In the early stage of business you simply can’t afford to compromise your security. Here, we look at the measures to take to protect yourself.
Each year, crime costs businesses billions of pounds. Vandalism, shoplifting, burglary, and employee theft are all just a portion of the damages that businesses suffer. Since it cannot be guaranteed that the business will never suffer from some sort of criminal loss, having some additional security features in place will help to protect and minimise the risk of loss or damage. For example, investing in a high security locks system will help secure access to the business and have better monitoring of the whereabouts of your stuff.
Security tips for buildings and property
- Install good lighting around the building and in the parking lot. Eliminating hiding spots is a great way to prevent anyone from sneaking around the area.
- Interior lights on a timer can keep criminals guessing as to whether or not there is anyone in the building, which will likely work as a deterrent.
- Keep window shades down, eliminating the amount of valuable items visible from the outside, and keep these valuable items such as purses and backpacks away. Also, don’t leave them unattended (opt to keep them in the trunk of your vehicle if they are not needed during the workday).
- Lights that are motion-activated near the entry of the business will deter thieves and provide a better lighting for employees coming or doing when the sun is down.
- A closed-circuit camera will monitor all people entering and exiting the building, along with the time and date of the occurrence.
- Keep in mind that community efforts are also a great way to take charge of business security; a few businesses can come together and form a neighbourhood watch group to alert each other about any criminal or suspicious activity.
Proper management
- Keep money counting out of the presence of anyone that isn’t part of the company, even a spouse or relative of an employee. They have no business around the funds.
- Make deposits during business hours and make them often. This limits the amount of cash on hand at any given moment. Two people should sign checks as well.
- Have more than one person supervise the payroll process.
- A keyless entry system can limit the amount of individuals that can enter the facility, especially if the turnover rate is high.
- Encourage employees to speak up if they have seen some suspicious activity.
- Implement a system for locking doors and turning security systems on at the end of the day.
- Keep a record of all highly valuable office equipment including serial numbers.
- All new employees should have background checks performed.
- If something were to happen, be sure that there is an area in the office where customers and employees can take refuge or escape from a dangerous situation.
- Write a security policy and enter it into the employee handbook. This should include: areas with limited access, visitor restrictions, a policy for removal of company property, and a plan with steps to take in the event that a violent or threatening incident occurs.
No matter how small the measures you decide to take to secure your business are, they will definitely prove to pay off in the long run. Don’t compromise on security and consult specialists if necessary. Keep in mind that some security services provide free consultations for businesses, so use this opportunity to make your business a safer place to be in, both for yourself and for your employees.
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Despite rising rates of educational attainment, employers continue to struggle to hire thanks to troubling skills shortages, a study finds.
In the private sector this issue is most prevalent in the tech space, according to a study by jobsite Indeed.
Shortages in Java skills – the most widely used programming language – are particularly notable, with businesses attempting to overcome the deficit by drastically raising wages.
The average role for skilled Java workers offers a salary of approximately £60,000, 130 per cent higher than the average salary of open positions across all industries, which stands at £26,600.
Despite the huge salary boost, UK enterprises are still struggling to entice candidates who hold the technological skills required for their roles. Worldwide, the share of job postings calling for Java skills is five times greater than the share of searches for this skill.The report identifies that aside from salaries, candidates within these industries prioritise flexible and remote working. In the UK, job searchers within the healthcare and computing industry are most likely to look for jobs using specific criteria including ‘remote’, ‘work from home’, and ‘telecommute’.
Indeed’s chief economist Tara Sinclair says, ‘Rather than focusing on salaries alone as the cure-all for attracting employees, organisations would be wise to look closely at the wider expectations and demands of their candidates, if they are to draw in the best talent.
‘That said, while increasing the flexibility of the job offer can provide an effective short term solution to draw in the best candidates, ultimately even these measures won’t resolve systemic talent gaps that have a significant impact on the long term health of the business.’
With skills gaps growing, despite rising tertiary education attainment, the report points to the need for more targeted education and training for employees, if corporations are to overcome the skills gap in the long term, Sinclair says.
‘Employers need to reconsider the way they think about hiring. If candidates with the right skills and qualifications are lacking, simply throwing money at potential employees is not a long term solution.’
Money should be spent on better training schemes and qualification opportunities for employees, Sinclair adds.
‘With this strategy in place, enterprises can embrace candidates who are the right fit for the job in terms of culture, experience and willingness to learn – offering them the opportunity to gain specific qualifications on the job.
