Cost saving opportunities for the new Finance Director

By Paul Giuffredi

Paul Giuffredi is a Finance Director of entrepreneurial companies. He has been Finance Director of PE backed, family owned and AIM listed companies in a variety of business sectors.

When you've just landed a new position there are a number of ways to make a good impression....

One that often gets overlooked is finding cost reductions in some of the less glamorous areas of company spend. This can be a good early win, especially if you're working for an owner managed or private equity backed business where cash flows are tight. 

Value adding analysis

By Neil Gaskell 

Neil Gaskell is the Commercial Financial Controller for Indesit Company UK Ltd. He is a CIMA qualified accountant and is responsible for commercial finance and credit management. He specialises in financial modelling in Excel and Access.

In the current climate many companies are tightening their belts and looking where to cut unnecessary overheads. Far too often the area that is overlooked is the one profit and loss line that can do more for the bottom line than any fixed cost.

A 5% increase in sales revenue will add more to the bottom line than a 5% cut in fixed costs ever will. Before proposing a blanket price increase to your sales director, a simple analysis can be done to identify areas to reduce discounting and where profitable customer behaviour is not being encouraged.

Finding the right Finance Director and CEO relationship

By Paul Giuffredi

Paul Giuffredi is a Finance Director of entrepreneurial companies. He has been Finance Director of PE backed, family owned and AIM listed companies in a variety of business sectors. 

Many of you will be aspiring or even experienced Finance Directors. In order to reach this career goal there is a lot of focus on professional qualifications and long hours of hard work in the office but when the opportunity finally beckons, how much of your success in such a role is down to your skills and how much to the personal relationship with the CEO? 

Chances are that you wouldn’t have been shortlisted for a Finance Director position without ticking all the skill and experience boxes. The competition is too fierce for headhunters not to come up with a healthy list of candidates who can do the job. Given this,  what then is the major factor in you getting the job? 

In my experience it is whether the CEO likes you and feels that they “can do business with you”. In order to pass this test you should probably be yourself but there are some pointers you should consider in the process... 

To Accept or Not to Accept: The Question of Counter Offers

The rejuvenation of the job market in the Finance and Accountancy sector has without doubt gathered pace in the last six to eight months.  One of the results has been an increase in job seekers willing to explore their options whereas before, many people were staying in positions in which they felt dissatisfied due to fears about the turbulent economic climate.

So, as an employee you have taken the plunge, explored your options, gone through the interview process and been offered an exciting new role.  This is always a slightly nerve wracking time and many understandably feel the process of resigning from their current position to be a stressful one.

Submitting Your Resignation
When you sit down with your line manager and submit your letter of resignation, there is a sense of relief and the excitement of starting a new role can be indulged.  However, what happens if the following day your employer presents you with a counter offer?  What do you do?

This is a difficult situation in which to find yourself.  On the surface, it appears to be in the employer’s interests to retain you; you are a valued employee.  They are able to retain you within the business rather than have to progress once again through the recruitment process, which can be time consuming.  You are in situ; you know the company and are an established member of the team whom they have already invested in.

It can be a tempting and very flattering offer.  You are within your comfort zone; you know the business and the people, and a pay rise is being offered.  At this stage, it is vitally important that you examine your reasons for leaving in the first place.  If your motivation is more than simply remuneration and is based around a desire for career progression, or a disillusionment with the company, ask yourself the question; is this going to change or, by accepting an offer, are you simply placing a band aid on the real issue?

A Long Term Solution?
Being counter offered with a pay rise or a promotion will not necessarily resolve the underlying reasons that first motivated you to search for an alternative.  In this instance we find that in many cases the employee will be once again be back on the job market within a few months, as the initial problem has not been resolved. In my own personal experience, I previously worked with a Management Accountant in a senior position who was very disillusioned with their working environment.  We secured them a new position with a pay increase, and when they subsequently submitted their resignation, their employer offered to double the pay increase to keep them.  They accepted the counter offer, however came back to me within five months looking for a new role, as the environment had not improved and the initial problem remained.

On the other hand, if your reason for leaving is purely motivated by remuneration and you feel that you are being undervalued either through the employer’s inability to offer an increase, or through a failure to recognise your worth, is it a good idea to accept a counter offer?  On the whole I would still suggest that it isn’t.  Using this process as means of forcing your employer’s hand should be avoided.  It almost always causes a breakdown in trust and leads the employer to question your loyalty and dedication to the company.  If they believe that you are capable of being disloyal it is doubtful that the previous levels of trust will ever be re-established, which can have implications for your long-term career in that company.

