What is Internet Banking

 Internet Banking  No Responses »
Jan 252011
 

Internet banking is used widely by masses, and has numerous benefits to offer. Nowadays, all banks provide online banking facility to their customers as an added advantage. Gone are the days, when one had to transact with a bank which was only in his local limits. Online banking has opened the doors for all customers, to operate beyond boundaries. Nowadays, people are so busy in their work lives, that they don’t even have time to go to the bank for conducting their banking transactions. Internet banking enable people to carry out most of their banking transactions using a safe website, which is operated by their respective banks. It provides many features and functions to their customers, and enables them to view their account balance, transfer money from their account to another account (be it in their respective bank or any other bank), view their account summary, etc.

In this procedure, many financial transactions can be carried out by simply utilizing a computer with an Internet connection. The necessary things that a person needs for using online banking are, an active bank account with balance in it for transactions, debit or a credit card number, customer’s user ID, bank account number, the Internet banking PIN number, and a PC with access to the web. People using Internet banking are certainly benefited by the online services their respective banks are providing them with. The primary reason why it is so famous and mostly used is that, customers are allowed to bank at non-working hours.

Banks create their banking interfaces and websites in a viewable and user-friendly manner, which enable customers to conduct their financial transactions with ease. If they are stuck in any process while performing their online transactions, banks have another helpful facility that is ‘phone banking’, wherein customers can call the bank’s toll-free number and get assistance in completing their transactions. Electronic bill payment, viewing and downloading financial records, and money transfers are some of the general transactions which the customers generally carry out. All online banking services, provided by some banks, are free of cost.

When a customer views the bank’s website, there are many options available, but to execute those transactions, he would obligatorily need to log into his virtual account. Without logging in, he won’t be allowed to carry out any kind of the transactions. Initially, when he opens an account with the bank, the bank gives a welcome kit which contains important documents that include the checkbook; a document on which the customer’s user ID, online banking password, phone banking password, and account number is embedded. The kit also contains some other confidential data, the credit or debit card, and the card details. The website will prompt the user to enter the necessary details like the Internet banking password and account number, and then will display his account information. In this stage, he can carry out all functions that are available on the website.

With regards to the password authentication and encryption, high security is maintained, as there is a chance of hackers getting unauthorized access to the customer’s account and performing malpractices. However, banks keep their online security systems up-to-date to prevent such scenarios. Moreover, banks also suggest their customers to keep on changing passwords periodically. They also implement some security measures like using unique login IDs, transaction codes, using two passwords, security tokens which generate automatically changing passwords, etc.

The Internet banking facilities provided by banks differ from bank to bank, and country to country. To know all online banking services and processes, one has to thoroughly refer to the guides which were made available in the welcome kit. Moreover, proper care has to be taken regarding the confidential documents as, Internet banking frauds are on an increase.

 Posted by at 1:39 am  Tagged with:

Advantages of Internet Banking

 Internet Banking  No Responses »
Jan 152011
 

Internet banking or banking via the Internet, can be considered a remarkable development in the banking sector. The ability to carry out banking transactions through the Internet has empowered customers to execute their financial transactions within the comfort of their homes. Besides this, the benefits of Internet banking is not limited to a particular group of people, as it benefits both bankers and customers alike. Let’s have a look at some of the important advantages of Internet banking.

Advantages of Internet Banking

The greatest advantage of Internet banking perhaps lies in the fact that customers are no longer required to wait in those long and wearisome lines of the banks to request a financial transaction or statement. Another important advantage of Internet banking is that it has made the opening of an account quite simple and easy and without much paperwork. The same flexibility can be observed even while closing an account. You can also apply for bank loans without personally visiting any local branch of your bank.

Conventional banking has always been slow and time-consuming, so much so that sometimes you need to wait several hours to process a simple transaction like clearing a check. But, Internet banking has tremendously reduced the time required to process banking transactions, thereby making banking faster and convenient. For the bankers this system is cost-effective, as it has considerably reduced the administrative costs and paperwork related to the transactions. Besides, banks can also cater to the needs of thousands of customers at the same time. All these factors have significantly increased the profit margins of commercial banks by lowering their operating costs. This has enabled them to offer acceptable interest rates on savings account and credit cards.

