Thinking In Percentages Not Absolutes (Investing)

Question: Which hurts your investment portfolio value the most?

• You own $10,000 worth of a mutual fund representing the Nasdaq Composite index. The Nasdaq Composite, which opened at 2,795, drops by 200 points by the time the market closes today. Headlines scream about a large market loss.
  
• You own $10,000 worth of stock in a company, which opened at $8.00/share and falls to $7.20/share by the time the market closes today.

Choose your answer. In the next day or so I'll post my answer, an explanation, and why I highlighted this scenario.

(Better) Invoicing & Time Tracking for Contractors/Consultants

When I set out on my own again, especially once the consulting gigs started to really pick up, I needed a solution to handle invoicing, time tracking, and accounts receivable management. In the past, I'd known myself to procrastinate (gasp!) generating invoices.

The procrastination was really the symptom of something else: I'd never really taken the time to automate the process. I'd started off on the wrong foot to begin with. I was tracking minutes in text files, adding them up manually, etc. Further, even if I'd used a fancy system to track and generate the invoices, I have this apparent aversion to addressing, stamping, and walking to the mailbox. Guess I'm just lazy.

So, a bit back, I spent a few hours seeing what was out there these days. Ultimately I settled on three (hosted Web 2.0-ish, if you will) solutions as the major candidates that met my needs:

• FreshBooks
• Blinksale
• Cashboard
  

After getting test accounts with each of them I ultimately went with FreshBooks. The main thing that did it for me was that FreshBooks allowed me to send paper invoices without actually touching a stamp, envelope, or printing anything. Yep, they mail it for me and even include the return envelope with my address!

I do actually send all of my clients e-mail invoices -- since that has become much more acceptable these days -- avoiding hard copy whenever possible. However I like having the option and it can also be handy when someone is taking their time paying..

Technically, FreshBooks doesn't e-mail the invoices but sends out an e-mail with a URL that contains the invoice. While others include the invoice in the actual e-mail, I have found it nifty that FreshBooks' approach allows me to see who has viewed their invoice (and they even provide an RSS activity feed to track client invoice reads!).

Since going with FreshBooks, all three billing solutions have added plenty of functionality. And Cashboard, which was in beta when I first looked at it, is now out of beta. I may re-look at each of them at a later date, but I really am pretty satisfied with FreshBooks for the moment.

If you suspect you spend too much time on invoicing, take a look at what's out there these days!

-jr

Can Technology Geeks Be (Good) Managers?

If you are a technology geek currently serving as a manager, you better figure out how to become a business manager, if you intend to lead a successful IT department, group, team, or project. You owe it to yourself, your direct reports, whomever you report to, your colleagues in other departments, and your company. You will get a bigger budget, better compensation, more respect from all of your constituents and stakeholders, greater cooperation for your projects to help them be more successful, and greater satisfaction from your career.

It's not all bad for the technology geek turned manager though. If you can grasp the business side, by taking a bit of initiative to learn it, and combine that with technology savvy (even if you let your direct reports worry about the deep down details) you can have the best of both worlds. The last thing technology geeks want are clueless managers. It doesn't matter whether they are clueless about business or about technology -- they are still going to make things more difficult, albeit unintentionally, for their employees.

IT managers should know how to write business plans, prepare budgets, use financial concepts competently such as: the difference between cash flow and profit as well as grasping present and future value calculations, tie projects to business objectives, communicate and be held accountable in business terms, systematically assess and explain risk and uncertainty in ways that relate to the overall business, and communicate with non-technology management in regards to strategy.

This doesn't mean you need an MBA. If you don't understand all of these concepts there are options:

• Take a basic accounting course (or two) at your local community college
• Sit down with your CFO, controller, or accountant and ask for some tutorial sessions
• Buy some books. Ask your CFO, controller, or account for some recommendations (and get them to promise to answer your questions if you take the initiative by reading the books they suggest).
  
• Ask your CEO if you can peak at the organization's overall business plan. Afterwards consider and discuss how your department, group, or project fits into the bigger picture. Ask if there are ways you might better consider and communicate your group's vision, goals, successes (and, yes, failures too) as part of the bigger picture.
  
• I'll also try to highlight, in a future post, some specific resources that have helped me out.

-jr

GnuCash 2.2.0 released (and now runs on Windows)

GnuCash is a nifty personal and small-business financial accounting app. It is free and open source and has been usable under Linux for awhile. Now it's available under Windows. Folks that don't already use Quicken or MS Money (or have tried and found them too complex) may want to give this a look.

Designed to be easy to use, yet powerful and flexible, GnuCash allows you to track bank accounts, stocks, income and expenses. As quick and intuitive to use as a checkbook register, it is based on professional accounting principles to ensure balanced books and accurate reports.

The v2.2.0 release announcement: http://www.gnucash.org/#070715-2-2-0.news

Read the Introduction the documentation for more info (excerpt):

GnuCash is the personal finance software package made for you. It is versatile enough to keep track of all your financial information, from the simple to the very complex. It is one of the few financial software packages that supports global currencies, and it is the only open-source program of its kind. Best of all, GnuCash is easy to learn and use!

So, what can GnuCash do for you? It can keep track of your personal finances in as much detail as you prefer. If you are just starting out, use GnuCash to keep track of your checkbook. You may then decide to track cash as well as credit card purchases to better determine where your money is being spent. When you start investing, you can use GnuCash to help monitor your portfolio. Buying a vehicle or a home? GnuCash will help you plan the investment and track loan payments. If your financial records span the globe, GnuCash provides all the multiple-currency support you need.

While GnuCash is well suited for personal finances, it is also powerful enough for business use. There are many business features, from integrated accounts receivable and payable systems, to tax table construction. You will find these and the many other business features surprisingly powerful and easy to use.

I'll be taking a closer look during the next few days.