Steven Mugglestone

The more I learn, the less I know

Posts Tagged ‘Business Advisors

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

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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.

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.

T: 0845 519 5659                T: 0121 236 3317

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


Written by Steven Mugglestone

February 24, 2012 at 11:37 am

Independent Accountants, McGregors Corporate open in Leicester

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Independent Accountants, McGregors Corporate open in Leicester

McGregors Corporate, who are an independent firm of Chartered Accountants, Finance Directors and Business Advisers have started to operate in Leicester, with an office in New Walk.

McGregors, currently operate from offices in Birmingham, Nottingham, Mansfield and Lincoln, have a mixed partnership made up of senior directors and partners from large national and smaller mid- tier accountancy firms, together with partners with industry experience as finance directors.  They also contribute and are members of Probiz Tax Solutions, who both sponsor and have Leicestershire cricket captain, Mathew Hoggard, as their local ambassador and promoter.

Steven Mugglestone, the partner responsible for the development of the Leicester practise, who had worked in Leicester for many years and still lives with his family in the city, said, “I am very keen and excited about working within the Leicester business community again and opening a presence in Leicester.

Establishing a presence in the city had become a natural progression as we have been working with more clients in the Leicester area.  We have a number of projects that we are also currently putting together, including a business growth forum, within Leicester and we have been working with other Leicester professional advisers, Bray and Bray Solicitors and Precept Optimum Performance to launch that additional support later this year as well.”

McGregors describe themselves as Entrepreneurial Chartered Accountants, as they work with growing owner managed businesses, helping businesses with accountancy, finance, tax and general business strategic planning.  Steven Mugglestone continued, “I think that we are seeing a different new breed of business accountant and adviser and hopefully more choice.  There is a lot of change in the accountancy world.  We are building an independent partner lead practice, with over half of our partners, including myself, coming from larger corporate and commercial backgrounds, at a time when many of the older established independents have looked to being acquired by the national firms and franchises.  We are keen to highlight our varied skills, experience and backgrounds to be able to offer SME businesses a real alternative to the more expensive big names and perhaps the less innovative and experienced smaller firms.  Our experience as Finance Directors working within growing businesses is also proving to be successful with our clients and is really adding to their success and improving our working relationships with them.  Our message is simple, in that local SME businesses do not have to face the high fees and costs of large national firms to have access to the same service, advice and experienced staff.”

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.

T: 0845 519 5659
47 New Walk

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

Written by Steven Mugglestone

January 20, 2012 at 12:48 pm

Family Trusts making way for Family Investment Companies

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Family Trusts making way for Family Investment Companies

After the changes to the taxation of trusts in recent years, family businesses and any planning for succession should consider all the viable options for family wealth and succession planning including alternatives to trusts.

Changes to taxation for trusts

Trusts have traditionally been a basis of family wealth and inheritance tax (IHT) planning, offering wealthy individuals and families the chance to pass assets down generations in a tax-efficient manner.

In recent years, however, there have been significant changes to the taxation of trusts, making them a much less efficient route.  The key points are as follows:

  • The highest rates of income tax and capital gains tax currently apply to most trusts (50% and 28% respectively)
  • Gifts made by individuals to nearly all new trusts will trigger a 20% upfront IHT charge, after the donor’s nil-rate band or IHT threshold has been exceeded.
  • Most trusts fall into the relevant property regime, which means that IHT charges at up to 6% on the value of the trust less reliefs are suffered every 10 years and when assets are disposed.

Trusts still, however, remain popular as they allow individuals to pass wealth down generations without providing access to it at too young an age, and they allow for changes in beneficiaries’ entitlements under the trust without triggering tax charges.

When trust work

Key issues in using UK trusts tax-efficiently is to fund the trust without triggering the immediate 20% IHT charge by considering the following:

  • An individual can gift up to £325,000 (current nil rate band) into a trust every seven years.
  • Excess income can be gifted into trust.
  • Assets qualifying for business property or agricultural property reliefs can be transferred to trust, enabling significant value to pass into trust. This may not reduce the immediate IHT charge to nil unless the asset qualifies for 100% relief on the whole value.
  • Reversionary interest trusts can be used to pass significant sums into trust without an IHT charge, although there is risk to this planning as it seeks to circumvent the legislation.

