FD's Diary: Where did all the good guys go?
The FD's Diary is sponsored by Exchequer Software
March 30 ' Serves me right for thinking the year end might be closed. I got a call from Ops as I got to work this morning. He is at a client's premises. We installed some new kit there in February. Over the Easter weekend they suffered a burst pipe and this blew out some electrics and IT kit. As they're a pub/club this meant they could not trade for an evening. Now there risk assessor has said it's our fault and either they or the insurance company will be suing us for loss of earnings.
Ops got there with digital camera in hand to find that our kit had indeed been placed on the wall in question where the leak apparently occurred. But of course no one actually took pictures at the time to show that the leak started where our kit had been. And now that repairs are underway Ops took a lot of pictures to show that the repairs appear to be much lower than where our kit would have been, and not in line with where they would have been located. None of which has placated the client's area manager, or the insurance assessor.
But the simple questions have to be asked, why did it take six weeks to leak? Why are we being blamed when the leak appears to be some distance from our kit? What do we do about it? And what, if any provision do I need in the accounts?
Legally I'm sure we can fight this, but this is a good client. Or maybe I should say it was. But this new person (and apparently he is) is clearly trying to make a mark and blame anyone for his lost night's earnings. I have a strong suspicion this will cost us something, whatever the rights and wrongs. This is a dimension of business I really don't like. Where did all the good guys go?
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March 29 ' Friday being a holiday, Ops and I marked our return to work with a lunch today instead. And, as we'd promised ourselves, we tackled the issue of our proposed new business.
It's a good job we did. Whilst ruminating over the chips of which my wife would definitely not have approved it became obvious that we both have different objectives for what we're thinking of doing. Ops see this as a technical innovation. We have developed something that could be sold, so it should be sold. We didn't intend to create the opportunity (we'll both admit) but that, in his view, is just the way it is. We have it, so we will sell it.
I confess I see it differently. I see this as a way of expanding our market by pitching our product at a price point we haven't addressed before, whilst (hopefully) letting us preserve the existing higher price point for existing customers by differentiating the service level. Frankly, the technical innovation just happens to have opened my eyes to an opportunity we should, perhaps have at least been looking for.
The difference is quite important though. It's a bit techy versus marketing (not that I usually cast myself in that role ' but it seems a bit like the one I've taken on here). And just talking about it made both of us realise we'd better take a step back on this. After all, we're actually neither of us really wanting to do it for market share or technical kicks. We want to make a profit. At the end of the day we need to, and we're rewarded for it. But it's easy to forget that when an idea seems quite exciting in itself.
So, having agreed it was good to talk, we're both now going to put something down in writing summarising what we see as possible. To date Ops and I have worked reactively in the main ' cooperating to deal with the problems that have come our way. This is the first time we've really gone out of our way to make a problem for ourselves. Lesson one seems to be making sure we understand each other.
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March 24 ' Hard to think that Easter is upon us. I'm sure those in the Church (which Church?) who decide these things know what they're doing, but it seems mighty early to have a break. But in fact it's useful.
With the accounts out of the way for now I've drifted a bit this week. Next week Ops and I have agreed it's time to start going forward again. There's a new business to work on. Maybe it's the fact that it's warm, or that the days are obviously longer, or it's just a new accounts year, but I have the urge to work on this now.
So, it's a weekend to get the garden in order and then it's nose to the grindstone time here too. After the number crunching of the last few weeks it will be good ' I promise myself.
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March 21 ' Sometimes you get a pleasant surprise. The auditors are amazed to have got everything already!
But they've also asked me for the entire nominal ledger on back up ' and on excel if possible (I think they're hedging their options). They tell me this will save them time, and I'm sure it's true.
Things have changed since my day in audit of searching through long lists of invoices to then select a sample from random number tables.
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March 18 ' Draft year end accounts going to he auditors today.
I was adamant we'd get them out by now. First of all this keeps the shareholders happy. Second, it keeps the auditors happy. Third, copying them to the bank keeps them happy. Fourth, it means they're off my desk.
There are, however the inevitable questions one asks one's self before committing such an act. Are you creating a hostage to fortune? Is there some wobbly number in there you've overlooked? What is their approach going to be? Passive, or aggressively looking for differences to prove their worth. Should some of the estimates have been more precise as a result (because, let's be honest, we all have to make them).
