IDU | Budgeting Forecasting and Reporting Solutions: 2014

Thursday, 18 December 2014

idu’s 2014 in Review

2014 has flown by here at idu. The home team have been focusing on our current customers and developing, improving and rolling out idu-Concept Version 5. Our sales and consulting team has travelled far and wide this year, to Gaborone, New Zealand, Australia, Dubai, Zambia, Tanzania and Mauritius, amongst others, between them, extending our idu family with new suppliers and customers.

Speaking of extending our idu family; we have also welcomed 6 new team members. And a few of our currents team members have extended their families; with Jackie and Don getting married, and Minette and Hendri, as well as Zaheer and Athirah, expecting their first babies early in the new year.

Our fifth idu user Conference in March 2014 was a huge success, drawing a full house from around the world to our conference venue at the beautiful Spier Wine Farm in Stellenbosch.  And the 2015 User Conference on the 12th and 13th March next year is set to be as big a success with spaces filling up fast.

A lot of this year’s focus has been around the completion and release of idu-Concept V5. V5 is in the process of rolling out across the client base and we are sharing some special tips and tricks on the blog to help you make the most out of the system. This will be supported by special workshops and training sessions at the conference in March next year.

idu-Concept has also expanded to include Spend Management, a certified third party application leveraging the power of the industry leading Fraxion Spend Management application; allowing you to take control of your cash flow by authorising expenditure before it is incurred, saving you money and increasing your efficiency dramatically.

Our blog celebrated a year live in November. We have continued our excellent relationship with Accountancy South Africa (ASA) magazine with our monthly column proving popular with readers. Our CEO Kevin Phillips and his fellow columnists will be gracing the ASA cover in March 2015, and you will all receive a copy in your conference packs!

2014 was an excellent year for us and focused on consolidating all that we have built thus far. 2015 is looking to be the year we leap into new markets all over the world; so watch this space!

Tuesday, 9 December 2014

It’s that time of year again - idu’s 6th Annual User Conference

CFOs, Financial Directors, Financial Managers, Financial Accountants, IT managers and other key financial role-players from near and far will once again be flying in to Cape Town for  idu’s Annual User Conference in March 2015.

One of our points of pride at idu is our collaboration with our clients to help them achieve whatever their business goals are through the support and use of our software, “If you can dream it, we can do it” – and thus the conference theme of Dreams was born.

And in keeping with that, you will get the chance to hear from Kevin Phillips, CEO of idu Software, talking us through our plans for the forthcoming year and have a chance to influence the idu Development Roadmap for 2015.

Our special training and workshops on key modules given by our team will again focus on Version 5 of idu-Concept that was successfully launched in October 2014. We will be taking you through the exciting new features and modules and teaching you all the tips and tricks that will allow you to maximise your use of the system. You will also have the opportunity to listen to and learn from customer case studies and success stories.

The now-established idu Lounge will once again be a draw, allowing delegates one-on-one access to consultants, technical experts, other clients and partners; facilitated through an informal coffee shop environment, complete with access to the latest software. This form of networking has proved a huge success and provides attendees the opportunity to meet and develop relationships with a variety of interesting and stimulating people, encouraging an open exchange of experiences, ideas and best practise learning’s.

The conference has become extremely popular for our inspirational guest speakers and this year will be no different, with talks from Riaan Manser, Guy Lundy and the ever entertaining Riaad Moosa.

After the amazing success of the 2014 conference, 2015 will once again take place at the gorgeous Spier Hotel and Conference Centre in Stellenbosch.  Internationally renowned as one of the most beautiful wine farms in South Africa, Spier offers world class conferencing and accommodation; and the setting displays Cape Town at its most beautiful.

We have managed to keep the conference cost increase to just 10% this year! Registration is now open and we have limited spaces that fill fast every year; so get online and book your space now!

Monday, 24 November 2014

idu-Concept Version 5 - Tips & Tricks Part 1

As promised not so long ago, we are sharing a few nifty tips, tricks and special features available in idu-Concept Version 5.

To begin with, let’s look at some of the new features that empower users, creating more autonomy and less dependence on administrators.

Where previously you needed to interrupt an administrator and wait for them to make the changes, now you can do all of the following yourself –

  • You can resize any of your layout profile columns simply by dragging
  • With a click on your user name, you can set your own themes, language and reset your password
  • You can also set your layout profile field settings per field type (these settings are kept for when you log back in again); meaning you can work in the way that works best for you
Click Less!
With our new module selector, you can open multiple modules and compare data on screen; with multiple tabs the data is a single click away.

  • Capturing in Budget types also has a few less clicks
  • You can drilldown on a budget capture view and all budget types are grouped in their own tabs
  • When you drilldown on an account, all the rest is in one screen
  • Capture per line/month
  • Should you drilldown into an account from the original or Classic View, you are able to see and perform the following on screen (with no more drilldown clicks)
    • Capture onscreen
    • View value percentages
    • View comparatives
And finally for this month, one of our best contributions to a better overall system: multiple years linked to your fiscal set.

