FD's Diary - Questionable motives

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The FD wants a credit controller

September 29 ' Well, we would have had a staff meeting, but #5 has been off ill. Given that she's incredibly reliable I have to put this down to bad luck. I don't want to progress formally without involving her though ' part of the change will be that she will now report to #3, not me, and it's important she's fully involved in that.

But, the rest of us have been talking. It's hard not to. And it's obvious that the task we want someone new to cover is credit control. That suits #3 with her new emphasis on cash flow, no one much likes it really, and it does take regular attention.

So a part time credit controller is what we'll look for. Hours, say 9.30 to 2.30, and term time only a possibility given we hope to have #4 to cover holidays for some time to come. I hope that isn't discriminatory because it suggests we're looking for a certain sort of candidate, but at the very least it indicates we're looking for someone with some life experience. You need that in a credit controller. And after dealing with kids dealing with the average bought ledger clerk is a doddle.

* * *

September 27 - AJ took the news like a duck to water.

'Bring it on' she said (or something like that - if what I've written makes sense).

So, tomorrow we have a team meeting, with #5 as well, to work out how to reallocate duties (with me keeping some, of course) and what we need a new assistant to do.

Perhaps more importantly, I need to work out what I am going to do. I have a sneaking suspicion this is not going to be a problem - although #3 has already asked if this is just a sneaky way for me to get more time off when the baby arrives.

Do you know, I'd never even thought of that!

* * *

September 26 - #3 came back to me this morning. Her reticence, it turned out was that she had been thinking of whether she wanted more responsibility - but it had in fact been about whether she and her husband had wanted to set up a new business of their own. She's mused on this and decided that I'm offering as much challenge - but what she does want is the chance of an upside in the business. So, her request is that she joins management team meetings in her own right and gets a performance related bonus.

Now that is interesting, because creating more formal responsibility for managers of departments is on my agenda, and the issue of bonuses related to key performance indicators has also to be tackled. Thankfully Ops and I don't need shareholder approval for this sort of thing, so after brief consultation with him we could agree #3's requests in principal - with details to follow on. But what we did agree is that as chief accountant her focus is not profit, and can't be. But it could, and should be cash flow - and that will be the KPI that drives her bonus.

Already this is a challenge. I like it!

* * *

September 23 - Told #3 of our plans this morning. Deliberately have not told AJ until #4 is happy.

#3 seemed quite surprised. I admit I'd been thinking she was looking for this opportunity, and might have gone elsewhere to get it. Perhaps I was wrong. She's asked for the weekend to think about it. It would be a shock to find my plans to devolve more went awry now becasue she doesn't want to take a change on responsibility.

Having said which, we did spend some time working through what that responsibility would be and even drawing up the job spec so she had specifics to take away and not generalities. I also stressed that I was still going to be based in the same chair, but with a different emphasis, and I think that was what she wanted to hear.

I hope she bites the bullet by Monday.

* * *

September 22 - Neither shareholder could just say yes to what Ops and I proposed to them. Although both seem increasingly remote from the business, and board meetings are becoming rare as neither can stand the sight of the other, they still seem to want to micro manage.

I guess it's flattering that they believe the petty cash system will fail if I don't supervise every expense claim, but the reality is that long ago I devolved responsibility for this to the little mentioned #5 in the department with #3 having responsibility for signing off all claims (except those from Ops and me, and those above £500. To keep the Revenue happy Ops and I sign off each others and I do all the rest ' thought I'd mention that just in case our Inspector is a reader!)

But I've had to explain to both of them that whilst in her day Mrs CEO liked to look at such things and the CEO managed accounts by looking at how far he could stretch creditors, and nothing else, we have a few more systems in place now, and I'm not integral to them all on a hands on basis. It is therefore possible to release me to thing strategically without the whole show falling apart.

I know as a result Ops had a suggestion from one of them (maybe both) that why were they paying so much to have me then? I'm not sure who this angered more, me or him. But we both kept calm, and he went through all the reasons why he and I work best as a team and if they want us to deliver a stream of profits into the future I need to get on with the issues we have identified becasue he is focussed on the current operations.

This morning we had emails saying we could do this and if necessary we could employ another part time assistant in accounts to balance up the budget for a whole time equivalent of #4. I think #3 will need this in her new role because she and AJ will need to devolve some tasks if they are to take on new duties.

I genuinely believe we wouldn't have got this without Ops intervention. I guess their reaction to my changed role indicates a simmering resentment about the fact that I am the man who got rid of them, even if they've been better off financially since then and we're on target for real growth in earnings this year despite what we're spending on new kit. But from my point of view I've got what I guess I've always dreamed of, just for the sake of asking - a strategic accounting role in an SME. This is pretty exciting, but I've also got to work out how to make it work now!

