Eric O’Rourke explains why organisations should not fear the process of corporate cultural change, and how internal audit can play a pivotal role. “If you can’t measure it, you can’t manage it”. When it comes to changing a company’s culture, this quote from Peter Drucker is something I, as an Internal Auditor, have heard often over the years. However, culture can be viewed as amorphous and, therefore, difficult to define and alter. For an organisation’s governance structure (i.e. the board and senior executives), the inability to measure an existing corporate culture can create an apprehension and some degree of fear around how to best progress to a desired culture. Culture matters for any organisation but from a financial services perspective, a positive culture drives conduct by promoting the benefits listed later in this article and protecting against conduct risk. A positive culture provides a guiding light for an organisation, particularly when it faces challenges and difficult choices. Culture guides what you should do, not what you can do. It helps organisations do the right thing and, in the context of financial services, this involves restoring trust and protecting the industry’s social license. In May 2020, the representative body for the funds industry in Ireland, Irish Funds, published the ‘Irish Funds Culture Guidance Paper’ for its members. The paper aims to provide member firms with guidance on key themes and good practices to measure, monitor and embed culture. It considers the critical factors to take into account when implementing cultural change. They include defining culture (present and desired) in addition to metrics that can be used to measure/monitor culture and related changes.   Existing culture vs desired culture For all organisations, the first step is to evaluate the existing culture while identifying the board’s desired culture, as its members effectively lead the organisation’s strategy. Based on this evaluation, the board can then decide whether a culture change programme is required. Employees at all levels should be engaged to ensure that the echo from the bottom matches the tone from the top. The tone from the top is critical to ensure that culture and values are articulated and hence, can be measured. A ‘cultural roadmap’ should then be created. This task should be championed by the organisation’s appointed culture champion or chief cultural officer from the senior leadership level. The advice of Internal Audit (IA) should also be sought at the outset, as the role of IA extends across organisational structures and can provide unique insight.   The art of measurement To measure culture, multiple cultural touchpoints should be amalgamated to give a full picture to key committees and the board. A ‘corporate culture report card’ should also be compiled every quarter and presented to the board by the cultural champion, as culture change is a long process. The report card should be reviewed thoroughly, and corrective action taken if required. Below are some of the metrics that were published in the Irish Funds Culture Guidance Paper. Evidence from the suggested mechanisms should form the basis of the corporate culture report card (see Table 1). Furthermore, IA should audit these metrics as part of any thematic culture audit, or question auditee culture as part of any audit undertaken.   Benefits of a considered and defined culture Many benefits accrue to organisations that embrace a healthy culture, including:   Sustainable growth and improved profitability; A more engaged and motivated workforce; The ability to attract and retain top talent; Better and more transparent decision-making; Responsiveness to change and risk; Improved customer satisfaction; and A corporate image and identity that others aspire to. So the critical question is: what culture is desired? Determining the desired culture and measuring the existing culture are the first steps. In closing, I note the words of Dale Carnegie: “Inaction breeds doubt and fear. Action breeds confidence and courage”. The time is ripe to review and possibly enhance your organisation’s corporate culture. Do not fear change; instead, focus on what can be achieved. Eric O’Rourke ACA is Head of Internal Audit at Sumitomo Mitsui Trust Group Global Asset Services and a member of the Irish Funds Internal Audit Discussion Forum.