This allows you to budget or forecast into future or any other fiscal sets linked up with your Base Fiscal set. This makes capturing into multiple fiscal sets easy; you no longer have to log out of one and into another. Even if you need to budget or forecast from a certain period onwards, we have a right-click context menu function (to apply to all going forward). This context menu functionality also allows you to change the spread factor.

For more on the new V5 functionality, keep an eye out for our Tips & Tricks Part 2!

Monday, 10 November 2014

Fraud - the ongoing effect

Fraud is a particularly fraught subject, not only is there the loss suffered by the business and the potential legal repercussions if it is client related information, it is also a seemingly personal attack on the business owner, and fair or not, it affects how others view the company that has been defrauded.

If it is not client information that is lost or if there is no way to get back what has been taken or you can retrieve the information without any further need for action, do you publicise or report the fraud?

The furore of voices that might instantly insist that you should, for a variety of reasons from revenge to teaching the person a lesson to setting an example for your other staff to the responsibility you might have to ensure the perpetrators don’t repeat it with someone else, are all perfectly valid.

But pause a moment and reflect on whether any of these is worth exposing yourself and your business to yet further damage.

There is some instinct in human nature that causes people to judge and blame the business that was defrauded. The facts of the individual case will be largely irrelevant to the people who hear of the fraud after a time – whether the loss was information, a trade secret, a client list, money or even stationery; whether the person was a secretary or janitor or account manager or senior partner – the business may become seen as less trustworthy and secure in the eyes of the public once they know.

This may be because they believe that the person who has committed the fraud has done so due to unjust circumstances or because they believe there must be something missing or lacking for the company to have “allowed” it to happen or that the company hasn’t taken the necessary steps to protect itself, and by extension its clients, against fraud. At the end of the day, the status of the business may well slip in the eyes of stakeholders, clients, potential clients and employees.

So again I ask, do you publicise or report the fraud?

The initial fraud has already cost you in one way or another, do you allow the defrauder to further tarnish your reputation and potentially lose current and future clients and investors and potentially even have future fraudsters see you as a target?

Or do you trust that reporting it and being transparent on the issue will lead others to see that you are doing the right thing, potentially protecting somebody else from the same experience and putting current and future fraudsters on alert? Perhaps there is no right answer and each case needs to be judged on its individual merits.

*As published in Accountancy South Africa magazine in July 2014

Tuesday, 28 October 2014

Five tips for choosing a software vendor

We have spoken before about what to look for when choosing your accounting software; but let’s take that one step further and look at what you should be looking for in a vendor.

Here are a few tips on things to look out for when selecting a vendor.

1. The initial financial outlay is not the Total Cost of Ownership
The vendors should include all costs transparently in the initial quote, so that you are not blindsided by sudden additional amounts for experts needed for implementation and integration, training, monthly support, call out costs or upgrades, to name just a few. When evaluating your Total Cost of Ownership, you need to look beyond your initial financial outlay and add any ongoing costs over a set period of time, say five years.  

2. Case Studies and references
A solid vendor will have an extensive list of case studies and client references readily available. Ideally, you should look for references from people in your industry or similar, so that you can get a fuller picture of how the software – and the vendor – might work for your business. Although praise for the software is important, that should be your minimum expectation; you need to know how the clients feel about working with the people that make up that organisation.

3. Does size matter?
When you are dealing with specialised software, as is the case with financial software, should you go with the big name brand or the smaller niche brand? Well, would you rather have access to a general sales person or the owner of the business? A smaller vendor is also likely to have a deeper understanding of and interest in your individual needs. You need to find the balance between their being big enough and having been around long enough to give you the security of an established, secure company, but small enough that you can still talk directly to the boss.

4. Training and support
Even the most user-friendly software will require some element of training and support. Ensure the vendor you choose offers full training and ongoing support from specialised qualified staff. If your financial software is designed to be used by non-financial users, you want to ensure that your supplier will take the time to train your people to make the most of the system.

5. Do they have a plan for the future?
Does the vendor have a development plan for their software or will you have to replace the whole kit and caboodle in a few years? Do they work with a client driven development mindset or do they just add features they think will be interesting to design or develop? Knowing that you are making a long term investment in something that has a long term future and that you could contribute to and be a part of can make your investment a deeper proposition than just another product purchase.

The best software won’t get you very far without the right relationship with your vendor, and those relationships can only be built if you know who you’re dealing with.

Wednesday, 15 October 2014

IDU supports the Santa Shoebox Project, do you?

The Santa Shoebox Project is a wonderful cause that the idu team has supported annually over the past four years. Started in our home town of Cape Town, the Project began by collecting 180 shoeboxes for children in orphanages, children’s homes and care centres locally; by 2013 the project had collected 118 274 shoeboxes to be distributed to over 1000 facilities across South Africa and Namibia.

