July 2005 newsletter

DUCKETT

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Literary supplement. An upmarket "special".

Forthcoming events

The Boyscout is working on it. Stand by.

Book of the month

"Feet in the clouds: A tale of fell running and obsession" by Richard Askwith. Clearly not a business book (it is the holiday season, but see below) and prefaced by the following disclaimer:

"The activities described in this book are dangerous and may result in injury or death. Donāt try them. Go to a gym instead, or stay at home and watch television."

I haven't been so excited by a book for years. Almost enough to try fell running (but: too old/too fat/bad hips/bad knees etc). So, if you ever feel guilty about doing something to the exclusion of everything else (like work?), then just compare your approach to the total obsession required to do the Bob Graham Round (27,000ft of ascent in the Lakes in 24 hours) and remember/realise just how reasonable you really are. Lack of ability is not an excuse for lack of application. Even if it nearly kills you.

Traditionally, at this point in the year, I suggest a raft of business books (without which any holiday would be incomplete). As far as I am aware, nobody has ever read any of them. But, persistence is (allegedly) the key to success, so here goes:

• Malcolm Gladwell - Blink - Good fun
• Ketan J Patel - The Master Strategist - definitely hard work
• On Bullshit - Harry G Franfurt (Is this a real name?) - a must read, surely?

I stand by for comment.

The lone(some) PC

It took even Microsoft some time to get this, but computers are only really useful if they can talk to one another. Hence the rise of the Internet and the importance of broadband. Within a business, you need a system that allows the same level of communication as the internet (ie a network), but this is actually harder to achieve than it sounds. Simply stringing together a few PCs (that happen to be lying around) doesnāt work. [The Boyscoutās analogy: you donāt buy a Mercedes gear box, a Saab body-shell and Vauxhall running gear, throw it together and expect it to work.] The cost of PCs has fallen. Spend the spare money on a decent network, and, most importantly, a computer guy who will keep it working. Not that Iām frustrated, you understand.

Sport beats business

The Sunday Times has been running a series of articles suggesting that top sports coaches have a lot to teach business managers. The first article is an interview with Clive Woodward and covers similar ground to his book. His most memorable message is "Donāt waste time with those that arenāt committed to your vision" (to paraphrase). No. 2 is cricket; no.3 is swimming. I have the articles in Word (or OS?) if anybody wants them.

Think Pink

"A whole new mind" by Daniel H Pink

Received wisdom for the last 30 years has been that success depends on qualification/profession. Forget careers advice to "follow your heart". However, (arguably) most careers are now being de-skilled and out-sourced (think of bank managers) and all tacit knowledge is being devalued. Adding value is driven by enthusiasm and commitment, emotions that shine through only if you are doing what you enjoy: www.danpink.com

If you follow the links from the site you get to his (seminal) article in a US daily newspaper. Quoting this seems a lot like showing off?

Not in the office is no excuse

I turned up at a clientās place at 10.30 one Saturday morning to be greeted as follows:

Q: "Have you seen the e-mail I sent you this morning?"

A: "No. I haven't been to the office yet."

Q: "What's the office got to do with it?"

Of course he was right, at least to the extent that I don't need to go to the office to collect my e-mail. However, it is unlikely that I would want to check my e-mail on a Saturday morning, unless I had indeed gone to the office.

The real question is whether we are going to need to have offices much longer (commercial property owners beware). I can certainly see the time coming when my office is a collection of computers with all the real people working somewhere else (ie remotely). Voice over IP is a reality. Working video conferencing over broadband canāt be far away. My management style is to do some proper work, get bored, and then go and see what everybody else is up to. This could easily be replicated electronically. Who will miss the hot breath of the boss on the back of their neck? Is physical personal interaction central to team performance?

Feel the fee

Anybody with world domination in their business plan should check out websites like this

www.burningquestions.com

KPMG in trouble in the US

Itās received wisdom that you employ an accountant to keep your tax bill as low as humanly possible. Why else would you pay such exorbitant fees? Certainly, the Revenue are convinced that accountants exist to help taxpayers avoid tax they should otherwise be paying. [For the purposes of our impending Practice Assurance visit, I wish to make it clear that we never bend the rule. Although we might sometimes push the envelope in particularly grey areas?] However, KPMG in the US seem to have pursued this policy a little too aggressively and are defending themselves against charges that they promoted illegal tax shelters. It seems that they may have to part with between £50-150m to buy their way out of an Andersens style meltdown. Does the word "extortion" seem appropriate?

