Would you share how much you earn? Posted 01/11/2019 by Loulla Smith & filed under Members. It’s long been accepted that you shouldn’t share your salary with colleagues. But a growing number of businesses are breaking the taboo. People in the UK generally don’t discuss their salaries – it’s just not done. However, some companies are trying to change all that, believing transparency is really beneficial for businesses and employees. One of the early advocates of salary transparency was Whole Foods, whose co-founder John Mackey made employees’ salary data available internally as long ago as 1986. Other companies have followed suit, and some have experienced measurable benefits. For example, the social media management platform Buffer decided to publish its staff’s salaries in 2013, along with an explanation of how wages were calculated. A month later, it saw a 50% increase in job applications, according to business publication Fast Company. Bosses at US marketing firm SumAll say salary transparency has boosted productivity, while a survey of 71,000 workers by PayScale found that a person’s “intent to leave” a company was directly related to a lack of knowledge about their pay. More output fewer politics More recently, Jason Trost, founder and CEO of online betting exchange Smarkets, has taken the idea of transparency a step further, allowing staff to choose what they get paid, with the figure being reviewed by colleagues and a committee before being finalised. The system is designed so the individual worker gets the final say. “We’ve been doing it for four years. It was a crazy experiment but I think it works quite well,” he says. Today Smarkets has 120 staff in the UK, Malta and Los Angeles. It only had around 30 staff before it switched to its transparent system. A positive impact on productivity The benefits noticed by Trost largely align with the arguments typically made in favour of salary transparency. He says employees trust the company more as “it’s less like you’re working for this anonymous organisation and more like you’re part of it”. He adds: “There’s a very strong notion that you’re in control, more so than in a traditional company.” Trost agrees that salary transparency has a positive impact on productivity. “You can concentrate more on your job, which is what the company wants,” he says. “It makes people focus more on output and less on politics.” Having a transparent system also represents, Trost believes, a “great step” towards closing the gender pay gap. It means there’s “no hidden agenda or surprises”, he says, citing the shock felt when the BBC published its broadcasters’ salary information last summer – the top 12 earners were all men. Humanising the salary process Trost also believes his company’s system allows organisations to “humanise” the salary process. If someone needs a few thousand pounds more to get a mortgage or if they have children, that can be taken into account by those reviewing the salary request. But, in a closed company, Trost says, “you want to pay people as little as possible to get them to do the job that you need them to do”. Trost admits there are drawbacks. Initially, Smarket staff could have a salary review every month, but this proved too disruptive. Now it happens twice a year, and a committee speaks for the organisation. It pushes back when people want to pay themselves too much, “but we let the person make the final decision”, Trost says. There have been a few cases where the committee told an employee to pay themselves more, but mostly people are too aggressive with their salary requests. “Sometimes people ask for too much because of game theory, thinking: ‘I’ll go high and get knocked down,’” Trost explains. The market for software engineers is also part of the problem, as “some salaries are going up by 20% to 30% a year, which is insane”. In an ideal world… There are two things Trost would like to fix. Firstly, he’d prefer the system to be less disruptive overall. Secondly, he wishes it were simpler to tell how much somebody should be paid. For software engineers, “there can be a six-figure difference between somebody’s market salary depending on whether they work for a bank or a small startup. Where do you put a person on that spectrum?” And, while taking children into account can be seen as a humane approach, it also causes problems. “If you take the point of view that you want to pay someone more because kids are expensive, you could be considered to be unfairly penalising people who don’t have kids,” Trost says. Despite the challenges, Trost is happy that Smarkets has a transparent system. He says it makes for a healthier work environment, adding that “the organisation takes care of itself more than in a top down way”. And he believes that, as society becomes more transparent, companies will start adopting pay models similar to his – although the change may take a decade or two to become mainstream.
