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Thursday, 17 December 2009

Fun Christmas Quiz - in Excel

As everyone is winding down to Christmas, I thought something a bit light-hearted and seasonal was called for.

I have spent Thursday afternoon creating an Excel spreadsheet containing a seasonal (and entirely pointless) quiz - so you can have an equally unproductive Friday! Get all of the answers right and reveal a Christmas picture and message from Spreadsheets by Email.

Pass it round the office and try to do it without Google!

Get your Christmas Quiz (in Excel) at the link below:


...and Merry Christmas

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Tuesday, 1 December 2009

Great Excel Resource

I have previously linked to posts on the Pointy Haired Dilbert blog, as he has some great content, particularly on Excel Charts.

He has just brought all of this content together and indexed it at Learn Excel Online. I have bookmarked it. If you use Excel, particularly for charts, I suggest you do to.



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Thursday, 26 November 2009

Giving thanks in a recession

It's Thanksgiving today for our friends across the Atlantic and this made me think how little we take the time to be thankful.

It's easy to lose perspective if business is difficult, you are not sure if your job is safe and maybe the added financial pressure of Christmas approaching is causing genuine stress and worry, but we all have things to be thankful for.

Whether it be good friends, family or even just the fact that we are not starving and we have a roof over our heads, many around the world could show us why we should be grateful.

I for one am truly grateful for my amazing wife and children.

What have you to be thankful for?


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Tuesday, 17 November 2009

Preparing for the new year

I know this may sound a little premature but "What is your New Year's Resolution, when it comes to work?"

Many of you will have a December year-end, but for everyone else the end of the year provides a natural breakpoint too.

Why is this important now?

Typically, you will resolve that something will work differently in the new year. This will require a new process, new software or some other change to your working environment to enable the change. If things are to be different in the new year, these enabling changes need to be starting to happen now. If you leave them until the new year, they are unlikely to get started until, say, February (once you have caught up after the break), they may then take, say, a month to implement, turning your new year's resolution into a reality in March, rather than January.

So, back to my earlier question, "What is your new year's resolution?" and "What do you need to implement now to make it a reality?"

If the answer involves a spreadsheet, why not let Spreadsheets by Email do it for you and you can concentrate on planning your office party!





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Monday, 16 November 2009

Excel Pivot Table Uses: Cash Book Analysis


Regular readers will know that I am a huge fan of Pivot Tables in Excel and I thought it might be useful to start an occasional series highlighting some of their uses. I thought I would start with an accountant's staple - Cash Book Analysis.


If you are not yet familiar with Pivot Tables, it will almost certainly help to view our free video on the subject before you read the rest of this article. Alternatively, if you have already seen this and want to learn pivot tables in greater depth, have a look at our Introduction to Pivot Tables video training course.

Typically, accountants use Excel to automate a traditional cash book by mimicking its manual equivalent with the added benefit of the totals being automatically calculated. A slightly different approach, using the power of Pivot Tables, reduces the data input and significantly increases the reporting flexibility.

Instead of replicating the net balance of each cash transaction in the column associated with its category (as in a manual cash book), simply have a column that contains the name of that category (this can be a drop-down list using data validation) and include the net value once.

By dragging this field into the column area of the pivot table, with the net amount as data, you replicate the traditional approach - but can choose to just show totals rather than the detailed transactions (if you wish). Using the "=month()" formula, you can have a column alongside the data that strips the month number from the date. If you use this as a the Page field in the Pivot Table you can provide monthly summaries.



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Thursday, 12 November 2009

New location for free Pivot Tables Videos

Many of our regular readers will have already viewed our Free Excel Pivot Table Training Videos for both Excel 2003 and 2007, or indeed have purchased the full Introduction to Pivot Tables Video Training Package.

Due to their popularity these have now been given their own domain at www.pivot-tables.biz.

You can still see the free videos at www.pivot-tables.biz/FreeVideo.htm or purchase the full course at www.pivot-tables.biz.

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Wednesday, 4 November 2009

Very funny take on the UK banking shake-up

I have just received a link to a silly but very entertaining take on the break up of the bailed out UK banks that I just had to share:

Banks to be broken up into kittens

Enjoy!


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Tuesday, 3 November 2009

Poll Results: We're all building our own spreadsheets!

We now have the results of our (completely unscientific) October poll in answer to the question:

Who builds your spreadsheets?Thank you to all those who responded.

As you can see from the graph above, the overwhelming majority of you (90%) are designing and building your spreadsheets yourself.
Thirty-eight of the forty-two respondents to the poll said they built their spreadsheets themselves, two delegated the job to a junior member of staff and another two used a specialist provider such as our own Spreadsheets by Email.

I would question whether in every case this was the best use of your time. It is easy for a senior (and expensive) member of staff to spend hours getting a spreadsheet to do what he/she wants it to, when efficient delegation to an Excel-literate member of staff - or a few pounds to an external provider - can usually return a better, more cost-effective result in much less time.

My suspicion is that people like myself are not getting the message out there well enough as to how easy it is for someone experienced in Excel and business to understand your requirements and produce a spreadsheet that meets, or exceeds, your requirements. All I can do is suggest taking a look at what some people have to say about their experience with Spreadsheets by Email.

I would also suggest submitting your requirements to Spreadsheets by Email. You will receive a no-obligation, fixed-price quote for the work and you can decide yourself whether it is worth it.

Sorry if I sound a bit salesy, but you can genuinely save a great deal of time and money and it costs nothing to get a quote.

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Tuesday, 27 October 2009

Warren Buffett and Rudyard Kipling

I was just reading Warren Buffett's best investments on the BBC web site, giving an insight into why he invested in some of his biggest successes.

A theme that seemed to come through from pretty much all of them, and particularly his latest headline grabber, Goldman Sachs, reminded me of a line from a poem I remember from when I was a child and which I now read to my son:

"If you can keep your head when all about you are losing theirs...."


Read it through again, here. It could be written for dealing with a credit crunch!

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Tuesday, 13 October 2009

More wake-up calls for accountants and traditional software companies

I have touched on the threat from the cloud computing world to the traditional accounting software providers, and to the way accountants work with them, previously on this blog.

Last week's UK Software Satisfaction Awards rather hammered the point home with Internet-based Software as a Service (SaaS) providers winning almost all of the accounting categories. A noteable exception was a couple of prizes for Pegasus, but the message is clear - if you have not taken a look at what these providers can do - do so now. If you are an accountant in practice, do so before your clients do.

The full list of winners is available at http://www.softwaresatisfaction.co.uk/ and Accountingweb provide a good summary of the event on their site.


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Thursday, 8 October 2009

Is it Pivot Tables or Age that is puggling my mind?

Earlier today, I told a client I didn't want a late finish next Friday because it was my birthday. I then put the telephone down and it wasn't until about 20 minutes later that I realised that my birthday is tomorrow!

