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?

Sunday, June 20, 2010

Identity theft and fraud

We all hear a lot about identity theft and related fraud ... but only when it happens to you does it perhaps really have an impact and make you sit up.

We have recently become aware of a scam e-mail that is doing the rounds which does make me feel a little uneasy ... it looks like this:

From: Mr Garry Mumford FCCA, Director mrgarryinsight@hotmail.com
Reply-to: insightsassociates@w.cn
Date: Thu, Jun 17, 2010
Subject: Deceased client

From: Mr Garry Mumford FCCA, Director
Insight Associates ltd.
Insight House Riverside Common Rd
Stansted Mountfitchet Essex. UK.

I have been directed to contact you with regards to ongoing investigations involving a deceased client of Lloyd TSB Private Banking Ltd. The client, who shared the same last name with you, died intestate so it is standard and mandatory that a next of kin be sought who may inherit the estate. Kindly clarify the following:

- Are you aware of any relative of yours whose last known contact address was Brussels, Belgium, with investments of considerable value with Lloyd TSB Private Banking Ltd?

- If you answered yes to the above then can you establish beyond reasonable doubt your eligibility to assume status of next of kin to the deceased?

Understand that we are at this point constrained to share more details of this matter with you. We will need to hear from you urgently and hope you can assist us in bringing this inquiry to a conclusion. Please respond to my private email below as soon as possible to afford us the opportunity to close this investigation. Thank you for accommodating our inquiries.

Yours sincerely,
Garry Mumford FCCA, Director
Insight Associates Ltd.
Email: insightassociates@w.cn

We have received many phone calls and e-mails about this, including one from Lloyds themselves. Since the e-mails clearly did not originate from us there is not a great deal on the face of it that we can do. We have asked all those we have spoken to to report it themselves.

The e-mail when you look at it closely contains numerous errors in our details and in the English used. The e-mail address is nothing like ours so any responses get routed back to the perpetrator. There also appears to be a number of slight variations in the ones we have seen.

The information they have used is all freely available from our web site and numerous other places across the web.

It somehow makes you feel vulnerable and concerned a bit perhaps about reputational risk ... but other than that you really cannot do much else other than to just get on with life.  I just wish these people would find something better to do with their time!

Monday, June 14, 2010

Common Financial and Accounting Terms Explained – Number 1

This is the first of what will be occasional blog entries explaining various financial and accounting terms that business owners and managers may come across.

Like all technical areas, accountancy and finance has it’s fair share of acronyms and odd terms … but when you understand them they can all help get a better understanding of the financial picture of your business. Which at the end of the day is what it is all about.

So our first term is:

DSO

DSO stands for Days Sales Outstanding and is a commonly used measure to understand the amount outstanding as Trade Debtors (amounts owed by customers).

Just looking at the total value of Trade Debtors alone is not a good indicator of the efficiency in collecting the debt or if perhaps there are any trending issues. If you have a good sales month you might expect debtors to rise if your business gives 30 days or more credit. What DSO does is show the value of your debtors as a factor of sales, and therefore it is not influenced by any fluctuations in sales values month by month.

There are commonly two methods of calculating DSO. The simple method is to establish the average daily value of sales (including VAT, as VAT is included in your debtors!) and divide this into the total amount of debtors outstanding. The answer is the average number of days of sales tied up in debtors. If this is then plotted each month the trend in DSO will show if the businesses debtors collections are getting better or worse.

Total Value of Debtors ÷ Average Daily Sales (incl. VAT) = Average Number of Days Sales tied up in Debtors

The more complex method as before but using the most recent months sales first and working back, and therefore getting in effect a more accurate measure than a simple average. However, as DSO is most useful when looking at trends whichever method is used it is consistency which is important.

What might you expect the answer to be? Well that depends a great deal on your agreed credit terms. But as an example lets assume that you give 30 day terms. In reality this often means “30 days current month”, that is to say your customers will pay you 30 days after the end of a month. April sales being paid on 30 May for instance. If your customers paid you bang on the nail on 30 May, then at the end of May you would expect only May’s sales to be outstanding …and therefore your DSO would be 31 days. However, the reality is that payments are likely to arrive during early June …in which case at the end of May you would have both April and May’s sales outstanding and have a DSO of 61 days. Alternatively the answer may be somewhere between the two!

When companies have a member of staff responsible for Credit Control, DSO is a useful measure to judge performance.

Friday, June 11, 2010

The end is nigh for Time to Pay?

We’re all aware that the most pressing priority of the new coalition Government is to deal with the country’s massive deficit and ahead of the June 22nd Emergency Budget speculation is rife about what schemes will be axed to help achieve this.

We at Insight have been singing the praises of the HMRC ‘Time to Pay scheme’ for some time now and many businesses have enjoyed the benefit of deferring tax payments of more than £5bn in total on ‘agreed terms’ rather than facing hefty late payment penalties when they can’t pay. Indeed we have used the scheme through the Business Payment Support Service very successfully for a number of clients.

In a recent survey of SME senior decision makers, 30% said they expect HMRC to withdraw the scheme with a further 31% believing it would continue for existing users only.

With many businesses relying on Time to Pay as a ‘secondary banking facility’ to ease an otherwise difficult cashflow, one thing that is clear is any withdrawal of this service may have serious repercussions which could result in terminal insolvency for many businesses. It is critical that if the scheme is withdrawn or reduced in scope it is done very carefully indeed.

One of our key areas of expertise at Insight is the management and improvement of cash flows and reducing businesses financial risk. Get in touch if we can help in anyway.

Thursday, June 10, 2010

New Web Site ...

Our long overdue face-lifted web site has now gone live!

Check it out at http://www.insightassociates.co.uk/

Like all sites should be it is very much still work in progress and new and revised content will be added over the coming weeks.

Two significant additions are a video introduction and our new business health check. Why not take a look!

Fraud - Don't get caught out!

Ernst & Young have just completed their 11th Global Fraud survey and you may find the results a little unsettling.

The Bribery Act 2010 is a criminal law reform that encompasses modern bribery offences. Under the new Act individual directors and executives are no longer immune from prosecution. Despite this 18% of UK companies have not performed a fraud risk assessment in the last 12 months and 8% have never completed one!

A troubling fact when there has been a 20% increase in significant fraud cases in Europe in the last year.

In addition, it is very common for fraud to increase in troubled times. It makes sense I suppose, as times get tough people (including perhaps your employees or business partners?) get desperate.

To minimise fraud exposure it is essential for businesses to carry out due diligence before taking on any new financial risk, and to be sure that internal processes are robust enough to either prevent it or show it up if it should happen?

The financial systems and controls that Insight Associates implements on behalf of its clients provide good clear audit trails and set in place sound reporting and approval structures to minimise risk and prevent incidents before they occur – minimising risk to both the company and individual directors. These systems and controls have been developed over many years from experience and knowledge in many diverse businesses and situations. So all of our clients benefit from our work.

If you would like to find out more contact us now.

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
Tel: +44 (0)1279 647447 Fax: +44 (0)1279 814512
Insight Associates is a trading name of Financial Catalysts Limited. Registered in England and Wales Number: 5670047. Registered Office as above. Disclaimer | Cookies