John Kennedy explains how Chartered Accountants can help their clients break free from the shackles of their current challenges and, instead, work towards a brighter future.As we continue to deal with the implications of the untamed coronavirus, we have all been forced to pause and take stock. Many things we historically assumed can no longer be taken for granted. We, therefore, need to learn new habits, develop new routines, and adopt new ways of thinking.At the core of that change is the need to secure our future by identifying, and wisely investing in, our most precious assets. Take a moment to pause and think of the most valuable assets your practice holds – what are they?In my opinion, there are two: attention and energy. Your future success will be determined by your ability to take control of your attention and energy and, in turn, by how you guide your clients to invest their attention and energy where it is most productive and provides the greatest return. You and your clients must stop wasting your attention and energy on unproductive, corrosive thinking.Corrosive and constructive thinkingThe world is flooded with corrosive thinking right now. And, like anything with massive oversupply, it has no value. Corrosive thinking keeps you in a closed loop of negativity, consuming your attention and energy by focusing on the missteps, the problems, and how costly they will be. You will get no positive return on the attention and energy you invest in corrosive thinking.Constructive thinking, on the other hand, is entirely different. It is scarce and, therefore, has an unusually high value. Constructive thinking moves you away from worrying about how you and your clients reached this difficult place and, instead, focuses your attention and energy on reaching a better place. To move from A to B, however, requires the wise and judicious investment of your vital resources.The key is to take control of your future decisively. This is not an invitation to undertake some form of positive thinking or encourage you to merely wish or hope for better times. It is quite the opposite. It is a specific and practical skill that will enable you to create a clear image of a better future and identify the steps to reach that destination.The kitchen testNeuroscience has helped us understand how to harness the power of our brain and use our capacity to think more effectively. If you don’t take control of this capacity, your brain can easily work against you or steer you off-course. But when you know how to harness the power of your brain and focus it on success, profound change is possible.Achieving the success you seek always begins with creating a clear image of that success. Let us put it to the test.Take a moment to think about a room you are familiar with. Your kitchen is a good place to start. As you develop a clear and vivid image of your kitchen, your mind will work with you and help you set out in great detail the many specific aspects of your kitchen. You will be able to give this image real substance – the colour of the walls, the type of floor, or any paintings, pictures or posters on the walls, for example. You can create an image that is clear, vivid and substantial – and that is a very useful talent.The kitchen test shows that you can harness your thinking to work your way through the recent crisis and create a clear image of a better future. This is key to your investment strategy, as you can create an image of future success that has the same level of detail and clarity as to the image of your kitchenWhy is this important in terms of your future success and your success with clients? Left uncontrolled, your mind will come up with detailed and comprehensive images of the difficult situation you are in. It will default to wasting your much-needed energy by placing too much emphasis on the worries of the present. However, the troublesome present is where the problems lie. You want to be in a better place, but you have – at best – a vague and hazy image of that destination.The difficulties of your current reality will appear more potent than any possible future success. And since the mind values clear and detailed images, it will be drawn to where clarity and detail already exist – in this case, on the difficulties of the present situation. This is why the strength and scale of your problems seem to grow and grow. The more you focus your attention and energy on your current difficulties, the more vivid they become to the point that you may not be able to discern a successful future at all.This is where your investment strategy can provide its most significant return.The high-return investment strategyIn taking active control of your thoughts, you can switch your attention and actively invest your energy where it can deliver a more valuable outcome. This is not a trivial skill – it is scarce, of high value, and the vital key to future success for you, your practice, and your clients.To get full value from this insight, you need to establish a new habit. From this point on, every time a client falls into the routine of talking about the worry and stress they face, take active control of the dialogue and help them create an image of a better future.Don’t waste their attention and energy on vague or wishful thinking. Instead, guide them to create a clear and vivid image of a better place, an image that is as clear and real as the image of your kitchen.Rather than dwell on familiar problems, set them on a quest to establish what a successful future would be like. Your client has already built a business that is successful enough to need your accountancy expertise. Now, you can use your insights to help them leverage their knowledge and experience to create an image of a successful future.Research has conclusively shown that this ability is central to the success of the very highest achievers, those who achieve great success and prevail at times of stress or uncertainty. By helping your clients invest their attention and energy in creating a clear and specific image of future success, you are providing them with an immediate and powerful resource. They turn their thinking, attention and, therefore, energy to what they want to accomplish.For more than three decades, I have encountered a habitual pattern of clients focusing on current problems rather than investing actively in future success. Ironically, this habit can be most pronounced at the very time when it is least useful – when the problems seem so large and so vivid and are the cause of significant corrosive stress.When managers, groups or teams spend their time thinking about their most challenging problems, they tend to become dispirited and demotivated. When you help your clients do the opposite, however, you will become a scarce resource: the route to a better place.John Kennedy is a strategic advisor. He has worked with leaders and senior management teams in a range of organisations and sectors.