What makes the project so special is that you can choose the name, age and gender of the child you are creating the shoebox for, adding a very personal touch. We enjoy being able to choose the children we are donating to and putting together boxes especially for those children; our team members choose the children and create their own shoeboxes and we donate them as a company. We have donated a total of 111 shoeboxes since 2011.

This year, the project has extended its reach by creating additional channels for involvement. There is the option of donating a Virtual Box online for donors who don't live close to any of the drop-off zones. The virtual boxes will be put together by Checkers who will pass them to the Santa Shoebox team to take care of delivery. There is also the option to donate Proudly South African raincoats to children who live in high winter rainfall areas, to keep them dry on their way to school every day.

Corporate clients and other sponsors can also make financial donations to the new Santa Shoebox Legacy fund that will provide additional support to children’s facilities in the form of financing and introducing a new skill every year to build and uplift communities across South Africa.

There are only 2 weeks left before the cut off for Santa Shoeboxes and thus far only 90% of the boxes have been pledged, so you and your organisation can still use one of these channels to bring some magic into the lives of these children and their communities.

  • Email friends and family - nothing beats a personal recommendation
  • Invite all your Facebook friends - also those living abroad and out of town as there are still many Virtual Boxes available - especially for them. All Virtual Boxes are earmarked for farm schools in rural areas.
  • Download the supporter logo and e-signature from the Handy Downloads page on the SSB Facebook page and include on your website and email.
  • Mention Santa Shoebox on your blog.
  • Mention Santa Shoebox to your HR Department as a worthwhile CSI initiative.
  • Tweet about it @santashoebox #SSB2014

You can also volunteer to work at one of the drop off points, particularly at the Santa’s Workshop drop off at the CTICC. You can register through the website or mail
Get involved and help make a difference! 

Tuesday, 7 October 2014

Idu-Concept Version 5 Update

Earlier this year, we introduced the new and improved Version 5 of our flagship product idu-Concept at our idu User Conference and we have been beta testing it at a client site for the last couple of months.

Technology has developed substantially over the past 10 years and we wanted to bring our software in line with the user requirements of today to make budgeting, forecasting and reporting even quicker and easier than before. At the heart of it, our software has remained true to its core objective, providing a user-friendly Financial Budgeting, Forecasting and Reporting tool to both financial and non-financial managers.

Version 5 is sporting a fresh new look, with the user interface being completely redesigned to enhance the user experience both visually and technically, allowing better multi-tasking and time savings.

Building on the power of Version 4’s Bulk Edit screens, Version 5 provides rapid budget capture screens in all budget types. With in-line editing dramatically speeding up the budget capture process and expandable /collapsible columns allowing you to easily compare data, the end-user is empowered.

Budget capture screens also now feature auto save functionality, so you no longer need to hit the Save button, meaning no risk of losing unsaved changes; if Eskom kills your power halfway through your job, your work will still be there when it comes back up.

An extremely valuable addition is the ability to upload supporting documentation at every step of the budget process, allowing the provision of full motivation for budgeted values.

With Standard, Itemised, Allocation, Grade Remuneration and CAPEX (Depreciation) budget types all featuring export / import functionality, working off line has never been easier. You can now export data to excel, update the budget figures, and re-import it into the system once you are ready. The file format for importing data has been updated to .xlsx from .csv. What this means to you is no more dropped leading zeros, no more duplication and import functionality that was impossible using .csv files.

In our continued spirit of empowering all users of the system, the Admin module has brand new features, making system administration that much easier.

Watch our blog over the next few months as we delve a little deeper into these great new features and others available in idu-Concept Version 5.

Monday, 15 September 2014

The silver lining of cloud computing

Many businesses put large amounts of time and money into investing in and managing their hardware and software. This is all fine and well if your business is in IT, but what about if it isn’t? How much money have you invested in technology you don’t understand? How many additional man hours do you expend trying to manage it yourself? How much money are you spending on hiring experts that cost a fortune and are not directly contributing to your business bottom line?

The shift to cloud services addresses this dilemma for businesses of all sizes. With cloud, there is no large upfront cost and most solutions are easily scalable, allowing you to add or remove user licences as needed. Our experience has shown that it allows us to offer solutions to businesses that might not have had access previously due to set up times, upfront purchase price or even location - cloud provides products with greater international reach.

When you own the hardware and infrastructure, it is your responsibility to maintain it, keep the security up to date, ensure that there is sufficient storage and that your backups are working and heaven forbid anything crashes or breaks down and you don’t have an internal specialist on staff – the cost of bringing in an external consultant can be prohibitively expensive. How much are you investing in an IT department to manage a system that is there to support your core function, not be the core function?

Moving into the cloud can be a daunting prospect, as many consider it the “unknown”, this is no longer the case with the proliferation of cloud services, and the many high level businesses that successfully use them should help ease your concerns. Remember, transitioning from traditional paper practices to IT solutions raised many of the same fears in the past and look at where we are now.