Communication is Key
If you do feel that a pay increase or promotion is justified I always recommend that you firstly have an open and honest conversation with your employer, laying out your justifications.  Through open channels of communication it is much more likely you will be able to come to mutually agreeable terms that have fewer potential repercussions later in your career.  If the employer is not able (and in the current economic climate many are not, through no fault of their own) or willing to negotiate in terms of remuneration then if you still wish to pursue the issue, consider your wider options and explore the market with a clear conscience.

John Richardson joined Alexander Lloyd in 2003, and as a Senior Manager within the organisation he currently leads the Accountancy and Finance divisions. He personally maintains a client database recruiting senior finance professionals on a permanent basis within the Accountancy and Finance sector and specialises with the recruitment of qualified level Financial Directors and Controllers for both blue chip and SME clients, and also recruits niche roles such as tax/treasury and corporate finance and audit.

The Next Generation of Managers

With university fees on the increase, many young people are looking at alternative routes into their chosen careers. Should employers now be looking to school leavers instead of graduates for their next generation of managers?

University is no longer a financially viable option for most young people and it’s fair to say that it hasn’t been a guaranteed route into the majority of graduates’ chosen careers for some time. Recent research commissioned by the AAT and the CEBR revealed that an estimated 55% of this year’s university leavers will graduate into unemployment or unskilled roles.

While many young people might feel a door has been closed to them with university fees being hiked up, it’s actually a really exciting time for ambitious school leavers and businesses alike. We are currently noticing a big trend with employers recruiting school leavers over graduates through apprenticeship schemes. Proctor & Gamble for instance have adopted this approach, solely recruiting school leavers for their European Finance Centre, with lots of other companies of varying size and scale following suit.

Why? Firstly, school leavers tend to have a strong idea about the career they want and therefore are determined to work hard to achieve their career goals rather than it just being something they ‘fell into’. School leavers on apprenticeship schemes have a strong sense of pride and willingness to learn. They don’t come with huge expectations and are aware how lucky they are to be earning, training and working at the same time. They also tend to have a good work ethic and are used to a school routine – this lends itself well to the office environment.

School leavers also have a strong sense of loyalty to their employer and apprentice scheme. They invest in the business and the business invests in them. This sense of worth instils confidence in the school leaver and as they climb the career ladder they inevitably add more value to the business. School leavers are not just stop-gapping before something better comes along.

Not only can apprenticeship schemes be more cost effective, but all businesses across all sectors must appreciate the benefits of cherry picking highly motivated young people.

While of course I understand that there will always be some professions which will always need graduates of a certain calibre, I do think there are still many businesses nationwide that haven’t considered hiring anyone other that a graduate and it’s these employers who should think again. 

I’m excited by our apprenticeship programme and the new school leavers joining us this autumn. They have the right foundations that our business needs. If they work hard, maintain a positive attitude and are supported properly, then they will go far. In this fragile economy all employers should wise up and see the potential of a school leaver, knowing what a sound and solid investment they can truly be.



Jane Scott Paul has been Chief Executive of the AAT since 1997. Under Jane’s leadership, the AAT has grown to an overall membership of 120,000 with an influential voice in the education, training, development and support of accounting technicians worldwide. She was awarded Honorary Membership of the Chartered Institute of Public Finance and Accountancy (CIPFA) in 2003 and the OBE in 2008 for services to the accountancy profession.

Top Tips for Tough Times: How to Survive a Company in Administration

Habitat, Oddbins and Focus DIY are just three retailers who appointed administrators in 2011. According to research by Deloitte, the accounting firm, the number of retail companies falling into administration in the second quarter of 2011 increased by 8% to 43 compared with 40 in the same period last year. And so, in these tough economic times, many finance professionals will find themselves unexpectedly working for a company in financial difficulty. 

This is sometimes known as working in a ‘distressed environment’ and with good reason: it can be a challenging platform from which to operate. But there are various ways to ensure you keep smiling and come out on top. 

Accept the things you cannot change

When a company is in administration, business matters are out of the control of the directors and board. The administrators are running the show and will be making day-to-day decisions about creditors, payments, banking, risk and invoicing: all matters traditionally under the control of the finance department. Understandably, this can be disorientating and difficult for anyone whose remit has previously covered any of these areas. Fighting the administrators won’t help; they’re appointed to do a job and they’d like your cooperation but can do what they like without it.

