Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Wednesday, November 16, 2016

Make Best Friends With Your Bank Manager (Here’s How)


Have you ever come across this problem? Friends of yours are having relationship troubles. One complains that the other partner never talks to them anymore, and that they never discuss problems. The other says…. Exactly the same thing.

You just wish that one of them would take the initiative and start talking to the other.















Unfortunately, it takes two to tango. If you want a good relationship, you both share some responsibility for communicating with each other.

And since this is an email about financial management of your business, not personal relationships, what works for couples also holds true for your company and your bank.

Business owners often complain about their relationship with their bank. It’s almost always the same issues: No one’s available to answer questions…  Their bank manager shows no interest in the business….. When you need help urgently, they’re just not responsive.

But instead of complaining, why not pick up the phone and talk to them?

If you want a relationship with your bank manager, you can’t rely on them to do all the heavy lifting. You need to work at it, too.

Make your bank manager your best friend.

Don’t keep them in the dark – let them know what’s going on with your business on a regular basis. Give them good news as well as bad, and send them your monthly management accounts.

Invite them for meetings and to visit your company. They’ll usually come.

They hate surprises, so if you think you’re about to hit a bad patch and need their support, get in touch sooner rather than later. They’ll be more inclined to help if they can see that you have a long-term plan for your business.  It’s in their interests to lend you cash, so help them help you.

Find out what networking groups are in your area. Many may include local bank managers – it’s a great chance to meet them informally and start building relationships.

Size could be an issue, of course. Most banks will not have dedicated relationship managers for small-sized companies, but what they consider small varies. Generally, the lower limit is a turnover of £1-£2 million. Some, such as Metrobank, have no lower limit and will be happy to help you out no matter the size of your business.

At Insight Associates, we make a point of nurturing relationships with local banks because it’s so important both for ourselves and for our clients. For example, we get to know local bank managers and invite them to our offices so they can see first-hand how we work.
Having an open line to your bank manager will always pay off in spades.


In a previous email I mentioned a customer who had complained about their banking. We solved that by moving them to a bank where we already had a relationship, helping them to get that too.

Many people consider their bank manager their enemy, but they don’t have to be. They can be your business’s biggest friend and supporter, giving you great business advice, helping you tide over difficult periods and smoothing out issues with your banking quickly.

So don’t leave it to your bank manager to reach out first… The relationship is far too important to leave to them!

Wednesday, November 09, 2016

Is Online Banking Safe For Your Business?


Wherever the president of America goes, he (or soon, possibly, she) is accompanied by a military aide carrying the “nuclear football”. This is a metal briefcase in a black leather “jacket” with the launch codes for nuclear weapons.

I carry my briefcase myself – no military aide – and admittedly it’s not quite nuclear weapons, but I also never, ever leave the office without my own set of codes.
To be precise, I carry a bag full of different security devices to access each of the major banks’ online banking facilities, such as Barclay’s PINsentry and HSBC’s SecureKey. This means that if our clients need me to access their accounts for any reason, I can do so even on the go.

It’s actually so rare for one person to constantly use all the different banks’ online security systems, that we were contacted by HSBC in Canary Wharf, who wanted insight into our experience.

Without going into the details, I had a fair amount to tell them – because there are wide variations between the systems.

And that’s true for almost every aspect of Internet banking.

As you’ve probably noticed, banks are working hard to get their customers online as much as possible. They are closing hundreds of branches all over the country, a process that is likely to accelerate over the next decade.

It makes sense for them as it’s a much cheaper way of doing business.
It can also work for you because it’s quicker, more convenient and flexible.

But – and it’s a big but. Not all internet banking services are the same. In fact, there are lots of major differences. And they will not all equally suit your business.

Here are some things to consider:
  • What kind of payments can you make? Are there any restrictions on transaction sizes and do these fit your needs? What about foreign payments, if you do business with companies abroad?
  • Security: How secure is their system and what guards does the bank have in place against fraud?
  • For example, how easy is it to log onto your online account? Think about how you control access. Do they use a dongle, PIN sentry or another system which has to be physically plugged into a USB port?
  • Connected to that…..
  • ...Authorisation: How easy is it to authorise payments? Do you need dual authorisation or does the bank require just one person to allow a transaction to take place online? This can be important because you could unwittingly be giving a huge amount of authority to a relatively junior member of staff.
  • How much control do you have over your online users? If multiple users need to access your online account, can you give them different levels of access? Some banks, for example, will allow certain users to look at statements but not make payments. Others are an-all-or nothing proposition.
There is no right or wrong answer to any of this – it all depends on the nature of your business and your specific requirements.

What’s important is that, unlike most businesses, you think carefully about your bank’s online services, and whether they really do fulfil your needs. If not, it’s time to go shopping for a new bank.

Monday, November 07, 2016

Are you with the wrong bank?


Banks...the institution we love to hate above all others.







Indeed, I had one client who complained about his company’s bank incessantly. The customer service was bad, their Internet banking didn’t work and nobody took time to find out about him and his business.

One day I stopped him in mid-flow.