The data centres cloud providers use, have backups in place to prevent the loss of your data, ensuring your ability to recover it should any disaster hit – natural or otherwise. In addition to this, the physical security at a data centre far surpasses that which the average business could afford. So you are gaining a physical safety bonus as well.

Most providers will also include automatic updates, from software integrations, customisations, fixes and even additional products and features that can be implemented without any disruption to your business.

Cloud services not only allow you to refocus on your company’s key strengths and clarify your objectives, it also frees up large amounts of capital from hardware and software, allowing you to invest in your business and the people who will help you take it to the next level.

*As published in Accountancy South Africa magazine in June 2014

Monday, 1 September 2014

idu-Concept Spend Management

idu-Concept Spend Management is a comprehensive solution and a sophisticated add-on to most accounting and ERP solutions. It complements and extends the functionality of existing systems, increasing the combined value of the systems beyond the investment made.

This solution helps your company to work smarter, enhancing efficiency and accuracy in a centralised, paperless environment. It seamlessly links organisations that have geographically dispersed branches and divisions via web browser. The technology automates the full spending and procurement cycle and streamlines the purchase-to-pay process while providing end-to-end visibility.

The web-based, user-friendly interface is simple to navigate and requires minimal training and the EDGE License model enables 90 to 100% of an organisation to use the system, either directly or through third parties. This allows you to empower your employees to operate within their delegated mandate, without losing financial control.

The application makes a notable difference to your ability to manage all of the below:
      -  Purchase & Payables
      -  Expense Claims
Capital Expenditure Management
Petty Cash Management
Travel Management
Invoice Management
- Payment Management
Supplier Management
Leave Management
Catalogue Management
Receipting Management
Quotation Management
Credit Note Management
Document Management

Savings in time and costs will transfer directly to the bottom line in an increase in operating profits. Most clients achieve quantifiable ROI within 6 months of deployment and continue to experience savings moving forward. It also allows SMEs to experience the same ROI benefits as large corporates.

The system allows you to make informed decisions by generating on-demand, real-time reports for detailed spend visibility and analysis. Accruals are visible at a glance, enabling you to provide for expenditure before it is incurred. Detailed reports provide insight into all spending behaviour and budgets, including committed spend.

idu-Concept Spend Management is a certified third party application that leverages the power of the industry leading Fraxion Spend Management application. Allowing you to take control of your cash flow by authorising expenditure before it is incurred; it will save you money and increase your efficiency dramatically.

Wednesday, 20 August 2014

Redefining Longevity

Today’s workforce is more dynamic than ever before; new generation employees will change jobs and even careers a number of times throughout their working lives. This does not have to be a bad thing, business owners need to look at longevity in a new way – it may not be about keeping someone in the same position forever, it is perhaps about keeping talent in your company long enough to maximise the time and enthusiasm new employees bring.

You can hire the best and brightest candidates and they will come in bringing fresh perspectives and ideas; they will soak up the knowledge you have to offer, pour their heart and soul into the work, master the skills benefiting your business and then move on as their interest wanes. Isn’t that perhaps better than trying to keep someone who has lost their zeal for your business?

This workforce wants a lot out of the jobs that are available to them - they want to be engaged, to learn and grow and to feel that they are contributing. If you want to get the most out of them, it needs to be a fair trade. This is the perfect opportunity for small businesses to take the lead over larger businesses.

There is a common misconception that bigger corporations provide the best job security and have more room for growth and progression in a clear career path. In fact, it is more likely that a new employee will simply be a small cog in a very large machine; a larger company is more likely to downsize, resize or refocus as times get tough, and the rule of thumb tends to be “last in, first out”.

Smaller businesses can offer a new employee far more attention, more input and accountability, more mentoring and access to business leadership. As you grow, your staff can grow with you. A small business is more agile, more flexible and more likely to change which is more difficult with legacy staff, newer younger staff are more likely to accept and even welcome change. You also have the ability to teach specialised skills and ways of doing things that will translate across any further fields your employee might look to explore in the future.

Regardless of the size of your business, the way to optimise your staff is through effective employee engagement; it is the only way to get full investment, more productivity, better service, and greater longevity from them. You need to give your employees trust and responsibility, allow them to set their own goals and provide valuable input and to feel heard. This new version of longevity has so much to offer, utilise it instead of treating it as a risk to be managed.

*As published in Accountancy South Africa magazine in May 2014 

Friday, 8 August 2014

Hiring based on discrimination

I am against hiring people because there is a law that tells me I have to, whether it is because of race, gender, age or hair colour. In an ideal situation, I would like to review a CV without any of this information included, that should be the law – it is the only way in which you would be guaranteed to short list the best person to perform the job function you require without any concern for discrimination.

