Archive for the ‘business’ Category

Are you a UK Franchisor with international Franchisees? Are you concerned that they are not disclosing their sales properly and are you missing out on MSF or royalty revenue?

December 12, 2012

This is a potential minefield, with language, cultural and geographical barriers. To be honest it is very difficult to police and potentially very costly.
In most case the first port of call would be your master franchise within the country or countries concerned. There are two issues here:
1) Are they collecting sales data and revenues correctly/effectively?
2) Are they passing the info and funds to you as they should be?
If they are responsible for collecting information and funds on your behalf then any costs associated with verifying that figures are correct should be covered by them… Yes, but that still effects you in the long run…
At CBCS, we recognise that auditing internationally, particularly in developing countries is often not considered because the main cost to the Franchisor is not the audit fees, it is travel. And yet frequently your international franchisees are the worst offenders when it comes to disclosing their revenue and royalties correctly. So how do you get round this…?

The biggest cost is frequently travelling to and from the destination country (particularly long-haul). Why would you pay for someone to travel business class, when economy is just as acceptable? If you can travel economy when you go on holiday with your family, surely you can when you are on business? Then there is the cost of hotels and transport to and from the various franchisee destinations. Again, there is no need to occupy two floors of the Presidential Palace, when the Holiday Inn will suffice and is why not take advantage of trains and buses rather than hire cars, taxis and flying? Strict control of a business trip that involves multiple sites will reduce your cost markedly and can turn this into a viable option.

international business travel can be expensive...

international business travel can be expensive…

And what of the other obstacles mentioned above: language, cultural, even local business ethical issues. Language will always be a barrier if one party or the other does not speak the same one with any fluency. You have to assume that as a UK Franchisor, your franchisees, be they in Kansas City or Outer Mongolia will have some understanding of English. So mostly this is not an issue; communication can be more challenging, but not impossible. Cultural differences are easy enough too. An understanding and willingness to comply with local cultural and business ethics is part of preparing for a trip to another country. Again preparation is key.
The additional preparation and the challenges of working in another country make international franchise auditing more complicated than the domestic version. As a result costs for audit and of course travel will be a little higher, but the returns could well be higher too.
CBCS offer a full range of Franchise auditing and business review services both domestically and internationally. Please give us a call or e-mail us, if you wish to discuss this potentially difficult area in more detail. We will treat each case individually and can tailor an auditing package designed specifically for your franchise operation and of course to the individual countries involved.

December 10, 2012

Danny Alexander has suggested the UK will not enter a triple dip recession. Fine, if that proves to be the case, but ‘bumping along the bottom is just as dangerous. And the ‘Walking Dead’ are still out there, waiting to secure their unsuspecting prey. It could be you if you don’t prepare for them…

All Things Financial

All the hard work has been done. You products and services are selling and you have new clients on board…. All you have to do is provide your service or supply the product and everyone is happy. All you have to do now is get paid…

Most of your clients are paying you on time, some even within terms. The majority of the others have a good reason for not paying you. But why is one client in particular not paying you? Will they ever pay you?

Hopefully if the value of the business generated form this new client justifies the cost, you have already done a credit check on their business and you have reviewed and set a specific credit limit based on the clients buying expectation and your assessment of their credit report. But is that the whole story?

The media has this week been awash with stories about the strength ( or lack…

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CREDIT CONTROL – it need not be rocket science!

May 10, 2012


Cash is King…. Especially in 2012… But so is your Client!

With sales harder to come by, the last thing you need once you have delivered your goods or services, is for your clients to hold onto your money longer than they should. You impose credit terms and they exceed them… Is this a familiar story?

How much cash to you actually have tied up in your credit sales? When you pull off a Debtors report, do you have large amounts still outstanding beyond 30 days? Do any of your debtors still have invoices outstanding for 60 or 90 days plus? Of course there may be good reasons for this. There may be queries against these invoices, or the client has not received or processed your invoice; but anything else and you are in danger of losing your money and remember the longer you leave it, the harder it will be to collect.

This may sound like a lesson in basis common sense, but if there is an issue building up in your debts beyond 30 days, you need to jump on it now. Obviously you can resource in house; maybe by asking your accounting or admin staff to send a statement or a letter or even phone the offending debtors… but once this task is done, will the action be followed up and how successful will your collection efforts be?

Using a third party collection agent is an obvious solution. They will set out an agreed collection strategy in advance and will follow the process through to the end. If there is a query noted, they can help you resolve it and if the client does not pay they can be contacted again until the debt reaches the point where further action may be required to collect that debt. As long as they do so within the terms agreed with you and they do not upset your client then everyone is happy… Of course that is frequently not the case. The collection agent may not do a very good job, they may upset your client and you will have forked out a vast sum for collection when the effect has been limited and your client base has been disturbed by bad collection techniques.