It's a bit of a guessing game with a new auditor. I know those who always keep back a few prepayments, a bit of stock and maybe a few repairs they can capitalise in the event auditors try to knock the profit down. I don't. I'm not sure it's ethical. But there's always a bit of a game to be played in this process, and with a new auditor you're not quite sure what it is.
So I'll just push the send button and hope, and then forget about it for the weekend.
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March 16 - Why did I bother? I made myself deeply unpopular by throwing most staff out of the kitchen in which our only television is located to watch the budget, and now I'm wondering what I could have more usefully done with my.
Am I impressed that we've been growing for longer now than at any time since 1701? Well, to be honest, no. Neither I nor Gordon Brown was around at the time to count, and I have some suspicion that the accounting then was even more dubious than now, so I thought this opening claim was an invitation to take all tat followed with a pinch of salt, which I did.
Do our figures show we grew by 3.1% last year? Well, yes they do (and a bit more) but should Gordon be claiming the credit? I don't think so, actually. We did a lot of that. And if he's seen our budgets he'll knew we're more ambitious in our growth targets than he is too. But, if he can keep inflation under control I am pleased, so I'll give him a nod for that one. But as for the rest of his numbers, quoted with such certainty, I let them wash over me. I know what I can do with my accounts when I want!
So was there anything I was pleased about?
I like his emphasis on reducing regulation - and much if what he said made sense, but I really do wonder what the impact for us will be. I know we have some inspections - but few of them seem that onerous, even VAT and PAYE (mind you, there's one of them coming up). Perhaps it's because we're one of the "good" companies. But if it means even less inspection, I'm happy, although it's not going to change our lives.
Any more than, to be honest, will R & D incentives radically change our world perspective. We do some, but I'm not sure how these grants impact us. As far as I can tell we get by quite happily without them, but it might be a nice question for the new auditors, just in case there's a win to be had.
And then, there's tax. Did anything happen? We don't do international arbitrage (whatever that is - but I gather Gordon doesn't like it) and otherwise all seems as it was. Do I smell a general election in the offing? What else could motivate such desire to make no change whatsoever to tax? Nothing I can think of.
So, I'll yawn quietly, try to stay awake and go back to generating my own fictional view of the world by writing a few more year end journals.
PS Just as I thought I could sneak out he's just said he'll double the stamp duty start point (which will just boost house prices, so no benefit there) and will leave me a bit more of my father's estate if only it wasn't all being spent on an old people's home. It's good politics, but will it really do much? Not for business it won't! But he did get a cheer for it, and that's more than I'll get today. But that's not enough to make me want to be Chancellor. Maybe this job's OK after all.
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March 14 ' Job done, division sold. Well, offloaded might be the right way of putting it because by the time we've transferred the liabilities to make staff redundant and so on we have basically given this away ' but as we have no prospect of making money from it that's fine.
And as all deals should end with a celebration Ops and I are out to lunch.
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March 10 ' Typing very carefully and deliberately to ensure no more embarrassing entries slip into my offerings.
Actually, the last couple of days have seen me largely bogged down with the agreement to transfer the troublesome division to its foreman. He can't afford a lawyer, he says (and he's probably right) but has at least got an accountant looking at this. We decided we had to use a lawyer and at last seem to have got him to do what we want for a reasonable budget.
But it's still taken quite a lot of work to ensure staff are being transferred with all the right details provided, accounting information given makes sense for us and for him (because I'm trying to be fair) and so on. But with a bit of luck they should be out on their own on Monday, and I'll have one less thing to worry about.
That frees the decks for the new product range.
I feel much more comfortable about being an accountant when I don't have to spend my time preparing numbers!
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March 8 ' I hate year end. It's all the normal hassle in life magnified by a lot.
It also makes me realise how much I don't do in the department now. Over the last year #3 has pretty much taken over the preparation of accounts and the rest of the team keep the transactions under control between them. It's a great system because it's let me get on with much more interesting stuff. And I have to admit I really don't miss some of the routine items ' I just like signing it off after asking what (I hope) are intelligent questions.
