Posts Tagged ‘Outsourced accounting’

What is the True Cost of an Employee – Part 3

Tuesday, September 13th, 2011

At last here is the final instalment of my What is the True Cost of an Employee?   If you missed it click here is Part 1 and Part 2

What is the true cost of an accountant?

The true cost of a £60,000 accountant is actually closer to £100,000 or £445 per day during their first year.   So what is the cost if you incur all the recruitment and training costs and then you find out after six months that you have recruited the wrong person?

I feel another blog coming on.

(Click here to see table for my full calculations)

 

What is the True Cost of an Employee – Part 2

Tuesday, August 9th, 2011

Here is the next instalment of my What is the True Cost of an Employee?   If you missed it click here is Part 1.

Getting up to speed

In terms of training and induction, the heaviest load will be the first three months.  There is usually a month’s handover with the member of staff being replaced at zero productivity. The cost of getting up to speed is therefore £5,000 (plus NI and loaded costs).

Tools for the job

The cost of office space, rent, rates, service charges, utilities, reception, photocopier, fax, is about £50 per square foot in the South East; an average desk space per person is about 75 square feet per person.  So the cost per annum is £3,750 per person.

Productive time

The other issue that employers fail to take account of is the actual productive time of an employee.  There are 260 working days in the year, however after holidays (say 25 days) bank holidays (8 days) sickness, company meetings, appraisals and training days it is unlikely that there are more than 220 working days.

Employee management

The final issue is what is the cost of managing and developing an employee? This includes the cost of appraisals, setting objectives, informal one-to-one meetings to discuss career aspirations or providing feedback on progress.  This is likely to absorb at least three days of management time (£1,500 cost or £3,000 opportunity cost) across the year and much more than this if issues arise.

Final instalment coming shortly ………

 Mike O’Connell, CEO, Isosceles Finance

What is the True Cost of an Employee – Part 1

Tuesday, July 19th, 2011

When I am in a ‘sales’ situation explaining the benefits of outsourced accounting or a part time FD, one of the thorny issues I have to deal with is the question, “what is the real cost of an employee?”.   In fact, just the process of looking at outsourcing part of a business process is healthy because establishing the cost of an employee is one of the central questions that a business manager needs to know the right answer to.

Once a business manager knows the real cost of an employee they can then answer the even bigger question, “what is the value of my employee?”

Finding the answers to these two questions is not as difficult as one might think, but what may surprise is how cost effective outsourcing some parts of the business really is.

In order to calculate the cost of an employee we need to look at the true cost of employment and the cycle of employment.  First the individual must be recruited and inducted; secondly they must be trained both through formal and on-the-job training; and thirdly there is a period of getting up to speed.  Once up to speed there is the cost of managing that individual, setting objectives, appraising performance against these objectives whilst bearing the burden of personnel and administrative costs of holidays and sickness, etc.

An employee also requires certain tools to do the job. They need a desk, phone, mobile phone computer, software, a network to store documents, a printer and paper to be able to print documents off and general stationery.  Our employee also needs internet access and a clean safe environment in which to work.

Click here for Part 2

 Mike O’Connell, CEO, Isosceles Finance

Design Inc Win Isosceles Cup ….. again!

Tuesday, July 5th, 2011

It was a beautiful Summer’s evening that welcomed ten teams to the second Isosceles Cup football tournament.  As the players descended from their team coaches with their brand new kits, their tracksuits and their branded water bottles there was a keen sense of anticipation.  

The teams included most of those from the last year; Solsis (now amalgamated with Tax Computer Systems to form SolTax), Isosceles, InsightSoftware, Design Inc, Line Communications; together with the new teams: Digital Barriers, Waterfall, Protean, Mint Design and MetaPack.

IsoscelesSupport for the teams was terrific with close to 100 people either participating or supporting.

The Isosceles team looked confident having been unbeaten in all matches since last year’s final, but realistic after Roger Federer had been knocked out of Wimbledon the very same day –  Julian’s warning to us that the most beautiful football does not win tournaments turned out to be more prophetic than we imagined.

If bonus points could have been awarded they would have been awarded to Mint MintDesign – in their ‘mint condition’ strip, this was their first outing as a team and the only team to field female players. They were also weighed down with this season’s new range of jewellery – at least they looked like premiership players.