Pensions A day

The world of Financial Services continues to whip itself into a frenzy over the new pension rules that come into force next April. If only they'd finished writing those rules. The big opportunity seems to be the ability to put your house into your pension scheme. Given that I donāt give advice in this area, why would you want to do that?

BIK on broadband

I was really, really irritated (apoplectic?) by the news that the Revenue wants to treat the provision of a broadband connection to staff as a taxable benefit. It's OK to let them use £2.5k of computer kit (that's a lot), but what use is a stand alone computer? The get out is that the connection is not taxable if it's (as usual) "wholly, exclusively & necessarily" for business purposes. Whatever that means. Sparkle suggests a stern letter to all employees advising them to use their remote links only for "business purposes".

What rules/which rules?

For anybody who is still bothered, the Arctic case has now gone to the Court of Appeal. [This is the case where the Revenue wants to tax husbands on dividends paid to wives.] The really interesting point about the judgements so far on this case is that the Revenue don't appear to want to make the rules clear as this would allow some smart accountant or other to outflank them. As long as they can keep things grey, they can keep changing the rules to suit. Seems a bit sneaky to me, although it does encourage "creative solutions". Or is that what's got KPMG into trouble?

Annual Returns get lost

Having reported positively on various government filing initiatives, normal (lack of) service has now been resumed. The Boyscout has been busy saving clients £15 (and costing me £2 in the process) by filing Annual Returns on line. Then we had a late filing notice on one of the Returns that had gone in on line. It turns out that Companies House had an "IT fault" and lost 6 weeks of electronic data. Just like that.

At the same time, there have been articles in the technical press about the move to file non-audited company accounts on line using 2 different technologies. Worryingly, the site link to find out more about this didn't work, so I can tell you no more. Hurry slowly, I imagine?

PAYE bribe

The Revenue's bribe to surrender £250 if you filed your year-end PAYE returns on line created plenty of takers. Now, of course, they are getting snotty about actually paying the £250. Sparkle identified an instruction on the Revenue's website suggesting that it's really their money and they're not sure you should have it anyway.

Open source gets better

I've had an ongoing fascination with the open source movement (delusions of rebellion?), but Microsoft has always had the upper hand. Excel & Word have been the standard for so long (even if Supercalc was my first love). However, a new version of the OS spreadsheet and wordprocessor has recently been released and I duly downloaded the software from www.openoffice.org

To my surprise/delight the spreadsheet is very easy to use and would make an acceptable alternative to Excel. Apparently, MS have plans to charge an annual fee for use of its programs. That may well drive users towards OS?

OII

What do you think would be the function of the Oxford Internet Institute? Presumably, to ask people daft questions about why they use the internet. Then present the findings in a 136 page report. Be my guest: www.oii.ox.ac.uk

Tax payable

Don't forget that the next income tax instalment is due at the end of July. Mind you, a recent report suggests that there is £1.1 billion of outstanding income tax from late returns. How they know how much tax is due when they haven't had the returns is beyond me. The Revenue's response is to create a simplified tax return. Presumably, this means less pieces of paper to file in the bin when you ignore them? There's also talk of rewarding people for filing returns early, as long as the Revenue doesn't actually have to part with the reward?

Cash is still king

The development work weāve done over the last few years has shown that cash flow (or lack of it) is still the single most important factor in the success of any business. You canāt pay wages with profit; only cash will do.

Whilst businesses often do future budgets, only those struggling at the bank actually bother to produce cash flow forecasts. Such forecasts are only remotely accurate over the next quarter, but that doesn't mean you shouldn't try. The Boyscout has a slightly different way of looking at the problem: he routinely performs his "bottom-up" analysis. By this he means (I hope) starting from the drawings requirement and working up to the activities that drive the sales line. At least that way round you can control the business and not the other way round. He's got some excellent examples of this technique working in practice.

Late news

Last night, after a steamy day in the office, I was just contemplating some light accounting when my mouse strayed onto the FastCompany website. In a flash, my belief in the American Way was restored:

www.despair.com or

www.demotivation.com

Dilbert on steroids. I can feel a special coming on.

Disclaimer

Stay on the right track and eventually you will be run over. [From the swimming coach.]

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