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FD's Diary: Excel, here I come
June 30 - I'm going on a training course tomorrow. All this recent talk of CPE and so on has persuaded me that I should take this issue seriously.
The course is on advanced Excel. I always think I'm pretty good at Excel, but I have to admit there are some things that still baffle me. I know pivot tables are meant to be the answer to everything, but in that case I seem to have failed to ask the right question because I've lived without them.
I'm also keen to look at Excel as a database more thoroughly. I expect these are related issues, of course. I've always been of the opinion that the world splits into databasers and spreadsheeters. Certainly, whenever I want to get information from our database I get our IT chap to dump what I think I need into Excel for me and I sort from there. He writes a query. Which seems to confirm my argument.
I'm quite looking forward to the course. I'm also making a big deal of it in the office because I want it to be seen that going on a course is an OK thing to do (or do they call it “cool”?). As far as I can see the company has set a training budget for years and has always underspent it. I think that's wrong, so I'm going to try out the local firm who are offering this course and if they're any good will see if we can get other people to advance their skills as well. I'm sure it will pay.
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29 June - To hedge or not? No, I'm not about to take gardening leave. The issue is our foreign currency exposure.
We spend quite a lot each year with a Belgian supplier. No one in the UK can match what they do for us in quality and technical terms, and to be honest our exposure to them is in my opinion one of the weaknesses in the business. As significant as that though in financial terms is that because of our lead times and the fact that we are one of their biggest customers means we have to place an order schedule with them up to six months in advance of our planned requirement dates.
But that also means we know when we'll be making payments in Euros some considerable time in advance of doing so. Our Euro receipts are insignificant (I'm afraid) so there is a real opportunity for hedging here, which I have discussed on several occasions with our bank.
And I still can't make up my mind whether to buy forward or not. We have the bank capacity to do so; that's not the issue. It's just, is this wise? The only rule I know is this: if we're making money at the current exchange rate, having allowed for the cost of buying forward, is that a position we're willing to fix at? I've written all of this out for Ops. Ultimately I figure this might be a financing decision, but it's also about operations and he's effective CEO now. He has to share in this.
That then worries me that I'm passing the buck, but I figure that I'm not paid to do everything. I can live with this.
What this has reminded me of though is the discussion that I got involved with some months ago about key performance indicators. Some may think this is a perverse way of looking at things but I reckon that having a record of why we took a key decision such as this is itself a key performance measure. Justify your decision when you make it and you're more than half way to justifying it after the event. Which brings be back to my perennial concern about putting everything down on paper, or at least on disk.
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June 24 – Had a drink with a friend I trained with last night. Like me he joined a new company not long ago. On doing the P35 and issuing the P60s he got a complaint from a member of staff that their tax code was wrong on the P60. He challenged them, and so they produced evidence of a new code advised by the Revenue. He had received no such thing, or so he thought. So he phoned the Revenue to check. His predecessor had set up a secure mail box for receiving communications from the Revenue. About 8 months of notices were in it by the time he checked.
I laughed, and then remembered to offer my sympathy for the mess he’d found himself in, but first thing this morning I feverishly checked that we seemed to be in receipt of appropriate communications from our dearly beloved friends. And even though I was sure we were I also phoned them to check. This was problematic. I was of course phoning about a secure system, but in practice they assured me that we had no such arrangements in place.
I would never have thought of checking this. Neither had my friend. Yet again, there but for the grace of God go I!
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23 June - Got the auditor's draft management letter for comment today. I know I've said it before here, but I think that the management letter is what an audit is about. If it throws light on what we're doing from a different angle from which we can benefit then it makes the whole process worthwhile.
This one did not. Which was much as I expected based on the closing audit meeting. So I've dutifully commented where required so it can be issued with the final accounts (on which we seem to have agreement) for the benefit of the shareholders.
But I have deliberately ensured that the auditors have not put the standard paragraph in about re-election of the auditors. It's true that they could as until now elective resolutions to dispense with the need for annual reappointment have not been in place. But I intend that all such resolutions will be proposed at the AGM and before the accounts are considered. That way we won’t have to reappoint them, which avoids me having to say now that I don't want them to do the job next year.
