Finance professionals determine if a business endeavour is sustainable and how it will generate money to stay afloat. It is critical to have great administration in such a crucial sector. That is why it is critical to understand what Leading Safe Training is good before its functions.
Finance Management: An Overview
Finance is an essential and crucial component of every business. Without adequate financing, profit-making or other organisations will struggle to survive for extended periods of time. Besides this, effective management of these economic resources is necessary for long-term sustainability and viability.
Financial management aids businesses in achieving this goal. This phrase refers to an organisation's financial operations and procedures being planned, organised, directed, and controlled in an effective and efficient manner. Apart from numerous other responsibilities, this covers fund acquisition, financial resource allocation, and fund use.
That now we know what money planning is, we must comprehend the significance of this role in any business. There are several online finance courses that emphasise the necessity of financial management in the corporate world.
What Is The Importance Of Finance Management For Businesses?
- Financial Management Aids in the Success of Businesses
Another issue that emerges from poor financial management is poor planning and the failure to capitalise on chances to increase earnings. Without a doubt, poor financial management will result in business failure. Without the help of professionals in this field, business owners may overestimate income and budget for additional costs. They will be taken off guard and will be unsure of what to do.
- Follow the rules and keep track of your taxes.
Financial management duties include assisting businesses in maintaining their accounts and reducing their tax burden. It is critical for all businesses to have accurate records. This will not only make it easier to comply with rules, but will also simplify tax computations. Finance departments can also assist in determining what taxes must be paid. They can also assist in the search for lawful solutions to minimise a company's tax burden.
- Improve Your Financial Access
Money is required by all businesses in order to operate and expand. They'll have to hunt for this precious item from a variety of places. Finance managers assist in the identification of cost-effective suppliers. They will also be able to advise company owners on the best ways to generate cash for their businesses. These professionals will also draught business plans in order to persuade financiers to fund the company.
- Cost-cutting in the workplace
Every business spends money on day-to-day activities. Some fixed costs must be met by businesses. Cost-cutting will be aided by sound financial management. One of their tasks is budgeting, which helps them plan and save costs. It is feasible to avoid needless bank charges by spending within available finances. Surpluses can be intelligently invested to earn additional money if costs are kept under control.
Money is the yardstick by which a company's performance is measured. They are believed to be more effective when they make more money. To enhance earnings, however, careful financial control would be required. These specialists are also needed by businesses to calculate how much profit they have made and compare it to prior years. Financial analysts also look at a company's performance in comparison to its competitors. This type of information inspires everyone in a company to work harder.
Finance executives utilise analytics to determine which parts of a company are profitable. They can provide financial data on how various departments in a business are functioning. Financial management also includes determining which items provide more earnings. They are capable of processing this data for any commercial activity. This type of analysis will aid in the improvement of weak regions and the support of profitable operations to assist them to operate better.
- Company's Marketing Optimisation
Marketing is an important activity for any business since it contributes to income generation. It is, nevertheless, a department that spends a significant amount of money. As a result, it's essential to know how much money each campaign generates. If an advertising campaign isn't generating enough revenue, it needs to be tweaked or temporarily halted. Finance managers give precise information on marketing campaign results.
- Concentrate on Potential Growth Areas
To develop, all businesses must diversify their operations. However, there must be specific knowledge regarding where it is most advantageous to invest in order to increase earnings. Finance departments can assist in identifying places where investing money can pay off handsomely. It's likely that purchasing new gear will aid in increasing output and meeting new market needs. Financial management plays an important part in a company.
Despite the rapid automation of various business processes, machines will never be able to completely replace humans. People are also required to programme and operate devices. This is why a company's human staff is so important. However, hiring more personnel will require higher costs. Financial management aids in determining the most lucrative roles to fill. It will also allow businesses to pay more to deserving staff.
- Risks Can Be Predicted And Avoided
Finance departments are responsible for anticipating future occurrences using analytics. It is beneficial to be aware of potential hazards in the future. Assessing actual outcomes to projected statistics can also reveal whether there are any issues that need to be addressed. Companies can be aware of financial downturns and take precautions to mitigate them. Finance managers also continue to research markets in order to identify elements that may have an impact on a company's position.
