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?

Thursday, August 28, 2008

Latest News Insight

The latest edition of "News Insight" our e-newsletter was published today.

Containing many updates on recent news from Insight Associates and also our new article on Credit Management.

If you have not received it you are probably not on our distribution list ...if you want to be just e-mail your details to info@insightassociates.co.uk and we will soon rectify that!!

In the meanwhile you can read it now by clicking here

Monday, August 25, 2008

Business and financial planning in an economic downturn

As concerns over the UK economy continue to grow, it is essential that all businesses, are properly prepared for financially-testing times. Sound business and financial planning is always important, but especially so in an economic downturn.

The following few tips can help you weather the ‘credit-crunch’ storm (also check out our ten tips in our news section); but remember, there is no substitute for one-to-one discussion, so contact us today to give your business the best possible chance of success.

Debt management

This is essential in an economic slowdown – you will soon encounter difficulties if you allow outstanding debts to accumulate, a problem which is all the more likely in lean times. Make sure you have a clear policy for collecting debts and that customers are aware of it. Above all, ensure you enforce it. Pursue outstanding debts with letters and telephone calls, and threaten legal action if you have to (Solicitors letters are very effective and cheap!).

Ensure that your terms of business allow for adding interest on overdue accounts (again a useful threat). If your terms set credit limits, stick to them and stop supplying as credit limits are reached or invoices go unpaid.

Take a look at our white papers.

Maintain customer loyalty

In difficult times it becomes harder to attract new customers. Therefore, it is more important than ever to maintain loyalty amongst your existing ones. Consider ways of developing and rewarding customer loyalty, such as selected discounts (especially for early payment), regular mailings or loyalty cards.

Beware of cutting prices

If receipts begin to taper off, it can be tempting to cut prices. But this can be a mistake. In a recession your costs will inflate and as a result you may be forced to raise prices to cover this expenditure. Cutting prices can also have the negative long-term effect of devaluing your image in the marketplace. Remember that suppliers might raise their prices as well, so try to negotiate a long-term discount or fixed prices with them.

Don’t skimp on marketing

The marketing budget is often the first casualty in a recession, but smart businesses continue to market through a downturn and position themselves to take full advantage of the upturn as soon as it starts. In tough times the marketplace becomes more competitive – you may need to market more vigorously, not less. If you do not have a strategic marketing plan, now is the time to draw one up.

Look after your employees

While job cuts may be necessary in some circumstances, you should always try to retain your key employees: their strengths will help you through an economic downturn, and you will need them when business picks up. You should use any dips in workload as an opportunity for key staff to develop new skills and coach newer members. Remember, employee motivation can rapidly deteriorate in times of economic uncertainty, so maintain good communication with your staff to prevent a decline in morale.

Planning ahead

Planning is vital for the success of your business. Always remember the old saying: “if you fail to plan, you plan to fail”. You need to plan the changes that can strengthen your enterprise against tough times, and how those changes will be put into action.
However, planning is not just about ‘worse case scenarios’ – you should always have an up to date strategic vision which flows through to a well thought through business plan with key actions and objectives. Our JUST ONE DAY strategic planning session is a great way to start the process, helping you see the wood from the trees - contact me to learn more!

Tuesday, August 19, 2008

Approved Mileage Rates

Those that use their own cars on company business, will be familiar no doubt with the Inland Revenue’s Approved Mileage Allowance Payments (AMAPs). These are the amount per mile that you can reclaim from your employer without any tax or NI issues. Many of Insight Associates clients make use of this system.

AMAPs were introduced in the 2002/03 tax year and were set at 40p per mile for the first 10,000 business miles and 25p per mile thereafter (in any one tax year). AMAPs were meant to be a contribution towards the depreciation and running costs incurred by the employee in using the vehicle for work purposes (including the cost of petrol). This rate has not been revised at all since, despite very significant rises in fuel prices and the cost of motoring generally. However, over the same period there have been a number of upward increases in the approved fuel only mileage rates used by company car drivers who do not get all fuel costs paid by the employer.

The AA has calculated that the actual cost incurred by a driver of an average car (costing between £13,000 and £20,000) over 10,000 miles is something close to £6,500. This compares to the 10,000 x 40p = £4,000 that can be reclaimed. Therefore the driver will subsidise employment related travel by almost £2,500.

It is very clear that this whole area is in very urgent need of attention by the Government.

However, in the meanwhile there is a little known extra that can be claimed, that may go some way to plug part of the gap. This is the Approved Passenger Rate. This is an additional tax free 5p per mile that can be claimed when one or more employees are passengers in the vehicle and also travelling on business. The amount is fixed at one x 5p regardless of the number of passengers unfortunately! So make sure you keep a note of the journeys that you make when you have a fellow employee with you and claim the extra 5p. Thanks go to our good friend Nick Paterno of Vantis for letting us know about this one - thanks Nick!

Thursday, August 14, 2008

Is this another sign of the times ... ?

I have just read on "Accountancy Age" - the weekly journal for the accounting profession (yes - sorry - a small concession to being an Accountant!!), that two of the largest firms (PWC and Deloitte) are actually running specific training for their staff on spotting early warning signs in their clients.

I am determined not to fill this blog with constant talk of the credit crunch - but I do find it rather interesting that these guys feel it is worth investing what is no doubt not an insignificant sum on ensuring their staff are "ready". I am sure they would not do it if they did not feel it was worthwhile.

They are focusing on compliance and banking facilities, and the managements view on risks and prospects - as well as cash flows of course.

It is no doubt true that what might well have been valid positions to take only twelve months ago do not hold true now. We have seen the fortunes of businesses turn rapidly, often made worse by the managements apparent complacency in their position.

