Mayweather vs Pacquiao in Numbers

We are just hours away from one of the biggest fights in boxing history, here is an infographic to show you the fighters financial stats.

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A corporate Christmas tale (and a ghost story)

by Xavier Sanso, CFO, UppTalk

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It is 8pm on a late November Sunday evening. I have been studying at the office during the weekends for most of the month, in order to prepare for my upcoming exam. Having two small kids, I conveniently go there to avoid distractions. The office building is completely empty, the days are short, and in the street someone is already installing the Christmas lights. What started as a bright Autumn day typical of Barcelona, has ended as a gloomy, slightly depressing, dark evening.

I decide it is time to call it a day and start to pack in order to drive home. Many coffee and tea cups to be washed, many papers to be collected and put back in their folders. Hopefully the exam, which was one of my New Year resolutions about one year ago, will go well. A lull. An impending nostalgia over the eleven months-plus that have passed since then forces me to mentally recapitulate about 2014. What was achieved, and what was not. What went right and what went wrong.

It is almost one year to the day where, in the sleepiness following a copious Christmas banquet I decided that, two decades after getting my MBA, it was worth polishing a bit my knowledge and seek a UK management accounting certification. Tough cookie, as I am not a native English speaker, I have a young family and work for an intense small start up. My second, less clearly stated wish, was to finally help put “my” company in the correct trajectory so that it would merit either a further financing round, or be a candidate for an M&A deal.

After many bumps in the road typical from the start up world, we are about to check on the second front. And about the exam – it took some mental effort and much family support not to give up when the date was approaching and I was severely delayed, but I also think we are on track. Is it also the time to “call it a year” and start making resolutions for 2015? Well, I would like to be able to gain at least 20% of my income from my own consulting projects. And I would like my recent experience at UppTalk to become either an executive education seminar, or a book.

Suddenly, I freeze. At the far end of the corridor, a key is turning into the lock and the door of the empty office is opening. The corridor light is switched on. I wait to hear the noise of footsteps and see who is there. Nothing happens. The peaceful Sunday evening takes a sinister turn. I walk to the corridor to see who is around, but before I get there, the door closes and only the light at the hall definitively proves that someone was there.

The installation of the Christmas lights has finished and now the street is completely empty. Time to switch the computer off, go home, and remember that reality always gets in the way of strategy.

Finance and Sales – Crossing ‘The Great Divide’

by Philippe GANGNEUX, CFO at Sidetrade

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It is a cliché as old as the hills – the finance and sales departments do not get on, with the sales team seeing finance as the “sales prevention department” and finance viewing sales as having more interest in their bonus than whether payments will really ever be made.
Of course, neither position is entirely fair and, increasingly, such thinking is proving to be an impediment to growth. After all, accounts receivable management is a cross-disciplinary process that affects numerous employees and departments within a company. As well as finance, it relies on the customer services, marketing, and, yes, the sales teams to do their part in the process.
What we need, in today’s competitive business environment, is understanding and, above all collaboration.

Learning to collaborate

So how can this be achieved? Having the right platform in place will allow you to inform all stakeholders, in a business, about best practice and promotes the finance department’s crucial tasks and responsibilities, in order to promote a positive cash culture across the business.
Proper training can also promote and instil a beneficial cash culture within a company, enabling all employees to learn about corporate finance and to have a greater understanding of what they do effects the work of the company’s cashflow position.
But the learning is not just one way – the finance department should also look at how they manage working capital, to bring it into line with sales and marketing targets.

All operational employees should also be encouraged to work together with a shared goal. In addition to providing a secure record of all employee actions, the right technology can provide a cross-disciplinary uniform approach. This can include dashboards, indicators, and alerts that highlight common objectives – all with the goal of providing a rapid return on investment by helping your business to achieve its goals.

Dashboards Show The Way

Of course, it is all very well to talk, in general terms about the need for different departments to cooperate for the benefit of the company, but, in reality, it is often when people see the benefits for themselves that they buy in to what you are trying to achieve. So dashboards displaying the most important financial information play a crucial role in this.
Customer payment performance can be assessed and automatically shared by finance departments, giving everyone an up to date and real time balance of their customers’ outstanding accounts receivables, qualified receivables and information on disputes.
Reports on customer payment behaviour can be produced to provide an important appreciation of the various grounds for disputes and accounts where attention should be focussed. Using this insight promptly identifies risks and informs on where immediate action should be taken.
Meanwhile, it is important to consider how be to use your data to improve your work – you can improve the risk outlook of a company by collaborating with the sales departments to assess, prevent and reduce customer risk. The finance departments needs to manage their cash generation projects by ensuring that each step of the pre-defined plan is implemented correctly.

