bills of exchange
Bills of exchange are an order executed by individuals or preferably by small and medium-sized businesses with a very clear objective: to replace cash payments. In any case, it is characterized by the fact that two very special characteristics must be present in its broadcast. On the one hand, the tacit commitment to pay between the two parties that make up this process and on the other hand, that a certain date for its execution is also collected.
Well, if these conditions are met, there is no doubt that we are actually dealing with a bill of exchange. It is preferably used for lines of credit, of any nature, although it is also applied to obtain a advance payment or discount. It is a very beneficial operation for entrepreneurs and businessmen because it generates immediate liquidity in the short term.
When this document is signed, the drawer, which is how the figure issuing it is called, is committing to pay money to third parties and that is when this financial product acquires the status of be obliged to execute this monetary transfer within the agreed deadlines. In some ways, bills of exchange are very similar to discounting promissory notes.
For the existence of bills of exchange three figures should appear that are irreplaceable in the writing of this document. The drawer that is the legal or physical person that issues or draws this document. The drawee, who, on the contrary, is the one who accepts the payment issue and finally the payee who is simply the one who receives it and who must pay this account charge.
The use of this payment system allows a level of liquidity to be obtained through the discount. It is, in short, a tool to obtain different lines of credit, among them business loans, leasing or factoring among the most relevant.
Types of bills of exchange
If this payment model stands out for something, it is because of its high flexibility and that which other products with similar characteristics suffer from. This is because bills of exchange have different expiration dates. That is, the terms when they must be paid and that determine that they can be accounted for until four types of bills of exchange. Do you want to know what they really are? It may be very useful information because it can help optimize this order within a company's accounting. Their essence is the same and what makes them different is their expiration date.
- Hay letters rotated to fixed day and that expire on this date, in sight. That is to say, it will have its maturity in the same, and therefore these limits cannot be exceeded in time.
- with a deadline from the date of issue where something very similar to the following will be expressed: "pay 1.000 euros on August 13, 2019". In this case, the mandate will have to be executed on that specific date.
- Bills of exchange to a term from sight and that they are the ones that meet the periods since they have been accepted. They are the most complex of all because there may be some confusion about how far their maturity can go and therefore they are not so common in commercial or commercial operations.
- The bills popularly known as payable and that they are denominated in this way because this denomination will become effective if an expiration date has not been applied to this financial product. To the point that it will be formalized the following year unless otherwise indicated. They are also known as released to a term from the view or from the moment of their corresponding acceptance.
Crowdsourcing
In recent years, a series of highly innovative terms have appeared that have a lot to do with commercial approaches or direct marketing. One of these is crowdsourcing and whose real meaning is the demand for information or opinion, more or less contrasted, on a particular topic in order to develop a specific task.
Within this strategy, there is room for many aspects that have to do with the implementation of a product or service in the market, a trend in the consumer sector or simply inspire a propaganda objective or in the field of values.
Types and Examples of Crowdsourcing
To better understand what crowdsourcing really is, it is enough to mention that it is a system used by many companies or multinationals to find out the opinion of consumers about a product that is available on the market or is going to launch it in the near future.
So that, in this way, they have more effective and objective data on the degree of penetration that it will have among the most important sectors of society. In this sense, it is very similar to what a marketing campaign would be.
Crowdsourcing to create a debate
Crowdsourcing can also be used to create a discussion about user needs. This is a trend that is increasingly valued by social agents and especially business.
For example, boost the use of a certain model of mobile phone or from the point of view of ideas, start a social, political, labor, ecological or other debate.
From this general scenario, and with so many applications that crowdsourcing can provide, there is a common trait that helps to identify this very modern term. It is the one that refers to the objectives that you are looking for and that can be of a different nature, such as in the following scenarios:
- Increase sales of a product intended for consumption.
- Raise awareness on the part of users.
- Generate opinions among some sectors of society.
Where another of its common features is that companies obtain some very valuable data or information without having to face large amounts of money.
Through results that will almost always be much more beneficial than through other more conventional marketing strategies.
Crowdsourcing for collective financing
However, in recent times this term has been more closely linked to crowdfunding and is better known from this perspective.
That is, seek financing for various purposes such as the sale of books, records to another series of professional, artistic or business activities. Where its maximum expression is linked to the startup of start-ups or newly created companies.
In the latter business segment, it has become a alternative source of investment traditional from banks or other financial institutions.
With the aim that they can grow from the beginning, without getting excessively indebted and generally with better contracting conditions.
On the other hand, it is postulated as a way to not depend on outside interests that financial groups may represent.
From this point of view, collective financing makes it possible to gain greater independence to carry out a business or even a charitable project.