David Lucas explains how businesses can access funding and trade through the COVID-19 crisis.The COVID-19 pandemic has impacted businesses throughout the country. Cash flow is scant, debt is mounting, and many companies have yet to resume trading in any meaningful way. Those that are trading again have returned to a desolate and unfamiliar environment. Shops and high streets are empty, many stores remain shuttered and, with further restrictions in the pipeline, dented consumer confidence in certain sectors looks unlikely to rebound fully until a vaccine is developed.SME supportsWithout access to significant cash reserves, liquidity and cashflow are critical concerns for many small- and medium-sized enterprises (SMEs). Fortunately, SMEs adversely affected by the COVID-19 crisis can access a range of Government supports. The schemes listed below have been well-received by business owners, but preparation is the key to a successful application.SBCI COVID-19 Working Capital SchemeThis scheme offers loans from €25,000 to €1.5 million at a maximum of 4% interest to SMEs and small mid-cap enterprises. Applicants must meet at least one criterion related to the impact of COVID-19 on their business and one innovation criterion as per the European Investment Fund’s (EIF) standard conditions. No security is required on loans up to €500,000.Future Growth Loan SchemeThis scheme aims to make up to €800 million in loans available for terms of seven to ten years to SMEs and small mid-cap businesses. Loans range from €25,000 to €3 million per eligible company, with loans up to €500,000 available without security. The initial maximum interest rate is capped at 4.5% for loans under €250,000 and 3.5% for loans more than or equal to €250,000 for the first six months. The rates after that are variable.Sustaining Enterprise FundSupport of up to €800,000 can be provided to eligible companies that have been negatively impacted by COVID-19. Funding will be provided for five years using repayable advances, grant aid, equity, or loan note, comprising a combination of repayable and up to 50% non-repayable support. Administration fees on repayable support will be 0% over the first six months and 4% per annum after that. Repayments will be due in years four and five.Restart Grant PlusRestart Grant Plus is an expansion of the Restart Grant scheme. It provides grants of €4,000 to €25,000 to businesses with 250 employees or less, turnover of less than €100,000 per employee, and a 25% reduction in turnover as a result of COVID-19.Trading Online VoucherGrants of up to €2,500 (with 10% co-funding from the business) are available to companies with ten employees or less seeking to build an online presence. The voucher is targeted at small businesses with little or no online presence, turnover of €2 million or less, and at least six months’ trading history.Business Continuity VoucherBusinesses employing up to 50 staff are eligible to apply for a Business Continuity Voucher to the value of €2,500 towards third-party consultancy costs to assist with developing short- and long-term strategies to deal with the COVID-19 pandemic.Pandemic Stabilisation and Recovery Fund (PSRF)The PSRF is set up to invest in large- and medium-sized enterprises employing more than 250 employees or with annual turnover of over €50 million. Enterprises must be able to demonstrate their business was commercially viable prior to the COVID-19 pandemic, and that they can return to viability and contribute to the Irish economy. Investments are made on a commercial basis and they will seek a return for this and can invest across the capital structure, from equity to debt.Temporary Wage Subsidy SchemeBusinesses have also relied on the Temporary Wage Subsidy Scheme (TWSS), which was replaced by the Employment Wage Subsidy Scheme (EWSS) in September. The main elements of the EWSS are as follows:A €203 flat-rate subsidy per employee per week for businesses with a decrease in turnover of 30% or more;Employers in all sectors may qualify, subject to meeting certain qualifying conditions; andThe EWSS will expire on 31 March 2021. The legislation, however, provides that it may be extended beyond that date.CashflowThe measures above can provide critical relief and cash support to businesses. However, there are other proactive and straightforward ways in which companies can meet their liquidity needs before repayment moratoriums expire in Q4.Businesses can optimise by selling slow-moving stock to generate cash, for example. Also, debtor management might sound obvious, but assets can become tied up and the longer a debt remains unpaid, the less likely it