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Wednesday 24 December 2008

Merry Christmas from Not Just Numbers

A Merry Christmas to all of our subscribers, readers, clients and suppliers and here's to a very Prosperous 2009, despite the doom-mongers.

Tuesday 16 December 2008

Backwards compatibility in Excel 2007

A word of caution:

If you are using both Excel 2007 and Excel 2003 in your organisation, as many of my clients are, you need to be aware of backwards compatibility issues.

Saving an Excel 2007 file in 2003 format does not guarantee compatibility. There is a compatibility check that is run when you save, but this does not give you the opportunity to make certain things compatible. In particular, a Pivot Table created in Excel 2007 will not work in 2003 unless created in "Compatibility Mode". For reasons best known to Microsoft, this mode can not be switched on in 2007 and can only be accessed by opening a 2003 file.

So, if you need to develop a spreadsheet (particularly with Pivot Tables) that has to run on both versions (and you wish to develop it on a 2007 machine), I suggest creating a blank file on a 2003 machine, saving it, then opening this file in 2007 as your starting point.

Crazy but necessary!

Watch a macro doesn't hide a problem

When I tell clients that I can automate complex reporting in Excel so that it involves only a couple of clicks, they invariably assume I am going to use macros. Truth is, I hardly ever do.

Macros have their uses, i.e. to automate repetitive tasks, however in most cases the requirement for the repetitive tasks can be removed by better designing the spreadsheet.

If you can do what you want without macros, the spreadsheet tends to be more intuitive, easier to develop further and more flexible. Once a macro is used, users tend to be frightened to change anything in case the macro stops working.

Use of Pivot Tables in particular can automate a great number of reporting tasks far more elegantly than macros.

So, take a look at any spreadsheets that you use that incorporate macros and consider whether there is a better way.

Wednesday 10 December 2008

Banks vs Property - a thought-provoking report

I just received a link to this free report from a property investment advisor whose mailing list I am on.

Clearly he has a particular inclination towards property investment, but I thought the report was worth sharing for its rather alarming summing up of the current crisis, and the state of the banks.

Have a look yourself at:

I'd appreciate any comments from any of you once you have read it.

Thursday 4 December 2008

2% Interest Rates - what will the banks do?

Well, I think it's fair to say that the Bank of England are no longer pulling their punches. Interest rates are now at 2% and forecast to drop further in the new year. I have even heard talk of the base rate dropping to zero!

Hopefully this now starts to filter through to businesses, although for most businesses I come across, it is access to borrowing rather than the rate that is the problem.

We may find that the banks still don't pass on the rate-cuts and use the extra margin to bolster their balance sheets. Obviously there has to come a point when they no longer need to do this and they clearly need to lend to somebody to earn any money. Hopefully that point is now closer with this further rate cut.

As usual, Robert Peston at the BBC has an interesting analysis of the problem and the dilemma the banks have got themselves in.

Arrogance of banks

Has anyone else received a guide from their bank on surviving the recession? I received one this morning entitled "Trading through the Economic Downturn".

I was expecting some advice from the bank's own experience but I have scanned it from cover to cover and they seem to have kept the advice that really worked for them to themselves. As they seem inexplicably shy about revealing their best tip, I thought I had better do it for them:

The banks' real approach to trading through the downturn:

"Gamble everything to make sure you get your bonuses and then ask the taxpayer to bail you out."

Am I missing something?

Thursday 27 November 2008

Comments now working properly

You should now find it easy to comment on the blog posts.

I have only just discovered that I had the blog set to only allow posts from registered users. I have now corrected this, so anyone can leave comments.

Please add any thoughts you have on reading the articles.

Tuesday 25 November 2008

PBR - Can anyone see how the VAT rate cut can work?

I am struggling to see how the 2.5% VAT rate cut can stimulate the economy. If passed on across the board, it would mean a price cut of 2.1% in goods sold in the shops. I can't see how that will cause consumers to go out and buy things they weren't already going to. The stores are already running sales with 20%-25% savings in an attempt to kick start spending, 2.1% will be a drop in the ocean.

Part of the problem is that the government have created this expectation of a rate cut across the board. The retailers may be able to stimulate spending if they were to use the extra margin available to strategically target price-cuts, allowing them to show big discounts on some items. However because of the expectation built up in the consumers' minds that there will be a 2.1% price cut on everything, it will be difficult for retailers to do this.

There are also significant costs attached to the change, both to retailers and businesses selling to other businesses, who will get no direct benefit. Accounting systems across the land will need to have their rates changed, although in most cases this is hopefully quite straight-forward. Worse are all of the areas we forget about. In my small business (where all of my sales are to other businesses who claim the VAT back anyway), I have come across four today:
  1. My training fliers need re-printing because although prices are quoted excluding VAT, the payment amounts stated need to be changed;
  2. My expenses forms (in Excel) that calculate the VAT element for fuel need editing;
  3. My Paypal account needs its rate changing for online sales of Excel training courses and videos
  4. Numerous spreadsheets calculating commission payments need editing
These changes are in addition to the changes to my accounting system, and my business is tiny compared to most. I also know I will stumble across many others over the next few days.
As far as I can see, this change will introduce a significant administrative cost to virtually every business in the UK, and the benefits even to retailers (who are the only businesses who can directly benefit from this) are dubious.
I hope I am wrong, I would appreciate any comments from everyone else.