With these options, UK trusts are likely to remain a key tool in wealth planning. However, there are individuals and families for whom the above options are not available or sufficient to deal with the assets they wish to shelter from IHT.

The alternative to trusts

Current alternative to trusts are, for example, structures like Family Limited Partnership (FLP) or Family Investment Company (FIC).

FIC is simply a private company whose shareholders are members of the same family, and whose memorandum and articles of association can also be drafted to suit the family’s needs.

Similar to a trust, this enables the founder to retain control over family investments, but FICs do not suffer the 20% entry charge or six per cent 10-yearly inheritance tax (IHT) charges applicable to trusts.

Estate planning

In terms of estate planning, FICs have some attractive features.

  • No immediate IHT charges on transfer of property to the FIC, and no on-going 10-yearly IHT charges.
  • Gifts of shares in the FIC to other family members fall outside of the IHT net (providing the donor survives seven years).
  • The donor can gift shares in the FIC up to the value of the available nil rate band into trust without triggering an immediate IHT charge.
  • A share class can be created into which future growth in value of the FIC passes, and these shares can be gifted to a trust or an individual with minimal tax charges.
  • If the donor holds shares on death, IHT will be payable, but the value of the shareholding is discounted to reflect its relative size (for example, minority shareholdings often attract significant discounts).  It is possible, in certain circumstances that no IHT is payable on death.

Tax within the FIC

The FIC is subject to corporation tax – currently a maximum of 26%, falling to 23% by April 2014 – (payable on income and capital gains generally). This tax charge can be mitigated to varying degrees by the fact that UK and most overseas dividends will not be taxable within the FIC, and it will also benefit from an indexation allowance on gains, meaning that only returns above the level of inflation will be taxed.

If profits are to be accumulated within the company, this makes FICs very attractive, as the rate of 26% or less compares favourably with personal and trust income tax rates of up to 50%.

There are two main disadvantages of a FIC from a tax perspective.

  • If capital assets, as opposed to cash, are transferred to the FIC then there may be a capital gains tax (CGT) charge on the transfer, although there are various ways in which this charge might be mitigated and specialist advice should be taken.
  • There is a double tax charge when profits are extracted by shareholders, who may pay further tax of up to 36.11% on dividends – this can be mitigated to some extent


While not offering the same degree of flexibility as a trust, FICs are nevertheless a credible vehicle for holding and passing down family wealth where the 20% trust entry charge cannot be avoided, or in circumstances where it is anticipated that profits are likely to be reinvested within the structure.

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.

T: 0845 519 5659                T: 0121 236 3317

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

Written by Steven Mugglestone

December 5, 2011 at 10:29 am

Tax Planning Newsletter Autumn 2011

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Autumn 2011 – McGregors Tax Planning Newsletter

Click for a copy:

Current Hot Topics

  • Tax efficient profit extraction
  • Tax efficient monthly directors’/partners’ remuneration
  • Use of pension money
  • Commercial property tax relief


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.

T: 0845 519 5659                T: 0121 236 3317

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

Written by Steven Mugglestone

November 25, 2011 at 9:10 am

Location, Location, Location, Cost, Cost, Cost, Service, Service, Service

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Location, Location, Location, Cost, Cost, Cost, Service, Service, Service

As any business should, we are constantly reviewing what is important to our current and future customers (yes, we are a business and yes, we have customers; we sell services and products; and yes they are also our clients as we have a professional responsibility to do what is best for them and to represent them to the professional standards that we have been trained to meet).  Customers and clients are not mutually exclusive, you ensure the best possible service to your customers and you will do the same for your clients.  Many accountants shy away from this, constantly referring to their clients, trying to disguise the simple fact that we are also in a business, our clients are also our customers.

From our research and understanding we have simplified the key issues facing our customers, when they look to choose an accountant and adviser down to three, location, cost and service.

Location, location, location

Some businesses only sell to their local market.  Most businesses look to sell to their local market and beyond.  Many businesses look to sell throughout this country and beyond, and in respect of Virgin Galactic well, it starts to go further than that.

