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?

Monday, October 17, 2011

Millions, Billions and Trillions ...

A guest Blog from our friends at
Independent Banking Consultants 

Since 2008 references to “millions” “billions” and “trillions” have become commonplace; but do we really appreciate how big these numbers are?

In 2008 the collapse of Lehman Brothers signalled the onset of the global financial crisis, which in turn has escalated into the present sovereign debt crisis. Throughout this time references to “billions” and “trillions” have become commonplace in discussions about GDP, bank bailouts, quantitative easing and the like. So just how big are these numbers?

Before we try to put them into context lets first define the numbers themselves. Historically the international definitions of these numbers differed but the following are now the accepted ones:

1,000,000 - One Million (a thousand thousands)

1,000,000,000 - One Billion (a thousand millions)

1,000,000,000,000 - One Trillion (a thousand billions)

The problem is that these numbers are so huge that it is hard for the human brain to comprehend them without adding a frame of reference. And one of the easiest ways to do this is to relate them to a recognised period of time. Take ‘one second’ for example; there are 86,400 seconds in one day.

Therefore a million equates to more than eleven and a half days when measured in seconds.

A billion equates to roughly 31 years and eight months: in other words, if you had started a clock ticking when Margaret Thatcher first became Prime Minister it would only have passed the billion second mark last year!!

And your clock would have taken a staggering 31,709 years to count out a trillion seconds!!!

Putting some recent events in context

If we now apply the same frame of reference to some recent events it really helps to put them into context.

  • At the time of writing the UBS rogue trader has cost his (former) employer $2.3 billion – that’s nearly 73 years when measured in seconds, so you would have had to start your clock in 1938, the year before the Second World War started 
  • In April Lloyds TSB set aside £3.2 billion to cover the cost of payment protection insurance mis-selling – measured in seconds that equates to over 101 years, so that’s the same as your clock running since 1910 (two years before Titanic sank on her maiden voyage) 
  • Recently the cost of separating retail and investment banking was put at £7 billion – that’s 222 years, or back to 1789 (the start of the French Revolution) 
  • There is talk of increasing the European Financial Stability Fund to two trillion Euros in order to cover European bailouts and recapitalise its banks – that’s 63,418 years which would take us back to the time of Neanderthal man 
  • The USA recently increased its overall debt ceiling to $14.3 trillion – that’s an eye watering 453,438 years!! 
Small numbers are often not as benign as they may seem

So what conclusions should we draw from all this?

Well, you can remember this as a fun thing to entertain your friends with, although there is also a serious side to it that stems from our tendency to overlook the reality behind many numbers – sometimes numbers that can appear quite small and innocuous.

In our world we see this all the time, whether it is borrowers who fail to appreciate the difference that interest rates can make to the overall cost of some loans; or not appreciating the creeping effect of compound interest on the total amounts repayable.

It is always worth taking a reality check with numbers – especially when talking about loans that your business will be responsible for repaying, or for which you might be giving a personal guarantee. Getting the detail right can makes a BIG difference to the end result…

Independent Banking Consultants Ltd

Saturday, October 08, 2011

Love and Loss - Steve Jobs

In amongst all the material being realised this week in the aftermath of the untimely and tragic death of Steve Jobs, founder of Apple, this really hit me. It is so true in everything we do, but in particular business. It is often what makes the difference between success and failure.

Steve Jobs gave this as his second story of his Commencement Address at Stanford University on June 12, 2005.

Love and Loss

I was lucky. I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation - the Macintosh - a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started?

Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I thought about running away from the valley. But something slowly began to dawn on me - I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT.

I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together.

I'm pretty sure none of this would have happened if I hadn't been fired from Apple.It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers.

Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking.

Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. 

Don't settle.

Steve Jobs

Saturday, September 24, 2011

44% of businesses have poor accounting records

Business owners beware – after a very successful pilot scheme HMRC has decided to carry out a further 12,000 business record checks in the current financial year.  Recently established businesses are most likely to be approached and a further 20,000 checks are planned for the next financial year.