Anyone familiar with Elizabeth Kubler-Ross’s ‘Change Curve’ will know that the reaction to change traditionally starts with denial and is followed by anger, bargaining and depression. The curve ends with acceptance of the change. In an administration situation the earlier the finance department moves to acceptance the easier life becomes for everybody concerned. Once the administrators have been appointed, acceptance and cooperation are your friends. The only things you can change are your reaction to the situation and your own behaviour.

Stay professional 

Once a company is in administration almost anything could happen: the business, or part of it, could be sold (and you with it); you may want a reference from someone you currently work for; the company could close altogether. But if you stay in the same field you will continue to bump into the same people, professionally, for many years to come. So keep your cool and remain professional at all times – it can only enhance your reputation. And in business, matters are never made worse by good manners and a positive attitude but these are often noticed and rewarded. The company shouldn’t expect you to lie to customers or suppliers so maintaining your integrity is important too but any particularly difficult matters can usually be referred to the administrators.
 
Keep your cool

This is similar to staying professional but with a slight difference: it’s about recognising why your co-workers, who have hitherto been cooperative and maybe, even, your mates, have suddenly turned into  psycho colleagues from hell. Life can be difficult working for a company in administration and everyone from the Chief Executive down will be feeling the strain. And stress, uncertainty and extreme anxiety can change people’s behaviour. Not yours, of course, because you will stay professional but if you recognise that your colleagues may not be themselves and make minor allowances accordingly you’ll be making your life (and theirs) a lot easier. That’s not to say that the unacceptable is suddenly to be tolerated, because it isn’t, but if someone is behaving in an uncharacteristically difficult way it might be worth temporarily cutting them some slack. This doesn’t only apply to colleagues – suppliers and customers may also be edgy and uncharacteristically badly behaved as they try to protect their own interests. You don’t have to be a doormat but keeping calm and carrying on is the right thing to do. And the view is better from the moral high ground.

We are where we are

In an administration situation some workers will already have left the company, some will have been made redundant – and given little incentive to hand over  before they leave – and others will still be employed but perhaps without leadership or without the knowledge they need to carry out their roles. This can sometimes mean that nobody understands a process or procedure end to end, due to lost knowledge, poor paperwork or newly-unsupported computer systems. You could spend months trying to track down the original source of knowledge – good luck with that – but sometimes it’s quicker to create a new process than establish how the old one worked. And there could be a silver lining because this can throw up improvement opportunities, which any business should make the most of as they arise. And of course, if everything is documented when you move on or are promoted, the colleagues you leave behind won’t be left in the same situation.

It’s tough working in any position in a company going through administration or in financial difficulty – whether you’re the CFO or the office cleaner, uncertainty is always hard to deal with.

But you can make the best of it by behaving well, giving your best, and remaining calm and professional. Who knows? Once the administrators have moved on there could be a job for you in a restructured company, a recommendation from someone who liked your business-like style or a new opportunity via an ex colleague. And, like a phoenix from the ashes, your career stock could rise too.



Louise Graham spent five years working for The Walt Disney Company before taking a break to have her two children. Since then she has worked on an interim basis for Abbey National, First Choice, The Carphone Warehouse and Fountains, who were previously part of Connaught plc (in administration). Fountains separated from Connaught plc and moved into independent ownership in 2011.

How Will the Basel III Accord Affect the Banks?

On September 12th 2010, the Basel Committee endorsed the next piece of their master plan. Having originally released details on July 26th 2010, the Basel III Accord was revealed and aspired to once again make the banking system safer by putting measures in place to avoid a repeat of the “worst recession in over 100 years” (Ed Balls, Shadow Chancellor).

The Basel II Accord was originally introduced in June 2004 to ensure that savers’ money was protected and that banks had a bit of a cushion to absorb unexpected shortfall from the potential inability to repay loans. Basel III was constructed using the same three-pillared framework, but was developed following the credit crunch. It strengthens the bank’s capital requirements and introduces new regulatory requirements on liquidity.

Basel III looks to define new capital target ratios, or the amount of ‘ready’ capital a bank must have. Other changes include the increase in transparency, quality and consistency of the capital base. The new regulation states that banks must have available capital equivalent to 4.5% of assets. There is an additional requirement of 2.5% which is in place to withstand future stress.