* * *

September 20 ' Well, I said I was bored. And I told Ops I was bored. And we agreed that we need to do something about it, because it's true, unless we do it looks like I'll be underutilised for the time being.

Lunch on Friday lasted a long time. We actually met on Sunday night as we wanted to talk again. And we had a late evening in the office last night, but some patterns are emerging. I guess you could call it a SWOT analysis.

We came to the conclusion Ops is great at running ops. And there's lets to do there right now. And he's also quite good at maintaining existing client relationships. But he's not so hot with new clients though.

He's also not that hot at seeing where we should be going. And there are issues we need to address. We do have too many eggs in a few baskets when it comes to customer concentration. And we might be introducing a new product now ' but it may have been overdue and anyway, it only replaces what we have, it doesn't really take us into new areas. And there's still a lot we need to learn about what we are doing well already which we should build on.

What we agreed on is that I'm probably better at these things. And I have a team who need to be challenged more if they're to be kept happy. And I should be released to look at these more strategic things. So today we've sent a mail to the shareholders saying we want to make #3 chief accountant, and AJ is to get the title operations accountant (not sure what it means either ' but we need to promote her and give her a pay rise or I fear about whether she'll stay.) And we want to get them to take over more accounting whilst I work on three things.

The first is to review our existing systems to work out what is going well, how we can report on it better, and how we can make people make better decisions.

The second is our forecasting as people are not future orientated enough.

The third is just what we're going to do to diversify the product and client base. Call it a business plan if you like.

It's going to keep me quiet - if the shareholders agree these changes, that is.

* * *

September 16 ' Maybe it's just me, but the onset of autumn and the shortening of the days has left me lethargic. I can bounce out of bed in the light. But already it's dark when I need to get the show on the road in our household, and the dogs getting re-acquainted with street lamps on our evening work again, simply for the sake of illumination.

I fear this is my prevailing mood at work as well. I doubt anyone has noticed yet, but it's tough to get stimulated by anything. It occurred to me I've been here nearly two years now. It's extraordinary what has happened. Anything from new loos, creating a new team and unleashing the potential in the survivors of the one I inherited, sacking the owners and becoming an executive director with Ops, working successfully with him, getting the accounts and cash flow under control, building a CRM system (near enough), nearly buying a Belgian supplier, and then not doing so, starting new products, sorting out the way vans are used and increasing GP quite a bit as a result, changing auditors and nicking the best member of staff from the old ones, having fun, being the butt of my departments every joke (my fault for being the only man) and more. And so, I ask, what now?

I certainly can't leave ' not with baby Olivia due in November. But right now with the new product under way and my having little reason to be involved with it at the moment, and with little capacity for the rest of the company to do anything else, I'm suddenly feeling under challenged.

It's Friday. I think I'll share this with Ops. I'm not good when I'm bored. As my wife and #3 agree (and they do talk to each other) I'm the sort of man who needs to be packed off out of the house if I'm at a loose end, just to make life bearable for everyone else. It feels like that situation has arrived right now.

* * *

September 12 - I've seen comment of late saying taking 5 days to close down the accounts at a month end is too long.

Is it? Who says so? Why?

I'd like to think we run a good show here. Odd IT crashes apart most of the time we have things pretty much under control. There is no big month end saga as there was in days of old to get control accounts reconciled and all that sort of nonsense. The bank, for example, is reconciled daily. Why not? It's got to be done sometime.

But that doesn't allow for the human factor. I know in principle that everything should be ordered and go through the purchase ledger processes. But let's be candid. In smaller businesses sometimes that's just a nightmare we can't do. When operational efficiency requires someone to spend to get something done that a client needs, we let them do it (within limits) and frankly the PO is written afterwards to clear the system. Is that wrong? I don't think so: not if it gives us a competitive edge.

But does it mean it's more likely that we will have some unaccrued costs which get picked up in the days after the month end? Yes, it does. Would I rather those are in the accounts? By and large, yes, and so would Ops - if only becasue we don't want too many surprises hanging over from month to month which we have to tell the shareholders about. They're embarrassing.

So do we tolerate 5 days to close the system? Yes, we do; quite often. That doesn't mean the management accounts aren't started until that is done. Quite a lot of the work on other areas goes on whilst the system is closing e.g. stock and all fixed asset journals are usually cleared here before the purchase ledger is shut - becasue we rarely get caught out on accruals for them.