is to materialise.Debt fundingMany people talk about loan-to-value and property, but at the end of the day, cash repays debt. Property and asset values are significant from a security perspective, and the banks draw comfort from having this as security. However, in recent years, cashflow (and its recurring nature as the first port of call in servicing debt) has been increasingly analysed. Banks are not in the business of selling companies or property unless they have to, but they do need to see cash being generated to service the existing debt quantum.In this volatile business landscape, SMEs may need to renegotiate covenants or restructure debt. Many businesses will find themselves over-leveraged and unable to make their debt repayments as they fall due. Banks expect this in cases where COVID-19 has hit businesses hard, but the key to success is open communication with the bank or funder.Think of it as a partnership approach. Businesses must be extremely well-prepared as approaching a bank can be painstaking and time-consuming. That said, they do understand the position you are in; all business owner/managers want to be able to pay down debt and keep their businesses alive.The standard suite of bank covenants comprises leverage (net debt/EBITDA), interest cover, and debt service cover ratio (DSCR), with the latter often proving the most difficult to manage. As a result of existing trading circumstances, all three may have been breached or be approaching a breach. The banks have provided moratoriums in many cases, but they will need to be looked at and renegotiated as they expire later in the year.The amortisation or repayment profile on debt may also need to be readjusted to match the company’s ability to repay. COVID-19 has devastated many businesses, and some may never return to the same trading levels as before. This outcome would, therefore, require a re-calibration of amortisation; back-ending or reducing it may be the only option. Banks will likely begin to pursue ‘cash sweep’ mechanisms to reduce debt positions in a restructure. Cash sweeps can be administratively cumbersome but show the bank that you intend to work with them to pay down debt.Meanwhile, businesses seeking access to further funding must become familiar with the various options available. Alternative lenders can be less onerous in terms of covenants. They tend to lend a little bit more than the traditional banks and offer increased flexibility, but they also charge higher interest, often as high as 7%.Invoice discounting, where banks lend based on an entity’s debtor book, has also become a popular form of lending from a working capital perspective. It gives the lender increased security, as they have direct access to the debtor book. The facility limits can also grow concurrently with business growth.Private equityEquity is another potential option for SMEs in need of a capital injection. This route has become increasingly popular in recent years, as investors provide experience and growth potential as well as capital.Many business owners are apprehensive about trading a piece of their business, but it is always better to own 70% of a thriving venture than 100% of a failing one.ConclusionOpen communication is crucial at this uncertain time. Lenders understand the position many businesses are in and will expect requests to pay down debt at a slower rate, given that earning profiles may have changed. The key to success, however, is organisation and planning.Seven tips for approaching a bank during a crisisSeek expert advice. A skilled and experienced adviser will know what the bank and its advisers want and will be able to communicate this effectively.Accept the situation. Look for the positives and work with the advice given to you to identify areas for improvement in the business. Listen to recommendations and have robust discussions about solutions.Be honest. A bank likes certainty and predictability. These are uncertain times, so work with the bank and do your best.Prepare a deliverable plan. Create a budget that is real and deliverable, with actions and assumptions clearly laid out. Communicate. Deliver the information clearly and precisely to reduce the potential for misinterpretation and confusion. Don’t ignore the bank and hope that the problem will go away.Prepare. Talking to your bank can be a very confronting and stressful process. Be prepared for hard questions, and don’t take it personally.Have back-up plans. Speak to your adviser about alternatives in the market, be it a direct lender or private equity investment.David Lucas FCA is Corporate Finance Partner at PKF O’Connor, Leddy & Holmes.

