Category: Business /Finance/Economy

Meaning of Consumerism

It is well known fact that the products and services usually do not reach to the people’s expectations. If the expected level of satisfaction and the actually attained level of satisfaction are reasonably close, people will tolerate the gap. But if the actual satisfaction level is much low, it means, the gap between what people want and what they actually got  is not same then people will not tolerant the gap and the protest from the buyers arises. This phenomenon had led to a new concept called ‘Consumerism’, a name given to the consumer protection movement.

Philip Kotler has defined consumerism as ‘’a social movement seeking to increase the rights and powers of buyers in relation to sellers’’. Consumerism as a social movement built on the foundation of frustration, dissatisfaction and bitterness of consumers. It is a battle against exploitation and is collective effort of the consumers to protect their interests. It is generally organised by concerned citizen with government support, to protect and enhance the rights of buyers in relation to sellers and rights of consumer in relation to producers. It leads to development of policies aimed at regulating the products and services, methods and standards of manufacturers, sellers and the advertisers in the interest of buyers. Such regulation may be institutional strategy or embodied in a voluntary code accepted by a particular industry or it may result more indirectly from the influence of consumer organisation. Thus, consumerism is:

  • An organised effort of consumers.
  • concerned with increasing rights and powers of consumers in relation to sellers,
  • oriented towards ending the malpractices of business community,
  • aimed at obtaining adequate relief to aggrieved consumers,
  • a movement placing more stress on protection of economic interest and physical safety,
  • a psychological projection of negative attitude of dissatisfied consumers and
  • a movement encompassing various measures and activities of government business, voluntary organisation and concerned consumers to achieve consumer welfare.

Advantages and Disadvantages of Budgeting

The following are the advantages of budgeting:

  1. Budgeting leads to maximum utilisation of resources with a view to ensuring maximum returns.
  2. Budgeting increases the awareness about business enterprise at all level of management in the process of fulfilment of targets.
  3. Budgeting is helpful in better co-ordination between different functions/activities of business/organisation and hence better understanding between different functions.
  4. Budgeting is a process of self-examination and self-criticism which is essential for the success of any organisation.
  5. Budgeting makes a path for active participation and support of top management.
  6. Budgeting enables the organisation to prefix its goals and push up the forces towards their achievements.
  7. Budgeting stimulates the effective use of resources and creates an attitude of cost consciousness throughout the organisation.
  8. It creates the base for measuring performance of different department as well as different functions of production activities.

Despite of the above advantages, followings are disadvantages of budgeting:

  1. Forecasting, planning or budgeting is not an exact science and a certain amount of judgement is present in any budgeting plan.
  2. The basic requirement for the success of budgeting is the absolute support provided by the top management.
  3. Budgeting should be followed up by effective control action, this is often lacking in many organisation which defeat the very purpose of budgeting.
  4. It is only a source and not a target and hence can not take the place of management while it is only a tool of management. Thus, the budget should be regarded not as a master but as a servant.
  5. It requires the experienced man-power, technical staff, analysis, control etc; hence, it is costly affair.

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Meaning and Objectives of Budgeting

In our daily life we use to prepare budgets for matching the expenses with income so that available funds can be invested in profitable manner. Similarly, in business budgets are prepared on the basis of future estimated production and sales in order to find out the profit in a specified period. A budget is in the nature of an estimate and is a quantified plan for future activity to coordinate and control the use of resource in a specified period. Thus, budget is a quantitative statement of management plans and policies for a given period and is used as a guide for the purpose of attaining the given objectives. It is also used as a standard with which actual performance is measured. Budgets must be prepared with full knowledge and acceptance by the executives whose performance is to be measured against the budget. Different types of budgets are prepared for different purposes.

Budgeting may be defined as the process of preparing plans for future activities of a business enterprise after considering and involving the objectives of the said organisation. This also provides the steps of collection and comparison of data by which deviations from the plan either favourable or adverse can be measured. This analysis is helpful in performance analysis, cost estimation, minimising wastage and better utilisation of resources of the organisation.

