MiP News November 2011
Editor’s note Clearly the economic environment remains tough and this impacts on price pressure for compliance services and demand for certain consulting services. I do believe though that the SME sector needs to invest in the skills of CMAs to manage them through the current cycle. Compliance is only the satisfaction of statutory obligations. The real need is for the monitoring of marketing activity through KPIs, cost control and above all cash flow management. Pricing and marketing strategies are also key at the moment. Some businesses under pressure will need to cut the less profitable
services or products from their offerings and concentrate on core business activities. Interestingly though, many businesses are still growing at a rapid pace, but there are dangers here that need monitoring. Bad debts are a real threat and many businesses fail to run a proper credit control facility. Rolling cash flow forecasts concentrate the mind and as we know the fact that cash is reality, it should be a priority for those businesses to limit risk. So there are plenty of opportunities out there if we adapt to market conditions. I have even seen some MiPs offering free compliance in return for a retainer to attend board meetings and generate genuine and proper management information on a monthly basis. Clients want value for money, value that CMAs can easily offer. Mark Allen, Editor and Immediate Past Chairman, MiP Panel
What’s new? Tristan Maynard FCMA takes us on a light-hearted journey of days past and present. Recent conversations at the CIMA Professional Standards Committee and Members in Practice Conference led to remembrances that exactly 45 years ago in 1966, England won the World Cup and our Institute was called The Institute of Cost and Works Accountants (ICWA). These discussions led to a comparison of what the Institute attempts to do today as opposed to then, and particularly what Financial Management deals with as topics of professional interest. There is a feeling that we have moved away from techniques and accounting tools to issues. The following might give a snapshot comparison, albeit a personal one. In 1966, the accountancy world was tackling the introduction of (main frame) computers in commerce, discounted cash flow and budgetary control were red-hot new techniques, and value analysis gave a way of working with engineers and production colleagues to reduce costs. Inflation was a typical 3.7% but the bank base rate was 7.0%. CIMA head office was in a beautiful John Nash address in Portland Place. In 1966 the World was in turmoil – as it is today. We were threatening war with Spain over Gibraltar, Vietnam was brewing up to be a very nasty war, and man was destined to land on the moon within three years. Peace and love were breaking out in California, Carnaby Street was the place to be and you were either a Stones or a Beatles fan. Oh, and the ICWA exams were really hard then!
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Current affairs 12 January US President Lyndon Johnson states that the US should stay in South Vietnam until Communist aggression there ends. 14 February The Australian dollar is introduced at a rate of two dollars per pound, or ten shillings per dollar. 4 March John Lennon states the Beatles are ‘more popular than Jesus now’. 31 March The Labour Party under Harold Wilson wins the British general election, gaining a 96 seat majority. 30 April Hovercraft service begins across English Channel (ceased in 2000 due to Channel Tunnel). 16 May The Chinese Communist Party marks the beginning of the Cultural Revolution. 2 June Surveyor 1 lands on the moon, making it the first US spacecraft to soft land on an astronomical object. 30 July England beats West Germany 4-2 to win the 1966 FIFA World Cup at Wembley after extra time. 5 August Groundbreaking takes place for the World Trade Center.
The Beatles release the legendary Revolver album in the UK.
1 September While waiting at a bus stop, Ralph Baer, an inventor, writes a four page document laying out basics for creating a video game to be played on a television, beginning a multi-billion dollar industry. 21 October The Aberfan disaster occurs in South Wales. 8 November The actor Ronald Reagan is elected Governor of California. 31 December The Monkees’ song ‘I’m a Believer’ hits number one and stays there for seven weeks. And finally... The year ended on Saturday 31 December 1966.
A comparison between Management Accounting July 1966 and Financial Management July 2011 Management Accounting – July 1966
Financial Management – July 2011
42 pages. No advertisements.
65 pages. 19 pages of advertisements.
The Budget 1966 A summary update
A word from the President ‘Close relationships are key to CIMA’s success’ Harold Baird, CIMA President
Notes and comments • Norwich conference • Treatment of computers [Investment Grants – 20%] • Buxton technical conference • The new ‘selective employment tax’ • Summer school 1966
Editor’s note • Sustainability reporting • CIMA Conference, Cape Town ‘I worked on the UK’s most sustainable corporate HQ’ Richard Beastall
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Current affairs Management Accounting – July 1966
Financial Management – July 2011
EDP and management control Application of computers to solving production problems, controlling management systems, scheduling and planning.