The second major change from Basel II is the additional strengthening of the capital framework’s risk coverage. This includes strengthening the capital requirements for counterparty credit exposures, by raising the capital buffers to allow for these exposures. All the changes are in a bid by the committee to encourage the banks to raise their own capital buffer in times of a good economy, so they can be called upon in more troubled times.

Following the crisis of 2009, the banks are now working much closer with the regulators to ensure that it is not repeated. But, in reality, how will the banks and their recruitment processes be affected by the introduction of the Basel III Accord?

The long-term benefits speak for themselves: an estimated net benefit for European banks of 30% of GDP, equivalent to 10 trillion Euros. This prediction by UK economists comes on the back of the sizeable buffers that the new Basel mandates all major banks have at their disposal.

Having said this, the short and medium-term problems cannot be ignored. While the big banks are no longer ‘able to fail’, the IT implications and integration costs and resources threaten to drive down the financial sector’s profits.
 
Although the capital requirements are being introduced gradually, the scale of the change that banks will have to go through cannot be underestimated. Barclays are in the process of raising £3.3bn in order to cover the costs of Basel III – some of which will be used to cover the capital requirements, but a large amount will be spent on retraining and recruiting qualified staff. 

The next piece in the Basel jigsaw will surely lead to increased hiring levels to accomodate the changes.


Oliver Gale is a Change Management Consultant for Marks Sattin.

How to tackle competency-based interviews

As we edge out of recession, the start of the recovery offers a chance for local businesses to get a head start on rivals. But capitalising on the upturn means making the right decisions and making them quickly – from when to invest more in R&D and marketing, to training staff and recruiting new people.

Some of the region’s businesses will find making these decisions easier than their rivals thanks to the critical role played by switched-on and strategic-thinking finance people. Employers are looking for commercially-astute staff, but finding these kinds of accountants is not always as simple as it looks.

These ‘new generation’ accountants don’t simply act as a support to other departments, but challenge strategic and operational decisions and offers alternatives. They are, if you like, the glue that holds the whole process together.

Many organisations successfully recruit people with the right skills to take on a more commercial role. The challenge is how to recruit finance people who really can make a big difference to an organisation – not just those who look good on paper. We are seeing an increased demand for top accountants with the sort of strategic planning, problem solving and leadership skills that put FDs at the commercial heart of businesses. But finding the people that really have these competencies – not just the ability to put a CV together – means changing the way businesses recruit.

In HR circles, the solution is known as competency-based interviewing. It’s an approach routinely used by large employers, but smaller organisations are increasingly using these techniques too. Competency-based interview questioning allows the interviewer to get beyond standard CV claims to assess how a candidate’s past activities can predict future performance.

Sometimes called structured interviewing – a clue to the fact this is a lot of common sense rather than HR wizardry – competency-based interviews give information about a person’s past behaviour and experience so recruiters can score and compare candidates. This helps recruiters make hiring decisions based on evidence rather than gut feeling.
 
It is therefore important for accountants and finance professionals to ensure that they understand the concept of competency-based interviewing and thoroughly prepare beforehand.

Perhaps the most common competencies are: Communication, Customer Focus, Teamwork, Leadership, Planning and Organisation, Commercial Awareness, Flexibility, Problem Solving, Analytical Thinking and Influencing Others.

These will vary depending on the role and the level however in the interview; however, you should expect a series of competency-based questions exploring each competency. These are usually behavioural in nature and take the form of:

• Tell me about a time when you?
• Describe a situation when you?
• What would you do if?
• When you give your answer the interviewer will dig deeper and ask about the detail such as:
• How did you do that?
• Tell me exactly what steps you took to resolve that?

By investigating further, the interviewer is trying to discover more about your skills as well as looking for clues that may suggest that you are exaggerating your part in the process.

When answering competency-based interview questions, I suggest that you choose answers based on real experiences that you have had. Your answers need to be relevant and sufficiently detailed. Be specific and tell a story. A technique to use when answering competency style questions is:

1. Set the scene and describe the situation, problem or task;
2. Talk about the role you played and what action you took;
3. Explain the result. In finance this would ideally include financial figures, cost benefits to the company or profit made.

Always use “I" rather than we".