Objectives of Budgeting 

It is well known fact that planned activity has better chances of success than unplanned one. The budgeting is a forward planning and effective control tool. Thus, the objectives of budgeting are:

  1. To control the cost and increase revenue and thereby maximise the profit so as to know the profit at different level of production and best production level.
  2. To run production activities in efficient manner by lay behind the chances of interruption in production process due to lack of material, labour etc.
  3. To bring about coordination between different functions of an enterprise this is essential for the success of any enterprise.
  4. To incorporate measures of calculation of deviations from budgeted results and analysis of the same whereby responsibility can be fixed and controlling measures can be taken.
  5. To ensure that actions taken are in accordance with the targets and if required to take suitable corrective action.
  6. To predict short term and long term financial position for better financial position and management of working capital in better manner.

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Here’s Why You Should Always Pay Your Credit Card Bill on Time

At times, when you are short of cash or other payments to make, you might be tempted to delay your credit card payment. Do you know how important it is for you to make credit card payments on time? Are you aware of the consequences? There are people who are ready to pay late fees or even penalty charges. Are you one of them? If you are, in that case, you need to be aware of certain things which might encourage you to make payments on time. What if I told you that delaying your credit card payment can damage your credit score, big time! Besides, there are various other factors which you need to take into consideration

In the following section of this article, you will be offered a brief insight, as to why it is important to make credit card payments on time

Why You Should NeverDelay Your Credit Card Payments

Here are some of the reasons that would prompt you to make the payments on time. Some of them might appear to be negligible; however, they can have a serious impact on your overall financial well being. Here are a couple of reasons that might convince you:

  • Say No to the Collection Agencies: There are many debt collection agencies operating in the market whose main job is to push those who fail to make timely payment. Even if you have a very small amount that has been kept unpaid for many months, can be handed over to the collection agencies. The moment your account is being handled by the collection agencies, your option of making minimum monthly payments is gone! The collection agency is likely to demand the full amount and even at times some additional charges as permitted by the law. They will keep on disturbing you as long as you don’t pay them. This can be really damaging for your reputation. Remember, their job is to collect the money from you. Hence, they won’t hesitate to harass you if required.
  • Lower Interest Rate: If you are late with your credit card bill payment, in that case, it can affect the low-interest rate that you have been enjoying. The credit card companies have permission to increase the rate of interest if you are late with your payment for more than 60 days. There are some companies who charge a staggering rate of penalty interest and can be as high as 30%
  • Late Fees: Companies can charge late fees if you are late in making payment for even an hour past the due date! Not possible? Well, there have been instances. Besides, why would you want to pay late fees in the first place? It can amount to something between $15 and $40. That’s a substantial amount.There is one more thing that needs to be mentioned, your late fee amount might increase if you fail to pay consistently for 6 months. Therefore, it is absolutely necessary for you to make sure that you made your credit card payments on time. It will help you save a lot of money
  • Improve the Credit Score: As far as your credit score is concerned, nearly 35% of it is being determined by the fact whether you have made timely payment of your credit card or not. If you make your credit card bill paymenton a timely basis, every month, in that case, your credit score would shoot up. On the other hand, if you are a defaulter on a consistent basis, in that case, your credit score might get affected big time
  • Low Insurance Rates: It is your credit score that is used by the insurance companies for the purpose of determining the rate of insurance. If you are late with your credit card payment on a regular basis, in that case, it will affect your credit score, as a matter of fact,will lower the score. This will result in an increase in the rate of insurance when it is time to renew it. Making credit card payments on time makes sure that the lowest rate of insurance is being maintained and it also helps to save a lot of money.
  • Lowers Your Monthly Payment: If you miss your credit card payment, in that case, your next month’s bill will be more than double. Wondering why more than double? Well, you probably didn’t take the late fees and penalty charges into consideration. If you think that you skipping the payment for a month would give you some relief, then you are mistaken. The amount will keep on mounting up and there will be a time when it will go beyond your control. Therefore, it is absolutely essential to make sure that the credit card payments are made on time
  • Good Standing: If you keep on missing your credit payment on a regular basis, in that case, the companies do have the right close your card. Your card will be deactivated, even if you have a sufficient amount of credit limit available on it. Unless you clear your previous dues, you won’t be able to use your card. On the other hand, if you make your payment on time and have a track record of making prompt payment, in that case, the company could and generally does, increase the credit limit on the card. It helps to keep your account in good standing

These are some of the reasons as to why it is important to make credit card payments on time. No matter what, you need to make sure that you don’t skip a single payment. As mentioned, you might feel that skipping a payment for a month would give you relief; however, it is temporary, it is going to hit you back quite hard the very next month. Besides, good portions of your credit limit remain used up if you don’t clear your previous dues. Therefore, make it a point to make credit card payments on time

There is one more important factor which is related to making a prompt credit card payment. It is your credit score. You need to remember, that your payment pattern plays a very important role when it comes to determining your credit score. Therefore, in order to make sure that you have a good score and it keeps on rising, you need to make the payments on time and need to maintain consistency.