I work closely with a number of strong women at all levels of my organisation (and I have another three at home in my wife and two daughters!). These are all qualified, independent, motivated, driven people who would have my head on a platter if they believed for a second that they were hired to fill a quota of female employees.

I am sure that in certain industries an argument for discrimination based on gender may be made, but I would argue that in professional fields it should be irrelevant.  Anyone who has successfully qualified in accounting or law or medicine or computer science received the same training and must deal with the same business environment. Results are clear cut and easy to determine, so what has gender got to do with it?

In today’s world, work-life balance is an issue we all deal with, and respecting that both men and women have families is good for everyone. Men are often as involved as women in their children’s lives and are as likely to take time off to look after sick kids or attend ballet recitals or even take paternity leave, so that should no longer be relevant to employment decisions.

All the women I know can be every bit as practical, objective and cut-throat as men; perhaps, in some cases, accentuated by years of being treated as if they weren’t. I have also found their ability to empathise and find alternative solutions for issues more often than not make them better able to deal with business situations and conflict.

But even these statements are making the assumption that women are more empathic than men or acknowledging the stereotype that a woman is seen as more likely to be emotional than a man, which aren’t necessarily true. Stereotypes may have been stereotypes for a reason once upon a time, but now they are largely irrelevant where gender roles in business are concerned.

In the end, I believe hiring someone because of their gender is discrimination, whatever that gender might be. And I feel that forcing a business to create their hiring policy based on discrimination of any kind should be beyond the purview of legislature.

Monday, 28 July 2014

Next Generation Leadership

Leadership is evolving with the next generation. The way things were done in the past, from pyramid corporate structures to top-down budgeting have slowly fallen away as new generations come along with their own views on how things should be and where the generation before has gone wrong. This is nothing new – it is a cycle that happens over and over in life as every generation strives to improve on what has come before.

The generations who will come to leadership over the next decade have none of the fear of technology that the retiring leadership of today and yesterday may have had. They have always had unlimited access to information and they believe one hundred percent in the power of technology. They have a need to do more and be more than any generation before them, a job alone is not enough – they believe in leading a balanced life that brings them personal satisfaction and growth.

This will reflect in the way in which they lead as well. They will want to empower their employees, providing them with more responsibility and more accountability in order for them to feel more fulfilled in their duties. They will want their employees to be well trained and have access to whatever information they need in order to make decisions and lead by example. This is their way, it is what they know and they believe in and they will want to share it with the world.

They want things now, not tomorrow and certainly not next week, and they will demand instant access to all the information from their organisation wherever they are. To maintain the work-life balance they strive for, telecommuting and working from home will be common-place and they will still need to be able to get at any and all information they need.

Real-time, user-friendly, easily understandable, accessible from anywhere information will be the only way they operate, as they will want all levels of their business to be able to access, comprehend and input on the information at hand. They will want to be able to collaborate at any time of the day or night from anywhere they happen to be; if they want the opinion of their manager in Singapore they will not want to have to travel to get it.

Luckily, technology seems to be staying just ahead of demand and financial management software today can provide many of these things already. The next generation of software will need to keep evolving in anticipation of the leadership needs of the future, but the forward-thinking business owner will already be investing today in the technologies that will make that progression organic and natural when the time comes.

*As published in Accountancy South Africa magazine in March 2014

Monday, 14 July 2014

Risk Management - Using the weapons in your armoury

Risk Management can feel like going to war; there are threats on the horizon and it could take substantial investments of time, resources and effort to achieve victory. Some of the threats your business will face are bad debts, theft or fraud, loss or theft of data and natural disasters. The good news is your business already has all the weapons and resources in its armoury that you will need to manage most of these risks, so the cost may not be as overwhelming as you might think.

Your first line of defence will be your financial software. The systems of today have built in tools, from alerts and red flags that tell you something outside of your preset parameters is occurring to providing user-friendly real-time access to your information.

Alerts and red flags can provide early warning that one of your customers are struggling with payments, allowing you to get in touch with them before they get relegated to the bad debts pile. If you get a notification when one of your branches is burning through their budget way ahead of schedule, you can immediately follow up and head off any potential fraud or theft before you experience any real loss.

This of course ties back to real-time access – what good is the air raid siren a month or even a year after the shells have been dropped? If you can only review your books at year end, the losses will have already occurred and you may never identify who was responsible or when it happened.

To the layman, traditional systems seemingly communicated in complex code that could only be broken by accountants, an expensive resource that appeared to spend all their time pawing through figures no-one else could understand. Systems today can provide simplified information that can be understood by non-financial users, meaning there are more people available to recognise when something is out of place.

An unexpected ally has also joined your ranks in the form of your cloud services. Cloud providers employ security specialists to keep your data safe; they update your software through automatic updates; and the data centres they use provide redundancies ensuring your ability to recover from any disaster – natural or otherwise. The physical security at the data centre is also likely to be far superior to anything the average business can afford, adding an additional layer of protection for your data and additional peace of mind for you and your customers.