But I think people who say things like 5 days being too long to close down at month end haven't prepared enough management accounts of late, at least in SMEs, and don't know enough about what human beings can do to any system.

So I'm going to ignore then. Although it won't stop me sending stroppy emails to persistent abusers of the purchase ordering system (unless that abuser is me, as #3 has a habit of pointing out).

* * *

The FD's worried that he might be a blogger ' whatever next?

September 8 ' The suggestion that I might be a blogger made by someone of scurrilous disposition on this web site is causing me some considerable concern.

Whatever next? Will my eldest (let alone my team) begin to think I'm 'cool'?

No, not a snowball's chance of that.

* * *

September 6 ' Three good bits of news.

First, I now think our ledgers are back in order ' and in particular that stock movements have been correctly recorded. The thought that these might have been out of sync was just too horrible to contemplate. I can produce figures with an easy(ish) conscience again.

Second, with Ops back from holiday and most staff in full swing for the autumn again we're solving the final problems with the new kit (which some detailed trials with good staff over the last few weeks did a lot to eliminate). So we're looking for more productivity.

Third, cash flow seems to be better. The team of AJ and #4 really got things sorted. We'll have to try to keep it under control when #4 goes back to university in a couple of weeks. It's odd having her here in spells, but it's also really useful because unlike most people on holiday jobs she adds real value because we can put her on high quality jobs that need attention when she's here. I can't say I'd recommend it as an employment pattern of choice, but it's worked for us so far.

* * *

September 2 - August is our half year. Which means the results are above average important. And candidly, we're in a bit of a mess this month end. The system might be working now, but three days of deliveries requiring extensive stock and other amendments because they took place off-line leaves me doubting the quality of our data.

The result is extra stock counting in the vulnerable areas and me having to do a weekend at work when it looks like it will be a scorcher.

Which also means I'm not popular at home. I'm being reminded, quite often, that heat and pregnant women don't mix. But I'm afraid that this weekend they're going to have to.

Oh, the joys of responsibility.

* * *

August saw the FD take a holiday - and have his IT systems crash whilst he was away.

For previous installments of the FD's Diary, see:


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14th Sep 2005 12:09

5 days too long - don't make me laugh!
I'm in total agreement that to close month-end before day 5 is too early. The system I have to work with (not to mention an extremely efficient #3) could allow me to close by day 3 - certainly all ledgers would be up to date and control accounts reconciled (albeit electronically in most cases). But when I am presenting to my Board, I don't want to be thinking that the figures I'm showing them are not the entire story.
I will close at cob day 6, having done a lot of groundwork on my report before then, being in a position to present by mid-morning day 8.
I'm happy, my board are happy, and there are no surproses lurking around the corner!

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By k743snx
14th Sep 2005 12:45

Month end closedowns
If there was a little less of the "we want these numbers yesterday" attitude, the accounting community might have been spared a scandal or two.

PG (slightly tongue in cheek ;0) )

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16th Sep 2005 20:00

Dear Mr FD,

This situation of boredome seems familiar to me and i have been recently passing through this phase. But guess how i got out of it, well simply by reading all the episodes of ur Blog :-). I recently discovered AccountinWEB which is an exciting and useful site. And found ur blog which has been very useful. Well since now i have read all of the episodes so once again the situation returns but will hopefully vanish once i embark upon my search for job in few days.

For ur gooself i have some suggestions to come out of it. U can:

1) start reading a book u have longed to read
2) Make a review of the state of family affairs specially children's education to see if u can add value there too
3) Hire some new staff having unique taste of clothing.

Hope atleast one of the above would be helpfull.


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09th Sep 2005 11:04

Have you considered insuring against loss of job due to blogging?

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08th Sep 2005 17:11

Blogs and Ducks
To borrow a saying often used by the taxman, I'm inclined to say that if it looks like a duck, sounds like a duck and walks like a duck, then it must be a duck!!!

A very interesting duck at that though.

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27th Sep 2005 22:21

KPIs must be relevant (and controllable by "holder")
Whilst it is most desirable for both #3 and you that she is interested in taking on management responsibilities, and that you will relate her bonus to key performance indicators, you must recognise that there is a limit on how any one person (particularly in "middle" management, such as a chief accountant) can influence certain aspects of a business. To make cash flow the key KPI for the chief accountant may not be appropriate, since actions by many others (Ops, you, the board (?), sales, etc.) may disrupt her best laid plans - unless you also grant her the right to have some control over, or at least to provide her input on, all decisions that might materially effect cash flow.

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