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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