Defending your business against risk can seem an intimidating and costly venture. Sometimes the difference between raising the white flag and racing to victory can be as simple as taking a closer look at the resources you already have in play.

*As published in Accountancy South Africa magazine in February 2014

Monday, 30 June 2014

If Poker is just a game of chance then so is business

If you don’t know what you’re doing in poker, you can lose with the best hand at the table. Conversely, if you’re skilled and a little lucky, you can win with the worst hand.  Not always, but often enough to tip the odds in your favour in the long run.

It’s exactly the same in business. We don’t get to choose the hands we’re dealt -- but we do get to choose how we play them. To succeed, you must know the rules, learn to calculate odds, take calculated risks and know your opponents.

Be tight-aggressive
Being over-cautious can be as dangerous as being over-aggressive. If you play every hand, but are too timid to call a raise, you’re likely to lose. Don’t bet on every hand, but when you do, bet aggressively. If you believe in your cards, take control of the hand and go on the attack. 

That strategy works in business too; there’s a place for aggression in every tactical toolbox. If you can recognise when to back down and when to push back you have a huge advantage.

Know when to hold ‘em and when to fold ‘em
Knowing when to fold is a critical survival skill. To make the decision, you need information.

How much do you stand to lose if you fold? How many cards in the deck will help you? How much more do you need to invest to stay in? How much do you stand to win if you get the right card? You need to be able to calculate the odds objectively.

A business deal is no different – at every stage you need to dispassionately evaluate how much you have invested, what might work in your favour and what it will cost -- financially, in time, in energy -- to keep going. When does the cost outweigh the reward?

Know your opponent
Evaluate your opponent. What is their playing style, how do they react to certain situations, what are their tells? Good poker players watch their opponents at least as carefully as their cards. A realistic assessment of relative strengths and weaknesses allows you to match yourself to the competition in poker and in business.

You can’t bluff in business

The one fundamental difference is that you can win in poker on a bluff and never have to show your cards – In business you always have to deliver. Business success is decided on delivery. In fact, if you deliver on your word, you might get to choose the game next time around – and it doesn't always have to be poker.

**As published in Accountancy South Africa

Tuesday, 17 June 2014

Business Analytics: Not all tools are created equal

Although there are many Business Intelligence and Business Analytics tools out there, they are definitely not all created equal. In order for your Business Analytics tool to help you maximise the value from your financial information, you need to ensure that the product is well established and can deliver innovative reporting to both management and the business as a whole.

A high quality Analytics tool will deliver true slice and dice capabilities around the financial information held within your existing database, allowing you to answer any deeper question you might have.

In order for it to deliver true value, it needs to be extremely user friendly and offer both a real time view and rapid analysis of your data.

It should provide dash-boarding capabilities at the click of a button, and require no IT involvement to configure and deliver quality reporting; saving your team valuable time.

It should come standard with a preconfigured set of models integrated with your database and deliver immediate added value to users; and be easily customised to meet specific needs of individual clients.

In today’s mobile work environment, it should also allow for the availability of data off-line and have a facility to replicate the database to your local pc or laptop and allow for the continuation of the analysis off-line.

An added bonus would be the inclusion of a limited top down budget approach, ideal for the quick re-forecast type environment, where there is a requirement to amend some figures at a high level and then ripple the effect of these changes down to the lowest account cost centre combination by month.

The Analytics should link across your existing software modules, exposing all tables to the application and enabling complex analysis across Sales, Asset and Financial tables where these are in use.

The Analytics tool you choose should be extremely flexible and allow you to easily analyse different components of your business. Ideally, the business providing your financial software should be able to offer you a high-quality tool or module that easily integrates with your systems and helps you to gain insights from your financial information to inform your business decisions.

Monday, 2 June 2014

Accounting for Bribery - Corruption or Practicality?

A local news story on a forensic audit which uncovered a petty cash slip made out for R 5,000 and described as “bribe money” for a municipality caused much outrage about the corrupt attitudes this exposed. But is the tracking of this amount corrupt or just a practical way of managing a very real issue? 

What is Bribery?
In its simplest form, bribery is giving someone in a position of power something in order to change or influence their behaviour to benefit you or your business or cause. Bribes can be anything from cash to gifts to favours to extravagant entertainment; but not all of these are necessarily bribes. What is considered a bribe differs from country to country and from culture to culture.

Where is the line?
Giving someone a gift to show appreciation or respect may be construed as a bribe in one country where it is common practice and even a tax deductible expense in another. In some cultures a cash bribe or “tip” to thank someone for helping you is tradition, gifts to show respect or pleasure at working together is the norm, flying potential clients into your country and putting them up in respectable hotels including meals and entertainment for the duration of their stay is simply practical if they are in the country purely to see your operations.

