Management Accounts

On or Offsite?

Online working or Onsite?


Our work of book-keeping with management accounts plus a payroll bureau was about 85% online before Covid-19, now of course it’s 100%. 


Gradually over the last 10 years our clients have moved towards an offsite service and nearly all new prospects want this. We’ve always delivered payroll this way – for 25 years. But now the remaining few have been forced to change. Perhaps surprisingly the transition has been pretty smooth - it helps a lot that we are very used to such a change. It clearly begs the question as to whether any of this should revert to onsite after this virus - time will tell.


Of course it’s not all positives - it does rely on the client to communicate efficiently. Most clients do but not all. There may be a bit of work assembling data to be sent to us but this is rapidly dwindling as more and more source data becomes electronic, such as purchase invoices. Documents now tend to be sent to software that routes the data automatically into Xero and the like. Such changes always improve efficiency and in some cases literally transform the business – it’s great to behold.


We abandoned going onsite to London years ago – the added costs and travel time were just ridiculous.


Canary Wharf – would you travel there for a new client?


We were all set to be appointed to a major new client with the first task being to sort out a huge reconciliation mess. We offered to do all this offsite as travelling to Canary Wharf was impractical for the staff we would have used. The prospective client declined our proposal and politely insisted that all the work had to be handled onsite and to a very demanding timetable.


The company needed an immediate start and wanted someone to work totally onsite full time for two weeks in Canary Wharf as it required working closely with their Finance Manager on a complex task. We questioned this as our 25 years experience told us that none of this work needed to be done that way. We therefore suggested that some initial work could be done onsite but other work could be completed remotely. 


Instead the company decided to use an onsite contractor to handle this phase 1 with a view to appointing us ongoing in the phase 2. Half way through phase 1 the contractor left, without notice. The work had been left in a poor state and the need was even more urgent with an extremely tight timetable for completion looming. We picked up the baton to achieve the complete reconciliations. The extremely tight deadline was achieved after the BookCheck team had unpicked and resolved the errors that had been made.


•    Our staff (from 60 staff) were split into teams, allocated to different streams of the work in order to get up to speed quickly and within the completion deadline 
•    We worked extremely long hours, including a full weekend and pulled together to complete phase 1, facing considerable time pressure to complete everything by an immovable deadline. This included a two year VAT reconciliation - transactions from Sage had to be manually ticked back to transactions migrated to Xero to ensure the first MTD VAT return was completed accurately and on time as it was. This work started on 2nd September for the VAT quarter that was due to be filed with HMRC by 7th September
•    FD and Financial Manager of the client provided schedules to show how things should be appearing in the accounts; BookCheck were tasked with making sure the accounts matched up
•    A lot of the work that the contractor had handled was unpicked and corrected.

The point is that All of this work was done offsite, without the BookCheck staff meeting anyone at the client. We acknowledge the full support from the client in assisting and communication with us – this was essential in achieving the objective.

It left us wondering why not use us in the first place? I suppose it’s a matter of trust - if you can see it you can control it? Obviously not.

So a silver lining from this virus will be a big push to much more working offsite for a whole range of jobs, after proving that in most cases it works well. Not before time in our opinion.
 

Boost your Profitability by using quality Management Accounts

In our 25 years of experience we often take on clients with issues, often unknown, surrounding their management accounts.

If you’re serious about improving you profitability then naturally you’ll ensure that you receive promptly, every month, the key information, both financial and non financial, that you need to run your business effectively and efficiently.

This isn’t what your accountant gives you in their format or what you’ve inherited. It’s what you and your team or Board have determined that you need. You’ve really got to "own" it otherwise you risk not extracting the most benefit from the potentially precious information.

Some issues are obvious and easy to identify such as just no management accounts or they’re far too late or of poor quality. What tends not to be obvious or even admitted are personal user ‘difficulties’ around the table. These broadly fall into two categories. The first is a simple lack of understanding of what the numbers mean and what action consequently should be taken. The second is in accepting a sub standard form of reporting, perhaps assuming, probably wrongly, that it can’t be changed or that such would be too expensive. 

A sub optimal reporting scenario is a shame but it’s worse than that. It’s potentially costing serious money if management decisions are being delayed or prevented because of the lack of quality MI. The funny thing is that, in our experience, most issues mentioned are pretty straightforward to deal with and are well worth considering. 

Beware - it’s not a good idea to carry on with the same reporting that you inherit without reviewing as to whether or not it’s fit for your purpose. Circumstances may have changed over time so that the reporting needs adjusting but this won’t happen automatically. 

Of course this applies equally to charities where arguably it’s even more important to have the MI and understand it as Trustees are personally responsible. 

One of the most profitable developments in a reporting system is to split the single Profit & Loss report between different parts of the business such as in BookCheck where we report separately on each of Bookkeeping with Management Accounts and Payroll. They’re different businesses with different margins. If they’re mixed together in one, whilst you can still tell the sales performance, you don’t know which is improving its margin profitability and which is not – there’s no way of telling.

Perhaps the most difficult obstacles to overcome is for a user to admit a lack of understanding. To a certain extent that’s down to the service provider checking, asking, hinting or otherwise. But it’s mostly down to the individual getting real. 

Quality Management accounts should be a terrific basis for boosting the profitability and hence value of the business so our advice is - don’t waste the opportunity.