John Convery discusses the important elements when creating a start-up and how you can improve its chances of success.Entrepreneurship is actively promoted and regularly encouraged. Being a business owner can be very fulfilling but starting a business is no easy task. This is a journey where you will meet a rollercoaster of highs and lows. It is a challenging, demanding, frustrating, testing, isolating, lonely, long road on the way to – hopefully – profitability and success.Research suggests 20% of start-ups fail in year one, just under 50% make it to year five, 66% have failed by year 10, and by year 15 only 25% are still surviving. Some businesses deemed to survive merely limp along for years, often referred to as 'the living dead'. However, with the right planning, mindset, and funding, improving start-up survival rates is achievable.Why start-ups failThere is a myriad of reasons why start-ups fail. In my view, it is usually due to a combination of factors rather than just one. Figure 1 summarises the most common reasons start-ups fail. They are broken into four areas:  market, founder, finance and other.Improving your chances of successTo improve your chances of having a successful start-up, you must get some fundamentals right.Sell a product/service that customers want A key reason start-ups fail is because there is an insufficient market need for the product or service. This can be mitigated through focus on the customer from the start. You must be customer-centric before you build, design, or develop anything. Take the time to put your ideas down on paper, and then go out to customers.Talk to potential customers or users, listen to them, try to identify their biggest pain points or struggles. Do market research.Build a basic, early version of the product.Go back to some potential customers, get their views and feedback.Refine, modify and enhance your product based on the feedback. Go back to potential customers again, get their views and any further changes or improvements needed.Enhance your product again.It is only with constant feedback and user reaction that you can improve the product and arrive at a point where it can begin to appeal to potential customers. It is a test and feedback loop. After the testing is done, you will begin to get a feel for a business model and pricing.Create a balanced teamFind good people with complementary skills who gel with one another – preferably a designer, engineer and marketeer. Teams build companies, not individuals. Investors also want to see a team, not a single founder.Control cashflow tightlyIt’s the job of the main founder or appointed finance person to make sure the company does not run out of money and to control finances tightly.Write a business plan The process of writing a business plan is not an academic exercise, it is a validation exercise on the product and overall business. The business plan should corroborate whether the product and overall business has potential. Appoint a savvy external business mentor or adviserTheir role is to ask hard questions, challenge you, objectively evaluate progress against targets set and hold you accountable. This person should not be a close relative or friend.Is entrepreneurship right for you?Creating a start-up is not for everyone. Like any career choice, not everyone is cut out for certain roles. It may not suit your interests, temperament, passion, or skills. The requirements or skillset for an entrepreneur are not specified, yet the skills required to be successful are rarely discussed other than in academic textbooks.Your character and resilience will be severely tested in a start-up, especially in the early stages. Delays, disappointments, criticism, rejection, frustrations, travel, endless presentations, knockbacks and 80-hour weeks with little pay is what a founder is facing. Fundraising is arduous, where it can take six months of meetings, calls, presentations and visits to secure investment. This takes a toll on you mentally and physically, and your ability to face these knocks and challenges while remaining optimistic is difficult. Successful entrepreneurs show some essential personality characteristics such as patience, an ability to listen, learn, accept criticism, and stay positive. They are a people person, and able to get along and deal with all types of individuals. Failure does not defeat them, and they learn from mistakes. They can take things in their stride and are willing to adjust or pivot when required. Successful entrepreneurs possess drive, ambition, and determination.Anyone who might be considering creating a start-up should do some self-examination as part of the planning. They need to ask themselves honestly if they have some or any of the requirements that an entrepreneur needs to have. Ask yourself questions such as:Do I have that entrepreneurial drive and determination?Am I cut out for this?Why do I want to start a business? You should only start a business for the right reasons. Self-indulgence, fulfilling a dream and pleasing someone else are not valid reasons.You fail and you learnThe aim of a start-up is to solve a problem for a customer. The customer comes first. Your starting point is talking to customers, discovering their pain points, and then using that feedback.If you are not getting good market traction, be prepared to pivot and change. If the business is still struggling to get off the ground, be prepared to disengage. This can be a difficult decision but necessary. You can always start again. Remember: you will pass failure on the way to success. A failed start-up is a valuable lesson. You fail, you learn, you start again and you do things better.I believe it is possible to improve start-up survival rates with good planning, the right mindset, and a funding plan. If your product/service is good enough, you will always secure funding. While the risks of failure in a start-up are high, the entrepreneurial spirit will nevertheless always be alive.John Convery FCA is a business adviser to start-ups and small businesses.

