This article is taken from the latest copy of The Business Magazine where I explain why bad debt prevention should not just be the responsibility of the finance function but of the company as a whole; 

The finance team is ultimately responsible for monitoring the financial health of a business and should have the necessary processes, policies and visibility to nip bad debt in the bud before any serious damage can be done.

However, while this responsibility lies in a central finance team, it’s often the case that your staff are equipped with the means to spend the company's money and make deals with customers, making it difficult to keep financial affairs within the finance department.

With costs being cut and ‘profit’ on the lips of every MD, here are some pointers on making debt a company-wide concern to help keep your cash-flow on track.

1.   Educate your workforce: Bad debt affects your profit and loss which will affect their salaries and, ultimately, their job security. Make sure employees understand their role in creating a sustainable business.

2.   Keep your collective ears to the ground: Is a customer’s business heading for trouble? Is there a supplier who persistently delivers late, incurring fees customer-side? Has your usual customer contact vanished without a trace? These could point towards the possibility of a sinking ship that could cause payment issues down the line.

3.   Avoid information overload: Your staff shouldn’t be expected to understand a load of financial jargon and spreadsheets full of figures. Don’t blind-side them with detail, instead make sure your software can make financial information easy to digest at any level, from the sales team through to the MD.

4.   Give staff a 360-degree view of their customer’s account: Does your CRM system link through to finance and enable problems to be flagged? Everyone who pulls up a customer record, such as to take a sales order, should be able to see at a glance the customer’s track record and credit-worthiness – or otherwise.

5.   Review client profitability: It may be that some customers pay eventually but only after an uphill struggle and constant chasing on the part of your credit controllers. This eats into your profit margins and if not set straight early on, is likely to be a persistent problem. Make sure your finance department shares these tales of woe with the wider team as they may be able to encourage more prompt payment from their customer base.

6.   Communicate ‘rules of engagement’ to all staff: Put your policies in writing and circulate them regularly to staff, making it clear what their role is in tightening the noose on bad debt. Selling to customers – even exiting customers – without checking their account and credit status should be a strict taboo.

7.   The power of the PO: There is no such thing as a ‘Gentleman’s agreement’ when it comes to business, especially when it concerns money. Make sure your team live and breathe by purchase order numbers as an order or agreement without one is worthless.

8    Use cashflow as a business intelligence tool: Good cash control management and software can go much further than just tracking who owes what money where. It can show you where the cash drivers are in your business, who is performing well, where red flags should be going up and other events that could threaten but also boost profitability.

Poor cash management impacts your own working capital, eating into the amount of money you have to invest in the business and affecting your ability to pay off your own debts. The longer a debt is outstanding, the greater the risk of the company going out of business and the greater the cost of resolving and recovering the debt.

By making bad debt a company-wide concern you can make sure that you not only get your customers’ money into the bank but also ensure it stays there. 

For the full article please visit www.bizmag.co.uk 

This 8 point plan is taken from the IRIS Exchequer whitepaper 'Tightening the Noose on Bad Debt'. The whitepaper is free and available to download in full at http://www.exchequer.com/downloads/guides--whitepapers.aspx

For further information:
0844 815 5590
exchequer@iris.co.uk
www.exchequer.com 

Advances in technology are seeing mobile devices become a key way in which businesses can boost their productivity and remain competitive in challenging times (as the infographic below illustrates). Mobile working gives businesses the flexibility and agility they need in a 24/7 economy and can even help to create business opportunities. For some, working away from the office is becoming the norm and it’s essential that they can work on the move and access their accounting software as easily as if they were in the office.

Research from IRIS Accounting & Business Solutions shows that three quarters of businesses now offer remote working to its employees, with 76 per cent claiming it makes their organisation more profitable and one in ten saying it gives them the edge over their competition.

The research of 140 business leaders shows that the benefits of remote working extend beyond efficiency and productivity. One in five businesses say that mobile devices allow them to provide customers with a better, more flexible service.

Trust issues amongst employers and staff regarding remote working are a thing of the past, as nearly all businesses asked (93 per cent) said they trust staff, and actually one in five found that it made staff up to 50 per cent more productive.

