MiP News October 2010

MiP News OCTOBER 2010 CONTENTS 1

Editor’s note

2

Current affairs

Editor’s note This quarter you are being spoilt with an array of articles which I hope you will find useful. Following on from his great presentations at the CIMA Conference, John Niland will continue to contribute to this newsletter. Fiona Bevan has joined John in providing

7 Useful links 8 MiP events 9

Letters

10 And finally

another excellent article on ‘Minding your Ps and Qs’ and is well worth reading.

If you would like to contribute to this newsletter then write to me using the email address: pbadger.manacc@ntlworld.com Details of what form the article should take are given in the July 2010 MiP newsletter.

Philip Badger, Editor

Referrals Mention the word ‘referrals’ and you may trigger quite touchy reactions from many people.

Those who are far removed from commercial or professional activity will have little idea what you are talking about. If explained to them, it will be greeted by many like news of a new treatment for haemorrhoids: ‘I’m sure it’s very useful, dear, but do we have to talk about this at the table?’

On the other hand, there are those who will enthusiastically tell endless stories – if you let them – of how their customers are introduced via others, how they never have to do any marketing, how their reputation marches before them… presumably clearing the way for their ego.

By now, the first group are changing the subject, and asking about your holiday plans for the year ahead.

Room for growth Most of us find ourselves somewhere in the middle. We are interested in how we might get more referrals, but not at the expense of alienating our friends and colleagues, and certainly not losing the trust of the clients we already have.

How can we do this? How can we construct a conversation that feels right, rather than one that gets avoided?

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Current affairs Secret weapon?

We begin by dispelling some myths in this area. The first of these is that referrals are equally applicable to any business. This is simply not true, ask a haemorrhoid specialist. Not everyone talks about their problems, and when they find solutions to these problems – particularly solutions that confer commercial advantage – many want to keep these solutions to themselves.

The second myth is often articulated by the phrase ‘givers gain’. Some givers certainly do gain, as long as other conditions are also met: most obviously, when others understand what they offer. But many givers keep on giving for months and years, before quietly fading off the scene. Unfairly, perhaps, their stories do not feature in the stories and folklore of training-room legend.

The third myth is that to get referrals, all you need to do is satisfy the client by doing a good job. We might like this to be true, but it isn’t. There are lots of professionals doing a good job today, which is simply allowing their clients to think about something else.

Why the referral conversation is difficult Many professionals would rather starve than ask for referrals. Why is this so?

While the precise reasons vary from person to person, here are some of the key ones: • they don’t want to create mistrust with the client, by sounding too ‘commercial’, or even letting the client know they are looking for work • they are afraid the conversation will ‘go wrong’ in some vague, unspecified (but scary) way • they are afraid the client won’t provide referrals and that (somehow) this reflects negatively on them • being unfamiliar with this style of conversation, they keep postponing it • they believe this is a conversation that should be initiated by the client • they simply forget to have the conversation – even when they know they should, and there are no specific fear factors in operation.

Small steps, giant leaps With some reflection, most professionals would agree that the risks above are minute … when seen in the context of the potential benefits of increasing referrals and introductions. Referral business is the easiest to close, the cost of marketing is nil, it reinforces your reputation with the referrer and there is no capacity limit. Seen against all of this, these little pieces of trepidation seem tiny indeed.

The key to success is to get the conversation started. To do this, we may have to create a bit of context for the referraldialogue that follows. For example:

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Current affairs Context

Conversation

‘We are doing some research into the problem of xyz’

Who else should I speak to?

‘We are re-doing our website’

Which aspects of our work together contribute the most?

Who else should we speak to?

Addressing the sudden loss of a market

Asking for their help to fill the hole

This is called ‘contextualising the conversation’ and it is a fundamental skill in business development. We can talk about anything by first creating a context for that discussion to take place. The precise context will vary from person to person and from situation to situation.

In order to have a compelling conversation, we need to begin with a compelling context. This is the foundation for everything that follows.

More?

John Niland of Success 121 is presenting a webinar on ‘The Power of Strategic Alliances’ at 9.00am GMT/10.00am CET on 24 November. This will address how to make the referral conversation easier through the use of strategic alliances.