I have however sent a copy of the draft management letter, my comments and my thoughts to Ops and the shareholders so they are in no doubt about where I stand. I've only got to emphasise value for money to win this argument, I know. I'm also asking that we get on with this quite soon. I've no desire to come towards next year end with no one in place, and a bit of time will help me do my research.
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June 22 – A long time ago (well about six months) I sang the praises of my new radio mouse and keyboard. Others told me to hang fire – and that they would fail in due course.
I’m afraid they were right, in part. The mouse has now failed. Nothing seems to be encouraging its revival so an old fashioned thing with a long tail has been plugged back in to replace it for the time being. But I have to say that the cord is annoying after so long with the freedom to roam wherever I wanted on my desk. I have a feeling a replacement radio mouse will be ordered soon as a result.
And in the meantime the keyboard marches on. Long may it do so!
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June 18 - #4 seems to think she has a personal responsibility to recruit the audit junior to job share with her when she heads off to university.
Apparently they got on well last Friday and #4 thinks there is a possibility of recruiting her. But she’s playing it carefully. At a personal level though they’ve hit it off and are going out clubbing together tonight.
Both are nearer my children’s age than mine and I confess I neither “club” or want to, but if that’s how #4 thinks it best to undertake her mission, then who am I to argue? I do, however feel sorry for any chaps they meet. In combination they might be a pretty tough act. Which thought makes me wonder whether I’m being wise to encourage this.
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June 17 – A pleasant chap from the Inland Revenue has phoned me about the EMI valuation. Admit this took me by surprise. I was expecting to do this in writing, but overall I think it efficient and welcomed the approach.
He’s agreed my figures for sustainable profits and is happy with my discounts for minority interests (not that I think I was very aggressive on this). In fact his only issue seems to be a fair multiplier for profit for an unquoted company in this sector at the moment. I suggested 4, having asked Ops and the CEO about which private competitors might have been bought or sold recently and then had a look at their accounts and trying to work out what was paid for them. The Revenue want 6 based on a discount on quoted companies.
I’m inclined to argue this. Partly that’s because it’s personal. This will cost me money if I lose. More realistically, it’s because I looked for examples from companies like ours. They have discounted quoted companies but no quoted company has anything more than a small division that’s equivalent to anything we do. As a result I think my data is better than theirs. Perhaps I should have sent it in with the original submission, but I will now, and I have to say that to his credit the chap at the Revenue said that if I had sector specific data he’d consider it.
To be candid I’m quite enjoying doing this. It’s a change from the usual. And I cannot help but wonder how much I’m saving us by doing it myself. Since Ops and I would be quite happy with the number we first thought of, that result at no extra cost will do us nicely.
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June 14 – Oh what a beautiful morning.
No auditors today. Just routine stuff (I hope). Thank goodness for that.
It’s not, as someone has suggested that I don’t like auditors. I do. I was one. I just want to work in partnership with people who want to do their best. You could call it the Gordon Ramsey syndrome if you like. If you ask me crap questions I won’t be amused. Bring me a good one. That’s the auditor I’m looking for.
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June 11 – Well, the audit partner came, and he went. But he won’t come next year.
We had a meeting after his review with the audit team yesterday. What are they worried about? Residual values of assets! Oh yes, my flippancy was reported. And in addition, they’re really worried about the fact that not all overtime has been authorised in writing. The fact that the overtime data is now sent to us in accounts by email for processing by the managers who actually authorise it doesn’t seem to be enough authorisation in itself. I was not amused.
Nor was I much impressed by the question about whether I’d thought about improving credit control given the problems we’d had with cash recovery late last year. Given that some readers of this diary might have noticed this became something of an obsession for me during the period I was trying to get it under control I felt this question suggested he might not have noticed that the current debtor days are looking not at all bad. So much for the post balance sheet review. I also felt like asking why they’d never raised the question before it became such an issue when it was so obvious it needed attention.
As a result of which I asked him some questions about the systems into which I have put less attention, such as purchasing, and what improvements he might suggest? I’m afraid to say the feed back was not promising. I did wonder if he’d ever used an IT based purchase order system, for a start. Pre numbered pads aren’t all they used to be these days.