Whilst most businesses look for customers across a wider geographical spread and are happy to travel themselves, they will look to choose an accountant within a mile or so of their offices.  Why, when the accountant and their staff can travel and we live in a world where communication is almost instant.  I remember a time, not so long ago, when documents and plans being drafted were sent by post and returned with manual mark-up changes.  This is now instant, technology has moved on.  We are moving to the provision of monthly online accounting for clients as well as keeping up with the online filing with HMRC and Companies House.

A business does not have to walk around to their accountants office to discuss a problem, depending on an accountant’s approach to email, you are likely to get better value from your accountant by emailing your query and getting a written response, rather than exchanging niceties face to face or over the phone which, unless you have a fixed fee arrangement, you would be paying for under the traditional/old fashioned hourly charging basis of many practices.

An accountant who is available via email can give a more considered answer to your question and provide links to useful resources. There are also very few queries which need an instant response.

You may also consider whether your accountant needs to be local at all. Do you really need to have a regular face to face meeting? Do you value having a local accountant over the distant, competent/specialist, cost effective accountant? Perhaps there is a middle ground, literally as we generally help clients within the Midlands region of the larger West Midlands/Birmingham area, Nottinghamshire, Leicestershire and Lincolnshire.  All of this is achieved within an hour’s drive from one of our offices.

In over 20 years in practice, I find that a client/customer face to face meeting is becoming less and less necessary, although we very much have appropriate meetings with clients directly as part of our key planning process to ensure that we are still providing our client with the most appropriate advice and service. Correspondence is generally via email and telephone. Queries/advice are usually emailed and read/answered at each other’s convenience which is more efficient than leaving messages for each other to call back and also the questions/answers are more focussed.  Meetings are still held to discuss key issues and for periodic updates, but these should be focussed to achieve an appropriate outcome for both parties.

Some accountants will “sell” location, but just because they have an office on your doorstep does not mean that they will provide you with the most appropriate service and advice and at the most appropriate cost to you.

Some accountants and auditors actually seek to perpetuate the myth that location is vital by seeking to send their staff to a client’s premises to spend longer than is actually necessary.  For those out of the audit profession, most audits can be split into equal thirds of time; a third planning, whereby information is gathered and key issues are identified; a third fieldwork, whereby the audit testing is carried out; and a third completion, when reports of key issues and treatment and checklists are completed.  Only the fieldwork requires staff to actually be at a client’s premises, and then not for all of that time either.  Some accountants actually encourage their staff to spend longer at the client’s (customers’) premises than is necessary to make it look as if significant time is being spent, when mostly the client’s staff could do without the auditors being there for longer than is necessary.  We are honest enough to explain that to our client’s the process and will only spend the appropriate time at the client’s premises.  If the managing director wants us to be there longer as they see the visibility of the auditors as important then we will, but this will done as part of an honest discussion around what is actually required.

Cost, Cost, Cost

Interesting one, and a key issue that many accountants really do shy away from, when many other businesses have to transparent and open.

The key issue is that many accountants continue to use an outdated (Victorian) business model for their own business.  They charge by the hour (usually by 6 minute units) and continue to do so for whatever they do, and some firms 6 minute rates can be quite high (let alone an hour).

There is a different model and certainly one that we adhere to.  General compliance work (i.e. the stuff that has to be done for legal/tax reasons, the accounts, audit and tax returns) is a commodity product and can be set at a fixed price and this price does not need to use high charge out rates with partners charging even higher rates for their minimal input.  The majority of this work is process driven and costs can be kept low.  Many SME businesses pay far too much for this work.

A separate area of service is where you can actually make a different to a business; save them tax; reduce their costs; increase their profits; grow their business or find them finance.  Again, is an hourly rate appropriate?  We do not think so and will always look for the fee/cost to the customer to reflect the VALUE of the work done and SAVINGS or IMPROVEMENTS that we have achieved.  Surely this is WIN/WIN in the game theory rules of business.  A dark art, I do not think so, but honest and open business.

Service, Service, Service

“You pays your money and you takes your choice,” well, sometimes.  Service covers a multitude of areas, including, but not exclusively being polite and acting quickly for your customers.  Most clients/customers use the term Pro-active, when asked what it is they are looking for from a client.  To be pro-active, you have to offer a wide range of services to a client and understand where the client is going, where they are now and what are their aspirations and goals.  You also have to care; none of this is about completing accounts that are six months or more out of date.