In Conclusion

There really is no reason, in this day and age, why a war should exist between the sales and finance departments. In fact, quite the opposite, there is every reason why the business needs the two sides to cooperate. Modern technology and training can give visibility and a comprehensive understanding of customer financial relationships to all sides of the business, and, ultimately, allow collaboration to take place and cash flow to improve.

Keeping Up With International VAT

by Jonny Steel, VP Sales & Marketing, VATBox

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2014 – Latest Changes Across Europe

According the EY Global Survey on VAT/GST changes in November 2013, carried out in 96 countries, changes in VAT rates happen very often! In some countries it happens as often as monthly, and in three out of four countries, it happens at least once a year. That’s a lot of changes to stay on top of!

Some changes have a major impact on certain industries. For example, an EU change in VAT rules will move taxing rights on cross-border sales of
telecoms, broadcasting and digital services such as e-books, apps, and cloud storage services to the countries where customers, rather than companies, are based. This change will redistribute VAT revenues across Europe, push up the prices of many digital products and reduce the competitive edge of operating offshore.

The incentive for businesses such as Amazon, Apple and Microsoft to be based in a low VAT jurisdiction like Luxembourg will disappear, driving hundreds of millions of e-commerce VAT back to the UK Treasury. Luxembourg in turn is expected to lose more than €700 million of VAT revenues, a factor in their decision to raise their standard rate VAT from 15% to 17% next year.

European VAT Rate Changes: The Highlights

Where is VAT on the Rise?

• France – From 1 January 2014, standard rate VAT increased from 19.6% to 20% and reduced rate 1 increased from 7% to 10%.

• Italy – On 1 October 2013, standard rate VAT went up from 21% to 22%.

• Luxembourg – In 2015, all rates are going up. Standard from 15% to 17% and reduced rate from 6% to 8%.

• Poland – The temporarily higher rates of 23% (standard rate) and 8% (reduced rate) have now been extended to last until the end of 2016.

• Spain – Since the start of 2014, the standard rate was extended to cover e-books and digital newspapers.

• Belgium – As of 1 April 2014, many services performed by lawyers will be taxed at full 21% rate when previously they were exempt.

• Cyprus – From 1 January 2014, the standard VAT rate increased from 18% to 19% and the reduced rate increased from 8% to 9%.

• Montenegro – From 1 July 2013, the standard VAT rate increased from 17% to 19%.

• Serbia – From 1 January 2014, reduced VAT rate of 8% increased to 10%.

And Where has VAT been lowered?

• Ireland – The temporarily reduced rate of 9% on tourism and hospitality services which was due to expire at the end of 2013, has been extended for an undetermined period.

• Greece – From 13 August 2013, a temporarily reduced rate of 13% for catering services such as restaurants and hotels (down from 23%) has been extended to include all of 2014 as well. However, take away is not included.

• Netherlands – From 1 January 2014, the temporarily reduced rate of 6% on rebuilding and renovations was extended through to the end of 2014.

• Romania – From 1 September 2013, bakery products like bread, wheat and flour which were previously standard rated were lowered to the reduced VAT rate of 9%.

Up and Down!

• Czech Republic – From 1 January 2016, the standard rate of 21% and reduced rate of 15% will be replaced by one uniform rate of 17.5%.

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Digital Collections – Are You Ready For The Future?

By Valerie Burel, Sidetrade Cash Performance Director Sidetrade

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We all know that technology is moving ahead at break-neck speed. We often hear the comment that the average wristwatch, today, contains more processing power than the entirety of NASA brought to bear to send the first men to the moon!

A Connected World

But it actually goes even further than that: today, people are accustomed to technology playing an intrinsic part in their lives. They expect that technology will be there to connect them with friends, colleagues, and services in an easy and rapid way, whenever they want.

And so it should be for the Finance Department, when it comes to sharing around relevant information relating to a company’s accounts receivable, both internally – with colleagues, branches, and stakeholders – and externally with your customers.