Are you not in a position to pay a considerable amount of money at the end of every month? In that case, you need to make sure that you use your card in a judicial manner.

Classification of Budgets

Budgets can be classified in different categories on the basis of time, function and flexibility. The different budgets covered under each category are shown below :

1.Classification According to Time

The budget, on the basis of time, may be classified as:

Long – term budget – A budget designed for a long period is defined as long term budget. The period generally is of 5 to 10 years. These budgets are concerned with planning of the operations of a firm over a considerably long period of time. They are generally prepared in terms of physical quantities.

Short – term budget – The budget prepared for a period less than 5 years is defined as short term budget.Generally, short term budget are prepared for a period of one to two years. They are generally prepared in terms of physical as well as in monetary units.

Current Budget – The budget prepared for a period of a week, a month or a quarter is termed as a current budget. They are essentially short term budget adjusted to current conditions or prevailing circumstances.

2. Classification According to Function

Different types of budgets under this head are as follows:

Sales Budget:  This is the most important budget on which all other budgets are based. The sales manager is responsible for preparation and execution of the budget. The budget forecasts total sales in terms of quantity, value, items, periods, areas etc.

Production Budget: The budget is basically based on sales budget. It forecasts quantity of production in terms of items, periods, areas, etc. The work manager is responsible for preparation of overall production budget and departmental works manager is responsible for departmental production budgets.

Cost of Production Budget:  Itforecasts the cost of production. Separate budgets are prepared for different elements of costs such as direct material budget, direct labour budget, factory overheads budget, office overheads budget, selling and distribution overhead budget, etc.

Purchase Budget – The budget forecasts the quantity and the value of purchases required for production. It gives quantity wise and period wise information about the materials to be purchased. It correlates with sales forecast and production planning.

Personnel Budget – The budget anticipates the quantity of personnel required during a period for production activity. This may be further split up between direct and indirect personnel budgets.

Research Budget – The budget relates to the research work to be done for improvement in quality of the products or research for new products.

Capital Expenditure Budget – The budget provides a guidance regarding the amount of capital that may be required for procurement of capital assets during the budget period.

Cash Budget – The budget is a forecast of a cash position, for a specific duration of a time for different time periods. It states the estimated amount of cash receipts and cash payments and the likely balance of cash in hand at the end of different periods.

Master Budget – It is a summary budget incorporating all functional budgets in a capsule form. It interprets different functional budgets and covers within its range the preparation of projected income statement and projected balance sheet.

3. Classification According to Flexibility

Budgets can also be classified in the following categories:

Fixed Budget – A budget prepared on the basis of a standard or fixed level of activity is called a fixed budget. It does not change with the change in level of activity. If the output and sales do not fluctuate from year to year or if an accurate prediction of the same can be made, a fixed budget can be prepared.

Flexible Budget – A budget designed in a manner so as to give the budgeted cost of any level of activity is termed as flexible budget. Such budget is prepared after considering the fixed and variable elements of cost and changes that may be expected for each item at various levels of operation.

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Transferring Money to India from Abroad: Challenges & Solutions

Transferring money to India from abroad isn’t as much of a challenge today as it used to be a few years ago. The rise of online money transfer companies helped a great deal. These services provided a cheaper and more efficient alternative to bank transfers. This, in turn, has had a positive effect on the development of the Indian economy as a whole.

There aren’t many international money transfer companies operating within India yet. And those that do, often offer somewhat limited services. However, the increasing demand is sure to change this situation soon.

The Growing Need for International Money Transfers to India

Today India is at the top of the remittance receiving countries in the world. Indians working abroad sent over $68 billion back to their homes in 2016. This amount has been growing at a fast rate over the last decades and it shows no signs of stopping.