Results of the pilot scheme showed that a massive 44% of businesses had issues with their record keeping and 12% had seriously inadequate records and could face penalties of up to £3,000.

For years Insight Associates been extoling the virtues of good record keeping to understand your financial position and to make good business decisions.  From HMRC’s perspective good records are also an indication of how likely they are to receive the correct amount of tax – so it’s in their interest to notice inadequacies.

In brief you should pay particular attention to sales/purchase invoices, receipts, petty cash and general expenses.   We’ve covered many of these topics on the Business Hub Radio show and you can read the articles and listen to our podcasts here

For more in-depth advice or details of our accounts audit procedure contact me, Garry Mumford, directly.

Sunday, September 11, 2011

Watching supplier bank details

Whilst businesses will be vigilant and careful with making payments over the Internet, using their banks Internet Banking offering, how many times do you actually consider if the bank details you are using are correct?

Just think how easy it could be to get those details wrong, or for them to be changed without you being aware and your payment ending up in the wrong place, or worse!

An interesting scam that has become increasingly common recently is for a fraudster to request that you change an existing suppliers bank details so that payments get directed to him/her!  A simple telephone call, or maybe an e-mail might innocently get acted upon and before you know it your cash is lost to fraud.

This is becoming such an issue that recently we have noticed some of the banks posting notices on their systems warning customers about it.

Ensure therefore that you put the necessary checks in place to be certain that all requests to change a suppliers bank details are genuine. We would suggest only accepting changes from the company in writing on their letterhead and not verbally or electronically. You really cannot be too careful.  It might also be worthwhile regularly checking that the bank details that appear on suppliers invoices agree to those that you use when making payments.

Saturday, July 23, 2011

HMRC appoints external collectors for unpaid tax

This Blog Post is from our good friends at KSA Group

HMRC have appointed ten debt collection agencies to pursue tax arrears.  This follows a successful trial last year.  The agencies will be charged with collecting about £1bn in taxes. 

Given that the agencies will only be paid on the amount that they collect it is likely they will be somewhat more forceful than HMRC.  This is going to be an added pressure on businesses.  The agencies appointed are being charged with collecting older and smaller debts allowing HMRC to focus on the bigger ones.  It demonstrates that HMRC are becoming increasingly more serious about the need to collect
VAT and PAYE arrears.

The collection agencies appointed are as follows;
Advantis Credit, Apex Credit, Close Credit Management, Clanchatton, Hillesden, Fredrickson International and Rossendales, Commercial Collection Services, Fairfax Solicitors and iQor Recovery Services.

The procees will be that HMRC will send a letter out prior to referring the debt to the collection agency.  We strongly advise that any business that receives this letter should contact the HMRC and try and agree payment terms as quickly as possible.  Payment terms may not be able to be agreed with the agency.

It is also critical that businesses seek help quickly from specialist firms such as KSA Group, who have a wealth of experience, and understand the processes within HMRC. If a payment deal cannot be reached there are often other options available if you act quickly, including a Company Voluntary Arrangement ("CVA"). At Insight Associates we have been working with one company that recently very successfully completed a full five year CVA from KSA!

Tuesday, July 19, 2011

Payments Council cancels plans for cheque withdrawal

You may recall that in May this year we wrote a blog item drawing your attention to the end of June cessation of the Cheque Guarantee Card Scheme.   Whilst this was considered an inconvenience it raised few concerns largely because a large proportion of consumers didn’t understand how the cards worked in the first place!

There was however a large public outcry at the announcement of the closure of the cheque clearing system planned for 2018 .  Although cheque use has been declining since 1990, about half of all cheques in the UK are used by businesses.  Many charities also raised concerns about how to adapt to the potential loss of income that losing cheques would have. 

It is therefore a welcome relief to many consumers that last week Richard North, the Chairman of The Payments Council announced that cheques will continue for as long as customers need them and the target for the possible closure of the cheque clearing system in 2018 has been cancelled.

