12 Oct 2015 |Off Balance
" ...WE WANT to work with our suppliers to get back to innovating on behalf of our customers and these changes will make is easier for us to do that."
These are comments made by Tesco chief Dave Lewis at the latest IDG retail conference, and a big part of this ‘innovation' is to tell its smallest suppliers that they will receive payments within 14 days.
Off Balance is fascinated at how Tesco will achieve this, what with it having such a bad reputation in how it treats suppliers. In June, the Groceries Code Adjudicator said that 30% of suppliers it spoke to said Tesco rarely complied with the Supply Code of Practice. Only Iceland scored lower.
OB was also reminded of the last Competition Commission (as it was then) back in 2006, when sister title Accountancy Age and credit agency Graydon revealed that only 67% of invoices below £5,000 had been paid on time. Then-FD Andrew Higginson said that "we have electronic payments to suppliers so don't see that as the case...".
Can Tesco finally get its house in order? Better late than never...
26 Aug 2015 |Off Balance
OFF BALANCE was intrigued to see another big merger in the gambling sector announced today, with Betfair and Paddy Power entering into that ‘mutual appreciation society' phase in front of investors and the markets.
Of course, towns aren't big enough to accommodate both boards. And some people have to move on.
Paddy Power CFO Cormac McCarthy is conspicuously absent from the businesses' statement to the market about its future plans and board structure. Alex Gersh, Betfair CFO, is announced as the CFO if the two companies merge.
While Cormac won't have the top role, he can console himself in being part of what OB believes are the best set of executive portraits. As you can see (below), the caricatures look awesome, certainly better than the efforts you see in tourist destinations. And he's even holding an abacus!
Though not averse to a bit of wild cheek itself (see Betfair's Twitter accounts), it will be interesting to see how the new group will manage both brands, and how it deals with culture at staff level.
One thing's for sure, if Off Balance was Alex Gersh, we'd be lining up a new portrait as soon as taking on the new finance role.
18 Aug 2015 |Off Balance
OMG. Those clever number-crunchers at the Bank of England set up an experiment to see if Twitter could help predict a run on a bank.
Concerns had been raised in the lead-up to last year's Scottish independence referendum, which Governor Mark Carney had warned "could raise financial stability issues".
So they wrote a programme to analyse tweets (there's 500 million of them every day). Suddenly, on 15 September, there was a spike in the number of tweets containing the words ‘run' and ‘RBs'. Were queues of anxious depositors about to start forming outside the Royal Bank of Scotland?
Nope - it was tweets about the Minnesota Vikings game. ‘RBs' referred to ‘Running Backs', not ‘RBS'. "We learnt a lot about social media analysis," says the slightly embarrassed Bank, "and a little about American Football."
ROTFL, as they probably don't say at the Bank of England.
07 Jul 2015 |Off Balance
"THE GREEK DEBT CRISIS DEEPENS" or some variant thereof is something OB has become wearily used to reading over the past five years, and even more so over the last couple of weeks.
So imagine our relief when, at last, a modicum of good news about the beleaguered Mediterranean state emerged as it teeters on the edge of leaving the eurozone.
Yes, a well-meaning man by the name of Thom Feeney is trying to crowdfund another bailout for Greece.
29-year-old Feeney, who works in a shoe shop in London, is seeking a rather ambitious €1.6bn (£1.14bn) by the end of today, and has so far attracted €1.9m from donors.
Anyone donating €3 can expect a postcard from Greece of Alexis Tsipras, Feeney promises, while a donation of €6 will get you a feta and olive salad. €10 will gain you a "small bottle" of Ouzo, while €25 will buy you a bottle of Greek wine. (How much for the whole country? Ed)
It's fair to assume that, unless the IMF has a massive change of heart and chooses to use IndieGoGo for the first time, then Feeney's efforts will be in vain.
Still, it's not for the want of trying.
"All this dithering over Greece is getting boring," he declares on his fundraising page. "European ministers flexing their muscles and posturing over whether they can help the Greek people or not. Why don't we the people just sort it instead?
"The European Union is home to 503 million people. If we all just chip in a few Euro then we can get Greece sorted and hopefully get them back on track soon. Easy."