You must constantly review where you are and what is going on around you - and ensure that your financial management and control is really giving you what you need to run a strong and robust business that can weather this storm ...however strong it turns out to be!

Sunday, August 10, 2008

A real alternative ...

In the early stages of a businesses life the founders are so busy just getting on with running and developing the business that they see "doing the books" as an annoying extra that has to be done when time allows.


Invariably this is on the kitchen table on a Sunday afternoon when there is some impending deadline - like the VAT return or to get numbers for the bank manager!


As the business grows the founders find they have less and less time for all of this admin and they employ a part-time bookkeeper or accounts assistant. The mentality does not change though and this poor sole is often pushed into the corner of the office and still just seen as an overhead.


What a huge missed opportunity!


"Doing the books" should never be seen as necessary evil but as an essential way to manage and add value to the business. This is not normally the case as the people who create and build businesses are often technicians who understand the work that the business does but not all of the aspects of actually running a business that does that work! Financial management is an essential and critical part of the whole picture - the very foundation on which the business is built.


Just picture this. Imagine that you are the MD of a multi-million pound business - you've done it! - your business has annual revenues of £30m, maybe more. There you are sitting in your big office presiding over your success. Outside your office is a long corridor and at the end of it is a door with "Finance" written on it. If you have any sense you never go through that door - why would you? Inside there are a team of people dealing with all the day to day accounting and finance issues in your business. Receiving the post, paying the bills, collecting cash, paying the employees and generally counting the beans! Everything from an accounts clerk, credit controller, payroll clerk, to accountants and the like.


No - you don't need to deal with all that now (unlike you did when you were smaller) as you are a big business and you have people to do it for you.


Also, you have your Finance Director - he's the one in the know - he knows what is happening the other side of that door, and what's more he understands it!! He is your candid friend, your confidant. He has a grip on the numbers and can help you make quality decisions about your business. What would you do without him?


But back to know. Your smaller business where you are still concerned about the minute detail of every piece of paper - but don't really have a grip on what it all means.


Why should it be this way? Why does the small business have to make do and mend, or have a bookkeeper who is always a compromise and often just taken for granted and ignored. Why can't the smaller business have that wonderfully orchestrated finance team that the bigger guys have and then you can get on with running and developing your business - what you do best.


Well now with our OUTSOURCED FINANCE DEPARTMENT the smaller business can have what the big boys get - no more compromises - now you can have the finance team that your business deserves - one that can add true value to your business.

Tuesday, August 05, 2008

Paying the VAT bill ...

I found it interesting to read in the accountancy press recently, that there has been quite an increase in "time to pay" deals with the VAT man!

Many businesses often find that the quarterly VAT bill creates quite a spike in their cash flow, but the suggestion is in these difficult times that with tight cash flows this can be a bridge too far.

The article suggested that HM Revenue and Customs were open to making arrangements to pay by instalments, but will charge interest. It is certainly our experience that they will allow this if a proper approach is made, but with VAT they rarely let it roll over to the next quarter. Which in effect means you have three months to get up to date.

The trick is not to bury your head in the sand but plan forward and approach HMRC in good time and with a well thought through proposal. We have significant experience of dealing with these situations as do our colleagues at KSA, who run the fabulous web resource companyrescue.co.uk where you can find further information.

Doing a time to pay deal like this is though only a very short-term fix. In planning and thinking your position through you need to consider if perhaps your problems are deeper - in which case there could be better and more appropriate solutions.

At Insight Associates we have 16 years of experience of dealing with businesses which are financially distressed, in all ways and for all reasons. If we can help give us a call 0800 180 4265.

Monday, August 04, 2008

Woolly Mammoths and other ramblings ....

We are very fortunate at Insight Associates to have a great loyal and committed team, who all have tremendous talents and are totally focused on providing our clients with a quality service. Everyone makes a great contribution to enable us to deliver to our clients, and as in any team each have a role to play.


One long standing member of our team is Shirley Hoy our Office Manager. As well as being a great and talented administrator Shirley is also phenomenally creative and the following piece written by her is a great example of this ... I would never have been able to see this connection ...


I watched a television programme on the history channel last night detailing the struggles that early humans went through for survival around 10,000 BC and it got me thinking about how some things haven’t changed.

The programme mentioned an area of America that had naturally occurring tar pits (where oil pushes up through the ground) creating what they affectionately termed ‘naturally occurring carnivore traps’. These tar pits had been excavated and revealed a huge selection of beautifully preserved bones from woolly mammoths and giant sloths to sabre-tooth cats.

What happens is an animal such as the woolly mammoth accidentally stumbles into one of these tar pits where they get stuck and die. The dead or injured animal’s carcass attracts attention from carnivores such as the sabre-tooth tiger looking for their next meal. That animal falls into the same trap and dies and the circle continues.

Starting or growing your own business can be full of pitfalls. You are merrily getting on with what you do best and then all of a sudden you find yourself in a sticky situation and you’re not sure how you got there or how to get out.

That’s why you need to make sure you surround yourself with people who can bridge these gaps in your knowledge to help you get over the sticky situation before you get bogged down.

There are some businesses who have faced difficulties in the past and have just about managed to scrape through because the economy has been buoyant.

However, with the current economic downturn and the dreaded credit crunch (where borrowing cash is increasingly difficult) things may not be so easy next time around. That’s why it’s vital you understand why your business keeps heading for the ‘dark side’ and give yourself the tools to fully understand the hazards of your environment and avoid the pitfalls.

So, don’t stick with your Neanderthal accounting practices – try using the Outsourced Finance Department to help you through the here and now so you can be assured of a bright future.



Brilliant!

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
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Insight Associates is a trading name of Financial Catalysts Limited. Registered in England and Wales Number: 5670047. Registered Office as above. Disclaimer | Cookies