We believe that to provide great service for all SME businesses there are number of key factors:

  • A partner lead service from an experienced, approachable and positive business professional
    (many accountants can either sit in ivory towers or just do not have the drive or experience)
  • The ability to grow and drive a business with the skills of a commercial Finance Director,
    (most accountants have never worked within a business or part of a business at all, yet claim to be business advisers and specialists)
  • The provision of strategic marketing and sales opportunities to grow a business organically
    (most accountants do not understand marketing and shy away from this crucial support)
  • The control and reporting skills for a business with the skills of experienced auditors
    (most small and mid-tier accountants, have never been part of large complex auditing or accounts assignments, and larger firms can cost…..a lot!)
  • Obtain finance to ensure your business continues to grow
    (corporate finance is still a crucial part of a business success and requires experienced and “well-connected” professionals to deliver appropriate funding)
  • Provision of innovative tax saving structures with the support of imaginative tax specialists
    (large firms sell their own “products” under the heading of advice, small firms tend to hide under a rock, but tax planning is still very crucial and strategies and planning opportunities change as often as tax laws do….. tax laws change as the tax planning proves to be effective and legal.  Some people claim that these are loopholes, when actually it is the law)
  • Control and reduce your costs with utility, insurance and other key supplies associates
    (in today’s climate cost control is vital, and this includes your audit, accounts and tax compliance costs as well, but find an accountant who can source other cost reduction reviews, as part of my first FD position, we reviewed, re-modelled and re-tendered out all main costs, having fully understood what usage we faced .… and this included the audit)
  • Innovative structures to protect and grow your wealth
    (never have an IFA/wealth management specialist provide support without being part of an accountant team, they need to work together)
  • To maximise your wealth and value of your business when the right times comes for you to sell or retire or pass on your business to your family
    (experience, experience, experience and the skills of an FD to really groom your business for sale)
  • Pass the barbecue test.  I spent some time with a UK wide group of FDs and after all the experience and qualifications part of the recruitment process, the final part of the recruitment procedure was whether you were a person who you actually wanted to spend time with, have a drink with at a bar or barbecue, someone interesting and with personality.
    (ACCOUNTANTS/AUDITORS …… enough said!)
  • All of this should be provided with a smile on their face and with real positive attitude and energy.  Their aim is to improve your business and personal situation and their attitude and drive to do this should shine through.

Get yourself the right accountant today and you will not be repeating this process for years at a time, but also do not be afraid to get a check-up and re-tender a service proposal to find out what else is out there.  Accountancy firms change; some get better; some get lazy; some get more expensive and some never had it in the first place.  Better yet, you will save yourself tons of time and money in the long run, and you will have a new trusted partner to bounce ideas off of down the road.

A Final Joke

A newly qualified chartered accountant applies for a job advertised in the Times.  He is interviewed by the owner of a small business who has built it up from scratch.

“I need a qualified accountant,” says the man, “but mainly I’m looking for someone to do my worrying for me.”  “How do you mean?” says the accountant.  “I have lots of things to worry about, but I want someone else to worry about money matters.”

“OK,” says the accountant. “How much are you offering?” “You can start on sixty thousand,” says the owner. “Sixty thousand pounds?” exclaims the accountant, “How can a business like this afford
to pay so much?”

“That,” says the man “is your first worry.”

Steven Mugglestone BA FCA,
West Midlands Area Director and 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.

T: 0845 519 5659
T: 0121 236 3317

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

14 Questions to ask your Accountant

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Trying to compare anything can be difficult, but when it comes to your business and personal finances, you need to make sure that you have made the right choice.

An Accountant can save you a lot of time and money, which you may needlessly spend on the Taxman. But, more than that, a good Accountant can oblige you, for your own benefit, to face up to issues which you may otherwise have been tempted to ignore. A good Accountant can provide solutions to help your business succeed.  That’s another reason to find one you like.

Whatever you do, ensure that you interview several. You can start by asking family, friends or colleagues if they know of a good Accountant. Failing this, you will also find lots of ads on the Internet, in Yellow Pages, or in your local newspaper. Never forget though; a personal recommendation from someone you trust carries a lot more weight than an ad from someone you’ve never heard of.