‘In a tight labour market, addressing barriers to education and self-advancement is a more valuable investment than outbidding competitors.’
Read More by Ben Lobel
Managers of UK small businesses have identified the new legal requirement to automatically enrol staff into a qualifying pension scheme as one of the biggest business challenges facing them in 2016.
Some 150 managers of small and medium-sized enterprises (SMEs) were asked by Exemplas what the biggest challenges are that they are likely to face in 2016, in the areas of business regulations, employment law, skills, business finance, digitisation, business taxation and business development.
The challenges most frequently raised within the research are finding employees with appropriate skills, lack of finance/funding and the time and costs of setting up pension schemes for employees, with the latter appearing to be of rising concern.
Out of those who identified a business challenge, one in five considered the time and costs associated with the auto-enrolment pension scheme to have potential for a big impact on them, with respondents even saying they feel bullied into it.
Specific comments include, ‘I really do not know how I’m going to put money in the pot to pay for it.’
Another manager comments, ‘We already have pensions here but now I’m being forced to give them to my staff by law; they are bullying you into it.’
Finding employees with appropriate skills, particularly to fill more junior roles, is also a major challenge for 2016 by nearly half (45 per cent) of the respondents who were able to identify one. Managers complain that particularly in specific industries ‘in terms of technical skills…those with the skills are either retiring or will not leave their current company’.
Other issues facing SMEs in the New Year include lack of access to finance and funding (32 per cent), finding new business and entering new markets (32 per cent), challenges and costs of employee rights and restrictions (26 per cent), the cost of training and finding the appropriate trainers (24 per cent), and keeping up with industry specific regulations (21 per cent).
Jill Barnes, chief executive of Exemplas says, ‘The coming year is likely to prove a challenge for SMEs in many ways, from the perceived skills shortage among young recruits, to the ability to diversify and enter new markets, and also keep up with ever-changing industry specific regulations.’
She adds that the government’s Comprehensive Spending Review has impacted funding provision for support and, with the closure of the Business Growth Service in particular, SMEs are struggling to access the support they need to grow.
‘One of the biggest challenges identified was the impact that the legal requirement for an auto-enrolment pension scheme will have on their already stretched time and finances, Barnes says.
‘In particular, smaller companies we surveyed commented that they simply do not know where the money will come from to fund this scheme.’
We have a way to save you time and cost with your auto enrolment, please click here for more information.
Read more by Ben Lobel
UK finance chiefs, male and female, see increasing opportunities for women to progress in the profession
FINANCE CHIEFS believe opportunities are much greater for women to progress through finance than ten years ago.
Two-thirds of UK finance chiefs surveyed by Robert Half said there were more opportunities for women to advance through the accounting and finance ranks than previously.
Nine in ten believed that this increased opportunities for women to secure executive board positions, a figure brought into focus as Lord Davies has revealed that there are no more all-male FTSE 100 boards. In 2011, women only accounted for 12.5% of board members.
Lord Davies’ final report on gender equality includes a new target of all FTSE 350 boards having 33% female representation by 2020 – around 350 more women in top positions.
Female finance chiefs are more positive than male FDs about the opportunities: 67% of women are positive about female finance career paths, compared to 61% of men.
Phil Sheridan, MD of Robert Half UK, said: “Creating a diverse talent pool should be at the top of the agenda for businesses, alongside attracting and retaining skilled professionals.
“Providing more career opportunities for women within finance will see a stronger talent network for business to draw upon. This will not only improve prospects for women, but for the economy as a whole.”
Despite the positivity, other stats show there is still plenty of work to do.
The FRC’s latest Key Facts and Trends Survey shows that the total proportion of female members and students in the accountancy profession remained broadly constant between 2010 and 2014 at around 50%. However, the percentage of female qualified members is 36%, having crept up from 34% during that period. This shows that men are still having longer careers in the profession.
Written By Kevin Reed
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Cost of compliance is becoming business’s top complaint, British Chamber of Commerce tells ministers
THE BRITISH CHAMBER OF COMMERCE has written to ministers requesting new measures are included in next week’s Autumn Statement to cut the cost of tax administration.
In an open letter to cabinet office minister Oliver Letwin and business secretary Sajid Javid, the business group said the cost of complying with tax obligations had become one of companies’ principal regulatory complaints.
