After 28+ years as an accountant, financial controller, finance director & managing director for a range of businesses I opted to become a business adviser within the public sector.
In 19 years I had a range of successes culminating in the creation of a specialised forecasting toolkit for smaller SMEs. The greatest barrier most SMEs suffer in gaining access to the cash to help their businesses grow is affordable, well presented business plans & financial forecasts.
I have the experience, skills & tools to meet those needs.
There were a few stats getting bandied around re the size of an SME. This is the correct broad definition at 2003: ( EU recommendation 2003/361 ) Max 250 employees AND EITHER Max T/o EU50M OR B/S Total Max EU43M. Having examined the accounts & the books of many SMEs, they are whiter than white when compared to larger businesses up to & incl plc re paying their correct taxes & on time. The SMEs who are most likely to have hidden earnings tend to be the one-man-bands with customers willing to pay cash in hand. How many of us condone this by taking advantage of the "reduced" price yet will comment on here as if we know nothing about these practices??
When I was a lot younger I thought "old guys" talked a load of out of date, out of touch "pony & trap".
Now I am one of these old guys, I realise that maybe I have learned a bit with advancing years.
All laws & rules should be fair & equable, otherwise you destroy the basis on which they were formed. No exceptions.
This judgement makes a mockery of the law. These are trading businesses which should be subject to the same rules as all trading businesses. No exceptions!
This "law for us" approach comes from the same mentality that has voted for not kicking Rangers Football Club out the Scottish Premier League as it could cost the other clubs money they have become accustomed to receiving. Rangers were (apparently) financially propped up by a series of potentially illegal tax wheezes where they attracted players on the back of taxes they were not paying. Not paying taxes is tantamount to theft; the success bought from the proceeds of this "crime" attracted huge crowds; increased gate money all round; so these other clubs were beneficiaries to a criminal act. Its like the restaurateur who bemoans the imprisonment of his best customer for loan sharking as his restaurant will lose good business.
It is the same morality set that saw, admittedly in the early days, one newspaper saying they were only hacking in the public interest.
Sorry, public interest demands the application of laws to be fair & equable.
Mr Justice David Richards has (apparently) lost all notion of his responsibilities.
Can someone explain whether the administrators, having paid Dunfermline the £80k+ they were due from a pre-administration fixture, have prejudiced the positions of other creditors?
I think the 2 submissions which followed mine have extended the debate into the ground we should be looking at.
The "doing away with the need for accounts" proposal from the bEUROcrats is but one small bit of the equation.
It is being seen as if the only need for producing accounts is for a bureaucratic need at Companies House.
But, accounts are needed for:
managementHMRCpotential lenderspotential supplierscredit rating agenciespotential buyers of that businessanalysis & advice in case of cash/business viability problems
Will the suggested format of accounting:
A simplified, cash-based trading statement to replace the profit and loss accountA statement of positionA simplified annual return
I learned my accounting skills in the mid 60's before the advent of columnar accounts.
When accounts were presented to the clients in that old A3 landscape style, income on one side expenditure on the other: assets on one side liabilities on the other, clients had no problems at all in understanding their accounts.
I'm not sure what drove the market down the columnar route, it certainly wasn't the typewriter manufacturers.
But that single event prefaced a whole series of changes driven by computerisation. Whilst this promised all, it actually had restricted delivery in terms of user understanding of accounts.
The problem actually lies therefore in presentation which does not aid understanding. If we could but recapture that "moment".
Doing away with the need to produce accounts is just a bureaucrats answer to a problem he cannot solve.
For many, many businesses, ongoing periodic accounts are essential to the management of those businesses. Cash, as said above, does not always mean profit.
How will businesses now establish credibility to seek loans? The banks are criticised for starving SMEs of essential working capital. Changing systems like this will merely encourage their intransigence.
I think there is a lot of stuff being said re the institution that is Rangers, etc. Unfortunately, such commentary misses out the fact that the club was a quoted limited company run by people whose responsibilities as directors are laid down in statute.
It would appear that there were 2 periods where such people could be deemed culpable.
First, when a majority shareholder entered into a payment scheme which would appear to have been an abuse of the tax laws.
Second, when the latest majority shareholder appears to have failed to remit deductions from wages & salaries on or about the due date to HMRC & further failled to pay VAT on or about the due date.
In addition, there appear to be other issues surrounding the allegations whether this latter majority shareholder had conducted his past business affairs in an honorable & leegitimate fashion.
All this is, of course, compounded with allegations that the money from advanced ticket sales may have been paid into the incorrect company bank account.
The impact on football in Scotland is a side issue. We cannot allow sentiment to cloud our judgement.
There also too many cases where clever changes of business name creep into this whereby by moving the business name & assets around the business gives the appearance of continuity whilst the debts are still in the old re-named business.