There is no charge for this webinar, but space is limited. Please register by visiting www.success121.com or by clicking on this link: https://www1.gotomeeting.com/register/122348448

Parting shot In looking for referrals, many professionals feel they are asking for a favour. But who is being done the greater favour: the client-organisation who is suffering from a problem, or the professional who can guide them through?

If there is any doubt about the answer to this question, then perhaps there is an ‘inner-conversation’ that needs to precede any ‘referral-conversation’.

That way, we clear the way for ‘piles’ of referrals. © John Niland – January 2010 www.success121.com

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Current affairs Minding your Ps and Qs Given the stresses involved in running your own business it is vital you are passionate about your product or service. Let’s face it, it is much easier to engage with potential customers if you can show passion for what you do.

Once you know what you want to do, you need to have a robust plan. As accountants, we are the worst at producing business plans for ourselves. We believe we know it all. However, we are not good at understanding who our ideal customers are and how we should ‘sell’ to them.

We need to present ourselves to the market. In my opinion one of the best ways to do this is to network. People buy from people they trust so you need to be out there meeting and getting to know local business owners.

Having got that first meeting with a potential client it is vital you question them about their business and what they expect from their accountant. The most common client complaint is that their accountant never talks to them and doesn’t seem interested in their needs. To me a key element of a quality service is communication – this means listening and responding to clients’ concerns.

Effective communication will allow you to qualify a potential client’s needs and what they particularly value. Having established value it should be fairly easy to give them a price.

For me the biggest mistake accountants make is not agreeing a real price with clients up front. They work on hourly rates and the client pays based on the number of hours the accountant works for them. In my opinion this model is fatally flawed because most clients do not have any idea how long a job should take. This leads to disputes between accountants and clients and delays in payment.

Far better in my mind is to set a fixed fee up front. This will allow you to accept standing orders so cash collection is a doddle, but more importantly every conversation you have with your client, once the fee is agreed, is about them, not the payment of your bills.

To close, your business will not be measured by the outside world on what it is but on what people perceive it to be. So keep your ear to the ground and ensure people’s perceptions match your reality. © Fiona Bevan 2010 Director of Bevan Financial Management Ltd and Bright Dimension Ltd

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Current affairs New online application and support package for Members in Practice As of now any member wishing to work, or already working, as a Member in Practice (MiP) will require a Practising Certificate (PC) to obtain and retain MiP status. Licensing procedures have been streamlined and CIMA’s MiP regulations revised. The new MiP regulations are now in force.

To help members apply for their Practising Certificate, a new easy-to-use online application process has been introduced. It consists of a series of screens outlining the requirements for practice compliance. Each screen is self-explanatory and has links to further information should they require it during their application. Guidance on how to apply for a PC, FAQs and how the regulatory changes will affect current and potential MiPs can be found the members’ handbook.

For members considering a career change, making the move into practice can be a big decision and there are many issues to consider. For example, have they considered where they will work from? How will they source and retain clients? What regulations do they need to be aware of? Or even whether they have the right skills and mindset to run their own business?

To help them answer these questions CIMA has created a new MiP support package to help point them in the right direction when starting out. This is in response to MiP feedback and includes a checklist and set of guidance notes specifically tailored towards starting out in practice.

CIMA’s find a practising accountant database has also been given a more prominent position on the website. It is now even easier for potential clients to find CIMA practising accountants to fulfil their business needs.

If you are already a Practising Certificate holder, or part way through an application under the previous regulations, please refer to the members’ handbook to find out what action you should take.

CPD monitoring Thank you to all MiPs for keeping your CPD up to date and special thanks and congratulations to those who were randomly selected to submit their CPD records from 2009 to CIMA earlier in the year for assessment.

As you know the CIMA Professional Development cycle allows members to concentrate on the learning activities relevant to them and the ensuing learning outcomes. You are not restricted to attending courses; anything that helps you develop in your role may be recorded including reading publications and workplace activities.

Not only did the 2009 CPD records submitted reach a record level of compliance (100% in the UK and 99.8% worldwide) but the standard of the submissions was excellent too.

After the CPD monitoring and assessment process has finished each year 10% of the CPD submissions received are passed on to an independent panel for review and comment. One of the reviewers commented that: ‘the records submitted were of a high professional standard, and show that all members are keeping up-to-date in finance/accounting/relevant matters depending on their chosen field and are developing their skills as appropriate. I am impressed – CIMA should be proud.’