Dream job, dream island – why Malta is a great place for new accountants Posted 01/10/2019 by Nicola Smith & filed under Job hunting, Students. With its azure waters, white sands and warm climate, the Southern European island of Malta is better known internationally for its holiday packages than for the career opportunities it offers to accountants. But that’s a situation that Amanda Cini, a Senior Human Resources Manager at a fully integrated fund administration and corporate service provider, Alter Domus, is working to change. The tiny country of less than 500,000 people has seen a boom in business development, successfully attracting gaming businesses, credit card and financial services, fund administrators, and the government has now prioritised the blockchain industry and cryptocurrencies. How Malta is changing “There are so many companies that are either moving their business to Malta or even starting off their business here. The growth is impressive and the number of opportunities for job seekers is incredible – from financial services through to start-ups ,” said Amanda. “Demand is outstripping supply right now” She added: “Malta has a huge shortfall in accounting professionals, at all levels. Even those [just starting their AAT studies] are in demand. The opportunities and job openings here mean we have the ‘luxury’ of being able to offer excellent conditions and prospects to overseas applicants’’ The government has recognised that there is such a big demand in the financial services industry, specifically for accountants, that red tape has been slashed and candidates can apply for positions and to live in Malta with ease. Sun, sea and salary EU nationals can start working and renting accommodation immediately upon arrival, while non-EU nationals must provide specific documents for their work permit application, but the procedure is relatively straightforward taking an average of six to eight weeks to be finalised. Salaries are competitive, and “they have a fantastic career ahead of them,” commented Amanda. “The abundance of opportunities – be it a client or non-client facing role, internal or external, fund administration, corporate services or tax – the job-seeker really can pick and choose.” But the island’s comfortable living standards and widespread use of English have also made it a popular destination for EU citizens looking for fresh career prospects. Rents are currently erring on the high side, but the authorities are taking measures to counter this. Amanda reveals that the beautiful summers, beaches and the island’s rich culture are often reasons cited by interviewees who wish to make the move. The nightlife is buzzing and the country is considered to be very safe. “They love the fact that it’s a multicultural country. The number of nationalities in Malta is incredible. At Alter Domus Malta, we currently have 18 different nationalities,” she said. Using your AAT qualification While the draw of Malta’s lifestyle is obvious, opting to move to the island, located some 50 miles south of Italy, can also give you a head start when it comes to career progression. The AAT qualification is held in high regard, and obtaining additional qualifications such as ACCA is both encouraged and facilitated. “We offer internal training by qualified trainers who are qualified accountants. We also offer study sponsorship. Applicants that start the ACCA will also be sponsored, and seminars they attend will be funded.” said Cini. “At the end of the day, promoting staff expertise is very important for us as we aspire to keep the highest standards in our services delivery. We want to make sure they keep up-to-date with accounting standards so to promote further learning, we offer study leave as well. Employee Development is top priority for Human Resources.” The growth is impressive and the number of opportunities for job seekers is incredible Searching the job market Social media, especially LinkedIn, is the best source of job vacancies, she added. “Job-seekers will have no problem whatsoever. The number of accountancy-related vacancies in enormous. The situation is such, that within a couple of weeks, you will find an accountancy position in Malta.” British candidates are highly rated for having the right attitude and professional background, but Amanda was disappointed to see a decline in applications from younger UK candidates lately. “It could be that they are looking at other markets,” she said. Brexit changes Uncertainty over the Brexit negotiations and whether there will be fundamental changes to the rights of British nationals to live and work in EU countries may also be a factor. Amanda, like everyone, is hoping that Brexit talks will end with a suitable agreement for people wishing to work abroad. “The fact that Malta and the UK, historically have very good ties and a very strong relationship gives me the positivity that agreements will be eventually be in place to allow freedom of movements between our countries,” she said. Student testimony One person who can testify to the ample opportunities open to accountants in Malta is Sarah Vella, a local student who started an apprenticeship with Alter Domus just six months into her AAT course and is now in the process of studying for the ACCA. When asked what was her main draw to Alter Domus, she highlighted the broad spectrum of learning opportunities open to her. “What I love the most is that you experience every aspect of accounts. Obviously, you learn as you go along,” she said. “When I was doing the AAT, for instance, I started working on things that I hadn’t actually begun to study yet, so when the course continued and that topic came up, I had a big advantage,” Sarah added. She would like to remain in the corporate service sector and to eventually own her own firm. But for now, she enjoys the international atmosphere that the accountancy industry in Malta provides. “We have employees from the Mauritius, Philippines, South Africa and Italy. You learn more about different cultures,” she said. “Here you get along with everyone. You learn different things from different people.”
Retiring from your own business, when is a good time? Posted 01/09/2019 by Georgina Fuller & filed under Pensions and payroll. The number of people who label themselves as ‘retired’ before the age of 65 has fallen to a 23-year low and is now down to 1.19 million, according to recent employment figures from the Office of National Statistics (ONS). The number of employees in workplace pension schemes is now over 9.5 million since the government introduced its auto-enrolment scheme in 2012, the ONS figures showed. But what about if you are self-employed and run your own businesses? Is it easier to work towards the age of 67 and then hand the baton over, or are you more likely to hang on to your business for as long as possible? The right time to retire Angela Ashworth, co-founder of accountancy firm Purple Lime, says people should know when the time comes to retire. “In today’s digital economy industry and regulations are changing rapidly, so at some point one must ask oneself if you want to focus on keeping up to speed in order to ‘hang on’. Do you have the same enthusiasm, energy and capability – both physically and mentally – you had when you were younger? Are you actually delivering the service and knowledge your clients require as their industries change also?” Ashworth, who plans to retire in three years’ time when she turns 60, says she intends to phase her