Blue Dot Consulting

Our client was keen to incentivise its staff to beat its revenue targets during the financial year and asked us to help.

The scheme we designed was based on beating a monthly target for invoiced sales.

• If the monthly target is beaten then a small bonus is paid to all staff and a larger provision is carried forward to accumulate at year end.
• At year end if the annual target has been beaten then a much larger bonus is paid out.

This keeps all staff motivated to beat the full year target. It also means that if one or two monthly targets are missed, then there is still the opportunity to make up the shortfall in later months and share in a decent bonus pool at Christmas.

An added benefit is that as the scheme measures invoiced sales there is a tremendous incentive for projects to be completed, closed out and invoiced in good time, which resulted in a significant improvement in cash flows.

Over the last 5 years this scheme has helped to boost profits and has been a great hit with the staff. So much so that now the client is expanding overseas they have asked us to design the International Scheme!

We're constantly surprised by the number of clients who worry about cash flow but who don't have the one tool that they need to help them... a cash flow model.

With one client, the process started with a cup of tea in our local café and has led to a simple cash flow model, that's updated and discussed every month at the finance review meeting. More importantly, it's used every day in the business to make sure the cash implications of decisions are thought about upfront, not when it's too late.

Across this business they're watching stock levels, debtor payments, suppliers' terms, pricing and margins like hawks and ensuring that action is taken when any of these looks like it's going to damage cash flow.

And it's no surprise that when you get the whole team thinking about cash flow it improves!

Creating a cash flow model and implementing it across your business is really quick and incredibly powerful. If you can see the benefits but need help getting started, please call us on 020 7384 6800 and let's discuss how we can help you.

Our client had changed accountants and hired us to sort out the financial mess they had ended up in.

The MD had no management information, no decent accounting records, the tax man was chasing him for both VAT and PAYE and suppliers were chasing him for payment. He was being dragged down by the financial quagmire despite the fact that his business was inherently profitable with plenty of potential for growth.

Over the course of 6 months, Blue Dot helped him.

• Rebuild 2 years of accurate historical financial information
• Negotiate settlement plans with HMRC for his VAT and PAYE
• Design a set of management accounts which provided the directors with relevant and useful information on which to base their business decisions
• Establish cash flow management and forecasting routines

After 2 months, the MD began to see the light at the end of the tunnel. His business achieved consistent monthly profits and cash flows improved. By the end of the 6 months, the business was stable and management could focus on growth and delivering its potential.

If there's light at the end of the tunnel, we can help you find it. The light might not be an oncoming train.

A new client came to us after having struggled for three years to produce their accounts using Excel. He was fed up and frustrated with the process and the financial struggle was holding back the growth of a really good business.

We agreed that it would be more effective in the longer term if he learnt how to use QuickBooks to maintain his own financial records. Over a 4 week period, he came to our office once a week and we showed him how to use the functionality of QuickBooks in a supervised and supportive environment where he could ask questions. Using his live data for training we

• Spent time understanding his business and showed him how to enter his standard, recurring transactions in a way that will feed into useful financial reports
• Showed him how to set up a suite of monthly management accounts reports
• Demonstrated how to correct errors (and to use the audit trail that Quick Books produces)

After the initial training sessions, we set up remote access links to the client's computer so that we can help him out if he gets stuck when he is back in the office.

You'll find more practical examples at our video tutorials.

Many managing directors place a great deal of trust into the hands of their bookkeeper and accountant. Many MDs tell us that one of their biggest challenges is how to review their accountants work effectively, what are the appropriate checks and balances? What timescales should they expect? What does best practice look like when you have never
seen it?

MDs know that the numbers are important but their instincts are best in growing the business and less attuned to the nuances of finance, double-entry bookkeeping and the mystique that poor quality accountants throw up to protect their space.

We have numerous clients who have found themselves in a financial hole caused by poor accounting and who have come to us to help them get out of that hole. Often we have been required to

• Redesign systems and accounting records so that they're doing the right job
• Negotiate with the tax man for time to pay tax
• Chase down old debtors and collect cash owed to the company
• Kick into touch the offline spreadsheets that have been used as workarounds and which aren't necessary to get the job done properly

Poor quality accountants are like KGB sleepers, you may not know that you have got one until it's too late.

We were approached by a web services start-up business. One of the owners had run a small business previously and had learnt from what turned out to be a bad experience. He knew that to avoid any recurrence of the troubles that he had suffered, he needed a solid financial foundation. Blue Dot was recommended to him by another of our clients and we helped him:

• Form a company
• Organize a bank account and deal with the bank's view of the business' credit-worthiness
• Register for VAT
• Set up payroll and PAYE routines

This consumed the first few weeks and our client told us that he had been surprised by the level of administrative work required. But once it was done, it was done!

Thereafter, we focused on his bookkeeping routines with a particular focus on

• Credit control and ensuring that he was paid by customers
• Making sure that he submitted his VAT returns on time and paid his VAT
• Running payroll enabling NIC and PAYE to be paid on time
• Producing monthly management accounts with a strong focus on cash flow

We also set up a #2 bank account and transferred a percentage of cash received into it each week. In this way, the company always had a cash reserve to pay its taxes.