Fortunately, technology suppliers have been quick to demonstrate their innovation. So, for example, our app now helps you to promote your cash culture iPhones and iPads, meaning that your financial customer relationship can be at your fingertips – and those of your customers and you can keep the relevant colleagues abreast of the key information immediately. Whether they are in and out of the office.

Innovation At A Glance

As we know, nothing promotes a cash culture as much as the relevant stakeholders being given the key information so that they can see how what they do effect’s the company’s overall cash collection performance. So, with this app, the sales force can now:

• See all your accounts’ financial status – including delays and outstanding invoices.
• Access your contacts and communicate with them directly via the app.
• Create shortcuts to your key accounts.

Meanwhile, you and your credit managers will be able to:

• Keep an eye on your financial KPIs, such as turnover, ageing balance, DSO, and disputes.
• See the key details of an account’s status at a glance.
• Follow up your strategic customers.

The Rise Of Digital Collection

More generally, Digital Collection has become something of a buzzword for Finance Departments, bringing the best of modern technology to the traditional invoice-to-cash process.

Our own solution makes invoices available to your customers meaning that both you and your customer benefit from a personalised and secure area for dialogue. Your customer becomes a real part and stakeholder in the dunning process and chooses when to reply.
Just some of options afforded include:

Create your digital letters – Adapt your digital dunning letter to your corporate branding guidelines and publish it on a web space dedicated to the dunned customer. Ensure comfort, fluidity and responsiveness in your customer relationships.

Provide statements of account – Display a breakdown of each invoice by customer account (number, date of issue, amount, due date, balance, number of days overdue, status and so on) as well as the electronic PDF version of the invoice. Increase your dunning potential and improve productivity.

Receive your customers’ invoices updated – Allow your customers to update by themselves the status of their invoices, using a list of values that you have pre-defined, without any additional cost for them. Increase the reliability of the data and the responsiveness of your teams.

Enrich your dunning contacts database automatically – Enable your buyer contacts to update their contact details and function, and choose to accept manually or automatically the changes that have been submitted by your customer. Allow your customers to transfer the digital letter if they are not the right dunning contact. Your customer collection contacts are updated and added to with each transfer of the digital letters.

Decrypt and increase your dunning efficiency – The information provided by your customers is incorporated real-time and your dunning scenarios are adapted accordingly. The payment of invoices, dispute detection and resolution are accelerated. Now, you can measure and continually monitor the effectiveness of your actions, as well as identify the dunning strategy that provides the best results.

Technology is now touching every part of our lives, and gives so many opportunities to the Finance Department to promote a better cash culture in your business, showing innovation and a desire to share up-to-date information, both internally and externally, and to share key information with your customers.

These innovations provide real productivity gains that we can measure and analyse during our outsourcing missions.

The opportunities really are there for you to take!

An attractive value proposition: reduce inventory, improve availability and save on labour costs

by Tools Group

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For a consumer goods manufacturer, guaranteeing high product availability is vital. Stock-outs mean lost sales, penalties from retailers and loss of brand image, all of which have a direct effect on the bottom line. But current trends are making it more difficult to achieve the desired ’almost perfect (99 %+) service levels’. Factors such as frequent new product launches, promotions, advertising, yours and that of the competition, among others, are making the market increasing volatile, fragmented and dynamic.

In order to create a market-led supply chain, it is necessary to identify demand signals early (“demand sensing”) and effectively translate them into manufacturing and purchasing requirements. But excellence in service should not be achieved at any cost in terms of inventory; stocks must be right-sized to cover for demand and supply uncertainty and deliver planned performance targets: under-stock will cause service failure and lost sales; overstocking entails not only a misuse of financial resource, but also many other costs.

Improving product availability

In a stock-out situation, there is a high risk that some of the demand cannot be met. The entire contribution margin of a lost sale negatively affects the profit and loss account. A reduction in stock-outs has the direct consequence of ensuring this contribution margin.

Beyond the improvement in brand market image which is a consequence of high service levels, costs are reduced by optimised product availability: the costs related to urgent deliveries/shipments and losses due to wastage can both be reduced, while aggregate holding costs are also reduced.

Reducing fixed assets

While stock-outs may represent a problem, the typical situation is overall excess of stock. This is because it is impossible to size the product mix correctly using the conventional planning methods of most ERPs. Not only does overstocking lead to stock obsolescence, it also uses up financial
resources which could otherwise be deployed more profitably.

