Whilst it might feel good to be the director of your own company you have several responsibilities as directors under the Companies Act 2006:
- To act within their powers (in the articles of association etc)
- To promote the success of the company for the benefit of its members as a whole ie not benefitting one member above the company eg by allowing one director/shareholder to take out more dividends/loans that the company can afford
- To exercise independent judgement – you can take advice but must decide for yourself
- To exercise reasonable care, skill and diligence eg using a chartered accountant or professional bookkeeper if you don’t have those skills in house
- To avoid conflict of interest
- Not to accept benefits from third parties
- To declare interests in transactions
Management accounts. What should they include?
It depends very much on the users, their goals and their understanding of finance.
Most management accounts that I have seen over the years are just information overload. I prefer to focus on three key numbers at a time. These numbers may vary over time as focus shifts to improving different parts of the business.
Of course there should be more information available to drill down but most managers prefer to focus on a few key items at a time.
What do you like to see in management information?
Like most authors I’m delighted when people buy my books (list and links below) but less pleased when they sit on the buyer’s shelf gathering dust.
I’m as guilty of this as the next person with over 100 unread books (fiction as well as business) on my bookshelves and Kindle. Or perhaps I’m worse than most?
Unread books are just a waste of money. Better to read one book a year and implement any useful actions than to spend on unread books that can not possible generate any benefit. It’s why we make it a condition of all our coaching and courses that the client spends at least half a day per week working through any agreed actions.
It’s not even a time thing as I read pretty quickly and can finish a 200 page book in a couple of hours. So, my resolution is to stop wasting time on Netflix and to read AND IMPLEMENT at least one book a month. Will you join me? And what will be the first book on your list?
If it’s one of mine the links are here:
For accountants and bookkeepers:
The Numbers Business: how to grow a successful cloud accountancy practice
Changing the Numbers: how to deliver advisory services for maximum success
For any type of business:
Growing by Numbers: how to scale up your small business with confidence
As you know I’ve spent the last year writing ‘Changing the Numbers: how to deliver advisory services for success’ to help accountants to provide real help for their business clients. And I’m the first to agree that, whilst all businesses need this service, not everybody can afford to pay for it. (This is why we have free products such as our Better Business webinars for accountants and our Money Matter ones for general business.)
But for those clients that can afford to invest in growing their business then we can do much better than a bit of tax advice at the year end or help completing a loan application. As accountants we have financial training but we also have exposure to hundreds, if not thousands, of businesses as well as running our own.
Accountants who, like me, have worked as Finance Directors or similar will know that their role at the board room table includes much more than ‘just’ accountancy. The topics that I’ve identified include:
1. Vision and values
2. Cash flow
5. Efficiency of operation
8. Mergers and acquisitions
11. Customer services and quality
12. Cost control
Different accountants may offer advice on some or all of these areas depending on knowledge and experience so we need to be clear on those areas.
We’re both viewed as necessary evils.
I was quite shocked when, a few years ago, an old friend told me that she would rather see her dentist than her accountant. As somebody who is terrified of going to the dentist (he’s lovely really) this really made me view myself as an accountant in a different light.
I see myself as an expert who loves to help business owners. Sometimes that’s keeping them out of trouble and other times it can put an enormous smile on their faces. And my dentist probably sees himself the same way.
So I started to think about why I had chosen my dentist and what I could learn as an accountant:
• I choose to pay a little more in the hope of a better service than mere competence. I want somebody to take a little more time to reassure me should I ever need any work done.
• They have a dedicated car park (although I walk as they are opposite my office)
• The receptionist, Belinda, is probably their biggest asset. She always calls 48 hours beforehand to confirm the appointment so there’s never any confusion.
• Belinda is very reassuring with her calm, competent manner. She explains all Covid restrictions clearly as they are constantly changing
• The waiting room is calm and has free Wi-Fi so I can distract myself by checking my emails or messaging a friend while I wait.
• There are calming videos of fish and wildlife, including on the ceiling of each surgery. (I’m not sure what the accountants’ equivalent would be)
• The dentist and hygienist themselves are always friendly and ask about my kids or work; something personal to relax me.
• They take payment as I leave and book in the next appointment.
How much more enjoyable would clients find it if we spent time on creating a welcoming environment in our business? Take a few moments to think about how you interact with clients at every stage.
2022 is here and, one week in, I’m still hanging on to my business plan.
What helps is that I have a list of specific actions for all 12 of my main projects for the year. And the actions for the first couple of projects have deadlines and time allocated in my diary. I know some of them will slip, especially the ones for later in the year, but at least it helps to make a good start.
Have you turned your New Year’s Resolutions into an action plan? I really find that it helps.
Make sure that your goals are SMART.
This is the busiest time of year for accountants and we’re often overwhelmed by contact from clients (in addition to the clients who never respond to any of our chasing letters/emails/calls). How accessible are you? And are you too accessible?
My preferred methods of communication is email and I’m able to file these in Outlook and in my CRM for ease of use if I need them later. Many clients prefer phone calls so I take notes and file them in with their other documents and my CRM.
So far, so good.
But I also do a lot on social media for my businesses so people often message me that way on Twitter, Linked In or Facebook Messenger. And sometimes via Instagram or WhatsApp which I don’t use for business. With so many different channels these often don’t get added to my CRM so I’m left with a vague recollection of a message and having to find which platform it was on.
If you have any ideas on how to manage all this I’d love to hear.
I do have some wonderful tools to help with accessibility:
• VOIP + Answer It takes messages and forwards them to me by email
• Melu chat on both my websites is run by human beings based on a series of FAQs that I sent to them and which they are augmenting. They also forward chat summaries to me by email
• Calendly.com is great for scheduling calls directly into my diary and I receive email notification of these too.
• Voicemail – if I don’t recognise a number on my mobile, or if I’m on another call, my voicemail will record messages for me to follow up later.
How do you manage all your incoming communications or are you too accessible?