It is vital that your Accountant understands all of your goals; short, medium and long-term, so outline any ideas or dreams you have for the future. For example, if you are planning to buy new office premises, or set up a new company in the near future, make sure you say so. The reason for this is that your Accountant may be able to save you a lot of money. They may also have good advice to offer based on previous experiences of other clients and if you are lucky they may have work for other accountancy businesses or as a Finance Director within a business and so can bring a wealth of experience to you.

So; let’s get to the point of this post; I want to help you choose your Accountant, and to do that, I am going to give you 14 questions that you should ask before you hire.

Question 1) What are your professional qualifications?

Astonishingly, anyone can call themselves an Accountant. Accountancy is not like being a Doctor; to call yourself an Accountant, you do not have to have any qualifications. Only consider an Accountant with a recognised professional qualification, such as the Institute of Chartered Accountants in England and Wales or a Chartered Tax Adviser. At the very least, this gives you some protection or an avenue for complaints if needed.

Question 2) Can I speak to a couple of your Clients about you?

Ask the Accountant if you can speak to someone in a similar position to yourself. When you speak to this Client, you want to know things like how reliable, prompt and proactive your potential Accountant has been; whether they explain things clearly, seem good value for money, and have produced any good ideas. Keep in mind though; you are only likely to get the names of friendly Clients!

Question 3) Who will be my point of contact?

Make sure you meet the person who will be dealing with your work. It is important to ensure that you can establish a good working relationship, as you will be in contact with them regularly. If more than one person will be involved with you, ask to meet the others,

Question 4)  Can I visit your office?

This should help you judge the quality, nature and scope of the Accountant’s practice. Be wary of an Accountant working from serviced offices or their offices are very run-down. Then again, you should enquire closely about the fees of someone with conspicuously lavish premises!

Question 5)  How long have you been in business?

Unless your affairs are very simple, you need someone with experience. Don’t just take their word for it; make sure you ask for evidence.

Question 6)  How many directors are there in your practice? And other employees?

If you employ a one-man band, there will obviously be problems when illness occurs or they take holiday at a time when you need help. Also, there could be problems at the busiest times of the year, like January, when many Self Assessment returns have to be submitted. Check if there are other people around to help. Solo operators may well also lack easy access to expertise in specialist areas, such as VAT, PAYE, Capital Gains Tax and Inheritance Tax planning and Corporate Finance if that’s what you need.

Question 7) Can I see a portfolio of your work for Clients?

An Accountant cannot give you detailed information on other Clients for confidentiality reasons. If you ask in advance, however, it’s not difficult for them to prepare a case study, but black out the confidential details as well. You should be looking for someone who is regularly dealing with other Clients that are in the same position as yourself. This is important because you want to make sure that they are accustomed and experienced in dealing with someone like yourself. For instance, there is a big difference in the sort of work the Accountant needs to do for an actor, with fluctuating income, and an employee, with a steady, constant income, or a retiree who is living off their pension and investments. Finding an Accountant who already works with Clients in a similar position will save you a lot of explanation and should stop your Accountant having to learn at your expense.

Question 8)  Do you have specialist knowledge of areas which are important to me, or do you have in-house specialists?

If you have complex problems, ensure that there is someone in the company who specialises in dealing with them. It’s no good employing an Accountant to help you simplify your financial matters if they don’t know what to do about them either!

Question 9) What is your fee structure?

Accountancy can be split into two different types of work. The first is compliance; work like filling out a tax return, which can usually be done by someone quite junior. The second is giving more sophisticated advice, which can only come from an experienced director. If you want the latter, you shouldn’t have to pay them high rates for merely filling out a tax return for you, which a junior could do. Therefore, check that the work is handled, from your point of view, cost effectively.

You want your costs to be as controlled as possible, so find out if a fixed fee is available for compliance work, as the more sophisticated advice will more likely be charged by the hour.

Question 10) How far does your advice extend when it comes to investment?

By law, an Accountant can only give you a certain amount of investment advice unless they are registered with the FSA(Financial Services Authority) as an IFA (Independent Financial Adviser). However, your Accountant should either have an IFA in-house, or be able to recommend one.