Monday 24 November 2008

PBR - Pay your Taxes when you can?

It would appear that Alistair Darling said in his Pre-Budget report that business will be given as long as they need to pay VAT, PAYE, and Corporation Tax.

Clearly there must be limits on this, and the following page of the HMRC website gives you full details of who you need to call to discuss what is available for you.

You can download the full Pre-Budget Report from the treasury at:

Good luck!

Wednesday 19 November 2008

The Seven Wastes

by Andrew Nicholson of Nicholson Consultancy

Lean for the Workplace is a way of applying the principles of Lean Manufacturing to non-manufacturing processes. As in Lean Manufacturing, the ultimate aim is to eliminate waste. The following are descriptions and examples of The Seven Wastes.

Overproducing - Producing more than needed or producing too much too soon does not improve efficiency. It consumes resources and leads to other wastes. Examples include keeping paper and electronic copies of documents; producing reports, which are put in a file and never studied.

Waiting - Waiting for people, machines (printer, photocopiers etc), information. It adds no value to the service, and can be most aggravating to employees. Examples include waiting for a signature; waiting for a phone call.

Overprocessing - Having a process that's over complicated. Examples include checking someone else's work; paying by cheque instead of by direct debit, requiring multiple signatures.

Inventory - Excessive stock can take up space, and become a Health and Safety issue. Examples include a cupboard full of stationery materials; files that are no longer used. (How many post-it note pads, pens, etc do you have in your desk drawer?)

Motion - Any motion that is not necessary to the successful completion of an operation/process is waste. Examples include walking to the next room to retrieve print outs from a printer; walking to another room to pass on documents.

Defects - Producing defective work that needs to be redone. Examples include computer data entered incorrectly.

Transport - Transporting something further than is necessary. Examples include files kept in a central filing office; office supplies moved to a temporary location before being put away.

Once you start thinking about it in these terms, you can quickly begin to identify where your processes are "wasteful" or inefficient, which is the first step to making them more streamlined.

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.

Recession?......what recession?

by Les Hodgson of Next Level Financial Management

Now that we are officially in a world wide recession what should we be doing? If we listen to those that have just realised we are in recession we might think all we need do is hold on until things get better next year. But if they did not know the recession was coming until things were really bad, how do they know when things are going to get better?

We are also told the recession is world wide but the UK is better placed than other countries – so why is Sterling going down against the Dollar and the Euro?

While we need to listen to what the ‘experts’ are saying we also need to get on and make the best of the situation.

In stormy times cash is king, so close attention must be paid to making sure cash is closely controlled. Instead of the profit & loss being the primary focus, attention needs to be switched to cashflow. Key areas to look at include:
  • Accurate forecasting of cashflow on a monthly basis for 12 months and a daily basis for 8 to 10 week is essential. Performance against the daily forecast needs to be continually monitored and adjusted – this means looking at it every day.
  • Money from debtors needs to profiled and collections closely controlled – the telephone is the greatest weapon in the fight to get paid.
  • Credit terms and limits need to reviewed and applied rigorously. Tight credit control is crucial to the process – if customers do not pay on time or go beyond their credit limit - stop supplying immediately.

Cost control is also important and all costs must be closely scrutinised and suppliers changed where appropriate. If you are not already using the services of companies like

FC Procurement then you need to see what they are offering.

Rapid change and fast moving situations always throw up many opportunities – you need to spot these opportunities and be ready to grasp them. Having access to a pot of cash or access to capital is a great position to be in!

Areas to watch include:

  • Sterling weakness is an opportunity to look closely at overseas markets. A poor exchange rate makes UK goods and services cheaper for overseas buyers. There is a lot of help available from
UK Trade & Investment.
  • Companies are failing at an alarming rate and there are a lot of opportunities to purchase these businesses or their assets at a knock down price. Even if you do not have the cash, liquidators will often accept a phased purchase.
  • Review staffing levels and remuneration strategy. Uncertain times mean employees are more receptive to changes in pay and conditions, such as the ending of final salary pension schemes.When competitors are cutting back watch out for opportunities to capture their star players – they usually come with a lot of knowledge and new customers. Of course be wary of unsettling your own star players.

  • Well good luck going forward; hopefully things will improve sooner rather than later!

    Next Level Financial Management is a specialist Chartered Accountancy practice dedicated to turn round & rescue and VAT & PAYE arrears arrangements. Email or 0191 548 6000 / 07939 809 249.

    Follow My Leader - To Effect Change, Leaders Must Walk the Talk!

    by Glen Feechan

    A leader's role

    In any change project, a leader must wear many hats,
    however his/her role can be split into two key areas:

    1. Set the strategic direction of the change and;

    2. Convince everyone of its importance.

    The importance of the first part of this role is generally
    understood and is for another article on another day, however the second part is
    often overlooked (or done very badly) and can be of even greater importance.

    Where this point is addressed, it is generally done by
    giving presentations and distributing memos. Although these can be necessary,
    they are often ignored or just paid lip service if the most important method of
    communicating the importance of the project is missed - action.

    "Do as I say, not as I do!"

    Many of us will have heard this line from our parents
    (some of us just might have been known to use it with our own kids now and
    again), but can we remember how patronising it felt?