The Payments Council  is the organisation that sets strategy for UK payments to ensure the systems and services meet the needs of users and further consultation with stakeholder groups led them to the announcement.  The Payments Council will continue to focus their efforts on security and efficiency and encourage innovation for a suitable alternative for consumers.

So, it would seem that the good old fashioned cheque, that has been with us since Roman times lives to fight another day!

Thursday, June 02, 2011

An interesting letter from HMRC Debt Management

This letter has today been received at our offices, addressed to one of our clients. We have never seen anything like this before and it does rather raise the question is this really a major change of position from HMRC?

This client has not been a repaet user of the Business Payment Support Service, unlike many businesses. I wonder what would happen now if they did request a further Time to Pay arangement?  Are they saying they would not get one?

Is this an interesting development?  We would be interested in any comments below on experience from any readers.

Wednesday, June 01, 2011

Are you prepared for 2012?

A guest blog entry from Nigel Taylor of Seddon Smith Financial Services
As you are no doubt aware, 2012 is the year when the Olympics come to London, bringing with them a potential boost for the UK. However, rather less well known is that this also sees the introduction of NEST, a pensions scheme designed to change employees’ access to workplace pension and retirement arrangements – and which will increase costs for many businesses.

A recent study of 300 businesses by BBS consultants & Actuaries shows that employers are unprepared for the new legislation with 87 per cent of respondents reporting they had yet to agree their policies on dealing with the measures

Considering the changes

NEST – the National Employment Savings Trust – is designed specifically to encourage lower earners to start making provision towards their own retirement. The scheme will use a combination of compulsion and incentive to maximise participation and thereby offer a savings solution for many workers who have so far made no independent arrangements of their own.

The compulsion will come by making enrolment automatic whilst the incentive comes through enforced employer contributions and tax relief, which will double the amount the employee, invests. An employee has to actively opt out – every year – if they do not want to be involved.

Employers like yourself are therefore now faced with a number of decisions: -
  • What are the costs and how will you fund them?
  • In addition, what more flexible arrangements can you offer to retain higher earners or incentivise more valuable employees?
  • Alternatively, does your existing scheme meets the new criteria and therefore be allowed to continue in place of the Government’s plan?
To take action now and learn more, we have prepared a small document to give you the facts. To receive this free, please email:

Tuesday, May 24, 2011

Will you catch a cold with HMRC penalties?

Several weeks ago on Radio 4’s Money Box program there was a report on the heavy handed tactics of HMRC who had made final demands for immediate payment of tax liabilities for what seems like very small sums of money.
The Governments austerity measures are hitting hard and HMRC is taking a hard line with regard to late payments.  In May 2010, in an attempt to encourage companies to pay the correct PAYE and related liabilities on time, they introduced a penalty charge calculated as a proportion of the amount that is paid late – the percentage of which gets bigger depending on how often payments are late (our news article refers).

One of the subtleties of the system companies may have failed to pick up on is that the penalty would be applied on a risk assessed basis for 2010/2011, not throughout the year. So if you have not had a penalty yet, it does not mean you won’t get one!  For example paying a small amount for the first 11 months followed by a large amount in the last month to top up the years payments would be considered an abuse of the system but HMRC would have to inspect the records to discover the exact amounts. These discrepancies may only be identified several years later and the total penalty (which could be very substantial) demanded in one lump sum.

April 2011 also sees the introduction of online filing for P45’s & P46’s (Leavers and Joiners) in addition to the  end of year returns (P14’s and P35’s). Penalties from £100 to £3000 have been introduced for non-filing.

Late penalties remain at £100 per 50 employees per month.  From 2012 the £100 initial penalty will be followed by a daily penalty if filed more than 3 months late.

PAYE and NIC inaccuracies also come under the standardised penalty regime for inaccuracies.

Don’t expose your business to fines and scrutiny from HMRC due to poor financial management and record keeping.