For your ongoing assistance further information about CPD may be found on our website: www.cimaglobal.com/cpdcentre

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Current affairs Growing business knowledge hub expands The CIMA growing business knowledge hub (www.cimaglobal.com/growingbusiness) is a free online resource providing small and medium sized businesses with help and guidance in applying business skills, strategic expertise, commercial awareness and decision making capability to drive profitability and business growth.

It now features useful information on: • • • • •

carbon reduction cloud computing cash flow and working capital planning for growth business technology.

The hub, which is sponsored by SAP, also carries information about our quarterly business confidence monitor and case studies of students and members enjoying great careers in SMEs. In an audiocast on the hub, Ray Perry, CIMA Executive Director of Brand, Profile and Marketing says: ‘CIMA and SAP have worked together on some successful initiatives already with good responses and feedback. These include: • the business checklist which is about making a success of your business • an expert Q&A session and discussions on CIMAsphere, our online community • the webcast ‘SAP for SMEs at a glance’ • an online learning tool for SMEs which is part of the online courses for students and members and is being developed continually.

Perry continues: ‘We are also continuing to build our bank of case studies and we are hopeful that more and more CIMA students and members will get involved and share their experiences and insight with others as to how they have successfully grown small businesses. So we see it as a hub that helps everybody through collective experience as well as the words of wisdom from SAP and CIMA.’ ‘We live in a very fast changing world and it’s never been more relevant to look to growing businesses to get their processes, activities and support right and get fit for the future. CIMA members can be instrumental by applying their tools and techniques which add rigour to the decision making process. This is how we think we can help.’

Stephen Read, director of SME UKI, SAP, says: ‘SAP created and defined the category of ERP in the 90s, brought fantastic innovation to businesses globally and continues to experience tremendous growth in 2010 – now achieving the significant goal of 100,000 customers. While SAP is known for delivering value to large enterprises, 77% of our customers are small and mid-size enterprises.’

‘We see the community of management accountants as very important and we are very excited about working with growing businesses, and looking forward to seeing CIMA members benefit from the information on the hub.’

Visit the CIMA growing business knowledge hub www.cimaglobal.com/growingbusiness

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Useful links Money laundering regulations SOCA have very kindly provided us with four documents as part of SOCA FIU Bulletin providing information and guidance about the SARs regime and how best to submit a SAR. The documents are all Not Protectively Marked and can be used for training purposes/posted on internal intranet sites and member sites.

The four documents are: • • • •

introduction to SARs compliance and consent reporting via SAR Online case studies.

They can be accessed using this link: http://www.cimaglobal.com/Members/Members-handbook/Anti-money-laundering/ Registration-and-supervision/Risk-based-approach/

MiP logo The new MiP logo is attached to the newsletter email. Please use this instead of the ‘old’ logo you may still be using, showing that you are a Practising Certificate holder.

IASB news If you want to prepare your accounts under IFRS for SMEs then you can download the standard (for free) from the IASB official website by clicking here.

Small business networks Accounting Web have provided some good articles in the past for this section and I spotted two good articles on networking options aimed at small businesses. This is well worth a read if you are thinking about upgrading a network or just starting up for the first time. Just click on the link below if you even think you are interested.

Building your ‘network for one’ Tips for building your own business networks Finally, don’t forget to check out CIMA Insight.

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MIP Events Date for your diary The 26th annual MiP conference will take place on 24 and 25 June 2011 at Heythrop park.

Regional meetings Scotland regional meeting Wednesday 24 November, 10.00am-4.00pm Golden Lion Hotel, 8-10 King Street, Stirling, FK8 1BD No charge Regional meetings in East Anglia, the West Midlands and the North West will take place next year.

For further information and to book a place at any of these meetings please visit: www.cimaglobal.com/Events-and-cpd-courses/Members-in-practice-event-search/

MiP skills workshops Getting it right in financial reporting Saturday 20 November, 10.00am-4.00pm Ramada Coventry, The Butts, Coventry, CV1 3GG £120 plus VAT including lunch and refreshments Business performance improvement and KPIs Saturday 4 December, 10.00am-4.00pm Ramada Coventry, The Butts, Coventry, CV1 3GG £120 plus VAT including lunch and refreshments Developing your practice Saturday 4 December, 10.00am-4.00pm Ramada Coventry, The Butts, Coventry, CV1 3GG £120 plus VAT including lunch and refreshments To book a place at any of these workshops please book online at www.cimaglobal.com/Events-and-cpd-courses/Members-in-practice-event-search

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Letters First letter Mike Houldershaw has written in with another ‘stunner’ from HMRC and this problem could easily have affected you.

