Think tank suggests way to boost UK productivity

By Ken Maggs, Moore Thompson

According to a leading think tank, the UK’s productivity could be boosted if the government focused on low-wage sectors, such as hospitality and parts of retailing, which currently receive little support.

The Institute for Public Policy Research (IPPR) argues that help tends to be targeted towards highly skilled workers in advanced manufacturing and yet the low-paid employees in bars and at checkouts could be the key to sustaining the UK’s recovery.

As a spokesman for the Institute said, while manufacturers often have a strong incentive to improve their performance in a bid to compete with more efficient foreign firms, the same pressure does not exist across large parts of the domestic service sector economy. The IPPR is therefore calling on the Government to think more carefully about how its spending can help to boost productivity in these sectors.

The UK’s productivity expanded at an average annual rate of 2.3 per cent in terms of worker output-per-hour in the years between 1979 and 2007, which helped to drive rising living standards.  However, since 2007 this has fallen by an average of 0.1 per cent.

This unexpected failure of output-per-hour to rebound after the financial crisis has been called the “productivity puzzle”. This is partly blamed on collapsing productivity in the North Sea oil sector and in the financial sector. Meanwhile, several other sectors including retail and transport also saw productivity fall sharply when the crash happened.

However, since the recovery got underway in 2011, another important explanation for the productivity puzzle has been the rapid rise in employment in relatively low-productivity sectors.  Therefore, raising the minimum wage to £9 by 2020 could help by giving firms an incentive to invest in technology and training to get more out of their lower-paid staff.

 

 

[wpi_designer_button share_id=1075]

Help for small businesses

By Ken Maggs, Moore Thompson

Hot on the heels of the announcement of the creation of a so-called small business ‘csar’ tasked with tackling the late payment of bills to small firms, which creates enormous problems with cash flow, a new small business funding exhibition has been announced for next year.

Taking place next February in London, the Business Funding Show (BFS) will connect entrepreneurs with key finance providers and will help “pave the paths to success” for small and medium-sized enterprises (SMEs).

The show will include a range of seminars and workshops covering debt, equity and growth finance and the audience will be able to hear from a number of successful entrepreneurs, such as Angels Den founder, Bill Morrow. There will also be workshops, bootcamps and a one-to-one advice clinic to help business owners get “investment ready”.

As a spokeswoman for the BFS said, modern entrepreneurs are still failing to consider all the options available to secure the right and best funding for their businesses, so the show is perfectly timed in terms of bringing investors and entrepreneurs together to build lasting relationships.

Commentators have welcomed the news, with Innocent Drinks’ co-founder and head of venture capital fund JamJar Investments, Richard Reed, actually announcing the show.

However, given that it is now August, one wonders whether he cut short a holiday to make this announcement, as separate research has found that more than three-quarters of owner/managers admit to responding to work emails at least once a day while on holiday. Their inability to leave work alone also causes problems with partners, with almost 60 per cent saying they have had arguments with loved ones about contacting work while on a break.

How can a cash flow forecast help your business?

By Lynn Munday ACA, Forecast Flow

Having entered all the known and expected receipts onto your cash flow forecast, and all the known and expected payments, you now have an overall picture of what the cash position is for the next 13 weeks for your business. You can see where there are likely to be cash shortfalls and surpluses.

With this information you can be proactive and plan your way out of the shortfall rather than being reactive and making bad short term decisions. You have time to make decisions.

So how do you rectify the situation? Does the forecast show you that you need to be chasing your customers for payment on a regular basis as they are not paying on time? If you offer a small cash discount might the customers pay quicker? Do you need to renegotiate your credit terms and try and extend your credit terms with your major suppliers? These may help or do you need external help?

Cash Flow Forecasts and Payments

By Lynn Munday ACA, Forecast Flow

I mentioned previously that your weekly cash flow forecast should include all your sales/receivables from your customers and therefore to complete the picture you must include all your payments.

There will be more categories of payments and the format you choose depends on how much detail you want to show in your cash flow forecast.

Payments include amounts due to be paid to suppliers, expenses to be paid to employees, rent, rates, payroll, PAYE/NIC, VAT, intellectual property fees, professional fees, loan repayments, loan interest, bank interest, bank charges and whatever other payments you need to make. For each of these payments you need to work out when they are due to be paid and allocate them to the appropriate week.

