Finding The Best Entry Level Finance Jobs

In the financial job market, there are many obstacles for graduates seeking to rise quickly in their professional lives. Financial organizations, ranging from banks to international stock-brokers, adopt high standards for their middle and upper management professionals. Indeed, the delicacy of the marketplace and the attitudes of individual clients towards their financial situation requires a high level of experience and good aptitude for a management position. The financial graduate who is just leaving university to find a job, however, can accelerate the process of rising quickly in the field of finance by choosing the right entry-level finance job.

The first consideration for professionals looking for entry-level finance jobs is their short term goals. If a graduate is concerned with making a good salary immediately, working with an international company or a larger bank may be the wisest move. However, those who want to build experience and rise through the ranks may wish to consider smaller organizations, such as financial planning firms, where there is more contact between executives, managers, and entry-level workers. This is an important consideration, as it can set you off on the right or wrong foot immediately.

Another important thought on entry-level finance jobs concerns the amount of upward mobility available for exceptional finance graduates. The graduate, who works for an international bank, can certainly rise to prominence within the company and the industry in general. Indeed, there is plenty of opportunity for such a professional to rise to local, regional, national, and international positions. For the graduate who works with a smaller company, mobility may be more difficult because of the relatively fewer positions between president and entry-level worker.

A third consideration on entry-level finance jobs is the nature of the job that a graduate accepts. Indeed, the chances of rising through the ranks decrease if a professional doesn’t enjoy their job and bring the same level of effort day in and day out. A professional who wants to help people directly may wish to work as a financial planner or advisor and rise to departmental management after years of commitment to client success. Another professional that thinks of finance in terms of larger companies, or even governments, may desire to make their way as a stockbroker or corporate financial professional, rising through the ranks by networking with prominent clients. All these considerations are important when thinking of the best entry-level finance job for a particular graduate.

International Finance for Trade and Commerce

International trade involves international financial transactions because different countries have different units of money. When your nation wish to buy goods from other nations, they usually must pay for the goods in the currency of the exporting country. In other words, Japan will probably demand yen, France will demand francs, West Germany will want deutsche marks, Great Britain will insist on pounds, and Mexico will demand pesos in payment for the goods they sell. Foreign currencies are called foreign exchange, and they are bought and sold in foreign exchange markets, which are markets that deal in the buying and selling of foreign currencies. Some banks specialize in financing international trade, and they are the major participants in foreign exchange markets. If an American importer wishes to buy automobiles from a Japanese manufacturer, the importer will go to a bank that specializes in financing international trade, and will exchange dollars for yen.

Exchange Rates: The foreign exchange rate is the price of one currency in terms of another. For example, the British pound might be worth 76 times more in Indian money. Historically, there have been two major types of foreign exchange rates: fixed exchange rates and flexible exchange rates.

Under the fixed-exchange-rate system, the price of one currency was fixed in terms of other currencies so that the rate did not change. The advantage of such a system is that importers and exporters know exactly how much foreign currency they can purchase with a given quantity of their own nation’s currency today, next week, or six months from now. Foreign exchange markets operated under a fixed-exchange-rate system from 1944 until the year early 1970. Prior to 1971, the value of the United States dollar was tied to gold at the rate of $1 equals 1/35 of an ounce of gold. In other words, one ounce of gold was equal to $35 in American money. Since the value of other currencies was also fixed in relation to gold, the dollar price of each foreign currency remained constant.

The disadvantage of the fixed-rate system was that it did not make allowances for changing economic conditions in various countries. For example, if the developed country like United States of America was experiencing high inflation at a time when Japan or China was experiencing little or no inflation, American-made goods would become increasingly expensive in relation to goods made in Japan or in China. As a result, Japan or China would purchase fewer American-made goods while Americans would tend to buy more goods made in Japan or in China. This in turn would lead to a serious imbalance in imports and exports between the two countries.

With a flexible-exchange-rate system, the type of system under which world trade operates today, the forces of supply and demand determine the value of a country’s currency in terms of the value of other currencies. Therefore, under this system, the price of a country’s currency can fluctuate up and down daily in response to market conditions.

