This continues to be our most popular article to date, so much for the technical, MBA & tax stuff:

Are Accountants Really Boring or Really, Really Boring

I started to write a technical piece, but I was distracted by the eternal debate that appears to have started again.  Are Accountants really boring or really, really boring.

Yes, I am an Accountant and yes I am part of a firm of accountants, in fact I am a Chartered Accountant and part of a firm of Chartered Accountants.  I have lived with this all of my working life.  I trained as an Accountant and qualified as an Accountant (although, I do not have an Accountancy degree, it was Economics).  I have worked in business, as a finance director, which is like an Accountant, just more decisive.  I have faced the stigma and the ridicule, the tumble-weed silence when someone asks you what you do.  I consider myself a fairly confident and comfortable individual, married with children.  The stigma of instantly explaining that I am an Accountant usually means that I tend not to tell new acquaintances what I do.  I tend to have a good chat and sometimes later in the discussion I get asked the inevitable question and usually I get the same response, “No, …. Really, … You don’t seem that boring.”

I have read recently how the debate continues, Accountants are boring.

So I have taken some time to have a look at this, …. Sensibly and with the respect and gravitas that the subject deserves.

The Science of It

It appears that in 2005, the City University of Hong Kong proved that accountants were boring and this was due to using dull words and dull methods of communication.

http://www.telegraph.co.uk/science/science-news/3342652/Its-official-scientists-prove-why-accountants-are-boring.html

Now, I am sorry, but I think that you will find, that if you study any specialist talking through the technical areas of their roles, it is boring to others.  Physics and rocket science hardly makes great after dinner conversation, but Hollywood can make it look like that they are all Tom Hanks.  And anyway, an academic study to prove that accountants are boring, surely that has to be the apex of boring.

Technical or detailed aspects of any job will be boring but cannot make you boring.  All jobs have a level of technical knowledge and expertise; Formula 1 engineers are intensely technical, yet are seem to be glamorous. Honda pride themselves on the attention to detail and market that as a key USP for what they do.  Professional decorators watch paint drying for a living, but they are not labelled as boring as Accountants.

In fact the technical point and the issue that even Accountants are different can be seen in the categories that in the Accountancy profession, we find ourselves labelling each other, finders, minders and grinder.  The differences between those who are good at getting clients; those that build relationships and those that do the numbers.

The Butt of Many Jokes

Accountants tend to be the butt of jokes and they centre on the boring tag:

An Accountant is:

• Someone who uses their personality as a form of birth control (I have two sons!)
• Someone who makes a bold fashion statement by wearing a blue suit instead of grey
• Someone who isn’t really boring, they just get excited over boring things
• Someone who does not have the charisma to be an undertaker
• Someone who does not know that Gap is a clothing store

An extroverted accountant is one who looks at your shoes while he is talking to you instead of his own.

However my favourites have to be:

There are three types of accountants in the world, those who can count and those who can’t!

There once was a business owner who was interviewing people for a division manager position. He selected an engineer, a mathematician, a physicist, a logician, a social worker, a lawyer, a trader and an accountant to interview and decided to select the individual that could answer the question “how much is 2+2?”

• The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, “It lies between 3.98 and 4.02”.
• The mathematician said, “In two hours I can demonstrate it equals 4 with the following short proof.”
• The physicist declared, “It’s in the magnitude of 1×10¹.”
• The logician paused for a long while and then said, “This problem is solvable.”
• The social worker said, “I don’t know the answer, but I am glad that we discussed this important question.
• The lawyer stated, “In the case of the Crown vs. Svenson, 2+2 was declared to be 4.”
• The trader asked, “Are you buying or selling?”

The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, “What would you like it to be?”

Why is the last joke funny? Yet it speaks volumes about why Accountants are not boring.  It is not that we cheat or that we have an array of despicable tricks (ish).  It is that we are trained to think laterally, finding an answer and solution for our clients in what we do, despite apparent problems and issues.  We try and cut through the issues and problems and solve the problem, in whatever way we can.  We are solution providers and aim to get clients where they want to be.  There is no such answer as no and there is no such statement as “It cannot be done.”

Glamour and fame does not necessarily mean that you are not boring

Living with the stigma of being an Accountant has meant that I do not immediately tell people, as I explained earlier.  Yet it can appear that working in the more interesting world of showbiz can mean that you are instantly seen as interesting and glamorous, even if in reality you are, well, boring.

Everybody has an odd story about meeting a TV celeb and I am not any different.  Mine comes from meeting a celeb as part of the hobby that I have, a hobby that used to be seen as unusual and weird unless you were Welsh or gay with a Judy Garland obsession, I sing.  But now since the advent of Last Choir Standing, X Factor, Britain’s Got Talent and now Glee, it seems not only acceptable, but actually cool.