If the payments are not made according to the cash flow forecast then they need to be moved to the following weeks.

 

[wpi_designer_button share_id=1075]

Small business commissioner addresses late payments

By Ken Maggs, Moore Thompson

The department of Business Innovation & Skills (BIS) has announced that it is creating a new role for a small business csar tasked with tackling “unfair” business practices, such as late payment of bills to small firms.

Following the announcement, Small Business Minister Anna Soubry dubbed late payment disputes as “simply unacceptable, saying that small businesses in the UK are owed a whopping £26bn in late payments every year, while chasing the debts costs them millions more.

According to recent research, the average delay in receiving payments faced by small businesses has risen to 72 days, which is a day longer than a year ago and 11 days longer than at the peak of the recession.

As a spokesman for the organisation that commissioned the research said, despite the economic recovery gathering pace, payment delays are getting worse, not better, for small businesses. This is critical, as delays to payments put enormous pressure on small firms’ cash flow and smaller businesses are particularly vulnerable.

Business groups welcomed the news of a csar, with the Federation of Small Businesses (FSB) saying that the appointment is a step in the right direction but adding that the role must be properly funded and be high profile.

A spokesman for the FSB said it is important to ensure that the new commissioner has the confidence of the entire business community, a clear focus on tackling supply chain bullying, and sufficient powers to intervene and resolve late-payment disputes in a timely and effective way.

Meanwhile, the Institute of Directors (IoD) called the announcement “very welcome”, with a spokesman agreeing that late payment is a “particular problem for smaller companies”. He added that it affected around two-thirds of IoD members last year alone.

 

 

[wpi_designer_button share_id=1075]

CASH FLOW FORECASTS AND RECEIVABLES

By Lynn Munday ACA, Forecast Flow

All companies need a weekly cash flow forecast which shows all the forecasted receipts and payments of the business for the coming 13 weeks / 3 months to show whether there will be a cash shortfall or surplus over that period.

Every cash flow forecast must include all your sales invoices from your sales/receivables ledger which are due to be paid by your customers. The amounts due should be inserted into the week corresponding to the due date of the invoice. If the customer pays on time then this is good news as the cash is yours and is included in your cash balance. However if the customer does not pay on time the sales invoice has to moved to a later week in the forecast which impacts your current cash balance.

The cash flow highlights if you are having a problem with customers paying on time and you need to ask, does your customer have cash flow problems or are they taking extended credit terms without asking for them? Either way this needs to be resolved as you need to collect what is due. How quickly are your customers paying and is this affecting your current cash position?

 

 

[wpi_designer_button share_id=1075]

MOORE THOMPSON JOINS 1STOP4BUSINESS

Ken Maggs of Moore Thompson.

Ken Maggs of Moore Thompson.

Peterborough business organisation 1stop4business (www.1stop4business.org) has expanded the range of services it offers by welcoming accountancy firm Moore Thompson as its latest member.

1stop4business is a co-operative marketing campaign launched by some of Peterborough’s leading professional service providers. Through its website and call centre it offers a ‘one stop shop’ for companies which are seeking suppliers of these business services.

Moore Thompson provides a wide range of accountancy, taxation, audit and related services to businesses throughout the Peterborough area from offices in Wisbech, Spalding and Market Deeping.

Ken Maggs of Moore Thompson said: “Working with other service providers through 1stop4business allows us to collectively promote our services to companies currently based in Peterborough or which are planning to move into the city. The one-stop shop concept for professional services is a cost-effective way of developing new business opportunities for 1stop4business members while also providing a unique and convenient single source of information for businesses.”

David Dixon of Personnel Matters, chairman of 1stop4business, said: “Accountancy is clearly a key offering for firms seeking professional services and we are delighted to have recruited Moore Thompson as a member to provide that service.

“We are continuing to expand our activities and would welcome enquiries about membership from firms providing services that are not offered by our existing members.”

Full details of 1stop4business and its existing members are on its website at www.1stop4business.org.