I have narrowed the cause of this bumbling behaviour down to two possibilities:

  1. Naturally age is a contender, always front of mind when another year passes, but one would would hope that senility was still a while away at 39;
  2. Excessive exposure to Pivot Tables over the last 10 years or so.

My money's on the latter. I'd appreciate any of your confessions of your own bumbling in the comments below both to make me feel better, and to give us all a laugh on a Friday!


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Two personal milestones this week

This week marks two personal milestones for me:

  1. I turn 39 tomorrow (Friday), only one year to go until the big 4-0. It's now going to take some serious cramming to hit the 'millionaire by 40' goal!
  2. I have only just noticed that the previous post, Do you build your spreadsheets yourself?, was the 100th post on this blog. Not exactly prolific but I am pleased at how the volume of information builds up if you keep at it, and it seems a milestone worth noting (to me anyway).





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Friday, 2 October 2009

Do you build your spreadsheets yourself?

One of the things I have noticed in the first few months of my Spreadsheets by Email business, is how our clients are often senior (and expensive) people in finance (and other fields) who were planning to build the spreadsheet themselves before stumbling across the service. This got me wondering how many of you out there do build your own spreadsheets, and how many use others inside or outside of the organisation.

Please let me know who builds your spreadsheets by voting in the poll at the top-left corner of the blog.

You can also see the results so far - assuming you are not the first to vote!




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Wednesday, 30 September 2009

A wake-up call for accountants everywhere

I have blogged about cloud computing on the odd occasion previously, and I am convinced that a sea change is occurring that many accountants are missing. New products like Kashflow, Xero, E-conomic and FreeAgent are creating a new market place, with a level of user-friendliness for a small business owner that the likes of Sage can only dream about - all accessible from anywhere with an Internet connection (including your accountant's office).

This post from Dennis Howlett's AccMan blog, should be a wake-up call to all accountants in practice, giving a client's view of how far behind the pace some accountants are.

Make me love you and you will be rewarded

It should make interesting reading for all of us, but may be a little uncomfortable for some accountants in practice.

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

Tuesday, 29 September 2009

Can governments legislate morals into markets?

Today, the UK Prime Minister, Gordon Brown, said in a speech to the Labour Party Conference that "Markets need morals". He also went on to say that the the government will introduce a law to intervene on bankers' bonuses. The UK is not alone and there are calls all around the world to legislate on these matters. This makes me a little uneasy.

What if the amount of regulation and legislation was the cause of
the absence of morals?


In my experience, excessive legislation tends to allow individuals (and society as a whole) to abdicate their own responsibility to apply moral judgement. Over time this leads to the attitude that we can do anything we can get away with, within the rules. Professions that were once governed by their members' judgements of right and wrong (and their peers' approval and disapproval), are now regulated in everything they do. Wrong-doers get away with it if they tick the right boxes, whereas innocent mistakes are punished. In this environment, the distinction between right and wrong becomes a technicality. When you take responsibility away, people stop exercising it.

I might be being naive and I doubt we can ever go back, but does anyone else feel the same way?

I'd love to hear your thoughts, either way - examples too. Please comment below.

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Tuesday, 22 September 2009

Elapsed Time and Dates in Excel

Great post on the always excellent (and exquisitely named) Pointy Haired Dilbert blog showing how to calculate elapsed time in years, months, weeks, days, hours, minutes, seconds and even working days. Includes links to descriptions of other date functions in Excel.

http://chandoo.org/wp/2009/09/22/elapsed-time-excel/


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Thursday, 10 September 2009

EXCEL TIP: Using the Solver Add-In

I consider myself quite an advanced Excel user but I still come across features and tools that I have never used before. In producing a spreadsheet for a client the other day, I needed to get a sales forecasting spreadsheet (which I had already designed) to work backwards to calculate the number of new leads that needed to be introduced to achieve a required annual budget.

I had been planning to re-build the spreadsheet from scratch, working the formulae backwards (no mean feat, it was a pretty complex spreadsheet going forwards), to calculate the answer. That was before I investigated the Solver Add-In, which is provided with the Excel/Office disks from 2003 onwards but not installed as part of the typical installation.


This Add-In allows you to set a requirement for the value of a target cell and calculates (through multiple itterations) the value required in another cell to achieve that target value. Great for forecasting.


If Solver is not on your Tools Menu, then you need to select Tools -> Add-Ins and tick the box that says Solver Add-In and then click OK.


Once the Add-In is installed, select Solver from the Tools Menu, you will see the following:



In the box marked Set Target Cell choose the cell that contains the result that you wish to fix, e.g. forecast sales. You can then choose to maximise that cell, minimise it, or require a specific value.



You then choose the cells you wish to vary to achieve this (in the By Changing Cells box), Solver can guess these for you if you want.





If you have any particular constraints you need to apply, these can be added in the box below. For example, particular change cells might need to be an integer or must be between certain values.



There are options to change tolerances, etc. by clicking the Options button, but that would be overkill in this article.



You can then click Solve and Solver will change the cells until it achieves the required outcome (or fails to find one that meets the criteria).



Assuming it finds a solution, you can choose to keep it or restore the original values.

You also have the opportunity to see various reports on the solution.

Note that Solver has not added new formulae to the spreadsheet, merely changed an input value based upon your required outputs. This means you can use it in your existing forecast spreadsheets to work out what you need to do to achieve your targets.

Have a play, I think you'll find it useful.



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Monday, 7 September 2009

The Ezine is dead, long live the Blog!

Following the comments on the previous post I have decided to stop the monthly ezine associated with the blog, to allow me to spend more time on the content of the blog. Subscribers to the ezine will continue to receive notification of new blog posts by email as before.

Thank you to all of our readers and I hope you continue to follow these articles by email or RSS.


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Thursday, 3 September 2009

Blog, Ezine or both - please let me know?

I am considering a slight change to the format of Not Just Numbers and would like to get some feedback from readers.

Not Just Numbers started as a monthly ezine and then extended to include this blog. The blog includes all of the articles that are in the ezine as well as many posts that are not. Subscribers to the ezine receive regular emails with links to the latest blog posts - as well as the ezine.

On the face of it, the time spent compiling and formatting the ezine adds no new content for readers who receive the articles anyway in the blog digest emails. I feel that this time might be better spent adding extra content to the blog.

Before I make this change, I would really like to find out what readers think. So, please comment on this post with any preferences you have either way. I look forward to hearing what you have to say.





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Saturday, 1 August 2009

Excel Resources for Accountants

by Glen Feechan

Now that Not Just Numbers has been running for a while, I thought that it might be useful to pull together a number of the Excel resources available on the blog and from the Feechan Consulting Group.