Profitability can be improved by ensuring the right composition of the stock mix. A reduction in stock also contributes to an immediate improvement in operating cash-flow

Bringing Foreign VAT Recovery into the Digital Age

by Jonny Steel, VP Sales & Marketing, VATBox

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Many of us can cast our memories back far enough to the days before VAT hit the shores of the United Kingdom. Introduced in 1973, generally speaking the rate has only increased over time… and judging by international trends, the only way for VAT is up!

In fact, last year HMRC’s revenue from VAT payments broke a new record, increasing by 6% to break through the £100 billion mark, according to Syscap.

Worldwide VAT/GST Rates On the Rise

In the EU, the average standard rate is now up to 21.4%, according to EY, an increase of over 10% in the past 6 years.

While Europe is certainly the world’s number one VAT continent, you will find VAT (or GST as it’s known in some countries) in most corners of the world. The newest countries to join the party are the Bahamas in July 2014 and Malaysia in 2015. China has successfully implemented a VAT pilot that will come to replace Business Tax and India is about to introduce a national GST. In addition, the Gulf Cooperation Council states are considering introducing it too.

Many countries outside of Europe have taken a slightly different approach to increasing the rates. Countries such as South Korea, Kenya and Mexico have reduced the standard rate but at the same time have scrapped the zero rates or exemptions.

Recovering International VAT

If your UK business buys goods or services in other countries in the European Union (EU), you will often have to pay VAT on them. This can include:

• Hotels
• Restaurants
• Travel and Car Hire
• Professional Services
• Conferences
• Shipping
• Telecommunications
• Advertising

Entities established in another EU Member State may recover VAT based on the VAT refund procedure for foreign entities (EU Directive 2008/9). But to say it’s tricky would be an understatement. Billions of Euros of international VAT are unclaimed each year with an estimated 40% of the Fortune 100 leaving money on the table.

To obtain the VAT refund, the application files have to be sent to the tax authorities in the relevant country. Each country within the European Union operates its own system with different percentages being applied to different products and services. Some can be reclaimed in full, others partially, and some not at all. Confused? In order to submit a reclaim you need to know all the rules in that specific country, for example is VAT on car expenses deductible in Denmark? Is VAT on hotel costs refundable in Portugal? In some cases you need to have an accountant in that country to submit the reclaim, and of course, you need to know the language.

Due to the complication of this process, many companies turn to outside help to recover their international VAT. VATBox is the world’s only fully automated solution for businesses to recover all international VAT, making sure that technology – rather than your internal resource – does the hard work of getting back all of your money.

Contact Us today for a Personal Demo at http://www.vatbox.com or call us on +44 (0)20 3608 1931.

Why Business transformation fails?

by Adrian Ryan Head of Finance and Transformation

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I recently read an article that gave 5 reasons why Finance Transformation fails. While the reasons were all valid, and no doubt you will have heard them all before, the article didn’t discuss the primary reason for failure, which is a lack of commitment by senior leadership figures at the outset. The principal reason for a lack of such leadership commitment is fear of change. There a 5 main change fears experienced and exhibited by organisation leadership:

Risk to reputation: the nagging concern that someone is going to ask why these opportunities had not been identified sooner and therefore question whether the incumbent managers are up to the task in the future

Risk to position: the concern that in embarking on a long term change to ways of working new skills will be needed and therefore new management will be needed or at the very least that changes to existing remit will ensue, remits often long in the building

Risk to rewards: management knows how a company works, especially in terms of maximising rewards, and changes to ways of working can lead to changes in rewards structure leaving people feeling that they no longer know how “the game is played”

Risk to legacy: the fear of being seen as the person who instigated significant and widespread changes to the way things are done and, more particularly, the impact of job losses, especially if the changes are not deemed to have been successful or reaped sufficient benefits when set against the emotional stress of job losses

Risk to short term results: a mismatch between short term needs and long term benefits. The classic reason given for not proceeding with long term ways of working change is that the benefits don’t pay back quickly enough and cost too great in the short term

The risks all point to one central theme which is a fear that one’s position will be undermined by one or more of the above. The trick is to find ways to alleviate these instinctive fears sufficiently for decision makers to feel they are secure and so can make the decisions based on long term horizons rather than past or present circumstances. This safe environment must come from the board and the Chief Executive. It is about leadership. Without this no major change is possible and no change management plan is achievable.