Conclusion
Non-finance degree courses are in short supply in the industry for performing specific tasks such as science and math for credit derivatives, derivatives, and quantitative trying to trade, among other things. Obtaining a job in the financial industry, even so, is likely to be difficult for the vast majority of non-finance degree holders. This is due to the fact that following the global recession of 2008, banks and financial organisations cut thousands of jobs. You may enhance your chances of starting a successful career in finance by combining the above recommendations with a digital financial management online certificate.
London is a central hub for businesses from all industries. It is brimming with opportunities and potential investments. It is a cosmopolitan metropolis adored by both tourists and business owners. Every day there is a new opportunity waiting to be grasped by a business owner.
However, running a business is difficult. Trying to grow a business in London can have added pressure, especially as the competition is heightened compared to being in a smaller city. As a small business owner, you need to ensure that your time, and money, are being spent wisely to ensure that your company can grow. It can be challenging without the right guidance helping you along the way. This is why we have put together a few things you need to consider when trying to grow your business in London.
Consider Partnering Up
A partnership is often a joining of two people or businesses. All partners involved will share the risk and achievements of the partnership. They will also share the responsibilities and liabilities. The benefits of a partnership are the opportunity to reach new markets and interact with a wider audience.Being a small business in a big city has its challenges. However, partnering with a bigger, reputable company, opens the door to possibilities and opportunities that are too good to turn down.
Collaboration is a powerful business tool for companies, as it helps businesses to be innovative, grow, and increase their competitiveness on many levels. It can help your small business to climb the ladder as you work towards reaching your next goal.
Ask For Support
When running a business, it is almost impossible to have a deep understanding of all the guidelines and regulations that come with each department. You may have a solid idea but there will always be small clauses that you might not have considered. As such, it is worth considering asking for help. For example, you may have a relatively firm understanding of accounting and the processes. However, being a small business owner, your time is limited. Accounting tasks can often be time-consuming as they need to be done properly the first time to avoid costly penalties. This is why hiring an external company to handle your accounts will be incredibly beneficial.
Being based in the capital, there is no shortage of accountants in London. Firms such as Azets will be on hand to help you with all things related to accounting within your business. In doing so, they have freed up your time to focus on thinking of new ideas and ways to help your business grow. They can also offer advice on what is possible with your current financial situation. In addition to this, you can rest assured knowing that there are no issues with the financial side of your business.
Do Your Research
Regardless of the services your business offers or the industry you operate within, the chances are high of another company in London doing a similar job. This is why you should do research on the area and the market to see what has been successful in the past and what has failed. This will help you to avoid mistakes others have made and what has been successful in the market.
When choosing to do business in London, you are opening the door to potentially working with an incredibly talented group of individuals. London is more than just a city, it acts as a bridge between your business and a whole host of opportunities.
The best way to maximise being based in London is ensuring that you have covered all bases, from having the right support behind you, choosing the right location and ensuring that you have the resources available to help you grow. In doing so, you could see your business thrive in the vibrant city.
As increasing numbers of people are receiving alerts to stay at home by the NHS covid-19 app after coming into contact with an infected person, the petrol industry is calling for vaccinated workers to be exempt from self-isolation rules to avoid further disruption and profit losses.
Across England and Wales, some 600,000 people were instructed to self-isolate last week as the Delta variant of the virus continues to tear through the country. This has impacted countless businesses across several sectors, from hospitality, to car manufacturers, to food production, and most recently petrol stations.
BP, which already reported losses of $5.7 billion during the UK’s third lockdown, has said it is experiencing fuel supply issues due to a shortage of drivers across the entire industry. This has led to a handful of BP’s UK sites having to temporarily close.
Andy Campbell, Global Solution Evangelist at FinancialForce, explains how companies can turn the tide on revenue leakage.
A single unified system
The gap between revenue sold and revenue recognised will vary depending upon the industry, however, for a services business, it might typically be between 5% and 8%. This sounds small but if organisations spot the gap and address even just 50% of revenue leakage they could end up making some significant impact on the bottom line. The big issue is that usually organisations often don’t notice the leakage until it is too late. The problem is that disconnected systems and feedback loops hide the leakage so unless an organisation is actively looking for the gaps, they won’t see them.