“Our relationship with our own bank couldn’t be better.  Everything happens quickly, we can speak to a manager whenever necessary and their local manager even came to visit us to learn more about our business.

“If you don’t like your bank,” I asked, “why not find another one that will offer your business the same level of service?”

I even offered to help him move, as we have done for several clients, because a good relationship with your bank is crucial for smooth financial management.

He stared at me blankly. It had never occurred to him to move.

We often like to complain about our bank, but the trouble is we seldom do anything about it.

Research shows that customers are likely to stick with the same bank once they’ve opened an account, no matter what. When they start a business they will almost certainly go to the bank where they have their personal account.
 
It doesn’t make any sense. You should be shopping around for the bank that’s best for your company.
 
Not long ago, it didn’t matter as much. The four big banks probably all had a branch near you, and offered broadly equivalent services.
 
But following the banking crisis, the industry has gone through a period of enormous change. Not only have the big banks started to break up – welcome, TSB - we’ve also seen the arrival of new ‘challenger’ banks such as Metrobank, Atom, Aldermore, Handelsbanken and others, which are much more ‘niche’.
 
At the same time, many larger banks are closing smaller local branches, with a few abandoning the high street altogether in favour of the digital space.
 
There are now genuine differences between the banks, and genuine choice.

Here are some factors to consider:
  • What facilities do you need? Will you be cashing cheques, or depositing large sums of cash frequently? Do you need a deposit box? If so, you’ll need a bank with a physical presence near your headquarters. As I said, this is no longer a given for many banks – and over the next decade, will become even rarer….
  • Internet banking: Banks are doing more and more of their business online. If this is a facility you intend to use often, you must know that their security measures are up to scratch. I’ll go into this in more detail soon so watch out for the next blog.
  • Foreign payments: Do you conduct businesses overseas? If so, what are the fees like for foreign payments? This area is becoming much more competitive.
  • Charges: How much does the bank charge and what for? Make sure you understand all the charges because banks can be slippery about this.
  • What kind of relationship do you want? Do you expect to have a relationship with your bank manager, for example? Depending on your size, not every bank will be able to offer this.
The good news is that moving banks is no longer complicated. The banks will automatically transfer all your standing orders and forward all direct debits made out to you, so there’s very little for you to do.
 
So is your bank fulfilling your company’s needs? If not, it’s time to shop around.
 

Wednesday, October 26, 2016

How to Get Staff To Engage With Your Budget


At the Astounding Leadership Insights conference which we sponsored in September, one of the presenters told the following powerful story.

A man was in a road digging a hole, surrounded by a group of people directing him. Each time he’d finished they told him, “That’s not what we wanted, dig another one.”
Before long, the street was littered with holes – and the man digging them was frustrated and annoyed. He had no idea why he was digging, so he saw the whole exercise as pointless.

Eventually, one of the supervisors mentioned the truth: They were looking for the gas mains, because there had been a leak. However, they’d lost the plans and had no idea where the gas mains were.

Immediately, the digger’s attitude changed. Now that he understood why he was digging a series of holes, he worked with renewed enthusiasm, and even made his own suggestions about where it made sense to dig.

The moral of this story? If you want your staff to engage with what they do, make sure they understand why they’re doing it.

It’s particularly relevant when it comes to your budget.

Many companies have trouble getting their staff to take the budget seriously, and stick to their spending limits and priorities.

One of our directors, Shirley Hoy, loves to relate how in a relative’s company, this became such a problem that he handed his staff Monopoly money. Every time they wanted to spend money for their department, they had to hand some over.

The point was to help them visualise their share of the budget, and make them more accountable for how it was being spent. It was certainly a creative solution!

But it’s just as important to explain to staff why the budget looks like it does, and how their own portion of the budget fits into the overall strategy.

Understanding where your piece of the jigsaw fits in is a very powerful motivator.

Without that context, the figures in the budget look random and abstract – especially if the
budget is divided up in the plain, faceless way that so many companies insist on.

With that context it gains meaning and purpose.

So tell your staff how the budget helps your company achieve its goals. For example, it is designed so that you have everything in place to raise turnover by 20%, or to help you conquer a new target market.

Then explain their portion of the budget.

Tell them: “Your branch is getting £X in order to make it a flagship for the UK,” or “We are increasing your budget for communications training, so that we can ensure the team works together seamlessly – and is ready to take the lead next year in a major project.”

Do that and not only will you have them fully on board with the budget, but – like our man in the hole – they may be able to make valuable suggestions about how to work within the budget, too.

If you’d like help creating a budget that will push your business forward and engage staff, let’s chat. It will help your business run much more smoothly.

Wednesday, October 19, 2016

With Your Budget, Think Like a Hypochondriac


We all know someone who’s always going to the doctor, worried about their health. They’re never truly ill and it seems like they never get sick.

I don’t think it’s a coincidence. Because they spend so much time obsessing about their health, they never miss a thing.

That’s why you need to check you business’s budget more often, too.

Many businesses never revisit their budget. They draw up a comprehensive set of figures, then put it away in a drawer for the next 12 months.