retirement in gradually. “As of next year, I am decreasing to three days per week. I call it my ‘pretirement,’” she notes. “Whilst I thoroughly enjoy what I do, I want to spend more time with my family, travel as much as possible, be involved with charities or do something to ‘give back’ and pursue my hobbies. It will be great to hand over to younger members of the team.” Seeking advice from external sources Oli Thomas, who is in his late 20s and is Ashworth’s co-founder at Purple Lime, says he thinks it’s easier for employed people to retire. “If you’re self-employed, there is more of an onus to seek advice from external sources (experts, financial advisors etc). There is a tendency for business owners to put-off taking advice and starting to plan as they are too busy growing their business in the here and now.” Ben Rendle, who has just started his own accountancy business and is in his 30’s, says many people from his generation may not be able to afford to retire. “At the present time, unless my business asset grows to such a level where the sale can fund retirement, starting a meaningful pension pot would take too much of my earnings and would be almost impossible with a young family to support.” Funding your retirement Rendle believes they need better financial education in schools to fully grasp the benefits of a retirement plan. “It’s not until you get a bit older that you realise it’s an up-hill battle to fund your retirement. In my own case I will be 69 before my mortgage is settled so I will have no choice but to keep on working.” Steph Rickaby, director of Sunflower Accounts in Wiltshire, says the thought of working into her 70’s is very unappealing. “As a sole practitioner the thought of working until 67 is a daunting prospect,” she notes. “I am therefore quite happy to hand over the “baton” to the right person.” Rickaby says she tries to make her business as client-focused as possible and that it will be essential to find a replacement who shares her values and outlook. “For me, going into business was always about disrupting the way that traditional accountancy practises were run,” she notes. “We wanted to put our clients and their business as the main focus not just compliance.” Providing strong customer service and focusing on building relationships and being instrumental in decision-making processes are all key factors when it comes to finding a replacement, says Rickaby. “It is imperative that we build the right team and have the right people to assist in my exit strategy when I retire in ten years’ time.” Building the habit to save David Hearne, director and wealth management adviser at Satis Asset Management says self-employed people should start saving as soon as they start working but not necessarily for a pension. “This is in order to build the habit of saving for tax, and saving to cover lean times, not necessarily to put the money in a pension yet,” he notes. “Saving regularly, building a buffer, getting used to investing in an ISA, are all good building blocks before starting to make pension contributions with confidence and as part of a plan.” You should also give your business a realistic assessment and price your work accordingly, says Hearne. “Is this just a couple of years of trying something new, of needing some flexibility, or is this the expectation for the rest of your career? If your self-employment is regular, you should treat yourself like your own employee and pay into your pension regularly.”
10 signs that a company might collapse Posted 01/09/2019 by Christian Koch & filed under Members. Last year was a bad one for company closures. January 2018 saw the collapse of construction firm Carillion (aka ‘the company that runs Britain’), which went into liquidation with debts of around £1.5bn. From hiding debts through ‘creative accounting’ to invoices that never get paid, here are some red flags. 1. The business is haemorrhaging cash As the Carillion case showed, discrepancies in figures can often be overlooked. Having worked on Heathrow Terminal 5 and Liverpool FC’s stadium, in 2016 Carillion boasted sales of £5.2bn – a 14% year-on-year rise. Yet cash reserves increased by a mere 1.6%. Its contracts proved less lucrative than they seemed. “The most important thing you can do on a balance sheet is run your fingers down the current and historic year, looking at the differences between the two,” says Steer. “If a company’s sales are up 10%, then it’s reasonable to believe all other balances on the sheet will be up 10%”. Anything materially out from that figure is worthy of investigation. “Remember: the only thing that is a fact on the balance sheet is cash. Every other number is a matter of opinion.” 2. Accrued income Accrued income is basically the income that a company claims to have earned, but hasn’t yet invoiced the customer for (or indeed received). Accrued income proved problematic for Carillion. Its receivables grew by a mind-boggling 114% over the five years to 2016. Yet, during the same period, sales rose by only 3%. “Carillion was thinking it was owed more from accrued incomes, which told me the quality of its current assets was going down,” says Steer. “But it hadn’t even invoiced the client! 3. When the CEO suddenly starts flaunting a flashy lifestyle on Instagram The spending splurges of bosses have always aroused suspicion – with good reason. The lavish lifestyle of Dennis Kozlowski, former CEO of US security firm Tyco, included $2m (£1.5m) birthday parties for his wife and $6,000 shower curtains. It was later revealed that Kozlowski and his fellow executives paid themselves $150m in bonuses – a move that landed them hefty jail sentences. 4. The accounts are as easy to read as books on quantum theory For most people, annual reports are boring. But maybe that’s the point: by presenting charts and figures in a baffling way, outsiders are deterred from scouring through and unearthing the juicy numbers lurking within. When Sherron Watkins, an employee at US energy firm Enron, stumbled on a complex Excel spreadsheet in 2001, she knew something peculiar was going on: the company’s unfathomable accounts were concealing huge debts. After she exposed the fraud, $74bn of shareholder funds were wiped out, with thousands of workers losing jobs. Today, it’s considered the world’s biggest accounting scandal. Steer’s tip? “Companies often hide losses in ‘development costs’. Look for that in a balance sheet – it’s where all the naughty stuff is hidden.” 5. Non-stop acquisitions Alarm bells should ring at any company that gobbles up other firms like it’s going out of fashion. Carillion adopted this strategy in the 20 years before its implosion, with many of these freshly acquired firms failing to deliver growth. As Steer says: “What’s the point of buying these companies if they’re not moving profits ahead? An acquisition strategy is rarely a passport for moving the share price up.” 6. It’s taking ages for the company to get paid… Notice any outstanding invoices in the annual report? They can also hint at problems. Take Carillion (again!). In 2016, its sales grew by 14%. Yet the amounts owed to the company for construction projects and other receivables grew by 70%. Such payment delays damaged its bottom line. “I could tell something was awry because Carillion was taking a very long time to get paid by customers,” says Steer. “It indicated to me that clients were quarrelling over the bills, saying: ‘No, we don’t owe you for that.’” His suspicions proved well founded. 