11 Jun 2015 |Richard Crump
'BASH the banks but just not too much, particularly if they threaten to up sticks and shift their tax base to friendlier climes' - has been the reaction to HSBC once again considering whether to move its headquarters from the UK.
Earlier this week the bank - which has been engulfed by scandal and controversy over its historic tax practices - said it will review where it is domiciled, raising the prospect that it could end its 22-year stay in Britain and return to its historic home of Hong Kong.
And in Margaret Hodge, the former chair of the Public Accounts Committee and one of the bank's fiercest critics, HSBC has found an unlikely supporter. Speaking to Financial Director at the Chartered Institute of Internal Auditors annual dinner at London Guildhall last night, Hodge, who once branded HSBC bosses as 'incompetent and naïve' over the bank's tax affairs, said "of course they [HSBC] should stay, but they should act properly".
Among HSBC's chief gripes is the cost of the UK banking levy, effectively a tax on balance sheet assets. The bank is set to pay around £1.5bn in 2015. If HSBC and its ilk are to remain in the UK with their very substantial tax contributions, the chancellor will need to consider a reform of the bank levy in order to reduce its burden on the foreign operations of UK banks.
The taxman has also come in for its fair share of flak from Hodge during her tenure chairing the PAC. But rather than subject HMRC to an independent review of its resources, powers, culture, governance and modus operandi as called for by Paul Aplin, chair of the ICAEW' Tax Faculty Technical Committee, Hodge added that the taxman should be "better and properly resourced".
05 May 2015 |Off Balance
WHILE NOT the most publicity-loving of finance directors, David Keens hasn't been afraid to pull together the numbers of one of the high streets few successes of modern times - namely as FD of NEXT.
Although in the prime of his life, Off Balance did wonder whether he would slink off to tend to the garden, having put in a 23-year stint with NEXT and senior roles for the preceding ten years.
But the understated number-cruncher has come back with a bang, scooping two senior non-exec roles within a space of days. This just months after picking up the Lifetime Achievement Award at the Business Finance Awards.
Firstly he was named audit chair at Sainsbury's, where he will work with other uber-finance heads such as chairman David Tyler (GUS, Christie's) and CFO John Rogers. Just three days later, and he's picked up another role: as audit chair and senior NED at Auto Trader. Having had a break over the May bank holiday we assume he'll be recharged enough to take on another role soon.
One thing's for sure: Keens certainly isn't letting the grass grow under his feet...unless he's in the garden of course.
21 Apr 2015 |Off Balance
FINANCE CHIEFS tend to stay out of politics, Off Balance has noticed. Some would say that finance chiefs rarely stick their head above the public domain parapet on anything.
So it was nice to see the AA's CFO, Martin Clarke, giving plenty of space on page two of today's City AM to reveal his wishlist for what a political party would do to win his vote in the General Election.
Perhaps unsurprisingly, he calls for "investment in industry" as top of the business agenda. Certainly not in spendthrift mode, he say there is a real opportunity for "modest" amounts of public money to be used alongside commercial and retail sources of funding to create industries of the future.
Despite Clarke declaring himself a Labour supporter, he described the party as "the worst offender" in "crude politically motivated policies that have nothing to do with their stated intent", citing the mansion tax as a cynical ploy to punish bankers.
He also wants a proper culture of philanthropy in the UK, with tax concessions and structures that mirror the US. Clarke also calls for someone to have the courage to admit that "throwing money" at the NHS is not the solution.
Off Balance is intrigued at how, given Clarke's wishlist, his party of choice will manage...
01 Apr 2015 |Gavin Street, Klood
A FEW FRIDAYS AGO I met up with Financial Director editor Kevin Reed for a coffee and got talking about everything finance, tech and career-related. As a result of this I am delighted to be writing a regular blog for FD from the perspective of recently-appointed finance chief in a start-up environment.
I have lots of things I am passionate to write about but first thing's first, let me provide a little bit of background about me. I qualified with ACCA and historically spent my time in large organisations in the banking and transport sectors. I learned much of my trade in these roles and gained a broad amount of experience in leadership, change management and different cultures.
