Steven Mugglestone

The more I learn, the less I know

Posts Tagged ‘West Midlands

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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 16, 2011 at 9:11 pm

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.

Does your Accountant really have the Ability and Experience to Help Grow Your Business?

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Does your Accountant really have the Ability and Experience to Help Grow Your Business?

And we mean really helping your business grow …….

Ask yourself the question; what should a business look for in an Accountant and Business Adviser to provide your business the advice and support it needs to really grow and prosper?

McGregors Corporate can provide the answer and the real difference, Ability and Experience, delivered by innovative and very approachable finance professionals: Ability and experience ….

  • …. to grow and drive your business with the skills of a commercial Finance Director
  • …. to provide strategic marketing and sales opportunities to grow your business organically
  • …. to control and report your business with the skills of commercial auditors
  • …. to obtain finance to ensure your business continues to grow
  • …. to provide innovative tax saving structures with the skills of imaginative tax specialists
  • …. to control and reduce your costs with utility, insurance and other key supplies associates
  • …. to provide innovative structures to protect and grow your wealth with commercial wealth management specialists
  • …. to maximise your wealth and value of your business when the right times comes for you to sell or retire
  • .… and we hope you will enjoy our company over a drink or two,….even if it’s only a coffee.

Our principals’ backgrounds and experience include many years with international accountancy practices and as commercial financial directors.  We have helped start and build businesses; raise funds from banks, private equity and stock exchange.  We have re-structured and re-launched businesses and helped turn around businesses facing trading issues and we have helped business owners maximise the value of their business when the time is right to sell.

Our aim is to provide the quality, experience and range of service of an international firm at the cost of a local practice, all delivered by really nice people.  With McGregors Corporate, our Ability and Experience will prove to be the real difference.

Ask yourself again, does your accountant really have the Ability and Experience to help grow your business?

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.

T: 0845 519 5659
T: 0121 236 3317

Recruitment is Like Choosing an Accountant, it’s no Joke!

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Recruitment is Like Choosing an Accountant, it’s no Joke!

A man has died and is standing at the gates of heaven in front of Saint Peter.  He moves forward and Saint Peter welcomes him to the gates of heaven and tells him that he is a chosen one, someone who has lead an exemplary life, someone who has contributed so much to the world when alive that on his death he is now able to choose whether he would like to spend the rest of eternity in heaven or hell.

“But how will I be able to decide,” the man says.

“Well,” says Saint Peter, “I will grant you a day in each, for you to see which one suits you, but remember, when you come back to me, you must decide and your decision will last for ever.”

“OK,” says the man, “that sounds fine, where do I go first.” “Your choice,” replies Saint Peter.

“Fine, I’ll try hell.”  At that moment a lift door opens and the man walks in, waits for the lift to arrive at its destination and walks out into a beautiful Caribbean beach setting with a beach party, music and groups of beautiful people dancing and having a fantastic time.  The man stood admiring the scene, when the devil walks past with two beautiful bikini clad women on each arm.  The devil stops in front of the man and asks the two women to look after the man for the day.  Needless to say, he has a great time.

On returning to the lift at the start of the second day, the man enters heaven. Heaven is serene, quite, with the gentle sound of angels singing, but, the man thinks, generally boring.

After the second day, the man returns to the gates of heaven, for Saint Peter to stand in front of him and ask, “Well, you have seen both heaven and hell and you have experienced what they both have to offer, you now must decide, but remember your decision will be eternity, for ever.”

“I have made up my mind,” says the man. “Are you sure?” says Saint Peter, “As I said, this decision will be for eternity, there will be no going back.”

“Yes,” says the man.  “Where is it to be then,” replies Saint Peter.  “I want to go to hell. This is my decision.”

On that, the lift door opens again, the man enters, but when the doors open again he is confronted with a desolate waste land of fire, sulphur and lava, with the sounds of incessant screaming ringing in his ears.

As the man stands in disbelief, the devil walks past him again and the man stops him and asks, “erm.…, where is the beach, the party, the music, the girls.”

