one year, which is ,000.

There are some special features of the lifetime learning credit.  It is granted for more than one course at the same time.  Also there is no limitation on how many years the taxpayer can take this credit.  You can go on claiming this credit even for your lifetime!  The only restriction is – if the altered adjusted gross income (MAGI) exceeds the limiting limits, the credit gets reduced or eventually eliminated.  You can't claim this credit by paying the fees in advance.  The only exception is, you can pay fees and using a calendar year in order to cover academic period commencing before March 31 of the following year.  If a student has a felony drug conviction, he’s not eligible to claim the hope credit but such rule does not exist for the lifetime learning credit.

Remember, if you are paying your tuition fees out of a tax free scholarship, then this credit is not acquirable to you. If you are married and filing separately, you can't claim this credit.

Find more Tax Course articles from search form.

7 step course, as you yourself might guess, is a course to comprehend and learn online marketing. Justin Blake provides this course, he has been very successful in making money online, and now he intends to share it with the world.

He calls what he will tell you “a secret”. He states that there is a secret to online success and when you will now it, you will also acquire a handsome amount online.

The price is only , after that there is a monthly payment for the upkeep of the website that he will give you. I do not know much about the compensation plan what you will acquire with this opportunity.

There are seven sections of the total training

1st-He will explain to you how can you make a good team and how can you find people who will help you in earning online

2nd-This section is about promoting stuff online

3rd-He will share what is a joint venture, what can you acquire and how can you find the effective ones.

4th-How you can use informational products to build a good business

5th-He will explain you, how you can reduce the taxes

6th-He will give you a free website.

But wait, these are only six what about the seventh part, well yeah the seventh part is making an effort.

Is it a scam?

Well, Justin Blake is a famous mortal when it comes to the world of world wide web marketing; I think that he will not alteration his reputation by defrauding people. However, I am not sure.

According to the majority on the internet, 7 step course is a scam and you should try your ideal to refrain it.

Useful or not

Well, if we speak about useful, it can be useful, if it is not a scam. If you look at the things that you will learn, it is quite a good deal at but then again you will have to pay for the site maintenance, which will be very heavy on your wallet.

My opinion

If you ask me, I am on the fence about this idea, and in the world wide web world if you are on the fence about something, leave it and search for something else. As there is no money back guarantee, therefore I will not advocate this product to you. If you have someone who has used Justin Blake 7 step course, who has also been successful with it, please tell me.

Find more Tax Course articles from search form.

There is a reason why accounts receivable financing is a four thousand year old financing technique: it works. Accounts receivable financing, factoring, and quality based financing all mean the same thing as related to quality based lending- invoices are sold or pledged to a third party, usually a commercial finance company (sometimes a bank) to accelerate cash flow.

In easy terms, the process follows these steps. A business sells and delivers a product or service to another business. The customer receives an invoice. The business requests funding from the financing entity and a percentage of the invoice (usually 80% to 90%) is transferred to the business by the financing entity. The customer pays the invoice directly to the financing entity. The concurred upon fees are deducted and the remainder is rebated to the business by the financing entity.

How does the customer know to pay the financing entity instead of the business they are receiving goods or services from? The legal term is called â??notificationâ?. The financing entity informs the customer in writing of the financing agreement and the customer must concur in writing to this arrangement. In general, if the customer refuses to concur in writing to pay the lender instead of the business providing the goods or services, the financing entity will decline to advance funds.

Why? The main security for the financing entity to be repaid is the creditworthiness of the customer paying the invoice. Before funds are advanced to the business there is a second step called â??verificationâ?. The finance entity verifies with the customer that the goods have been received or the services were performed satisfactorily. There being no dispute, it is reasonable for the financing entity to adopt that the invoice will be paid; therefore funds are advanced. This is a general view of how the accounts receivable financing process works.

Non-notification accounts receivable financing is a type of confidential factoring where the customers are not notified of the businessâ?? financing arrangement with the financing entity. One typical situation involves a business that sells affordable items to thousands of customers; the cost of notification and verification is excessive compared to the risk of nonpayment by an individual customer. It simply might not make economic sense for the financing entity to have several employees contacting hundreds of customers for one financing customerâ??s transactions on a regular basis.

Non-notification factoring might require additional collateral stipulations such as real estate; superior credit of the borrowing business might also be required with individualized guarantees from the owners. It is more difficult to obtain non-notification factoring than the normal accounts receivable financing with notification and verification provisions.

Some businesses worry that if their customers learn that a commercial financing entity is factoring their receivables it might injured their relationship with their customer; perhaps they might loose the customerâ??s business. What is this worry, why does it exist and is it justified?