I was actually taking part in a large choral piece with a group of choirs and we had an afternoon rehearsal before the evening performance.  I stood next to a chap, who I did not know, and spoke to him during the coffee break.  Now I usually  have a high tolerance for boring people but he was pushing that somewhat and he started to say to me that he likes singing but “with his job” he does not really get enough time to join in with singing stuff.  Now at that time, I was going to ask what he did, but I did not get the chance and we carried on chatting or he carried on talking at me and he kept dropping in with, “of course with my job I don’t get a lot of free time and of course with my job I am out and about a lot.”  Well, I kind of got the message, but decided that I would not ask him what he did, let alone realise that I was supposed to know already.

Afterwards I was asked by the others around me, what was he like? What did we talk about?  I did not know that he was a famous TV presenter (of the DIY/house-changing/gardener-ish ilk), yet I declared that he was ok, a bit boring and pretty self-centred.

A lot of people in business say that perception is everything.  I think that is true in this case, he was perceived to be interesting and famous, and I am sure that it is true about Accountants.

Accountants in business and as leaders

The UK has about 50,000 family doctors, but nearly 280,000 professionally qualified Accountants.  That is a lot of boring people.  At any one time there are 165,000 registered students training to be Accountants.  That is a lot of young people wanting to be boring people. 

Around 80% of FTSE 100 Companies have at least one Chartered Accountant on their main board of directors.  Many Finance Directors go on to be Chief Executives and prove to be successful, ok Gordon Brown did not do that well.

And Accountants have gone on to fame and fortune and have shaken off their old image as being boring:

• Barry Hearn – Boxing manager and sports events promoter
• J. P. Morgan – This famous financier and banker
• Pádraig Harrington – The former PGA and Open Golf Champion
• Lee Van Cleef – Hollywood star of spaghetti westerns
• John Major – Former British Prime Minister and often described ‘Baddest Man on the Planet’ (…no wait that’s Mike Tyson). Major trained as an accountant. Some might say, “Unsurprising!”
• Kenny G – The saxophone player
• Josiah Wedgewood – As in Wedgewood the potter.
• Luca Pacioli – Big mates with Leonardo Da Vinci.
• John Grisham – The best-selling author, and I thought he was a lawyer
• Robert Plant – The Led Zeppelin rock legend
• Cecil Parkinson, former Conservative MP and now Baron Parkinson

And for those in the West Midland who have already have heard of Peter Murphy, he was included in an article in the FT in December 2010 as the story of the Accountant who went on to feature on the South Bank Show, meet the Queen and play harp for Queen Anne-Marie of Greece.

Has Accountancy made me boring?

I do not believe Accountancy has made me boring, but I let others be the judge of that.  I do believe that it has given me an insight into how businesses work and what does not work.  It has given me insight into how you can build a business, sustain a business, the importance of supporting structures for business, for operational issues and improvement, the importance of strategic thinking, of assessing where you are now, where you want to get to and how to structure a plan of how to get there.  It has given me an insight into finance, into cash management and working capital and it has given me insight into taxation, what can be achieved and what cannot be achieved.  It has given me an insight into leadership and change management and what makes organisations work and what deters them from working well.  It has given me an insight into recruitment and appraisal and how to challenge others and help them improve, how to empower others to improve the business and to enhance the team, their skills and achievements as well.  It has allowed me to work with a large number of businesses, helping them achieve their goals.  It has given me an opportunity to understand the real meaning and importance of good marketing and sales as the lifeblood of a business.  It has allowed me to be involved in marketing initiatives, new start-up businesses, new funding initiatives, working with banks, with other business organisations, with universities and new technologies.  I have worked on business turnarounds, helping business turn a corner and re-build.  I act as Finance Director for a number of innovative start-up innovative product businesses, new technologies and leisure businesses.  It allows me to talk to and meet new contacts and potential new clients on a constant basis.

If all of that means that Accountants are boring, then, well I am ….. boring I suppose.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317

steven@mcgregorsleicester.co.uk
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Tax increases for 2012 already on the books, a brief reminder:

Tax increases for 2012 already on the books, a brief reminder

I am sure that we will have a go at making some predictions for the 2012 budget, as most accountants do, as most of the changes will get leaked well before the budget.  We will not, however, try and make comments on the economy, as most tax accountants try to do, despite them neither having qualifications in economics, nor having actually managed or run a business.  We will stick to reporting the facts and this, accordingly, is a reminder of the tax increases or increased powers of HMRC to raise penalties and fines etc., that have already been put in place and will be implemented post April 2012, despite what may or may not be announced in the March 2012 budget speech.

This is perhaps the opposite and balances out our article, “Top Tax Tips for 2012, without moving to Switzerland.” http://wp.me/pQyUg-7H.