Regular readers will know that I am a big fan of Pivot Tables and you can learn how to set one up with the following videos:

Free Excel 2003 Pivot Tables Video
Free Excel 2007 Pivot Tables Video

If you want to learn about Pivot Tables in more depth, there are two video training courses available from Feechan Consulting:

Introduction to Pivot Tables course
Advanced Pivot Tables Course

Sometimes a pivot table is great for doing the number crunching, but you wish to use the results in a more flexible layout - for example, a management accounts format. To do this you will need the GETPIVOTDATA function:

Excel Tip: Using GETPIVOTDATA (part 1)
Excel Tip: Using GETPIVOTDATA (part 2)

Pivot tables come into their own when analysing large amounts of data, which can come from existing software packages:

Why all finance directors need to know about ODBC

Or be keyed in:

Using Excel Pivot Tables with manual records

Often you need to look up data from elsewhere within a spreadsheet, maybe to add new data to the source data for a pivot table. To do this you use the VLOOKUP function:

Excel Tip: Using VLOOKUP
Learn VLOOKUP with this short, free video tutorial

A couple of other useful tips with many applications are given below:

Excel Tip: Dropdown boxes in Microsoft Excel
Excel Tip: Reporting by year or month

Although I try to avoid macros where possible, sometimes you just need to automate a repetitive task:

Free Video: Record a Macro in Excel

A number of useful functions are discussed above, but here is a useful way to get to grips with an Excel function:

Excel Tip: Use any Excel function in seconds

For a useful application that ties many of these techniques together, have a read of:

Do your management accounts take weeks, days, hours, minutes…or seconds to prepare?

If you still don’t feel you are able to produce the spreadsheet you want, or you don’t have the time, why not get us to do it for you – quickly and cost-effectively with Spreadsheets by Email?

Or if your requirements are more complex, including reporting from your own systems, call Feechan Consulting.



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Customer service: the role of the back office

What effect poor back-office customer service can have

by Emily Coltman


Some weeks ago I bought a new top from a chain of shops whose nearest branch to me is Newcastle. That’s 50 miles away from my home.

The top developed a fault and so, rather than take it back, I sent it to the chain’s national centre, asking for either a refund or a replacement.

This weekend, the replacement duly arrived, nicely wrapped in tissue paper and sent in a strong cardboard box.

But there wasn’t a letter to accompany it. Just a form written in gobbledygook, of which the only words I could understand were “authorised” and “returned”, and a flyer suggesting I recommend the company’s products to a friend.

If the new garment hadn’t had labels on it, I would have been unsure whether the chain had actually replaced it or just sent the old one back.

I’d say that’s poor customer service – and it would be down to the packaging department at the national centre. Not to a member of the shop-floor staff.

I’d have liked to have seen, in that cardboard box, a personal letter addressed to me, apologising for the fault, explaining that they’d put in a replacement, and assuring me that the replacement didn’t have the same fault and they would replace it or send me a voucher if one developed.
What I received was what I might call generic customer service.

Service where the systems in the back-office behind the sales front line are so rigid and inflexible that the customer ends up feeling like a hot dog. No, I don’t mean that as in a dog panting from this heatwave that Britain is suffering at the moment (hooray for the North of England and cooler weather says this expat Southerner). I mean the identical sausages.

Hugh Williams, in his book “Proper Coffee and Other Ways to Grow Your Business”, describes an occasion where a top industrialist wanted to change his car.

He first of all went to Garage A. He found a suitable car and the garage said that it would get back to him with a trade-in price on his old car. As far as we know, he still hasn’t heard back from it.

The next garage he approached was Garage B and the salesman, who told us the story, said that he took the car to be tested, which was full of petrol, out to the industrialist’s home so that he could try it for a day. The salesman then took the car to be traded-in back to his garage and when he returned it, not only had the old car been valeted but it too had a full tank of petrol.

The next garage to be approached was Garage C. The industrialist drove the car away on a trial run. Within three miles, the petrol light came on and when, a few miles later, he turned the car to go back to the garage, the windscreen washer light also came on.

At this point, the industrialist said to himself, “I can’t be doing with all this inefficiency from Garages A and C. I am definitely going to buy the car from Garage B as it knows how to look after me.”

The same thing as happened to that man at Garage C happened to me when I was looking for my second car. I had to put £10 of petrol in one car I test-drove, just to get it back to the garage. I didn’t buy from them.

This story also highlights the importance of how back-office staff can impact on customer service.

At Garage B, do you think it was the salesman himself who valeted the car and filled both cars up with petrol?

And at Garage C, would it have been the salesmen’s job to see that the cars available for purchase were kept filled with petrol and washer fluid?

No. In both cases it would be the job of the back-office team, the mechanics.

How can an FD help?

So what back-office systems could the finance department put in place to help improve customer service?

Here are a few of my suggestions.

  • First and foremost, remember that your customer is likely to be a layman, not an accountant. That means:
  • Use plain English. Make sure any letters to customers, any documents they receive such as quotes, invoices, statements, remittance advices, etc. etc are written in plain English and clearly understandable.
  • Explain any figures you supply. A layman won’t know what on earth a “debtor days” ratio is. Show how it’s worked out and explain, in plain English of course, what it means.
  • Use graphs, especially bar charts, line graphs and pie charts, to illustrate your figures. A picture is worth a thousand words. And make them colourful – no boring black and white.
  • Remember your customers could be internal as well as external. If you’re supplying a monthly report to the Board of Directors, the Board are your department’s customers. (Honest.)
  • Try and make it fun for your customers to interact with you. I know you probably won’t be able to make like the fish market staff in Fish! and start throwing fish to each other, but hey, if this guy can make the safety briefing on an aeroplane fun…


http://www.youtube.com/watch?v=ivjybzdXVmI


Conclusion


So yes, it is vitally important to train your front-line staff in good customer service.
But it’s just as important, if not more so, to set up systems for your back-office staff to make sure that they support your customers and make them feel special, too.


Because without good back-office systems, sales are lost. As the car story proves.


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Tuesday, 14 July 2009

What would you like to know more about on Excel?

Apologies for not posting for a while, things have been a bit hectic. Apologies too to those waiting for the next issue of the Ezine - a June/July issue will be forthcoming shortly.

While deciding what to post, I thought, for a change, why don't I ask you all. I know my Excel tips are always popular and I thought why don't you tell me what you want to know more about on Excel. I can then factor your requests into my posts over the next few weeks (where possible).

So please comment below with anything (Excel-wise) you want me to provide some tips on.

Also, don't forget the Spreadsheets by Email service if you would rather just get us to build your spreadsheet for you.


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Tuesday, 16 June 2009

Free Video: Record a Macro in Excel

I very briefly posted this video over a week ago, not realising that the competition that Emily of AskM had entered it in, restricted its use elsewhere on the web until the competition was finished.

The good news is that the competition has finished, and the better news is that the video reached the top 5.

It will teach you how to automate a task (or series of tasks) in Microsoft Excel 2007. If you like this video, you can also learn how to create a pivot table.

http://www.screencast.com/t/0X3sOpMV

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Friday, 5 June 2009

Get Not Just Numbers headlines on your website

We have many readers who have their own accountancy or consultancy practices and/or financial blogs/websites.

