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If you have no access to credit and need a quick loan, you may consider a payday loan. The idea sounds attractive: the lender deposits up to $2,000 into your bank account and the loan is automatically repaid from your next paycheck. You don’t need collateral and there’s no credit check.But before you walk into the payday loan office, do your homework. Here are some crucial facts you need to know.1. What is a payday loan? According to the U.S. government, a payday loan is defined as “a closed-end credit transaction, unsecured by any interest in the consumer’s personal property and excluding any credit card transaction under an open end consumer credit plan, with a term of 91 or fewer days in which the amount financed does not exceed $2,000 with a finance charge exceeding an annual percentage rate of 36%.” In other words: short-term, high-interest.To ensure repayment, the lender will require that you present a personal check for the total amount borrowed plus fees, or that you sign over legal access to your bank account for the total amount due. Your check is post-dated to your next payday. On that day the lender will cash the check or debit your bank account. This gives the lender an automatic repayment mechanism and the legal right to collect.2. Are payday loans legal everywhere? No! They are regulated by individual states. In some states they are illegal.They are also illegal for members of the U.S. military. One of the provisions of the FY 2007 Military Authorization Act makes it against the law for lenders to make payday loans and/or car title loans to military personnel. Lenders are also prohibited from charging more than 36% interest to military borrowers. When calculating the interest rate, additional renewal charges, fees, service charges, or credit insurance premiums must be included.3. What are the interest rates for these types of loans? Very high! Why? Because the lender typically requires only that you have a job and a bank account for the past sixty days. Payday loans are most often made to people who have poor credit and no collateral. These high-risk borrowers pay interest rates that can be as high as 600% APR.What does that mean? Here’s a typical payday loan breakdown:Loan amount: $1,500
Your next payday: 14 days from today
Fee per $100 borrowed: $20
Your effective APR: 521.43%
Total fees you pay: $300
Total debited from your account 14 days from now: $1,800Fourteen days after advancing you the loan for $1,500, the lender will debit $1,800 from your bank account. If for some reason the full amount isn’t there, you must still pay the $300 fee for that 14-day period. You will pay $300 every two weeks until you repay the original $1,500. When you receive your next paycheck 14 days later, you will owe $1,800. That means that if you miss the first repayment deadline, you will end up paying a total of $2,100.4. Are payday loans controversial? Yes! In many states they are considered usurious and are illegal. But attempts to regulate payday loans are receiving mixed responses. Congress is now considering the Payday Loan Reform Act of 2009 (HR 1214 IH). This bill would ostensibly regulate payday loans, but consumer protection groups are opposed. In a recent letter to U.S. Representative Luis Gutierrez, the bill’s sponsor, several groups including the National Consumer Law Center assert that H.R. 1214 gives Congressional authorization for single-payment loans of 780 percent APR for one week or 390 percent APR for two weeks. The mandated loan fee limit of fifteen cents per dollar loaned sounds reasonable, but it permits lenders to charge $75 for a typical $500 loan, which is due on the following payday. For the average customer who takes out nine loans per year, H.R. 1214 permits lenders to collect $675 in finance charges for a $500 loan taken out over an eighteen weeks.Imagine paying more in finance charges than the loan amount! Before you consider a payday loan, do the research and ask yourself if it’s really the best choice for you.

Background

Police funding has risen by £4.8 billion and 77 per cent (39 per cent in real terms) since 1997. However the days where forces have enjoyed such levels of funding are over.

Chief Constables and senior management recognize that the annual cycle of looking for efficiencies year-on-year is not sustainable, and will not address the cash shortfall in years to come.
Facing slower funding growth and real cash deficits in their budgets, the Police Service must adopt innovative strategies which generate the productivity and efficiency gains needed to deliver high quality policing to the public.

The step-change in performance required to meet this challenge will only be achieved if the police service fully embraces effective resource management and makes efficient and productive use of its technology, partnerships and people.

The finance function has an essential role to play in addressing these challenges and supporting Forces’ objectives economically and efficiently.

Challenge

Police Forces tend to nurture a divisional and departmental culture rather than a corporate one, with individual procurement activities that do not exploit economies of scale. This is in part the result of over a decade of devolving functions from the center to the.divisions.

In order to reduce costs, improve efficiency and mitigate against the threat of “top down” mandatory, centrally-driven initiatives, Police Forces need to set up a corporate back office and induce behavioral change. This change must involve compliance with a corporate culture rather than a series of silos running through the organization.