Being aqua turf pitches they were lovely and soft underfoot, but at ¾ of a mile long by ½ mile across they were a little on the large size, those players sporting grey highlights or indeed no hair at all exchanged anxious looks and mumbled under their breath.

Digital BarriersThe teams split into two leagues.  In the first league after the first couple of straightforward matches we reached the first spicy game of the tournament – Digital Barriers against Waterfall.  There was much riding on this derby game, the first time the two companies had played each other Waterfall(both part of the Digital Barriers Group)  with bragging rights at stake as well as three points.  It was a tight affair with much energy, grunting and skill involved Waterfall pinched a 1-0 win and Digital Barriers looked crest fallen.  Ian McLaren was heard whispering to Dan Lomas “how come we didn’t learn about this during due diligence?”  MetaPack were showing some early form and looking like certain qualifiers until a controversial final game (apparently the final whistle was blown after only 90 seconds) put them in danger of going out.  SoltaxSolTax seemed to play well in patches, but not have the results to show for it.

Meanwhile in the second league Protean were busy demolishing the opposition – they arrived like an Eastern European team in the 1970’s – unheralded, quality unknown, but their well used kit containing the odd faint blood stain said “we don’t take prisoners” and so it proved.   InsightSoftware arrived like a team from the Middle East – mildly delighted to have a team in the first place and surprising themselves with some quality goals and some good results before reality struInsightSoftwareck – the truth is they did surprisingly well for a team that hadn’t played together even holding last year’s champions to a 0-0 draw with Ronnie showing goal scoring ability throughout.  Line Communications meanwhile were busy putting right some of the wrongs of the previous year winning two matches – they missed one or two chances in crunch games – no names (Jonathan).  It is worth noting that Line’s two defeats were both 1-0 and against the eventual finalists.  Mint Design tired as the heat of the evening took its toll, Sonia showed some glimpses of class up front and Chris showed Linesurprising aptitude in goal.  The final Mint match report reads “carnage, players sitting in the pitch, rugby tackles and the first injury” – I’ll say no more.

We were then left with just four teams – Isosceles who had won three matches and drawn one, MetaPack who qualified on goal difference, Protean who had ominously won all their matches and Design Inc who had been extremely lucky to qualify.

The Isosceles/Design Inc semi-final was a repeat of the previous year’s final and early on all the negative memories from last year played on Isosceles’ mind as they quickly fell two goals behind.  However just in time and shortly after Mike was substituted off (hmmm) Isosceles remembered what a quality side they really were and dominated,  equalising and missing a number of chances in front of goal – Design Inc were holding on by their finger nails.  It went to penalties and despite some heroics from James in goal Design Inc converted their final penalty to go through very luckily to the final.

MetapakThe Protean/MetaPack semi-final pitted the two most competitive teams of the tournament together.  Protean weren’t about to compromise now and MetaPack could give as good as they got.  Unfortunately in an accidental collision Karl, the MetaPack goalkeeper, suffered a nasty knock to the ribs – in fact a fracture was later confirmed at A&E – ouch!  Protean eventually won through 2-0.

The final was therefore Protean against Design Inc.  Protean had already beaten Design Inc in the league and did I mention how lucky Design Inc had been in the semis?  Protean were the fancied favourites.  The final Proteanwas a tight affair, Protean seemed to tire and whither and the ecstasy of Design Inc’s unexpected semi triumph seemed to spur them on (did I mention how lucky they had been to get to the final?).  Ultimately both sides cancelled each other out and we went to penalties.  I have to say that both teams took the best set of penalties I have ever seen for two English sides – each one leaving the goal keeper no chance whatsoever.  In the penultimate penalty for Design Inc the goalie saved but then fumbled Paul’s shot, fortunately for him, into the goal – the ball just slipping under the goalkeeper.  Protean’s final penalty taker missed and it was all down to Jon.   After three hours of blood, sweat tears, fractured ribs and broken finger nails it all came down to this last kick.  JDesign Incon took a long run up before blasting the ball into the back of the net.  Design Inc had won (yet again!) and although they had been very , very lucky (did I mention that?) to win the cup for two years in succession, can be no accident.   The truth is Design Inc richly deserved their victory and the unbridled joy on their faces after both the semi and final wins will live long in the memory.  Not since George Michael, has it been so gratifying to bring so much pleasure to other men.

