Would you accept this money?

Now this is an unusual one. It involves an accountant that wouldn’t accept money…

Baverstocks Accountants is a small firm of accountants in the UK that recently fell out with one of their clients.

Their client, a Mr Fitzpatrick, got into a dispute with the accountants and withdrew his business from them with an outstanding debt of £804.

The (ex) client apparently wasn’t overly happy with things and decided to settle his debt by payment in cash. Now this wasn’t 80 crisp £10 notes together with four pound coins. No, he decided to pay his £804 by dropping off five big boxes full of 1p and 2p coins.

I don’t know the exact split of coins but if we assume that the £804 was settled by way of 2p coins this meant that there were over 40,000 coins in the five crates!

Now whilst the disgruntled client was no doubt feeling very pleased with himself that he had settled the debt and left a mess of thousands of coins at the accountants, the accountants decided not to take this sitting down.

As a result, they took Mr Fitzpatrick to court and sued him, arguing that it was illegal to pay off debts higher than £10 with coins.

The accountants were successful and the judge ruled in their favour.

Apparently, under the Coinage Act 1971 (no, I didn’t realise that existed either), copper coins (1p and 2p coins) are only legal tender up to the value of 20 pence, coins worth up to 10p can only be used for payments up to £5 and coins worth more than 10p can only be used payments up to £10.

The end result is that whilst the unhappy client probably felt quite pleased with himself when he dropped off the thousands of coins, he has now been told by a judge that he has to settle the debt correctly (and collected the coins…)

Mobile phone plus food equals…

Mobile phones have revolutionized the world. It’s not just communication where they have changed things dramatically but if you think about it then a Smartphone is in effect a computer in your pocket.

Today’s Smartphones are more powerful than some of the computers we saw only a few years ago and are capable of doing lots of things.

So, they have lots of benefits but there’s one particular business that is trying to improve their results by encouraging their customers not to use their phones.

Over in America, a Los Angeles restaurant is offering diners a 5% discount on their meals if they don’t use their phones in the restaurant.

Now, in my mind this is a pretty good idea. I’ve been to some restaurants where it felt that I was the only person that was not speaking or texting on the phone (admittedly that was because my phone battery was dead but even so…).

Eva Restaurant in LA will offer a 5% discount if you hand over your phone for safe keeping as you enter the restaurant.

According to KPCC, owner Mark Gold said “For us, it’s really not about people disrupting other guests. Eva is home, and we want to create that environment of home, and we want people to connect again,” he explained. “It’s about two people sitting together and just connecting, without the distraction of a phone, and we’re trying to create an ambience where you come in and really enjoy the experience and the food and the company.”

I think this is a great idea and although I haven’t seen the small print of the terms and conditions of the offer then surely if I could get together 20 mobile phones to check in at the restaurant then 20 x 5% discount = 100% discount = equals free meals?

This EY partner has been a bit naughty.

Well it seems like an EY partner was working late with a client and it was more than the audit files that they were reviewing.

office relationsNew York stock exchange quoted Ventas Inc has announced that it has removed EY as their auditor due to an “inappropriate personal relationship” between a (now former) EY partner and Ventas’s (now former) Chief Accounting Officer and Controller, Robert Brehl.

It looks like discussing the audit files wasn’t exciting enough for both of them and one thing led to another and before you could say “prudence concept” they were ripping each other’s clothes off having inappropriate personal relationships.

Now, as any self-respecting finance professional will know, a core characteristic of auditing should be “independence”.

[Words deleted so as not to upset people of a sensitive nature] with the Chief Accounting Officer when you’re an audit partner is clearly not a characteristic of independence.

KPMG have now replaced EY as the auditors of Ventas and my guess is that both the ex-EY partner and Mr Brehl will soon get a reminder of what independence means as if they are married their husband/wife will soon be independent of them.

And the prize goes to… the taxman.

Tax evasion is a major problem for lots of countries. The tax authorities of the Central European country Slovakia though have come up with an ingenious way to reduce tax evasion.

restaurant moneyRestaurants can be notorious for not declaring all of their sales. With lots of customers paying for their meals in cash it can be very difficult for the tax authorities to ensure that all the revenue is properly reported by restaurants.

The Slovakian tax authorities have come up with a clever way to limit the non disclosure of income by restaurants. They have launched a lottery with a monthly top prize of €10,000. The twist in this lottery though is that you don’t buy a ticket to enter. Instead, you enter the lottery by submitting your receipt from the restaurant.

Yes, your receipt acts as the ticket for the lottery. You therefore have happy members of the public who get free chances to enter a lottery to win €10,000 and a happy taxman who now has copy receipts which they can check against the tax records of the restaurant to ensure that the sales have been properly declared in the tax returns.

So far over 60 million receipts have been submitted by 450,000 people.

A very good idea.