That's not possible at year end. It's my policy that at year end everything be scheduled to a higher standard than normal (and I won't accept month end accounts without back up). Trouble is some of those things involve judgement. So, for example although I recall that fixed assets are never high in the auditor's priority someone has to review the register, make judgement on residual values, asset lives and whether they're just any use any more and so on. And that's bogged me down for a day which I would have rather used for something else.
I guess I'm facing that standard crisis that comes to all accountants in the end, or so it seems, which is do I really want to be an accountant at all? Answers on the back of a postcard please.
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March 4 ' Apparently there has been some slight 'tut-tutting' going on about my interest in AJ's hemline. Is this what a man should be noticing when at work? Which has made me think about the responsible employer's role on clothing.
Let's put my cards on the table. I'm old enough to legally be AJ's father, with a margin to spare. In fact, I'm quite old enough it seems to be a grumpy old man these days. And I'm well aware that for some men this gives rise to an unhealthy interest in younger women, which in most cases, I am sure is a sad delusion on their part as to their attractiveness.
Rather to my wife's amusement (and I think pleasure) as I have got older my tastes in women have matured too. So if you asked me to name someone I'd think worth watching on screen now it might be Jenny Seagrove, or even Helen Mirren. I'm quite sure neither would have the slightest interest in me, I make the point to make clear that it is possible to reach middle age as a man and have tastes to match (my wife, in my case, to be honest). So, whilst I cannot deny that it is pleasant to work with attractive young women (and AJ and #4 in particular both fall well and truly into that category) it's rather like someone said of old master paintings; you can admire them without wanting one in your bedroom.
So, if do I have a reason to be concerned about AJ's hemlines? Well, I think I do actually. That interest is, I suppose, a bit paternalistic. I do worry about AJ leaving herself open to abuse. I do worry about the time sales department and operations guys spend in accounts milling around claiming to look for copy invoices when short skirts are on display. I do occasionally think there are health and safety issues involved in clothing. We did for example allow female staff to wear strap T shirts in our warehouses in the past, but one had a quite nasty scrape on her shoulder as a result, the impact of which would undoubtedly have been minimal if she's been wearing a garment covering her shoulders at the time. In the case this week, #3 and I really did not think a mini skirt suitable wear for a stock count.
So I guess I am acting a bit like the Dad of daughters here. Indeed, one of my friends laughs at my situation thinking that at work I have 3 daughters (AJ, #4 and the quieter #5) and a wife (#3) who I fret with and leave to deliver the message when all is not going as I wish. Maybe he's right. And maybe like a Dad I like my 'daughters' to look good, and enjoy it when they do and worry endlessly about the consequences.
But is it wrong for an employer to have such concern about the staff who work for them? Personally I don't think so. Which is why I do see the reasons for guidance on office romances (we have it) and dress when it is an issue.
And, as accounts have traditionally been involved in ordering the uniforms here I think I might take the opportunity to give this task to AJ to think about and see what she suggests. It might be a way of bringing home the point that there are issues in the clothing you chose for work which are quite different from those you were at other times.
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March 2 ' Happy new year in our little world. Well, actually, as ever that greeting has already over run its usefulness as yesterday was just too busy to think about anything but stock and paying creditors who'd noticed we'd paid late.
The stock counts here went OK. We were curious to find though that the four vans we called in to be counted all had stock shortages against the standard mix they're meant to hold, and which is supposedly replenished on an imprest system when items are booked out as used on a job.
And we were also surprised to note that the main 'ready made' items that could be broken up to supply spares to cover those deficits also had deficiencies. Maybe this has always been the case. But I'm wondering whether we don't need a bit more control around this. The first thing to do would be to reduce the stock the vans are meant to hold if they can apparently operate with less than standard kit and then monitor more carefully whether items booked out of stock as warranty replacements are in fact all going to site. I have a sneaking suspicion that some people are being lazy somewhere and have found a route to replenish stocks without telling us. Or maybe I'm just missing a point somewhere as both are short? But I really don't think our stuff is that useful to most people so I can't see them stealing it.
AJ returned from her trip, smiling widely, expense claim in hand and more suitably attired for a day in the office. I asked if she was happy with all she'd seen. She assured me she was. I didn't have the nerve to ask if they'd been happy with all they'd seen.
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In February the FD almost got the budget for 2005/06 past the board. Now March has arrived and the New Financial Year is upon him.