Update • CIMA and AICPA • Demand for UK accountants • Firms lacking sustainability strategies • This month’s dilemma – ethics • Better, not more, reporting required • BT’s energy-saving plan • Book in brief – Money and Power • IFRS – Journey to global convergence
Auditing and data processing ‘Using computers to audit processes’ KV Kitwell CPA, Texas
Contemporary articles • Discounted cash flows – discount rates • The computer as a creative tool of management • Project cost control with network analysis • Evaluating research and development activities • Economics and accountancy • What do we mean by efficiency?
Forum – from the blogs • Business strategies for women • Can you explain (the depreciation of) foreign currency? • Poll of the month
The implications of size • Economies of scale • Integer programming
Interview Julian Kelly ACMA, Group Director, HM Treasury
[Investing] In Africa… ‘An emerging market finally ready to seize the day?’
Oxford course Beyond greenwash ‘The accountant’s role in commercial management’ ‘Which companies are making the most progress … to true sustainability?’ Scottish weekend Fifth residential school for students
Meet the President Interview with Harold Baird
Legal commentary • Contract – personal injury from breach • Occupier’s liability – joint occupiers • Company law – winding up by contributory
Eight ways to reduce complexity Study notes and exam notices P2 Performance Management Target costing – value analysis
Coventry annual dinner • Speeches • President’s address • Meetings of Council – ICWA • New appointments – elections to membership • New library regulations – loans of books
E3, P3 and F3 Information systems
Letters to the editor • DCF • Decimal currency
The new CIMA Certificate in Business Accounting
How women can hone their networking skills Putting business models under the microscope
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Current affairs Management Accounting – July 1966
Financial Management – July 2011
The sky’s the limit Humorous skit on internal memos
Job of the month Group Management Accountant
For registered students Cost accounting and financial accounting – a comparison
CIMA global events
Book reviews • Statistics for accountants • Business law • A guide to management accounting • The theory and practice in management
Updating CIMA’s governance ‘Governments rely too heavily on auditing’ Charles Tilley, CIMA CEO CIMA Q&As Improving customer service
Members in Practice 25 year celebration On Thursday 29 September, the Members in Practice Panel (MIPP) held a prestigious networking reception at the House of Commons to celebrate MiPs and their important role in the SME community. The event was a great opportunity for MiPs and their SME clients to hear from Harold Baird, CIMA President, about CIMA’s role in the SME community. Harold was followed by Ray Baxter, MIPP Chairman, and Robin Tidd, who discussed the essential difference management accountants make to SMEs. John Walker, National Chairman of the Federation of Small Businesses, presented a very bright future for the SME market. The event was also attended by Meg Hillier, MP for Hackney South and Shoreditch and Shadow Secretary for Energy and Climate Change, and was sponsored by PaperLess Software Europe.
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Current affairs Discussion paper on small business reporting The Financial Reporting Council (FRC) and the Department for Business, Innovation and Skills (BIS) have issued a discussion paper on reducing financial reporting burdens for small businesses. The report proposes to ease corporate reporting procedures for micro-entities and result in considerable cost savings in preparation of their accounts. Further information and the discussion paper can be found here: www.frc.org.uk/press/pub2629.html
Notice from CIMA – Members in Practice fees 2012 CIMA MiPs are governed by a set of rules to ensure best practice and protection of the public. These rules require any member offering accountancy services to the public to be registered by the Institute for that purpose, to hold a Practising Certificate and to pay an annual fee in addition to their CIMA membership subscription. The annual MiP fee is calculated each year, and relates to service costs not member benefits. The core services to MiPs which this fee currently includes and on which costs are based are: • Assessment and award of the Practising Certificate • Annual re-registration to renew MiP status • Anti-Money Laundering supervision and monitoring • CPD monitoring (MiP element) • Mandatory requirements monitoring The MiP fee does not take account of any of the following costs insofar as they relate directly to MiPs: • Subscriptions paid by CIMA to regulators globally • Regulatory drafting costs arising from regulators’ recommendations • Development costs of reference/support materials • MiP web database/development costs • Helpline subscriptions • Costs associated with complaints casework management This information is to explain why a fee is levied and what services can be expected in return in relation to regulatory activity. The fee for Members in Practice (worldwide) is 103GBP.
