Financeheads Blog

Gardens need rain, which has been conspicuously absent in recent weeks (might even be into months). I have been really grateful for my water butt and the fact that I have been able to do the essential watering and increase the chances that I will still get a healthy crop of vegetables

Many businesses are seasonal, or just experience ups and downs, which can provide challenges. These challenges can be even greater if unforeseen due to a lack of planning and forecasting. None of us have a crystal ball but we can use past information, and our ambitions, to get good estimates for cashflow forecasts and even staffing plans.

The future isn’t predictable, but some possibilities are foreseeable, and reserves (of water or cash) should be gathered where possible so that the impact is controlled.

Normally I talk about things that grow (or need doing) in the garden but, as part of the hype surrounding a particular big event, it came to my attention that there are now trees in an Abbey. I don’t expect they will thrive in that environment long term but it made me realise that we should remain open minded about what can be found where.

One of my first tasks when working with a new client is to review their existing management information and ensure that it is complete, accurate, timely and appropriate. In particular I consider how sales and costs are analysed and whether this provides management with the greatest insight to current performance. From there decent decisions about the future can be made.

So if you want to make sure that all your trees are counted and classified (not just the ones currently in the garden) then consider getting an independent review to check how complete, accurate, timely and appropriate your information is.

FinanceHeads  is delighted to announce that it is expanding rapidly with the half a dozen new members  and associates joining recently. These new members are an indication of the success of FinanceHeads that is still only in it’s second year of operation. 

The new members are:
Nick McCleery , the parttimefd, based in Reading; Julie Raikes, JR Business Solutions, based in Bridgend (and our second member based in Wales), and Linda Webber, Minevera Business Advisors based in Surbiton.

Our new associates are:
Matteo Turi, Taras Services, based in Northolt, John Panczak, Balvaird Consulting Services. and Kate Wright, Wright Finance Support based in Goldaming.

Full details can be found on our financeheads website

We warmly welcome all our new members and associates, who have already made valuable contributions through our meetings,  blogs, and online forums.

When asked why they had chosen to join the FinanceHeads, the overwhelming response was the friendly support that of a peer group of like-minded professionals.

Other benefits include
• Share experiences and learn from others
• Continuity partnership arrangement
• Relevant discussion topics at meetings, and a chance to gain objective feedback from other member’s clients and other third parties
• Ability to approach multi-locational clients as a network, that would be denied to individual companies
• Joint marketing and social media networking
• Adds “weight” to own offer
• Able to refer clients to other members that have the relevant expertise or location
• Referrals from other members

Financeheads looks forward to continued growth in 2011, both in numbers and geographical areas.

Last week I was approached by a company very proud of itself. They have doubled sales in the last 2 years and they are going to increase their sales six-fold in their next 24 months. This is a really successful commercial story.

Except that they are in trouble with funding…They have tried to extend finance facilities but the banks will not lend due to their….financial ratios and the….funding gap. Therefore their commercial expansion plans will now suffer….

Hang on a minute…. Commercial expansion? Short of funds? Can these both happen at the same time?

Of course they can. To be truly successful, a company needs not only to be commercially successful (which means it needs to increase sales) but it also needs to be financially successful (which means to generate cash).

Achieve commercial and financial success for your business and call your part-time Finance Director now.

Our very own Stephen Foale sponsored a Guinness world record attempt by the Plymouth University Hockey Club for the longest indoor game of six a side hockey in April.

Unfortunately the 52 hour record was not breached due to injuries and fatigue!!!  But they had fun!!!

Some people say that good business is about “doing things right”.

Some other people say that good business is about “doing the right things”.

So why are those two statements so different? And why, outside the world finance, an accountant/book-keeper and a finance director may be mistakenly seen as the same thing?

Quite simply, a good business needs a good book-keeper. In finance terms, a book-keeper will “do things right”, that is to record the correct amount of VAT, the correct amount of sales and purchases, etc….

So what is left for your part-time Finance Director to do? You guessed it, the Finance Director will “do the right things”.

So what are these “right things”?

A good business needs to generate profits but, most importantly, needs to generate cash to reward the risk of the shareholder. Without good management of your capital and close relationships with banks, the business will inevitably fall short of its commercial potential. Even an improved sales procedure might increase sales…..