However, last year I wasn't feeling the passion in my work any longer and I came to a natural crossroads. I thought back to the reasons I wanted to be a finance professional in the first place, which was to feel real purpose and value in my work through running a business or supporting someone else running theirs.
Somewhere in my career progression I had lost sight of this, but realised I wanted to do something on a smaller scale where I could measure my impact every day. That became my compass to find my next challenge.
After about six months of networking I had a stroke of luck and met the CEO and chairman of digital analytics company Klood. We hit it off and I have been supporting the business as CFO ever since. What a difference a year makes.
So now you know a bit about my background here is a brief insight into a day of my life being CFO of a tech start-up business.
6.00 am - 7.00am
Try to exercise everyday (Training for coast to coast cycle event!)
7.00 am - 7.30am
One of two rules I try to stick to everyday - to have breakfast with my two children.
After this I will work for a short period at home to check the company bank transactions and our previous day's KPIs. I am genuinely excited by this to see who has paid us, how our cashflow is performing and whether the metrics are moving in the right direction.
After this I will have a quick scan through my emails to see if anything urgent has come in overnight. I have to say this daily habit goes against the productivity tip of hitting your big items first of all each day but I've found in the world of a start-ups it pays to be on the pulse and be one step ahead before you move onto the big items of the day.
7.30am - 10.00am
Drive through the sunny countryside of Northamptonshire to Long Buckby train station and board the train the London Euston. I work on the train reviewing some business case proposals looking at how different pricing scenarios and product features would drive revenues and PBTs.
Challenging assumptions and reviewing cost drivers to ensure operational impacts of proposals are taken account of. This is the work I relish being involved with. Looking at plans and really trying to test it from a physical sense in a fully operational way.
10.30am - 12.00pm
Meeting with a large firm of accountants in the City to discuss ideas and options to raise funds to expand the business globally. I am greeted by three generations of accountants, the trainee, the newly-qualified and the experienced MD. We share stories and have an enjoyable in depth conversation about the options available and the best approach for the business.
We move onto how digital is changing everything at such pace and I give the three of them a quick guided tour around our cloud based accountancy package Xero. We discuss how new digital products are automating a number of standard and analytical tasks and how this is starting to drive a different kind of accountant with more time and emphasis on strategic direction and influencing.
12.00pm - 2.00pm
Hop on the tube. Arrive at a vibrant and busy coffee shop in the West End to meet a potential client who I have been introduced to by a mutual contact. This is certainly out of my comfort zone but I relish the chance to develop a broader skillset and drive the business forward. There's no better way to learn about your products than to show them off and talk about the features.
The meeting lasts for an hour and a half and as I need to shout above the noise and start to warm up I feel closer to closing the deal. We leave with a handshake and a sign up to a 14-day trial period. Not a paying customer, but certainly a step in the right direction.
2.00pm - 5.30pm
I catch the tube and head over to thriving Shoreditch in East London where I spend the afternoon working in our London office in the basement of an old warehouse. Think of bare brick walls, industrial lights, trendy trainers, 20 start-ups on a floor and six people crammed on a row of desks - you get the picture.
Apart from the challenge of finding somewhere private to make a confidential call the environment is very creative and I love the contrast of working there compared to days when I am working in solitude in a quiet space.
I meet with our software development team to see what is being prioritised in their pipeline of work and discuss the cost benefit of adding additional people to the team. I then spend a few hours with our CTO reviewing our funding plans and business case assumptions before he flies back to Calgary, Canada where he is usually based.
5.30pm - 7.00pm
I catch the train home and catch up on emails. After a day of interesting meetings in London I plan a day of detailed tasks for tomorrow working from home in the morning and then in our Milton Keynes office in the afternoon. The list for tomorrow looks long and varied but then that's the joy of working in a small business. I reflect back on the contrast of my day and on my role as CFO of Klood and can certainly say I definitely feel alive again.
7.00pm - 8.00pm
Finally I arrive home and I am greeted by my family. I follow the second most important rule I try to stick to everyday - put my children to bed.
Now you know a little bit about my background I look forward to writing some future posted about the things I am passionate about and believe other CFOs will be thinking about.
Gavin Street is CFO of digital analytics business Klood. He will be blogging about things technology, finance and career-related for Financial Director
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