Entertaining clients or potential clients in an exclusive box at the rugby – entertainment or bribe? If a business manager hears how a competitor has been wining and dining a potential client and decides to up the stakes by getting the potential client tickets to a Celine Dion concert because the wife of said client is a huge fan; is that a bribe or simply entertainment and friendly competition?

This goes even further when considering hiring staff in other countries. It is common and smart business practice to hire local people to manage your business operations if you start a new branch in a foreign country. You hire them for their specialised knowledge and understanding of their country and their laws and regulations; isn't part of what you chose them for knowing how their local culture works with regards to doing business efficiently? Ethical standards are culture specific and a person acting on your behalf in a foreign country may not even realise that what they are doing is considered illegal elsewhere.

A little bit of history & reality
Until the mid 1990s bribery, particularly in the case of foreign officials, was not only acceptable business practice, but a tax deductable business expense. It was only in 1997 that 34 countries signed an anti-bribery agreement with the Organization for Economic Cooperation and Development (OECD). Although this convention came into force in 1999 and now includes 40 signatories (34 OECD and 6 non-OECD countries), there are a large number of countries; including those that have signed; that still do not consider bribery in foreign countries illegal.

There are very few countries in the world where it is possible to do business without making some form of government payment and any business that wants to compete in these markets is aware of this. There will always be somebody willing to remove or shift regulatory obstacles for a price.

Why bribery?
Laws alone cannot eliminate bribery since the root of the activity is tied into the conditions and cultures of each individual country. Where officials are paid poorly, where a few individuals have the power to choose suppliers without having to justify their choices, there will always be bribery.

Apart from the possibility that managers may not be aware that what they are doing in incentivising certain bodies to gain favour is illegal and bribery, there are also those who are faced with everyday business pressures to perform and deliver and don’t see any other way to do so.

The new branch manager, who has been given the responsibility and accountability for launching into a new market with tough targets and the need to succeed, is faced with a choice of giving someone what they ask for in order to reach the goals set or failure.

This is not to say the business owner is in favour of bribery or encouraging it in any way, but you push your people to deliver and ideally you want them to make the right decisions while getting the job done, but how many people might see it as a lack of choice? Especially when they are responsible for the jobs and livelihoods of others and you have sent them to a country where bribery is nothing more than a basic cost of business and competition.

The line between what is right and what is necessary may very soon become blurred.

Accounting for Bribery
Although the legalities have changed, the realities have not. If bribery is a reality in your business because of where you operate, surely as a business owner this is information you need to know?

From an accounting point of view, if amounts that are some form of bribe are hidden in a multitude of other expenses; and usually in a variety of different expenses depending on the branch or manager; as a business owner you have a largely skewed overview of where your money is being spent.

For example, if your new office has “donated” a large sum of money to the local government party as this is the standard in this country when joining their economy, but the manager knows that there is nowhere that this expense actually fits; would you rather the manager adds it to “International Travel” expense? And elsewhere, you have another branch that has given the expected gift to the head of the new company you have won over as a client, should this be added to the “Entertainment” expense?

What happens when you are reviewing expenses at the end of the year and you see the cost of expenses has doubled in one branch, but you have not secured new clients that equate to that expenditure; or that suddenly your entertainment budget is off the charts in a branch in a small town in Witwatersrand?

What happens when you are budgeting for your next year; and not knowing what those expenses are actually covering you cut those budgets, possibly losing major business without realising it, putting your entire business at risk?

There is a reason we as accountants value transparency so highly – it is necessary in order to make informed business decisions on all levels.

The Dilemma
How do you plan or manage your business when you have no idea where your money is being spent. Denying bribery exists by building it into other costs means not knowing the actual costs of your company doing business. Would you as a business owner rather have a clear line-item for bribery or “New business expansion” which would allow you to make informed decisions moving forward, or should your managers continue to hide these amounts elsewhere?

I can already hear the furore of voices at the implication that one would condone illegal activity such as bribery of officials by adding a line-item to your books to account for it, but there is a big difference between condoning the behaviour and accepting the reality of its existence.

Monday, 19 May 2014

Forecasting in life and business

Forecasting in all things is a delicate balance between what we know and what we can learn, and it is used to guide us and help us plan in both life and in business. There are some elements that are common to all forms of forecasting and the similarities might surprise you.

Let’s begin looking at modern weather forecasting. It uses a combination of technology and computer models with human input in the form of observation and knowledge of trends and patterns. But there are a number of variables such as wind direction and temperatures that are so variable that it can make forecasting past a certain point impractical and increasingly inaccurate and the ability to acknowledge that, and remain flexible and agile in your ability to recognise and respond to it can make a big difference to the outcome.

Financial forecasting is no different. Using the right technology and software will go a long way to helping you accurately forecast the financial future of your business. But just as with weather forecasting, there is a definite need for the human element that can keep track of ever shifting variables in their environment that no computer can be aware of.