Actually good credit control does is not rocket science. At its best it can be effective and affordable and if you outsource, your companies relationship and integrity with your clients will remain intact. Whether it’s a one off campaign or part of a seasoned rational credit policy, outsourcing credit control can be a very effective solution… and usually much more so than conventional in house collection.

We have a very good track record in reducing a customers debt, whilst maintaining a positive relationship with your debtors. Our collection techniques are straight forward, firm and courteous, whether they be in writing, by phone or by other media and refreshingly our prices are amongst the most competitive in the collection industry.

We specialise in collecting B2B debt and have experience across the whole spectrum of industry. We have no formal barriers for who and what we chase either. We can chase one debt for a Million pounds or two thousand  debts for a hundred pounds. And we are successful too: in a typical three letter collection campaign on average we will collect: 60% after letter one, 25% after letter two and 10% after letter three. Then if further action is required we can pursue the matter through the courts to judgement, enforcement and beyond…

And we don’t stop there either. We have the experience and know how to help you establish better collection techniques, if you want to keep it all in-house. We can help you develop a credit policy, help you to establish credit limits and to credit score your new customers. We can help you to establish behavioural credit scores for your existing clients, set up query databases and even help you with the recruitment of good quality collection staff.

How much does your accountant charge?

March 7, 2012

Probably a great hunk of cash that goes straight against your bottom line & with low profits & difficult cash flow; small businesses in the UK need to remember they don’t need their accounts audited. They can actually submit their accounts to Companies House themselves, although they still need to be accurate and conform to all aspects of the Companies Acts. If you do need an accountant, get them to quote for the whole service you have applied for including phone calls & e-mails… That way you can compare like with like and there will be no surprises .

In my capacity as Franchise Auditor, I do come across some exorbitant accounting fees being charged by accountancy firms to carry out basic year end accounting. Small franchisees and other small businesses are being exploited by professional firms. It does not take long to analyse a set of accounts, especially a computerised set. With on-line submission to companies house, once the draft documents are available the process of submitting is straight-forward and as most of these smaller firms can claim exemption from full filing of accounts. There is no excuse for over-charging with over complicated analysis and cross-referencing with prior years, trends etc.

Of course, with different industries and business types there is no way you can put a maximum figure to how much you should be paying. Some manufacturing businesses, for example may consider a £5k spend on year end accounting good value, whereas a retail shop, with point of sales tills and computerised stock listings may consider £1k a more likely maximum. The best advice is to look at what you are getting and then shop around.

The Recession. Is it over?

November 19, 2009

What a funny world we live in. The credit crunch has turned everything upside down in the last two years and where there was belief, enthusiasm and confidence and profit was the name of the game, everything has changed. Now, there may still be belief and some enthusiasm, but still very little confidence and profit is an aspiration to most.

Those of us who are still here are hell bent on survival. Costs have been reduced and then reduced again and there is just a little hope that future prosperity is just around the corner. In the UK, technically we are still in recession, but the government insists that recovery is just around the corner. But why have we in the UK had to wait so much longer than most other developed countries?

This blog entry is about taking advantage of the recovery and is not meant to be a blatant criticism of our national governments economic policy, but you can’t help but think it a little ironic that everybody else seems to be growing and yet our economy is still shrinking. You could argue that the UK is unusually dependant on the service economy, rather than manufacturing or production and that makes us different from other major economies. The trouble with that argument is that the service sector is now effectively in growth. Whatever the reason, it is clear that some sectors of the economy are in growth and some are still in recession and depending where you are and what you do, you are either on the positive side or the negative.

SME’s are the life blood of the UK economy and those that are surviving the economic downturn are now leaner and much more effective than their cousins who fell by the wayside. Prudent evaluation of costs, good marketing and control of processes means that the best companies survive. But that does not mean that they still need a little help.

There are literally hundreds of resources available to SME’s in the UK today. There are consultants, advisors, funders, trainers, web resources galore. The trick is to determine if you need help, what you need, how much you are prepared to pay, how soon you need it and who has got it.

Whatever the government claims, the recession will be over soon and we can all look forward to growth again. Maybe not the megabucks boom growth of the first half of this decade, but sensible, controlled growth, where business owners begin to make cautious business decisions once again rather than sit on the fence and wait to see what happens. The businesses that do the best will be the ones who are best prepared. Are you?

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