    Too often this is the message communicated to employees
    from senior management during a major change. Employees are expected to attend
    seminars and workshops (and are sent memos and emails stressing their
    importance). These may even be preceded by a major presentation from the
    managing director, stating that everyone must give full support to the project.
    The senior management then continue to go about their day-to-day jobs as if
    nothing has changed.

    The Managing Director misses a session he was scheduled to
    attend because he has a meeting with a major client then the Sales Director uses
    this excuse at the next session, which the Finance Director also misses because
    he has a meeting with the auditors. In the next round of workshops, there are no
    salesmen able to attend (they all have meetings with clients), the payroll clerk
    cannot attend because the wages must be processed and the management accountant
    makes his excuses because he is under pressure to get the month-end accounts

    Pretty soon the project is completely off the rails and
    the managing director is wondering what went wrong. The simple fact is that
    people follow the examples of their leaders rather than what they are told. When
    the Managing Director demonstrated that his meeting with a client was
    more important than the project, this message was picked up by the Sales
    Director (who also has important meetings with clients), then comes the Finance
    Director, who is quite sure that his meeting with the auditors is at least as
    important as any client meeting. This message is then cascaded down to those
    reporting to these directors, until no-one is attaching any importance to this

    Perception is reality

    Not only must the senior management team give the project
    the priority it deserves (and that they are telling everyone else that it has),
    they must go out of their way to be seen to do so. This is often best
    done by doing something out of character that clearly (and publicly)
    demonstrates the importance of the project. This may involve such activities as
    missing a regular golfing trip to attend a workshop session (no-one said it was
    going to be easy) or coming in on a Saturday morning to attend a session with
    Saturday staff. The trick is to get people talking in the canteen about how
    important the management must see this project as, if the managing director is
    missing his golf/Saturday mornings, etc.

    Listen and act

    As a project progresses, one of the best ways to
    demonstrate its importance is to listen to feedback from workshops, etc. and act
    on it as soon as possible. This demonstrates that the project can really make a
    difference and that this is everyone's opportunity to contribute to how the
    business operates.

    If senior management can demonstrate this level of
    commitment, the project is well on the way to success.

    Tuesday 18 November 2008

    Report in Excel like an OAP

    When I work with clients on their management reporting I usually advise them to separate out the process into three, using my OAP approach.

    OAP stands for Obtain, Analyse, Present:

    Obtain - obtain the data. This may be through, say, an input sheet, but more likely from a database such as your accounting system or ERP package. Typically you would pull this in through an ODBC link. It should be pulled in in a format that is easy to analyse, i.e. in columns with unique headings.

    Analyse - Analyse the data. The best way to do this is usually through Pivot Tables, particularly when combined with formulae, particularly lookup formulae, alongside the data.

    Present - Consider whether the Pivot Table can be amended to present the data in an acceptable format, alternatively use the GETPIVOTDATA formula to populate any report, such as Management Accounts.

    By treating each of these steps as separate, you will find that you can create far more flexible reports, simply.

    Have a look at my video training course on Pivot Tables. Alternatively if you want to look at this whole approach in a lot more detail and you can get to Sunderland for 21st January, book yourself on my workshop.

    Friday 14 November 2008

    Learn Pivot Tables Now

    If you have been following my blog posts and ezine articles, you will know that I am a strong believer that you are only tapping in to a fraction of Excel's power if you do not understand Pivot Tables.

    Pivot Tables form an integral part of the workshop I am running in January, along with a lot of other material you will find useful.

    However, I am aware that a number of you are not based in the North East, and that training can be difficult to allocate budget to in a recession. To address these issues I am offering a video training package, available for immediate download, that will teach you the basics of Pivot Tables at a price that will suit any budget.

    Please follow the link, and finally unlock the power of Pivot Tables.

    Thursday 13 November 2008

    "Invest to Survive" event

    I will be speaking at the Invest to Survive event in Sunderland on 10th December, where I will be elaborating on my "10 Tips for Surviving in Hard Times" report, which is available free to those who sign up for the free "Not Just Numbers" ezine.

    Also speaking at this event will be Andrew Nicholson, who will be talking about how to apply Lean principles to dealing with the recession.

    For more details, or to find out booking details, visit here.

    Painless Cost-cutting

    The news is full of cost-cutting programmes, usually involving large-scale job losses. Only today, BT announced a further 10,000 job losses by March next year. In addition, every company I talk to is undergoing some form of cost-cutting exercise at the moment and it is easy to see these as involving nothing but pain.

    It is important to note though that a significant level of cost-cutting is possible without any pain and without cutting your workforce or capacity to take advantage of opportunities. Those businesses that can remain at full strength through the recession are likely to profit from cut-backs at their competitors.

    I am talking about reducing what you pay for your overheads rather than what you are paying for. Most businesses have a decent grip on what they pay for raw materials but invariably significant savings can be made across their overheads by switching to more competitive suppliers.

    There are a number of reasons why existing suppliers might not be the most competitive, sometimes it is just complacency.

    Also, many of these areas do not get looked at as often because individually they may not appear to represent a large percentage of total costs, however it is important to remember that these savings are not harming the company's ability to operate.

    Would it be better to save £20,000 p.a. by laying off an additional employee or changing stationery suppliers?