You’re not an auditor, you’re a financial detective…

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I’m an accountant and I’m proud of it.

I think the education and knowledge that you acquire both during your studies and continuing professional education are fantastic.

At the start of my career when I worked for one of the Big 4 I spent several years in the Audit department and this was a great opportunity to find out how a variety of different companies worked.

Sometimes though it has to be said that the term “auditor” doesn’t always have the most exciting of images to the general public. People may think that an auditor is merely somebody who checks other people’s work.

To be honest though a simple piece of rebranding whereby “auditors” were known as “financial detectives” would go a long way to removing some of the negative perceptions that some people have in terms of the excitement of the profession and could create a whole new generation who want to become auditors financial detectives.

Now, whilst most people have heard of the term “auditor” a lot of people don’t really fully appreciate how it works.

The Institute of Chartered Accountants in England and Wales (ICAEW) have got a website called “True and Fair” which in their own words aims to “help you find out anything you would like to know about the process known as audit – or to use its full title “Audit of Financial Statements”.”

I think it’s an excellent site and if you are an auditor and want friends or family to find out what your job entails then you should direct them to it (although admittedly if you’re on a first date with somebody and they ask you what you do then maybe say you’re a financial detective).

For any of you that are attempting an ACCA or CIMA paper with an auditing content it also makes for very good background reading.

The site can be found at www.trueandfair.org.uk

You get a safe hotel and a great bed. The towels and TV will cost you extra but what about the toilet paper?

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The Tune Hotel chain has just opened up its first hotel in the UK. The chain already has 7 hotels in Malaysia and 2 in Indonesia and they claim they offer 5 star beds at 1 star prices.

Their policy is to offer the essentials that people look for in a hotel such as safety, cleanliness and comfortable beds whilst at the same time removing a number of “extras” that some customers don’t necessarily want.

With rooms starting at £35 it certainly offers great value for London hotels. It wouldn’t suit everyone’s taste though as some of the things that people take for granted at a hotel are not included in the standard price.

There are a number of optional extras that guests can purchase. A towel for example can be provided for £1.50 per stay whilst the use of a hairdryer will set you back £2. If you want to watch TV you’ll need to pay £3 a day.

If you’re the type of person that likes to take your own towel to a hotel or is relaxed about whether or not you wash then you could end up with a very cheap room.

Whilst this hotel wouldn’t be everyone’s “cup of tea” (incidentally there are no coffee or tea making facilities in the rooms) there will certainly be a market for people that only want a clean and safe hotel room to sleep in and are not bothered about the extras.

In the past we’ve blogged about the BMI Weymouth hospital that was adopting a differentiation approach to business. With Tunes Hotels adopting a hospitality industry equivalent to the low cost airline models of Easy Jet and Ryan Air, this is a great example of either a cost leadership approach or Bowman’s no-frills strategy.

Guests can rest assured though that toilet paper is included in the price and is not an optional extra.

Husband hides money in oven and then wife decides to…

There’s a saying that “money makes the world go around” and as finance professionals we should all have a good solid understanding of the importance of cash flow and treasury functions.

With the recent history of banks failing and the turmoil that is currently taking place in certain European countries there is also the question as to how safe is your money.

Both companies and individuals should therefore make sure that their money is kept in a safe place.

Now, this doesn’t just mean ensuring your bank account is with a reputable bank. No, it also means don’t try and hide your money in a pretty stupid place…

As an illustration of where not to “invest” your money, according to press reports in Australia, a gentleman in Sydney stored his money in what must rank as one of the most stupid places to store money.

Due to the slowdown of the building industry that he was working in, the unnamed individual had been forced to sell his sports car to pay various bills and mortgage obligations.

The individual had just sold his Toyota Supra for AU$15,000 and when he was looking for a place to hide it until he could get to the bank the following day he decided that the best place would be to put the cash into the kitchen oven.

Now let’s just stop for a moment and think. Was this a good idea? Was there any chance that the oven could get turned on, become very hot and as a result the cash become pretty worthless??

Yes, you guessed it.

His wife came home and decided to preheat the oven so that she could cook some chicken nuggets for their children.

20 minutes later and as she went to put the nuggets in the oven she found a pile of melted money (interestingly, Australia has plastic banknotes which last longer than the traditional paper banknotes although not if baked to 200°C).

The gentlemen went to the bank the following day to see if they would replace the damaged money. In some countries the central bank will replace damaged bank notes with new bank notes but it’s unclear how much if anything the individual got back in this case.

So, the moral of the story is if you’re going to put your cash in a safe place then make sure it is safe.

Instead of hiding it in the oven then why not try hiding it in the trash bin…

The viewers won’t be talking about this new TV channel.

Do you have a favourite TV programme? Is there one particular programme that you really like and watch it as much as you can?

Before you start answering those questions I should say that I’m not talking to you but am instead talking to the dog.