“Oh, sorry,” says the devil, “you were here the other day weren’t you.  Well that was recruitment day, you work for me now.”

Recruitment is no joke

There are a number of versions of the above joke, known as the recruitment day joke.  It is as relevant to the employer as the potential employee, yet still do we take recruitment as seriously as we should.

Employment of any staff is important and, obviously, senior leadership and director level appointments even more so.  They can either add to the success or contribute to the failure of an organisation, more than any other of your team.  Yet again do we take enough time and effort to select and choose the appropriate person or do we leave it to someone else.

I have been involved in my fair share of recruitment, on both sides of the desk, but as an employer, I have recruited graduates for an international accountancy practice, recruited accounting staff for clients, recruited chief executives for a public company and even recruiting head teachers for schools.

The Recruitment Pitfalls

Are you really qualified or do you need support

Everyone believes that they can recruit.  A recruitment agency provides a short list and you only have to choose, but have you really given enough consideration of the strengths, skills and experience that are required for the role.  I have seen instances of a senior position being recruited and appropriate skills and experience matrix being created only for the selection and decision makers concentrate on one area and ignore the rest.  Why go through all of the time and trouble to have the matrix prepared and considered, only to disregard it.  The result was the person just did not have the relevant experience for the large organisation and floundered from the start.  The recruitment agent should have picked it up, but did not and the recruitment group and interviewing committee, in this instance a school, did not have the experience to review and make the right judgement.  In this environment when the leader is key, the recruitment is even more so.

Missing the evidence

Possibly the number one mistake.  If you are going to review a CV and a major success stands out as a key draw, do not just rely on it, ask and find out more.  This seems obvious really, but again, I have seen examples of where just a little more background either from an interview or finding external evidence exposes a rather different story and claims of success that have actually been due to the work of others.

The advice from others

A very senior managing director/chief executive role for an MBO team is an important recruitment decision.  The individual is being recruited to work with and lead the others in the team.  A CV and interview will help to provide some of the support and answers but for a position like this a written reference may not either be available (or if the individual has been subject to a compromise agreement from a previous position, this reference will be sterile and very carefully worded).

In a role where management style is paramount, I have seen a business recruit this position and only afterwards when speaking to their former colleagues it was ascertained that their style of management was divisive, convincing one of the team was a weak link and needed to be removed, while saying the same thing to the others individually.  Childish, selfish, petty and divisive.  The same situation happened in the new team as in the last.  To find out you only had to ask and listen to a number of the former colleagues.

Experience and age are strengths not weaknesses

What an individual has done over the last year or two is important, but so is what an individual has done over the last 20 years.  Experience and age are strengths and not a weakness and too many times there are examples of employers (and recruitment agents) selecting the recent experience of younger candidates rather than considering the values of older and more experienced individuals.  I am still not convinced that I understand why age is an issue and not a key strength.  Perhaps the recruitment consultant is looking for a life-long candidate and contact; perhaps I am getting older myself.

If you don’t have references ensure you have controls

Obvious I know, but I have seen a number of examples where the new company bookkeeper, financial controller and even the FD has been caught with their hands in the till.  Cash expenses, personal cheques paid to the individual and posted in the books against old creditor balances that are not being chased, these are the obvious frauds.  If you are not going to find out more from other sources, either written or verbal, at least have the controls in place to ensure that one individual cannot carry out these obvious and easy ways of extracting money from a business undetected.  If they are single signatories, ensure that there is a system of matching payments with invoices; ensure that larger payments require more than one signatory.

This is not a full and comprehensive list, only some observations and lessons from actual experiences from real life situations and pitfalls and hopefully the lessons to be learnt from them.

