Pat Sutton discusses the changing role of the accountancy profession in Irish business with Karl Fitzpatrick.
Planning for Business Growth
Sunday Business Post June 2016: The lowdown
By Patrick Sutton
Four fully actionable targets for growth
To achieve growth and boost profitability, SMEs and family-owned firms must take decisive action. A strategic plan can help to identify opportunities for growth and set out strategic objectives.
The strategic plan should have fully actionable targets for a specified timeline, be it 12 months, three or five years. They are:
A strategic plan can help them to identify opportunities for growth which will result in an agreed set of strategic objectives. Critical to achieving the success planned for, is a tight and concise implementation programme which should have fully actionable targets for a specified timeline, be it 12 months or three or five years. As part of the figuring out bit it is essential you work out the right business model for you and your business.
Here are five sample strategic objective headings of how some companies set about boosting their growth:
1. Develop a marketing plan with a view to increasing turnover
- Companies typically increase market share through strengthening customer relationships, innovation, skilled & experienced workforce and acquiring competitors.
- Do you understand what your customers want and need, so you can focus your business on customer drivers to gain and keep the customers you actually want. Are your growth plans focused upon customer retention, increasing customer average-spend and gaining your target customers.
- Customer surveys are a powerful way of interacting with customers to find how you can improve your service and product offering.
- Many businesses achieve 80% of sales revenue from 20% of their customers. For an immediate bounce in sales why not concentrate on selling additional products and services to the top 20%, this could have immediate upside on the bottom line.
2. Identify an acquisition target
- It is normal that public limited companies, large companies and multi-nationals achieve growth through acquisition. Just because your small doesn’t say you can’t look at acquisitions to. It is possible to fund acquisitions through structured finance, leveraging the target company’s own assets be it asset finance, invoice discounting, contract finance, stocking loans, bank finance or a combination of all.
- Acquisition programmes are something that should be planned well in advance with experienced professional advisors. It could take a few years to identify a suitable target. The acquisition process can be time consuming and disruptive so it’s essential your own business is stable and working efficiently.
3. Implement programme for staff training and performance improvement
- Does your business have a great team culture where people are rewarded for success and are clear on their authority and responsibilities.
- The most important and expensive resource in many companies is the people. It’s frightening how many companies fail to invest in maximising the output from the workforce and creating an environment where they can reach their true potential. You need to create a culture where staff are made to feel they make a difference and are a true value to the business.
- Staff training programmes will improve the business be it technical, customer service, or personal development. Every staff member should have performance targets for example credit controller is judged on cash collected, production operative on output and wastage, R&D engineer on improvements passed or new products introduced.
4. Carry out additional R&D to make product or service best in class
- Business operates in cycles and unfortunately, the cycles can be unpredictable. Each cycle creates a new situation. In today’s Digital Age everything changes so rapidly so you need to be continually assessing the markets, customers, competitors, and industry experts.
- Innovation or lack thereof can be the difference weather a customer is attracted to your product or service or indeed sticks with it long term. Innovation is one method by which a company may increase market share. When a firm brings to market a new technology, product or service its competitors have yet to offer, it will attract new customers. Many of those may become loyal customers, which adds to the company’s market share and decreases market share for the company from which they switched.
- Whilst SME’s don’t have to be leading the way in disruptive technology developments they can certainly be the best at what they do.
5. Improve profit margins
- Some say cash is king, well without profit you won’t have cash. Many companies have implemented continuous production efficiency programmes, many through lean manufacturing leading to improved efficiencies, improved product quality, reduced lead times and greater customer satisfaction, all of which drive profitability.
- Improved product design or a more efficient customer service delivery will have direct impact on the cost of delivery.
- Better purchasing either through shifting suppliers or renegotiation of existing contracts can directly reduce cost of sales.
- Cost reduction whilst never easy normally yields a direct increase to the bottom line. The problem with many growing businesses is that they end up with continuous spiralling costs which can remain unchecked until too late.
Many times we have been told by business owners there’s nothing they can do to improve their bottom line or drive growth, we say there is always some more you can do. However much you look and however hard you work there are always fresh ways to improve focus and thus profitability. Through analysis, discussion and decision-making, strategic objectives can be identified and agreed and ranked in terms of priority.
It’s essential that the plan is fully costed and the company has the resources to implement the agreed programme. It may be a case you have to revert to your lenders or financiers for additional resources or else scale back the plan.
Belief, vision and action together are powerful drivers of success and most business owners have these in abundance. Ask yourself do you have the energy and passion to deliver success. Whatever the plan is make sure to enjoy the journey.
Patrick Sutton email@example.com is founding partner with O’KellySutton
The inaugural Irish Accountancy Awards took place on Thursday, April 21st 2016 at the DoubleTree by Hilton Hotel Dublin.
Ireland’s accountancy industry was recognised and celebrated in front of an audience of over 350 industry professionals. 15 prestigious trophies were presented to the very best leaders, practices and teams within the industry.
Pat Sutton said that O’KellySutton were extremely pleased to have O’KellySutton’s work recognised by such a prestigious award.
The Irish Accountancy Awards, being held on Thursday 21st April 2016 at the Ballsbridge Hotel Dublin, showcases excellence, innovation and best practice within the accountancy sector in Ireland.
O’KellySutton are delighted to be shortlisted in the category ‘Small Practice of the Year’. We want to thank our excellent staff and great clients for enabling us to make the shortlist of this prestigious Award.
The Awards event itself presents a unique opportunity to make new business connections and strengthen existing customer relations. As a key annual networking event, the Awards will bring together some of the most influential players in the industry, including key decision-makers and budget holders.