3 in 10 businesses say smartphones are the technology of choice for remote working. Emerging technologies are proving crucial in enabling staff to work remotely with 1 in 10 handing out tablets and 24 per cent providing workers with dongles. The move is a sign of the times as businesses embracing virtual offices becomes more popular.

We’re so used to using smartphones, apps and tablet devices in our personal life that it’s inevitable that this way of working is starting to become more widespread in business.  

Infographic courtesy of Vertic.

Government should look to UK firms for business solutions to drive growth

The British Chambers of Commerce (BCC) says the UK has avoided going back into recession. Its quarterly economic survey of businesses predicts growth of 0.3% in the first three months this year.

BCC director general John Longworth told the BBC Radio 4’s Today programme this week that they were predicting slow growth, "bumping along the bottom" for the first six months of 2012, picking up in the second half of the year and then stronger growth in the following year.

But whilst we may be skirting a recession as business bounces back from the lull, what can Government do to take action to stimulate the economy?

Although the reduction of corporation tax by 1% was welcome in the recent Budget, by comparison raising the business rates by 5.6% and doing nothing for capital allowances meant that the Budget wasn’t a Budget for business, it was a Budget for politics.

The BCC is therefore asking the Government for a focus on infrastructure.  There are two things they say that the government needs to do in the medium to long term in order to accelerate recovery now and keep business confidence;

 1. Big infrastructure. While the government has promised positive changes that will help businesses, improved transport infrastructure and deregulation for example, they are yet to become a reality. These medium- and long-term measures must be brought forward to help businesses grow and create jobs. 
2. Digital infrastructure and the infrastructure of education - skills which are important and that will insulate us against possible external factors like the Eurozone crisis, American debt and oil crisis.
There is no doubt that business supports the need for the government to persevere with its deficit-cutting plan, but there must be a significant reallocation of spending priorities. There must be a greater focus on policies to support growth that will enable businesses to create jobs, invest, and export. 

What we have to understand is that living in a global economy what may or may not happen in Europe in the next 6 months often is the determinate of what happens to us.

We could however avoid that fate in the longer term. Of course external threats still exist but by committing to infrastructure projects now, in the medium to long term will encourage businesses that do have cash to start to invest that money for growth and for jobs.

The BCC’s survey indicates that export and manufacturing balances are going very positively and its encouraging to see that businesses are feeling more confident at the start of 2012 than they were at the end of 2011.  The thing that hindered recovery in the last half of last year was cash flow, so the government really needs to look at giving businesses access to capital if they haven’t got cash.

Access to finance is still a real problem for many firms, and more must be done to mean that this doesn’t threaten recovery. More radical measures, such as a state backed SME lender, should be implemented to address the gap in business funding. (Over the medium-term, Vince Cable suggests that part of RBS be used) which could eventually be returned to the private sector.

It remains to be seen if this measure could be introduced in the UK. Other European countries and the US, the BCC say have business banks that run very successfully.

In fact, state the BCC it is companies like Microsoft that started with loans from a business bank in the US.

The UK economy is still facing huge challenges and the recovery is much too slow but if we want to see the Microsofts of the future here in the UK, then the government has to set businesses free to grow and drive recovery.

What business really wants to hear is confidence from no change - for the Chancellor to say that there are no changes, we haven’t moved on and that nothing radical has changed to the public outlook.

Top of the wish list for business in the Budget is business solutions, growth and to jump start the recovery and generate jobs. But whilst many business leaders are firmly behind George Osborne’s deficit busting plans, these 5 points consider the direction the Chancellor should consider.

1.  Increased help for small businesses: 

The Chancellor will imminently confirm that top banks have signed up to the government’s National Loan Guarantee Scheme which will boost lending to small business.

But whilst it is a step in the right direction it won’t solve the problems faced by businesses trying to access finance.

The National Loan Guarantee Scheme will make some loans more affordable. But it will not help the smaller, younger, and high-growth firms that have trouble getting credit in the first place.

Since credit easing will be accessed via the banks, lenders will need to work harder to encourage firms, many of whom have been turned down for loans in the past, to consider applying for credit. Banks will need to ensure that their staff are able to fully explain these new loans, and that those business owners that aren’t eligible for the scheme, are advised of suitable alternatives.

More radical action is needed. Over the medium-term, a brand-new, fully-fledged state-backed SME bank, which could eventually be returned to the private sector, should be created as a matter of urgency.

2. Less red tape:
Clearly another positive area to aid business recovery would be to cut red tape. UK companies need to be able to position themselves to be able to compete competitively for contracts, strengthening their supply chain and removing obstacles that may weaken their case.

By automating more government processes and a better integration with business software will allow businesses to get goods and services to market within a shorter timeframe and this needs to be encouraged.

3. Tax cuts:
Likewise business wants to see an investment in people. If there is one measure that business really would welcome, that would help the economy because it would generate jobs and grow organisations is a National Insurance contributions holiday because that would make job creation less expensive.

At the moment National Insurance is just a tax on jobs which could be put to better use to reinvest funds into learning and training, making staff more effective and business more productive.

What business wants to see is that the credit rating is maintained and to get access to lower interest rates.

4. 50p tax rate:
Scrapping of the 50p tax rate is expected but is a thorny topic for government who are accused in being more interested in cutting taxes for the rich. However it has been said that if the Chancellor cuts the rate from 50 to 45p, will the gain in business confidence really outweigh the political downside? Is the 5p cut really enough of a signal to foreign investors to come and do business in Britain? If Mr Osborne is going to take the risk, he might as well go the whole hog and abolish the rate entirely so that more rich people stay in Britain – as the argument goes – and pay more tax the long run.

5. Revolution in planning rules:
One of the most heavily affected industries of recent years is construction and current planning rules are holding back economic development in Britain. As an industry fallen victim to mass un-employment, a shake-up in planning rules will make it a lot easier for building to take place in this country that will allow businesses to expand and people to have decent homes and children to be able to afford a home when they grow up.

Databreach can take many forms and utilise a plethora of methods but is usually instigated by a 3rd party gaining access to confidential information from an improperly secured source.

This great infographic examines how smaller businesses can be harder hit and how you can protect your business. Of course smaller businesses can also find that providing a high-performing, secure and compliant IT infrastructure represents a real drain on the organisation's resources. In addition, there's the burden of protecting sensitive stakeholder data from threats posed by viruses and hackers or from accidental loss.

People always assume that just big companies are subject to data breaches, but that is definitely not the case. The ever expanding area of small business is just as susceptible.

Some ways to keep your data secure are to keep secure passwords and firewalls to protect your information and the information of your customers/clients, deliver your software and IT service through hosted solutions and be sure that your employees are trustworthy and are keeping an eye out for potential leaks or intrusions, and to consult an expert. The expertise of the hacker is definitely growing and the safest way to be protected is to be protected by a professional. 

IRIS Hosted Solutions - is an affordable and effective alternative to managing your IT in-house and the great thing is that the core software applications are hosted on dedicated, powerful servers in a highly secure and scalable data centre.

The service delivers the highest levels of reliability, resilience and security and is provided as a monthly per-user fee, removing capital outlay and enabling efficient budgeting - thoroughly recommend that you take a look ...

Infographic courtesy of Bolt Insurance.

4STBCU4M4KVE

The British Chambers of Commerce (BCC) is today (Monday) urging George Osborne to deliver a Budget for business, which allows firms to drive growth, invest and create jobs.

This view is echoed by IRIS Exchequer customers. Some 30 per cent of businesses think that reducing administrative burdens would encourage them to grow, while more than a quarter (27 per cent), feel that tax breaks would provide the best incentive for expansion, revealed from our recent study of 150 companies on the IRIS Exchequer Roadshow surveying our accounting software customers.

A further 30 per cent say the uncertain economic climate will continue to be the greatest challenge for businesses in 2012, followed by operational costs (23 per cent) and staying competitive (18 per cent), with 12 per cent feeling that customer retention would be a challenge for them in the next 12 months.

If business is to prosper then George Osborne has to pull out all the stops to create an environment in which they can thrive, create jobs, and export our goods and services abroad

Just days ahead of its Annual Conference, however the BCC believes the Chancellor should stick to Plan A, but use the wiggle room he has within the current spending envelope to bring forward substantive changes that will stave off stagnation and weak growth.  

 The BCC suggests that there is sufficient latitude within the fiscal rules to implement three specific initiatives to support business growth, at a maximum cost to the Exchequer of £4.2bn. 

Scrap the upcoming business rate rise which is anathema to growth

·         In April 2012, the 5.6% up-rating of business rates will severely aggravate already uncertain business cashflow and impose hefty new costs without offering any real improvement in business conditions.

·         In addition, the BCC is calling for the restoration of the Empty Property Rate Relief (EPRR) to £18,000. The current threshold for EPRR creates perverse business incentives, deterring investment. 

Cost:   £2.2bn

Introduce a time-limited £1bn capital allowance scheme for medium-sized companies

·         A ‘when its gone, it’s gone’ capital allowance scheme would provide an incentive to firms who have put large investment projects on hold

·         Providing a two-year window for medium-sized companies to make crucial investments would create a real incentive for businesses to take advantage of the opportunity. 

Cost:   £1bn

Incentivise employers to take on young people

·         The BCC is calling for the Chancellor to double the amount of money available for employer wage subsidies and funded placements under the new Youth Contract (from £1bn to £2bn), or consider changes to employer National Insurance Contributions for young people.

·         This would provide a cost-effective way to prevent the alienation of young people, and assist businesses with the development of the skills base required to drive future growth. Furthermore, the BCC records its continued commitment to work with the government to investigate new ways to fund business start-up for young people. 

Cost:   £1bn

In addition, the BCC is recommending the following low-cost or no cost changes to the business environment to allow companies to grow, export and take on staff. 

·         Implement an effective credit easing programme, and consider the creation of a fully-fledged SME bank, which would be backed by the state at first and later returned to the private sector. This would go a long way to improving the follow of     credit to viable businesses.

·         A speeded-up National Infrastructure Plan and delivery of the mechanisms promised in the Autumn Statement to increase private investment in infrastructure projects. 

·         An aviation strategy that delivers both capacity for the South East and growth opportunities for Britain’s regional airports. 

·         Delivery of radical reforms to the planning system in the National Planning Policy Framework to help businesses expand, invest and grow. 

·         Help for SMEs trading internationally, through improved access to mentored outbound missions, smarter use of inbound missions and greater financial support for promotional activity and tradeshow attendance. 

·         Real de-regulation that makes a difference to businesses on the ground. This should include the reform of dismissal rules, such as relaxing the collective redundancy rules and introducing a new no-fault dismissal route. 

Without concerted action in these areas, the potential for businesses to grow will be limited, and so will the economic recovery.

Source: http://www.britishchambers.org.uk/

4STBCU4M4KVE

 4STBCU4M4KVE

The role of the FD has traditionally been seen by many companies as a goalkeeper rather than the star midfielder or centre forward. But more than ever, the role has become far more diverse. Has the FD become more important than the CEO?

It’s no longer just about the finance ledgers and cash flow. These days any FD wrth their salt is an expert in all aspects of the business in which they work.

The key reason for this has been the recession, which has been both a vast challenge and a huge opportunity for FDs to prove their worth. It has changed the way the FD is perceived in the board room.

“With austerity measures still in force across many organisations, FDs are continuing to make decisions every day,” says Paul Sparkes, accounting software product director at IRIS Accounting & Business Solutions. “The recession has given FDs a real opportunity to prove their worth, with many rivalling the authority of the CEO.”

Research conducted by The Real Business Satisfaction Survey in association with ICAEW supports this.

The results show that in 58 per cent of companies, the amount of time discussing finance in the boardroom has increased. And for 43 per cent of respondents, the amount of influence yielded by the FD in the boardroom has increased.

But according to some, it isn't just the FD's role that has increased: other roles have grown in prominence as well, strengthening the board.

"Like all good working democratic boards, important decisions are not taken by individuals in isolation but as a collective, with experts in different areas of the business combining to make the right decisions for the business as a whole,” says Rob Amar, MD of fine foods importer R.H. Amar.

“In today's economic climate, the FD – like the marketing director, MD or chairman – has to have his or her finger on the pulse of what really makes the business tick, and needs to display creativity and agility when faced with sudden difficult challenges such as key currency fluctuations or potential business exposures.”

This expanding role is seeing FDs become responsible for other areas of the business.

“Site viability decisions, disposal of non-core business, contractual negotiations, business development, business relocation, etc – FDs are becoming more influential in other areas of their business,” says John Seaton, financial and commercial director of Nova Laboratories, a manufacturer of trial medicines.

“Their exposure to and understanding of the dynamics involved in their particular sector increases their insight; finding the key drivers for success, differentiating them from competitors and spotting trends in that particular market.”

As FDs successfully make the move into general management, could the FD become a co-CEO?

“It's no surprise that more FDs are becoming CEOs than ever before. The turmoil of the last few years has thrown FDs into the spotlight but they have clearly risen to the challenge,” says IRIS Exchequer's Paul Sparkes. “We're seeing a breed of FDs coming through, who have greater and more varied skill sets and can therefore wield more influence at board level.”

This article originally appeared in Real Business.

With the Olympics expected to generate 1m extra passenger journeys a day on London’s already overloaded transport network and a third of Londoners expected to change their travel routines during the 2012 games, could the inconvenience to business signal a move to remote working?

Commuters will notice changes to rush-hour patterns as crowds descend on some of the busier Tube lines and in the centre of town will be the greatest impact.

 “It is going to be very much life is unusual and business is unusual,” the ODA has already helpfully commented, leaving it to lie with the City’s employers to decide on a solution to ease the strain on commuters.

 But could letting staff rely on remote working, staggering their hours or working from home during the Games be viewed as a soft option?

 At BT, nearly three-quarters of its staff operate some kind of flexible or remote working. Staff can ask to vary their hours so that they can plan social activities, parenting and a reduction in travel expenditure around their role. It’s paid off for BT as a cost cutting exercise – they estimate to have saved £500 million by encouraging it.

 And at American retail giant, Best Buy, corporate headquarters staff were allowed time off to play golf, sleep in and then work evenings to catch up. The remote working experiment, suicidedly bold some might say - resulted in a staggering 35% increase in productivity – suggesting that freedom from the distractions of the office, pays.

So if some of the Capital’s main employers let staff work flexibly or remotely during the Games for three weeks and they too receive the benefits of reduced expenditure and happier, more productive staff, then why stop there?

The Olympics could be used as a springboard towards a much more widespread four-day office week with either staff working from home, doing compressed hours, or going part-time. A move that not only will help employers cut costs and ease the strain on commuter rail and roads (and ultimately the tax payer who funds their repair) but to help ease the pain of tough economic times. Perhaps then we will finally discover that remote working really can be a win-win.

Here are my tips to ensure that your organisation could benefit from a remote working strategy:

1. Be creative – Launch a pilot programme in your organisation. Start with one or two departments or a set period of weeks (the Olympics could be an ideal time) and monitor results against set targets.
2.  Develop criteria – Get a good remote working policy in place. Generally, the adoption of remote working involves building the minimum appropriate infrastructure – hosted solutions, or software installed and hosted in secure scalable data centres. Tools could include remote control applications, collaboration software and video conferencing software. It may be easier to reach team members via the web than walk around the office.
3. Technology – Ensure that you choose a hosted service that includes the ongoing management of the servers, software and data including the provision of backup services, installation of security patches and various levels of technical expertise and support.
4.  Communication – create a schedule for regular communication. Use instant messaging and video chatting for spontaneous conversations to ensure that staff don’t miss out on ‘the real world’.
5. Metrics - It’s well known that when staff work from home they are happier, free from office distractions and often more productive. However what about staff that need supervision? Rather than monitoring hours worked per day, set production targets or goals to be completed.