Minimise the risk to your business with good, accurate, reliable and honest accounts from Insight Associates. With more and more fines being incurred due to bad record keeping and poor accounting information it’s even more important to use the services of professionals like ourselves.

Monday, May 09, 2011

Cheque Gaurantee Scheme to close

The UK’s cheque guarantee card scheme is closing on 30th June 2011 following a decline in the use of guaranteed cheques.
Cheques can still be used after this date but they will no longer be covered by the guarantee even if the card is still valid and carries the cheque guarantee hologram.  Guarantee cards will gradually be phased out. 

Any cheques you accept may be returned ‘unpaid’ by your bank if your customer does not have enough money in their account to cover them.   

If you rely heavily on accepting or issuing cheques now is the time to look at alternative payment options such as Debit/Credit or Charge Cards, On-line banking, telephone banking or cash.

For further help or advice on this please get in touch and we can help you assess your options.

Thursday, May 05, 2011

Is Time to Pay getting more difficult?

It seems that there has genuinely been a change at the Business Payment Support Service of HMRC.  

I have been on record over recent months in saying that much of the press about HMRC getting tough was ill founded when it came to Time to Pay (TTP) deals.  It certainly was the case that HMRC were getting very tough on defaulters but we were not experiencing any real issues with putting in place new deals on behalf of clients if the circumstances were sensible.

However recent experience and new statistics are now showing that there has been a change. Not only has the number of actual requests for deals dropped quite dramatically but also the proportion of those requests being refused has risen. In the first quarter of 2009 the number of requests was 82,000, in 2010 this had dropped to 57,800, but for 2011 it was right down to 32,900 … only 40% of two years earlier. At the same time the percentage of those refused has increased from 3% to over 10%!

There is increasing evidence that it is getting harder to get repeat deals, and indeed we have had experience of this first hand, and also longer term deals. Shorter periods now being more palatable to HMRC it seems. In recent case I am aware of a Company Director was told he should pay a Corporation Tax demand on his personal credit card as he had been taken dividends and salary out of his business previously!!

HMRC are quoted as saying there has not been a policy change, and their criteria for arrangements have not changed. However, that is perhaps missing a statement tucked away in the small print of the Budget in March which said that TTP would continue to be available to “viable businesses experiencing temporary financial difficulty”. That is a long way from Alastair Darlings statement in November 2008 when he launched the scheme to “enable firms facing difficulties to spread their tax on a timetable they can afford”. How HMRC can establish if a business is viable and their difficulties are temporary is beyond me …but if that is not a policy change I am not sure what is!

The concern is that if this is evidence of a change then is it likely to have an impact on the continuing viability of what is undoubtedly a lot of very fragile smaller businesses in the UK.

Thursday, March 10, 2011

Changes in the audit thresholds for UK companies

I do wonder if Vince Cable has lost his mind?

It has been announced that the Government intends to increase further the audit exemption threshold from 2012, from its present £6.5m turnover to the EC maximum of £8.6m (€10m). In addition it intends to seek exemptions (through Europe) for businesses turning over less than £1.7m (€2m) not to have to file accounts at Companies House!

This is all in the name of reducing red tape! Sorry?? How does that work exactly?

It staggers me that Mr Cable does not seem to understand that any well run business will already be producing accounts for management purposes as a tool for good decision making. That is without considering the Directors legal obligations to understand the financial position of the business at any time, and the need for accounts for tax purposes etc. Given this how does not filing accounts at Companies House save around £400m a year??

Added to this the pledge to remove the need for independently audited accounts for thousands of small businesses is endangering the economy rather than improving it. Saying “it’s important that we free small firms up so they grow and drive the economy” is short sighted at best and downright irresponsible at worst.