    Also, some of these areas are a bigger spend than people realise. On average, spend on printed materials accounts for around 1% of sales turnover. A saving of 20% on this spend has the same effect on the bottom line as a 1% increase in sales (assuming a generous profit margin of 20%).

    At FC Procurement we provide a free service to our clients to help effect these changes with the minimum of effort on the client's part. We cover a wide range of supply areas, that is growing all of the time.

    If you are a company based in the UK who is looking to save money without the pain, check us out.

    Wednesday 12 November 2008

    Free online payroll software

    Just a quick post to let you know about a free tool I have been using for a few months now.

    I have been using an online payroll package that amazingly is guaranteed to be free for at least 5 years (for 50 employees or less).

    It is HMRC approved, appears to have more features and be easier to use than most purchased packages I have come across. In addition, because it is online, you don't need to worry about year-end updates.

    It is called Payroo. Have a look and see what you think. Please comment below if you have used this yourself or suggest any other free software you have come across that other readers might find useful.

    Monday 10 November 2008

    Horses for courses with Lean Manufacturing

    While at my son's football training tonight, I got talking to one of the grandads who was a shop-floor supervisor in an SME manufacturer.

    He was talking about the NVQ training he was doing in Lean Manufacturing at work and how it all related to the big automated car manufacturers and was not relevant to his company.

    This is such a common story where trainers provide generic and often inappropriate training, particularly where government funding is involved and 'bums on seats' means money.

    The truth is that introducing some Lean techniques can be incredibly profitable for this type of company, if they are introduced by a consultant/trainer who takes the time to understand the business and its needs.

    Someone I have aways admired for his ability to do this is Andrew Nicholson of Nicholson Consultancy. Take a look at Andrew's new blog.

    Sunday 9 November 2008

    Why all finance directors need to know about ODBC

    I regularly come across companies that are paying a small fortune to their software providers for any reporting they want from their ERP system. This is not only expensive, but usually takes a great deal of time and effort from the company's employees in explaining their requirements.

    Often no-one at the software provider mentions a free route to report from their software using a tool that staff are familiar with. A quick email or phone call (asking the right question) to their support team and this can be set up - free of charge.

    This is not some specific tool from the software provider, but one that is available (free) for almost every software package out there. The tool I am talking about is ODBC (Open Database Connectivity) which allows you to automatically use Excel to report from all of the database tables. For most databases this is already installed on your PC, although you might not know it -for more obscure databases there may be some software to install, but this is usually included on your initial installation disks.

    If you have any issues reporting from your software, ask your provider about using the ODBC links - they will almost certainly be available. If you want to read more about what you can do with the data you access, read:

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

    Good luck!

    Friday 7 November 2008

    The link between the base rate and what the banks charge us

    Following yesterday's rate cut, I came across this blog post from the BBC's Robert Peston, that is one of the clearest explanations of the complex links that drive the rate that businesses and consumers get charged.

    Thursday 6 November 2008

    Will a 1.5% interest rate cut do the job?

    Today the Bank of England dropped its usual "steady as she goes" image to make a dramatic (and larger than anyone even asked for) rate cut to bring the Bank Base Rate down to 3%.

    But as Mervyn King bends over the twisted body of the British Economy, shouts "Clear!" and applies the defibrillator, will it be enough to restart its bruised and battered heart?

    If the rate is passed on (and quickly) to mortgage payers and businesses, it might just get people thinking that they can afford to go out and get some Christmas presents in, helping out the retail sector.

    Again, if rates are passed on, and the banks are prepared to lend (big ifs), this could be a great time for all of those first-time buyers who have not been able to afford to get on the housing ladder to take advantage of cheap house prices and low interest rates - giving a boost to the construction industry.

    Combined with a new president, and a new found optimism, in the US, maybe things won't be that bad after all.

    Or am I clutching at straws.

    What does everyone else think? Please leave a comment.

    Wednesday 5 November 2008

    A salutory Excel lesson from Barclays and Lehman Brothers

    I have reproduced the following article from AccountingWeb because I think it is a very amusing, yet sobering demonstration of the importance of using Excel properly, and ensuring that Excel spreadsheets are set up in a robust way:

    Hidden spreadsheet rows hit Barclays with toxic Lehman

    On Tuesday 5 November, lawyers for Barclays Capital appeared before the US
    Bankruptcy Court in New York to try and extricate the company from taking on
    Lehman Brothers liabilities accidentially included in a PDF copy made of an
    asset spreadsheet. John Stokdyk reports.

    Following Lehman's collapse in September, Barclays Capital agreed to
    pay $1.35bn for the failed bank's assets once they had been stipped clean of
    some of the more toxic elements.

    Unfortunately, a docket submitted by Barclays' representatives Cleary
    Gottlieb Steen & Hamilton LLP to the bankruptcy court in advance of the 22
    September sale date included 179 contracts that should have omitted.

    In an affadavit uncovered by the Above the website, the junior associate who compiled
    the list explained what happened.

    On the evening of 18 September a colleague asked the clerk to help
    reformat an Excel asset spreadsheet and convert it into a PDF.

    "Some of the rows of the original Excel spreadsheet were spaced too
    close together or too far apart, making it difficult to read when printed or
    converted to PDF format. I therefore globally re-sized all the rows in the
    document to make it easier to read when printed or converted to PDF format." The
    clerk also removed several columns that were not needed in the final document.