Question 11) How pro-active are you?

Ask for some examples of how your prospective accountant has made pro-active suggestions to Clients, beyond the routine requirements of what was asked for. You want an Accountant who’s going to walk that extra mile, not sit and wait for a bus.

Question 12) How accessible are you?

Ask how long it usually takes for your Accountant to respond to emails, telephone messages, a letter, etc. If you need urgent help suddenly, having your Accountant available on a mobile or via email can be essential. Ask if this is available – but find out if you will be charged for having a short conversation or reading an email.

Question 13) I am thinking of starting a business, can you help me?

A good Accountant should be like a business adviser; analysing problems and offering solutions, helping with advice on financial management, cashflow forecasting, etc. They should always be on the look-out for new ideas and innovations that can grow your business.

Question 14) How many Clients do you have?

While they may not tell you the exact number, it is important to have a rough knowledge. The reason being for this is that if you ever urgently need help, or your tax return is going to be late, in a big company, your work could be near the bottom of the pile. In a smaller company, however, there will be less work, and therefore should be completed quicker.

To find out how we can help all SME businesses with this real pro-active support, experience and background or to even help you source a part time FD for your business, feel free to contact me at or call me on 0121 236 3317.

Written by Steven Mugglestone

April 13, 2010 at 11:32 am

How an FD drives a business when sometimes Accountants are just catching up

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How an FD drives a business when sometimes Accountants are just catching up?

Recent debates and criticism from Finance Directors say that Accountants generally do not have the commercial skills required to truly help, support and drive a business.  What does that mean; when a significant number of FDs go on to be chief executives, could you see your Accountant doing the same.  What are the skills and experience that an FD possesses, that an Accountant does not and how can those skills and experience help all businesses.

Most FDs work within a structure of their role covering how a business operates and where it is going and this can be looked at within three distinct areas, support, operational and strategic.

Support Areas

This covers some of the traditional areas that you would expect an Accountant to be responsible for, but an FD may have a differing approach to improve and support the business.

Compliance reporting is one of those areas and whilst this ensures that a company is up to date and complies with its statutory requirements to file its accounts and tax returns, an FD will also ensure that the messages within those financial statements are firmly within the company’s strategic vision and missions and that those financial statements reinforce publicly where the business is heading.

An FD will also be responsible for tax planning and overall dealings with HMRC, on an annual basis.  Whist an FD may not be a tax expert, they will ensure that tax costs are mitigated and planned for and sensible structures are in place to ensure that all relevant reliefs and tax breaks are made available to help the business, and individuals involved in the business to manage its tax costs.  As part of this, an FD will assess the risks involved to ensure that overall risks are managed in line with the strategic plan of the business.

As part of a support role, an FD usually gets responsibility for the areas that the other directors do not wish to touch.  These are usually HR, IT and insurance (part of risk control and mitigation).  Whilst larger organisations may well have separate staff and departments (usually reporting back to the FD), in a smaller organisation and business an FD is likely to outsource these and other similar areas.  Outsourcing allows an FD to ensure that the relevant risks involved in these areas are controlled and mitigated and that costs are also controlled.  However, despite being an Accountant by training, costs are not the only reason why outsourcing is considered as the risk profile and support afforded by the outsourced provided may well be more beneficial than trying to carry this out in house.

Again an area that other directors or the owner of the business may have little interest or desire to be responsible, albeit an area key to the success of a business is dealing with legal documents and agreements.  Whilst an FD is not a lawyer, they do understand what reasonable terms and conditions would include and what clauses should be in an agreement and what should be avoided or mitigated.  An FD will liaise closely with the businesses legal advisers (outsourced) to ensure that commercial matters are reviewed and considered in all of the legal agreements that the business adopts.

Operational Areas

Again this would appear to be a traditional area that an Accountant would operate within to help support a business, but an FD will have a different emphasis to ensure that the operational areas truly help to improve a business.