Prevent the problems occurring right from the start and avoid the costs associated with having to fix them when Revenue come knocking on your door! There’s been a few articles written lately about how to handle the problems a revenue audit can present which is all well and good however the thing that most articles miss is the importance of preparing accurate accounts and income tax returns in the first place. If everything is in order you can sleep soundly at night without having to worry about having that revenue audit. It might sound a bit obvious but there are a number of reasons why inaccurate or incomplete returns are submitted to Revenue which in some cases can lead to large tax liabilities. Here are the 7 top reasons why this happens:
- Poor accounting systems and bookkeeping practices will lead to errors and mistakes. It is the responsibly of the tax payer to have an accounting system that is fit for purpose, and ignorance is no defence when it comes to tax law. The day of the manual books or bag of receipts should be long gone. A good cloud accounting system like Xero costs as little as €20 / €30 per month.
- Mis-understanding what is allowable and not allowable. Expenses must be wholly exclusively and necessarily for the purpose of the trade. No the holiday in Spain is not allowable, or the new kitchen, or the cost of the night out with your friends! Or charging VAT at 0% or 13.5% when it should be at 23%, no you won’t get away with that.
- Tax payers really doesn’t understand the long term importance of accurate, timely and complete figures, and the consequences of failure in this regard. Time should be given to understanding the costs associated with bad practices.
- Trying to be too ‘clever’ in hiding income, bank accounts or bumping up expenses. So how can you have a lavish lifestyle on the minimum wage ? Some Accountants are afraid to challenge the tax payer for fear of losing the client.
- Accountant not giving due care to the preparation of the accounts and returns, not using completion checklists and not reconciling figures to third party documentation, in other words taking shortcuts to keep costs down.
- Ignoring good advice from Accountants. In spite of paying for and receiving some really good advice there are tax payers who simply prefer to take a chance.
- The classic excuse being ‘I don’t have time’ to get my books in order can result in some Accountants submitting half-baked returns to Revenue. This is completely unnecessary, if you don’t have the time then just agree a monthly fee with a suitable Accountant or Bookkeeper to look after your affairs, it won’t cost a fortune.
In summary, have an up to date fit for purpose accounting system and a good professional Accountant who knows what he’s doing will serve you well in the long term. You would be wise to spend some time preventing a possible problem rather than trying to fix the problem at revenue audit stage where it will be far more expensive exercise. If you want to be properly prepared for that day contact Pat Sutton, O’KellySutton firstname.lastname@example.org
O’KellySutton Chartered Accountants www.okellysutton.ie are delighted to announce the appointment of Alan McCormack to our team.
Alan is an honours business graduate from DCU and just finished his Chartered Certified Accountants exams.
He joins us from Bank of Ireland, having previously spent 10 years with Allied Irish Bank in various executive roles such as Commercial Lending Manager, Relationship Manager and most recently as Lending Risk Analyst. Alan will add considerable experience to our Business Development and Financial Services teams.
He is an accomplished Gaelic footballer with his club Ellistown and played university soccer with DCU.
O’KellySutton are delighted to announce we have been appointed as Xero Certified Advisors. Xero is the leading global cloud accounting software with 600,000 users worldwide and now for the first time this software can be got locally through trusted advisors O’KellySutton. Xero will compliment nicely our existing range of business reporting and business planning tools and tax planning programmes.
We offer a number of affordable packages to suit your needs such as our sole trader start-up package which includes the Xero licence, set-up and training from €99 per month and our corporate start-up packages from €199 per month.
We are the only Xero Certified Advisors locally so for more details and a tailored quote contact Pat Sutton on 045 530777 or email@example.com
Tax Free Vouchers
Employers may now give a voucher worth up to €500 to an employee tax free since 22nd October 2015 following recent publication of the Finance Bill 2015. This is increased from the exiting €250 but like the previous one terms and conditions apply. A welcome break for employers and employees who may want to share in some Christmas giving without having to worry about tax.
Non-resident no-executive directors travel expenses
The Finance Bill among other things clarifies that vouched expenses for travel and subsistence incurred by non-resident non-executive directors will not be subject to Irish Income tax from 1st January 2016. The expenses must be incurred solely for attendance at meetings relating to the affairs of the company in the capacity as director. Prior to 1st January 2016 these expenses were taxable. O’KellySutton welcomes this relief, one that we have been calling for a while now.
For more clarification on any aspects of Finance Bill 2015 please call Pat Sutton or Patrick O’Rourke on 045 530777 or firstname.lastname@example.org
Business Advisory News
O’KellySutton are delighted to be invited to contribute regular business advisory articles for AIB Business Banking and their website and newsletter.
In our recent article http://business.aib.ie/blog/2015/11/7_common_challenges we outline common challenges and opportunities for SME’s and family owned businesses in todays changing environment. We expect to look at practical tips for implementing real growth in the next article so if you want to know how to double the size of your business watch this space as they say.
On the subject of business advisory O’KellySutton will shortly be announcing news of the appointment of a senior lending executive we have just recruited from one of the main Irish Pillar Banks. So great news for our clients that we will be adding this additional level of expertise to our team. Borrowers need every advantage when going to financial institutions looking for funding, and that critical advantage can be found at O’KellySutton.
For more information contact: Pat Sutton on email@example.com
Finance and Business Graduates with first class honours degrees and Accounting Trainees with 1 to 2 years’ practice experience. Be part of a small dynamic team, customer focused. Work with a practice to high quality standards. Only apply if you can demonstrate a high level of academic achievement.
- Training programmes for Chartered Accountants and Chartered Certified Accountants. O’KellySutton is a certified training firm.
- Receive quality training in all aspects of accounting, audit, taxation and company secretarial.
- Small team environment so get the complete experience.
- Opportunities to specialise in taxation, business strategy and other areas on completion of training programme.
Email details to firstname.lastname@example.org