7. Any time you come across the word ‘goodwill’ When one company buys another, the goodwill figure represents the difference between what was paid for the firm and the fair value of its net assets (such as its technology and patents). Quite often, this figure is unsubstantiated. The 2016 annual report for outsourcing group Mitie estimated that its recently purchased healthcare company, MiHomecare, was worth £145m, which included £107m of goodwill. In reality, the acquired firm was racking up serious losses. MiHomecare was sold in 2017 for just £2, with Mitie forking out £9.5m to get rid of it. 8. Exiting execs When senior management start bailing en masse it suggests the company could be heading for a brick wall. If these defecting directors start cashing in shares before leaving, that’s another warning sign. A good example is the execs at ailing housing group Connaught, who sold £16.6m of shares between 2008 and 2010. 9. Failing to adapt to tech disruption Whether it’s the likes of Netflix forcing VHS emporium Blockbuster to shrink from 9,000 stores to just one (FYI, it’s in Oregon), or Kodak floundering due to the rise of digital photography, the list of companies that have failed to evolve in the face of tech disruption is long. Socio-political factors can also play a role – see Monarch Airlines, which went into administration in 2017 after terrorism in North Africa (a key area for its business) and a slump in the pound battered its revenues. 10. Look around the office In many workplaces, the cracks are often visible long before the business collapses. Think toxic office morale or senior execs emerging from secretive meetings with harried expressions on their faces. Then there are the more obvious harbingers of doom – an announcement, say, that the company HQ is moving from a gleaming skyscraper to a warehouse on the edge of town, or a decision to cut health benefits. However, these measures don’t always spell disaster: HSBC, the civil service and Jaguar Land Rover have all announced hiring freezes in recent years.
Excel tips: how to write an IF statement Posted 01/08/2019 by Gill Myers & filed under Excel tips. Working with spreadsheets can make accounting tasks much more efficient and reliable once we have learnt to use the required functionality. However, in order to achieve that we have to combine accounting knowledge with spreadsheet skills and for many of us, bringing both areas together is a real challenge. In this article we’re going to work through how to write Excel IF statements. Comparisons are frequently used in accounting. For example, we compare the total debits to the total credits in the Statement of profit or loss (SoPL) columns in an extending trial balance (ETB), and if the value of the credits is greater than the debits, we conclude that a profit has been made. IF statements can be used to do the same. The IF function allows us to make logical comparisons and then provides an answer or statement based on the result. This means that there can be two results or outcomes. Returning to our example, more income than expenses results in profit but if debits were greater than the credits then the outcome of the same comparison would be a loss instead. If we look at the SoPL columns from the ETB below, we can easily see that the value of the credit column is more than the debit column so we know that a profit has been generated. However, if we are required to write an IF statement in cell D16 to evidence that a profit has been made, then the IF statement needed is: The IF statement can be deciphered as: If C16 is greater than B16, then return the word Profit, if not, then return the word Loss. The brackets, commas and speech marks are all essential for the function to work and if they are omitted or used incorrectly then the formula is unlikely to be accepted or an error message will be returned. Excel will automatically add the correct basic ‘grammar’ though, if the function arguments tool is used. Click into the cell you want the IF statement in and then click on ‘fx’ just to the left of the formula bar. Then search for and/or select the IF function: The argument box for the IF function has three boxes which splits the statement up into its three logical sections: Logical_test Enter the comparison Value_if_true Enter the outcome required if the comparison is true Value_if_false Enter the outcome required if the comparison is false Note: The speech marks were automatically added to box 2 when I moved onto box 3 and will be added to the text in box 3 when I select ‘OK’ to complete the task. The IF statement, with the required basic ‘grammar’, is produced in the formula bar as the information is entered into the argument box. IF statements can be used to return any text depending on the comparison required. Are the totals of the columns in a trial balance equal – yes or no? How do the actual sales figures compare to the targets set – over target or under target? Actual production exceeded expected production so a bonus is payable this month – true or false? You should be mindful of how a question is asked though because it will affect how the statement is written and be aware that there can be more than one way of producing the same result. Therefore, it is always a good idea to check that the IF statement has returned the result you were expecting. IF statements can also be used to return calculations. For example, let’s say employees are eligible for a bonus of 2% of the sales revenue they have generated in excess of their target. We could start with a simple IF statement that returns yes or no to the question, is a bonus payable? Then we can use another IF statement to calculate the amount payable: Note: When an IF statement is comparing text or words then the spelling must be an exact match and speech marks need to be manually added* or an error message will be generated: Brackets also need to be included when a calculation has more than one operation (addition, subtraction, division etc.) because Excel works on BODMAS principles.** In this case the actual must be deduced from the target before 2% can be calculated of the difference. If the brackets are omitted then the multiplication will happen before the subtraction and the figure calculated will be wrong. A quick manual check of A Abli’s figures (the actual is more than the target and 2% of £236 is £4.72) provides the reassurance needed that the IF statements are correct and can therefore be applied to the other three employees using direct cell referencing, in other words highlighted and dragged: The IF function is one of the most popular and useful functions in Excel and has lots of practical applications to both financial and management accounting tasks. Whenever you are combining accounting knowledge and spreadsheet skills, firstly think about how you would perform the accounting task manually and then consider how you can best replicate that in Excel using formulas, functions and formatting to make the process more efficient and accurate. Read more tips on Excel here Browse the full range of AAT study support resources here * Comparing TRUE or FALSE is the only exception and doesn’t required speech marks but the spelling must still be correct. ** BODMAS is the mathematical rule that gives the order in which to do calculations that have more than one operation. Brackets (calculations within brackets always come first), Orders (powers or square roots), Division, Multiplication, Addition and lastly Subtraction.