There are many areas where revenue leakage can occur, and at every stage in the opportunity to cash process. Some are easier to find than others and a single unified system will eliminate the likelihood of problems that can cause revenue leaks from arising, addressing the issue at source. For example, if you are delivering projects for a customer, there could be an issue with time worked but not invoiced. Or you could be providing services to a client and miss the opportunity to sell additional products that the customer would have happily purchased to use up their unspent budget. These are easy problems to fix but they fall through the gaps when data isn’t managed effectively and if you do not have visibility of the entire process. This can come down to an overreliance on bolt-on systems like spreadsheets that just aren’t up to the task of collating complex data from multiple inputs.
It is also a problem of siloed business teams. When each team works separately and handles their data individually, gaps arise because there isn’t one centralised process or format. Different functions operate without awareness of the consequences of their actions on other departments. For example, the finance team may need a member of the project delivery team’s hours to invoice a client, but that member hasn’t put their hours in correctly or the spreadsheets may be formatted differently. As a result, the finance team might process the wrong figures, and an incorrect invoice is produced, which translates into revenue leakage in the form of payment disputes and delays, write-offs and poor customer satisfaction. This is actually quite a simple problem to solve that can be achieved by implementing a comprehensive and agile delivery platform, that can track all aspects of the organisation's sales, operations and finances and provide a true 360 business view.
Real-time analytics
The next step is for organisations to truly understand their data by using real-time analytics. Using past data to inform future decisions is like not going outside on a sunny Wednesday because it rained the Wednesday before – it doesn’t make sense. But this is what many companies have traditionally done to inform their future decisions.
Instead, businesses should use real-time analytics to understand current profitability and make informed decisions based on accurate data. This is vital for keeping projects on track, resolving issues, managing resources and maintaining profit margins, all of which impact revenue. Furthermore, by analysing data in real-time any potential revenue leakage will be identified before it has a chance to cause damage. For example, if you have a good understanding of the true cost to serve customers, this can be taken into consideration and used to ensure that any future work with the same customer can be priced more effectively.
The second element of this is that real-time data enables more accurate forecasting, which means that businesses can predict capacity, utilisation and backlog using scenario-based formulas. These can be tailored to be specific to a particular organisation, which in turn gives a greater understanding of resource scheduling. Forecasting in this manner means that organisations can optimise staffing and ultimately identify and correct potential issues in advance. This minimises the chance of revenue leakage occurring where, say, costly external contractors or expensive internal resources need to be brought onto a project because cheaper internal team members are not available. It is also particularly important to ensure effective cash flow forecasting that is so vital for many growing companies.
Streamline billing
The final step organisations should take to prevent revenue leakage is to ensure that billing is as simple as it can be. The most important element of this is to make sure that all pricing and billing processes can be accommodated so no matter what the customer uses, the process will be seamless from the opportunity through to the final invoice. An agile, single platform that can support the entire billing process from the beginning right through to revenue recognition and customer renewal will drastically reduce the risk of mistakes.
Furthermore, by using a single platform, all of this data can be linked up with the organisation’s financial systems, meaning that invoices will be processed on time and correctly. When these systems are kept separate and information is stored in different silos, data gets missed, for example, reimbursable expenses and billable hours. Prioritising billing in this way also helps improve customer satisfaction if the customer is presented with invoices correctly and on time. Some customers may require itemised bills, whilst others may prefer consolidated account level invoices. By providing customers with what they need, in a format that is easy for them to process, the chances of errors and delays in payment will be reduced. A single customer record of this kind will not only minimise revenue leakage but also improve customer retention by preventing disputes and simplifying processes across the board.
Revenue leakage often occurs because organisations cannot see it and aren’t looking for it. This is usually because the problem is obscured by the design of their current systems. However, if organisations take a step back and examine their operational processes, there are some changes that can be made with relative ease. While overhauling systems to implement new platforms may seem like a big task, these unified platforms and systems have been designed for ease of use. And the benefits of reducing revenue leakage far outweigh any potential negatives. After all, the result could be the turning of the tide on billions of pounds saved instead of lost.
Below, Jonas Puck, Professor of International Business at Vienna University of Economics and Business, outlines a number of factors that he believes will help businesses achieve success in the post-COVID-19 economy.