If this is you, I have now made it easier to include Not Just Numbers headlines on your site. Simply click on the Get Widget link below to get some code for you (or your web developer) to paste into your html. This will place the widget on your site/blog.





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Why is Gordon Brown's cabinet like Blake's 7?

The best description I have so far heard of what is happening to Gordon Brown's cabinet came from comedian Mitch Benn via Twitter, where he likened it to the last five minutes of the '80s Sci-fi series, Blake's 7.

I must admit I needed a refresher on that one but after watching it again, I can see exactly what he means. I thought it might be a nice Friday afternoon distraction for you, so I have embedded the the video below.

I think you'll see what I mean - enjoy:






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Thursday, 4 June 2009

Excel Tip: Dropdown boxes in Microsoft Excel

This is a one you either know how to do or you don't. Either way, you will know how to do it after reading this post.

You will almost certainly have used dropdown boxes, if not in Excel, on the web. They are a great way of speeding up input of data and eliminating user errors. In Excel, they are really easy to do.

First of all select the cell, or range of cells, where you want the drop-down list to appear, then, from the Data menu, select 'Validation'. This opens the following window:


In most cases you will choose 'List' from the 'Allow' box. This will introduce a new box entitled 'Source'. In this box simply enter your list, separated by commas. You can then click OK and you are done.

For a longer list, or one you may want to edit regularly, you can name a range somewhere else in the workbook that contains the list items and enter =Range Name in the 'Source' box, obviously replacing Range Name with the actual name of your range. When defining this range, allow space below to add new items if this is a possibility.

A new box will also have appeared below 'Ignore blank' entitled 'In-cell dropdown', leave this ticked.

If you wish you can add an input message to guide the user on the second tab and/or a tailored error message (on the third tab) for when someone types something that is not on the list. These are refinements and certainly not necessary for most internal uses at least.

And there you have it - dropdown lists.

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Tuesday, 2 June 2009

Accounting in the cloud

I was sitting in the office the other day and noticed that my colleague, Gillian, and myself were sitting working entirely on the internet. She was updating our accounting transactions on the rather brilliant Kashflow, and I was processing payroll on the unbelievably free Payroo.

Cloud Computing is the term being used for these types of applications, accessed entirely on web servers through a browser, and it is an exciting area that poses real threats to established software vendors.

Solutions tend to be cheaper (often free), easier to learn, better supported, easier to share (internally and externally) and with minimal setup and hardware costs - typically nil!

With complete office suites such as GoogleDocs gaining acceptance too. Next time you are looking for software for anything, check whether you can do it 'in the cloud' before you shell out the cash.

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Thursday, 28 May 2009

IT Expenditure - putting the cart before the horse

Why businesses spend huge amounts on ineffective IT investments.

by Glen Feechan


Another IT White Elephant!
It seems that almost every day we read in the newspapers about another hideously over budget IT project that doesn’t achieve its expected benefits. The ones we read about are usually major multi-million pound projects in the public sector, however this is only the tip of the iceberg.

Many more projects achieve similar results in the private sector, in organisations large and small. These may be anything from the purchase of a new off-the-shelf accounting package for an SME, or a large-scale fully-integrated ERP implementation across multiple sites and countries. These do not usually make the headlines due to the commercially sensitive nature of this information.

Does this mean that the technology is over-rated or that we cannot manage IT implementations or is there something fundamentally wrong with the approach?

Where are we going wrong?


“Computers make it easier to do a lot of things, but most of the things they make it easier to do don't need to be done.”
Andy Rooney, US news commentator (1919 - )

I wouldn’t go as far as the above comment, however there is an element of truth in it.

Typically the IT implementation is seen as the solution to the particular problem (or problems) being addressed, but this is rarely the case. Often the introduction of an IT “solution” can compound a problem as there is now less opportunity for the human intervention that previously stopped problems from becoming crises.

The problems usually lie in the business processes (both formal and informal), irrespective of whether these are carried out by computers or human beings. Automating these processes can simply have the effect of making the problems happen faster!

The obsession with IT as the solution to every major business issue is compounded by the marketing departments and sales people of software developers selling it as such. Until executives address the underlying processes first, we will continue to see streams of failed, expensive IT projects.

Addressing the real problem

To take a process approach to the problem, we need to understand (in some depth) the informal processes carried out every day by employees. These are not the processes that managers think they carry out, and are rarely as laid out in the ideal world of an ISO manual. We regularly find, when working with clients’ employees, that managers are unaware of a large percentage of the processes carried out in ensuring that the job gets done. This is not a criticism of the managers - the level of information overload that this would involve would render them ineffective.
Working with employees so that they can map out their processes in this level of detail and re-engineer them to resolve the perceived problems can have a radical effect with no IT expenditure.

Targeted IT Expenditure

So far I have probably given the impression that I have a “downer” on IT. This could not be further from the truth - the problem I have is with the way IT expenditure is usually approached, and the problems that this approach creates.

Having addressed the process issues, IT expenditure can then be used to facilitate the new process, targeting those areas that would benefit most and significantly multiplying the benefits of the process improvement exercise itself. This expenditure can often be in entirely different areas to those originally envisaged.

Conclusion

Organisations have benefited greatly from IT investments over recent decades and will continue to do so. However, the risks attached to these investments are significantly reduced (and the resulting benefits significantly magnified) if the underlying, informal processes are addressed first.
If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates, our monthly ezine and your free report.

Monday, 11 May 2009

AC/DC rock inside your Excel spreadsheet!

One of the most bizarre uses of Excel. An AC/DC rock video within the spreadsheet!

Watch the video below, or download the spreadsheet itself at http://www.acdcrocks.com/excel.




If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates, our monthly ezine and your free report.

Wednesday, 6 May 2009

Breaking Loan Payments Into Principal and Interest Components

By Stephen Nelson

Microsoft Excel can help you down a loan payment into its principal and interest components. Excel's IPMT function lets you calculate the interest component of a loan payment. And Excel's PPMT function lets you calculate the principal component of a payment.

Using the IPMT Function to Calculate Payment Interest

The IPMT function calculates the interest portion of a payment given its interest rate, the period, the term (or number of payments), present value (or loan balance), future value (or balloon payment), and, optionally, the type-of-annuity switch. If you set the type-ofannuity switch to 1, Excel assumes payments occur at the beginning of the period, following the annuity due convention. If you set the annuity switch to 0 or you omit the argument, Excel assumes payments occur at the end of the period following the ordinary annuity convention.