The legislation around all of this needs re-examination.
My answers
There were a few stats getting bandied around re the size of an SME. This is the correct broad definition at 2003: ( EU recommendation 2003/361 ) Max 250 employees AND EITHER Max T/o EU50M OR B/S Total Max EU43M. Having examined the accounts & the books of many SMEs, they are whiter than white when compared to larger businesses up to & incl plc re paying their correct taxes & on time. The SMEs who are most likely to have hidden earnings tend to be the one-man-bands with customers willing to pay cash in hand. How many of us condone this by taking advantage of the "reduced" price yet will comment on here as if we know nothing about these practices??
When I was a lot younger I thought "old guys" talked a load of out of date, out of touch "pony & trap".
Now I am one of these old guys, I realise that maybe I have learned a bit with advancing years.
All laws & rules should be fair & equable, otherwise you destroy the basis on which they were formed. No exceptions.
This judgement makes a mockery of the law. These are trading businesses which should be subject to the same rules as all trading businesses. No exceptions!
This "law for us" approach comes from the same mentality that has voted for not kicking Rangers Football Club out the Scottish Premier League as it could cost the other clubs money they have become accustomed to receiving. Rangers were (apparently) financially propped up by a series of potentially illegal tax wheezes where they attracted players on the back of taxes they were not paying. Not paying taxes is tantamount to theft; the success bought from the proceeds of this "crime" attracted huge crowds; increased gate money all round; so these other clubs were beneficiaries to a criminal act. Its like the restaurateur who bemoans the imprisonment of his best customer for loan sharking as his restaurant will lose good business.
It is the same morality set that saw, admittedly in the early days, one newspaper saying they were only hacking in the public interest.
Sorry, public interest demands the application of laws to be fair & equable.
Mr Justice David Richards has (apparently) lost all notion of his responsibilities.
Payment to Dunfermline FC
Can someone explain whether the administrators, having paid Dunfermline the £80k+ they were due from a pre-administration fixture, have prejudiced the positions of other creditors?
Who uses accounts?
I think the 2 submissions which followed mine have extended the debate into the ground we should be looking at.
The "doing away with the need for accounts" proposal from the bEUROcrats is but one small bit of the equation.
It is being seen as if the only need for producing accounts is for a bureaucratic need at Companies House.
But, accounts are needed for:
managementHMRCpotential lenderspotential supplierscredit rating agenciespotential buyers of that businessanalysis & advice in case of cash/business viability problems
Will the suggested format of accounting:
A simplified, cash-based trading statement to replace the profit and loss accountA statement of positionA simplified annual return
fully satisfy these needs?
Bureaucrats? A plague on their crops!
I learned my accounting skills in the mid 60's before the advent of columnar accounts.
When accounts were presented to the clients in that old A3 landscape style, income on one side expenditure on the other: assets on one side liabilities on the other, clients had no problems at all in understanding their accounts.
I'm not sure what drove the market down the columnar route, it certainly wasn't the typewriter manufacturers.
But that single event prefaced a whole series of changes driven by computerisation. Whilst this promised all, it actually had restricted delivery in terms of user understanding of accounts.
The problem actually lies therefore in presentation which does not aid understanding. If we could but recapture that "moment".
Doing away with the need to produce accounts is just a bureaucrats answer to a problem he cannot solve.
For many, many businesses, ongoing periodic accounts are essential to the management of those businesses. Cash, as said above, does not always mean profit.
How will businesses now establish credibility to seek loans? The banks are criticised for starving SMEs of essential working capital. Changing systems like this will merely encourage their intransigence.
OK, I hear you, but ...
I think there is a lot of stuff being said re the institution that is Rangers, etc. Unfortunately, such commentary misses out the fact that the club was a quoted limited company run by people whose responsibilities as directors are laid down in statute.
It would appear that there were 2 periods where such people could be deemed culpable.
First, when a majority shareholder entered into a payment scheme which would appear to have been an abuse of the tax laws.
Second, when the latest majority shareholder appears to have failed to remit deductions from wages & salaries on or about the due date to HMRC & further failled to pay VAT on or about the due date.
In addition, there appear to be other issues surrounding the allegations whether this latter majority shareholder had conducted his past business affairs in an honorable & leegitimate fashion.
All this is, of course, compounded with allegations that the money from advanced ticket sales may have been paid into the incorrect company bank account.
The impact on football in Scotland is a side issue. We cannot allow sentiment to cloud our judgement.
Pre-Packs
There also too many cases where clever changes of business name creep into this whereby by moving the business name & assets around the business gives the appearance of continuity whilst the debts are still in the old re-named business.
The legislation around all of this needs re-examination.