On the upstream side, interruptions of supply can cause severe operational and consequently, financial challenges. Firms that are dependent on very few suppliers, rare raw materials, and/or geographically concentrated supply channels are most vulnerable in this situation. The strong dependence on production from China in the textile/garment/clothing industry or in the field of central processing unit production has led to major delays and supply-chain interruptions – and severe financial consequences for players in the industry. Firms that have diversified their supply-chain risk by sourcing through multiple channels from multiple regions will have good chances to be less affected on the supply side. Note that the ‘solution’ to the supply-chain risk is, in my eyes, not the ‘nationalisation’ of supply chains as proclaimed by many politicians around the world. From my perspective, ‘nationalising’ supply chains would conceptually put firms at the same risk as current practices as they would again be dependent on a very specific set of suppliers within a single context.
In operations, the central indicator for survival will be flexibility on different levels. Flexibility is connected to the cost-structure in firms. Firms that have fewer fix-costs (as compared to their industry peers) in their operations will be less affected as they can address changes in supply and demand more flexibly and without severe financial consequences. If companies have high fixed-costs in comparison to their industry peers, they will still have a good chance of successfully venturing through the crisis, as long as they can efficiently leverage support from COVID-19 relief packages as offered by many states, countries, or supranational organisations. Airlines are a good example of this- we can see how they struggle because of the high proportion of fixed costs in their business models. At the same time, however, the airlines that have good connections with political decision-makers may, in the end, benefit from the financial distress of others.
The ‘solution’ to the supply-chain risk is, in my eyes, not the ‘nationalisation’ of supply chains as proclaimed by many politicians around the world.
On the output or customer side, I see a similar logic to the diversification logic described for the supply side. A larger and more diverse set of clients across different countries, industries, and firm characteristics reduces the risk of major demand interruptions. It also improves a firm’s competitive position if competitors do not have the same options. Some firms have also increased the diversification of their customer base during the crisis and have sold their products in new industries and/or to new customer segments. Some hotels, for example, have adjusted their offering to health workers. The Vienna Trade Fair has turned part of their space into a hospital for coronavirus patients with mild symptoms. While this could be considered as too costly or out of strategic scope in ‘normal’ circumstances, such active diversification moves can help to reduce the risk of severe losses during the crisis.
Next to challenges in the operating supply chain, we can find indications for vulnerability and/or survival in the way value chain’s support functions (e.g., finance, IT, etc.) are designed and how they are currently characterised. Very straightforward but extremely important indicators on the side of finances are cash holdings and the ability to postpone major investments. If firms can postpone investment projects or payments for such projects, this will strongly increase their financial flexibility. Major cash holdings are usually not only associated with positive connotations, but they are of major importance today as liquidity helps to remain strategically agile in the current uncertain times. This agility allows firms to react to developments in the crisis and keeps them alive and potentially ahead of the competition. Similarly, a well-designed and implemented IT support system helps to survive the crisis. Digital connectivity, especially in times of reduced physical connectivity, can support decision making, indicate challenges in supply and demand at an early stage, and forecast financial challenges.
I believe that successful firms in the current environment are characterised by their ability to diversify their risk in supply and demand, as well as by their operational efficiency and flexibility. While diversification and flexibility are associated with costs and therefore are not always something that firms focus on in ‘normal’ times, they are of utmost importance today. It will be interesting to see how firms work towards the optimal balance between flexibility and efficiency as soon as the crisis ends.
Effectiveness So Far
The run up to the implementation date of the EU General Data Protection Regulation on 25 May 2018 saw a flurry of activity – most visibly in communications with customers; notifying them of changes in privacy policies and seeking their opt-in consent for marketing activities. While many communications were not strictly necessary, they reflected the focus of many businesses on external-facing compliance initiatives, such as their public facing privacy policies and contractual arrangements with vendors.
The key practical challenges for businesses have centered on thoroughly operationalising GDPR and creating a GDPR compliance culture. The GDPR introduces some new and enhanced rights, such as the right to erasure, but equally importantly, it introduces principles which require changes to internal procedures and systems. Technology changes have often been time-consuming and expensive to implement. Creating a GDPR compliance culture has, for many businesses, been equally challenging. For many organisations, the area of focus in the short to medium term is the work required on internal-facing compliance initiatives, such as staff training and policy formulation and integration. While many aspects of GDPR compliance have taken the form of a ‘re-papering’ exercise, the challenges in becoming compliant are generally much deeper.