HMRC increase and strengthen penalty regime

See, “HMRC seeking 100% penalties for late Tax Returns, resistance is useless & the world recession is not an excuse for having no money” http://wp.me/pQyUg-6H

HMRC powers to prevent deliberate non-payment of PAYE
From 6 April 2012, HMRC will hold additional powers enabling it to ask employers to pay a security where there is serious risk that they will not pay their Pay As You Earn (PAYE) tax deductions or Class 1 National Insurance contributions (NICs).  This will not affect employers who pay their tax on time and in full, and it will not be used for employers who are having genuine problems settling their liabilities.

HMRC has confirmed that it will only use this power to tackle employers who deliberately try to defraud the Government, and will calculate the amount of the security on a case by case basis depending on the amount of tax at risk, the previous behaviour of the employer and other risk factors.  The required security will usually be either a cash deposit from the business or director or a bond from an approved financial institution which is payable on demand.

Daily penalties increased to up to £1,000
Finance Act 2011 introduced legislation, effective from 1 April 2012, to increase daily penalties for failures to comply with a written request for information from HM Revenue & Customs (HMRC) or deliberate obstruction of an officer of HMRC in the course of an inspection.

Currently, a flat-rate penalty of up to £300 may be applied for failure to comply with an information notice, or deliberate obstruction. Additional daily penalties, of up to £60, may also be imposed if the failure persists.  With effect from 1 April 2012, however, where the failure continues for more than 30 days from the date on which the information notice was issued and if it is believed that the current £60 daily penalties will be insufficient to encourage compliance, HMRC will be able to apply to the tribunal for increased daily penalties of up to £1,000 to be imposed.

Where the increased penalties apply, HMRC must issue notice of the amounts imposed, and the date from which they apply.

Capital allowance amounts falling
Rates of writing down allowances will be reduced, with effect from 6 April 2012 for unincorporated businesses and from 1 April 2012 for companies, as follows:

• Main rate pool will be reduced from 20% to 18% per annum
• Special rate pool will be reduced from 10% to eight per cent per annum

Where a chargeable period straddles 6 April 2012 for unincorporated businesses and 1 April 2012 for companies a pro-rated hybrid rate should be used.  Reducing the rates of writing down allowances will mean that businesses continue to receive full tax relief to reflect the depreciation of plant and machinery assets, but over an extended timeframe.

The annual investment allowance (AIA) will also decrease from £100,000 to £25,000 from 1 April 2012 for companies and 6 April 2012 for unincorporated businesses, with the rules for periods straddling 1/6 April 2012 involving apportioning the AIA on a pro-rata basis including limiting expenditure after 1/6 April 2012 to £25,000, appropriately time-apportioned. Consideration should be given to the timing of any capital expenditure during the period which straddles the change, and it may be advantageous in some cases to amend an accounting period in order to secure the maximum AIA available.  These measures were included in Finance Act 2011.

Short life asset lives doubled (perhaps positive with a sting in the tail)
The 2011 Budget included the announcement that the period to which a short life asset election applies is to be doubled, increasing from four to eight years.

This change will allow businesses to allocate assets which they expect to sell or scrap within eight years (rather than four) to a single asset pool, and ensure that the capital allowances available to them over this period will be equal to the net cost of the asset.

Although this appears to be a positive step and may provide a cash flow benefit to businesses, the additional record keeping required by allocating each relevant asset to a single asset pool is likely to create a significant administrative burden and cost.  Many businesses, therefore, may choose not to make the voluntary election.  This measure was included in Finance Act 2011 and applies to expenditure incurred on or after 1 April 2011 for the purpose of corporation tax, and 6 April 2011 for the purpose of income tax.

Landfill tax rates increasing
Legislation was introduced in Finance Act 2011 to increase the standard rate of landfill tax by £8 per tonne to £64 per tonne for disposals made, or treated as made, to landfill on or after 1 April 2012.

The Government had previously confirmed that the standard rate would rise by £8 per tonne on 1 April each year up to and including 2014. Also, that it will not fall below £80 per tonne from 2014/15 to 2019/20.  A lower rate of landfill tax applies to less polluting wastes listed in a Treasury Order. The rate is currently £2.50 a tonne and this rate will remain frozen in 2012/13.

Keep watching this space

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317

steven@mcgregorsleicester.co.uk
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Tenon’s clients paying a high price for their failure:

Tenon’s clients paying a high price for their failure

There continues to be significant and almost weekly reports in the press about both the business issues and reported practices of the UK’s only listed accountancy practice, RSM Tenon.

• http://www.accountancyage.com/aa/news/2155941/rsm-tenon-takes-gbp60m-goodwill-hit
• http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9033988/RSM-Tenon-shares-plunge-29pc-on-profits-warning.html
• http://citywire.co.uk/new-model-adviser/tenon-faces-raising-20-million-to-repair-balance-sheet/a563868
• http://www.accountancyage.com/aa/news/2152593/-pwc-managing-partner-takes-rsm-tenon-ceo-role
• http://www.accountancyage.com/aa/news/2140498/raynor-steps-rsm-tenon-warns-loss
• http://www.accountancyage.com/aa/analysis/2140715/boardroom-clearout-rsm-tenon
• http://www.accountancyage.com/aa/analysis/2142348/rsm-tenons-plight-listed-firm-model-scrutiny

I have read these with interest, as a former PLC Finance Director and now a partner in an independent firm of accountants and business advisers.  Much of what is being reported in the press now has been known within the accountancy profession for quite a time.  I read it all with both surprise and sympathy, surprise that a public listed firm of accountants can act this way and make so many mistakes in dealing with their own business and the operations of a public company and sympathy for their clients, as it their clients who are paying the increasingly high price for Tenon’s failing business model and practices.