    The coverted document was subsequently handed into the court, but the
    clerk was not aware that the original spreadsheet included hidden rows, nor that
    there were 179 contracts designated with “N” in a column to indicate that they
    should not be included in the sale.

    "I also was not aware that these hidden rows were exposed when I
    globally re-sized the rows in the spreadsheet or that, once exposed, they would
    appear without the original designations," the unfortunate clerk testified.

    The law firm says that a junior associate had reformatted an Excel
    spreadsheet into a PDF document to post on the court's website.

    Clearly Gottlieb filed a motion to asking for relief from the final
    sale order due to "mistake or excusable neglect" to extricate its client from the
    potentially disastrous commitments.

    Above the Law noted that the work took place just after 11:30pm. "Who
    knows how much sleep anybody at Cleary got between Lehman crashing on the 15th
    and the 18th when the mistake happened? And, as we all know, they don't teach
    "Excel" in law school and they really, really should," it commented.

    If you want to make sure you don't make the same kind of mistakes yourself,
    take a look at the
    workshop I am running in January.

    Hidden spreadsheet rows hit Barclays with toxic Lehman

    On Tuesday 5 November, lawyers for Barclays Capital appeared before the US
    Bankruptcy Court in New York to try and extricate the company from taking on
    Lehman Brothers liabilities accidentially included in a PDF copy made of an
    asset spreadsheet. John Stokdyk reports.

    Following Lehman's collapse in September, Barclays Capital agreed to
    pay $1.35bn for the failed bank's assets once they had been stipped clean of
    some of the more toxic elements.

    Unfortunately, a docket submitted by Barclays' representatives Cleary
    Gottlieb Steen & Hamilton LLP to the bankruptcy court in advance of the 22
    September sale date included 179 contracts that should have omitted.

    In an affadavit uncovered by the Above the website, the junior associate who compiled
    the list explained what happened.

    On the evening of 18 September a colleague asked the clerk to help
    reformat an Excel asset spreadsheet and convert it into a PDF.

    "Some of the rows of the original Excel spreadsheet were spaced too
    close together or too far apart, making it difficult to read when printed or
    converted to PDF format. I therefore globally re-sized all the rows in the
    document to make it easier to read when printed or converted to PDF format." The
    clerk also removed several columns that were not needed in the final document.

    The coverted document was subsequently handed into the court, but the
    clerk was not aware that the original spreadsheet included hidden rows, nor that
    there were 179 contracts designated with “N” in a column to indicate that they
    should not be included in the sale.

    "I also was not aware that these hidden rows were exposed when I
    globally re-sized the rows in the spreadsheet or that, once exposed, they would
    appear without the original designations," the unfortunate clerk testified.

    The law firm says that a junior associate had reformatted an Excel
    spreadsheet into a PDF document to post on the court's website.

    Clearly Gottlieb filed a motion to asking for relief from the final
    sale order due to "mistake or excusable neglect" toextricate its client from the
    potentially disastrous commitments.

    Above the Law noted that the work took place just after 11:30pm. "Who
    knows how much sleep anybody at Cleary got between Lehman crashing on the 15th
    and the 18th when the mistake happened? And, as we all know, they don't teach
    "Excel" in law school and they really, really should," it commented.

    Tuesday 4 November 2008

    A new dawn....

    I have just finished watching the news, seeing the queues lining up to vote in the US election.

    It has become the norm for the rest of us around the world to criticise everything about the US, but something about this campaign seems to have reminded everyone of the dream of freedom and democracy that was its foundation.

    Every poll suggests that tomorrow morning we will wake up to the first black leader of the free world. At a time when the world is dropping into recession all eyes are turning to one man, desperately hoping that he will lead us to a bright new future. I can't help but wonder whether that is too much expectation for anyone - let's hope he's up to it!

    Monday 3 November 2008

    UK Financial Investments Ltd - The new Banking Behemoth

    Earlier today (3rd November 2008), Alistair Darling announced details of the new company that will hold the taxpayer's investments in the banking sector. This new organisation, publicly owned, but managed autonomously by Philip Hampton, Sainsbury's chairman and ex-Lloyds TSB Finance Director, is set to dominate the UK banking industry for the foreseeable future.

    Full report from the BBC

    The BBC's Robert Peston's take on the new company

    Monday 13 October 2008

    Gordon’s Alive: Why is Gordon Brown leading the way in saving the world from the credit crunch, and what can we learn for our businesses?

    by Glen Feechan

    Remember the dim, distant days of September 2008, when Gordon Brown was almost universally unpopular, wasn’t expected to last the year in his role as Prime Minister and everything he touched seemed to go wrong.

    I am writing this on 13th October and Gordon’s plan to save the banks seems to be well-received by the markets and looks set to be followed by the rest of Europe and the US. The rest of the world seems to be turning to Gordon for advice and leadership on what to do about the crisis, weeks after his party didn’t even want him as leader.. What happened?

    Clearly Gordon Brown has far greater experience than his fellow world leaders in dealing with the financial markets, from his time as Chancellor, however, I don’t think this fully explains the turnaround in his fortunes. There are some aspects of the last few weeks that we can all learn from.
    Primarily, Gordon Brown didn’t panic. When bankers, the media and a large proportion of the general public sounded like Private Frazer from Dads’ Army – crying “we’re doomed!” – Gordon analysed the problem, and what he could do about it, and then got on with the job.