For many organisations, the area of focus in the short to medium term is the work required on internal-facing compliance initiatives, such as staff training and policy formulation and integration.
Practical challenges faced by businesses
Some of the practical challenges faced by businesses have been in identifying and understanding the scope of the personal data held and processed – including its nature, location, security requirements and, most fundamentally, the business drivers and legal grounds for collecting and processing such data in the first place. While principles of data minimisation and purpose limitation are not new under the GDPR, they were frequently overlooked under previous legislation as businesses collected increasing amounts of personal data and used them in ways in which were not necessarily consistent with the original purpose. Many businesses have not properly addressed these fundamental issues which are frequently coming to light in practice in two key areas: managing data subject rights and responding to data breaches.
For example, the right to erasure applies in a specific set of situations but many organisations do not possess the level of granular detail about their processing operations required to respond accurately or efficiently. Organisations which have made superficial policy changes will lack the deeper understanding of the internal business processes resulting from a detailed data mapping exercise or a thorough analysis of an organisation’s grounds for processing. This often makes responding to such requests much more time-consuming, and in certain cases leads to organisations fulfilling requests by default to save administrative burden. This is far from ideal, particularly where some data categories processed about an individual are likely to be outside the scope of the right to erasure. Moreover, there may be legitimate business reasons for retaining such data. A related practical issue is the lack of uniformity across European jurisdictions on exemptions to and derogations from the rights of individuals to have access to their personal data, and the lack of guidance from regulators on the scope of some of the exemptions.
Organisations which have made superficial policy changes will lack the deeper understanding of the internal business processes resulting from a detailed data mapping exercise or a thorough analysis of an organisation’s grounds for processing.
Another area where the lack of internal awareness becomes apparent is in respect of data breaches. The GDPR defines a data breach extremely broadly. Media attention is often focused on large-scale breaches involving millions of records containing financial and sensitive personal data. However, practically any unauthorised access to personal data (including within an organisation) can amount to a notifiable breach. This reflects the volume of data breaches which regulators are handling – with some European regulators handling between six and twelve breach notifications each day. The GDPR imposes a well-publicised default period of 72 hours during which the appropriate regulatory authority must be notified. This frequently exposes, in real time, knowledge gaps within an organisation relating to the nature and location of the personal data held, security arrangements and internal processes.
Overall impact on businesses
The GDPR is a reflection of the increased importance placed by EU law on personal privacy as a fundamental right, which needs to be taken into account when treating personal data as an essential input in business processes, if not a commodity in itself. That is simply an unavoidable cost of doing business. While increased awareness of such rights has been positive, the notification fatigue suffered by individuals has been less beneficial. This resulted partly from the lack of concrete guidance from regulators sufficiently early in the run up to the implementation date. Similarly for businesses outside the EU, the uncertainties regarding the GDPR’s extra-territorial scope has often resulted in protracted discussions and unnecessary compliance burdens. That said, there is an almost inevitable harmonisation upwards towards EU privacy standards. For example, Japan has harmonised its laws to EU standards, and there are forthcoming changes in the United States – currently the state of California, but potentially at a federal level – to move towards GDPR standards. The key test of the GDPR’s effectiveness and overall credibility will be in enforcement. Six months in, it is still too early to gauge regulatory appetite for the headline fines of up to 4% of global revenue. In the coming months, the results of investigations and enforcement actions will start becoming clear. The internal costs to businesses are more difficult to assess, although they are largely unavoidable.
Website: https://www.faegrebd.com/
Finance Monthly speaks to the Director of the Financial Planning Program at Stephen F. Austin State University - Banker Phares, who has been licensed to practice law in the State of Texas since 1964. He was founding member of the Estate Planning and Probate Specialty for the State Bar of Texas in 1977 and still holds that specialty certification which is renewed every five years. Representing individuals, businesses, and foundations interested in charitable giving, he provides advice concerning the amount, structure, use, and deductibility of charitable gifts.
What do you think prompts charitable giving in the US?
In 2017, I wrote an article on Charitable Giving in the United States. Using a report published by Giving USA Foundation, I found that charitable gifts in the United States totaled $410.2 billion in 2017. The percentage breakdown is as follows: 70% was given by individuals, 16% by foundations, 9% by bequests at death, and 5% by corporations.