In fact, it grows faster due to the increased availability of money transfer services. The majority of all remittances, go to rural areas. People there rarely have access to banks. However, today you can benefit from the convenience of transferring to India with online providers. It’s easier for the average person from a small village to get to a computer with an Internet access than going to a bank. Therefore, such online platforms make it possible for more immigrants’ families to get the help they need.

With such a huge contribution to the country’s economy, it’s safe to say that online money transfer companies play an important part in improving the Indian economy. However, remittances aren’t the only way, through which these services help the country prosper.

Today, India is the second most popular destination for outsourcing in the world and the first in some industries. For example, India is the leader for IT outsourcing, and the IT industry is the fifth biggest in the country.

Businesses that outsource their services to India and everyone who hires freelancers from this country need to pay them for their services. The limitations associated with traditional banking routes are the same for these businesses. Therefore, they need alternative solutions to make this kind of outsourcing beneficial for them. Online money transfer platforms give them exactly what they need. Thus, they help increase the demand in the Indian workforce and create new jobs.

Challenges of Transferring Money to India from Abroad

Both immigrants and businesses that outsource to Indian professionals can appreciate the benefits of online money transfer companies. The main reason for this is that they can save quite a bit of money with their help.

Traditional bank transfers and services of companies like MoneyGram or Western Union can result in losses of 5-10% of the transfer amount in fees. Online money transfer platforms charge small fees, if any. And when using them, you can also get a better currency exchange rate, which helps you save further.

You also shouldn’t forget that traditional money transfers take a lot of time. Sometimes you might need to wait for up to a week before you can use the money. With online money transfers, you can get them in a few hours or a couple of days max.

The ease of use is another benefit that makes these companies more attractive. Some of them don’t even require for you to have a bank account in order to receive a transfer. All you need is a smartphone and an app that will provide you with all the necessary instructions on how to get your money.

On the other hand, the complexity of the banking process is notorious. Therefore, you might need professional help in order to understand all the intricacies connected with bank transfers coming from abroad. Never skip the fine print in Terms and Conditions, regardless of whether you use a bank or a money transfer company. This is the part of important paperwork where less trustworthy businesses hide nasty loopholes.

Please bear in mind that in India, all foreign currency transactions are regulated by the Foreign Exchange Management Act of 1999 and Foreign Exchange Dealer’s Association of India.

Money Transfers to India: Examples of the Best Companies


If you want to be confident in the security of your transfers, you should go for the company with a long history of excellent service. Payoneer in India is a fine example of this. It has over three million clients worldwide, and this number is growing constantly.

Payoneer transfers to India are specifically designed to be a great solution for freelancers. Their main benefit is that you don’t even need to have a bank account to use this service. This means that Payoneer offers a fantastic opportunity to the people in more rural areas, who don’t have easy access to banks.

Currencies Direct

Currencies Direct is one of the leading money transfer companies in the world. Therefore, it’s not surprising that it contributes to the huge and demanding Indian market. The company even has an office in the country. It’s a proof of commitment and trustworthiness that not many online money transfer companies offer today.

This company, however, doesn’t accept clients based in India. Therefore, it provides only inbound transfers for the country. On the other hand, the terms and rates offered by the company are very good, so everyone can benefit from its services, regardless of the transfer volume.

Money Transfers to India from Abroad: Final Thoughts

The market for money transfer services in India is huge, growing, and rife with opportunity. The coming of online transfer companies made a big impact on the country’s economy. However, there is still a lot of room available for companies willing to take the risk with working in India.

As both the outsourcing and remittances continue to increase, so will the appeal for the providers of these services. It’s true that the economy of India can be rather unstable, and such a volatile environment is a big risk for any financial service providers. But the positive changes, partially brought by the fact that transferring money to India has become cheaper and easier today, improve the situation as a whole. With more stability, more companies should be willing to provide India with options for effective and affordable money transfers from abroad.

Secured and Unsecured Business Loans: Choosing the best fit for your business

The age that we live in is very entrepreneur friendly and is considered as the age of startups. With support and aid from governmental and private institutions, it is no longer a daunting task for business aspirants to raise debts. With incubators and accelerators in place to offer aid in mentor-ship and business expansion, it is no longer a daunting task to break even, clear debts, and skyrocket into profits. With thousands of startups and small and micro enterprises raising capital through public and private institutions, the options are more flexible and are oriented to help the applicant go through the journey with maximum ease.