    Lessons from Gordon

    1. Don’t Panic
    This time it’s Corporal Jones from Dads’ Army. It is so easy to get swept away on the tide of hysteria and bring your business activity to a halt – not because customers are not buying, but because you have stopped making decisions for fear of making a bad one. It is imperative that we review our activity and decide what activities are important for moving the business forward, and make sure we continue doing them!

    2. Work on your Circle of Influence
    A useful model I often use, from the personal development field, is that of the “Circle of Influence” and the “Circle of Concern”. This model can apply to both individuals and businesses. Our Circle of Concern contains all of the things that concern us, that bother us. This circle is usually very large, and has recently become a lot larger for most people and businesses. Our Circle of Influence is a smaller circle, inside the Circle of Concern, which contains all of those things that we can influence.
    We all get dragged into our Circles of Concern, but the time we spend there is of no use, as we can’t change anything. As a result, our time and effectiveness is gobbled up by our worries, actually shrinking Circle of Influence.

    The good news though, is that if we spend our time in our Circle of Influence, we are not only a great deal more effective, but our Circle of Influence actually grows as we move forward, bringing things that were previously in our Circle of Concern under our control.

    So much of the global financial crisis is in our Circle of Concern and not in our Circle of Influence that this model is incredibly appropriate at this moment. Work out what is under your control and put all of your efforts into that. The worst case is that you still fail, however this effort will not have made things worse, whereas worrying about the things you can’t change very well might.

    3. Put it all in perspective
    Keep a clear head and remember what’s important. I bet if you were to list the top three most important things in your life, they would have nothing to do with the FTSE-100 or the banks’ liquidity, or even your house, car or job. Take some time to spend with your partner, your children, your friends or in nature. The credit-crunch threatens none of these, but worrying about it might!

    Here’s to a profitable next twelve months.

    Glen Feechan is Chief Executive of the Feechan Consulting group of companies and editor of Not Just Numbers. Email Glen at

    Fighting the Credit Crunch – why “Just do it!” doesn’t do it

    In turbulent, fast-moving times it’s tempting to think that planning is pointless – who knows what tomorrow will bring? The truth is that an hour’s planning is often worth 5-10 hours of doing, so don’t “just do it” - plan it, do it and review it. This is the heart of any meaningful improvement approach and the core of continuous improvement. It’s worked for more than 50 years across all organisations and it always works. The only thing that changes is how frequently you need to do it – in the current environment that’ll be “frequently”. In any survival situation you have to work with the tools that you’ve got - adapt, improvise and overcome!

    In essence: use simple, well-proven tools; do it quickly; review progress daily or weekly.

    The first thing to face is that the organisation – and you – will need to change. Doing more of what you do will only get you more of what you’ve got – you need to do things differently. You need to change – and if you’re a leader, you need to lead change.

    We recommend that you follow John Kotter’s well-proven 8-step process for Change Management – so here’s how it works:

    1. Create the Urgency

    Ensure that everyone understands the need to change – “thrive or die”. Face the facts, use outsiders, communicate the pain and the gain. Challenge previous ways.

    2. Develop the Guiding Coalition

    Get together a small team (if you can, use Belbin Team Roles to set up the team, troubleshoot problems and overcome blind spots)
    Establish a clear leader, roles and responsibilities
    Agree how key decisions will be made – unilateral or consensus.
    Set the disciplines – regular, short, sharp review sessions; timely (if rough) measurement and feedback

    3. Develop a vision and strategy

    Provide a realistic assessment of the future – this might be a 3-month or 12-month future, rather than five or ten years. In situations of great volatility create three scenarios:

    a) Best Guess
    b) Optimistic / best case / opportunity, as appropriate
    c) Worst case

    Decide which objectives and approaches can be changed or sacrificed in the short term and which must be adhered to at all costs. For example, you might decide to sacrifice margins to generate cash, but want to stick to the Company Values.

    Be clear about must-have’s, should-have’s and could-have’s – list them.
    Which cows really are sacred? Really, really?

    4. Communicate the change vision

    It might be negative, it might be uncertain, so display commitment and belief
    Emphasise experience, strengths, resilience, determination
    Negotiate with the stakeholders – get their “buy in”, share the pain

    5. Empower broad-based action

    Challenge previous ways
    Give people the freedom to act
    Rely on guidelines, principles, values, rather than rules and regulations
    Use the multiplier / accelerator effect – involve everyone as early as possible
    Ruthlessly cut out the dead wood
    Use Lean principles – focus on those things that add value for the customer and reduce or eliminate those that don’t
    Streamline your core processes – engage people in Rapid Improvement Events

    6. Generate Quick Wins

    Get together each team and facilitate a short, sharp improvement ideas session
    Brainstorm improvement actions then use the “Ease and Effect Grid” to prioritise them – do first those activities that are easiest and have the biggest impact
    Create an Action Plan
    People need to see at least some results as soon as possible – do it, publicise it
    Monitor progress using traffic lights (Red=pending; Orange=In Progress; Green=Completed)

    7. Consolidate gains and build momentum

    Success breeds success
    Recognise and reward those who adopt successful new approaches

    8. Anchor the new approaches

    Firm up on successful new ways
    Establish “One Best Way”
    Maintain discipline
    Regularly repeat the “Plan – Do – Review – Improve” cycle
    Keep it going

    Andrew Nicholson is Managing Director of Nicholson Consultancy Limited, specialising in Business Strategy and Lean Thinking. If you wish to discuss this approach further, contact Glen Feechan at FC Procurement Ltd on 0845 6439693 or Andrew directly.