A good business may want to expand or diversify. This will require a new different business model that needs to be managed to achieve its goals. This may mean increasing staff productivity, better utilization of its financial resources and the list can of course continue.

Good businesses can also go through negative trading periods. This may require re-financing, re-structuring, a new zero based budgeting approach and so on.

The list of the “right things”, as you might have guessed can be rather long, depending on the range of businesses the Finance Director will encounter.

Make sure your business is in top position to express its full potential. DO THE RIGHT THING and call NOW your part-time Finance Director to start or continue a season of commercial success.
Written by: Matteo Turi FCCA
Chartered Accountant and Finance Professional
Business Innovation And Commercial Strategies
Skype : matteo.turi
www.taras-financial.com
Tel. +44/(0)7915/202111

I was struck afresh the other day by how much we can each take our own skills for granted. How often have you been struggling to do something with a mobile phone and someone under the age of 20 has come along and fixed it for you in seconds?

The great thing about outsourced services is that small businesses can have access to the services of a specialist without taking on a full time permanent resource. We may not be able to sort the mobile phone challenges but the great thing about being over 20 years old and having extensive finance experience is that we can look at numbers and get to the heart of the problem in the blink of an eye.

Within FinanceHeads we value the range of different expertise  our members offer, and our clients benefit from the insights we can provide directly or through the network.

Written by: Caroline Billington from a-count-a-bility
Website URL: www.a-count-a-bility.co.uk
Email address: cb@a-count-a-bility.co.uk
Landline: 01635 826124
Mobile: 07954 440241

It is often said that, in financial terms, lack of cash is like a heart-attack and it can kill your business instantly.
Lack of profit, instead, is like a cancer. It will kill your business slowly.

How do you address both issues? And what if your business is expanding, generating profits but not nearly as much cash?

In all 3 cases, this is where you part-time Finance Director can help your business on the road back to success.

It may be the case that all your business requires is closer bank, internal finance procedure or customer relationships to improve the management of your cash resources. This can prevent a heart-attack.

It may be the case that your business may not generate enough profits and all it needs is new commercial focus or just new KPI to optimize the selling process. The cancer can then be defeated and business life will return to success as normal.

It may also be the case that you have become successful at your business but you are “over-trading”. This often happens if your capital structure or your capital mix is now no longer suitable for your new expanding business model. This is where your FD can help to match positive results (profits) with more immediate rewards (cash). This can happen through a careful short-term business plan review (re-forecast, re-finance, dividend policy, etc..).
 
Matteo Turi FCCA
Chartered Accountant and Finance Professional
Business Innovation And Commercial Strategies
web: http://www.taras-financial.com/ 
Skype : matteo.turi
Tel. +44/(0)7915/202111

A Finance Director starts in a privileged position compared to other business executives because he already speaks…Finance that is the language of business and how a business is measured for success or failure.
 
Have you never seen a CEO trying to speak to the City press without his CFO next to him? Is the Finance Minister the most important Minister in the Government Cabinet after the PM?
 
I personally find great satisfaction in stimulating business changes and positive transformations through the potential of what we in Finance can do with our natural business awareness and market inclination.
 
This can happen through creation of new Key Performance Indicators, new profit/cost centres to stimulate talent and increase staff productivity, optimization of company-wide procedures to get closer to the paying customers and so improving margins and cash flows. The list obviously can go on……
 
 
Matteo Turi FCCA
Chartered Accountant and Finance Professional
Business Innovation And Commercial Strategies
Skype : matteo.turi
Tel. +44/(0)7915/202111

…..and therefore time is something that should be measured – after all, what gets measured gets done. There are two areas of time (amongst others) that I frequently address with clients:

• Time spent on gaining new clients. Is it really worth a day trip to their offices to get £1,000 of work which generates £100 of profit? Oh, and have you realised that particular job only generated £100 of profit or has it got lost in the pot?
• Time spent on processes that could be made more efficient. Often documentation is the key since, as a minimum, that reduces the thinking time (What is it I have to do/How do I do it?) each time the task is done. Once a baseline is established it is also much easier to see room for improvement or even make it possible to handover the task to a less expensive member of staff.

As a part time finance director I am interested in improving the financial success of my clients and this frequently involves considering more than just the money going through the bank.