Hi, A one-man digger driver company owner/director contacted me this week about being re-registered to receive gross payments in the construction industry because he had not sent in his monthly ‘returns’ for nine months.

When I looked the papers he had received, I could not work out what he had failed to do. The ‘returns’ reference numbers looked like payment slips, which he sends quarterly (but not monthly) with his PAYE cheques.

I phoned the R&C and the helpline guy checked out the company PAYE and the director’s personal tax details and said that the letter, etc. had been sent by mistake. He kept me on the line whilst he wrote an e-mail and then thanked me for my courtesy and patience.

This morning he phoned to thank me for pointing out an error in a computer system that has led to hundreds of companies being sent incorrect letters and being de-registered erroneously. He apologised for the mistake.

Who says we don’t do tax? I am baffled that I seemed to have been first on the scene. Were the other accountants seeking expert assistance, composing letters or running up bills against fee protection insurance?

It might we worth Philip putting something in the next letter to the MIP network along the lines of asking them to challenge with HMRC any CIS contractor who is de-registered to receive earnings gross. I trust my sketchy outline is sufficient for you to know what I am on about; if not please yell and I will send more details.

Regards, Mike Houldershaw Chase Accounting Treasurer MIPMG

Second letter Philip, Many thanks for the latest MiP newsletter and for the useful ‘bits and pieces’.

Your piece about the Data Protection Act is very relevant and might be worth expanding on in the next issue.

It is correct to say that registration is not needed where MiPs hold only client-related data – such as name, address, business details, dates of birth, NIC numbers, etc. – as might be needed simply to communicate or hold relevant details required to act in a professional capacity.

‘Personal data’ starts to be created when additional notes might be made, such as: attended practice-run courses, customer-invited cocktail parties, holiday dates and locations, spouse’s date of birth, hobbies, name of family members/pets, etc. It is a moot point that the simple creation of such data is not proscribed by the Act (probably not) but its use in all likelihood would be and might cause offence if seen to be used openly, e.g. ‘We are inviting all our tax clients who play golf to our...’

It might be worth reminding MiPs that the lower-tier registration still costs only £35 and removes any worries about being sued, etc.(!)

The ICO registration page directly is: http://www.ico.gov.uk/for_organisations/data_protection/notification/notify_or_renew.aspx Regards, Tristan Maynard FCMA MiP News | 9

And finally...

MIPMG Mark Allen Chairman 01789 294484 mark@accountax.net

And finally...

Tristan Maynard has provided an article on why tax is important to business accountants highlighting the need to continue to include tax within our repertoire of skills.

CIMA MiPs and Taxation

Philip Badger Editor T. 01733 752677 E. pbadger.manacc@ ntlworld.com Ray Baxter Vice Chairman T. 02890 998004 E. ray@baxterworld.com Ray Ankrah Vice Chairman E. rayankrah@aol.com Paul Koumi Immediate Past Chairman T. 01782 286334 E. paulkoumi@regency.uk.net Secretary Dr Ndubuisi Anomelechi-Onyeodi Mike Houldershaw Treasurer T. 01205 280094 E. mike@sheafHF.com

Everybody in business pays tax: • Employees pay income tax, NIC: PAYE •

As consumers, we pay VAT Council (Community) Tax Fuel Duty, Levies & Excise Duties, etc..

•

Companies/employers pay Corporation Tax (Sole Proprietors & Partnerships - Income Tax) Capital Gains Tax VAT Employer’s National Insurance, etc Business Rates.

•

Investors (Consumer-savers and Entrepreneurs) pay Income Tax on dividends and interest;

And so the list is endless . . .

To read the rest of the article, please email hayley.dove@cimaglobal.com to receive a copy.

Elected members Philip Badger Tony Boffey Antony Holdsworth Stephen Milne Su Moore Kwasi Okanta-Ofori Alan Scott Kim Swarbrick Robin Tidd

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