New competition entering the market, a decline in interest from customers in certain products or ranges, what elements occurred in this year that are highly unusual and do not lend themselves to helping to calculate what will occur in the coming year – these are things that only your staff can answer and taking this information into account will make your forecasts far more reliable. Ensuring your software allows for ongoing adjustments for unexpected variables will further increase the validity of your information.

Accurately forecasting the weather becomes increasingly important when you consider the many ways in which it affects our lives. Farmers use the predictions to plan for the planting and harvesting of their crops which directly affects our food chain and further along affects trading and the economy. Airports use local and to a degree international forecasts to safely schedule flights and flight paths. Towns and cities use it to keep track of major weather events from earthquakes to tsunamis to hail storms to droughts, using the information to keep all of us safe and protected from the worst possibilities. On a day to day basis, we use it to choose what we are going to wear and what activities we will do.

An accurate financial forecast will allow you to properly plan for most aspects of your business. The information will affect the number of staff you can hire or may need to let go; it will tell you if you can invest in new products or technologies or if you are going to need loans from others to cover your day to day expenses; it can help to predict your expected cash flow amounts or identify your risks to allow you to better manage them should they arise; it can tell you whether you are looking at business expansion or having to shut down one of your branches.

From daily decisions to long term strategies, accurate forecasting can make your life and your business more manageable. It can never be the only tool you use, but if you utilise your resources properly and allow for the possibility of change and continued input, it can form a strong basis from which to build. 

Monday, 5 May 2014

Alerting you to the power of alerts

It is all fine and well that you have embraced the shift in managing budgets by getting input from your staff from all levels of your organisation and it will undoubtedly ensure your budget and planning will be far more accurate and the staff will feel more empowered by their involvement.

However, empowerment does not change the fact that your staff are busy with their day to day activities, ensuring the business is on track and growing, and you may face a few problems getting them to prioritise accessing the system and reviewing the numbers. Providing the access and requesting the input is not going to get you very far if your team “hasn’t had time to look at it yet” and therefore can claim ignorance of any updates or changes.

As opposed to having to chase staff to get them to keep an eye out for any changes on a daily or weekly basis, it is much easier to set up pre-programmed alerts that allow you to push data directly to the relevant people via an email. This will ensure key people are kept aware of critical business information in a convenient format suited to their lifestyle, at a predetermined time.

While not all systems will offer this, there are definitely those that do, including idu-Concept, so keep your eyes and ears open when reviewing additional modules for your financial software.

Ideally, your alerts should be able to be controlled by the administrator or the user, depending on the needs of the business and the individuals involved. Decision need to be made from determining when an alert is triggered (whether the threshold is a transaction, balance or variance that affects the user), to scheduling the timing of the notification and the repetition of the alerts.

On one hand you don’t want the user to be able to override or dismiss the reminders before they have acted on them, but on the other if the user sets the parameters themselves, they are more likely to choose what works for them and then follow through.

Whoever makes the decision, the software should allow them to easily make some further adaptations. From identifying socially acceptable times to receive notifications (to avoid easy-to-miss emails’ at 3 in the morning while allowing for different time zones for international use) to activating the alert from a predetermined point in time (it would be pointless to notify users that they are under budget daily from the 1st of the month when salaries are only paid on the 25th).

Knowing your staff and understanding their challenges and how best to provide them with what they need is as important to empowerment as giving them the responsibilities in the first place. 

Tuesday, 22 April 2014

Empowering your employees

Too many businesses in South Africa see their employees as a problem to be managed as opposed to an asset to be optimised. Your business is nothing without strong employees, your business plans and ideas need reliable invested employees to become a reality. The strength of your business is wholly reliant on the strength of your workforce.

I believe that organisations thrive when non-financial managers can easily find, read and understand financial information that is relevant to them; particularly their budget and spending information. When people understand how their financial decisions affect the rest of the business they are empowered to manage them properly, and only then can they really be held accountable for those decisions.

Yet that level of transparency, particularly with financial information, can be threatening to some executives and business owners that feel that empowering their middle managers somehow threatens their own power; so instead of taking action to provide true transparency in the organisation, they make a big show of rebranding, sponsorships or event-based team building. A real team is built through shared goals and understanding, input and responsibilities for those goals.

Transparency is achieved when information is current, reliable, stored in a single place, easy to find and easy to understand. When this is the case, operational managers are empowered to take responsibility for the part of the organisation’s financial well-being that is in their power.

When your staff feel valued, when they believe their input is being taken into account and their knowledge is helping to build the business they are a part of, when they have a clear understanding and overview of what is going on with the business; they feel responsible for and accountable to the organisation as a whole.

This is not only true of financial empowerment, wherever you provide your employees with real opportunities to develop and own their position within their team and within your business, there is an increase in their sense of pride in both their role and the business as a whole. That sense of pride translates into an increased feeling of responsibility, employee satisfaction and productivity. This is not only good for business itself, but also for the reputation of your business – nobody sells your business and all it stands for better than a dedicated, happy employee.