All the players and spectators were able to re-live the events and relax over a drink and a barbecue whilst Karl was ferried to hospital. 

I have to say a big thank you to the teams, all the supporters, Julian and Karen for arranging such a professional and enjoyable event.  I also have to say thank you to our referees Baljit, Ryan and Harry and also to Kate for taking all the team photos.

All but one of the teams will have to wait a whole 12 months to put right the wrongs and injustices of what was the Isosceles Cup 2011.Winners 2011

How to sell your businesss for what it’s worth

Tuesday, June 7th, 2011

 I recently spoke about how to prepare a company for sale at the South East Business Innovation & Growth seminar ‘Preparing a Business for Sale’ which was held in Guildford on 8th April.  

About 30 CEOs from SME companies attended, and the feedback was phenomenal: 

“Very useful – will come again”

“Well presented and informative”

“A well constructed event which bought out many key areas for consideration”

“A stimulating and thought provoking meeting”

“Very timely, relevant and thought provoking”

“Outstanding”

“Excellent summary should you be considering options”

“A thorough and professional overview of considerations when planning an exit strategy”

“Thank you”

“Excellent, timley, relevant

 We have prepared a number of our clients for sale and likewise helped a number of our clients purchase companies so we have experience of both sides of the negotiating table.  I can tell you, without doubt: it’s all in the preparation! 

 “By failing to prepare, you are preparing to fail” (Benjamin Franklin)

 Here are my top ‘dos and don’ts’ on how to sell your business for what its worth.

 Do

  1. Start the process early – at least a year before you want to sell
  2. Identify your value enhancers, make sure your business plan compliments your exit strategy
  3. You can go a long way to manipulating your exit process through the partnerships and channels you establish
  4. You will get a greater value if you don’t have to sell and if you can make it a competitive process
  5.  Bring in non-execs or advisors who have done it before
  6. Tie up all those loose ends – unsigned contracts, updated contracts of employment, new sales term increase prices, IP
  7. Sort out outstanding shareholder issues, these will nearly always come to the surface during a sale process.

  Don’t

  1. Take the first offer that comes along or exit too early – £3m will make a much bigger difference to you personally than £1m i.e much more than three times
  2. Appear desperate, especially if you have had a difficult trading period and have just recovered – the temptation to sell while the going is good is sometimes overwhelming
  3. Ignore difficult issues – unhappy shareholder, difficult member of management, customers about to cancel.  Sort them out before you start
  4. Leave any loose ends! The process will take longer than you think and loose ends will unravel
  5. Forget you need to pay for good advice – but not until you need it

I recently wrote in this blog about  ‘Selling a Business – The First Time Entrepreneur’.  If you didn’t read it first time, now might be a good time.  The article appeared in three parts, click here to read Part 1

 Mike O’Connell, CEO, Isosceles Finance

Isosceles and The National Museum of Computing

Thursday, June 2nd, 2011

I recently had the pleasure of visiting the National Museum of Computing, which is located within the campus of Bletchley Park – the Bletchley Park of the code breaking fame in the film Enigma.

There I had the pleasure of meeting Kevin Murrell , Stephen Flemming and Tony Sale  together with other members of the team who had rebuilt Colossus -  the world’s first programmable, digital computer.  Colossus was designed to decode the highest level German ‘Lorenz’ codes much more complicated than those created by Enigma machines.

In today’s world of miniaturisation Colossus is unimaginable, for a start it’s the size of a large room.  It is a beast of a machine, it clicks, whirs, flashes and growls like the flight deck of the starship enterprise.  The paper tape carrying the code runs around wheels and cogs at 30 miles per hour, like a hamster on drugs on his wheel.   

Surely never in Britain’s history – if not the world’s – has a computer had a more important job.   Watching the machine in action it seems to process with a sense of urgency, you can almost hear it whispering to its German counterparts “I’m coming to get you, I’m going to crack you”.  I’m sure any British member of the armed forces entering the room in the 1944 would have left the room confident that, with this snorting giant on their side, anything was possible.