What you learn from being a PLC FD

I worked as a Finance Director of a fragile small public company, which in the end had to be restructured.  When first appointed you do need to learn very quick lessons about the business’ relationship with the market, the stock brokers and the brokers’ analysts.

As well as publishing accounts, every six months, a Plc. also issues summarised forecasts about its anticipated performance in the coming year.  If at any time it believes that the results of the business will waiver by more than 10% it has to announce to the market, the Plc must inform the market again, and these are known as profits warnings.

What people sometimes do not realise is that that these forecasts are scrutinised and questioned by third parties to ensure that they are robust.  As a new FD, I was certainly surprised by the depth of discussion with the analysts at the stock-brokers.  They need to understand your business, your competition, your competitors, the areas you operate, the reasons and assumptions underpinning your projections and they question you accordingly to ensure that they are comfortable to support your business, its accounts and forecasts, in order to support its share price and trading.  The analysts do understand the business that you operate in and do have a good knowledge of your competition and structural issues, so “fooling” them or “being foolish” with them is not an option.

I am not sure whether Tenon have tried to fool the analysts or they just did not understand their own business, either way it is not the way a Plc. is expected to operate and certainly not what is expected from a firm of accountants, who should know better.

Given the recent appointment of CEO by Tenon, maybe they have started to realise this a little late:

http://www.accountancyage.com/aa/news/2152593/-pwc-managing-partner-takes-rsm-tenon-ceo-role

Acquisitions

Given the importance of ensuring that your accounts are robust and that your forecasts are equally as reliable, growth by acquisition must also ensure that you have accounted for and dealt with your acquisitions appropriately as well.

When a business acquires another business, they assess the assets and liabilities acquired and make appropriate adjustments for losses and other liabilities as well as making provisions for closures, redundancies and other liabilities and costs (and cash requirement) derived from the restructuring and bringing in the new business.

Tenon has grown by organic routes but also by significant acquisitions.  Individual independent firms and offices have been taken into the firm (on a part cash/part shares basis) and these are offices where the partners have not sort to continue their firm’s name with new younger partners but have opted out by selling to a national firm.

Tenon has also made two major acquisitions over the last couple of years:

• RSM Bentley Jenison
• Vantis Plc.

Both of these acquisitions have been cited as reasons why Tenon has problems.

http://www.accountancyage.com/aa/analysis/2140715/boardroom-clearout-rsm-tenon

Both acquisitions seem not to have been dealt with appropriately, as other businesses would.  Appropriate and accurate evaluation of the assets and liabilities of both businesses does not seem to have been undertaken and worse still; the market has been told that these businesses will add to the profitability of the main business.  Plcs do not act this way and accountants do know better, so why has Tenon done this?  Is it ignorance or is it deliberate?

Given that Tenon may need £20million from shareholders by way of a rights issue, the one thing that they will have to be certain of is their current position and forecasts for the future, if the market is to trust them further.  The have been described by their second biggest shareholder as a “company out of control.”  This is probably why they have chosen to quickly appoint an experienced new chief executive, which in itself is an admission of failure of their current business model.

Desperate for fee income and reported bad practises

All of these “mistakes” have added to the pressures for Tenon to grow and produce profits from their other core business areas, and that means making more money from their existing client base as well as acquiring new clients.

The Times (Saturday 11 February 2012) has reported the whistle blowing of a former Tenon director and head of their Southampton office, citing a number of “bad practices” including prematurely recognising income on cases before they should.  This can mean billing clients before work is completed or reporting income when bills have not been raised, before agreeing these with their clients.

We are also seeing more comments from appointments with potential clients that they have seen fees continually rise from Tenon, with no change in the service delivery.  This is obviously alleged and anecdotal practise of the business, but given the reports now coming to light in the press, there does seem to be fire included within the smoke signals.

Employee Benefit Trusts (EBTs) are ticking time bombs

Tenon has seen significant growth from their specialist tax products areas.  This area of work is not covered by the FSA as a financial product but lies within the area of specialist advisers, legal opinions and an advanced business understanding.

Employee Benefit Trusts (EBTs) is one such area that has been “sold” over the last 10 or so years, but EBTs are failing and fall well within the current anti-avoidance legislation brought in by recent governments.

