CONCEPTS:

INTRODUCTION:

    VAULT is complete Personal Finance Management software designed & developed for an individual by VSoft Solutions & Consultancy Pvt. Ltd (hereinafter referred to as VSoft). VAULT helps the user in organizing his personal financial as well as non financial records. The software has been designed to meet specific needs of individuals with regard to finance management, document storage, and rates of gold/silver, shares listed on BSE/NSE and Mutual Funds listed in India etc. This manual has been laid out in a logical format, making it easy to understand the software and thereby draw the maximum benefit out of the same. Users are requested to read through the manual once before using the software. This manual can also be used for future reference as and when required. This User Manual is not to be used for Educational purposes. It is solely meant for distribution with the VAULT software.

Wealth Management Concepts:

VAULT is the result of a two year study by the VSoft team. During this study, the team had to rely on several wealth and personal finance management concepts. The team found that different people have different perceptions of their wealth. Some people excluded their residential house from their “wealth”, while others wanted to include even their household articles in their “wealth”, etc. After careful consideration and taking into account the views of majority of the persons interviewed, VSoft has arrived at the major features that needed to be incorporated in this version of VAULT.

Some of the major concepts of Wealth and Personal Finance Management incorporated in VAULT are:

• Personal Information is part of wealth.
• Personal Documents are considered to be a part of wealth as there is a cost if they are lost / misplaced.
• Budgeting needs to be a part of an individuals’ wealth management strategy as it is a known fact that savings increase merely by creating a budget and comparing it with actual income & expenses.
• Household Accounting is the first step towards effective wealth management.
• One needs to have an investment plan based on his/her own preferences and not those on the advice of a host of consultants.
• It is very important to create a Financial Plan and see if you are on the right track. If not, corrective action should be taken as early as possible.
• Wealth Management is of no use if regular Wealth Statements are not generated.
• Wealth management needs updated information (e.g. Gold, silver, Mutual Fund rates) at all times.
• Proper tax panning is also possible with updated information. The biggest hindrance in wealth management is the mental perception of wealth. A common refrain was: "I have no wealth, so what Wealth Management can I do?" As an investor, you will always think of ways to maximize the wealth that you already have, or in the event that you are accumulating, you would seek to accumulate the maximum possible. It is an important, but not so explicitly stated need.

So what does 'wealth creation' mean?

   It is, in the simplest sense, a desire to be rich, a desire to have control over the aspects that affect our financial life, a desire to command respect with the control of money power. Usually wealth creation has a negative connotation to it. If a wealth creation goal is set with the simple perspective of making conditions better for one’s own self, and through means which necessitate a use of some investing and discipline, then there is absolutely no possible reason for not doing so. The truth is that everyone has wealth. It is the quantity that is relative. VAULT attempts to attack this hindrance head-on with its simplicity & usefulness to all – those who are rich & those who aspire to be rich! As the VAULT motto states:
Record it :: Monitor it :: Grow it

Personal Accounting Concepts:

Generally, people are wary of doing their own accounting because:

• They don’t know how.
• They don’t understand Accounting terminology.
• They don’t have the time.
• They don’t have an appropriate tool to do the recording of transactions, etc.
These are problems that can be easily overcome by using VAULT.
• VAULT does not use Accounting terminology.
• VAULT needs only about one hour of your time per month to update your records which work out to 15 minutes a week.
• VAULT also guides you on how to maintain your financial records.

What is Personal Accounting or Finance Management?

It is merely keeping a central record of all your financial transactions. Transactions are a part of our everyday life. It is just a matter of setting a discipline of recording them. VAULT allows you to easily record all your financial transactions without worrying about complex accounting terms or complicated data entry screens. In fact with a little bit of practice, a layman can enter an expense transaction in about 10 seconds!

Broadly speaking, there are two types of accounting methodologies:

• Cash Method of Accounting.
• Accrual or mercantile method of Accounting.

Ideally for an individual, it is advisable to follow the cash method of accounting. Under this method only those transactions are considered which physically happen through cash or bank accounts. Thus for example, if you pay your telephone bill on say 15th April 2009, it will be accounted for in the year 2009-10 (Apr 09 to Mar 10) although the bill may be pertaining to the month of March 2009. Similarly, there is no need to make “provisions” for expenses under the cash method (depreciation is an exception, but that is a more technical issue). Many professionals are also known to follow the cash method of accounting. Typically business entities usually follow the Accrual/Mercantile method. Under this method, you need to consider the period for which the expense or Income is pertaining to and make entries accordingly. Under this method, it is mandatory to pass provision entries for receivable/payable which are due but not yet actually received/paid.

It is generally seen that individuals do not maintain their accounts properly. However, Personal Accounting has several benefits. It can help you easily file your tax returns. It can put you firmly in control of your finances. It can help you formulate a proper financial strategy. You can use the services of your consultants much better if you use VAULT. In turn, your consultants can give you much better service if you present your data in VAULT.

The later part of this User Guide will explain how to use the power packed personal accounting features of VAULT to easily compile your financial information. Simply put, recording your personal financial transactions (as opposed to business transactions) is personal accounting.

Maintaining your personal accounts is a very rewarding activity, not only in terms of money saved but more because of the clarity & control that it places in your hand. After all we spend the better part of our lives in making (or trying to make) money, so it will indeed be a pity if we don’t properly record what we make.

Our Mascot:

Mascot – Oyster Our Mascot is an Oyster, which gives you his “Pearls of Wisdom”. Our theme is that, just as an Oyster takes time to create a pearl, Wealth creation is a long journey. Since you have chosen VAULT to be your partner in this journey, the pearls of wisdom that we share with you will definitely benefit you.