A study by The Comparative Nonprofit Sector Project sponsored by Johns Hopkins Center for Civil Society Studies made a study of the level of giving by different countries. According to that study, the level of giving is determined by comparing the giving to the Gross Domestic Product (GDP) of a country. Using that test, individuals in the United States gave 1.85% of the GDP, Israel gave 1.34%, and Canada gave 1.17%. When volunteerism is the sole criteria, the study concludes that the Netherlands is first, followed by Sweden and then the United States.
Using a report published by Giving USA Foundation, I found that charitable gifts in the United States totaled $410.2 billion in 2017.
It is difficult to determine why a business makes a charitable contribution. From my 54 years of experience, I know that some do it for public relations purposes and some do it out of social conscience. I have listened to discussions where leadership groups “cherry pick” charitable organisations – not for altruistic purposes - but for the favorable publicity. Regardless of motive, the charities benefit.
What should businesses be mindful of when supporting charities?
Businesses should be very selective, and should examine the annual filings of the charity to determine the reputation of a charity and the amount a charity uses for charitable purposes. A large business has the opportunity to make a substantial contribution thereby allowing a charity to carry out charitable purposes it otherwise would be unable to undertake.
Businesses should be very selective, and should examine the annual filings of the charity to determine the reputation of a charity and the amount a charity uses for charitable purposes.
About Banker Phares
Banker Phares graduated from the Southern Methodist School of Law with Juris Doctor Degree in 1964, and, while there, served on Board of Editors of Southwestern Law Journal, and as a member of the Barristers. He became Board Certified in Estate Planning and Probate Law in 1977 by the State Bar of Texas. He is the Director of the Financial Planning Program at Stephen F. Austin University, and teaches in the Department of Economics and Finance. He is the John and Karen Mast Professor. He is also the Director of the Marleta Chadwick Student Financial Advisors, organised to the purpose of informing students and the public with the need for financial planning.
Banker Phares is engaged in Solo practice of law in his area of specialty with law offices in Beaumont and Nacogdoches, Texas. He has designed charitable estate plans which include gifts to universities as well as public and private foundations. He has also created public and private foundations as a component of estate plans. The gifting methods utilised include direct gifts of cash and other property to charitable lead and charitable remainder trusts, and the design of conservation easements.
To hear about tax planning and the things that need to change in the UK tax legislation Finance Monthly speaks with Adele Raiment, Director of the Tax Advisory team that specialises in entrepreneurial and privately owned businesses at Mazars LLP. Adele’s main area of expertise is working with privately owned businesses to develop and implement a succession plan, to ensure that any assets that the shareholders wish to retain are extracted in a tax efficient manner and she also works with all parties to assist in the smooth running of transaction.
What are the typical challenges faced by shareholders of entrepreneurial and privately owned businesses in the UK, in relation to the management of their finance?
I think the main concern on the horizon is the potential impact of Brexit on the UK economy and business confidence more widely. For privately owned businesses in the UK, many are still very cautious following the 2008/09 recession, and with the uncertainties surrounding Brexit, it is difficult to plan too far ahead. One of the main priorities of shareholders is ensuring that they have sufficient cash reserves to ride any potential downturn in the economy whilst recognising that they need to invest and innovate to thrive.
What is your approach when helping clients with tax planning?
My approach is to primarily understand the client’s commercial and personal objectives in priority to considering any tax planning. When planning for a transaction, I frequently find that the most tax efficient option isn’t always going to meet the key objectives of the shareholders or the business. It is important to consider the shareholders and the business as one holistic client, and therefore strike the right balance between personal, commercial and tax objectives. In respect of tax specifically, it is important to take all relevant taxes in to consideration whether it be corporate or personal. A good understanding of all taxes is therefore required.
My clients vary from FDs, to engineers, to self made entrepreneurs - all requiring different approaches. I believe that it is fundamental to get to know your client and adapt your approach to ensure that they understand you and what you are trying to achieve.
What are some of the day-to-day challenges of operating within tax planning? How do you overcome them?
As I predominantly work on transactions, I often work very closely with other professionals such as corporate finance professionals, lawyers and other accountants. The key challenge to this is making sure that the whole team is working collaboratively to achieve the best result for our client.