The supply and demand for foreign exchange usually are largely determined by the supply and demand for goods and services. For example, if United States of America importers wish to import increased quantities of goods from a country, suppose from Japan, there will be a strong demand for the Japanese yen. This could force the price of the yen up substantially unless Japan was at the same time providing a large supply of yen in order to increase their imports from the United States of America. The demand for goods and services is not the only factor that determines the demand for a nation’s currency. Political or economic instability in other countries may cause people in those countries to exchange their currency for a more stable currency, such as the dollar of United States of America. In addition, high interest rates in a particular country may cause foreign investors to convert their currencies into the currency of that nation. This happened in the United States of America during the early 1980s. Interest rates became so high in this country that many foreign investors were prompted to exchange their currency for American dollars for investment purposes. This increased demand for dollars caused the value of the dollar to increase in terms of other currencies. The “strong” dollar made American-made products more expensive in world markets. As a result, Americans bought more foreign-made products, and foreigners bought fewer American-made products.

Balance of Trade: The amount of goods and services that a nation sells to other nations, and the amount it buys from other nations, are not always equal. The difference between the dollar value of exports and the dollar value of imports is called the balance of trade. If the United States exports more goods to foreign nations than it imports from foreign nations, it has a trade surplus. However, if the United States of America imports more than it exports, it has a trade deficit.

In 1971, the United States recorded its first trade deficit of the century. In all the years since then, except in 1975 when there was a modest surplus, the United States has imported more than it has exported, and the trade deficits of recent years have been so large that they have caused major concern among some economists.

However, not all economists agree on how serious a problem the trade deficits are, or even on their causes. Some believe that, in the long run, market adjustments will correct the problem. Others are not so sure. Some economists believe that the high trade deficits are linked to the large deficits in the federal government’s budget in the past two decades. They argue that heavy government borrowing to finance high budget deficits helps to keep interest rates high and encourages foreign investors to exchange their foreign currencies for dollars. However, so many things influence the trade deficits that it is not always clear which factors are playing the biggest role in the deficit at any specific time. The one thing that is clear is that the United States must increase its competitiveness in world markets. Like it or not, the world is moving rapidly toward a global economy. The volume of international trade is bound to grow rapidly in the decades ahead. Competition is still the name of the game, but the number of players has increased.

Balance of Payments: Economic relations between nations involve much more than just imports and exports. There are many different kinds of transactions that involve the exchange of money between nations. For example, American businesses invest funds in foreign nations, and American banks make foreign loans. In addition, the United States government spends money for foreign aid and to support military personnel stationed abroad. Americans spend money for goods and services when they travel abroad, and American citizens often send money to relatives living in other nations. On the other hand, money flows into the United States from other countries when foreign citizens travel in the United States, when foreign businesses make investments in the United States, when Americans receive dividends on foreign investments, and so forth.

Each nation keeps an accounting record of all its monetary transactions with other countries. This accounting record is called the balance of payments. A nation’s balance of payments account includes all payments that it makes to other nations, and all payments it receives from other nations during a year. A country’s balance of payments includes imports and exports, flows of investment funds into and out of the country, loans between nations, and all other transactions that involve payments between countries. The balance of payments is a broader measure of the financial transactions between countries than the balance of trade.

What is Debt Financing?

Almost all businesses, big or small, need to borrow money at some point. Whether it is for large assets such as land and buildings, or simply for supplies to keep a business running, debt financing plays a major role in modern business. Put simply, debt financing is the borrowing of money to keep a business running, to expand a business, or to acquire assets. Long term debt financing is usually associated with larger assets such as machinery, equipment or real estate, and it is paid back over many years. Short term debt financing, on the other hand, is most often used for business operations such as supplies or payroll, and it is often paid back within a year.

The alternative to debt financing is equity financing, which involves the acquisition of money from investors and/or savings. However, we will focus on debt financing in this article.

While most companies in Britain receive their financing from internal finance, 39 percent rely on external sources of finance, usually debt financing in the form of a bank loan. The business will agree the term of the loan and the interest rate, whether variable or fixed, with the lender. As with any loan, companies will have to show the bank how it is going to repay the money and secure the loan against an asset. The asset will usually be a premises or a piece of equipment that covers the value of the loan. In addition, a bank may require that some kind of personal asset is offered as security.

