Friday, 30 October 2015

Year end coming up? What do your annual accounts say about your business?


As a specialist financial advisor to marketing agencies and professional firms I've recently come across two instances of companies losing business because of their public financial information. In one case after the company had won the pitch....and you know how much time, effort and money goes into that.. only to have the client's procurement department reject the company.

Owners of marketing agencies and professional firms are of course usually very careful with how their brands are perceived externally - especially by clients and the competition.

But when it comes to the annual accounts, their impact on the brand's image doesn't even get considered. In the cases I have seen recently, the costs were heavy in terms of the pitch and the lost business. Bankers and key suppliers also look to public financial information when deciding whether to do business with you.

Here are a six tips:

  1. Obtain credit reference reports on your own business and if there are errors get them corrected.
  2. Review your financial forecasts a couple of months ahead of the year end and identify what you should be fixing.
  3. Fix before the year end as it will be too late afterwards.
  4. Don't just let your auditors decide what the numbers should be.
  5. Talk through your objectives for the numbers with your accountants.
  6. Get the right balance between tax planning and financial presentation.
Investing a little time and effort in your annual accounts will easily pay for itself.
As a first step, why not pick the phone up and call John or email him and arrange to meet up. 

John's website is: 

His credentials:

Monday, 15 June 2015

Building a tender bank

A tender gives you the opportunity to inform the buying organisation how you will meet their requirements, offer best value and why they should select your company.

Many businesses will respond to a number of tenders each year and some will be tendering very frequently.

Collating accurate and current background information for tenders can be time consuming. The best approach is for you to maintain an up to date tender bank accessible by your colleagues.

Start by identifying the most usual documents requested by colleagues responding to tenders. The basic background documents will usually include:

·         Certificate of incorporation (and name change)
·         Public and employers liability insurance certificates
·         Audited accounts for the 3 latest years
·         Policies covering health and safety and quality assurance
·         Policies covering equal opportunities and the environment
·         Company ownership and organisation charts
·         Biographies of key staff
·         Product or service specific information

In addition to the basic background documents you should also consider including more specific product or service information in the tender bank. Identify those of your products or services most frequently subject to tendered bids. For these items collect:

·         References from other customers
·         Technical specifications
·         Service levels
·         Pricing
·         Percentage of your company’s turnover made up by these products or services
·         Personnel responsible for customer care

The simplest method for managing the tender bank is to collect the data into a shared folder on your system. Scan in original documents such as certificates. Maintain dates in the filename of each item of data so that you can ensure that the documents in use are the most current. 

Keep a contents log for the tender bank and include an “update by” date, for example, to remind you to insert the next set of audited accounts.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

John's website is: 
His credentials:

Thursday, 19 February 2015

Business Finance Handbook


On March 2nd my seventh eBook: Business Finance Handbook - Advice for business owners and finance managers will be published for ipad, iphone and kindle and will be available from 

This eBook includes 120 topics covering:
  • cash flow
  • profitability
  • planning and budgeting
  • corporate finance
  • financial management
  • accounts department

Examples from each section of the book are previewed in my last 6 blog entries.

This book is for owner managers and their finance people.

Throughout my career I have worked with many company owners and finance managers in companies of all sizes, helping them to solve business issues and be best placed to take advantage of worthwhile opportunities.

Most companies are primarily focused on their customers or clients and on sales. This is quite right too. Finances often take a back seat until things go wrong of course and the bank is calling, or suppliers are refusing to supply. Whenever I ask why finance has been left behind, the answer usually boils down to a lack of understanding.

This book is grounded in practical examples and issues that come up in real companies. There are lots of financial theory books and books covering accountancy and finance, this isn’t one of those.

 John's website is: 

 His credentials:

Monday, 19 January 2015

Preparing for the audit

On February 2nd 2015, my 6th eBook: Accounts department - Advice for business owners and finance managers will be published for ipad, iphone and kindle and will be available from This blog entry is a sample from the eBook. There are 20 topics like this one covered in the eBook. 

One of the busiest times of the year is the year end and the annual audit. Good preparation for the auditors makes a big difference to the time they take and the amount of disruption suffered by the finance team and management. As audit fees depend on the time spent, anything you can do to help the auditors be more effective should reduce the fee they charge. Here are five things you can do:

1.    Agree a realistic and detailed audit timetable that you and the auditors can commit to. Ensure that key members of staff are not absent on leave during the audit.