We are also under pressure to keep costs down, whilst ensuring that we provide quality advice. This can be difficult if the team has multiple transactions on the go at the same time and senior resource is constrained or if the project is wide-ranging, requiring several specialists to input in to the advice. The key to this is having a driven and supportive team, where teamwork and openness is pivotal to success. The working environment of my team at Mazars is incredible as we encourage open discussions on a variety of areas but one of the most useful ones is on technical uncertainties, which encourages consultation in times of uncertainty and technical development.
In your opinion, how could UK tax legislation be altered for the better?
Despite an exercise to ‘simplify’ UK tax legislation over more recent time, the legislation has increased in volume. A good example of this is that there are now two separate corporation taxes acts, when previously there was one. Having said this, the majority of the language used in more recent acts has made the legislation more user-friendly. However, there are still pockets of the legislation that seem to have been rushed through parliament and the practical use of the legislation was not considered fully prior to being enacted. This has resulted in several pieces of legislation being amended a year or two down the line. Although there does seem to be an element of consultation between Practice and HMRC prior to some legislation being enacted, I’m not always convinced that HMRC take on board the feedback. I therefore feel that a more rigorous consultation process should become standard to ensure that the commercial and practical elements of legislation are considered prior to enactment.
Contact details:
T: +44 (0) 121 232 9583/ M:+44 (0) 7794 031 399
Website: www.mazars.co.uk
Email: adele.raiment@mazars.co.uk
LinkedIn: http://uk.linkedin.com/pub/adele-raiment/13/693/360
Email: adele.raiment@mazars.co.uk
LinkedIn: http://uk.linkedin.com/pub/adele-raiment/13/693/360
UK businesses optimistic about international trade plans – and view trade as a catalyst for growth, says new report from American Express.
The UK remains a uniquely connected major economy, and the future looks bright for the country’s trade activity; 39% of UK businesses presently trading internationally plan to increase their volume of trade over the next 12 months, and almost half (44%) expect their revenue from trade to increase within this period.
American Express commissioned the Centre for Economics and Business Research (Cebr) in October this year to undertake the Fresh Frontiers study to understand more about the dynamics of international trade opportunities across six major trading markets.
Based on economic modelling, the report reveals that the USA is the top untapped trading partner for the UK. In addition, continental European markets also feature strongly in terms of untapped trade potential, with Luxembourg, Denmark, France, Finland and Austria all ranking highly. This suggests the UK businesses should look to continental Europe and the US for future trade growth.
As part of the Fresh Frontiers study, American Express also separately surveyed businesses in each country about their international trade outlook. The majority (77%) believe that opportunities for international trade are increasing and half are looking to trade with new countries over the next 12 months.
Reassuringly, the research also shows that the present economic turbulence isn’t deterring UK businesses when it comes to their trade ambitions: The vast majority (80%) of UK businesses trading internationally are confident in their global trade strategies, with bigger businesses (with 250+ employees) 11% more likely to be confident than SMEs. However, it seems that they are taking a cautious approach to their trade plans, with almost half (49%) describing their approach to international trade as ‘measured’ and 21% saying they are ‘risk averse’.
Despite the opportunities offered by international trade, businesses admit that they face significant obstacles when looking to trade. 75% of UK businesses surveyed believe that international trade is becoming increasingly complex, citing exchange rate volatility and economic changes as the biggest challenges to both their current and future international trade activity. UK businesses also revealed that making and receiving payments abroad was overly problematic (71%). However, less than half (42%) currently use FX forward contracts and only 28% use FX Options, despite the vast majority of those that do deeming them effective (87%).
Jose Carvalho, Senior Vice President at American Express Global Commercial Payments, comments: “It’s very positive to see UK businesses looking to international trade as a way to grow and undeterred by either geography or logistics. As well as looking to new countries to trade with, businesses are actively seeking solutions such as FX forward contracts to overcome perceived barriers. Technology has been a great catalyst in enabling this to happen.”
Cristian Niculescu-Marcu, Managing Economist at CEBR, says: “Taking into account key trade drivers, such as economic performance, regional trade agreements, low levels of corruption and institutions, the Fresh Frontiers analysis shows significant untapped trade potential for UK businesses both in the USA and closer to home.”