Whilst there are arguments that privately owned businesses, run by the owners, have a limited need for independent examination, this is only part of the story. Surely one of the prices paid for limited liability is the need for good stewardship. If a businesses owners are going to benefit from protection from their companys creditors then they should ensure that those same creditors can make informed decisions about the creditworthiness of the company they are lending their money to! A lack of available accounts, and any independent examination will surely have a detrimental impact on the granting of credit and therefore the working capital available to businesses.

The whole decision defies logic! It does nether save money nor improve the growth prospects of the economy!

Saturday, February 19, 2011

Managing costs

It is incumbent upon all business leaders/owners to manage the costs in their organisations in order to maximise shareholder value ... it is a very clear prime responsibility no matter what size the business.
One of these costs is tax it or not if the business pays "too much" tax it is not maximising shareholder value.
Why is it then that the bank Barclays is being chastised in the news this morning for what appears on the face of it to be good tax management?  It seems that the whole bank bashing state of mind is simply getting out of control ... Barclays did not even get Government bail out money so why should they be penalised just for being a bank and the things their competitors got wrong?
My real rant though is the statement made on BBC news this morning. In the same breath it was stated that "people" will get upset by Barclays actions as they have paid only £113m in Corporation Tax yet paid many billions out in bonuses!  I am no tax expert (far from it!) but surely the Exchequer have gained through this position?  The main rate of Corporation Tax in 2009 (the year in question) was 28% ...however the bonuses paid would have been subject to potentially 50% Income Tax, 1% employees National Insurance, and 12.8% employers National Insurance. A total bill of 63.8% ...more than double the Corporation Tax the bank might have paid on the extra profits had it not paid the bonuses??
I am happy to be proved wrong ...but to my mind this is just journalistic nonsense!

Monday, February 14, 2011

On the radio with The Business Hub

As you may have already read elsewhere, Insight Associates has just become the main programme sponsor for The Business Hub.

The Business Hub currently broadcasts on a Sunday morning on Star FM in Cambridge and KLFM across East Anglia, and negotiations are well advanced to roll out across the country.

Garry Mumford with show presenters Ian McKendrick (standing) and Mark Peters (right)
The Business Hub is the brainchild of and presented by business expert and social/new media strategist Ian Mckendrick and Star Radio’s breakfast show host and Programme controller Mark Peters. It is the only show of its kind across the East of England and is unique in the way that it engages with its audience not just through the FM broadcast medium but also through social media. Since launching in early 2010, the show has attracted a huge number of big name business hosts including ex-Dragons Den panellist Doug Richards and, most recently, ecademy founder Penny Power. The show, which aims to ‘help anyone in business succeed’, boasts over 80,000 weekly listeners and 20,000 podcast downloads a month.

As well as promotion throughout the show, Insight Associates also now has a weekly feature talking about “helping businesses better manage their money”, featuring Insight’s founder and MD Garry Mumford.

The pictures were taken in the Studio whilst recording last week, a great fun experience which always comes over in the show, which has mixed well the serious side of business with making sure it is all good entertainment.

Make a point of listening each week, either live to the broadcast (on FM, off the stations web sites, or on Internet Radio), or downloading the podcast.

Monday, January 10, 2011

Further evidence of reduced bank business lending?

An interesting piece of research from the credit reference agency Graydon UK shows further evidence of perhaps the dramatic slow down in bank lending to businesses.

Graydon analysed the numbers of charges registered at Companies House over the past ten years and found that this had dropped by a staggering 46% between 2007 and 2010.

A company must inform Companies House if it has given collateral security to a finance provider to support lending with 14 days of the security being given. Graydon's research is therefore a useful barometer of the level of new lending being given as most significant lending by banks (and other lenders) to businesses would have to be against security.

This further highlights that if the criteria is tough then a business seeking lending must make sure its case is all the stronger. Our experience has shown time and time again that being able to demonstrate strong financial control and management in the business is key to this. If the management regularly review and act upon detailed management information and have a full understanding of the financial position of the business this will show good governance to a lender. This coupled with realistic and well thought through business plans will at least increase the likelihood of a successful loan application.

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
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