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Useful links New resource for growing small businesses CIMA’s growing business knowledge hub now includes a new resource dedicated to helping small businesses thrive. Whether you are setting up a business, growing your business, expanding internationally or offering advisory services to small businesses, the new small business resource could help you find the answers you are looking for. The small business resource acts as a signpost to industry and government websites by region. It contains useful information that has been specifically tailored towards micro, small and medium sized enterprises.
Further links Supporting small businesses through international growth (Insight, August 2011) Thinking of setting up in practice? Transparency International: corruption perceptions index Business anti-corruption portal
Tip of the quarter Run through your client base and check for those clients that you have not contacted in the last three months or so. Make sure you call them all to say ‘I just wanted to touch base with you and ask how business is at present and to see if I can help at all with anything?’ It is amazing how often additional work is generated through such calls. Client contact leads to more fees. I would strongly recommend that you have a customer relationship management (CRM) process in place to ensure a client care process is followed.
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MiP Events Date for your diary Members in Practice annual conference Friday 22 and Saturday 23 June 2012 Heythrop Park Crowne Plaza, Enstone, Chipping Norton, Oxfordshire OX7 5UF
MiP skills workshops Compliance accounting practice management Saturday 19 November, 10.00am – 4.00pm Speaker: Diane Pilling ACMA Village Coventry, Dolomite Avenue, Coventry CV4 9GZ £120 plus VAT including lunch and refreshments Business performance improvement and KPIs Saturday 26 November, 10.00am – 4.00pm Speaker: Robin Tidd FCMA Village Leeds South, Capital Boulevard, Tingley, Leeds LS27 0TS £120 plus VAT including lunch and refreshments
Personal impact Negotiating, public speaking and personal brand – give yourself the edge Professionals who master the skills of personal impact gain a decisive edge in modern business – whether you’re presenting to clients, at interview or seeking to impress the executive board. Give yourself the edge by attending this event. London Thursday 24 November, 9.00 for 9.30am – 5.00pm Charing Cross Hotel, The Strand, London WC2N 5HX www.cimaglobal.com/Events-and-cpd-courses/Events/Personal-impact1/ Manchester Thursday 8 December, 9.00 for 9.30am – 5.00pm Macdonald Manchester Hotel, London Road, Piccadilly, Manchester M1 2AR www.cimaglobal.com/Events-and-cpd-courses/Events/Personal-impact/
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And finally... MIPP Mark Allen Editor and Past Chairman T. 01789 294484 E. mark@accountax.net Ray Baxter Chairman T. 02890 998004 E. ray@baxterworld.com Stephen Milne Vice Chairman Antony Holdsworth Vice Chairman Secretary Su Moore
The mechanic and the surgeon A heart surgeon took his car to his local garage for a regular service, where he usually exchanged a little friendly banter with the owner, a skilled but not especially wealthy mechanic. ‘So tell me,’ says the mechanic, ‘I’ve been wondering about what we both do for a living and how much more you get paid than me...’ ‘Yes?’ says the surgeon. ‘Well, look at this,’ says the mechanic, as he worked on a big complicated engine. ‘I check how it’s running, open it up, fix the valves, and put it all back together so it works good as new. We basically do the same job, don’t we? And yet you are paid ten times what I am – how do you explain that?’ The surgeon thought for a moment and, smiling gently, replied, ‘try it with the engine running...’ As CIMA MiPs we have to analyse and control business as it moves on from minute to minute, hour to hour, day to day and so on. Perhaps this is a story that can be used as a metaphor for our skills as more than just bean counters!
Mike Houldershaw Treasurer T. 01205 280094 E. mike@sheafHF.com Elected Members Tony Boffey Kwasi Okanta-Ofori Alan Scott Kim Swarbrick Robin Tidd Ray Ankrah Dr Ndubuisi Anomelechi-Onyeodi Fiona Bevan
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