Mostly applied for by entrepreneurs and business aspirants, these are for starting a company or for raising working capital or for business expansion or for purchasing new machinery/technology. While these are the broadly categorized buckets, any needs for additional capital are provided to as long as the necessity of instant additional funding is justified.

Types of business loans:

When you are out in the market looking to get the loan that best fits your needs, a thorough research on the types of loans available and the paperwork they come with falls in the preliminary things to do. In this competitive market, there are a plethora of lending institutions that will offer you the funds you looking to raise. That said, walking into a discussion with them without doing some back-end research could turn out to be overwhelming.  To help you get the foundation right, this paper will touch-base the different kinds of loans available and the steps involved in picking the one that’s the right fit for you.

Secured business loan: As the name suggests, these kinds of loans are available from lending institutions when the applicant is willing to offer residential, commercial, or industrial property as collateral. Apart from Gold, stocks, and Bonds are also accepted as collateral by lenders. These loans are generally for longer intervals and are available at a lesser rate of interest due to the absence of risk. If you are willing to offer a collateral for raising those immediate funds, this is an apt solution for your business. Else, you could always choose for unsecured business loans.

Unsecured business loans:

To explain in layman terms, unsecured business loans are like personal loans for individuals. Like personal loans, these are easy to apply, swift disbursement, and come with a higher rate of interest as they do not require any sort of collateral from the applicant.

Credit cards, Payday loans, Line of Credit, Cash Advance, Signature loans, Peer to Peer loans, Student loans, Small business loans, Business loans with guarantor, and Term loans are the few types of unsecured business loans that are available for applicants to choose from. Please note, except Peer-to-Peer loans, all the other kinds are offered by private and public institutions. Running a thorough research on these across various competitors is a good practice.

Off the lot, Line of Credit, Credit cards, Signature loans, term loans, small business loans are the kinds we will be talking about to realize if they are the best fit for your business.

Line of Credit:

This is a prominent unsecured business loan entrepreneurs opt for, as it offers them the flexibility to choose from a pool of funds and pay interest levied on the funds withdrawn. This is a good fit if you are looking to back your working capital with this as emergency funds. Also, with LOC (Line of Credit) the applicant will not have to offer collateral depending on his/her credit score and relationship with the lending institution. 

In this model, the user can also choose to alter the payment method depending on the cash inflow, thus making it flexible.

Term Loans: 

Term loans mostly fall under secured business loans but in certain circumstances can be offered as unsecured business loans depending on the credit score of the applicant, amount of capital requested, current banking structure and nature of the relationship with the lender. With term loans, the rate of interest could either be fixed or be floating in nature, depending on the terms agreed upon by the applicant and the lender. These come with a fixed maturity date and can either be repaid in weekly, monthly or quarterly instalments. The tenure for these loans range between 1 to 25 years and are apt if you are looking to build the business from scratch or are looking to expand the current business module.

Signature loans:

Breaking down the nomenclature, this form of unsecured business loans are granted by taking just the signature of the applicant as the collateral. These types of unsecured business loans often offer a lesser rate of interests when compared to credit cards and are opted in the case of medical emergencies, to tackle unexpected expenses or for vacations. Studies have proven that these kinds of loans are the preferred method when the need arises to close another lending with a higher rate of interest. 

Signature loans can offer your business that sudden funding to tackle unforeseen expenses or implement measures to accommodate sudden business expansion opportunities.

Small Business Loans:

Small Business loans have more than often been seen as a secured business loan but there are many tips that can help you get this as an unsecured business loan. While we will not dive deep into what those tips are in this paper, information on these kinds of loans will be shared. Small Business loans are available to applicants with an excellent credit score with a consistent lack of defaulting. These loans come with a varied or fixed rate of interest and when undertaken in an unsecured business loan can be obtained from Peer to Peer lender, private lending institutions, and cash advances. 

These are the various kinds of unsecured business loans you could choose from as an applicant if you are looking to raise funds without offering any property as collateral.  Hope this article has helped you zero-in on the type of loan that is the best fit for your business. If you there are queries you’d like our team to answer, feel free to get in touch with us here.

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