Developing a Best in Class Finance Function

Traditionally finance functions within Police Forces have focused on transactional processing with only limited support for management information and business decision support. With a renewed focus on efficiencies, there is now a pressing need for finance departments to transform in order to add greater value to the force but with minimal costs.

1) Aligning to Force Strategy

As Police Forces need finance to function, it is imperative that finance and operations are closely aligned. This collaboration can be very powerful and help deliver significant improvements to a Force, but in order to achieve this model, there are many barriers to overcome. Finance Directors must look at whether their Force is ready for this collaboration, but more importantly, they must consider whether the Force itself can survive without it.

Finance requires a clear vision that centers around its role as a balanced business partner. However to achieve this vision a huge effort is required from the bottom up to understand the significant complexity in underlying systems and processes and to devise a way forward that can work for that particular organization.

The success of any change management program is dependent on its execution. Change is difficult and costly to execute correctly, and often, Police Forces lack the relevant experience to achieve such change. Although finance directors are required to hold appropriate professional qualifications (as opposed to being former police officers as was the case a few years ago) many have progressed within the Public Sector with limited opportunities for learning from and interaction with best in class methodologies. In addition cultural issues around self-preservation can present barriers to change.

Whilst it is relatively easy to get the message of finance transformation across, securing commitment to embark on bold change can be tough. Business cases often lack the quality required to drive through change and even where they are of exceptional quality senior police officers often lack the commercial awareness to trust them.

2) Supporting Force Decisions

Many Finance Directors are keen to develop their finance functions. The challenge they face is convincing the rest of the Force that the finance function can add value – by devoting more time and effort to financial analysis and providing senior management with the tools to understand the financial implications of major strategic decisions.

Maintaining Financial Controls and Managing Risk

Sarbanes Oxley, International Financial Reporting Standards (IFRS), Basel II and Individual Capital Assessments (ICA) have all put financial controls and reporting under the spotlight in the private sector. This in turn is increasing the spotlight on financial controls in the public sector.

A ‘Best in Class’ Police Force finance function will not just have the minimum controls to meet the regulatory requirements but will evaluate how the legislation and regulations that the finance function are required to comply with, can be leveraged to provide value to the organization. Providing strategic information that will enable the force to meet its objectives is a key task for a leading finance function.

3) Value to the Force

The drive for development over the last decade or so, has moved decision making to the Divisions and has led to an increase in costs in the finance function. Through utilizing a number of initiatives in a program of transformation, a Force can leverage up to 40% of savings on the cost of finance together with improving the responsiveness of finance teams and the quality of financial information. These initiatives include:

Centralization

By centralizing the finance function, a Police Force can create centers of excellence where industry best practice can be developed and shared. This will not only re-empower the department, creating greater independence and objectivity in assessing projects and performance, but also lead to more consistent management information and a higher degree of control. A Police Force can also develop a business partner group to act as strategic liaisons to departments and divisions. The business partners would, for example, advise on how the departmental and divisional commanders can meet the budget in future months instead of merely advising that the budget has been missed for the previous month.

With the mundane number crunching being performed in a shared service center, finance professionals will find they now have time to act as business partners to divisions and departments and focus on the strategic issues.

The cultural impact on the departments and divisional commanders should not be underestimated. Commanders will be concerned that:

o Their budgets will be centralized
o Workloads would increase
o There will be limited access to finance individuals
o There will not be on site support

However, if the centralized shared service center is designed appropriately none of the above should apply. In fact from centralization under a best practice model, leaders should accrue the following benefits:

o Strategic advice provided by business partners
o Increased flexibility
o Improved management information
o Faster transactions
o Reduced number of unresolved queries
o Greater clarity on service and cost of provision
o Forum for finance to be strategically aligned to the needs of the Force

A Force that moves from a de-centralized to a centralized system should try and ensure that the finance function does not lose touch with the Chief Constable and Divisional Commanders. Forces need to have a robust business case for finance transformation combined with a governance structure that spans operational, tactical and strategic requirements. There is a risk that potential benefits of implementing such a change may not be realized if the program is not carefully managed. Investment is needed to create a successful centralized finance function. Typically the future potential benefits of greater visibility and control, consistent processes, standardized management information, economies of scale, long-term cost savings and an empowered group of proud finance professionals, should outweigh those initial costs.