    Efficient Practices With Excel Templates

    by David Toohey of The Accountants Circle
    This is something I'm still often surprised at. As an accountant advising a client, wouldn't you often recommend introducing or improving processes, minimising costs, introducing quality control and all those other simple yet wonderful bits of advice that can be rattled off for most businesses?

    Why is it so many of us don't consider this advice ourselves? This is why I am a little surprised. We clearly understand that operating a more profitable business includes improving efficiency and reducing costs yet we are spending... let me rephrase that - wasting - wasting lots of time on Excel spreadsheets and formula in a highly inefficient manner.

    There are a few options to consider, all of these can reduce your costs and enable your spreadsheets to be used much more efficiently than they probably are now.

    Starting with specific solutions, these can be outsourced to specialists such as
    Glen Feechan, to address your needs in a formal planned manner and developing a spreadsheet that will reduce your future time needed on the task, minimising or removing errors, and improving the output and information made available.

    The next option can be training to develop such methods yourself, and can prove quite advantageous. When you look at the ongoing time wasted and possible errors the costs of these can be quickly and greatly reduced by learning and understanding the principles behind efficient spreadsheet practices.

    The third obvious option is the use of existing templates. This is something I'll discuss in a little more depth as it's the area I'm involved in. Many accountants use existing Excel templates. A lot of templates are freely available and usually with a little tweaking and extra development yourself, are up to small jobs you require.

    Again the issue we are discussing here is efficient practises with templates, so if you do grab a template the efficiency can be reduced by your changes if you're not making the spreadsheet do the work for you.

    One thing we consider with Excel templates and their efficiency is the 'rules' applied to reduce errors. From the very beginning, formula should minimise errors where possible. Include rounding, allow for picking up empty cells... whatever it is the formula deals with should be considered and covered. Variables should also be removed from within formula. Anything that means formula needs to be changed, is usually best included as a separate input.

    Those are some of the simple ways for your spreadsheets to starting working more efficiently for you. Most and possibly all processes you do routinely in your spreadsheet work can be automated. Excel's real power is rarely used by most, but most of us are using Excel and continuing to use it poorly.

    So when might a general template be the option for you?

    Almost always, a template will suffice for performing standard calculations and producing schedules such as for loans, hire purchases, tax calculations and so on. There are also some templates available, such as our
    Financial Management Reporting System or Budget and Projection System that are also flexible enough to use for most small-medium sized client needs.

    Take for example our Financial Management Reporting System, used by several accountancy practices for producing consistent and professional client management accounts. For those needing management accounts presented in a specific manner or including departmental reporting, a general template such as this may not be the solution for you so a tailored solution or training yourself or your team in creating efficient and effective templates for your needs are possibly the better options to consider.

    Though if your needs are more general and the management accounts you produce regularly are like those of most small-medium sized businesses, then an efficient and flexible template such as this could well be an option to consider and let's face it, a more profitable way of producing reports.

    This goes for any work you do in Excel, not just the management accounts. The ways you can save time, time that can be better spent with clients, growing your business and providing your services are much the same with most templates.

    Now taking a look at how this template reduces your time spent. Regular tasks such as switching to another period become a simply click, then select the month/quarter and the rest is done. Also switching the format from monthly reports to quarterly reports (eg. for monthly reports throughout the year, and a quarterly set for the year at the end) is just a click too. This is done just be investing time once only into how Excel deals with the input figures, a simple trial balance and then automates the changes depending on your chosen settings. All you need to do is provide the information of the actual changes, and with minimal effort.

    And having flexible templates? We've done it with this one by separating the management accounts reporting from the trial balance. By distinguishing differences you can set the reports to show how you like, regardless of the chart of accounts as the two are kept separate. By keeping in mind how an Excel template is to be used and the different ways you might like it to work, you can develop it to make changes quickly.

    All of this does take time, but when looking at the repetitive work we do and adding up the time that's really wasted in manually adjusting templates, formula, dates and more on a regular basis - it's really not long before the time being saved far outweighs the time invested in efficient templates.

    This is a core aspect of how we operate at The Accountants Circle. We develop flexible templates for the needs of practice to ensure more profitable delivery of consistent and accurate services. Most practices have similar template needs, as much the same services are provided from practice to practice. With small membership contributions combined, we have a development team to provide and adapt templates to work efficiently for your general accounting and bookkeeping needs. Another option to help you work more efficiently, and more profitably.

    David Toohey is a part of The Accountants Circle's team, supporting UK accountants and bookkeepers. David can also be reached at

    Tuesday 9 September 2008

    Not Just Numbers e-zine launched

    Finally the first issue of Not Just Numbers - the ezine for Finance Directors who know it's not just about the numbers, has been emailed out to the initial subscribers.

    It contains articles on automating your management accounts preparation, funding growth through a recession and email security.