The strategy of this kind of crowdsourcing, on the other hand, is fundamentally based on trust on both sides and this factor is what makes it possible to finance projects that not only have economic purposes based on their profitability.
Being established at this time is a powerful way to develop innovative projects. Looking for people or companies that start from the same conception in the field of thinking or conceiving a business.
Financial Credit Institutions
ASNEF is the acronym for the National Association of Credit Financial Establishments and of course it is an organization that does not bring back good memories to some bank users. Because it manages a database that collects incidents of non-payment and in which people who have contracted a debt for non-payment in relation to banking, financial entities and companies of another nature. Such is the risk of being included in this unwanted list that you can limit them to access any line of credit: personal, directed to consumption or even mortgage.
For this reason it is very important to know if you really we are part of a list of defaulters, like the one developed by ASNEF. For it to be true, try by all means to get out of it to avoid problems in contracting some financial products and services.
It is very important to know that the ASNEF database is managed by the Equifax company. In these lists, the debts of its clients in the following companies may appear: banks, insurers, telecommunications or electricity and gas service providers, among some of the most relevant.
How do I know if I'm on the delinquent list?
Being part of this file can have dire consequences since it can close the doors of private financing to those affected by this situation. How to recognize that we are one of these people? A first indication may come from the company itself to which we owe a monetary amount, usually from the non-payment of a bill or household bill (electricity, water, gas...). In these cases, they may notify the customer, through a registered letter, the situation in which you find yourself and the need to comply with your obligations.
This demand can also be channeled by consulting the solvency reports of individuals and companies which are available from some consultancies that can access the main delinquency files in Spain. With the advantage that this management can be done online, in most cases after paying a fee or fee for contracting this specific service. In a few minutes, the user will have proof of his presence or not in the ASNEF files.
Identified with a reference number
Another of the keys to be sure of compliance with this undesired scenario has to do with the reference number. These are digits with which defaulters are registered and which in theory should be received at home by personal mail to notify them of their current situation.
It is constituted in the simplest way to show that yes, they are in debtor positions before some companies. But this is not always the case and other, more sophisticated information channels that meet these objectives must be detected.
To verify this information, you can access via Internet through the reference number on the Equifax website, the company that manages the ASNEF delinquency list. Once the data has been entered, the computer system will display the list and verify the reasons for joining it.
No reference number
If, on the other hand, this information is not available, there will be no choice but to vary the strategy and choose to contact Equifax by email or post. In order to provide information on ownership in the list of defaulters.
Before, you will have to send them a letter (with a photocopy of the DNI) asking them if the name in question is part of this singular club. If everything develops correctly, in a few days there will be a definitive answer, one way or the other. In either case, with an immediate objective: get out of it as soon as possible.
Bankruptcy Administrator
It is a legal figure that unfortunately to a certain extent has been common at times of the full economic crisis that began in 2008. Because we are talking about a person appointed by the highest judicial authorities to be in charge of ensuring and preserving for the good development of a company that has been declared bankrupt or receivership. Where you must exercise this important professional task by complying and abiding by all the formalities that are required by the legal system in our country.
This is the first key to correctly understanding who the bankruptcy administrator really is, since his first premise is that a bankruptcy situation occurs in the company. Generally, as a consequence of high debt that accumulates over the years and that usually causes it to be unable to make payments to workers, suppliers or official organizations (Social Security, Treasury, etc.)
One of the first objectives pursued by this very special figure in the business sector is that the line of business affected by this situation you can continue with your activity. To the point that it will dictate a good part of the management that must be carried out in these extreme cases. One of the most common is the restriction of spending so that the debt does not accumulate. So that in this way, it can adjust to the new budget generated in an exceptional way to get out of this dangerous scenario.
In some cases, the work of the bankruptcy administrator is successful and ends its functions at the moment in which the company's problems have been solved. Normally from the second or third year since he performs these functions and due to different causes. Moment in which he ceases to exercise this professional task. While in others, the process ends with the closure of the company before the impossibility of correcting economic incidents and its structure. With the liquidation of assets in an orderly manner, as indicated by current regulations.
How much does a bankruptcy administrator charge?
This administrative process has its greatest incidence to the extent that the indicators of the economy worsen. Thus, with expansive economic periods, the decrease in bankruptcy proceedings decreases notably and proportionally to these macroeconomic variables.
In any case, the person who acts as bankruptcy administrator is an individual. Generally, studies in economics or law are required and it is a guarantee that you have a specific training in Bankruptcy Law. While on the other hand, with regard to their professional fees, it must be indicated that they have the right to receive a salary, or rather, remuneration that is stipulated in Royal Decree 1860/2004.