A 2019 recruitment outlook for accountancy and finance professionals Posted 01/08/2019 by Neil Johnson & filed under Job hunting. Change, disruption and uncertainty will remain buzzwords swirling through all walks of life in 2019. Yet for the accountancy and finance profession, these don’t have to be dark clouds. While it’s easy to feel nervous of headlines suggesting armies or robots and algorithms are coming to steal our jobs and make us all useless, or that Brexit is going to bring the country to its knees, it’s worth taking an alternative view, that advancements in technology and sociopolitical disruption can in fact be catalysts for professional opportunity, for new, maybe even better ways of working – you just need to be prepared. The fourth industrial revolution is upon us According to recruitment agent Robert Half’s 2019 UK salary guide, 53% of CEOs are worried about the distinct lack of digital skills in the workforce that businesses require to adapt to the rapidly approaching fourth industrial revolution, characterised by digitisation, AI (artificial intelligence) and automation. Finance departments and accounting professionals are being increasingly called upon to support business transformation, which can include implementing new company-wide software and systems, setting up, supporting and working alongside outsourced functions, and analysing and interpreting huge amounts of data to support business growth and strategy. “From a business perspective, technology and a need for data continue to be driving factors behind growth, knowledge and a sense of certainty in a politically uncertain world,” says Paul Jarrett, MD at recruitment consultant Renaix. “Businesses are increasingly turning to finance to make sense of where they are and to provide assurance over the route the business is plotting. “Scarcity of capital and a general shift towards risk aversion mean that accounting and finance professionals are being increasingly relied upon. The key shift in the industry in 2019 is likely to follow on from 2018 where skills transferable to other business areas or a general ability to bridge the gap between finance and operations are well thought of, and the demand for data analysis from those skilled at interrogating data and providing insight will continue to grow.” Such a combination of skills and qualities is what is presently giving many CFOs and hiring managers headaches – professionals in this image are hard to come by, fuelling the long running war for talent in finance. Business partnering “Accounting and finance is becoming all-encompassing,” says Jarrett. “The trend to business partnering over recent years isn’t going to go away in 2019, and partnering between finance and operations is going to continue to increase. The times of finance being a standalone department are long gone, and while there will always be a requirement for people to fulfil specific roles with limited reach, these are the types of roles that are being automated or expanded. “An increase in recruitment for multi-skilled business partners is likely, and in this instance the ability to convey technical messages effectively between departments and to build cross departmental relationships is going to be close to mandatory. In similarly high demand will be the ability to tell stories from numbers and to take a range of situations and interpret the end outcomes, all of which will be required with the current uncertainty swirling around.” So if you can position yourself with such skills and qualities, ready for the fourth industrial revolution, you’ll not only help fills gaps in the workforce now, but you’ll be future proofing your career and working at the cutting edge of the profession. Brexit: will it won’t it? Whether you like it or not, Brexit is going to be a key factor in recruitment in 2019 – but as a finance professional, there’s no need to panic, says Jarrett. “Brexit will continue to dominate trends, particularly in relation to public sector hiring and sectors serving the public sector, but also private sector organisations by extension through the existence of uncertainty. “While accounting and finance is not immune, and there will be plenty of examples of companies slowing down in terms of hiring while uncertainty exists, this should be no worse than it has been over the last couple of years where the market hasn’t ground to a halt. There will always be a need for finance people to guide businesses through the inevitably tumultuous times that will follow any decision on Brexit, regardless of which way this eventually ends.” We want school leavers! A trend that has the possibility to run in 2019 will be the demand for school leavers, once again linked to the general mood of uncertainty. In an opinion piece for Onrec, Nick Kirk, the MD of Michael Page UK, said that this uncertainty is not only causing people to stay in their jobs, but it’s also putting some people off further education, particularly owing to the associated costs/debts. “As such, we can expect companies to increase the space for school leavers in 2019. This should involve an acceleration of the efforts to recruit them, and providing the sure-fire promotional paths previously reserved for graduates. Historically, we have seen entry level programmes targeted solely at graduates, but as the next generation of workers emerges, we can expect to see initiatives targeted explicitly at school leavers who are keen to get on to the career ladder.” Temporary, not risky While not quite part of the gig economy, the trend for mixing temporary finance staff into long-term staffing strategies is only being fuelled by the need to plug skills gaps amid transformation and uncertainty, with Brexit doing nothing to slow the trend. According to Robert Half, 38% of CFOs expect to hire temporary or interim staff in2019, believing a mix of permanent and temporary staff is vital for finance department success. So if you believe you’d be comfortable working in a contract or interim capacity, or even prefer it to permanent positions, this avenue is open for exploration and is becoming far less risky than it once was in terms of career security. Just be aware you’ll be your own boss, sales person, marketer and operations, and you’ll need to be very pro-active in making sure you’re abreast of essential trends and knowledge in your area of expertise. 