So then we came to the crunch. What, if anything, did they want to change? Well, they thought some stock pricing might not be FIFO. True, I said. Some might be closer to average, and on a few items we do have some price variation on components. But he gave in before suggesting it was material. He was much more confident that we’d definitely missed out some accruals and prepayments. So I heard him out and then said I wasn’t going to do anything about it. No one, not in a million years, would be any better off for the adjustment being made.
So, apart from a disagreement about whether I really have to agree to put the value of some trifling benefits in kind into the directors remuneration note for Ops and me, I reckon we’ll now carry on as before. Except that I really do not think I’m getting value for money so I’m going out for tender for next year’s audit.
And having decided that and having written what I did yesterday I did tell #4 to find out what the audit junior’s career plans are by suggesting my mob go for a drink with the audit team this evening. Once we learned she’s studying for ACCA and not ICAEW I immediately reckoned she might be worth poaching as she can continue studying that here, and we do need someone else. I tell you, it’s worth writing a diary. You get ideas you might have otherwise missed.
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June 10 – The audit continues to dominate my working hours. And the team continues to baffle me.
The junior will go far in life – I have to admit it. I think I’d offer her a job except for the disruption she’d cause, and the fact that #4 already offers some of the same personal qualities, even if part time in the future. But overall she seems to have that invaluable quality called nous. She’s certainly been showing it in some of the discussions she’s had with #3, and the matters all seem to have been resolved, as far as we know.
The senior is another kettle of fish altogether. The question on residual values seems to typify her style and all the concerns I noted in this diary on 27 April seem to be confirmed (and I’m also pleased to say, justify keeping the diary in itself). She clearly doesn’t understand business processes. She seems to have a black and white view of the world – things are either right or wrong, and forms come before all else. Frankly we could be making anything and I don’t think her style would change one iota. Numbers are just numbers to her as far as I can tell.
I’d hate to say this makes her a good auditor, but one thing that doesn’t make her one is that so far although I have a distinct sense of disquiet on her part I’m not really sure what they’re about. This afternoon is partner review time on site so maybe I’ll get a feedback then, even if it’s just that I’m paranoid. But right now some hint of an agenda of concerns would help me prepare for a meaningful discussion.
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June 8 – Day 2 of the audit and things have quietened down. A quiet word with the audit junior seems to have taken place and the rush of PAYE queries to the office has abated in response.
But I’ve also not been bowled over with audit questions either. Admittedly #3 who was here throughout last year is doing a sterling job in finding data for the audit team and is, as a result, keeping them off my back. And the audit senior and I did have a longish discussion on the sales system and all the changes we’ve made, which was encouraging. But in terms of nitty gritty, two days into a scheduled 5 days on site so far the only answer I have provided which appears to have given concern is with regard to the residual values I have attributed to some fixed assets. When asked to justify them I said I’d made them up, which might have been flippant, but was also true. Let’s be honest, they're not material, so you could say who cares?. And I think it’s reasonable to guess the residual value of a van, and we own a few (although most we lease). What it will actually be depends on far too many imponderables to be bothered to be too scientific about it, especially when we’re using straight line depreciation on the way to whatever number I first thought of.
But as usual, something irrelevant looks like its being over audited, even if they did say it was a systems query. Stock in the meantime seems to have been neatly filed with no issues of consequence raised. Now there I could have had a field day! But that’s the problem of knowing your own work too well.
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June 7 – I could do without the audit junior on the team that arrived today. I’m sure she’s fine at her job (not that she’s asked me anything yet). But the trouble is it’s very hot today. And I’ve just had to have a word with her senior. Because to be frank, she’s not just very obviously good looking, she’s also dressed appropriately for the day and quite inappropriately for this office. I don’t think we’ve ever had so many male staff want to query their pay in one day before. On top of having any auditor here, this is not what we needed (honest).
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June 4 – Well, I’m not as sanguine as I was last Friday. The reason is simple. Although I thought I was ready for the auditors it has still been a matter of getting my head down to tidy loose ends this week, along with all the more routine stuff.
I can’t be the first person who is usually relaxed about an audit who has slightly more than their reasonable share of concern when they know that they weren’t even here, let alone have responsibility for the books for more than half the year under review. I hope I’ve found all the warts that I inherited, but you can never quite know. And of course #2 might also have contributed his share and is not here to answer for them.