The function uses the following syntax:

IPMT (rate, period, nper, pv, fv, type)

For example, to calculate the period interest rate for the 54th payment on a 30-year, $150,000 mortgage charging 8% annual interest, you use the following formula:

=IPMT(.08/12,54,30*12,150000,0,0)

The function returns the value -957.51. Notice that to convert the 8% annual interest to a period interest, the formula divides the annual interest rate by 12. Notice, too, that to convert the 30-year term to a term in months, the formula multiplies 30 by 12. The function returns the interest payment amount as a negative value because it reflects a cash outflow you pay.

NOTE If you set the pv argument to -150000, you indicate that you're loaning money. In this case, the function returns 957.51, a positive value, showing that the interest payment amount is a positive cash inflow.

Using the PPMT Function to Calculate Payment Principal

The PPMT function calculates the principal portion of a payment given its interest rate, the period, the term (or number of payments), present value (or loan balance), future value (or balloon payment), and, optionally, the type-of-annuity switch. If you set the type-of-annuity switch to 1, Excel assumes payments occur at the beginning of the period, following the annuity due convention. If you set the annuity switch to 0 or you omit the argument, Excel assumes payments occur at the end of the period following the ordinary annuity convention. The function uses the following syntax:

PPMT (rate, period, nper, pv, fv, type)

For example, to calculate the period principal payment for the 54th payment on a 30-year, $150,000 mortgage charging 8% annual interest, you use the following formula:

=PPMT (.08/12,54,30*12,150000,0,0)

The function returns the value -143.13. Notice that to convert the 8% annual interest to a period interest, the formula divides the annual interest rate by 12. Notice, too, that to convert the 30-year term to a term in months, the formula multiplies 30 by 12. The function returns the principal payment amount as a negative value because it reflects a cash outflow you pay.

NOTE: If you set the pv argument to -150000, you indicate that you're actually loaning money. And in this case, the function returns 143.13, a positive value, showing that the principal payment amount is a positive cash inflow.

Stephen L. Nelson is a Bellevue, Washington CPA and the author of many bestselling books including the MBA's Guide to Microsoft Excel from which this article is adapted. Nelson also edits the popular information web sites forming an S corp online and the incorporating a business, the forming an LLC web sites.
Article Source:
http://EzineArticles.com/?expert=Stephen_Nelsonhttp://EzineArticles.com/?Breaking-Loan-Payments-Into-Principal-and-Interest-Components&id=859513

Giving and receiving feedback

by Angela Robson of Nicholson Consultancy

In this article we are going to look at giving feedback, which (if used correctly) is a tool anybody can use, at any time, with no cost (other than time), that will make definite, long term improvements to the business. It can be used to correct behaviour or to praise good performance. But like any tool there is a right and wrong way to use it.

The RIGHT way:
  1. Remember the reason for giving feedback is to correct an individuals behaviour - not to vent your emotion.
  2. Describe the specific behaviours / results you have observed, and explain the impact on the business, the team and you.
  3. Check your observations are correct
  4. Are there any mitigating circumstances ( remember to actively listen)
  5. Describe the behaviours / results you are looking for (be accurate and concise)
  6. Together, search for a solution
  7. Check the individual will do it (beware of “I’ll try”, which translates as, “I’m not going to do it”)
  8. Thank them in advance
  9. Give regular updates and stay focused on their behaviour / results.

The process for giving feedback on good performance is very similar:

  1. Describe the specific behaviours / results you are praising
  2. Explain how you feel about the results / behaviours
  3. Look at how the outcome was achieved and how it can be applied in other situations
  4. Thank them, and give further encouragement

For any feedback to be successful it needs to be specific, descriptive and factual, and delivered in a non-judgemental manner. You need to focus on the actual behaviours and results, not the individual. If necessary prepare beforehand and gather any information / evidence you need.
Be careful though, feedback will fail if you use any sort of:

  • Personal criticism e.g. “you’re not good enough” or “you’re too sloppy at work” - it will
    make them defensive
  • Assumptions about a person’s mental state e.g. “you’ve a bad attitude” or “you’re lazy” – this will make them both resentful and defensive
  • Generalisations e.g. “you’re always late” or “you’re always missing your deadlines” - if you exaggerate, they won’t believe you
  • Contaminated praise e.g. “that was quite good…for you” or “that report was very
    thorough...apart from the obvious mistake” - they won’t know if they are being
    praised or criticised

To be really effective at feedback you need to be able not only to give effective feedback, but also to receive it. It is important to seek out feedback (even asking for feedback on your feedback). This will help you to learn and progress and ultimately lead to an improvement in performance.
When receiving feedback remember:

  1. To listen actively
  2. Suspend judgement and let them finish
  3. Repeat back the main points (this will show you have understood what has been said)
  4. Ask for specifics
  5. If necessary gather further information from other people
  6. Decide what you want to do next

Remember that if you ask for feedback, then you need to accept what you hear and don’t begin to defend yourself. You need to understand that this is their observation. You don’t have to believe it, or act upon it, but you must listen to them openly. If you begin to defend your actions, others may stop telling you the truth.


We have included below our all time top ten tips for giving feedback.


Top 10 Feedback Tips

  1. Consider the business reasons for giving feedback
  2. Make it timely
  3. Praise in public, criticise in private
  4. Keep it simple
  5. Put it in context
  6. Focus on behaviour / results, not personality
  7. Use objective information, not just your own opinion
  8. Focus on the future
  9. Listen to the other person’s point of view
  10. Don’t overdo it!


Angela Robson is a Director of Nicholson Consultancy Limited, specialising in Business Strategy and Lean Thinking. Angela contributes to the e-zine, “Better Today”, with information for those who are interested in making improvements in their business. If you’re interested in Lean Manufacturing, visit Nicholson Consultancy’s blog, Manufacturing Times.

Where to go when the banks say ‘NO’

by Glen Feechan


Although there are signs that the banks are gradually starting to lend again, it is not at anything like the levels business has been used to. I am sure many of you will be very aware of the lack of finance available from the banks even with a profitable business. What these same banks have done to the economy might bring you down too and they can’t take the risk!


Against this backdrop, I thought it might be worth looking to see if we can come up with some ways of accessing funds between us, without the banks’ help.


I have suggested a few routes to look at below, but I am keen that anyone should add their own ideas to the comments on the blog post so that we can all use this as a resource.


One of the more obvious routes is financing fixed assets you already hold, for example the refinance of properties and/or equipment/vehicles. Although finance is still tighter in these areas than it was, you may well have better luck than approaching the banks.


Another option along the same lines is to fund your debtors through factoring or invoice discounting. Due to the current climate you may not be able to fund as high a percentage as previously but this could be a very useful option.


If you are based in the UK, at FC Procurement we work with good suppliers in both of these areas, if you wish to explore the options.


Equity funding may be an option for some, maybe through business angels for smaller companies. However although funds are likely to be available, investors are looking for bargains and know they can get them.


For smaller businesses, short term loans from friends and family may be an option but think carefully, as if things don’t work out as planned you may damage a lot more than your credit rating.


