An Introduction to Finance
An Introduction to Finance
Finance is an aspect of the business world that a person must learn to deal with, if they want to run their business successfully. How many times have you heard this phrase? Do you know what it means? Do you know where finance comes from?
Finance, as defined, is the money or finance used by a business for various reasons. In other words, when a business needs funds for whatever it is that needs to be done. The reasons could be because the business needs to buy raw materials for its operations, build new buildings, build equipment, pay employees, improve the productivity of its employees, or any other reason.
This is what finance is used for in all businesses. So, if you are a business owner or manager, where do you get your finance? Or if you don’t know where it comes from, why don’t you learn?
The first place you should look for your money is the bank. Why? Because your bank is one of the sources of money that businesses need to operate and make their business grow.
Before you will be able to generate revenue, a business must have money in the bank. But how can you be sure that the money you have in the bank is really yours? If the money is fake, it would be useless.
To ensure that the money you have is legitimate sources of funds, you must check the accounts of the bank. If there are some discrepancies between the statements that you get from the bank and the accounts that you see in the bank, then it’s time to get rid of the money. It’s better to be safe than sorry.
Now, who would run the accounts of the bank? A bank manager, obviously. And if you get the impression that the manager is working under orders of the company, then the money could be fake.
Of course, there is no way that the money will be refunded. After all, if the bank manager knows that he has no authority to provide refunds, then how will he know how to verify accounts? You won’t be able to get the money back.
As a matter of fact, you may find it a good idea to keep some money in your own pocket. When you withdraw cash from the bank, you must give the company the right amount. Otherwise, the money will be taxed to the company.
Because the money is in the bank, a company can borrow money at almost any interest rate. You have to remember that the interest rates for loans are always higher than the interest rates for deposits. Why?
Because the bank will be in a position to demand a higher interest rate if you choose to take out a loan. In any case, if the company cannot keep up with the payment of the loan, it will fail. It’s best that you be able to write a check for your company every month, so that you can clear the debts of the company in a timely manner. Also, you can use the money to pay for things that you need instead of purchasing new ones.
It is your responsibility to pay the debts in full and on time, because if you fail to do so, then you would have to take the company to court. At this point, you can decide whether or not to pay the loan using the money you have. But you must be reminded that the money is a loan, and if you do not follow your end of the deal, then you will just pay for the loans that you have taken out in the past.