On a positive and practical note perhaps I can list some other helpful tips;

Practical recruitment tips

  • Plan ahead…..what does your production schedule and work-planner tell you for the year ahead? When are you likely to need new people especially when you consider your marketing plan and winning additional work targets.
  • Nurture recruitment agency contacts. Meet with them so they can see your firm and know your business. Have an ‘on-going’ recruitment policy and see good quality candidates as they become available. Don’t just look to recruit when you have a gap to fill. The most successful businesses I know recruit good quality people and make a role for them. This always proves successful in the longer term and businesses find they have no problem in finding work to keep them busy.
  • What can you offer as an employer that will make people want to work with you? Do you share your business plan with your team so they know where they fit in and what the future holds for them?
  • Do you regularly survey your team, get feedback and report back to them on how you have taken their issues on board and what you have done about it. This may sound a bit ‘fluffy’ and in the territory of what only larger corporate businesses do. However, smaller businesses that do this report that the business plan progresses much more effectively and it sets them apart as a successful company.
  • Do you have a system of communicating regularly with your team so they feel involved in the business?
  • Do you have a simple system in place to measure how existing team members feel? This really does help you to retain good people. How often has someone handed in their notice and when asked why they are leaving you say ‘If only you had told me….I could have done something about it?’ Again, measuring staff happiness really does help to retain those you want to keep within your business and proves that you are different as an employer.
  • When interviewing do you have a set list of questions that you always ask people? Don’t just focus on technical matters- you want to assess an individuals’ attitude and personality. Also, everyone is human. How often have you conducted an interview that is different depending on your mood or the time of day? With a system in place you can ask the same questions every time and ensure every candidate receives the same information and impression of the firm.
  • A great interview question to really get under someone’s skin is to ask them to choose a friend or close colleague to describe, ask them what they like and admire about them, what they value about them and also what they dislike about them.  Then ask how their friend would describe them and their strengths and weaknesses.  Another way of articulating strengths and weaknesses but one that helps to ensure that the candidate talks openly and honestly.
  • Get your team involved in the interview and recruitment process. Second interviews are often best conducted when they are held by a member of the team and not you. If the team is involved in the process then a new recruit will be much more likely to have a clearer picture of what it is like to work for you and will settle in better.
  • Do you have clear written roles and responsibilities for everyone in your company? This simple ‘booklet’ is easy to produce and should be shared with candidates and existing employees. Again, this makes it clear how existing team members and new recruits fit in to the big picture. People like clarity and the sense of security of what part they have to play in the development of the business and its plans.
  • Do you have a comprehensive job offer letter which includes what the induction progress will be and how a new recruit will be trained on what to do?
  • When someone leaves or joins do ensure that everyone else in your firm knows about it. I have often seen a new team member join a company with no one knowing who they are or where they will even sit! Ask yourself what kind of impression this makes and is it any wonder that people then chose to move on in a short time to another job?
  • Many firms now offer ‘working second interviews’ whereby a candidate come back for half a day and is ‘tested’ on  a piece of work so you can assess their technical competence. This can prove very effective.
  • Accept that not everyone wants to progress in the company. Such people can still be a valuable asset – make sure they know that.
  • Do you have a visible training plan for all your team? For people to want to work and stay with you they need to know how you will train them, give them feedback and offer skills development. This is also necessary for you as an employer in order to people to become more competent and valuable to the development of your business plan.
  • What do you have in place to ensure people feel valued in your organisation and how do you reward them? Reward does not mean just financial. Have a flexible package of rewards as time off may be more important to some whereas others are target and financial driven or put a greater value on a social day or evening out.
  • When a new recruit starts working for you ensure you meet with them weekly for the first 3 months to give and receive feedback. Many times I have listened to employers say ‘Oh- they were useless and had to leave within 3 months and it has cost me a fortune!’ When I dig a little deeper I find that the new recruit had no opportunity to see the management team and had no idea what their role was or what exactly they were meant to be doing other than be given a box of records and told to get on with it! No feedback on jobs is given and no opportunity to learn from mistakes. Often, they didn’t even know who their ‘mentor’ was who they could go to and seek guidance or training from.