With the help of Internet banking, you can access any information regarding your account and transactions, any time of the day. This means that you no longer have to depend on the office hours of your bank to obtain information. Therefore, you can regularly monitor your account as well as keep track of financial transactions, which can be of immense help in detecting any fraudulent transaction. In addition to this, fund transfers, both national and international, have also become faster and convenient with Internet banking. Nowadays, you can transfer funds from one account to another within a few minutes. You can easily carry out stock trading, exchanging bonds and other investments with the help of Internet banking. All these features have made Internet banking ideal for people who make a number of financial transactions each day.

In addition to availing banking facilities for 24 hours a day, you can also receive other important information regarding banking policies, rates of interest offered on different types of bank accounts and formalities required in executing various transactions. With such information you can compare the services of different banks and opt for the one that satisfies your individual needs and requirements.

However, there can be some serious disadvantages of Internet banking, out of which the security of your bank account is the most important one. So while availing the facilities of Internet banking, you have to be very careful to ensure the security of your computer and personal information like the password, user name and pin number of your bank account. Otherwise, you may become a victim of computer hacking, which can lead to unauthorized use of your account by computer hackers. Though banks have come up with several security measures, the customers are also required to be a bit careful to ensure security and safety of Internet banking.

 Posted by at 1:21 am  Tagged with:

Internal Controls in Accounting

 Accounting  No Responses »
Jan 102011
 

There are many statutory compliance that have to be fulfilled by companies worldwide. Accounting standards and internal controls in accounting are some of the essential compliance that not only help the companies in managing their finances well, but also help the companies to keep track of liabilities, duties and taxes. The laws regarding internal controls in public corporations and companies are especially stringent due to the fact that public money and the common man’s interest is to be safeguarded with the help of such controls and compliance.

Need of Internal Controls in Accounting
As mentioned above, internal control in accounting is a statutory compliance. These controls are also subject to an annual audit, that is conducted by authorized and certified chartered accountants. The following is a small list of factors that explains the need for such internal controls and also the audit of such controls.

It is extremely essential for any company to keep track of all accounting records and financial statements that are transacted and authenticated by the company in one financial year. This kind of control ensures that the public finances are not misused.
Internal controls are also required to ensure timely payment of liabilities and taxes. These controls are required to uphold the reputation and credit rating of the company.
Internal controls are needed to reduce frauds and criminal activities in the corporate world.
The government, and agencies of the government, can demand financial records of the company, without any notice. These controls, once implemented, help the accounting and finance department of the company to produce financial records in such a short period.
Such internal controls are also required in order to increase the efficiency and effectiveness of financial planning and management.

Elements of Internal Controls in Accounting
There are several elements or policies that are implemented by companies in order to ensure effective internal control:

Segregation of Duties: There are several functions that are always going on in the accounts department of a company, which have to be monitored with the help of internal controls. Segregation of duties is an excellent policy where two different people handle the accounts and physical operation of assets. This policy also involves a series of cross checks and tallies. The double entry system is a very crucial instrument for such a process.
Transactional Authorization: All the transactions are authorized and definition of pricing is also implemented. It means that, during sale and purchase, employees need to follow a particular upper and lower limit policy, regarding prices.
Documentation and Records: There are several different documentations and records that are stored in the company’s computer systems with the help of accounting software. These systems basically ensure a simple functionality, easier cross checks, and reliable audits.
Independent Checks: Internal or external auditors of the company can conduct audits and surprise checks within the organization, in order to ensure that the internal controls are effectively working or not.

Read more on:

Purpose of Accounting
Glossary of Accounting Terms and Definitions

Many directors, owners and managers of companies make public statements regarding the follow-up of internal controls in accounting. Public statements also carry the internal control checklist, that is used by the employees and auditors. Internal controls audit is conducted by appointing a certified chartered accountant. It must be noted that internal controls in accounting have become a statutory compliance, and directives are issued by the government from time to time for their implementation

 Posted by at 3:06 pm
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