Hundreds, if not thousands, of EBTs and similar have been introduced and businesses that have them in place, should now have been advised that if they wish to either sell, pass on their business to family members or clear up their tax affairs with HMRC, they must seek to close the EBT and negotiate, agree and settle the tax position, which could be significant with HMRC.  Businesses with EBTs are now considered to be un-saleable until the EBT has been closed and settled with HMRC.

Tenon has introduced many EBTs and similar strategies and their clients are now finding out that they have a significant problem to deal with.  Costs, time and fees in dealing with these issues with HMRC are significant both to the clients and to Tenon.  Engagement letters are likely to be very clear that it was all the clients decision to accept and deal with the risk of these strategies, but their clients will expect to get support, and we are talking about significant support amounting to £millions of fees and costs.  Given the pressures of Tenon to generate cash and profits and given that they are also likely to need a cash injection by way of rights issue, there is significant doubt whether Tenon and their clients will be able to agree on who is responsible for the costs of rectifying these mistakes.

As an independent firm with partners and senior staff from top 10 and top 5 firms, we have to make it clear that whilst we have the same experience, offer the same service and access to finance, tax and growth strategies, we do not have to face these pressures or issues.  We do not have the same high cost and overhead structures; we do not have the pressure to generate high fees to meet regional or national targets set by expensive head offices and we do not have to make high returns to shareholders; in doing that we do not have to sell high sell high risk “products” without offering the future support to our clients.

We are offering to help and support businesses with EBTs to help to rectify the position with HMRC and for SME businesses, we are also able to offer and provide audit, accounts and tax compliance service at a fraction of the cost of either Tenon or other national firms.  All of this is provided by the same experienced levels of staff as Tenon and other national firms.  For some of us, including myself, who have been Finance Directors to SMEs and Plcs as well, we can bring those skills and experiences to our clients as well.  As outlined earlier, I am astonished at the behaviour and actions of Tenon as a Plc.  I am not sure, at all if a Plc. model is appropriate for a firm of accountants, but on top of that, there are other significant business decisions and practices that Tenon have undertaken which many other businesses as well as accountants would not have done.

Profits for the first half year; significant losses the second half; profits warnings; black holes, restatement of previous accounts; £20million equity requirements; sacked board of directors; errors in acquisitions; bad practices with clients; over-billing; attempts to bring forward income; settlements in court; desperation for fees and cash; massive selling of failed tax strategies; disgruntled staff and disgruntled clients; and all this from a firm that was awarded National Firm of the Year in the 2011 British Accountancy Awards, …… Amazing or just The Emperors New Clothes!

We expect there to be continued issues and changes with Tenon, including whether they will return to private ownership.  We are, however, seeing continued discontent with both clients and staff and we are obviously keen to support and help both.

Steven Mugglestone BA FCA,
Finance Director Services

Key business grants & funding that are still available

Key Business grants and funding that are still available

As a brief review and to help SMEs, we have identified a number of key grants and grant funding initiatives that are still available to SME businesses.

Technology Strategy Board and R&D

The Technology Strategy Board has started a new scheme which offers funding to SMEs to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge.

Open from 4 April 2011, the Grant for Research and Development (Grant for R&D) scheme supports R&D projects which offer potentially significant rewards and could stimulate UK economic growth. In contrast to the Collaborative R&D programme, Grant for R&D funding is available to single companies.

Smart

Smart (previously known as Grant for Research and Development) is a Technology Strategy Board scheme offering funding to small and medium-sized enterprises (SMEs) to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge.

The Smart scheme will support R&D projects which offer potentially significant rewards and could stimulate UK economic growth. In contrast to the Collaborative R&D programme, Smart funding is available to single companies.

We use the European definition of SME.  There are three types of grant are available:

• Proof of market  
• Proof of concept  
• Development of prototype

Any UK SME working in any sector may apply; applications are accepted on a rolling basis for assessment by independent experts.

Smart replaces the Grant for R&D scheme previously offered by regional development agencies. The scheme works alongside existing programmes in Scotland, Wales and Northern Ireland.

Proof of market grant

This grant enables companies to assess the commercial viability of a project, through:

• market research
• market testing and competitor analysis
• intellectual property position
• initial planning to take the project to commercialisation, including assessing costs, timescales and funding requirements.

Projects will last up to 9 months, have a maximum grant of £25k, and up to 60% of total project costs may be funded.

Proof of concept grant

SMEs may use this grant to explore the technical feasibility and commercial potential of a new technology, product or process, including:

• initial feasibility studies
• basic prototyping
• specialist testing and/or demonstration to provide basic proof of technical feasibility
• intellectual property protection
• investigation of production and assembly options.

It also includes pre-clinical research studies for healthcare technologies and medicines, including target identification and validation.

Projects will last up to 18 months, have a maximum grant of £100k, and up to 60% of total project costs may be funded.

Development of prototype grant

This funding is used by companies to develop a technologically innovative product, service or industrial process, and can include projects such as:

• small demonstrators
• intellectual property protection
• trials and testing, including clinical
• market testing.