With 91% of UK businesses agreeing that digital technology makes it easier to trade internationally and 73% agreeing that they expect to see business growth through international rather than domestic trade over the next year, there has perhaps never been a better time to assess new trade potential around the globe.
(Source: American Express)
Written by Richard Hurwitz, CEO of Tungsten Network
More and more we are enjoying the benefits that technology can bring. Drones are delivering packages. Robots are helping with cleaning around the house. Driverless cars have even begun ferrying passengers around some US cities. The recurring theme here is removing friction; doing away with tiresome, menial tasks that clog up our free time.
In the finance world, too, tedious jobs abound that needn’t. In my view the burgeoning FinTech sector is playing a huge role in reducing friction. Take electronic invoicing. As CEO of Tungsten Network, I’ve seen first-hand how digitising accounts processing frees up valuable time and resource to nurture partnerships. Equally, on-boarding suppliers reliably and securely fosters trust from the very beginning.
There are plenty of other examples of how FinTech enables frictionless business, such as Payoneer, an international money transfer platform that enables businesses and professionals to receive cross-border payments quickly, securely and at low cost – saving up to 90% on bank transfers while never leaving their desk. Another example is Lenddo, which uses non-traditional data from social networks and other sources to compute people’s identity and creditworthiness.
Technology is an enabler of relationships and development. Work streams like Procure to Pay – the implementation of a seamless process from point of order to payment – are allowing small businesses to link in partnership with large ones to innovate and grow. By cutting friction and easing pressure points in this way, the whole business community stands to benefit.
Technology is driving this change. In the retail industry, for example, automation and artificial intelligence are being used to speed up picking and packing. Current advancements in logistics are enabling humans to ditch the boring jobs and carry out more highly skilled tasks, such as robotics management.
Locus Robotics, with its strapline “robots empowering people” estimates that its warehouse solutions can help workers become up to eight times more efficient. Likewise, on the shop floor Target in the US is trialling a robot to track inventory – thereby freeing up staff to help customers more.
Twenty years ago, there were less than 700,000 industrial robots worldwide. Today, there are 1.8 million, according to figures from PwC, and this is projected to be as high as 2.6 million by 2019.
PwC carries out an annual survey of 1,400 CEOs around the globe. The most recent survey reveals that 52% of CEOs expect technology to have a significant impact in changing competition in their industry over the next five years, and 23% expect technology to completely reshape it.
Technological changes, perhaps, should be the focus in finance too. From procurement to payment there are plenty of opportunities to upgrade technology, yet many businesses still utilise time-consuming, unpredictable and inefficient sourcing and payment practices – wasting valuable human resources that could better target business growth and innovation.
To return to an example I’m familiar with, every day businesses waste time and energy by manually checking invoice documents received from an increasingly global supply chain, when technology exists that can reject incorrect invoices before they even arrive. Continuing with the theme, further time and energy is wasted for businesses and their suppliers who spend time calling and emailing to check on invoice statuses instead of accessing the information online. This friction can all be avoided.
Later in the accounts payable process, unanalysed procurement data stagnates in these paper invoices, instead of being quickly captured to understand procurement trends that can inform spending decisions. For suppliers, potential working capital is tied up in unpaid invoices, unavailable to be pumped back into the business and invested in targeting growth through new contracts or equipment. While invoicing is an old world example, the potential of digitising it sums up what FinTech is all about.
All businesses must think about what innovative solutions are out there, finance included, or risk falling behind the competition. At multiple points in the business lifecycle, sticking points and delays with manual systems cause friction not only for consumers of financial services, but also between suppliers in the industry and the businesses with which they work. This risks sowing conflict and mistrust between partners, weakening the trusted relationships on which supply chains are built.
I would argue that not embracing the potential offered by FinTech is a huge risk, causing friction at multiple levels. This can manifest itself in multiple ways: suppliers reticent to jump through too many hoops; administrative employees’ patience wearing thin; and finance departments hesitant to greenlight funds. Combined, the impact on the bottom line could be considerable.
The opportunities are endless and I’m confident that there’s even more potential for FinTech to enable the digital transformation of business processes, connecting buyers and suppliers with streamlined financial services capabilities and ultimately, removing friction across global trade.