2019’s in-demand skills laid bare “The need for a qualification isn’t going to diminish,’ says Jarrett, “in fact for most people looking for a long term career in finance and accounting, this is becoming something of a pre-requisite. Employers look to it as a rite of passage, a sign that an individual not only has the basic abilities and understanding of the underlying accounting theory, but also that they have the commitment and drive to see the qualification through to its conclusion. The attainment of a qualification shouldn’t be a barrier to entry in the world of finance and accounting, but a commitment to reaching the standards required by the various awarding bodies will almost certainly be required.” Beyond the technical, the softer transferrable skills are coming top of the list for CFOs, even usurping technical abilities as the deciding factor between candidates in 2019, believes Jarrett. “Candidates are going to be increasingly assessed on situational awareness, emotional intelligence and their ability to compare, contrast and evaluate situations, as well as their technical skills. These softer skills are becoming increasingly valuable and so is the art of communication. Perfecting the art of communication “Being able to communicate effectively with finance and non-finance teams and team members is growing in importance as finance are expected to broaden their horizons and provide insight into areas of businesses previously reserved for operations only. Operations are being increasingly challenged to understand their numbers in more detail and to understand the drivers of their numbers, and no-one is better placed than an effective finance function.” And of course, skills related to technology and a willingness to embrace change are high on recruiters’ wish-lists. “As the advancement of off-shoring, outsourcing, automating and implanting robotics continues, the ability to retain oversight of affected processes becomes critical. Being able to assist in the implementation of all these things requires a challenging mindset, an ability to identify best practice is paramount and so is a willingness to participate in an organisation’s change agenda. It’s fair to say that change has been on the cards for many years, and those that embrace it are likely to be most useful both during and afterwards.” Salaries and remuneration Jarrett says that, in general, salaries are likely to grow marginally in 2019 and the general demands of a career in accounting and finance are unlikely to alter significantly, yet there may be a change in how we work. “There is an expectation that at busy times around month and year end closes people in finance will put in the extra hours, but there’s a definite shift happening to make sure that working is more balanced outside of these busy times, following years of pushing the envelope on what finance professionals are expected to deliver year-round. “Expect to see salary stagnation offset by an advancement in opportunities to experience more of a business, through changing roles or secondments, since these are seen to benefit both the individual and the business in equal measure, and when it comes to securing a future role, these skills and experiences will be worth more than the latest benefits fad will ever be.”
The skills finance employers want – and how to get them Posted 01/07/2019 by The content team & filed under Career, Employers. You’re looking for your dream job in finance, but have you done an inventory to see if your skill set needs updating to match what businesses want? Employers are looking for accountants who can do more than just the accounts. The good news is that the skills employers want to see in their financial hires are easy to learn. In fact, you probably have most of them already, but simply may not have applied them in your work yet. So we asked a team of four coaches to help us put together a training plan. Our team includes forward-thinking accountants Anna Goodwin, Andrew Sullivan and Alex Falcon Huerta, and professional-services recruitment specialist Jemma Bailey. Broaden your industry knowledge Anna Goodwin: It’s important to be aware of how technology has changed and how you can use this to provide a better service to the clients or stakeholders you work with. Jemma Bailey: Accountants who stick to one role or one industry are often the most at risk. Companies often like accountants who are adaptable with their approach, who have experience working in different environments and who are confident with change and challenges. Those who have stuck to one role should seek out extracurricular training to develop their skill set or ask for more responsibility within their own organisation to broaden their skills. Step outside your comfort zone Alex Falcon Huerta: Modern accountancy is much faster-paced than before and things change all the time. A lot of people are used to working at their own speed and, when they come into a job that’s digital, it can be a shock to the system. Jemma Bailey: Many people become stuck in their everyday practices and less inclined to try new ways of carrying out tasks, but in order to improve your adaptability you should do the complete opposite. Seek out new opportunities, get involved in challenging situations and step outside of your comfort zone. If you continually push yourself to do new things, you will instinctively learn to adapt to new situations, which will help your finance career in the long term. Anna Goodwin: Download some of the cloud accounting software – for example, Xero or QuickBooks – and play around with it to see which package you prefer to use and which one you believe your clients will find easier to use as we move towards the implementation of Making Tax Digital. The main thing is to make yourself familiar with the package so you can be helpful to your clients. Ask the right questions Anna Goodwin: Many business owners feel unhappy and fearful about their numbers, so it is essential that you, as an accountant, put them at ease. Ask clients for feedback by sending them a survey on how your firm’s communications could be improved. If you aren’t in practice, ask non-financial colleagues what information would help them to do their jobs better. Prior to taking on a client, think about the whole subject of their business. What are their competitors doing? How can they price more profitably? Have they thought about using sensitivity analysis and benchmarking? If your skills are rusty in these areas, then book yourself on a course. Network, network, network Jemma Bailey: I would advise all finance professionals to go to industry events and network with other finance professionals in their sector. Anna Goodwin: Think about what sort of relationships it would be useful for you to build – for example, with small businesses, franchises, banks or other accountants. Research the networking groups in your area and book a spot. Do your research Anna Goodwin: To serve your clients or stakeholders, you’ve got to really know them. You’ve also got to know their competition. Research is becoming an increasingly important part of accountants’ day-to-day work. Why not put together a SWOT analysis, identifying the company’s strengths, weaknesses, opportunities and threats, based on your research and their performance thus far. Then look for the issues that you can help the company with. Think outside the box Andrew Sullivan: It’s hard to market yourself as a ‘creative accountant’ due to that phrase’s connotations, but accountancy is increasingly all about problem solving, and you have to think creatively to determine how to tackle to work. Logic puzzles are a great way to train your brain to solve problems. And the great thing is that there are so many puzzles available for free on the internet – just Google ‘logic puzzles’. Another way to get you thinking differently about a problem is by using mind maps. It really helps if you visualise an issue and break it down into manageable parts. With soft skills such as creative thinking, conflict resolution and problem solving becoming highly sought after in many roles including accountancy, there’s no better time to up-skill yourself!