Before you start questioning my sanity (or asking the dog if he thinks I’m mad) I should point out that a new TV channel is launching this month called Dog TV.

The channel isn’t aimed at owners of dogs. Instead, it’s aimed at the dogs themselves. It’s a 24 hours a day, seven days a week channel which has been specifically designed for dogs that are left at home whilst their owners are out of the house.

Instead of showing dog action movies or dog romantic comedies the programmes will aim to soothe and relax dogs who are alone at home.

If you look at the typical revenue stream of the TV channel it’s generally advertising revenue and subscription income.

The brighter amongst you will have probably realised already that advertising on a TV channel aimed at dogs and not humans isn’t likely to be that successful. After all, if Fido your faithful hound sees an advert for the latest dog food it will be tricky for him to tell the owner about it when he or she gets home from work.

So that leaves the subscription option and Dog TV will be open to subscribers for a monthly fee of $4.99.

It’s certainly a novel business idea and we wish the Tel Aviv company behind it all the best. If it is a success and the subscriptions go well then the company will be happy, the dog owners will be pleased and the dogs themselves will be soothed and relaxed.

It does of course raise the question, “what about the cats of the household and where is their TV channel? Where is Cat TV?”

Maybe this is in the company’s product development expansion plans??

Forget about Harry Potter. What about Alan the Accountant and his pants?

The Harry Potter books are a publishing phenomenon. Who would have thought that a story about a boy wizard would be so successful? Here we are more than 10 years after the first film in the series, Harry Potter and the Philosopher’s Stone, and the movies alone have earned more than £4 billion worldwide. Add in the books, merchandise and rights and you have a hefty sum.

But will there be a challenger to the Harry Potter crown?

I’ve just come across another children’s book and forget about wizard characters such as Harry, Hermione and Ron and instead welcome in “Alan the Accountant”.

Author Jinky Fox has produced a book about the likeable accountant Alan and whilst I haven’t yet managed to find a “window of opportunity” to read the book yet it does sound an exciting read.

Publishers Flaneur said that “as a student the author Jinky Fox planned to become an accountant, but was sidetracked into fine art”.

‘The series of books planned for Alan the Accountant will help me examine the exciting world of Accountancy that I turned my back on,’ commented Jinky.

So, as an accountant myself I’m pleased to see this potential challenger to the Harry Potter crown.

As one of the publicity shots for the book shows on the left he even looks like a fashionable accountant when he’s in his trendy pants.

A colleague in our marketing department though joked that seeing as it’s a book for children starring an accountant it will no doubt help children to fall asleep at night.

Forget about the football, what about the shoes?

The football World Cup is well under way and as well as being the world’s leading football fiesta it’s also one of the top events for sportswear sponsors to showcase their goods.

As an England supporter I haven’t been overly impressed with England’s attempt to save hotel costs by minimizing their stay in Brazil and Luis Suarez showing his favourite food is Italian wasn’t the most sporting action I’ve witnessed.

329839One area of the event which has been interesting though is the competition between the big sportswear brands.

Perhaps the most eye catching footwear has been Puma’s new evoPOWER Tricks 2014 boots which feature two different colours – pink for the right foot and blue for the left foot.

Ignoring the question as to whether the 2015 version will feature blue for the right foot and pink for the left foot, it certainly has raised awareness of Puma boots during the event.

The Puma company has an interesting history.

In the 1920s in Germany, brothers Adolf and Rudolf Dassler set up a shoe making business but soon fell out with each other and went their separate ways.

Adolf (Adi) Dassler kept the original company but renamed it Adidas (named after his first name and part of his surname) whilst Rudolf left and set up Puma.

Whilst Adidas and Puma were set up by brothers, the other big player at the finals, Nike has an altogether different background.

Nike, was established in 1962 by Phil Knight, who incidentally was an accounting major, and is one of the best companies in the world in terms of getting its marketing just right.

They have a long history of having a certain flair for marketing. After the 1972 Olympic marathon trials for example they proudly announced that 4 of the top 7 finishers had worn Nike shoes. They neatly ignored the fact that the top 3 were wearing Adidas shoes!

Students of strategy papers will be aware of Michael Porter’s generic strategies whereby organisations compete either by way of cost leadership or differentiation (see our ExPress notes for a refresher if you’re unsure about these terms).

It can be argued however that Nike take the best of both of these approaches.

They focus on the differentiation side of things by investing heavily in R&D, design and marketing. As a result they can charge a premium for being “different”.

On the cost leadership side of things then Nike use external manufacturers rather than internal production. This means that they can source their manufacturing via approved suppliers which they will select for each product on the basis of the best price offered by these suppliers. It enables them to shop around for the best price whilst still guaranteeing the quality.

All in all a very smart business model but I’m sure that fans of the World Cup are more interested in the goals that are scored with the football boots rather than the business models behind them.