Category: Uncategorized

An alternative approach to Brexit


Here’s a thought. The EU moghuls want the UK to pay a €60b Brexit bill. That would be about €2000 per working UK citizen. Some people don’t want to pay that and want a hard Brexit, some are happy for us to pay and hopefully enjoy the benefits of market freedoms in the future.

Why does this have to be a one size fits all approach? Would it not be better (I know this is an alien concept to the EU and politicians/lawmakers in general, but…) to democratise it? Let British people who want to have a permanent set of personal rights pay for an additional ID card like a superpassport (could be the prototype of a real EU passport) at €2000 per head or €5000 for a couple and their dependent children, with subsequent top up payments of say a quarter of the entry sum annually (collected say every four years) and the same for EU nationals wishing to work in the UK. Likewise companies wishing to import or export goods and services under the four freedoms would pay based on their employee numbers not having the card. If all their employees including subbies had the card then the company could trade up to a certain volume per head of employee based on what appears normal in databases like Amadeus. If they wanted to import unusual amounts for the size of the workforce in their sector then even if all their workforce are paid up Europeans they could make top-up payments for higher export and again that would work in both directions.

Then people, and private companies, can actually decide to be European or not. Their contributions would among other things fund their own representation as a constituency of UK Europeans in the European Government at all levels and they would also vote for their representatives. EU nation states citizens wishing to do border and tariff-free trade in the UK and buying the card in that direction could also vote for their own MP in the UK parliament, their own representation even in the House of Lords and representation at other levels of government as relevant to them. If living in the UK, they would remain entitled to vote in local elections.

In other words, the EU as far as the UK is concerned and vice versa would be an individual driven, opt-in system with complete respect for the individual and whether they identify as European or not.

If it works then it could after some years become a blueprint for further EU expansion or for those nations in the EU today potentially, for all we know as most are afraid to have a referendum, against the will of the majority of their people.

Contact managers and CRM systems are incredibly stupid | ZDNet


 

In the following article:

Contact managers and CRM systems are incredibly stupid | ZDNet.

David Gewirtz writes:

I’m having a crisis of faith. I can’t stand contact managers. Whether you call them CRM systems or contact managers, they all seem to be stuck in the land time forgot. They’re incredibly inefficient, and no matter how hard I try to force myself to use them, I find I get busy and never bother to update my contacts.

 

Find out why…

The profit and loss account, and why it looks the way it does


All those of us who have studied double entry bookkeeping will remember their earliest lessons, in which we are told how the balances of the various accounts in the general ledger are taken to one of two statements at the end of the reporting period.  One of these is the balance sheet, which (we were told in lesson one) is like a family photo, a snapshot of your business at one particular point in time, and therefore is “na dzien”, and the other statement is the profit and loss account, which is a story of how the family developed and what happened to them between the last photo, and the current photo.  Put simply, a profit and loss account is the story of how you get from one balance sheet to another.  There are in fact other ways in which balance sheet items can change which don’t involve things passing through the profit and loss account, but international standards of accounting seem to prefer it when as much as possible going on between an opening and closing balance sheet for a reporting period (usually a year) is reflected to the maximum degree possible in the profit and loss account, or as it is now fashionably known, the statement of income and expenditure.

What I wanted to talk about in this article is to let us think I’m at about the order in which things appear in a typical profit and loss account.  This is worth doing as there are many different layouts for the balance sheet as you go around the world (the Americans have theirs, the British have theirs, the continental Europeans have theirs and each of the above look somewhat different) but there is a lot more uniformity as you go around the world in the order in which things are set out in the profit and loss account, or statement of income and expenditure.

Invariably the first thing that it deals with is the issue of turnover.  In most countries which have VAT, but by no means all, the turnover figure in published accounts is shown net of VAT.  That is how it is done in Poland and that is the way in which international standards would also have us do it.  Similarly the expenses, where VAT applies which can be reclaimed by the entity, are shown net.  (This of course is different to the balance sheet, where debtors and creditors are shown gross of VAT and the difference which you would have in the profit and loss account if those items were shown gross ends up in the VAT control account).

The first question that our profit and loss account seek to answer is whether the business is making a profit or loss regardless of how it is financed or tax.  It is also good to show items which are likely to be normal recurring items, and not one-off or extraordinary items in the first part of the profit and loss account.

Hence the top of most people’s profit and loss accounts as you go around the world deals with the question of ordinary sales income and the costs incurred to get to that sales income, giving a basic idea of profit.  Before you add in the cost of selling an administration, while you are still looking at a cost of goods sold or the cost of providing the services of is a service company, the profit figure achieved is known as gross profit.  Exactly what costs and what revenues make up that gross profit actually do differ quite significantly from one firm to another firm depending on the business, and the principles of management accounting have quite a lot to say in how we will classify the costs and revenues going into the gross profit line.

Once we’ve subtracted from the gross profit other operating costs such as the selling and administration costs, we come down to something called profit on ordinary operating activities.  After that it might be a good time to look at the extraordinary activities that happened which were still operational, or “other” activities which are not core, such as sales of fixed assets or unusual write downs, and this gives you the operating profit.