But what does this remuneration for your work really consist of? It will depend on each case since there may be greater complexity in some situations than in others. But for it to be perfectly understood, it will be necessary to indicate that there is a part that is integrated into the contest phase and another for the liquidation period, if in the end this circumstance occurs. In each of these processes it will be 50% of the remuneration on the payment to suppliers, that is, in equal parts. But adhering to a special characteristic about your payment since it will accrue in the following five days after the judicial order in the first of the scenarios. While on the contrary, in the second of them it will be formalized in the same period, but from its firm resolution.
In any case, it must be exposed to an evaluation of this process through what is called the qualification phase, which will determine the task carried out in these very special functions that make up the bankruptcy administration.
discount lines
A discount line is a product intended for the financing of small and medium-sized companies and self-employed workers that is fundamentally characterized by its liquidity in payment. In the sense that it is an amount of money that banks make available to their customers for a certain period of time and is generally fixed in the operation.
Among other objectives, so that users can receive some receipts linked to their professional activity and that it is an amount that is advanced by the banks themselves.
Another of its most relevant contributions lies in the fact that these payments made through a discount line are formalized after the expiration of other products with similar characteristics, such as bills of exchange. But what is its main purpose?
Well, for something so necessary for any kind of company such as financing in the short term. For which, it conforms as one of the most efficient payment systems of the banking market and also provides less risk on this operation.
How does a discount line work?
To understand the mechanism of this very special financing system, there is nothing better than pointing out an example that illustrates how it really works. This is the case of an entrepreneur or self-employed worker who has been paid by suppliers with a bank promissory note and needs this money more quickly.
Well, this product (promissory note) usually has an approximate maturity between 3 and 6 months and the interested party may not be able to spend that long without collecting the amount owed. In this specific case, if you have contracted a discount line, it will allow you to don't have to wait those months to quickly dispose of it in your company account.
While, on the other hand, its formalization is not exempt from expenses since this point of bank liquidity carries commissions and interest like any kind of conventional credit and that will be applied to the amount received. Therefore, it will be necessary to analyze whether or not to formalize the discount line given the needs of the business or company.
The interest rate is calculated taking into account the difference in days that exist between the due date of the invoice and that of the discount line itself. Where as the terms are longer, the higher will be the surcharge that banks will charge for this advance. While, on the other hand, the commissions move in a range that goes from 0,50% to 2%, depending on the financial institution with which this product is operated.
Discount line: advance payments
Why does a small or medium-sized company opt for this characteristic line of liquidity? Well, basically so that your accounting does not resent the delay in collections and that can affect them to have certain problems to pay their workers' payroll, pay taxes or even undertake a more expansive business strategy. Although not all economic agents are sensitive to opening this financial product. On the contrary, they are usually used by companies or also by people who have a professional relationship linked to the sales sector.
Another aspect that must be stressed is that the discount lines work with other products, such as promissory notes, bills of exchange and receipts. From this scenario, emphasize that it has to be the financial institution itself that accepts it because, after all, it will be the one that anticipates the total amount derived from the operation. In an accounting movement in which the payment terms will play a fundamental role for its resolution.
Bank check
The bank check is a payment document used by both companies and individuals, which is mainly used to send a monetary amount to third parties. But unlike other products with similar characteristics, this one has different meanings depending on the destination that is given to this payment model. They will have different uses with respect to the real needs of users in this class of financial services. With very different applications, as we are going to see below.
One of the most common, although not the most interesting from the point of view of the payments to customers or suppliers, is the so-called personal check that is delivered by the financial institution to the people who demand this product in an individualized way so that they can make their payments to other individuals or companies according to their liquidity needs.
But with a relevant contribution or differences on another class of heels that is none other than the fact that The issuer of this product is the credit institution itself and therefore it is the one that is obliged to make the payment of the same. Even if it is the other party, that is, the client, who is in charge of filling out and signing the check.
Shaped heel: what is it like?
Another of the modalities of the bank check, and which may be of more interest to small and medium-sized entrepreneurs, is the one that is linked to what is the shaped check. But do we really know what this form of fertilizer consists of? well basically its characteristics are practically the same as the bank check or personal, but with a difference that is very important for its formation and subsequent explanation.
Therefore, in this specific case, the document is guaranteed by the bank itself and that even signs it with an unmistakable stamp on the front and back of the check. The main objective of this action is to confirm the operation, and therefore verify that the client has sufficient liquidity in their savings account to support this accounting movement.
From the point of view of the recipients of this product, it is much safer because they will have complete assurance that they will receive the money. In other words, the other party in the process is assured that the check can be collected without any kind of problem. This is a small difference with respect to bank stubs or checks since conceptually they are very difficult to distinguish. Its disadvantage is that you have to request them from the financial institution for you to check the actual status of user accounts. While on the contrary, your recipients will have to go to an office to collect it.
