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MEMBERS IN PRACTICE

NEWS February 2012

What do you really want? I have been working with several clients recently reviewing their business plans and working on various ‘what if’ scenarios. This has got me thinking about what motivates business owners and impacts on their decision making. Over the years I have had clients who have expressed goals for their business, which it turns out were not their goals at all, but goals they believed they should have. One particular example was a very focused, dynamic and forward looking client who was (and still is) a super business person. Their business was becoming successful and they had some surplus cash to spend. During one of our regular reviews they expressed the wish to get a new car. Now I already knew they also had plans to expand their business and to buy a new house. Given there was only the money available to do one of these things, I asked which was the most important to them to do. They immediately said expanding their business was paramount – which, incidentally, I knew they would say. They have since gone on to do just that. It turned out that the reason they wanted a new car was not because it was particularly important to them, but because they had picked up along the way that successful business people have new cars. The lesson of this story is to look hard at what motivates you. What does success look like to you? As members in practice (MiPs) we are very tuned into helping our clients explore what is important to them and helping them achieve what they want, but I am not sure we are always very clear on what we want. After all it is your business and should be delivering against your idea of success, not someone else’s. That is why we start businesses in the first place rather than carrying on in employment where we are working to achieve someone else’s dreams. Fiona Bevan Member, MiP Panel


Current affairs

CIMA world conference review and CGMA update The new CGMA designation was launched on 31 January 2012. For more information about the CGMA and the joint venture between CIMA and the AICPA, please visit the CGMA website. CIMA’s deputy president, Gulzari Babber FCMA, has given an interview in Insight magazine giving the highlights of the 2011 world conference in South Africa and how the new CGMA designation will benefit CIMA members. To read or listen to the interview, please click here.

Updating for the Charities Act 2011 Nigel Davies, Accountancy Policy Team, Charity Commission, provides advice on if and when to update your accounting policies and documents for the Charities Act 2011. The Charities Act 2011 consolidates previous charity legislation into a single comprehensive Act. The implementation date of the Charities Act 2011 is 14 March 2012. The Commission is busy updating its publications but what action might a finance director or independent examiner need to take? The basic advice is that reference should be made to the 2011 Act in any document, in this case the accounting policies or independent examination report, prepared on or after 14 March 2012, irrespective of the financial year to which that document refers. The simplest approach is to refer to the provision of the Charities Act 2011 on documents executed following the Act’s implementation and to refer to the provisions of the Charities Act 1993 (or other relevant charity legislation) in documents executed before the implementation of the 2011 Act. Independent examiners would therefore note that: • t heir examination of the accounts was under section 145 of the Act • t hey follow the directions made under section 145 (5) (b) of the Act

• t he charity keeps accounting records under section 130 of the Act • t he accounts comply with the requirements of the 2011 Act. Similarly, if preparing accounts, reference should be made to the 2011 Act where the compilation of those accounts is completed on or after 14 March 2012, irrespective of the financial year to which those accounts refer. For example, the accounts of a charity which is not established under company law would comply with Part 8 of the Charities Act 2011. The accounting policies might then advise for accounts prepared on an accruals basis that: ‘the financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice: Accounting and Reporting by Charities (SORP 2005), issued in March 2005, UK Accounting Standards and the Charities Act 2011’. There is no requirement to go back and change the Charities Act references in a document that has already been finalised before 14 March 2012. Finally, even if a repealed provision were to be inadvertently stated after 14 March 2012 in a document then schedule 8 of the 2011 Act provides that the effect is as if the relevant section of the Charities Act 2011 had been cited.

Client references Some bodies do not accept client references unless they are signed by members of ‘approved professional institutions’ and unfortunately this practice has led to some members of CIMA, who are not registered auditors, becoming excluded. The bodies in question are mainly business mortgage lenders but we are also receiving information from our members dealing with estate agents, letting agents, property managing agents and in one case, an independent bookmaker. CIMA MiPs may have long standing relationships with their clients in these areas and the inability to provide a reference may have a detrimental effect on an otherwise successful business relationship. Many small and medium sized companies in the UK are below the legal audit threshold and it would be worth bringing this to their attention. For more

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Useful links

information see www.companieshouse.gov.uk and the CIMA guidance on audit exemption reports. This situation is intermittent and inconsistent and most of the bodies involved are members of overarching associations. These associations would be in a good position to advise their individual members on the matter, given the correct information and CIMA is seeking a way of establishing a precedent. As MiPs will be aware, CIMA’s new licensing and monitoring regime requires all practising members to hold a Practising Certificate, which is only awarded once CIMA has received evidence (through a detailed application/assessment process) that a member meets CIMA’s mandatory requirements. This includes supervision for anti-money laundering purposes (CIMA is a designated Supervisory Authority under the Money Laundering Regulations 2007). We believe that the additional checks and balances provided by the new regime give CIMA another opportunity to discuss the position of CIMA members with these bodies to negotiate an appropriate form of recognition. This will be a process that is likely to take some months but in the meantime we would be keen to hear from any MiP who has experienced problems and also any MiPs that have put a successful case to a bank, building society or other body. For further information or to inform us of your experiences in this regard, please contact Samantha McDonough, Professional Standards Manager, by email: samantha.mcdonough@cimaglobal.com

MiP webcast: setting up a financial management and accountancy business A new webcast has been published on CIMA’s My Jobs website, designed to provide CIMA members with information if they are considering setting up as a MiP. The webcast informs members of the necessary considerations when setting up your own practice and goes into detail about what options are available. To view the webcast, please visit: myjobs.cimaglobal.com/careers/2179

More information for those considering setting up their own business is available here: www.cimaglobal. com/members/members-handbook/members-inpractice/starting-out-in-practice

IFAC update CIMA MiPs may already be aware that the International Federation of Accountants (IFAC) has a regular e-news bulletin for small and medium practitioners. You can sign up to receive it at the online registration page. The Small and Medium Practices (SMP) Committee of IFAC has released the second edition of its Guide to Practice Management for Small- and MediumSized Practices. This new edition of the guide features guidance on several new topics, including cloud computing and updated resources for further reading.