The next question that the profit and loss account will seek to answer is the cost of financing the business.  We are still well before the point at which tax is applied, as finance charges such as interest on business loans are usually tax allowable.  We look in this section of the profit and loss account at the interest received and take off the interest paid.  In Poland we have just about any foreign exchange differences also appearing in this section, where as in most western countries it would be considered correct to examine foreign exchange differences to see whether they really appeared on financing decisions or an operational decisions, and put them in the correct part of the profit and loss account depending on the answer to that question.  In Poland they are automatically considered to be part of the financing decision, which is not always true and therefore sometimes leads to misleading ratio analysis unless this is taken into account by the analyst.

At this point the profit and loss account will show us the profit on all the ordinary activities, and the next question that it starts to answer is what the tax is on that.  If a company is applying deferred tax, then the tax figure shown in the profit and loss account will be normalised tax on the profits to that point.  It takes account of timing differences between operational treatments of transactions and there tax treatments.  This means it probably won’t be the same as the figure on the tax return for the year.  The difference between the figure in the profit and loss account and the figure on the tax return for the year is usually going to be the amount added to or subtracted from the deferred tax assets and liabilities and the balance sheet.

In Poland that is usually the end of the line for the profit and loss account, however in some groups the profit and loss account goes on to answer the question ‘how about minority interest?’ which comes after the tax question because tax falls regardless of who the minorities are, and then questions about dividends are dealt with in the profit and loss account in many countries, but not generally so in Poland.

In order not to get confused the questions which the profit and loss account is trying to answer, it is important to observe the order of information, and also to consider whether an item is needed in order to help is to say the very important question of whether the underlying business is profitable or not, and the more the answer to that is yes, the higher up in the profit and loss account you should show it or expect to find it.

 

List of minimum wages by country – Wikipedia, the free encyclopedia


Minimum Wage In Paraguay, one simple figure
Image by WageIndicator - Paulien Osse via Flickr

List of minimum wages by country – Wikipedia, the free encyclopedia.

The above link’s content should provide most people with food for thought.

Compare the minimum wage in Holland or Luxembourg, just shy of 20 thousand dollars a year, with Burundi at less than 100 dollars per year – I don’t know why they even bother with minimum wage legislation, but presumably they need it which is harrowing even to dwell on.

Can it be that an unskilled person in Holland is really worth over 200 unskilled people in Burundi? Regardless of where they are, they are both unskilled.

There’s no easy answer to this one – if you increase the minimum wage then the investment in labour intensive jobs for lowly-skilled people just goes to a more competitive country, and more people starve.

Also of course, one dollar in Burundi will buy you a lot more than a dollar in Holland (especially in terms of unskilled services, should you require them, but also in terms of food, clothing and shelter).

In and of itself it’s not the most useful index of human development, but it certainly makes you think.

What do you want out of business?


The picture shows the typical stakeholders of ...
Some stakeholders, yesterday

Governance and strategy are what this blog is all about, but governance and strategy themselves are actually all about making sure that business delivers its intended objectives.  Objectives, in their turn, derive or ought to derive, from the mission statement of the organisation.  The mission statement is supposed to say what the stakeholders want out of the business.  Therefore even though this may seem to be a post on a lighter note than some of the posts in this blog, nevertheless I believe that this question really gets into the heart of what strategy and governance are actually all about.  Strategy and governance are all about making sure that we want out of the business, we get.

Therefore the starting point needs to be to ask ourselves the question, what is it that we actually want from business? This is a question which I’d like to ask today to anybody who is a stakeholder, please note I didn’t say “shareholder” but “stakeholder” in any business.  Please consider the businesses in which you are a stakeholder, please identify the one which has the greatest importance to you of those businesses, and with regard to that particular business, please put into the poll below all of the answers which you see as being things that you want out of that business.  Things that you are looking for from your stake as a stakeholder in that business.

Hopefully this will show a nice cross-section of the different things which stakeholders are actually looking for from businesses, but if you can see in the list something which you are particularly looking for from your business please feel free to add it in the comments afterwards.

Many thanks for taking part in the poll.

Domain names scam – what to do if affected


World Map Politic 2005 with ccTLDs - LQ version
CCTLD map from Wikipedia

You may have received e-mail (especially from Chinese and Hong Kong companies relating to .cn domains bearing your name if you didn’t register in China, but now more commonly in East Europe also) which says that if you use these people’s services they can prevent your name’s domain in that country from getting blocked.

Now this email gets sent out all over the world to addresses harvested from the internet page and chats and from usenet fora by robots, and of course the people behind the email cannot really afford to block every single domain that they are fishing for.  The one sure fire way of making sure that they do block your domain is if you respond to them, whether with threats or with asking for the help, even in terms of “what it would cost”. I suggest you only do this if you don’t want the domain really and have no intention of buying it, as if you are lucky it will lead the scammers into real cash outlay which they’ll never see any return on. I highly encourage that! Maybe some of these pests will stop it if they see that enough internet users are wise to them and don’t mind leading them up a garden path…

You can always search here on EuroDNS (in the interests of transparency that affiliate link earns 10% of anything you buy after you go there, but it shouldn’t cost you more and it’s the service I use myself) and see what the status is of all of your possible combinations of your name and the country endings or generic endings, as well as check the Whois status of all these countries, both Europe and Asia, all in one place. You will probably find that nobody has blocked your domain at all, and if you are interested in owning the domain you can block it there and then. They are ethical and I never had a problem with them that the owner didn’t solve within a week. If they are not contactable one day you can usually get them the next day. Continue reading “Domain names scam – what to do if affected”