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Created in 1992 by Drs. Robert S. Kaplan and David P. Norton, the Balanced Scorecard (BSC) is a revolutionary way to handle strategy management. Notably, it centers your vision and strategy around four distinct measures: Customer, Internal Processes, Financial, and Learning/Growth. Essentially, the Balanced Scorecard allows you to get your whole team on the same page with organizational goals in a clear and understandable way. Although it started out being used primarily in the private sector, you’ll now see the Balanced Scorecard in healthcare, non-profit, government organizations, and a number of other types of associations. [Clear Point Strategy]
Here are 10 examples for different types of businesses – click here
This the Balanced Scorecard for Barclays Bank
About half of major companies in the US, Europe and Asia are using Balanced Scorecard Approaches. The exact figures vary slightly but the Gartner Group suggests that over 50% of large US firms had adopted the BSC by the end of 2000. A study by Bain & Co finds that about 44% of organisations in North America use the Balanced Scorecard and a study in Germany, Switzerland, and Austria finds that 26% of firms use Balanced Scorecards. The widest use of the Balanced Scorecard approach can be found in the US, the UK, Northern Europe and Japan.
Even the most brilliant strategy is worth nothing if it isn’t executed well, especially by your front line — the employees who interact daily with your customers. Unfortunately, these employees are regularly asked to execute strategies that others developed and that they may not understand, never mind feel committed or connected to. In fact, according to Robert Kaplan and David Norton, the founders of the Balanced Scorecard, only 5% of employees understand their company’s strategy. This makes successful execution nearly impossible.
Watch this video, how well would your employees do if you asked them about strategy?
#isitok – to just be a really good management accountant?
I never really knew what I wanted to do for a living, just that I was good at maths, economics & geography which pointed towards some form of business occupation. I did a degree in Accounting & Financial Analysis at Warwick Business School, without truly knowing what accounting was. After graduating I just did some temp work in an accounts office (they hired me full time within a few days) before a recruiter sat me down one day and said I needed to get my act together and get qualified if I wanted a proper career. It didn’t need much research to work out CIMA was the route to go. Following this route enabled me to become a Chief Accountant, Financial Controller then Financial Director within a fairly short space of time. All of this was in the small company environment and I was involved in every key decision, which was fascinating and rewarding! But the politics were rife and the hours were long!
The question – How can I do all the fun stuff, the analysis/reporting/decision support/director mentoring without selling my soul to the business? My answer was to go freelance and try and emulate what I had done before but across a number of businesses in different sectors. This just reinforced what I’d previously thought – I had found my vocation in life – working with owner managers or MD’s of smaller companies, understanding their aspirations, delving into the businesses, providing the right information, making a difference, adding value, finding solutions to problems, evaluating everything for them – but not taking it home every day.
During all of this I entered into the CIMA Members in Practice world, a place full of very successful people, a mix of high flying entrepreneurs, some more traditional accounting practices offering compliance as a lead service, some specialist consultants, but as far as I could see not so many freelancers like myself. At the annual conferences in the midst of all these success stories I’ve quite often sat back and thought ‘Am I doing something wrong?’ My worry was that I had no desire to build an ever expanding business, I had no appetite for compliance work, I didn’t possess a specialism where I would stand out from the crowd and I didn’t feel I needed the best looking website or my own app (or certainly couldn’t afford it). On reflection, the last 15 years has confirmed to me I’m not doing anything wrong, it’s actually ok to focus on what you feel you’re really good at.
#isitok – to just be a really good management accountant? – I think it is.
Mark Tomsett, Avalon Management Accounting Limited
Celebrating 15 years as a Freelance Management Accountant
During my employed career working for a range of smaller privately owned businesses I always had a vision that I could perform the FC/FD role across a much wider range of businesses. In each work role I made an impact by just doing what came naturally to me; getting stuck into the numbers, working out the key drivers, assessing the different personalities, getting the right information at the right time to the right people, planning the future with all the potential scenarios. So I took a leap of faith!
15 years on…
I realised that I’ve now spent as much time in my current career than all of my other roles put together, so it was a successful career move. It wasn’t plain sailing in the beginning, I had to fill some gaps with contract work, but I backed myself and my passion for getting the numbers right and giving true commercial insight to smaller business owners and managers. The strongest business relationships I have today go back to those first few years of trading.
In celebration of this achievement, over the next few months I plan to share some of my thoughts and experiences gained over the last 15 years. I am hoping this will provide encouragement and insight to those who are following, or planning to follow, a similar career path.