You’re the boss: how do you stay motivated? Posted 01/07/2019 by Charlotte Beugge & filed under Members. Your staff can work flexibly to fit in with their home life. You pay them well and make sure that if someone’s done a good job, you thank them. And you even sponsor the company five-a-side football team – as well as turning out for them in crucial matches. In other words, were badges awarded for being a good boss, you’d have an armful. But while you might be brilliant at motivating your staff, are you similarly enthused? It’s easy to forget your own motivation when you’re in charge. Why you need to keep keen If you are no longer passionate about your business, then all the team building and motivational speeches won’t work. Eventually, your employees will see through the façade. You need to be authentic: faking motivation will soon be detected by your employees. Kate Howlett is the managing consultant at John Lees Associates, the career coaching specialists. She says: “It is important that you as a boss stay motivated. Just as a lack of motivation can affect the health and performance of employees, it can affect yours too. You need to put yourself first for your own good and that of the business”. All that might seem easier said than done, however. It is one thing for an employee to admit they are feeling jaded about their work but the impact of the managing director admitting to similar feelings could have a huge effect. But actually, if you manage your demotivation well, it can have a positive effect on everyone. “You must remember that you are allowed to be demotivated and that it is a strength that you are able to admit it” adds Kate. “It happens to everyone: as long as you have good strategies in place to get your motivation back, then it is a normal part of working life”. Carry on learning Don’t think you’re alone in feeling jaded about work. “Research has shown that at all levels people stay motivated on average at work for two years, eight months,” says Kate. “But you can re-motivate yourself in many ways – whether it’s changing your responsibilities, taking on extra or different roles or taking some new qualifications or training. We’re not talking about re-inventing the wheel, just making subtle adjustments which can spark your enthusiasm”. Exercising your grey matter and learning new skills could be the answer: you will remember why you wanted to do your job in the first place. The AAT offers a programme of continuing professional development (CPD) events and masterclasses to help you and your staff develop their skills and knowledge. And every year there is a two day AAT conference which covers all the major current issues in accountancy with speeches, workshops and sessions – as well as the all-important peer-networking. AAT members also have the opportunity to network via their local branch and they also have the opportunity to access online CPD resources: so you and your staff can further their learning from the comfort of their desk. And there are other ways to learn. Says Kate: “Have a peer mentor: there will be some parts of your work you aren’t as keen on or as good at. Seeing how someone else does it can help you improve. And also consider reverse mentoring: you can learn from those at the beginning of their careers as well as those who are well established. “A Generation Z worker will have different ways of doing things which you can learn from. Another idea is to get a mentor from a completely different industry: such a perspective can give you a whole new outlook and enthusiasm for your own role”. Back to the future “Re-motivating yourself is all about putting yourself at the centre of the story,” says Kate. “It can be a good idea to take a step back and consider where you are heading and where you want to go. Often people get to a plateau in their forties and think they can go no further”. But one way to get re-motivated is to imagine that you are now in your sixties or older and are looking back at your working life. If you were doing that, would you see your current role as the pinnacle of your career, the absolute best you think you could have achieved? Or would you in retrospect be disappointed and think that you could actually have gone further – or in a different direction – with your career? If in this imaginary scenario, you can imagine that you’d feel disappointed with your current role then you can do something about it. “Having something higher to aim at can help you re-motivate yourself?” says Kate. “Just because you’re the boss doesn’t mean you can’t aim even higher”.