Differences between check and bank promissory note
On the other hand, it is very common for this banking product to be confused with the promissory note. So that there are no doubts about the structure of both means of payment, nothing better than to highlight their main differences. The main one resides in that in first it does not appear or is reflected the payment date on the agreed amount. This fact favors that it is a much more flexible model to charge it by companies or individuals
While a second difference resides in that bank check, whatever its nature, is never addressed to the bearer, but rather the payment is addressed to a natural or legal person. Another aspect in which both products diverge, finally, is that the bank check cannot be guaranteed by a third person, something that on the other hand does not happen with the promissory note. Where the most relevant risk is that they do not have the support of the funds by their issuers, with the exception of the stub formed as explained above.
debt ratio
The debt ratio is a very relevant parameter that is used especially to verify the level of debt that a company has. With the main objective of determining what financial burden they can bear at any given time. It is so important to know it, that it is very often used by banks to clarify whether or not they can grant a line of credit and under what conditions in their contracting. Not surprisingly, less indebted companies are more sensitive to a more favorable resolution on their concession and can be financed more easily.
How the debt ratio is calculated
The greatest difficulty generated by this accounting term is to perform the calculation to get to know the level of debt of a company. Well, it is not easy but we are going to try to make it understandable with less technical complexity. It is determined by the ratio between the total debts contracted, both current and current liabilities) and the sum of liabilities in general and the so-called net equity.
From this arithmetic operation a digit will come out depending on the accounting notes that we have used. As it is higher, it will be indicating very clearly that the company analyzed have excessive debt and that at its highest levels indicates that it can be very dangerous to carry out the expansion objectives. While on the other hand, a lower ratio will indicate the opposite or it may also contribute too much property capital.
Anyway, this calculation can be simplified through a simpler operation to apply, although not with the accuracy of the previous model. It would be based on the result of dividing all the liabilities of the companies (debt) by the net worth. In either case, it will provide us with a fairly approximate idea of the debt ratio of the analyzed company.
Intended for various deadlines
Another aspect that must be taken into account in the ratio or level of indebtedness is that it is not a homogeneous variable. On the contrary, you can calculate taking into account the short or long term. With the possibility, more than likely, that their results are not the same in both mediations since debt levels that are clearly differentiated are analyzed.
On the other hand, one of the factors that should be better analyzed is to know what its real interpretation is. In this sense, it is easier to explain since all companies resort at some point to a bank line of credit. although with various purposes, such as those intended for the purchase of material or industrial equipment, to expand its share capital or simply to pay its workers or suppliers, among some of the most relevant scenarios.
Control of company capital
Given this scenario, it is very relevant from the beginning to know the debt ratio that a business can support because it can determine the most objective parameter for control the capital of the company. As well as to detect which one is the other's. As a consequence of its application, it will help entrepreneurs know when they can request a loan without jeopardizing the stability of their project. While on the other hand, it is a tool that financial institutions frequently use to give a positive response or not to the demand in search of financing.
While for others, it will always be very interesting to be able to compare the debt ratio with the Ebitda. That is, the gross operating profit calculated before deducting financial expenses. For a very precise reason, which is that we will have a more approximate idea of the debt with respect to the operating profit of the company. A piece of information that is widely used to verify its real state.
effect discount
This is a very special product that can favor the interests of a company at a given time. Despite the fact that its monetary cost is really high, above that of other financial products. In any case, its greatest relevance resides in the fact that it constitutes a tool to face liquidity problems. To deal with payments to suppliers, pay the payroll of workers or carry out an expansive process within the company. Situations that a good number of small and medium-sized companies in our country go through with some frequency.
But its importance goes even further since it is a very varied product as we can find documents with these characteristics of a diverse nature. For example, checks, promissory notes or bills of exchange, among some of the most important. Where its use will vary depending on several parameters: deadlines, urgency in payments, commissions and of course its formalization process.
credit assignment
The assignment of credit is an operation by which a person or company (creditor) transfers to another (assignee) the rights that the first of them represents against a third party. But with a very special contribution that helps to better understand this financial product: at no time does the initial relationship disappear. In any case, it must comply with a basic requirement, the obligation to be formalized under a consensus by both parties. That is, the common will of the two to reach a agreement on these conditions in the assignment of credit.
It can be very beneficial to the parties that are part of the process for a very compelling reason. It is because with your application current assets are not paralyzed of small and medium-sized companies and therefore can continue to develop their line of business as normal. While on the other hand, what is achieved with its use? Well, something as simple as collect money in advance regarding its expiration. Where a previously agreed interest rate and its consequent commissions would have to be paid.