An Auditor and Accountant will carry out tests and comment on procedures and reporting known as internal control.  An FD sees this area as controlled delegation, the difference being that the appropriate structures and controls are put in place to allow senior members of the business to concentrate and be allowed to carry out roles that they are good at and that are crucial to the improvement of the business.  As an example, if the key director is also a key sales person, they should not be spending their time writing brochures, catalogues or processing orders, but they need to be comfortable that those areas can be carried out to the appropriate standard without them.

A real traditional area is reporting, but an FD will always ensure that the reporting format and what is reported is not about dwelling on the past but ensuring that appropriate areas are planned for and controlled.  The term key performance indicators tend to be over used but an FD will always look to simplify the reporting to concentrate on key areas that really matter and these may not always be financial.  An FD will use budgeting as a control tool for reporting, but will also use benchmarking against best performance within the business and external to the business.  This is not done to dwell on the facts that the business is performing better or worse than others in a particular area, but to understand the reasons and address accordingly.  Sometimes you find that your competitors carry out some things better than you and if you can address these areas you can make a difference to the bottom line.

The use of benchmarking, budgeting and using key performance indicators by an FD will lead to identifying profit improvement, ensuring that operational reporting is used to enhance the earnings of a business.  An FD will usually be responsible for negotiating and agreeing many of the businesses supply and service contracts.  This will mean that they will look to consider all relevant factors, model usage accordingly and ensure that competitive tenders can provide what the business needs.

Profit is one thing, but cash is king.  Businesses do not go bust because of profits, but because they run out of cash.  An FD will always be responsible for working capital and cash management.  The maths in this area is relatively simple in that with high stocks, work in progress and debtors with low creditors comes a strain on cash.  An FD will control this area on a rolling weekly basis and on some occasions and with some businesses this will be done on a daily basis, to free up cash for use in the business.

Strategic Areas

This is an area that perhaps a traditional Accountant does not readily engage with or is involved in.  An FD will have knowledge and experience of an overall strategic plan which covers customer and marketing strategies, systems and processes and people development, but whilst overlapping, an FD will concentrate on the financial areas that underpin a strategic plan.

But what is strategic activity and how can it be defined.  An FD will lead defining strategic investment and activity.  This will mean assessing where a business is going to channel its resources to improve;  an FD will ensure that investments in both capital and human resource, marketing or other activities together with other related improvements and new areas that they are undertaking have a reason and a goal and that these are appropriately considered taking account of strengths and opportunities.  The costs and impact on the business can be measured and the future impact forecasted.  An FD is ideally placed and qualified to ensure that strategic activities are appropriately considered, planned, assessed and monitored and along the way they can add to the creative and entrepreneurial flair gained from the experience in this area.

An FD would not be an FD without considering risk.  All project management and strategic plans will contain a risk register.  Full consideration of both financial and commercial risks involved in all activities are considered and recorded and appropriate mitigation and insurance will be put in place.

All businesses should consider a time plan and an FD will ensure that an appropriate implementation timetable is considered and worked to.  This may be in respect of a specific area or the overall plan for the business leading to eventual exit by sale, or perhaps listing on a recognised market.

Underpinning a strategic plan is an appropriate funding structure.  The businesses own cash generation may not be appropriate to fund longer term investments and in return some higher risk areas may not attract bank or similar funding.  An FD will ensure that funding is appropriate for both the timescale and risks related to the business’ activities and strategic plan.  An obvious key area underpinning funding for a business is the relationship with current and potential future funders.  An FD is key to this relationship, whether banking, private equity or institutional as they understand what information is required and help to ensure that funders are comfortable with the current position of the business and its future aims, goals and requirements.

In summary an FD is not just an Accountant and some of the areas above highlight what FDs mean when they say that Accountants do not have the commercial skills and experience required to add real value to a business.  Some of their roles, including controlling delegation and support areas ensure that other members of the senior management team or the business owner are allowed to concentrate on other areas to enhance the business.  Other roles and functions such as reporting, profit improvement and cash management ensure that that the business can continue to improve cash generation which leads to cash being made available to support the strategic goals of the business.

Given all of this that an FD can offer a business, the only remaining question is why would you just use an Accountant when you can have an FD.

To find out how we can help all SME businesses with this real pro-active support, experience and background or to help you source a part time FD for your business, feel free to contact me at or call me on 0121 236 3317.

Steven Mugglestone BA FCA,
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.

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