Projects will last up to 2 years and have a maximum grant of £250k; up to 35% of total project costs for medium enterprises, or up to 45% for small and micro enterprises, may be funded.

Further information

All pre start-ups, start-ups, and small and medium-sized businesses from all sectors across the UK may apply for the Smart programme.

In future we may also run themed competitions using the Smart scheme, aligned with our priority investment areas.

Please note that the Guidance for Applicants have been updated and a new rule has been introduced from the open of Round 5. An individual business may only submit one project application per category (eg proof of concept) per round. If more than one application per category is submitted in a round only the first application submitted will be considered for funding.

http://www.innovateuk.org/content/competition/smart.ashx

The New RGF Grant Scheme with Bank Lending

The government has also announced details of the new Regional Growth Fund Grant Scheme which seeks to provide businesses with a grant amounting to 20% of the funding needed for a project, with the two major banks, RBS and HSBC providing the remainder as lending.

Full details of £95m of the government’s banking RGF assistance can be found on the BIS site at: http://lnkd.in/8R4wJV

The Regional Growth Fund (RGF) scheme is a £1.4bn fund operating across England from 2011 to 2014.  It is administered by the Department of Business Innovation and Skills:  http://www.bis.gov.uk/

Given the discussions that we are having with banks and that the total grant fund has been capped at £95million, we believe that small and medium sized businesses should act now and secure this major funding initiative before it runs out.

The Fund objective is to stimulate private sector investment by providing support for projects that offer significant potential for long term economic growth and the creation of additional sustainable private sector jobs – especially in areas which are currently dependent on the public sector.

RBS Group has secured £70m and HSBC has secured £25m of RGF to distribute to eligible customers.  This is open to customers acquiring eligible assets via a NatWest/RBS/HSBC loan and also through Lombard on a lease purchase agreement.

The scheme is designed to support the purchase of assets by providing a supplementary deposit contribution – this will take the form of a grant.

• The minimum amount of RGF that can be applied for is £5,000
• The maximum amount is £500,000 per customer group (i.e. including any group companies)
• The RGF element cannot exceed 20% of eligible costs
• This minimum amount to be funded after customer deposit and RGF is £25,001.

As the RGF element is a grant, no repayment is required unless the customer breaches any of the RGF criteria.

We are advising our current and future clients to contact us now to discuss how they can benefit from this valuable business initiative.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Why we are supporting Squeezeonline.co.uk & why small businesses should check it out now:

Why we are supporting Squeeze and why small businesses should check it out now

#itscoolfornotsofatcats

We are helping Squeezeonline.co.uk both develop and launch their innovative and cost-effective (in other words cheap) accounting system in the UK, together with the support of Sage UK, http://www.sage.co.uk.  We are doing this as we see it as a unique full accounting package that offers book-keeping, management accounts, cash control, payroll, year-end statutory accounts and tax computations in one area, at one low monthly fee.  We see it, therefore, as a system and product that many accountants cannot match for innovation and cost.  We also see it as a system that brings “power to the people” and puts small businesses in the driving seat and in a position that they have never been able to achieve at such a low cost.  In our view it is a “no-brainer.”  We cannot provide this support and innovation at such a low cost and neither do we believe can most other accountants.  Squeeze, therefore, offers a truly brilliant package for small businesses to take control.

Instead of us trying to explain this, we have, therefore, extracted a piece from the Squeezeonline.co.uk website that explains why a small business should Squeeze their accounts and tax.

 Introduction
When you are running a business, accounts and tax returns and issues surrounding these tend to be the last on the to-do list.  Big businesses do not operate this way as control, accounting, cash and tax are very much high on the agenda and form part of the key reasons why successful big businesses remain as successful big businesses.

Why is good accounting important?
Businesses do not generally fail because they do not have good ideas, or good customers, or great marketing or product.  Businesses generally fail because they run out of cash.

Yet the two areas above appear to be at two ends of the spectrum.  Cash and control of cash is the most important thing for a business to consider yet accounting is the last thing that a business, particularly a small business wants to consider and, worse still, actually manage.

The current bad practice
Many, many small businesses carry out their accounting in the same way, using systems that range from piles of paper, through to various inter-linked spread-sheets and, those in control, a variety of software packages.  These operate, whilst the business may check the bank account separately, but the connection and relationship between accounts and bank is mostly loose and sometime non-existent.

Needless to say, many small businesses do not really know how they are doing until they “hand-over” their accounting information either by way of plastic bag or back-up file to their accountant, who months later tells them that they have made a profit or loss and lets them know if any tax needs to be paid.

You then get a bill, on top of the software licence, if you have a system at all.

All of this does not put you, as the business owner in control; it does not really help you manage your business or make appropriate decisions based on facts; it does not help you control cash, the most important life-blood to your business and it costs you too much time and money to tell you something that is months out of date.

It does not have to be this way and Squeeze aims to prove why and how.