The MSN Encarta Dictionary defines the word worry as:

â??Worry

verb (past and past participle worâ?¢ried, present participle worâ?¢ryâ?¢ing, 3rd mortal present singular worâ?¢ries)Definition: 1. transitive and intransitive verb be or make anxious: to feel anxious about something unpleasant that might have happened or might happen, or make somebody do this

2. transitive verb annoy somebody: to annoy somebody by making insistent demands or complaints

3. transitive verb try to bite animal: to try to wound or kill an animal by biting it

a dog suspected of worrying sheep

4. transitive verb

Same as worry at

5. intransitive verb proceed despite problems: to proceed persistently despite problems or obstacles

6. transitive verb touch something repeatedly: to touch, move, or interfere with something repeatedly

Stop worrying that button or it’ll come off.

noun (plural worâ?¢ries)Definition: 1. anxiousness: a troubled unsettled feeling

2. cause of anxiety: something that causes anxiety or concern

3. period of anxiety: a period spent feeling anxious or concerned��

The opposite is:

�not to worry used to tell somebody that something is not important and need not be a cause of concern (informal)

Not to worry. We’ll do superior next time.

no worries U. K. Australia New Sjaelland used to state that something is no trouble or is not worth mentioning (informal)�.

Query: if a business is financing their invoices with accounts receivable financing, is this an indication of financial strength or weakness? Query: from the point of view of the customer, if you are buying goods or services from a business that is factoring their receivables, should you be concerned? Query: is there one answer to these questions that fits all situations?

The answer is itâ??s a paradox. A paradox is a statement, proposition, or situation that seems to be absurd or contradictory, but in fact is or might be true.

Accounts receivable financing is both a sign of weakness with regard to cash flow and a sign of strength with respect to cash flow. It is a weakness because, prior to financing, funds are not acquirable to wage cash flow to pay for materials, salaries, etc. and it is an indication of strength because, subsequent to funding cash is acquirable to assist a businessâ?? needs for cash to grow. It is a paradox. When properly structured as a financing tool for growth at a reasonable cost, it is a beneficial solution to cash flow shortages.

If your entire business depended on one supplier, and you were notified that your supplier was factoring their receivables, you might have a justifiable concern. If your only supplier went out of business, your business could be severely compromised. But this is also true whether or not the supplier is utilizing accounts receivable financing. Itâ??s a paradox. This involves matters of perception, ego and character of the personalities in charge of the business and the supplier.

Every day, each month thousands of customers accept millions of dollars of goods and services in contracts that involve notification, verification and the factoring of receivables. For most customers, â??notificationâ? of accounts receivable financing is a non-issue: it is merely a change of the study or addresses of the payee on a check. This is a job for a mortal in the accounts payable department to make a minor clerical change. It is a mainstream business practice.

Bobby McFerrin wrote and performed a song called â??Donâ??t Worry, Be Happyâ? for the motion picture â??Cocktailsâ? starring Tom Cruise. The song was a number one U. S. pop hit in 1988 and won the Grammy for Ideal Song of the Year. Here are the lyrics:

�Here is a tiny song I wrote

You might want to sing it note for note

Don’t worry be happy

In each life we have some trouble

When you worry you make it double

Don’t worry, be happy. . . . . .

Ain’t got no place to lay your head

Somebody came and took your bed

Don’t worry, be happy

The land lord state your rent is late

He might have to litigate

Don’t worry, be happy

Look at me I am happy

Don’t worry, be happy

Here I give you my phone number

When you worry call me

I make you happy

Don’t worry, be happy

Ain’t got no cash, ain’t got no style

Ain’t got not girl to make you smile

But don’t worry be happy

Cause when you worry

Your grappling will frown

And that will bring everybody down

So don’t worry, be happy (now). . . . .

There is this tiny song I wrote

I hope you learn it note for note

Like good tiny kids

Don’t worry, be happy

Listen to what I state

In your life anticipate some trouble

But when you worry

You make it double

Don’t worry, be happy. . . . . .

Don’t worry don’t do it, be happy

Put a smile on your grappling

Don’t bring everybody down like this

Don’t worry, it will soon past

Whatever it is

Don’t worry, be happyâ?

The bottom line: â??notificationâ? should not be an issue in most situations involving accounts receivable financing; non-notification factoring is another option that is acquirable for businesses concerned with confidentiality that meet minimum credit standards for quality based lending. Bobby McFerrin was right: â??Donâ??t Worry, Be Happyâ?.

Copyright © 2007 Gregg Financial Services

www. greggfinancialservices. com