One of the more innovative ways of accessing funds we have come across has now been used by a number of our owner-managed (UK) clients. It is now possible, under certain circumstances, to access personal pension funds to invest in private companies. A number of clients have used this method to access money tied up in pension funds from previous employers or in personal pension plans to invest cash in their own business.


This essentially brings a new equity investor into the business, without having to find one, allowing the long-term growth of the business to accrue to the owner for his/her retirement. This route may not be for everyone and you will need to talk to an Independent Financial Advisor (IFA) to discuss whether it is the right route for you. If you want to know more, we work closely with an IFA with experience in this field and can introduce you. Just drop me an email (glen@feechan.co.uk) or call on 0845 6439693.


These are just a few ideas, but please add your own in the comments below. Together we can get through whatever is to come.

Wednesday, 22 April 2009

Budget Day in the UK

Alistair Darling issues his most important budget today.

I would love to think he addresses the anomaly of an acute housing shortage and decimated construction firms with no work.

The UK has had a massive drop off in demand for the purchase of houses due to the credit crunch in the mortgage market, but still has a massive demand for housing (unlike the US, which has an oversupply of housing).

Surely the answer is to pay the construction companies to build council houses/social housing!

Good luck Alistair - you.re going to need it!

What does everyone else want to see in the budget?

Free Excel 2003 Pivot Tables Video

This video is now available here.

Tuesday, 21 April 2009

Excel Tip: Using GETPIVOTDATA (part 2)

This post continues from where we left in Excel Tip: Using GETPIVOTDATA (part 1) . We had explained the construction of the GETPIVOTDATA formula and how to use it to report a particular figure from the pivot table.

In this post we will look at the flexibility that can be achieved by using formulae to populate some of the arguments in the GETPIVOTDATA function.

To recap, the GETPIVOTDATA function has the following format:

=GETPIVOTDATA("Name of data field to return",location of pivot table,"field1","item1","field2","item2")

but each of the text fields (in inverted commas) can be replaced by formulae which, used intelligently, allow you to produce management accounts and reports in any format.

Examples:

You could replace "Name of data field to return" with a reference to the cell at the top of the column in your final report, which can hold the name of the data field you wish to return. By using [F4] to insert a '$' in front of the row but not the column in this reference, you can copy the formula across multiple columns using different data fields from the pivot table in each column on your final report. This is useful for reporting, say, month and year-to-date figures in management accounts.

Where the field item refers to the name of the raw data column containing a code that determines where the values go in your final report (e.g. a management accounts code) - if you replace the corresponding "item" field with a formula referring to the first column of the spreadsheet, this can be used to populate the rows of your final report. By using [F4] to insert a '$' before the column and not the row, you can now copy the same formula into every cell in your management accounts. Each row will show the value for that row, based on the code in the first column and each column will include the data field to use for the value, based on the first row.

How you get theses management accounts codes into the raw data is covered in an earlier post:

Do your management accounts take weeks, days, hours, minutes…or seconds to prepare?

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

Golden Cells: The ExcelZone online video awards

It is always nice to get recognition for what you are doing and I was pleased to see our Introduction to Pivot Tables video course featured in Accountingweb's (a respected UK Accounting website) Excelzone online video awards. The video was described thus:


"Many of the Excel video pioneers are American, but a new generation of UK
producers has emerged in recent months led by Carlisle-based Emily Coltman. Her
four-minute
Introduction to pivot table course video for
Feechan Consulting truly is a state-of-the art production, featuring shiny pink
introductory graphics, slick page-folding transitions and the now obligatory
enlarged yellow spotlight cursor technique. The content and pacing are well
planned and the narration crisp and authoritative.


You can see the free video here.

Friday, 17 April 2009

Ashton Kutcher and my 10 year-old: Why we should worry!

Two events this morning got me thinking about the future and what it will look like:
  1. Ashton Kutcher reached 1 million followers on Twitter, ahead of CNN;
  2. My 10 year-old son showed me the website he's built this week on his school holidays.

For those of you who don't know about Twitter, take a look at my earlier blog post, Twitter – What’s all the fuss about?

If we dig a bit deeper, these two seemingly unrelated events pose a stark threat (or wake-up call, depending on how you look at it) to those of us of a certain age (I'm 38).

Firstly, Ashton Kutcher, an actor, has become the first Twitter account to reach 1 million followers. CNN's breaking news account was looking like it would be the first to reach the million, and Mr. Kutcher laid down a challenge, among other things offering to buy 10,000 malaria nets for Africa if he got there first. CNN responded encouraging its TV viewers to log on and follow them. Even bringing out the big guns such as Larry King.

CNN has a team of staff updating its Twitter account, providing very valuable content, i.e. real-time updates of breaking news from one of the world's leading news networks. Ashton Kutcher updates his entirely on his own, with no additional resources beyond his PC, a mobile phone and a broadband connection.

Secondly, my son Ben, entirely on his own, has set up a website where he can post whatever he chooses (I'll be checking regularly). He got into Twitter last month.

What does all of this mean?

The world of communication is changing incredibly rapidly. One individual with a PC (granted he's a famous actor, but he's still one individual) can get his message out to the world and inspire a greater following than one of the world's biggest providers of "old-fashioned" communication.

A whole generation is coming through now that see these methods of communication as second-nature. They will be working in your business (and your competitors' businesses) very soon. They will also soon be your customer and suppliers.

Those of us in senior positions now - if we are still planning to be in the workforce in 20, or even 10 or 5 years time, need to sit up and take notice. The rules are changing, and we'll be dead in the water if we don't grasp the nettle now (a bit of a mixed metaphor, but you get the point). Going into an economic recession can only accelerate the process - those organisations, and employees, that understand these technologies will be the ones that thrive, and keep their jobs. Those that don't will be the ones that fall by the wayside.

I don't want to finish on a negative note. We still have a head-start on this next generation - there is a great opportunity if we act now. If you haven't already, set up accounts on Twitter (takes 5 minutes), Facebook, Linkedin and the like. Have a dig around and see what you can learn. Right now, the combination of business experience alongside these skills makes you invaluable, but that won't be a differentiator in a few years' time when this generation gathers experience. See you in there.

The time to act is now!

Good luck in this brave new world.

Thursday, 16 April 2009

Advanced Management Reporting in Excel, London,20th May 2009

You know that you have all of the information you need in your accounting and management systems, however every day, week and month you (and your team) spend time pulling it from different sources, tweaking it and presenting it in a format that you (and the rest of the management team) can use.

What if you had the skills to automatically populate your existing spreadsheets and/or create new ones that give you all of the information you need, in a few clicks, when you want it. You can reduce time spent on management accounts preparation, for example, from days to minutes or even seconds.

This one-day workshop is a rare opportunity to learn my unique approach to automating all of your reports (from simple sales reports to complex management accounts). This is possible, no matter what accounting and management software you use in your business.