“The of complying with the UK’s ever-more complicated tax code has rocketed up the list of business complaints in recent years,” British Chamber of Commerce executive director of policy Adam Marshall said. “Ministers need to put a brake on the number of changes to tax administration and compliance rules, much as they have done with other forms of regulation in recent years.
“HMRC is under a lot of scrutiny from business and individual taxpayers at the moment, and rightly so. By taking steps to reduce the number and frequency of changes to tax rules, the government would at a stroke make a big improvement to the prospects for business.”
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Written by Calum Fuller
The quality of financial reporting has improved but concerns about the creep of seemingly unproductive and irrelevant content remain, writes Veronica Poole.
TO many, it seems that the pace of change in today’s corporate reporting world never lets up. This may be true but real progress has accompanied the ever-increasing requirements and expectations of annual reports in recent years. Deloitte has been undertaking surveys of UK listed companies’ annual reports for about 20 years and the reports we see now are very different to those that were written when we started. For one thing, they’re about three times as long, averaging 135 pages.
Part of this change has been brought about by demands for more information from investors, the primary user of a company’s annual report. Sometimes it can seem like investors have an insatiable appetite for more and more information and the task of preparing an annual report is no mean feat.
According to a survey of UK investment professionals by the CFA Society, the annual report is the most popular source of information for financial analysis. Most respondents to that survey agreed the quality of financial reporting has improved over the past decade. But a recurring concern about the “creep of seemingly unproductive and irrelevant content” in financial reports was revealed, as was a feeling that important information was omitted.
Fool’s errand
Mechanisms to collate and communicate such concerns have been strengthened in recent years, with institutions such as the Financial Reporting Council’s (FRC) financial reporting lab liaising with the investor community to develop an understanding of what they want to see in reports. To an extent, materiality is in the eye of the beholder and inevitably there will always be room for improvement and requests for information that hasn’t been provided. But there is an unmistakable appetite in the preparer community to develop useful, and not just compliant, annual reports.
For example, this year almost half of the companies in the survey provided net debt reconciliations or similar and 40% provided insight on the level of distributable reserves despite there being no legal requirement to do so. Both these pieces of information have been cited as useful by investors.
Admittedly, there is a spectrum, with some preparers still aiming to achieve little more than a technically compliant report. This tends to be more of an issue in smaller companies, which have fewer resources to devote to report preparation and, in some cases, believe that investors pay little attention to their reports. The FRC has repeatedly sought to encourage smaller quoted companies to improve their reporting in recent years, acknowledging that generally they achieve a good standard. However, the areas where they fall short tend to be areas that investors are particularly interested in. For example, talking about the good and the bad in the strategic report.
Endeavouring to provide all the information that anyone might ever find useful is a fool’s errand, and this is where materiality and the FRC’s umbrella initiative of clear and concise reporting comes in. Regulators have been promoting the idea of cutting immaterial disclosures throughout the report for some time now, but preparers tend to be cautious and would often rather not have to justify omissions. Interestingly, this year’s survey saw 16% of companies undertaking pre-emptive strikes, explicitly stating that certain disclosures had been omitted on the grounds of immateriality.
One bank’s annual report this year stated that, among other items, it had rationalised its notes on lease commitments and staff costs and removed a separate note on property, plant and equipment, incorporating any relevant information into other notes. Another company decided not to provide all the disclosures required for some of their unquoted equity investments as they only amounted to £8m out of £4bn total assets.
The result of these efforts? Well, annual reports still got longer this year but, interestingly, financial statements dropped in length by two pages – it was the narrative that was driving the increase, perhaps because preparers find it more difficult to apply the concept of materiality to words, rather than numbers?
Linkage
Another challenge with all this information is linking it together and avoiding the “silo” treatment. When we say “linkage”, we’re talking about more than a table of contents and some cross-references at the bottom of the business model telling a reader to “see page 20 for key performance indicators”. We’re talking about true integration of these different aspects of the report – this isn’t something that you’ll achieve by working your way through a checklist.
Disappointingly, only 10% of the companies we looked at achieved what we deemed to be “comprehensive” linkage, pulling together all the different strands of the report. A good start in demonstrating this linkage is to provide a table, mapping strategies and KPIs to the company’s different objectives, and showing how the principal risks and uncertainties threaten the company’s achievement of those objectives.