    Sign up to receive your free copy at

    Advanced Management Reporting in Microsoft Excel

    If you are based in the North East of England (or could get there on the 21st October), you may be interested in the workshop described below. I rarely do this but it is very poular when I do.

    "Thanks so much for running [the course] for our company recently.
    It has certainly increased my own productivity. I now have no need to rely upon the rather unfriendly reporting abilities of our [accounting and MRP package] as I can extract the data and manipulate it in Excel much more efficiently.
    The others that attended the course are also using it almost daily and training their colleagues.
    The few people who were versed in the supplementary reporting package purchased alongside our current accounting and MRP package have now virtually abandoned it in favour of the superior and simpler functionality offered by Excel. Had I attended the course prior to purchasing the software in 2001 I certainly would not have bought the reporting package or any of the associated and costly training days.”
    Ian Batchelor, Finance Director, Analox Group Ltd

    Advanced Management Reporting in Microsoft Excel®

    One-Day Intensive Workshop

    with Glen Feechan

    21st October 2008

    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.

    Glen Feechan is a chartered accountant and expert in this field. This one-day workshop is a rare opportunity to learn his 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

  • To find out more, call 0845 6439693 or email Alternatively, please complete and return the BOOKING FORM.

    Sunday 7 September 2008

    Not Just Numbers e-zine coming soon

    The first issue of the Not Just Numbers e-zine is now only days away, and should be launched within the next week.

    Sign-up on this blog or at and also receive your free topical report, "10 Tips for dealing with hard times", while you wait.

    Monday 1 September 2008

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

    Using only Microsoft Excel and pretty much any accounting package on the market, I have rarely found a company that could not be set up to complete their management accounts preparation (from trial balance) in seconds. However, almost every company I come across is taking hours, if not days or weeks - every month - to do this job. In addition, when the process is automated, very often they discover errors in the accounts prepared under their previous laborious method. Below I will give some simple tips to achieve this in your business. The rewards are huge, as the focus switches from grinding out the numbers to understanding and interpreting them, thereby adding real value to the business.

    Key to achieving this is understanding that once you can produce a trial balance from your accounting package, the rest of the preparation can (and should) then be automated. You have all the numbers – you are doing the same things with them every month. This is what spreadsheets are for – automating the analysis and presentation of numbers.

    The instructions below are intended to provide someone with a good working knowledge of Excel with enough information to complete the setup, alternatively please contact me if you would like to discuss getting some help (it rarely involves more than two or three days consultancy to set it all up from scratch).

    Importing the trial balance

    First of all you will need to pull the trial balance into Excel. Having done this once it can be refreshed (with one click) every month and/or every time you make a change to the data in the accounts package as a result of errors spotted when you see the information in its final format. Every modern accounts package I am aware of has odbc links into the data. Excel can import data from the tables in the accounts package into Excel using Microsoft Query (this comes on the Excel disk and you may already have it installed – if not, you will be prompted to put the disk in when you try to “Import External Data”.

    Cross-reference table

    Once you have the trial balance in Excel you need to populate your management accounts with this data. I know many companies that have imported the trial balance and then tried to automate this step directly and got into difficulties when there are changes to the trial balance, such as new or deleted accounts codes. The key to doing this is to introduce a step in between that is a lookup table between your nominal ledger codes and the final management accounts. Give each line in your final management accounts layout a code and then copy your nominal ledger codes (from the imported trial balance) onto a separate worksheet in the same spreadsheet. You then need to put the management accounts code that you want the nominal ledger code to appear in next to each nominal ledger code in this list. You can then use a look-up formula to pull the correct management accounts code alongside each row in the trial balance.

    Analysing the data

    Once this step is complete, you can use a Pivot Table to analyse the trial balance by management accounts code rather than by nominal ledger code. This Pivot Table will contain all of the numbers that will go in your final accounts. If there are any new nominal ledger codes, there will be a line in the pivot table with a management accounts code of #NA, as the nominal ledger code will not be found in the lookup table and therefore the lookup formula will have returned this error for the lines containing the new codes. Simply double-click on the total of #NA to get a list of the new codes. These can then be pasted to the bottom of the cross-reference table and given a management accounts code. One simple click to refresh the Pivot Table and these codes are distributed into their rightful homes.


    If you already use Excel to present your management accounts then you can copy the existing layout into this spreadsheet (on a separate sheet). You will need to insert a column to the left of the management accounts to enter the management accounts code for each line. You can then use the GETPIVOTDATA formula to look up the financial value for each code and pull it into the accounts. Typically you can copy the same formula for each line. I also tend to insert a second column to the left of the accounts which I use to enter a 1 or –1 against each code. The result can then be multiplied by this column to allow you to use the same formula even when you want to reverse the sign (for sales and cost of sales for example).

    Two clicks

    Every month you can now complete the management accounts (from trial balance) in two clicks – one to refresh the data from the accounts package, one to refresh the pivot table. This also allows you to view the final layout very early in the process so that you can use this to review for accruals and prepayments, etc., make your changes and then refresh again.

    I hope this has given you some ideas on how to free you and your team from crunching numbers to enable you to provide valuable financial insights to the rest of the board.

    If you wish to discuss this further, please give me a call on 0845 6439693 or email

    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.