2.    Ensure that the timetable allows sufficient time for you to have finalised the trial balance and draft accounts before the auditors arrive. It can be very expensive for them to audit a “moving target”.

3.    Compile an audit file for the auditors containing copies of all relevant documents and information. The auditors should supply you with a schedule of the information they require.

4.    Arrange for a member of senior management to spend some time meeting with the auditors and showing them around the office, shop or factory. This will give the auditor a wider perspective of the business.

5.    Once the audit closing meeting has finished and the accounts are finalised, don’t delay in having the financial statements signed by a director and the auditors. If you delay, the auditors will have to make further checks before they are prepared to sign the accounts.

Frequent and open communication with the auditors can make all the difference to their efficiency.

You should be meeting the auditors before they finalise their audit planning process. At the meeting advising them of important events or issues encountered during the year will help them to plan their audit.

Arrange to meet the auditors periodically during the course of their fieldwork. Use the meeting to update each other on progress and issues arising so that surprises are not stored up until the end of the audit.

Your staff should make themselves available to answer audit queries they should pay particular attention to ensuring junior auditors understand the responses provided to them.

The post fieldwork audit review will generate further queries. If you delay in responding to these the audit team will have moved on and the cost of their dealing with your response may increase if more senior staff have to be utilised.

Use the closing meeting to explore ways to jointly improve the efficiency of next year’s audit process.

As a first step, why not pick the phone up and call John or email him and arrange to meet up. 

John's website is: 

 His credentials:

Tuesday, 30 December 2014

Profit and loss forecasts


On January 2nd 2015, my ebook: Financial management - Advice for business owners and finance managers will be published for ipad, iphone and kindle and will be available from This blog entry is a sample from the ebook. There are 20 topics like this one covered in the ebook. 

Budgets and full year forecasts perform very different functions in business. The budget is a financial translation of the company’s business plan. A full year forecast is the best and most current view of management on how the current year’s financial performance will turn out and should always be compared with the original budget.

A budget, once set for the year should not usually be changed or flexed unless the business is changing its plans.

In volatile market conditions a business should be preparing forecasts at least once a quarter if not on a monthly basis. The full year forecast should comprise the year to date actuals for each elapsed month with a forecast for each line item for each of the future months of the year. 

The full year forecast should form part of your monthly management accounts report and be a source of data for your cash flow forecasts together with your balance sheet.
Remember to involve your sales team in developing and verifying the numbers you include in the sales forecast. However, be appropriately prudent in your review of projected sales figures provided by the sales team.

Cost forecasts should be easier to produce than the sales forecasts. Certain costs, for example cost of sales and other direct costs can be modeled from their relationship to sales levels. Ensure that you take account of loss of volume discounts due on materials if you are forecasting lower cost of sales purchases. If you import goods and materials for processing ensure that your forecasts take into account up to date exchange rate information.

Salaries and wages are normally the largest overhead cost. Forecast these on a person by person basis. Prepare a staff cost forecast model in excel by person and department based on your payroll data. This will enable you to produce “what if” scenarios where you believe that more or fewer employees will be required in future months.

For your other overheads identify those that are fixed, for example rent, those related to the level of activity, for example telephone, and those that are discretionary, for example training and  prepare your forecasts for these accordingly.

Revise your full year forecasts each month and compare the prior month’s full year forecast to the latest so that you can assess any changes, for example, sales continuing to fall or unit materials costs continuing to increase.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

John's website is: 

His credentials:

Wednesday, 24 December 2014

What will the new year bring for you? - Making it happen.

As you find time to contemplate this year gone and think forward to next year, here are some questions to help you.
  • What am I most proud of this last year?
  • What have I learned?  What are our clients learning? (Can I ask them?)
  • What would make next year really great? (at least three things)
  • Why are these things important to me? 
  • What support would add fresh thinking and impetus? 
  • What excuses am I making? How can I be more accountable?
  • As well as strategy, what behaviour changes do I need to make?
Planning moves you from wishful thinking into action.
1. It helps you define a sense of purpose.
2. When you make a plan (however imperfect) you are creating your future and not acting as a hostage to fortune. 
3. You might just make those decisions that otherwise you keep putting off. 

With many thanks to John Niland.

As a first step to improving your business's fortunes, why not pick the phone up and call John or email him and arrange to meet up.

John's website is: 
His credentials: