News and Blogs 2021-11-03T15:57:11+00:00


News on Business Board grant funding for a local Vineyard from Cambridgeshire and Peterborough combined authority

Featured in an Institute of Chartered Accountants in England and Wales (ICAEW) article: Business spotlight: how to juggle a portfolio (19 June 2020)

ICAEW Business Spotlight


Latest Blog – November 2021


There is much coverage of inflation in the press at the moment, so you may be wondering how cost increases affect you, and whether you may need to increase your own prices. Pricing is one of the most important decisions that you make in your business. Price too high and you won’t generate enough sales. Price too low and your customers might be happy, but you will be “busy fools”.

Marketing strategy helpfully reminds you to manage your “Four Ps”: Product, Place, Promotion and Price. You have to have a harmonious balance where you are offering your products or services to the right people, via the right channels, presented in the right way, at the right price. The price needs to be consistent with the other three Ps. However, the marketplace changes and evolves, and pricing is not static.

Most companies do not like putting up prices until they have to. They allow cost increases to erode their margins and profits until it becomes too painful, then they reluctantly put prices up later. This is bad business! So let’s consider how different businesses tackle pricing.

At one extreme you have airlines and hotels who operate “dynamic pricing” for their services, with prices being updated many times a day to reflect demand levels and competitor actions. Petrol stations change prices almost daily. Some businesses publish a product catalogue (often also a website) with set prices, but there can be discounts and offers which reduce these for short periods. Others create a price using a methodical process based on estimated time and material costs (like a builder).

6 top tips, plus one more for free:

  1. Understand which of your costs are changing, and by how much. This will give you a minimum level you need to achieve to maintain your profit margins.
  2. Remember why your customers buy your items. What value or benefit do they perceive? That will determine what price they might pay, not the cost to you of producing it.
  3. Be aware of what your competitors are doing, both in terms of levels and timing. This is valuable market intelligence, and you should revisit your “Four Ps”. You need to make a conscious decision about how to price relative to your competitors.
  4. If you are dealing with repeat customers, explain in a politely worded letter or email why your prices need to increase and justify this. Whether you are selling B2B or B2C, humans will be processing your request for a higher price and you can influence their reaction.
  5. People will be more receptive to your price increases when they are hearing about other price increases. Do not wait until after you are suffering from cost pressures, you may “miss the boat” on customer acceptance.
  6. Tie in a pricing/discounting benefit to increased purchasing levels. Offering price breaks on volume, or “5 percent off your next order”, may encourage the customer to buy more from you, which will generate more margin overall, even if you have to concede a little on price.
  7. If you want to disguise a price rise, try repackaging the offering. Sometimes referred to as “shrinkflation” with chocolate bars and the like, you reduce the size/cost of the offering but the headline price may stay the same or even reduce. Or you offer a different “bundle” of products and services, so they can’t be directly compared on price. Adding a free element may have little cost to you, but add value to the customer.


Previous Blog – October 2021


There has been much media coverage of the recent government announcement of a new “health and social care levy” of 1.25 percent for the year 2022-2023, so I thought you might like to read about the history of National Insurance (“NI”). Separate processes exist for employed and self-employed people, but I will focus on the employment arrangements below as they cover the bulk of money raised by NI.

Both employees and employers pay NI, so it has been called “a tax on jobs”. The word “tax” does not appear in its title, but it is a tax by any other name. Paying NI gives people the right to certain benefits: state pension is the most obvious, but also SSP and some unemployment benefits.

NI was introduced in 1911 to support two parallel schemes covering unemployment benefits, healthcare and pensions. An employer would buy fixed price stamps weekly at a post office and affix them to each employee’s record card. This practice gave rise to the phrase “paying your stamp”, and in the event of losing your job, being “given your cards” as you took them with you to your next employer to maintain. In 1948, these two schemes were combined. In 1975 the flat weekly fee was replaced by an earnings-related measure that was also integrated into the PAYE collection process with income tax.

So how much NI do people pay? At the national living wage of just under £9 per hour, £17,600 of annual salary generates roughly £1,000 of employee contributions and £1,200 of employer payments (c. 5.5 percent and 7 percent of pay). Rising to the average UK salary of £30,000 these figures become £2,500 and £2,900 (c. 8 percent and 10 percent). As the employee contribution rate falls after £50,000, by £80,000 the figures are £5,500 and £10,000 (c. 7 percent and 12 percent). The extra 1.25 percent next year applies to both the employee and employer figures, so adds £100/£110 per year for the NLW, £225/£265 at the average wage and £880/£890 on a salary of £80,000. In total the new 1.25 percent scheme should raise about £15bn, contributing towards the government plans to spend an extra £36bn on health and social care in that year.

In the tax year 2019-2020, NI raised a total of £145bn for the government. They spent £150bn on the NHS in the same year, about £100bn on state pensions, with SSP and unemployment benefits on top, so you can see that the NI is “making a loss”. There is no magic pot somewhere containing our future benefits, unlike a private pension scheme. We are relying on a future government having income with which to pay us.

It would be convenient to combine NI and income tax into one system. They currently have different rates, thresholds and reliefs, and NI is not charged on unearned (e.g. investment) income, whereas income tax is. As there would be many winners and losers in such a radical change, it is unlikely that any government is going to want to alienate the losers, so we will probably have NI for the foreseeable future.


Previous Blog – September 2021


As a portfolio finance director for most of the last decade, I used to find my working pattern was roughly 70 percent working at clients, and 30 percent working from my own office, which happens to be in my home. Client work was generally hands-on, coaching and meetings, whereas working from home covered planning, marketing and single in-depth pieces of work.

Before the pandemic hit, most of my clients had finance teams who worked “in the office”. The computers were there, the scanners were there, the printers were there, the files of paper records were there – all conveniently in one place. If people worked from home, it was usually to undertake a large and complex piece of work in peace and quiet, or to fit around the delivery of a piece of furniture or similar.

When we were asked to work “from home if possible”, my clients had very different responses. Some IT systems and financial software were well suited to remote working, and others were not. Some offices were more paperless than others. Some went home, some stayed in the office, and some did a bit of both.

Now we are at “back to school” time of year, it seems strange that some finance teams are still working from home. Some never left the office, some have drifted back over time, but some remain resolutely at home. What will it take to get them back into the office? Or should we consider home working as a sensible long-term working method?

If you ask a more senior person in your organisation, they will probably say that working from home worked well. But that really means “well for them”, as they were familiar with the needs of the business and had a pleasant home office to work in. If you ask someone who has more recently joined the workplace, you may hear a different story. Cramped living conditions, sharing communal areas, and limited access to good wi-fi would always make home working difficult. Some younger people have even given up and moved back in with their parents. Formal training may have taken place on screen, but the informal learning you do from interacting with colleagues has been absent.

One of my clients found they were working extra hours and still running late in producing monthly accounts. To justify some recruitment, they analysed the number of transactions processed. Astonishingly, the transaction count was lower but the performance was slower. Here was evidence that working from home clearly accounted for a reduction in productivity.

I know of several R&D projects which are running even later than usual, not wholly accounted for by component shortages and other supply chain issues.

The evidence therefore suggests that while personal productivity may have improved for some people in some roles, team or collective productivity has worsened while working remotely. I recommend more returning to the office, a reduction in hours spent in Zooms and Teams, more talking and less drowning in emails. And people bringing cakes into the office.


Previous Blog – August 2021


It’s finally holiday season, so I thought I would reward my loyal readers with a seasonal treat.

One of my favourite memories of my old maths teacher (John Durran) actually has very little to do with numbers (and I love numbers). If we had been very attentive and studious in our lessons, he would sometimes tell us a joke. These jokes were often strikingly similar, and revolved around a group of people who had to solve a problem using their unique skills. So, here we go.

Once upon a time there were three people standing outside a church: a mathematician, a physicist and an engineer. A man arrived and said, “if anyone can tell me the height of this church tower, I will give them £100. The only equipment I can give you to use is a barometer, and fortunately I have three of them.”

I can guess that you are as excited as I am, as I type this fond memory, although the plot is already rather unlikely.

The physicist went first. He took the barometer reading at the bottom of the tower, climbed the steps to the top, took another reading, and walked down again while processing the data in his head. “About 120 feet,” he said, breathing hard from his exertion.

The mathematician went next. When he reached the top of the tower he took out his watch, and threw the barometer clear of the parapet, watching it plunging to the ground, breaking into many pieces, and narrowly avoiding hitting the other men. After checking the duration of the fall, he computed as he descended the tower and, after catching his breath, pronounced:
“130 feet.”

Meanwhile, the engineer had walked off and was knocking on the vestry door. A churchwarden opened it and asked how he could help.
“Ah, very nice to meet you,” said the engineer.
“If you can tell me the height of the tower on this lovely church, I will give you this elegant barometer in its beautiful burr walnut case.”
“You’ve asked the right man,” said the churchwarden, “I have written the official history of this church. The tower is 134 feet tall and it was completed in 1841.”

As usual in his stories, it was the engineer that won the contest, and by his normal slightly underhand tactics. Perhaps inspired by this, I later became an engineer, and then an accountant. I suppose that today all three would have googled the question on their mobile phones, and there would have been no joke.

To conclude, there are often several ways of solving problems. Not all will give you the right answer, and they will involve different resources, expertise, time and effort. In your businesses, your staff will each have their own way to solve problems, and by allowing people to find their own route, you may end up with the best answer.


Previous Blog – July 2021


I’m an accountant who likes cars, so I find this topic very interesting. And as discussed previously, the tax treatment of items affects people’s behaviour, so fasten your proverbial seatbelt and come for a spin.

A quick history lesson: in the last decades of the 20th century, sales reps had functional cars to help them travel (and sell), while managers could run a “nice” car with a small tax bill. The taxable benefit was based on the list price of the car, multiplied by a factor reflecting how much the car was used for business. Company cars were a tax-efficient part of a remuneration package.

When politicians started warming to…global warming…the basis of taxation was changed to reflect the official CO2 ratings of cars, whereas vans were subject to a totally different regime. So you might have seen a company bigwig parking up in a rather agricultural double-cab pick up truck! As the noose tightened on CO2 ratings, and the tax bills went up, the “free” car became less and less attractive and many staff took salary instead (as “car allowances”) and paid personally to run their own cars.

Into the pandemic era, and high-mileage sales reps became work-from-home staff, mostly “driving” nothing more exciting than a laptop with Zoom or Teams. Physical travel is poised to make a comeback, even if it is reduced.

So is the company car dead? Far from it.

The government is committed to ambitious net zero goals, and is heavily promoting the use of electric vehicles. These are expensive to buy, which can be off-putting for private buyers, so the company car sector is being stimulated. If you run an electric car as a company vehicle, the benefit-in-kind tax rate this year is just 1 percent and is only planned to rise slowly. Compare this to around 30 percent for a traditional “ICE” vehicle with a small petrol or diesel engine. The employee will also pay a lot less in running costs for electricity compared to fossil fuels. Even if you don’t like the car, it’s a big saving. It makes no sense to give an employee salary, taxed at 40 percent plus, for them to run one personally.

On another front, companies running electric car fleets can demonstrate (very visibly) their environmental credentials.

The rate of technological change in batteries is so dramatic that companies would be wise to lease the cars, and let others take the residual value risk. And once there are enough silicon chips to make the cars, manufacturers will be promoting their leasing options pretty hard.

So expect 2021-22 to see the return of the company car. Prepare to listen to sales reps boasting about their battery capacity and range!


Previous Blog – June 2021


I’m an accountant, so what do I know about music and Euro-politics?

The failure of the UK entry to score any points in last month’s Eurovision song contest was not because nobody liked it, it was because of the scoring system. And it teaches us two important issues for our businesses. Let me explain:

When 41 countries each rank 26 entries, and award points to the top 10, then 16 do not score any points at all. There is a difference between votes and points. So if you produced a truly average song, finishing 13th in every poll, you would receive no votes. If you produced a polarising song, which half the countries loved and half hated, you would score large points (say 8) from 20 countries and score 160 points instead of zero – even if you were only 13th in the total number of votes cast. The scoring system awards variation of opinion, and as such reflects real customers for your business.

  • If you offer an average product or service, who will choose it over a competitor who offers something more attractive/appealing/tailored to that customer?
  • You need to offer something distinctive that your target customers will respond to passionately.

We also learn the old adage “what gets measured gets done” is very true. You need to make sure you are measuring the important things, recording them accurately, and providing feedback to your staff. Not all of these will be financial measures.

If you reward your sales team on revenue, won’t you expect them to discount prices heavily to achieve volume over margin?

Other examples you might think about. Do you measure and follow up:

  • Sales, or sales where the invoices are paid on time?
  • Quotes made to customers who do not place an order (failed quotes)?
  • Number of customer complaints, or complaints AND positive feedback?
  • Number of accidents at work, or near misses (that help you prevent problems)?
  • The time taken to respond to the customer, or the time taken to solve the customer’s problem?

So get measuring and reporting, but only if they are the right measures that will fuel the right outcomes, and make sure you offer memorable and distinctive products and services!


Previous Blog – May 2021


“You are an accountant,” people say to me. “Can you help me to pay less tax?”

It’s funny how that is the thought that many people have about accountants. Some are tax specialists, but most accountants work in businesses, or with businesses to help them grow successfully. This will include financial recording and reporting, raising finance, budgeting, forecasting, developing strategy, managing cashflow, chasing debtors, managing people, and helping non-financial colleagues make financially-sound decisions.

But back to the tax question. I can guarantee to help you pay less tax: simply reduce your salary and less tax will be deducted every month on your payslip. Was that what you wanted? Did it solve your problem? Why not?

Of course, what we have here is an example of someone trying to solve the wrong problem. You don’t want to pay less tax, you want to have more profit/salary/earnings after tax. Buying some equipment primarily to get the 19 percent corporation tax relief is like buying clothes in a sale “to save money”. You have to need the equipment, or the clothes, for this to work. Otherwise you have just wasted money.

So please, please, think about what your business needs to do to become a better business. It might be recruiting a great individual, launching a new service or buying that piece of equipment to improve efficiency. And then think about whether there are any significant tax effects.

As the government goes about collecting tax revenues to pay back the debt incurred in fighting Covid-19, it may well have to increase certain types of taxes. So you may need to think about the tax you will be paying, but don’t let the tax tail wag the business dog. Try to think of paying tax as a sign of a successful business.


Previous Blog – April 2021


For those businesses that had a written strategy document for 2020, I’ll hazard a guess that very few forecast the disruption of a global pandemic and the lockdowns that arose from it. Most strategies would have talked about incremental change, gradual expansion, and maybe introducing one new product or service to market.

I am lucky enough to work with a portfolio of 12 businesses who were all very differently impacted by the events of the last year. These spanned a wide range:

  • A care organisation had to focus on resources and processes (staff, PPE, safe working practices)
  • Factories introduced ring-fenced shift patterns
  • R&D activities and many office roles moved to working from home
  • A tourism business saw a 90 percent + cut in revenue
  • A hotel, and a chain of shops both had to close for several months
  • Restaurants became essential food retailers and takeaways.

While government support measures have plugged some of the costs, that was not enough on its own. Necessity truly was the mother of invention. Nearly all of these businesses rapidly dreamed up and implemented dramatic changes to their business strategies in very short timescales. Changes included:

  • Shifting retail sales from physical to online
  • Revamping web sites and introducing online purchasing portals
  • Introducing new physical delivery services
  • Bringing out new products for growth markets (barriers, food packaging)
  • Changing marketing emphasis from exhibitions and trade shows to e-mail blasts, social media advertising, and even traditional letters.

The take-away learnings from this last year are therefore:

  • You can often achieve the unthinkable, but only if you think of it first
  • It is hard to give up the status quo in favour of new ideas unless you have to
  • It is OK to try a new idea that fails, as long as you limit your losses
  • You are always licenced to innovate, and develop a bolder strategy.

Most of these businesses are not going to revert to how they were when restrictions are ended, they are going to pick the best elements of past and present and see how they work together.

Perhaps in the future we will allow more wacky ideas and innovations to be tried out, and see how it goes. That is likely to be very interesting – for the businesses and for their customers.


Previous Blog – March 2021


For most owner-managed businesses, if you need more money you can only find it in two places. One is for you, the business owner, to invest more yourself. You may need to re-mortgage your house or sell other assets to provide the cash. The alternative is to borrow it. You could tap up your friends and relatives, but this can end in tears. Or you could go to your friendly Bank manager.

Banks tend to get a bad press, famously “renting umbrellas to people, except when it is raining.” You need to see it from the Bank’s perspective. They make money by lending money to businesses – as long as you pay it all back. They are looking for reasons to lend to you, but watching out for warning signs that they might not recover their loan in full. So how can you help them to lend to you?

Here are our 10 Top Tips for brilliant Bank borrowing:

  1. Don’t be a stranger. If you can cultivate a relationship with your Bank manager from the beginning, when you want to raise a loan you will already be at a better starting point. Make time to explain the business to them, and (Covid-permitting), show them around.
  2. No dirty laundry. Impressions count. You need to make sure that your Companies House filings are on time, you are not late paying VAT and PAYE, and you have no CCJs hanging over you. Old debentures should be scrubbed from the Companies House records. Anything else paints a bad picture of your business.
  3. Have good management information. You should be able to show that you produce timely management accounts and keep track of your business’ performance. This should include a balance sheet and ideally a cashflow, not just a profit and loss statement.
  4. Have a compelling reason to borrow. Banks like to know where their money is going, and investing in growth is more compelling than replacing losses (apart from the current Covid-response CBILs loans, where the opposite is true).
  5. Demonstrate affordability. The Bank manager has to show their Credit team that you can pay back the loan, with some headroom. Show them these forecasts, with reasons why the results will improve.
  6. Understand security. The Bank will usually want some security for their loan, whether that is a mortgage on your building, a charge on assets like book debts, or a lease on some equipment. You want to avoid giving a personal guarantee, if possible.
  7. Help the Bank manager do their job. They have to make a narrative report to the Credit team, so why don’t you write the story for them? This includes explaining clearly what the business actually does, the journey you have been on, and where you are going.
  8. People lend to People. Explain who the key people are in your business and how they will help deliver your future success. Photos will make them seem more real and approachable, and you can explain their expertise and experience.
  9. Gift wrap it. Putting the above points into a business plan format will make a good impression. Be available to help on the phone or by e-mail if there are last-minute queries.
  10. Don’t be afraid to haggle. Once you receive a loan offer, you may be able to negotiate down the charges, or the rate, or some of the terms. Probe to see which items may be flexible.

If you are struggling, you can always ask your friendly accountant to help you.


Previous Blog – January 2021


The start of a new year is a good time for a business to plan ahead and develop a new business strategy. However, if you do not start “at the beginning” you may not get to the right end point. You may deliver a good business, but not one that the owners wanted. It is vital to understand what your shareholders want, and to build up a shareholder strategy which will shape the business strategy that comes later. Different kinds of businesses have very different shareholder groups and expectations:

  • Owner managed – the MD/CEO owns and runs the business, possibly with other minority shareholders;
  • Sole trader – the manager is the business, there are not shareholders as such;
  • Family owned – some family members (sometimes plus some non-family members) run the business, and another group of family members (possibly the same group) own the shares. This could involve family trusts or other complex ownership structures;
  • Part of a bigger group – a remote “head office” owns the shares and sets aspirations and/or targets for the business to perform financially;
  • Charities and similar organisations – here there are not conventional shareholders but there are trustees who oversee the organisation, and charitable objectives/purposes that need to be met.