We also saw two-thirds of companies include directors’ remuneration schemes with performance measures that include at least some of their KPIs, demonstrating clearer alignment of directors’ pay with company performance. Consistency between front and back is vital too – if a company pulls something out in its P&L that is “exceptional”, one would expect to see that discussed with suitable prominence in the front end. Indeed, non-GAAP measures’ popularity has continued, with 81% of companies using them in the summary section of their reports and 54% presenting them more prominently than the associated GAAP measures. This remains an area of focus for regulators, with ESMA having recently published related guidance.
One of the new challenges for reporting this year is the requirement for a statement on longer-term viability. The viability statement requires directors to state that they have a “reasonable” expectation that the company will be able to continue, and meet its liabilities for a period they have specified. We’ve only seen a handful of companies adopting this requirement early. Again, there’s a balance to be struck between investors wanting as much assurance as possible and directors feeling nervous about going too far.
The question on everyone’s lips tends to be what length of time they should consider. It is expected, except in rare circumstances, that the period will significantly exceed 12 months. We’ve seen that most companies going early tend to look at three to five years, reflecting their medium-term plans, but it does depend on factors such as the financing arrangements in place, the maturity of the company and the nature of the industry. Including the statement in the strategic report or the directors’ report affords directors the safe-harbour provisions of the Companies Act.
Risk reporting
There’s also new recommendations for risk reporting, which is obviously of very real interest to investors. The latest guidance calls for insight on what risks are new in the year, what their potential impact would be, and what is the likelihood of their occurrence. About one-third of companies are currently showing changes to risks in the year, typically through the use of up and down arrows, but not many have been giving insight on likelihood and impact. This means that most companies will need to enhance their disclosures in this area this year.
In terms of what the future holds, the journey will continue – clear and concise is the name of the game at the moment and it seems that there genuinely are collaborative efforts between investors, preparers, regulators and auditors to strengthen and improve the UK corporate reporting scene.
Of particular interest here is integrated reporting, which is an international initiative, but one that resonates with the existing UK reporting framework. Some of the ideas it contains are taking hold in the UK: seven companies surveyed made explicit reference to integrated reporting. More than half talked about relationships or resources used as inputs or outputs in business model descriptions – termed “capitals” under the integrated reporting framework. Of course, a truly integrated report is an output of integrated thinking; it flows naturally from the integration of business processes and behaviours. Further embracing these concepts will help ensure that the UK remains one of the most advanced corporate reporting regimes in the world. ■
Veronica Poole is Deloitte’s Global IFRS Leader and UK National Head of Accounting and Corporate Reporting
Read more by Veronica Poole, Deloitte here.
ACCOUNTING SOFTWARE company Sage’s annual results to the year end 30 September 2015 has revealed organic revenue growth of 6%, reaching £1.4bn – up from 5% the year before.
Organic recurring revenue by rose 9%, up from 7% in 2014, with software subscription the primary driver.
The company launched its flagship product Sage One in Brazil, Malaysia and Australia over the course of the year, with further global expansion planned.
Significant partnerships were also confirmed with Salesforce, Microsoft, PwC, Deloitte, Barclays, Telefonica, Google, Constant Contact, Neat and Costco.
Sage group CEO Stephen Kelly said: “Our aim is to support businesses by providing the technology and ecosystem that they need to be successful and to grow. This is one of many milestones that helps us to connect our customers to accountants and partners with real time and intuitive information about their business.
“Sage One is central to our strategy of addressing the white space opportunity of small and medium businesses which are not using any means of accounting software currently.”
Read more by Calum Fuller
Britain’s SMEs are confident of ending the year in a growth phase, although certainty is beginning to wane from the peak recorded in Q2 this year, research suggests.
The number of small and medium-sized enterprises (SMEs) looking to grow their business has increased from last year (40 per cent compared with 36 per cent in Q4 2014).
However, this is a 3 per cent decrease on the 43 per cent of businesses that said they would aspire to grow in Q2 this year, according to a study by Hitachi Capital.
By sector, some industries have been hit harder than others, with the research indicating sectors such as construction, manufacturing and agriculture lacking in confidence this quarter and are cautious.
The research from Hitachi Capital’s quarterly British Business Barometer asked 1,021 small businesses in the UK what their business outlook was for the next three months and how these compared with 12 months ago in Q4 2014.
The number of businesses looking to significantly expand in the next three months remains low again this quarter, although there is a slight increase on 12 months ago (4 per cent Q4 2014 vs 6 per cent Q4 2015).
The number of SMEs saying overall growth is on the agenda (whether through significant and/or modest organic growth) has improved since 12 months ago (35 per cent in Q4 2014 vs. 40 per cent in Q4 2015).