So it’s matter of saying I know the balance sheet is OK, and I’ve had a good look at the P & L and now I hope they’re diligent enough, but realistic to go with it.
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June 2 – I thought email was by now a fact of life. Today brought the usual rash, and no doubt the server has eliminated thousands more from reaching me.
The auditors have had a change of plan and want to come in next week. I’ve agreed.
Mrs CEO’s man has read the options and is (almost) happy with them. The changes are small and so I can go to the Revenue now.
But the most interesting mail of the day was from a graphic designer Ops and I have engaged. When I got here I couldn’t help but comment that the firm’s logo looked as though it was designed 20 years ago, and found out it was. It hardly presented the image we now wanted, and looks particularly poor on our vans. In the 80s Ford Transits were still suffering all the curves and flowing lines of the Coke bottle era Cortina. In the mean time van design has moved a long way. I have to say I think a lot look really very good these days. I can almost understand the “van to car” movement that Renault and others seem to have pioneered.
And on these vans our logo just looked bad. It didn’t look much better on the vast array of clothing we supply to many of our staff, ranging from strappy little vests to XXXL anoraks. So I persuaded Ops this was something we should look at, and that we should get rid of headed notepaper and go for template based printing of stationery at the same time (this being my cost justification).
We were recommended to a really good designer. We liked his portfolio. We like his first ideas. But today came a really weird mail. Could we not mail or call him to discuss ideas? He really doesn’t like discussing issues electronically. He has to do it face to face. Which is especially weird as all his work is done electronically.
It’s quite surprising to find someone now who doesn’t like modern communications technology, but I guess we’ll live with it. I wonder how common this is?
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Follow the FD's saga through the preceding months:
May April March February January
December
November
October.
AccountingWEB.co.uk 30-Jun-2004
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Times read: 24342
Have you considered the use of options rather than buying forward cover ? It is (usually) possible to select a rate that (after payment of the premium) results in a total maximum cost at which you still make money (or which is within your budget) - this provides you with the worst case, and allows you to benefit from any level of the exchange rate that is better than the option rate.
In addition, whilst Ops may be the effective CEO and needs to "share in this [decision making]", I think that he would rightly expect you as FD to provide expert input and your opinion/recommendation, and then for the decision to be made jointly.
There are two points I'd like to make on buying forward:
1. I've received some pretty poor advice on foreign exchange from banks in the past. It's worth also speaking to a specialist outfit like Travelex or HIFX. They can put together a customised package that will suit your needs.
2. You say you're making money with the rate as it is. But it's worth considering what happens if the rate moves against you, especially if a significant percentage of your costs will be forward contracted. If your competitors are able to capitalise on the favourable rate and cut their prices you could be in an awkward situation.
Peto excellentia in totus res = Seek Excellence in all things! The motto of the "Value Added" service providers of Rome, 54BC!
I have got round this by vhanging margin for printing to 2mm (you won't getaway with this on most inkjets) You can also zoom the output on some printer drivers
I now get all the form on one portrait sheet
The FD comments that, "I think that the management letter is what an audit is about."
In my experience, (from both sides of that particular communication), the management letter often says little & is often wrong. As an executive director, albiet now also a share option holder, the FD may think that the management letter is all that is of value. There is a mass of work on an audit file, aimed at giving the owners some assurance that the figures on the accounts prepared by the executive directors are more or less right. The fact that the auditors have not come up with a stream of earth-shaking questions does not mean that they have not beavered away; hopefully it means that their work shows that the accounts were OK.
By all means challenge auditors on price but do not do it based on the mangement letter. It may be that Mr CEO would rather have an auditor he trusts rather than the cheapest.
I too have complained to the Revenue about their "un-printable" P9's! Most aggrivating.
I registered for secure mail with the Revenue some time ago and, on the whole, was impressed with the notices received.
However, in their infinite wisdom they have recently changed the format in which these are sent.
So now, instead of having a nice 'printable' (and therefore emailable) form, I have to print the web page that it is presented on. This involves changing my printer settings to landscape format so that I don't lose the information on the right hand side of the page. My notice then not only comes out on two or more pages but I get all the unecessary and grotty web page elements as well.