I also recommend that you prepare two examples for each competency so that you have enough to use in the interview and do not use the same example more than once. The more you prepare, the better you will portray your true abilities to ultimately ensure the interview is a success.



Alex Gregory is the Director at Grafton Banks Finance Ltd. He has over ten years’ senior finance recruitment experience. In September 2008 Alex established Grafton Banks Finance Ltd, recruiting interim and permanent qualified finance professionals across Sussex and South Surrey.

How to Make Your CV Resonate

Most Chief Financial Officers (CFOs) are feeling confident about their firms’ prospects for business growth in the coming months, according to our latest Professional Hiring Index. The hiring outlook is expected to improve as well. With hiring managers receiving so many CVs, what can you do to make sure yours stands out? Whether you’re a new graduate or a seasoned professional, the following tips will help you create a CV that can help you move one step closer to the interview process.

Fill Gaps in Your Employment History

If your CV is vague or incomplete, a hiring manager may think you’re deliberately trying to conceal information. Many people have been unemployed for a long period due to the recession; employers understand this. But it’s important to explain what you’ve been doing while out of a permanent job. For instance, if you’ve been working part-time or as an interim, volunteering, or taking classes, ensure you include that information.

Provide Clear Job Descriptions and Show Results

Explain the responsibilities you had in a previous job and how your work contributed to the company’s overall success. If you provide scant details about your former duties, a potential employer may think your experience isn’t relevant for the job you’re applying for.

Watch Spelling Mistakes

Even the most experienced professionals have made careless – and costly – mistakes when submitting their job application materials. Don’t be among them. Research by Robert Half shows many executives are not inclined to hire a candidate who submits a CV with even just one or two typos in it. Also, if your CV is disorganised or otherwise sloppy in its presentation, you could come across as lacking both professionalism and good communication skills.

The Finishing Touches

Take time to tailor your CV to each job you’re applying for. Positioning the information in your CV in a way that shows how your skills and experience are well matched for a particular role makes it easy for a hiring manager to understand why you could be a strong candidate.

Include a Cover Letter

And don’t forget to include a well-written cover letter, if you have the opportunity. This is not always possible when applying for jobs online, but when you’re able to include a short paragraph or two within the body of your email or the space on a job application allotted for ‘comments’, go for it. The cover letter allows you to expand upon your strengths and accomplishments and express why you believe you’re the best person for the job. It also can shine a spotlight on your communication skills, which many employers greatly value and specifically look for in candidates today when hiring for accounting and finance roles.


Andy Dallas is the associate director for Robert Half Financial Services Group, specialising in the placement of banking and capital markets professionals in the City of London.

Oscar Wilde and the Value Principle for Accountants

Oscar Wilde once wrote:

“What is a cynic? A man who knows the price of everything and the value of nothing”.

Musing on this, I had a slightly mischievous thought: Oscar Wilde might have been speaking as an accountant.

The current economic crisis has demanded that the public sector cut millions from various service delivery budgets up and down the country. The private sector has also been challenged with examining budgets to keep businesses afloat, maintaining profit margins where possible or indeed take advantage of the climate to expand. Inevitably, this unenviable challenge falls at the door of accountants.

Some accountants have adopted an across-the-board percentage cut to budgets to achieve targets and expect Operational Managers to get on with the imposed constraints. While there is some merit in this approach in very specific circumstances, most know it isn’t that simple.

The more visionary and imaginative accountants set out, with their General Managers and Managing Directors, to evolve business models to provide the same or improved services and products for less cost. They will look to where real value lies in the business or service to preserve or enhance it. They will examine very closely the interrelationships between value of service/product, cost savings and desired outcomes before acting and reducing budgets. There is a major difference between direct cost cut and carefully and thoughtfully reduced budgets in order to maintain overall value.

Oscar Wilde, by a twist of fate, might have made a very good accountant. Then again, he might also have been one of accountancy’s severest critics. Just paraphrase:

“What is an accountant? A man who knows the price of everything and the value of nothing”.

On an optimistic note, for those brave enough to grasp it, there is a real opportunity to rise to the occasion and to show that you are of value and not a cost to your organisation. 

Chris Cutting, of Chris Cutting Recruitment (CCR), has several years experience in accountancy recruitment at all levels. His career spans working for both national and regional recruitment consultancies in the Midlands and establishing two regional consultancies servicing the M5 and M4 corridors. The one constant throughout his career has been to provide a tailored and personalised service to clients and candidates.