Keeping the records
All businesses recognise that they have a legal duty to retain their accounting records.  This can be files, boxes of papers, back-ups of spread-sheets or other computer files.  To do this requires storage space and the need of back-ups and file maintenance systems.  Squeeze is a secure cloud based system that ensures that you are fully backed up and your records are safe so you do not have to worry any more.

The Accountant
Many small businesses want advice and help, particularly with tax, but do not see that meeting their accountant to discuss accounting information that is months out of date as being very worthwhile.  Many dread the meeting and most do not see the point.  At the end of it all, many do not see how the cost to their business can be justified.

The issues facing accountants
Traditional accountants still use a charging structure that is based on time and charge by the hour, many by six minute units.  Preparing accounts from manual records or un-reconciled computer records can be time consuming and many UK accountants will either seek to recover this time in a high fee or
seek to sub-contract the work overseas, and sometimes this sub-contracting is not disclosed to the client.

Squeeze utilises the latest web based technology to keep costs low and bring together the needs of a small business for accounting and cash control with the year-end accounts and tax computations linked to an accountants systems to ensure that the work and accounts preparation are seem-less and efficient.

The Solution
Squeeze is powered by Sage, one of the UK’s leading accounting software systems for SME business, and specifically utilises Sage One, an on-line secure web-based system that is a practical accounts package for small businesses from sole-traders to 20+ employees.

The key attributes of Squeeze are easily identified as:

• An easy to use book-keeping system that keeps you in control of your accounting
• A secure online system to ensure that your records are backed up and protected
• An easy to use accounting system that ensures you’re your management accounts will give you the information you need to manage, control and drive your small business
• Full training on-line of how to use Squeeze and how to make your accounting fun and easy to use
• A system to ensure that you control your cash and bank balances on line
• A fully integrated system that ensures production of your year-end statutory accounts and related tax returns, filed when you are happy and fully informed
• Help along the way as Squeeze can see, support and advise you when things go a little off-piste
• The piece of mind of never having to worry that you are going to be late with filing at Companies House or HMRC
• If you choose, all of this without the need to see an accountant
• Access to advice for accounts, tax, finance and business with our fully qualified UK based accountants, if you want further support and help

How can accounting be fun?
Squeeze has prepared detailed training videos to walk you through every step.  We have also worked closely with Sage to ensure that they book-keeping system is simple and easy to use and help is available throughout the whole process from raising an invoice through to paying a bill and seeing how you are doing.  There is no mystique or jargon and the whole purpose of Squeeze is to ensure that you are in control.

Further support if needed
You do not have to be alone, as you will have access to a helpline to speak to fully qualified UK based accountants.

If you are looking for further help with your business to grow, arrange finance, seek further help with tax or wealth management matters, the Squeeze helpline will point you in the right direction and help you with those areas as well.

Who is it aimed for
The simple answer is any small business whether you are a sole-trader, sub-contractor, consultant, retailer or small businesses employing up to 20 or more employees, Squeeze will provide your business with a full accounting system and support to allow you to manage and drive your business, without the hassle or costs that other business face.

Established Operating Businesses
If you are an already established and operating small business, it is very straightforward to transfer over your opening position into Squeeze and then start to benefit from the control and low cost that Squeeze offers.  Just call us now, sign up and Squeeze will talk you through what is needed.  And yes, Sage One also deals with payroll so this is also integrated into the Squeezeonline system.

But I’m married to the Book-keeper
This is not a problem as you do not need to get a divorce or separate.  If you are either married to your book-keeper or they are life-long friends who you want to retain, Squeeze gives them the power and control they have not previously had.

Does Sage One sort it all
Sage One provides the general book-keeping and management accounts, but it does not provide your year-end accounts and tax returns.  You will still have to arrange for an accountant to complete those.  Squeeze provides the full service with access to qualified accountants when you need one.

The cost that seals the deal
Squeeze is incredibly cost effective, as it brings together a robust, up to date accounting system that provides online backup and storage with year-end accounts and tax computations filing and maintenance for one very low monthly fee.  Software licence, online systems, year-end statutory accounts, year-end tax returns, and if you need it, payroll together with full back-up security for all files, all for one monthly fee.

From reviews carried out by Squeeze, we know that the system provides the most cost-effective support that is available today.   

It is made easy for you
Squeeze has been made to be easy, cost effective but incredibly powerful to put all of your accounts and tax systems in one area in order to put you in control.

Together with Sage One, system and operational support is available 24/7 and qualified accountants are on-hand to help as well.

The view from Squeeze is not why would any small business look to use the Squeeze system, but really why would any small business continue to waste money on other methods or expensive accountants and still not benefit from the control and power that Squeeze offers.