Mark Tomsett, Avalon Management Accounting Limited
Celebrating 15 years as a Freelance Management Accountant
We are delighted to announce the appointment of Gulzari Babber as our new Honorary Chairman. Gulzari was the President of the Chartered Institute of Management Accountants in 2013. He has been a member in practice for 30 years and his practice is Gulzari Babber & Co Chartered Management Accountants based in Harrow.
Commenting on Gulzari’s appointment, Steve Bicknell, our Business Development Director stated: “We are delighted to welcome Gulzari to the board, he will help the Association to raise its profile and build closer links with the Institute. We are enthusiastic about working with him and benefiting from his experience and skills in developing the Association for the benefit of CIMA Members in Practice.”
Gulzari is equally positive about joining the board. “I am impressed with the work done by the Association and how they have managed to create strategic partnerships, whilst the Association is still in the early stages I am sure the hard work being put in will soon start to show results and would encourage all MiPs to support and join the Association,” he said. “The Association is focused on helping members participate in business opportunities, it’s democratic and all MiPs are welcome to become shareholders and it’s a not for profit organisation so the benefits flow directly to the members”
Press Release Monday 9th February 2015
Thanks to http://www.freedigitalphotos.net
One of the great joys of working as a ‘CIMA MiP’ (“Chartered Institute of Management Accountants, Member in Pratice”) is that we are generally dealing with ‘small’ and ‘micro’ client firms (micro defined by EU regulations as firms with less than 10 employees/ £2m turnover; small defined as firms with less than 50 employees/ £10m turnover) and that we become involved in an enormous breadth and depth of subjects.
One of the less welcome challenges however is that as far as most small and micro business owners and managers are concerned, one accountant is the same as any other and this includes the myriad unqualified accountants who practice their particular brand of accounting services at rock-bottom rates. Indeed it is rare that I have been asked whether I am a ‘qualified’ accountant, and is rarer still that I am asked what that qualification is (in fact I cannot ever recall being asked that question by a client). The client generally assumes that because one calls oneself an ‘accountant’ then one can ‘do accounts’ and that accountants are all the same.
My particular practice specialises in manufacturing clients and most new clients have come from existing client referrals. Fortunately I do not need to be a great sales person to convert a prospect into a new client when (a). there is a recommendation from an existing client and (b). we appear to ‘speak the same language’. Clients generally put this down to my having owned and run manufacturing firms and to some degree that is true, but is is also because of my CIMA training.
If you’re looking for year end accounts, audit, or tax computation then you will likely be talking to a ‘Certified Accountant’ or ‘Chartered Accountant’, but where they will be reporting back to you on how well (or otherwise) you did overall last year and what your tax liability is, the CIMA ‘Chartered Management Accountant’ will be working with you to establish what activities made money and why, and whether you can do more of it, and of course which did not and how to avoid this in future; indeed the focus is very much ‘future’ as much as ‘past’.
In terms of the client business, it’s not difficult to see that helping the client to understand their business is a valuable element in managing, changing, and improving the business, and this is something which CIMA qualified people have to offer any business, so it’s a great shame that Chartered Management Accountants tend to be employed by big businesses who understand the difference between the different accounting disciplines.
None of this is to say that a Certified Accountant or Chartered Accountant could never do what the Chartered Management Accountant does, but it is not what they have been trained to do and equally as a Chartered Management Accountant in practice for twenty-two years I provide a ‘full service’ including year end accounts and tax returns for my clients, albeit the main focus remains helping them to improve their business.
I would urge Chartered Management Accountants to seriously consider a career in the small and micro business sector which accounts for 99.3% of the 4.7 million businesses in the UK (source: BIS 2013) and 47% of private sector employment (source: FSB 2013) and which is a vital part of the UK economy: whether in practice servicing a number of clients, or a full-time employee of a particular firm, I am sure that you will find the experience very rewarding
I would equally urge owners and managers in that sector to become aware of the differences between the main accounting bodies and the relative strengths of each, and to be sure that whoever they engage with will meet the needs of their particular business.
Paul Driscoll is a Chairman of CIMA MiPs in South West England and South Wales, a director of Central Accounting Limited, Cura Business Consulting Limited, Hudman Limited, and a number of manufacturing companies, and is a board level adviser to a variety of other businesses.
As businesses grow, their needs increase. The person steering the finances needs to be someone who can take on a broad commercial role. Forecasting, IT, tax issues, insurance and back office functions – all these need to run smoothly. But a fast-growth business needs someone who can anticipate both future opportunities and potential problems.
A good financial director will help owner-managers understand which aspects of the business are the most profitable, as well as forecasting ways to exploit other opportunities. (Santander)
So what key questions should you regularly ask your FD…..