Before, I could select the printable version and email it to the appropriate payroll person to deal with. I now have to print out something very messy and physically take it to them.
Well, that is until I changed my options and now the Revenue have to send a piece of paper through the post again.
So much for progress!
When I took this up with the Revenue, they thanked me for my comments and said they would take them in to consideration, but basically they could not reply to every comment or suggestion.
Anyone else have this experience?
My ball mouse failed, so replaced it with an optical which is excellent. Unfortunately wired (it was only £10), but it is possible to get optical wireless mice whcih have a base which plugs into a usb port. You rest the mouse into the base when it is not in use and it recharges the batteries, but these are more expensive.
I have been using, faultlessly a logitec keyboard and mouse for about 3 years now & I wouldnt want to swap back. I will admit that the mouse battreies only last about 3 months whereas the keyboard... well to be honest I cant recall ever changing the one in there.
It is used at home (the boss wont pay for one for work...LOL!) but where its located there are at least a couple of computers within a few feet, my mobile it always on the desk if I'm on my machine & both (battreies and clean rollers etc in the mouse permitting) have worked faultlessly from day one till now.
I have to admit I thought wirless keyboards & mice... a gimic, but would I cange back to cabled stuff now... would I heck as like!
I have a cable one that I use when the batteries go cos I never keep a spare set, or if I have its found an alterntive home by the time the ones in the mouse fail, and I find going back a real pain having to fight the cable all the time.
In my experience the batteries in the mouse expire long before those in the keybaord - I guess that registering movement across a surface takes more power than registering key clicks.
I'm sure you have tried changing the batteries, but have you also tried re-registering the mouse with the radio reciever. I've found this to be necessary with one of my radio mice - it entailed pushing very small buttons on both mouse and reciever.
I finally gave up on my radio mouse and went back to a touch pad after discovering that months of erratic mouse behaviour was due to radio interference from both DECT and, particulalrly, mobile phones that sit on my desk. The choice was no phone or no radio mouse - which was easy to make if not easy to live with.
Mike
... and the implication that the apostrophe was merely misplaced, when actually it was misused...
Leave alone "apostrophy". :-)
Thank you for taking the bait. I knew there would be someone out there who would be pedantic enough to pick up on a misplaced apostrophy, if I had the audacity to complain about the state of written English.
The recent diary entries have reminded me of an FD I worked for years ago whose attitude to auditors was unusual. He refused to deal with any audit queries until a meeting at the end of the audit. At the meeting in question he asked the audit senior how many queries he had, and on being informed that it was 15 (or some such number), he asked "if the answer to all these queries is unsatisfactory, are you going to qualify the accounts?". The audit senior stammered somewhat and then mumbled "probably not", at which point the FD riposted "then stop wasting my time!". Brutal, certainly, but perhaps he had a point?
How anyone can write a clause such as "that is still it's function today" and then go on to comment on poor spelling is utterly beyond me.
Latin did have a legitimate use once: International communication.
Have yau read the Practitioner's Diary today - I think he may be your audit partner!! Either that or attractive, scantily-clad audit juniors are not as rare as they seem from my desk.
I would prefer people not to use Latin phrases as I do not understand most of them. I did not study Latin at school, but even if I had I doubt whether it would help greatly as most are discipline specific.
The reason that Latin phrases are so prolific in the older professions, such as the church, law & medicine (but strangely not prostitution, which claims to be the oldest, where I believe Anglo-Saxon is more prevalent), was to exclude people. It was a means of retaining knowledge within a specific class or group and to create barriers to entry. Therefore the use of latin was to make things less clear, and that is still it's function today. We should not contribute to that aim.
On the otherhand I do have some sympathy with those that claim everything is being reduced to the lowest common denominator, commonly referred to as "dumbing down".
What is more worrying is the standard of English, even within our own profession, which after all is supposed to be a communications profession. The prevalence of poor spelling, grammar and punctuation is worrying as it does make meaning less clear.
I had always been told that the difference between an accountant and 'someone who works in accounts' was that accountants used judgements, and of course we are always seeing that very little in accounts is set in stone.
I think an educated guess of the residual of vans is perfectly reasonable, there is no definitive answer.
The more complicated the asset I suppose there could be a requirement to get someone else from another specialism to make their own educated guess, but then that is all anyone can do about the future.