To reduce the commercial, operational and capability risks, the finance functions can be completely outsourced or partially outsourced to third parties. This will provide guaranteed cost benefits and may provide the opportunity to leverage relationships with vendors that provide best practice processes.

Process Efficiencies

Typically for Police Forces the focus on development has developed a silo based culture with disparate processes. As a result significant opportunities exist for standardization and simplification of processes which provide scalability, reduce manual effort and deliver business benefit. From simply rationalizing processes, a force can typically accrue a 40% reduction in the number of processes. An example of this is the use of electronic bank statements instead of using the manual bank statement for bank reconciliation and accounts receivable processes. This would save considerable effort that is involved in analyzing the data, moving the data onto different spreadsheet and inputting the data into the financial systems.

Organizations that possess a silo operating model tend to have significant inefficiencies and duplication in their processes, for example in HR and Payroll. This is largely due to the teams involved meeting their own goals but not aligning to the corporate objectives of an organization. Police Forces have a number of independent teams that are reliant on one another for data with finance in departments, divisions and headquarters sending and receiving information from each other as well as from the rest of the Force. The silo model leads to ineffective data being received by the teams that then have to carry out additional work to obtain the information required.

Whilst the argument for development has been well made in the context of moving decision making closer to operational service delivery, the added cost in terms of resources, duplication and misaligned processes has rarely featured in the debate. In the current financial climate these costs need to be recognized.

Culture

Within transactional processes, a leading finance function will set up targets for staff members on a daily basis. This target setting is an element of the metric based culture that leading finance functions develop. If the appropriate metrics of productivity and quality are applied and when these targets are challenging but not impossible, this is proven to result in improvements to productivity and quality.

A ‘Best in Class’ finance function in Police Forces will have a service focused culture, with the primary objectives of providing a high level of satisfaction for its customers (departments, divisions, employees & suppliers). A ‘Best in Class’ finance function will measure customer satisfaction on a timely basis through a metric based approach. This will be combined with a team wide focus on process improvement, with process owners, that will not necessarily be the team leads, owning force-wide improvement to each of the finance processes.

Organizational Improvements

Organizational structures within Police Forces are typically made up of supervisors leading teams of one to four team members. Through centralizing and consolidating the finance function, an opportunity exists to increase the span of control to best practice levels of 6 to 8 team members to one team lead / supervisor. By adjusting the organizational structure and increasing the span of control, Police Forces can accrue significant cashable benefit from a reduction in the number of team leads and team leads can accrue better management experience from managing larger teams.

Technology Enabled Improvements

There are a significant number of technology improvements that a Police Force could implement to help develop a ‘Best in Class’ finance function.

These include:

A) Scanning and workflow

Through adopting a scanning and workflow solution to replace manual processes, improved visibility, transparency and efficiencies can be reaped.

B) Call logging, tracking and workflow tool

Police Forces generally have a number of individuals responding to internal and supplier queries. These queries are neither logged nor tracked. The consequence of this is dual:

o Queries consume considerable effort within a particular finance team. There is a high risk of duplicated effort from the lack of logging of queries. For example, a query could be responded to for 30 minutes by person A in the finance team. Due to this query not being logged, if the individual that raised the query called up again and spoke to a different person then just for one additional question, this could take up to 20 minutes to ensure that the background was appropriately explained.

o Queries can have numerous interfaces with the business. An unresolved query can be responded against by up to four separate teams with considerable delay in providing a clear answer for the supplier.

The implementation of a call logging, tracking and workflow tool to document, measure and close internal and supplier queries combined with the set up of a central queries team, would significantly reduce the effort involved in responding to queries within the finance departments and divisions, as well as within the actual divisions and departments, and procurement.

C) Database solution

Throughout finance departments there are a significant number of spreadsheets utilized prior to input into the financial system. There is a tendency to transfer information manually from one spreadsheet to another to meet the needs of different teams.

Replacing the spreadsheets with a database solution would rationalize the number of inputs and lead to effort savings for the front line Police Officers as well as Police Staff.

D) Customize reports

In obtaining management information from the financial systems, police staff run a series of reports, import these into excel, use lookups to match the data and implement pivots to illustrate the data as required. There is significant manual effort that is involved in carrying out this work. Through customizing reports the outputs from the financial system can be set up to provide the data in the formats required through the click of a button. This would have the benefit of reduced effort and improved motivation for team members that previously carried out these mundane tasks.