- What is our cash cycle and how can we improve it – Cash Cycle Blog
- What Key Performance Indicators should we use and what are they telling us – KPI Blog
- How can we improve profitability – 15 ways to improve profitability Blog
- What is our Business Plan and is it the right plan – Business Plan Blog
- Can we reduce Overheads – 10 creative ways to reduce overheads Blog
The ACCA issued a warning in May after research from cloud accounting software provider ClearBooks showed just 8 per cent of small businesses considered an accountant’s qualifications when choosing one. There is no law preventing anyone from calling themselves an accountant, and that as a result small businesses could be unknowingly paying someone without the necessary skills to handle their finances and help their business grow, who isn’t regulated or insured against risk.
CIMA (Chartered Institute of Management Accountants) Members in Practice are monitored by CIMA for:
- Continuous Professional Development
- Anti Money Laundering Compliance
- Professional Indemnity Insurance
- Continuity Agreements
- Letters of engagement
- Ethical conduct
CIMA operates a Masters degree standard scheme of qualifying examinations for prospective members. It is active in promoting local education, training and management development operations, the promotion of new techniques through its research foundation and the dissemination of management accounting practices through publications and other media related activities. WIKIPEDIA
For any business owner getting the right financial advice when you start the business is critical, here are some Do’s and Don’ts
Separate your bank accounts
Many start ups try mixing business and personal transactions in their personal bank accounts, its a total nightmare, don’t do it, get a business bank account.
Mixing things up will almost certainly have tax implications.
Get help and register for Tax
Getting things right at the beginning is extremely important and a CIMA Accountant can makesure you choose the right business structure and help you register for VAT, PAYE, CIS and other taxes. Choosing the right VAT scheme will save you tax – take a look at this blog
Not registering and filing returns will have severe consequences and lead to fines and penalties.
Ask your Accountant to review you contracts, they will be able to give you lots of useful tips.
Draw up a Budget and Cashflow and forecast how much cash you will need to run the business, looking at your cash cycle and managing it will be vital.
If you need funding ask your Accountant for help, they will be able to look at all the options and help you choose the option thats best for your business.
Many start ups fail to keep control of their accounting, by working with an accountant you can avoid this problem and they can help you choose the best accounting solutions for your business.
I thought as a conference I am organising is just around the corner it would be a good time to revisit the theme of professional conferences.
I have been to the CIMA Members in Practise conference for years and have always got key benefits from going:
- The conference is excellent for CPD, which as a professional management accountant, is vital. Although I don’t do tax or compliance myself I do need enough knowledge to help point clients in the right direction and conference is a good place to top up my knowledge.
- As well as specific CPD on accountancy issues we also have great key note speakers who motivate me to have the best business I can.
- Finally on the CPD front, sales and marketing is always a challenge for me and we have great workshops on how to get our messages across.
- For me, though, conference is about much more than just getting CPD. Because conference is full of like-minded individuals it is a great place to build relationships, which can carry me through the year. Working on our own can be a lonely place and these relationships help me to keep a balanced view of my world.
- And let’s not forget the gala dinner, disco, and the ‘craic’ at the bar! We have such a good time and, as I don’t get out very often, it is one of the few evenings in the year when I feel like a grown up!
I am really excited about what I will learn from this year’s conference but there is a sting in the tail.
Again I am chair of the conference (no pressure!!).
Last year the conference nightmares included not bringing the speaker slides and having to wing a presentation because one of the speakers didn’t turn up (could happen for real!). My nightmare of choice this year has been that a random eastern European pipe band crashes the event and plunges us all into chaos.
Nightmares aside I know it will all be OK because we have put many hours of preparation into it and we know we have a great programme.
So, if you are cogitating about whether to go to your professional conference (especially if you have not gone before) my advice is ‘give it a go’. You will probably get much more out of it than you ever imagined!
Often business owners wait too long before they realise that they need help from an accountant.
Key reasons are:
- They don’t understand the difference between a book keeper and an accountant
- They think an accountant will just be an extra cost – the reality is that most accountants will save the business many times their cost
- They think they accountants are just bean counters
But if you choose a qualified and experienced accountant they can bring huge benefits….
- Management tools to improve profitability
- Cost Controls
- Tax Savings
- Identifying Cash Flow needs and funding solutions
- Growth Strategies
- Business Planning
- Business Structures
- Business Accounting and Reporting Systems
- Maximise Credit Scores to win more business
So don’t wait too long, getting an accountant should be a priority for all businesses!