Having not been offered Latin at my (state) school, I do feel like I have missed out on something, and have to make wild guesses with all the latin tags that crop up in caselaw and other areas of my work. Apparently, 'mutatis mutandis' isn't a song from the Lion King. Or so my boss tells me.
Anyway, being of a logical mindset, I translate 'Peto excellentia in totus res' as 'tortoises make excellent housepets'. If that is of any assistance to my fellow diary-readers...
I like your series of diary entries on life in your office. Your style is nice and relaxed and entertaining. Do you have any plans to publish them in a book? Maybe, with a bit of luck, Hollywood will even do a film of the book of the diary!
Personally I'm happy just to roll up the shirt sleeves and ditch the tie.
I worked in Brisbane Australia for a while and even there we still wore the long trousers - shorts were an option but not if you have legs like mine.
What exactly is suitable clothing for a professional office in summer time?
A Suit and tie can be stuffy and sweaty!
The female professionals seem to get it much easier than the men in this respect.
Does anyone have any smart practical alternatives to Suit trousers that aren't cream linen and make me feel like the man from Del Monte!!
I expect you are a good deal older than myself then! Or may be the school had illusions of grandeur..
Sorry.... that should be chapess, not chap.
Mea culpa.
I learnt Latin (badly!) at a comprehensive school so don't assume that the contributor is a public school chap. I'm not sure how that's relevant but I felt I should say it.
Ipso facto sine qua non id est ad infitum...
Does using latin make you feel part of some special public school club? I find it rather annoying being a comprehensive boy myself - I was not offered the opportunity to learn.
Dont really see the point anyway - are your English skills not of a high enough standard to get your point across?
Whether I look at green on the screen, or in print or elsewhere makes little odds to me. I'm partially colour blind so green and blue are always confusing to me - and my wife says I frequently get them wrong. That's why Ops was dealing with that issue. I'll stick to the design bit - on which he seems to be the blind one. Between us we must be an interesting client. But the designer hasn't been told that! Perhaps he's rumbled us though.
Now the cynic in me, while aperciating the 'artistic' needs of the designer, is wondering if the reasoning is posiibly financialy motivated. Unless it's a fixed price job, is the designer seeing opertunity to boost his fee?
And is anything going to be gained from a specific specific 'green' when you plan to use template printing, can you gaurentee that every printer that will be used will accuratly reproduce that 'green' as intended? We all know monitors have different colour balances, & I've found printers just the same. If they wont, then is the designers agrument & extra cost justified?
I dont have a problem with using experts for specific's, but I always wonder if you always get the value for money you expect at time. Sorry, but I've worked at places where they pay consultants to tell the managers exactly the same as us internal staff had been saying all along, and thats happened more than once...
This is the tension between Art (emotion) and Science (reason).
It is "unreasonable" not to use electronic communication, except that much is lost in this medium (and why flame wars happen so often on email lists).
BTW What shade of green would that be? I know that the two monitors I have sitting side by side would give quite a different apperance. And also there is the question between additive and subtractive colours. Electronic reproduction is "look and feel" the same as an HTML page, not exact like paint pigments.
There is far too much "good enough" in the modern "instant" technological age we live in.
I would recommend that you judge this person by their ability and their work. Talented people who aim to excel and provide perfection are rare and should be valued.
"Peto excellentia in totus res."
Ops got really bugged by this issue, so contrary to the instruction given by our designer he phoned to find out why someone had made such a strange request.
As usual in life there is a reason. Apparently as a "creative person" he likes to sense the reaction of someone to his work whilst observing them - so he's only happy to use electronic media for basic communications, not discussions of the work itself.
We're still a little perplexed though. Of course we agree with him about concept discussions. But if the question was one of "do you prefer this shade of green to that shade of green?" (which was what Ops had wanted to talk about and which gave rise to the mail) then this is a real obstacle.
Makes you realise that a balance is needed in all things though. We'll tolerate an imbalance in this case because we've started, so we'll finish. But it will be darned hard to recommend him to others. Anyone who does not now use electronic communications well has got to be out in the commercial cold, I'd have thought.
That's a good thing isn't it? Developing a proper relationship with a key supplier/ figure?