That’s a mistake.

When you set your budget, you are setting your goals and spending priorities for the year.

Inevitably, things will change – there will be unexpected expenses, the areas where you want to invest will shift, you’ll bring in more revenue than expected or there will be crises and emergencies.

That’s all natural and normal; Business is hard to predict.

But the budget you set months earlier is like a roadmap showing what you expected to be spending and bringing in.  It allows you to compare where you wanted to be with where you actually are.

If you find there’s a significant difference between your budget and reality, then you need to understand why that’s happening.

Think about how close you came to the budgeted figures, what adjustments need to be made, if any, and what changes should you make to improve performance.

It’s not a question of right or wrong, or good or bad.  It’s simply a way to help you understand more deeply what’s happening in your business, a benchmark to measure your performance.

I recommend you looking at your budget at the very least quarterly, preferably monthly, but this could vary depending on the nature of your business. Your budget should be an integral part of your monthly management accounts pack.

Is it highly volatile? How important is it that you stick to your budget closely? If you’re working to ensure your business can make loan repayments, for example, the risk of falling behind could be high. Depending on your needs you might need to look at it very regularly.

That’s no bad thing. Just like the hypochondriac whose obsession with health keeps them healthy, keeping a close eye on your financial figures will keep your business healthy, too.

You’ll get a deep understanding of what’s really going on – and never miss a thing.

If that’s a result you’d like to see let’s chat. The more insight you have into your own business, the more success you’ll see – and we’d love to help get you there.

Wednesday, October 12, 2016

How to Guarantee Your Budget Fails


Several years ago, an acquaintance of mine bought out the company he had been working for, together with four other managers.

To raise the capital they needed, they went all-in and re-mortgaged their houses.

It was an enormous personal risk, so why did they do it?

Because the company’s budget stated that the following year sales would rise rapidly, and they would quickly recoup their investment.

Unfortunately sales stuttered, and 18 months later the business was in trouble.

In this case, whoever drew up the budget (possibly one of those managers…..) was guilty of a classic and very common error. They had assumed a rise in sales, but the budget didn’t say how this was going to happen – what they had to do to achieve their goal, how much they would need to spend or where they would have to invest.

So it never happened…..

Your budget is worthless if the figures it is based upon are no more than wishful thinking.

To create an effective budget, you need to work differently.

Start with the question: “What do we want to achieve, and how much will it cost us to get there?”

So for example, if we want sales to rise by 20%, what do we need to have in place? Do we need to hire two more sales people? Buy a certain amount of equipment or give a particular department more funds?

The actions you need to take become your budget.

When that happens, the end point - that 20% rise in sales - is no longer an optimistic dream, but the natural consequence of your game-plan. And it becomes an entirely reasonable figure upon which to base your budget.

Don’t get me wrong: Optimism in business is great. It can sustain you through some of the darkest times your business will face and if there’s one thing for sure, you will face some dark times.

But when it comes to budgets, you don’t need optimism. You need realistic, concrete plans.

All the more so if the stakes are high – for example, if you’re re-mortgaging your house!

If you would like to formulate a useful, realistic budget for your business, please get in touch.

With a good budget, you are far more likely to see the growth you want.

Monday, October 10, 2016

The Real Reason to Budget (It's Not What You Think)


“Plans are nothing, planning is everything.”

That was General Eisenhower - and as the man who oversaw D-Day, he should know. Before the greatest invasion in history his army spent, quite literally, years working out what resources were necessary, consulting 125 million maps (yes, that is the real figure), developing transport arrangements, and training troops.

But although Eisenhower was speaking in a military capacity, his words are just as relevant to your business’s budget.

Too many businesses fail to give budgeting the care and attention it deserves, throwing together some optimistic figures and then promptly forgetting about them for the year.

I believe this happens because they don’t really understand why budgeting can be so useful.

As Eisenhower was aware, the true value isn’t necessarily in the budget itself but in the process of drawing it up.

Some of the plans he drew up for D-Day needed to be adjusted on the ground – indeed, he very nearly postponed D-Day because of bad weather.  Nevertheless, all those months and years he spent working out exactly what was necessary to win paid off, because the fundamentals were all in place.

He had the right troops, with the right equipment, and the right training.

Putting together a good budget is exactly like that. To really come up with meaningful numbers, you are forced to analyse your business in depth.

Why are you pouring resources into a certain area of your business? Are all these activities really necessary? What do you need in place to achieve your growth goals?  Are those growth goals even realistic?

Only then can you decide on what your final budget will be for the coming year, and how to allocate available funds.

Just like on D-Day, you’ll probably have to make adjustments to your budget almost as soon as the ink has dried (as Harold Macmillan put it, “Events, dear boy, events”…).

But by taking the time to assess every part of your business, you’ll develop a deeper understanding of what’s really going on, and be able to make better decisions even when circumstances change.

So, try not to think of creating and managing budgets as an unpleasant task. Instead, view it as an opportunity – one which could be key to the success of your entire enterprise.

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
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