It is also not surprising that management fears change failure, and the ramifications of change, especially if they have little or no experience of implementing the kinds of change on the table. This fear of the unknown is entirely understandable but needs to be put into the context of the long term impacts of not changing. This is about corporate Darwinism; those organisations that don’t adapt will die out in the long run.

If your organisations leadership is exhibiting these fears then either a change in leadership may be required or a change in board focus, and thereby managements motivation, is needed. However before you conclude on this first ask whether a major transformation change is what the organisation requires versus a simple set of cost reduction projects. This is the very first step before you get people agitated about a major transformation.

The importance of being selective on emerging markets

by Marcos Dussoni Regional CFO Sodexo

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For the growth-oriented enterprises, there are still opportunities aplenty in the emerging economies of the world. But maximizing them through M&A transactions is challenging if you are an outsider who does not know local regulations and customs and lacks relevant information.

Companies should pursue some strategies in order to avoid big mistakes. For example, they should have a clear understanding of how M&A in emerging markets will fits with into your overall strategic growth plan. In another words, what countries you want to enter, why you want to be there, what customer or product segment offers the most potential and how you will compete…

Another strategy is to monitor your course carefully such as establish and practice a strong M&A governance.

Mergers, acquisitions, joint ventures, and other transactions are crossing borders at a rapid pace and those markets are an interesting opportunity for companies which is pursuing growth, but has to be remembered that those markets are still emerging… Emerging markets can be complicated but has been proofed that deserves an strategy since the acquisitions and/or development of types clients you want to have in your portfolio.

Some markets, most the big ones such as Brazil & China, transactions structure are much more complicated than the US, Europe and UK to avoid surprises. For example, you can´t structure to avoid liabilities in Brazil. In China, you need structural protections other than contracts terms, which is often ignored. It is time-consuming to get any deal done in these markets due to the difficulty of conducting due diligence, getting necessary approvals and other issues.

Navigating in an emerging market means deal with risks and to create value, a deal must master, no matter where the enterprise is located the five critical areas:

The regulatory, political, and economic environments

The accessibility of key information

Cultural integration

Local leadership

Change management

The quality of resources is critical especially in areas such as tax, contractual and in a buy-side make sure you understand the ownership of the company you are dealing with.

Some countries have different rules for domestic and non-domestic enterprises. China is an example. As a result, a foreign acquirer may have costs that a local competitor does not.

Mechanisms for protections should be considered in a manner that cover certain risks. For example escrow accounts has a stronger weight than provisions.

In emerging markets, the gap in understanding between leadership and the stakeholder groups is magnified, and without proper preparation and a clear communications plan for the entire process, that gap can erode shareholder value.

While emerging markets can offer significant M&A growth potential, sometimes the endeavor to the value creation for the acquiring company could be more complicated than expected. A bumpy road lies ahead as short term benefits may be lower than expected. However, some companies have proved that, when armed with the right strategies, they can be successful.

Utilisation & Development of Change Management as a key driver in Financial Transformation

by Jan Christiaens CFO Royal Philips Electronics

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Ever been involved in a challenge you thought would be feasible, but later found out you’d bitten off more than you could chew?

For many companies, the process of transforming the finance function in line with the corporate strategy can turn out a little like that.

Personally, you can behave in different ways. Is your reaction towards the challenge that you behave as a prisoner or a tourist, or do you become the true player who believes the future before you see it…

As a player, you take ownership, team up to excel and are eager to win.

Philips launched 2 years ago a worldwide business transformation program ,changing the way Philips does business and unlocking the full potential. To become more agile, innovative and entrepreneurial as a company.

As part of Accelerate, the Finance transformation program started.

By putting the customer in the center of everything we do at Philips. And to make sure we are properly organized and well equipped to serve that customer and deliver meaningful innovation in a fast and cost-effective way.

That’s why Philips finance is redesigning its organization, improving the processes & systems and last, but definitely not least; creating a winning team by living our behaviors and building capabilities for the future.

The Accelerate journey is not a sprint, it’s a marathon; it’s a multi-year transformation program that eventually touches each and every one in the company. A huge team effort, for both the growing business transformation team and the businesses and markets all over the world. It’s all about working together to wow our customers … and ourselves.

I will be talking about this at the CFO Event

The workshop gives insight in

-The Philips Accelerate and Finance transformation program
-Design of the new finance organization
-Transition and implementation of the new organization
– Challenges and pitfalls
-Examples of implementation

I hope to meet you in person at the CFO Event