For just £275 plus VAT per delegate, you will learn how to:
  • Interrogate your existing systems
  • Analyse the resulting data using lookups and pivot tables
  • Present it in any format, including your existing spreadsheets (no matter how complex), automatically

Click here to find out more and/or to book online.

Excel Tip: Using GETPIVOTDATA (part 1)

As regular readers will know, I am a huge fan of pivot tables and find them an incredibly useful and powerful feature of Excel. If you don't know how to create a Pivot Table, take a look at my free video.

For all of the power of Pivot Tables, sometimes the final format is not want you want and you need to use that data elsewhere. Management Accounts are a prime example of this - a pivot table can give you the numbers but you usually want these to then populate an ordinary Excel template, set out in your Management Accounts format. This is where the GETPIVOTDATA formula comes in.
GETPIVOTDATA allows you to specify the data you want to pull from the Pivot Table. The format is as follows:
=GETPIVOTDATA("Name of data field to return",location of pivot table,"field1","item1","field2","item2")
Where:
Name of data field to return is a text field, being the name of the pivot table field as it appears on the pivot table.
location of pivot table is a reference to a cell anywhere within the pivot table, it is often best to use the top left cell of the main body of the pivot table, as this will remain in a constant position no matter how much the data changes.
field1, item1,field2,item2,etc. are pairs of field and item names from the row, column or page (filter) areas of the pivot table. You can use as many pairs as you like. The field name comes from the original column heading in the data, the item name is the entry in that column that creates a unique row, column or page in the pivot table.
I think an example might be useful here:


To return the figure 15,813 for Matthew's sales for the South East, the formula would be:
=GETPIVOTDATA("Sum of Net",A3,"Salesman","Matthew","Region","South East")
This is useful when you are wanting to report one number, however you can really make use of this formula when you realise that any of the text arguments (in inverted commas) can be replaced with references to cells where the text can be found. You can then use this to populate any report layout, but I will leave this for a later post.

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

Tuesday, 14 April 2009

Top 10 current concerns of CFOs/Finance Directors

Thank you to Cindy Kraft of CFO-Coach.com for bringing this list to my attention.

The following is the top 10 current concerns of CFOs/Finance Directors according to the Duke-CFO Global Business Outlook Survey, Q1 2009, reproduced from a webcast available for download from www.cfo.com.

  1. Ability to forecast results
  2. Working capital management
  3. Maintaining morale/productivity
  4. Balance sheet weakness
  5. Attracting and retaining qualified employees
  6. Cost of health care
  7. Pension obligations
  8. Managing IT systems
  9. Supply chain risk
  10. Protection of intellectual property

Anyone have anything to add or disagree with the priorities?

I was surprised to see the absence of cost-cutting from the list!

Thursday, 9 April 2009

Learn VLOOKUP with this short, free video tutorial

Following my earlier post on the Excel VLOOKUP formula, I have produced (again using the excellent services of Emily Coltman of Ask M, who produced the Pivot Table video training package) A short video tutorial on this useful function. I hope you find it useful.

http://www.screencast.com/t/SLlrqpl8

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

Is your Easter Weekend covered by these 10?

A long weekend coming up and I bet there are a very limited number of ways in which we all spend it. I can think of ten:
  1. Do nothing!
  2. Get some jobs done around the house and garden;
  3. Spend some rare time with the family;
  4. Go away for a weekend break;
  5. Visit friends;
  6. Drink!
  7. Eat!
  8. Sleep;
  9. Take work home;
  10. Go into the office because you can't get any work done at home.

I am planning to do bits of 1,3,5,6,7 and 8. I will desperately try to avoid 2, 9 and 10.

I'd love to hear of anybody whose plans are not covered above. Please share below.

Wednesday, 8 April 2009

New look and feel - What do you think?

Regular visitors will notice a significant change to the look and feel of the blog - hopefully it looks more professional, that was the intention.

Please comment with your thoughts.

Monday, 6 April 2009

Spreadsheets by email

Those of you who read the Not Just Numbers ezine will be aware that Feechan Consulting has just launched the new Spreadsheets by Email service.

This service allows you to tap into Feechan Consulting's Excel expertise from a distance. Simply enter the details of any standalone spreadsheet you want developed (from anywhere in the world) and you will be provided with a fixed competitive quote. Should you wish to go ahead, simply pay by credit card and the spreadsheet will be emailed to you within the agreed timescales.

The service is already receiving a positive response from other blogs, see The Excel wizard has a new spellbook on Emily Coltman's blog.

Why not give it a try?

Friday, 3 April 2009

Excel Tip: Using VLOOKUP

Second only to pivot tables, the VLOOKUP formula is the one of the features of Excel that I am most often asked about. It is also one of the most useful.

Simply put, this formula allows you to look up an item from a list.

Its format is as follows:

=VLOOKUP(lookup value,range to lookup,column to return,TRUE or FALSE)

lookup value: This is the value you wish to search the first column of your table for (this can be the actual value, but it can be very powerful to refer to a cell containing the value).

range to lookup: This is the range (either named, or referred to directly) that contains the lookup table. It is useful to refer to whole columns as this allows your list to grow.

column to return: This is given as a number, where the first column (the one being searched) is 1.

TRUE or FALSE: This is a rather odd one. If you enter 'TRUE' or omit this argument, Excel will go to the closest value if the actual value being looked up is not there. This requires the first column to be sorted in ascending order. I can think of very few applications for this other than some form of conversion table, but as conversion tables are normally to help approximate a formula, there is not a lot of call for them in Excel where you can easily calculate the actual formula itself. For most financial applications you will need to enter 'FALSE' here as this will return an #NA error if it cannot find the lookup value.

The VLOOKUP formula is very useful for adding additional data to raw imported data in Excel. For one application, see my article on automating management accounts.

Monday, 30 March 2009

Excel or paper = no system?

By Emily Coltman of AskM

Reading back through the Xero blog this morning, I found this post from Vivian Morresey, who says;
It’s amazing how many people have joined Xero recently, that actually come from ‘no system’ at all, ie shoebox, Excel or paper, and I’m sure that once people truly see that it can be done better, the better off we will all be.


By "Excel or paper", I'm guessing Vivian means accounting records kept either on an Excel spreadsheet or a manual cashbook. And I'd take issue with his/her statement that these are "no system".

I agree that spreadsheet records or a manual cashbook would probably only suit the very smallest of businesses. Elizabeth Jackson of
Great Guns Marketing says in her book "Start Up!" that when she began her business, it was a one-woman band, and she kept her records on spreadsheets, before upgrading to QuickBooks when the business grew bigger.

For micro businesses, a neat well-kept set of records on Excel or a manual cashbook can be more than adequate. They've certainly done just fine for me in the past when it came to preparing year end accounts for those businesses.And, I keep my own records on an Excel spreadsheet :-)

In the next paragraph of his/her article, Vivian says;

Generally, it’s at the end of the (financial) year when all the real pain comes to the surface, such as collating all your receipts and trying to remember why you spent that money, and what was it for, do I claim the GST or not? Digging up your bank statements, and realising you’ve lost one, it won’t matter how far back, or how efficient the online bank statement export is, you know it will still miss the thing that you need. Finally, sorting through your invoices and realising that you haven’t been paid or worse, that you still have to pay someone. I could go on, but I think you get the point.