The tour then took us through the ages of computing.  It was fascinating to see the evolution and development of the things we take for granted today, such as the evolution of paper tape with holes to magnetic tape to huge circular storage disks to the small hard drives in today’s computers.  

There were plenty of chances to reminisce (whatever age one harks from) - for me it was  back to the ZX81, the BBC Acorn, early Apple Macs – computers which were the iPad of their day and which are still things of beauty. 

I was amazed at how much progress this dedicated group of volunteers had achieved.  There is so much to take in that one could fill many hours.  It is also clear to see how much potential there is to further develop the museum.

InsightSoftware.com one of our fastest growing clients has been an important sponsor of the museum.  It is very satisfying to see the money that they have donated being used so productively, I know InsightSoftware.com  is very pleased with the progress

Isosceles is delighted to provide outsourced accounting support to the National Museum of Computing.  It is especially appropriate that Isosceles, who have so many cutting edge technology clients, should now be supporting the place at the forefront of computing technology some 60 odd years ago.

Mike O’connell, CEO, Isosceles Finance

Growing to America

Tuesday, May 24th, 2011

I had the pleasure of attending the strategic sales meeting of one of our clients in Denver last week.  

 These guys and girls have an incredibly difficult task, they operate under a geographically distributed model.  They operate in small teams that might see each other once a week, they may only come to the head office a few times a year.  In addition they operate in an environment where they are often having to educate their customer as to why they have a problem and then sell them a solution with sometimes radically  new software products.

 I was amazed to see the level of entrepreneurialism within the team.  Each sale person, presales and inside sales executive worked like a chess master to unpick the sales objections and shared ideas and strategies readily with their colleagues to come up with the optimum strategy.  How much  of the behaviour was driven by company culture or  US culture and how much was driven by necessity is probably the stuff of books.  Looked like the ingredients for a successful year from where I was sitting.

Mike O’connell, CEO, Isosceles Finance

Mergers and acquisitions – positive news

Thursday, May 19th, 2011

Spent some time with Regent Associates – the technology investment bankers –  yesterday, looking at trends in European Technology M&A.  Numbers of acquisitions, valuations and  total value of deals all up during 1st Quarter 2011.   Despite macro economic gloom the technology world is busy grinding its way to recovery. 

Interestingly Regent feel that the quality of companies being purchased is increasing so where as transactions from 12-24 months ago may have been more like “fire-sales” and therefore opportunistic, current activity is being driven by the strategic need to acquire quality organisations.  This is a sign of health.

Mike O’connell, CEO, Isosceles Finance

Ace the Sale

Wednesday, May 18th, 2011

Picked up my signed edition of Nick Gomersall’s new book – Ace the Sale.

I worked with Nick at the GL Company, a very effective sales professional with a long track record of success.  The book is packed with amusing anecdotes  ……….there’s always a “W” in every company, if you don’t know who it is, its because you’re the  “W”……….. and a lifetimes insight into how the sales process works.    The book is easy to read with a simple introduction to empathy selling and the use of  emotional intelligence. 

It might even improve your golf.  

www.acethesale.co.uk  or follow Nick on Twitter @nickgom  or visit Amazon 

Mike O’connell, CEO, Isosceles Finance

Sign of the Times

Wednesday, February 16th, 2011

Since the turn of the New Year many of our clients (particularly retail clients) have been complaining about significant price rises in their product costs. The rises are way, way above the headline 3-4% inflation rate and way above the 2.5% increase in VAT. It remains to be seen how long it is before these rises translate into increased salary demands. Most staff are acutely aware of the circumstances of their employers, but none the less people are not immune from increases to their cost of living.

I was fortunate to attend a family celebration over the weekend held at a restaurant. From the time the event had been booked two weeks ago the restaurant’s fixed price menu had increased by 25%!

Perhaps the most significant sign of the times is that I recently filled up with my first tank of fuel of the New Year. I like to use the “pay at the pump” facility, but instead of the normal cap of £60.00 per user imposed by the petrol station, I was amused to see that this had been increased to £100.00. What do the petrol stations know that we don’t?

Mike O’connell, CEO, Isosceles Finance