Check out how to Squeeze

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Another Finance Director Area ……. Controlling Risk and How We Can Help:

Another Finance Director Area ……. Controlling Risk and How We Can Help

For the full time or part time professional finance director, risk is an area that sits firmly under their jurisdiction, mainly as an FD possesses the analytical skills and wherewithal to be able to identify, evaluate and manage this area, but also sometimes because the business owner or other directors cannot face dealing with such an area.  For FDs and special project managers, the risk register and risk management is part of the skills tool kit.

See “How an FD drives a business when sometimes Accountants are just catching up”: http://wp.me/pQyUg-j

What is Risk

Risk, according to Wikipedia, is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss.  Risk management is therefore a matter for every organisation. For those who have been involved in any substantial grant application, or collaboration agreement or even a new business tender, a risk register identifying the risks that the project will go off course and what steps are in place to bring it back in line is common.

Risk management, therefore, is seen as the process of identifying, assessing and taking appropriate positive steps to either eliminate or reduce the key risks faced by an organisation where it is practical and cost effective to do so. This is important as we are considering real potential events and real potential losses.  Thus, proportionate arrangements can (and really should) be put in place by all organisations to minimise the probability and impact of the risks they face – or to deal with the consequences if an external risk cannot be fully controlled or eliminated.

Risk management therefore presents numerous challenges as it reflects the inevitable fact that assets, processes and people can and probably will fail or can be damaged by external events. This in turn can lead to consequences that are unplanned, unwanted and costly to rectify. At the extreme, disasters can happen and business will be tested with their disaster recovery procedures, which are the extreme areas of risk management, but most can recognise the positive outcomes from those businesses who have put in place a robust disaster recovery plan and those that went from bad to worse and even closure as their recovery plan proved not so robust.

A key component of risk is what can be termed Operational risk. Clearly this affects all businesses and relates to those elements that fall within an organisation’s commercial operations. These can often include:

• Process and procedural robustness and integrity including legality and compliance with legislation, both general and industry specific
• Staff, skills, training and documentation
• Specific insurance and self-insurance
• Supply chain, outsourcing and inherited risk
• Infrastructure, systems and telecommunications
• Physical and information security

Risk has two main components; impact and probability. Impact is a reflection of the loss or discomfort that may be caused by an event. Probability (or likelihood) is an indication of how often we can expect a particular event to occur. Taken together, they give an indication of our exposure to risk or how much we can expect to suffer as a result of unwanted or unplanned events. If we picture this on a graph of cost and likelihood, actions that sit in the high cost and relatively high likelihood area are ones that need to be seriously addressed and controlled.

As our understanding of risk management increases, so does the expectation and requirement for organisations to adopt appropriate policies, strategies, training and documentation. A well thought-out risk management plan is critical to the well-being and continuity of an organisation.   Any board of directors for a larger business will ensure that this plan is high priority for delivery and maintenance.

Help with a risk management strategy

A full-time finance director can help manage this area, but those organisations without a full-time finance director, we can help provide this support as part of our Finance Director Services. We can help you prepare a risk management strategy, with relevant supporting policies to cover:

• Your staff and training
• Your data, computers and information systems
• Your internal control processes and procedures
• Your corporate integrity and security
• Your risk appreciation
• A risk register and control documentation

Why do you need help with a risk management strategy

• You know that you need advice generally on all areas of risk, and its management, that could affect your organisation
• You want to help embrace and include risk management within the organisation

• You know that you need help to develop key strategies and processes to manage risk
• You want to review and refresh your existing approach to risk management
• You want to improve the knowledge of risk management amongst your staff
• You need to comply with statutory and/or best practice requirements in your industry

Bespoke Training

If a risk management strategy is to be truly successful, organisations must embrace a risk management philosophy at every level. As organisations grow and risks start to be managed at departmental and divisional levels, it is critical that all those involved in the process are fully trained and aware of what is expected of them.

As full time Finance Directors, those in our firm that have developed our risk management service and help our clients with risk policies, have managed this area within an organisation and we have developed this crucial service for our clients. This can vary from small practical workshops and seminars to larger scale training events. It is generally aimed at senior management, non-executives and middle managers to help them understand the process and embed effective risk management philosophies throughout their operations. However, we will tailor our training to meet the specific bespoke needs of your organisation and this can be targeted at any level of staff you feel is appropriate.

Why would you need training support

• You want help in embedding a risk management culture within the organisation
• You want your managers and staff to have a better general understanding of risk management
• You want your staff to understand the organisations’ processes to manage risk
• You want to start devolving risks and managing them at departmental level and need some help to implement this

Risk management is critical to the success and continuity of a business and all business, whether small or large must consider and manage risk that is relevant to them and in a way that is both practical and cost effective to them.  Whether you are submitting a new work tender or a grant application, businesses are expected to be able to identify, articulate and demonstrate that they understand and control the risks that they face within their trading environment.  We utilise and combine our skills as former finance directors, managing risk in those business in which we worked within together with our knowledge and wide ranging experience of dealing with a large variety of businesses over our careers, to be able to really help you, our clients and potential clients.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.