In designing, procuring and implementing new technology enabling tools, a Police Force will face a number of challenges including investment approval; IT capacity; capability; and procurement.

These challenges can be mitigated through partnering with a third party service company with whom the investment can be shared, the skills can be provided and the procurement cycle can be minimized.

Conclusion

It is clear that cultural, process and technology change is required if police forces are to deliver both sustainable efficiencies and high quality services. In an environment where for the first time forces face real cash deficits and face having to reduce police officer and support staff numbers whilst maintaining current performance levels the current finance delivery models requires new thinking.

While there a number of barriers to be overcome in achieving a best in class finance function, it won’t be long before such a decision becomes mandatory. Those who are ahead of the curve will inevitably find themselves in a stronger position.

There is a lot of talk today about being “global”. What does global mean? A person of the world? Every country is as different. So is every locality and city or town. The skills a business person needs to be successful in international business go beyond being global. While not comprehensive, this list based on over a dozen years of international business experience should help.TravelFor the international business person, travel is a way of life. Long distance air travel can be especially brutal. The best advice is to arrive one day before any important meetings or conferences to adjust to any time difference. In the air, eat, sleep, work and read but do all in moderation. Air travel gluttony is common among international travelers. The on thing you cannot do is exercise on an airplane.LodgingStay where your host, whether a local office or a client recommends. While cost is a consideration, so is safety, convenience to meeting locations and services provided. This is the home away from home so chose it with care.MealsEat in moderation. Business travel is not the time to make up for every diet that one has ever been one. There is the temptation to eat more than usual. On the other had, when with people who live locally, whether colleagues or clients, ask what they recommend when dining together. Apart from allergies, one should be open to eating local cuisine.DrinkingSome cultures drink more than Americans. Some drink less. And some not at all. The best advice is to drink in moderation or not at all. Similar to eating, international business travel is not the time to beat ones college drinking record. It is not healthy and it is insulting to clients and colleagues.DressMost American business people, even after the business casual trend, still dress much more casually than business people internationally. Find out from local colleagues or even clients what attire is appropriate. If you do not know, dress in traditional business attire (suits for men and for women). This can always be dressed down if appropriate. Dress like you mean business but more importantly, dress appropriately. The same applies to evening dinners and functions outside of business hours.MeetingsBe at meeting early. Do not leave until the meeting is over. Even if others leave to take calls, do not do so except at scheduled breaks. Eat in moderation if lunch is brought in. Do not drink too much coffee but bottled water is good. Clean up after yourself after the meeting. And do not sit in the meeting with your laptop and read your email. That is rude. Do make sure you bring plenty of business cards. Introduce yourself to everybody. Do not interrupt, raise your voice or swear. If you have other calls, schedule them for the evening when not meeting with the clients or your colleagues.RecreationIn the evenings it is common to have dinner with clients or colleagues. After dinner is often a time to relax, exercise and catch up on some work before the next day. If staying over a weekend or taking a day off, visit local historical sites, museums, cultural events and also shops and restaurants. Staying in the hotel doing work is not healthy and it does not make one more internationally-minded or cultured.CommunicationFind out how your clients and colleagues prefer to communicate when not face-to-face. E-mail is common today. Conference calls are important too. Video conference calls can be very effective. Snail mail and faxes are less and less common today but are still necessary from time-to-time. Keep all communications clear, crisp and to the point. On international conference calls, listen more than talk. And do not interrupt. Ever. Take notes or minutes and make sure they are distributed within one business day of the call. Never e-mail jokes, gags, anything obscene or off-color. Do not swear or raise your voice on calls or video calls. Listening and patience are valued in most non-US cultures.LanguageWhile most non-US business people speak 2-4 languages most from the US speak 1 or perhaps 2 and not well. To this end, speak clearly in English. Be patient if asked to repeat or explain. This is especially true on conference calls. It is acceptable to pick up local words or phrases. Make sure they are appropriate and that they are pronounced flawlessly. Do not make a joke out of local words or phrases. This is insulting to clients and local colleagues.While business has a lot to do with finance, technology, human resources, research and development and law, it has more to do with people than anything else. To that end, doing business internationally is about people. By traveling and working with dignity and respect for customers and local colleagues, one is taking the first step toward the extensive skills needed to be successful in international business.