Importance of Business Process Management

Business process management is essential to running your business. Management need to understand what their profit & loss account is telling them and consider whether it is in line with the existing business strategy.

Businesses are finding it beneficial to develop systems whereby they can bring in the operating financial information and join it up to compare the profit & loss account to the business strategy. This requires the development and monitoring of appropriate KPI’s within the business.

It is important to reduce the time taken for a company to close the books and report its results to management. Businesses can for example standardize elements of their accounting system (ie SAP) to simplify the reporting and shorten the month end process. The average time taken to close the books for a medium to large sized UK company is approximately 14 days. For the companies surveyed, 22 days was found to be the longest time to close the books and 7 days was the shortest.

It is important to identify one off’s in the profit & loss and strip these out of your analysis by providing information on a “like for like” basis. Performance should not be assessed on one offs and many businesses (including the major banks) have fallen foul of this in the recent times.

Management must beware the incentives from the company bonus scheme. It is important that staff are incentivised to work in line with the Group strategy.

Communication within the business is essential as information is becoming increasingly important in today’s environment. Businesses are addressing this through the development of internal knowledge sharing databases and weekly or monthly team meetings. Weekly updates can also be used to promote business strategy. The key achievement or projects worked on by each department can be communicated across the group and provide a clear idea of what is driving the business. Having a professional edge can often lead to the ongoing success of your business.

Business process management is a key skill that can be used by both business owners and contractors to develop an edge in business.

Sterling Plummets Following Brexit Announcement

Sterling plummeted after Theresa May announced that Article 50 would be triggered by end of March 2017. The “Flash Crash” saw Sterling lose 6% of its value on Thursday. The Pound fell to as low as 1.13 against the dollar and now trades at 1.23. The Euro fell to 1.12 and is currently being sold to consumers at 1.08 on the high street. The turmoil is likely to continue until there is clarity over the exercise of Article 50 and its impact on the UK economy.

If you are a contractor and are looking to go abroad, now might not be the best time to convert your Pounds. In fact, now would bea good time to call in debts from any overseas customers.

National Minimum Wage to increase on 1 October 2016

The National Minimum Wage to increase on 1 October 2016. The increase will apply to the different age bands and for apprentices.

- The national minimum wage for adults aged 25 and over will remain at £7.20 per hour

- The standard rate for adults aged 21-24 will increase from £6.70 to £6.95 per hour

- The development rate for workers between 18 and 20 will rise from £5.30 to £5.55

- The rate for apprentices increases from £3.30 to £3.40