 

[wpi_designer_button share_id=1075]

FIVE ACCOUNTING PITFALLS FOR SMALL COMPANIES

Many small companies do not take their financial systems, controls and reporting seriously enough until something goes wrong. Set out below is a list of pitfalls which companies can easily fall into if proper financial systems, controls and reporting have not been implemented and the ways to avoid the pitfalls.

  1. Keep your accounting records up to date
    Often companies will leave entering transactions onto the accounts system until the last minute i.e. at the end of each quarter or year end and panic. Clearing the backlog of transactions can prove to be costly if help is required.Keep your accounts system keep it up to date. It pays to spend a small amount of time each week entering transactions onto the accounts system rather than letting a backlog of transactions build up.
  2. Prepare statutory accounts and tax returns on time
    Statutory accounts must be prepared and filed on time and not left to the last minute, as you will be fined for late filing by Companies House. Likewise ensure VAT, corporation tax and PAYE/NIC returns are filed on time, as late filings and mistakes incur penalties.Having an up to date accounts system makes the preparation of the statutory accounts and these returns easier as all the information is readily available.
  3. Install an accounts system
    Small companies often start by using excel spreadsheets for their accounting records but this is dangerous as mistakes can be made which could prove to be costly and reporting can be onerous.To avoid this install an accounting system. Packages which are easy to use are available on the internet for a small monthly fee.
  4. Chase debts
    Invoice your customers on time and collect the cash when it is due. If you do not do this you may find you run out of cash and you cannot meet your liabilities.Spend time each week chasing debts and maybe consider offering a small cash discount to receive the cash a little earlier.
  5. Prepare a weekly cash flow forecast
    Do not rely on the cash balance on your bank statement. Prepare a weekly cash flow forecast which includes all known and anticipated receipts and payments over the next 3 months. The forecast will show if there is a cash shortfall in the period.It is always better to be proactive and plan for cash shortfalls rather than reacting when it’s too late as finding finance could prove to be more expensive.

 

Source: Lynn Munday ACA, Forecast Flow

[wpi_designer_button share_id=1075]

 

NO ONE SACKED CLARKSON

By David Dixon, Personnel Matters

Jeremy Clarkson was not sacked … or so it seems.

In his announcement as Director General of the BBC, Tony Hall, make it explicitly clear what lay behind the decision of the Corporation to part company with Jeremy Clarkson after 25 years with Top Gear. He made no secret about the assault and the verbal abuse on producer Oisin Tymon. However, at no time though did the DG make any mention of sacking or dismissing Clarkson. In what was a measured and dignified announcement (1), he simply confirmed that the star’s contract would not be renewed.

That did not stop social media, the press and broadcasters with their misinformed, insincere and near hysterical speculation. Joe Public jumped on the same band-waggon and all had a field day often making frenzied comments, some of which were highly derogatory and downright defamatory. The net result is that no one came out of the incident or the follow-up particularly well. Opinion about Clarkson polarised, as if he were marmite, and the BBC frankly took a pasting, at a time it should have been credible, professional, diplomatic and above all discreet. Instead, details of what happened, some of them pure hearsay, were leaked, assumed or speculated upon so several million of us passed judgement on Clarkson –v- BBC.

However, by various accounts, including The Daily Mail (2), so it must be true, Jeremy Clarkson was self-employed and therefore could not have any contract of employment terminated and the BBC hierarchy never claimed he was. It follows quite simply that he was not dismissed or, more colloquially, sacked.

Interestingly, many employment law specialists, who should know better, have repeated the false accusation that Clarkson was dismissed.

For mere mortal employers and employees though, there are important examples and issues here. The BBC has set us an object lesson in how not to do things.

Firstly, do not wash your dirty linen in public. Right from the beginning the DG told us he was involved and that gave it the aura of being serious. In the following days, it appears various members of the Top Gear production team talked to the press, who no doubt crawled all over them. Both employers and employees and contractors have a right and obligation to be discreet, which not all of them were.

Secondly, suspending Clarkson was one thing, pending an investigation, but to cancel the rest of the series seemed premature, prejudicial and indicative of guilt. Any employer carrying out an investigation must follow the evidence and not jump to conclusions or prejudge the issues.