The first objective of any set of shareholders is that the business does not fail or “go bust”. Beyond that, the shareholders may want to:

  • Grow a business and then sell it;
  • Grow a business and keep it for generations to come;
  • Keep the business at a comfortable size so that their lifestyle is accommodated;
  • Generate sufficient revenue to keep themselves employed.

Some businesses may even have a finite life; for instance a company set up to carry out a one-off purpose (a joint venture, or to create a building, or a film) and the aim is to wind it down in an organised way and distribute the proceeds.

You therefore need to understand the shareholders’ approach to:

  • Return – how much do they want the business to grow its profits?
  • Risk – how speculative is the management allowed to be in achieving this?
  • Linearity – can you make a loss in the early term to generate bigger profits later?
  • Funding – are they happy to borrow money from banks to fuel the growth of the business, or to put in more money themselves?
  • Dilution – are they happy to issue more shares to other people to grow the business?
  • Anything else of importance. Some owners might want to meet personal ambitions such as to have an overseas office, or to meet an arbitrary size target. You need to know this.

Only once you have ascertained these needs can you go on to create the strategy of the business to meet them.


Previous Blog – November 2020


If your business is working at less than full capacity, or if you are coming up towards your year end, now is an ideal time for some simple housekeeping of your financial data.  Some of these will improve your quality of life, others may stimulate more business. 

Here are our 10 Top Tips for timely tidiness:

  1. Check your system for any incomplete or unposted transactions.  Sometimes these can be left “in limbo” and need pushing through to the right places.  Any older unpresented items on your bank reconciliations need investigating and resolving.
  2. Review your aged debtor report for overdue invoices – are you owed money you haven’t collected?  Can you chase for payment?  Are they an indication that you are failing to provide satisfactory goods and services in your operations?  Do you need to inform your credit insurers?  Are they about to be excluded from your invoice discounting facility?  Do you instruct a debt collection agency or start proceedings?  Can you claim VAT bad debt relief?  Do you need to provide for these or write them off? 
  3. Review your aged debt report for old unmatched credits.  Have you failed to produce an invoice, or posted it to another customer account?  Is your customer owed a refund – could you tempt them to spend it on a new order? 
  4. Review customers who haven’t bought from you in a while.  Can salespeople contact them to understand what has changed in their business and try to rekindle the business?  Do you want to reset their credit limits in case their circumstances have changed?  You might want to flag them as inactive if your system allows.
  5. Review your aged creditors for old invoices.  If you actually owe these, why isn’t the supplier chasing you for payment?  Have you actually paid them another way, for instance by credit card, or a cash book / nominal ledger / proforma payment?  Is this a duplicate that needs removing?  You can ask your supplier for a statement or account history to check this.
  6. Review your agreed creditors for old credit balances.   Have you paid the supplier but not received the VAT invoice and recorded the expense?  Do you need to chase this down?  Or have you overpaid and you are owed money you could ask to be refunded?
  7. Review old outstanding Purchase Order lines.  If you haven’t received the goods or services, check whether you actually need them and see if you can cancel them down.
  8. Review old “goods received not invoiced” items.  Have these been booked in mistakenly?  It is unusual for the supplier not to have chased for payment.  Trace these through to see if you have any systematic failings.
  9. Review your fixed asset register.  Do you still have all these items, or have you disposed of some?  It might remind you of things you own, but don’t use, and could sell.
  10. Check your payroll-related balances.  Your Nominal Ledger balances for staff pay, PAYE, pension and other deductions should be clearing to zero after monthly payments.  Check your HMRC online tax accounts to see if they think you owe what you think you owe – you might have overpaid and be due a refund!

Once you have finished this list your work should become easier and you should have improved your business’ position.