There has been a drop in the number of SMEs content with just staying the same – 46 per cent compared to 48 per cent in Q4 2014.
Concerns among the agricultural sector prevail for another quarter, with this sector the least optimistic for growth than any other sector.
Outlook within the construction sector is less optimistic this quarter, with the number of businesses saying they will grow down 5 per cent from 12 months ago (33 per cent Q4 2015 vs 38 per cent in Q4 2014).
Those looking to just stay the same has also increased significantly from 12 months ago, suggesting turmoil within the sector is changing their outlook from broadly positive to playing it safe and keeping the business steady (46 per cent in Q4 2015 vs 52 per cent in Q4 2014).
Despite continuing pressure on the manufacturing sector and a weak month for the industry in September, optimism among the sector is still stronger than it was 12 months ago, with a 5 per cent increase in growth compared with 12 months ago (28 per cent in Q4 2014 vs 33 per cent Q4 2015).
Significant expansion is not high on the agenda and has dropped considerably by 4 per cent in Q4 2015 compared with 7 per cent in Q4 2014.
Gavin Wraith-Carter, general manager at Hitachi Capital Business Finance says that, whatever the economy holds for us all in the next three to five years, one thing is evident; there is confidence in the SME market.
‘Although confidence is not on a par with Q2 this year, problems in the EU, the steel industry and agricultural sector in particular, will have changed the economic landscape for a significant number of Britain’s small businesses.
This quarter’s more cautious attitude to growth may be a sign businesses are taking a ‘wait and see’ approach and are striving to achieve steady rather than ambitious growth.’
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Company owners are used to missing out on festive moments, research finds.
Despite being a national holiday, nearly one in five (18 per cent) SME decisionmakers have had to go into work on Christmas Day, and nearly a third (32 per cent) have sacrificed the festivities to check and send work emails, according to a study by Zurich.
The insurer’s latest data has shown that small and medium-sized enterprises (SMEs) are missing out on a number of festive moments. Nearly one in ten (9 per cent) have missed their child’s nativity play and 9 per cent have also missed putting the Christmas tree up.
Another milestone in the festive period for many professionals across the country is the work Christmas party, but one in ten (13 per cent) have missed this event.
Not only have SME decision makers had to work over the Christmas period, they’re also losing out on annual leave. Data from Zurich’s SME Risk Index reveals one in ten (14 per cent) decision makers have not taken any annual leave this year and in addition, almost one in five (18 per cent) have not had more than ten days off this year.
Jason Eatock, Head of SME at Zurich says, ‘It will come as no surprise to SMEs that despite commonly held views about the lifestyle benefits of working for yourself, the reality can be very different.
‘Missing big events such as your child’s nativity play is a high price to pay and shows the pressure many SMEs are under.
Eatock adds that as we look forward to taking some rest over the Christmas season, it seems current economic and political concerns are driving many of our small business owners to carry on working.
‘We hope that everyone gets a chance to enjoy the holidays and as ever we offer our support to make their businesses run as smoothly as possible during the festive season.’
Read more written by Ben Lobel
The average UK annual report reaches 135 pages as growth in narrative offsets efforts to streamline financial statements
ANNUAL reports of UK listed companies have grown in length for a sixth consecutive year, according to new research from Deloitte.
This year the average UK annual report reached 135 pages, up three pages on last year – despite companies making positive inroads in ‘clear and concise’ financial statements which dropped by an average of two pages.
Front-end narrative reporting is driving the overall page increase, with non-GAAP alternative performance measures taking greater prominence.
“There is a growing trend for companies to harness their annual report as a channel in conveying their story around strategy, culture and external impact. This storytelling is a key component of the strategic report and one companies are actively embracing,” said Veronica Poole, partner and head of corporate reporting at Deloitte.
According to Poole, 7% of the companies have either embraced integrated reporting, or are en route to do so.
“This builds on the efforts of over half the companies who are now talking about a wider range of inputs and outputs as part of their business model in a move towards integrated thinking,” she said. “The use of alternative performance measures continues to be an essential part of telling a company’s story.”
The FRC has previously voiced concern around over-prominent presentation of non-GAAP measures. Poole said worryingly 54% of companies gave more prominence to these adjusted measures than to the statutory numbers.
Also, 42% of those companies adopting alternative performance measures as key performance indicators did not reconcile these clearly to their financial statements.
Written by Richard Crump.
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