This was an internal matter, but apparently solicitors were involved in several of the investigation meetings. Perhaps at this level, when dealing with complex high value contracts for service, you might have expected that. Those who are not facing any serious repercussions though like Mr Tymon, or employees subject to an internal disciplinary process, are not normally entitled to representation during the procedure by their solicitor. Involving them risks legal point scoring and unnecessary complication, though either party might wish to seek their advice outside the process.

Like any employer, the BBC owed a duty of care to Oisin Tymon (it seems he was employed), who is entitled to a safe place of work. If they had failed to support him over the so-called fracas, then he could possibly have claimed unfair constructive dismissal on the grounds he had an impossible working environment.

We know this matter was referred to the police, as there was some kind of physical assault. It would appear then that whatever abusive comments may have been made, Clarkson over-stepped the mark. In anyone’s terms, hitting a colleague is not acceptable, and (had Clarkson been employed) it would normally have led to summary dismissal. What’s more, if an employee in such circumstances isn’t dismissed, then the employer creates a weak and difficult precedent for the future. Consistency is essential here.

The BBC has revealed enough for us to know there was an investigation and various people were interviewed. It seems there was no mention of any disciplinary hearing or action against Clarkson, nor would that be expected, given he wasn’t employed. We have no idea what discussions or pleadings took place prior to the Corporation’s decision. Had a disciplinary process been involved, the question of any mitigation would have arisen. In Clarkson’s case, he has revealed that two days before the incident he was told by his doctor that he might have cancer of the tongue. Doubtless he was therefore extremely stressed and distressed when the fracas took place. If he’d been employed though, would that have been enough for the decision maker to take action that fell short of dismissal? Some years ago, I had to discipline a client employee who had hit another, who required medical treatment. Both had returned after lunch that day having had several drinks in the pub. He would normally have faced dismissal. However, the company had itself introduced alcohol late that morning, offering glasses of wine at the launch of a new major manufacturing process. On this occasion the employer had at least some element of blame to share. Dismissal was commuted to a Final Written Warning.

It is certain there are all sorts of standards in the complex contracts of senior BBC personnel and these will be negotiated at length. We do not know if Clarkson broke any of his conditions, though perhaps he did. What we do know is that he was very close to the end of his then current contract and was in discussions about another one. The BBC is entitled and expected to set its standards and apply them fairly. Not giving Jeremy Clarkson a new contract seems a reasonable and uncomplicated way of doing just that.

Reference links
1 = http://www.bbc.co.uk/news/entertainment-arts-32055744
2 = http://www.dailymail.co.uk/news/article-3019259/Top-Gear-boss-sends-au-revoir-message-staff-suggesting-quitting-Jeremy-Clarkson-sacked.html

David Dixon is Principal of HR consultancy, Personnel Matters, one of the founding members of 1stop4business.

 

Source: © David S Dixon, May 2015

[wpi_designer_button share_id=1075]

1STOP4BUSINESS TO HOLD SECOND EVENT

Peterborough’s newest business organisation – 1stop4business(www.1stop4business.org) – is to hold a second information event for potential new members following the success of its launch at the start of February.

More than 50 Peterborough firms supported the launch of 1stop4business which aims to create new business for its members.

As a result of the level of interest from potential members following the launch event, a second meeting has been arranged for Tuesday 3 March 2015 at the offices of Taylor Rose Law, Northminster House, Northminster, Peterborough PE1 1YN.

The meeting will start at 12:30 and a complimentary buffet lunch will be provided.

1stop4business is a co-operative marketing campaign by professional service providers in and around Peterborough. It plans to provide a ‘one stop shop’ for companies which are seeking these services.

Group chairman David Dixon of Personnel Matters said: “We were extremely pleased that so many companies came along to our launch event to see what 1stop4business is all about. Since then we have had many others contact us who were not able to come to that meeting but want to find out more.

“We have therefore decided to run this second meeting to give people an opportunity to meet the existing members and ask questions. We hope to recruit more members as a result.”

A number of businesses have already applied for membership following the launch event and they are currently being interviewed and assessed.

Full details of the new group are on its website at www.1stop4business.org

 

 

[wpi_designer_button share_id=1075]

.