Recruitment is no joke for either the candidate or the employer, whilst it may not be a decision that lasts for eternity it is pretty important to both parties and as such both parties should take is seriously.

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.

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.

Midlands Investor Network Launch with a Song and Dance

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Midlands Investor Network Launch with a Song and Dance

A group of banking, finance and business professionals working together as The Midlands Investor Network launchedthis month, literally with a song and dance in Birmingham at the main offices of RBS/Nat West at St Phillips Square, which as the area director for RBS jokes as is also known as the bank at the back of Rackhams.

The Network has been put together by Steven Mugglestone, West Midlands Area Director of McGregors Corporate, the midlands based firm of Chartered Accountants and Business Advisers, in order to give growing SME owner managed business an opportunity to pitch their businesses to potential angel and private equity investors. The Network also includes RBS, Else Solicitors based in Birmingham and Burton, Citizen Corporate Finance based in Nottingham, BA Capital based in London and MidvenVenture Capital based Birmingham. The event saw seven growing businesses from new technology start-up businesses through to established west midlands based engineering and manufacturing businesses looking to European expansion,pitching their plans to an audience of business angels and venture capital organisations together with their professional advisers.

One of the ventures was the opportunity to invest in a new musical looking to secure funding to establish a West End run. Mod Crop, the Musical contains well known songs from the sixties and has been written by the creator of Quadrophenia, and has already been seen by sell-out crowds at the Nottingham Theatre Royal. As an addition to their pitch, the show’s co-writer and producer, Steve Wallis, brought part of the cast and a group of musicians along to round up the presentations with excepts of songs and scenes from the show, with a finale of songs including Gimme’ Some Lovin’. The midlands head office of a national bank may have appeared to be an unusual setting, but the evening was a welcome song and dance alternative to routine business and financial issues.

The launch proved to be a success and a platform for future events in Birmingham and elsewhere in the midlands, with interest being shown in the businesses for future potential investment from the business angels and venture capital/private equity organisations within the audience. Steven Mugglestone of McGregors Corporate said, “We are very pleased that the event has gone down exceedingly well indeed. The presentations from all of the businesses were very well delivered and well received and we have had really good initial feedback. As well as interest being shown in the presenting businesses, I have also been approached by representatives of businesses and business angels groups wishing to put businesses forward as well as other equity investors wishing to be part of the network and future events. The team at Nat West/RBS have been fantastic in supporting the event and providing the venue and catering and they have already told me that they are very keen to promote and host another event in the Spring time. All in all, I think everyone enjoyed themselves, which for business and finance isn’t always the order of the day. I also believe that there will be some real positive outcomes for the businesses presenting at the first event.”

Businesses pitching at the first event included a company who have developed a system that refuels gas powered cars from mainssupply gas; a company that has developed a UV light cured car body filler; an award winningmanufacturing company that adapts small cars for wheelchair access and use; a company that has developed a system for doctors surgeries to control and monitor their referrals to the NHS; a rugby leisure clothing brand; anonline radio station for the over 40s and Mod Crop The Musical. All of these businesses are also being assisted by Citizen Corporate Finance, in their current and future search for funding.

Businesses or investors wishing to be part of the Network and future events being organised should contact Steven Mugglestone at McGregors Corporate on 0121 236 3317 or visit their website,,for other contact details and further information.

Steven Mugglestone BA FCA, McGregors Corporate, More than just Accountants! McGregors

Corporate are a Member OfProbiz Tax. We provide Innovative Tax Solutions to Owner Managed Businesses. We are relentless in helping businesses. Here are some examples of how we do that:

Accelerate Your Business Growth and get supported with Grant Funding.
Midlands Investor Network – Launch Event and Update
How an FD drives a business when sometimes Accountants are just catching up

We like to keep things simple, for ourselves and our clients;
We build our business by reducing our clients’ business and taxation costs;
We build our business by increasing our clients sales;
We build our business by helping our clients succeed in their business;
It is that simple and we meet you to discuss all these things for free;

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

January 27, 2011 at 2:28 pm

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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