Finance fitness: managing your cash The Department for Business, Skills and Innovation (BIS) have created a series of five guides to help businesses manage their cashflow, called ‘Finance fitness: managing your cash’. The guides include top tips, checklists and offer advice on knowing exactly who you are trading with, so you can check if they are credit worthy, and take legal action effectively if it becomes necessary. The series covers topics including: • knowing your customer • payment terms • invoicing • treating suppliers fairly • credit insurance. The guides are available on the BIS website and the first in the series is available here: www.bis.gov.uk/assets/biscore/enterprise/docs/ f/11-1460-finance-fitness-knowing-your-customer

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MiP Events Members in practice annual conference Business breakthrough: break through the clouds Friday 22 and Saturday 23 June 2012 Heythrop Park Crowne Plaza, Enstone, Chipping Norton OX7 5UF

Regional meetings Members in practice South West England and South Wales area meeting Sunday 4 March, 10.00am – 4.00pm Doubletree by Hilton Bristol South, Cadbury House,  Frost Hill, Congresbury, Bristol BS49 5AD Cost: £25.00. Lunch is included.

Members in practice North West area meeting Sunday 11 March, 10.00am – 4.00pm Britannia Country House Hotel, Palatine Road, Didsbury, Manchester M20 2WG Free to attend

Members in practice Scotland area meeting Sunday 7 March, 6.30 – 9.00pm Royal Hotel Stirling, 55 Henderson Street, Bridge Of Allan, Stirling FK9 4HG Free to attend

Members in practice skills workshops Developing your practice

Business performance improvement and KPIs

Saturday 17 March, 10.00am – 4.00pm Speaker: Tristan Maynard FCMA Grange Rochester, 69 Vincent Square, London SW1P 2PA £120 plus VAT including lunch and refreshments

Saturday 24 March, 10.00am – 4.00pm Speaker: Robin Tidd FCMA Grange Rochester, 69 Vincent Square, London SW1P 2PA £120 plus VAT including lunch and refreshments

For full listings of upcoming CIMA MiP events, please visit www.cimaglobal.com/mipevents

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MiP Events

Other bodies’ events Surviving a changing climate: accounting for business resilience An innovative series of workshops for accountants and financial advisors have been designed following research undertaken by the UK climate impacts programme, which identified accountants as ‘trusted advisors’. These workshops will give financial advisors the tools and training to enable them to work with their small business clients on actions to ensure their businesses are resilient to extreme weather events. CIMA, the Environment Agency, the Suffolk Climate Change Partnership and Groundwork East of England are partners and supporters of the project. These events are being held across the East Midlands and East Anglia and Central London and North Thames areas. For more information please contact hayley.dove@cimaglobal.com CMI management book of the year road show Following the success of the CMI management book of the year competition, CMI and The British Library have teamed up to deliver the management book of the year road show. These events will see leading authors specialising in entrepreneurship discuss management and leadership topics. They will introduce the theories and concepts presented within their books and take part in a leadership and management discussion. CIMA members can take advantage of the reduced CMI member booking rate through the links below or by contacting CMI’s events team on +44 (0)1536 207333. London

York

Date: Tuesday 6 March Venue: The British Library

Date: Tuesday 27 March Venue: York St. John University

Cardiff

Edinburgh

Date: Tuesday 13 March Venue: Cardiff University Business School

Date: Tuesday 24 April Venue: University of Edinburgh Business School

For full listings of upcoming CIMA MiP events, please visit www.cimaglobal.com/mipevents

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And finally...

MiP Panel Ray Baxter Chairman Stephen Milne Vice Chairman Antony Holdsworth Vice Chairman Alan Scott Secretary Mike Houldershaw Treasurer Elected Members Mark Allen Tony Boffey Kwasi Okanta-Ofori Kim Swarbrick Robin Tidd Fiona Bevan

Thought leadership reports on SMEs CIMA has recently published reports focusing on the SME sector which may be of interest to practising and consulting members working with SMEs. They are available to view free of charge on the CIMA website: www.cimaglobal.com/thoughtleadership Finance transformation: a missed opportunity for SMEs? This new report shows how leading organisations have transformed their finance functions to help improve their business’ performance. SMEs set their sights on sustainability In this report CIMA, the American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) spoke to SMEs to find out how smaller companies can implement sustainable business practices for the benefit of the environment, their communities, their customers and their bottom line. 

Click here for MiP Panel contact details Hayley Dove Event Co-ordinator T. +44 (0)20 8849 2406 E. hayley.dove@cimaglobal.com

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MiP News February 2012