Now there I would say that (s)he is spot on.

Trying to go through a pile of receipts at year end and remember what every receipt was for is a nightmare. By then you won’t have the foggiest idea why you might have bought a train ticket to London . To visit a customer? To go to the theatre? To go to a lap-dance club? (I did know a business owner who tried to claim "entertaining" for his visits to an address in Soho ...)

It’s not just your accounting records that you need a good system to keep track of. What about employee expenses? Purchase orders? Credit control? The list is endless.

So, Excel and paper systems do most definitely still qualify as systems. Pick a system that’s the right size for your business and keep on top of your paperwork as it comes in. The day after your trip to London , you’ll remember what it was for. The following month, you probably won’t.

[P.S. My apologies for the use of "his/her" and "(s)he" in this article, but "Vivian" can be either a man's name or a woman's and I don't know whether Vivian at Xero is a man or a woman.]

Emily Coltman is a qualified Chartered Accountant who, after several years in practice, now runs her own business making bespoke screen-capture videos.

The Lean Office - Learning to see information with Data Flow Diagrams

by Andrew Nicholson of Nicholson Consultancy

Back in 1999 Mike Rother and John Shook produced a guide to Value Stream Mapping, with the memorable title “Learning to See”. A more accurate title might have been “Learning to see manufacturing”, since manufacturing is where Value Stream Maps originated (at Toyota, like many of the Lean tools and techniques), and where they are most effective. For some years now people have been applying the Lean principles to many other non-manufacturing processes, with varying degrees of success. It’s not difficult to understand why…

The world of operations and manufacturing deals largely with tangible items - materials, components, products that we can physically see, count and touch. When we need to look instead at information we quickly realise that we’re in a very different world - one where data can move at the speed of light and exist in more than one place simulaneously. It’s a bit like moving from the world of conventional physics to the world of quantum physics. We need a different approach when we want to see information.

Before we do this, let’s take a step back and consider what it is that we’re trying to achieve…

The starting point for many improvement programmes is to understand exactly how the current process works. We need the people who carry out the process to map it - “process mapping”. The idea is to create a visual model - a “cartoon” - so that everyone can see and understand what is going on. When we get together the right team - from all parts of the process - to map out the current way of doing things (the “current state” or “as is” situation) and then to study the process in detail, it’s usually very obvious to them where the problems lie. Given the right tools - and some expert help, of course - they can then improve or “re-engineer” the process, to create the “future state” or “to be” situation.

When it comes to manufacturing or other operations where we are processing tangible items - components, chemicals, food or other things that we can see, touch, count and measure - the preferred technique is Value Stream Mapping (VSM). VSM is a great tool to help the team visualise this type of operations. Unfortunately, it’s much less useful when it comes to the processing of information and data. We realise that we’re in a different world when we try to work with information - all of that intangible “stuff” that can move at the speed of light and be in more than one place at the same time. Then we realise that we’re using a hammer to drive a screw and that if we could find a screwdriver instead then maybe we’d find it a lot easier.

The first bit of good news is that the mapping tools are already out there, and have been for many years. They’re called Data Flow Diagrams (DFD’s). Put simply, people who work with products use Value Stream Maps and people who work with information use Data Flow Diagrams. The next bit of good news is that Data Flow Diagrams are much simpler and easier to use than Value Stream Maps. DFD’s can be drawn by using only four simple symbols.

So the next time you need to map out information-based processes, forget Value Stream Maps and instead use Data Flow Diagrams


Andrew Nicholson is Managing Director of Nicholson Consultancy Limited, specialising in Business Strategy and Lean Thinking. Andrew contributes to the e-zine, "Better Today", with information for those who are interested in making improvements in their business. If you're interested in Lean Manufacturing, visit Andrew's blog, Manufacturing Times.

Is this the best use of my time?

by Glen Feechan

When launching the website for our new
Spreadsheets by Email service, I started fiddling around designing a logo, knowing I wanted the website live in a couple of days. After a few attempts that looked far better in my head than they did when I tried to recreate them on the screen, I stopped short and realised that I was seriously undervaluing my time. I took a few minutes to find a service on the web, paid £19 on a credit card for next day delivery by email, and got on with everything else I needed to do.

Those of us who sell our services, often have a good idea of what our time is worth, but we still need to pull ourselves up quite regularly. It can be even harder when we are working within an organisation.

When I was back in practice, our charge-out rate was always three times our hourly pay-rate. Keeping timesheets, which were costed at this rate was a very useful reminder of the opportunity cost of any wasted time. Are you confident that the time you spend at work is worth three times what you are paid? Useful question, isn’t it?

It can be worthwhile, keeping a timesheet for a week, or even a day, and attempting to put a value on each job before comparing it to the cost of the time spent.
Areas where Finance Directors often spend time that can usually be done far more cost-effectively by someone else are:

l need to add value to our businesses., especially in the current economic climate where it is vitally important to add more value to your business than you cost them – so, don’t forget to keep asking yourself, “Is this the best use of my time?”
  • Management Accounts preparation – the more you can automate and/or delegate this process, the better. The real value-added is in the review and decision-making based on the numbers;
  • Technical tasks, e.g. setting up spreadsheets, fixing IT problems;
  • Procurement – sitting in endless meetings comparing suppliers in areas where the possible savings far outweigh the time spent.
  • Company vehicles – I have seen Finance Directors spend huge amounts of time sourcing vehicles, effectively acting as a used car trader. This is one of those areas where personal interests can really distort our priorities.
I’m sure you can think of plenty more.

Whenever you find yourself spending more than, say, an hour on something, just stop for a second and think, “Is this the best use of my time?”
If the answer is no, the next question you should ask is, “Who could do it better and cheaper?” Here are a few ideas:
  • Another member of your department – we all know the benefits of delegation, so this route should always be considered.
  • A member of another department – sometimes we spend ages on jobs to get information we need, when a slight variation of that information is already produced in another part of the business. Adding a few amendments to the way that information is collected, may add no work to the member of staff producing it, while removing the work altogether from your department.
  • An outside supplier or freelancer – often these jobs are one-offs which mean there is an unproductive learning curve for whoever does it in the organisation. These are the times when it pays to go outside. It is very easy to find external suppliers via the internet. It can be very surprising the cost-savings available through this route. For example, within my own group of companies, we offer free procurement services and spreadsheets built from around £40/$60.
We all need to add value to our businesses., especially in the current economic climate where it is vitally important to add more value to your business than you cost them – so, don’t forget to keep asking yourself, “Is this the best use of my time?”