Financial institutions tend to favour companies that have good management, a reliable projected cash flow and good growth potential. The business may have to demonstrate that it can meet the monthly payments from projected revenues in its business plan. Of course, the company will have to comply with the payment schedule specified by the lending institution, and it may run into trouble if it deviates from this. Longer term loans are usually provided in this manner.

Debt financing products

Companies looking for debt finance to cover day to day running costs often opt for an overdraft instead of a long term loan, although these are falling in popularity because of high interest rates, steep fines and the obligation to repay on demand.

There are many options currently available for companies looking to avail of debt financing. Factoring and invoice discounting allow small businesses to take loans out against sales, while leasing allows for the borrowing of money to buy machinery or equipment. However, term loans remain the most popular with businesses and with banks. From the point of the view of the financial institutions, it allows them to impose regular repayment schedules over fixed periods, which is less risky than overdrafts. Many companies are known to have fallen foul of the banks because they were unable to repay overdrafts when asked. This provides an overview of the debt financing products available.

Every lending institution has its own products, rules and rates so it is worth while for any business to shop around for an arrangement that suits its needs. Some companies even offer credit cards designed for small businesses to pay for day to day incidentals. However, these can become an expensive luxury if the balance is not cleared every month.

Debt over equity

Debt financing remains more popular than equity financing for a number of reasons. Interest paid on loans can often be deducted against taxes, and debt finance is available in small, accessible amounts, whereas equity finance tends to be in large amounts. Also, with debt financing the lender has no say in how the business is run and has no rights to any ownership or profits of the business. Another advantage is that business profits can be kept within the company while the loan is used for day to day running or the acquisition of assets.

Debt financing is not a suitable option for all businesses. However, for small businesses where equity financing is not an option, it can be a valuable service in the day to day running of operations and the purchase of equipment. While loans often tend to be short term and at high interest rates, debt financing remains a popular choice for many companies.

The International Finance Centre at Hong Kong

The International Finance Centre was completed and became operational in the year 2003. However, it is still the epicenter of all talks related to international business and investment. It has become one of the landmarks of the Hong King Islands that are known worldwide.

It is situated in the midst of a jungle of skyscrapers that have dominated every corner of the island. It seems to command a sense of respect from all those tall buildings. It is one of the most gruesome battle sites in the recent history of international corporations. At the time of writing this, the International Finance Centre is the 8th tallest office building in the entire world. It is often compared to the former World Trade Center in New York. It is a symbol of strength and potential of the new and emerging Asian markets.

The tallest building in Hong Kong, it also has an international symbol of prestige for companies that have their offices in it. It stands out from the crowd and is one of the most recognized modern structures in entire Asia, outside the continent. To the modern world, the International Finance Centre is what the Great Wall used to be to China, a few centuries ago.

The IFC is divided into two main buildings. They are called Tower One and Tower Two. Tower One is known for its signature shopping mall, while the other for its 88 storey’s.

Tower One was completed and started prior to the second one going operational. It has around 40 floors and is no less magnificent than its taller counterpart. It is divided into 4 zones, and is built up on a total area of approximately 800,000 square feet. More than 5,000 people can occupy the building at an instance.

The International Finance Centre was developed under a joint venture of Sun Hung Kai Properties and MTR Corporation. The IFC was created with the aim of exhibiting the financial prowess of Asia to the rest of the world. It is strategically placed; very close to the airport, to make it better accessible for international business tycoons.

Tower Two of the IFC is as appealing as it is magnificent. It is the tallest feature of the complex and was designed by the world renowned architect Cesar Pelli. It was completed only in 2003; years after Tower One became operational. It has 88 floors, as the number 88 is considered to be very lucky in Chinese mythology.

However, it is interesting to note that Tower Two does not have exactly 88 floors. This is due to some other superstitions in the local culture. A number of floors have been omitted while numbering. This is because many numbers, such as 14 and 24 are considered taboo, because they sound very much like some expressions related to death.

The Tower Two of the International Finance Centre is known for its excellent and modern telecommunications facilities. A number of floors have been reserved for the use of the Hong Kong Monetary Authority. The floors of the building are designed in such an amazing manner that the columns are not visible at all. This tower is designed to accommodate three times more people than its counterpart. Together, both the towers can accommodate 20,000 people at one go.

Best in Class Finance Functions For Police Forces

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.