How to come up with a referrals game plan Posted 01/04/2019 by Iwona Tokc-Wilde & filed under Career. Referrals from existing clients are the most effective way to grow your business, but only if you make a conscious effort to get them. Many accountants and bookkeepers admit they get the bulk of their new leads from client referrals and word-of-mouth recommendations, rather than through advertising and direct marketing. These leads are also easier to convert because people trust referrals. According to various research, up to 70% of us will ‘buy’ when a product or service is recommended to us by someone we know. Carl Reader, director at accountancy firm d&t, confirms: “Our conversion rate is significantly higher if a lead has come from a referral, rather than through our direct marketing efforts.” You may have adopted the ‘wait and see’ approach to referrals. That’s fine if you are comfortable with what you’ve got and see no need to chase new business. But if you want your practice to grow, you can’t be passive about it – you need to actively encourage referrals, rather than sit back and hope they will come to you. In other words, you need a game plan. The blanket approach At the risk of pointing out the obvious, you need to ask for referrals to get referrals. “Send an email inviting referrals to your client database and if you are already sending out newsletters, make this invitation part of the template,’ says Charlotte Sheridan, marketing consultant at The Small Biz Expert. She also recommends adding a “New client referrals” or “Refer a friend” form to your website and emailing the link to your existing clients. “This makes it very quick and easy for people give you referrals, and the easier it is to do, the better the response rate.” Give people social media tools for referring you, too: Facebook and LinkedIn ‘share’ buttons require little effort on their part. Sheridan adds: “Put a referral request at the bottom of your and your staff’s email signatures and if you have a ‘please hold’ recording on your phone, you may want to include a ‘call to action’ there too.” You can also reinforce the message that you’d welcome referrals on invoice footers, in footnotes to client letters and in other client facing materials. The targeted approach Another strategy would be to look at your existing clients, identify those who could be good referrers and target them first. Bob Brown, director at business consultancy inspire2aspire, recommends grading your clients using the following criteria: a. good future economic potential (they will continue to be a viable client, with money to pay your fees) b. you satisfy all of their bookkeeping and/or accounting needs (they’ve no reason to go elsewhere for other services) c. they refer you. Grade 1 clients satisfy all three criteria, grade 2 – two, and grade 3 – one. Brown says: “Start with trying to get referrals from grade 2 clients that don’t give them and look to upgrade them to a grade 1.” He adds: “When they are or become a grade 1 client, institute a personal introduction scheme which works much better than just referrals. Rather than just pass on their contact details, your client calls their contact to check that they are happy to see or hear from you and you contact the introduction once this has happened.” Accountancy commentator and mentor Mark Lee points out that you can also look beyond existing clients for referrals: friends, family, and local influencers and introducers. But you must let all of them know (and this includes your current clients) who would make a good referral. “Who, not what. No one can refer a business turning over half a million pounds. But they could refer the owner of such a business if they’re looking for more advice and support than they are getting from their current accountant.” The clearer you are in this respect, the less likely it is that you will land a bad referral. “Fortunately, our clients and associates also tend to refer ‘people like them’, meaning that we have some level of reassurance that they are the kind of people we’d like to do business with,” says Reader. Should you offer incentives or rewards? Some firms thank their referrers with Amazon vouchers, finder’s fees of up to £100, and discounts off the following month’s service. Sheridan says: “It’s also worth considering rewards that benefit both the referrer and the referral.” For example, the referral also gets a discount, say 10% off the first month’s package. Making your rewards ‘programme’ fun or memorable can encourage long-term engagement and participation, too. Lee says: “I know of an accountant who set up practice some years ago, in the summer. A few months later she invited her clients and business friends to a Christmas get-together, to thank them for their support and their referrals. She named one client in particular and presented them with a nicely wrapped thank-you gift. She repeated this process each Christmas, in effect creating a friendly competition among her clients who wanted to see who would be rewarded for the biggest number of successful referrals each year.” Sheridan points out that you must always make it clear what constitutes a successful referral: they must sign up as a client and they must have paid their first month’s fee. “But do send a thank-you note even if the prospect doesn’t become a client, it’s good manners,” says Lee. Just remember that incentives and rewards are not enough if you want to keep those referrals coming. “You need to keep the referrers updated and reassured that you are looking after the contacts they’ve referred to you. Without that trust, there’s no way that they will refer you again, whatever the incentive,” says Reader.
MTD Pilot opens up to more businesses Posted 01/04/2019 by The content team & filed under Making Tax Digital. HMRC is maintaining momentum in the introduction of Making Tax Digital for VAT (MTDfV) as we head towards the deadline for implementation. Partnerships and Flat Rate Scheme users are now able to join the voluntary public pilot and gain experience before April 1. This following successful private testing of the MTD VAT service, conducted with a small number of invited businesses and agents. The announcement is a positive step after a setback at the end of 2018, when HMRC revealed businesses with complex affairs would be given an extra six months to switch to MTDfV. HMRC has now published its definitions for excluded firms, which are expected to affect up to 40,000 businesses. HMRC says businesses will not take part in MTDfV until October if they: currently trade with, or have traded with the EU are part of a VAT group or VAT Division are based overseas are a trust are a not for profit organisation that is not set up as a company submit monthly or annual returns make VAT payments on account are a business that is newly registered for VAT that has not previously used their VAT online account to submit their VAT Return. When VAT is paid by direct debit, the business will not be able to sign up in the 15 working days leading up to their submission date and the 5 working days immediately after it. HMRC has indicated that the pilot will be opened up to more businesses in due course and to regularly check their website to see if it has been extended.