With remote working here to stay, people leaders will need to understand the nuances of managing virtual teams and remote workers. Dr Annette Clancy explains.COVID-19 propelled remote working to the top of the agenda for every business. Overnight, virtual meetings replaced face-to-face interaction and have become the primary way in which work is conducted. This temporary solution to a once-in-a-lifetime pandemic is tolerable because we are in such unusual circumstances.However, some organisations such as Facebook and Twitter are now planning for permanent remote working. We are also likely to see remote working becoming more popular in non-technology businesses. For some people, and some businesses, remote working works. The ability to manage remote teams effectively will therefore be a critical skill in the new working world.What differentiates virtual teams from face-to-face teams? And what skills will managers need to ensure that remote working continues to work into the future?RelationshipsSustaining relationships in virtual teams is always a challenge due to the solitary nature of remote work. Research tells us that members of virtual teams have different ways of engaging with the team; not every member will engage and disengage at the same time. Also, people are coping with different types of emotions. We have seen, during the pandemic, how anxiety has taken hold and people have found it difficult to think. Managers of virtual teams must be attuned to these variances and work hard to help virtual team members generate a sense of belonging, which won’t naturally occur because members cannot meet in person or socially.TrustTrust is a critical issue for remote workers. Can you trust somebody if you have never met them? Recent research (2019) by Breuer, Hüffmeier, Hibben and Hertel tells us that trust is more important for virtual teams than face-to-face teams. The research identifies the factors most relevant for building trust in virtual teams. They are:abilitybenevolencepredictabilityintegritytransparencyThe authors offer some practical solutions to help with trust-building. These include creating a database listing team members’ expertise; providing more information about their ability; online profiles; information in email signatures; and online feedback systems and other processes designed to increase trust and encourage closer cooperation between virtual colleagues.Flexible workingFlexible working arrangements are at the heart of remote working, but this can be challenging for managers who have the job of coordination. In an article published in 2007, researchers Dyne, Kossek and Lobel suggest that collaborative time management processes can be ‘designed in’ from the start. Furthermore, employees can be asked to engage in ‘proactive availability’ where each employee is asked to take responsibility for identifying difficulties and notifying others on the team. For example, if a team member’s existing caring responsibility clashes with a meeting, they tell another team member and send questions/comments in advance to the meeting. In this way, time management and scheduling are organised within the team rather than by the manager.MotivationThe researchers also recommend ways in which managers can bolster motivation. Instead of focusing on how often people are present and available (i.e. virtually present and on camera), they suggest nominating specific events that occur at pre-determined times. Focusing on these events creates more flexibility, particularly for part-time workers, and re-orientates energy on outputs rather than on inputs. This, in turn, is likely to increase motivation and keep people focused on the bigger picture as opposed to who is absent from virtual meetings.Remote working is here to stay, and businesses that offer this flexibility will need to have managers who understand the nuances of managing virtual teams and remote workers. Managing people you have never met is enormously challenging, but there are big rewards for businesses in accommodating how people want to organise their work-life balance.Dr Annette Clancy is Assistant Professor of Management at the School of Art History and Cultural Policy at UCD.

Instead of counting the cost of the current crisis, clients now need their accountants to help them identify and forge a way ahead, writes John Kennedy.Whatever your age or the stage of your career, 2020 is a year like no other. In recent months, your world, your life, and your practice will have changed in a way that no-one thought possible. This has brought great anxiety, stress, and pressure for many. It has disrupted virtually every aspect of life, and it has changed many long-standing priorities and perspectives.At the outset, every conversation was about COVID-19. Then the emphasis began to shift; the focus started to move to how to respond to our unfamiliar new world, to learn how to deal with a dramatic new lifestyle, get better at cooking at home, become more proficient in using technology, and adapt to meeting online.As the days and weeks went on, this shift in emphasis continued. The importance of taking care of our minds as well as our bodies, and supporting each other, came into sharp focus. It is important not to overlook the far-reaching significance of this evolution in thinking. In a world with unforeseen financial pressures, how we connect with others has taken on a revised and revitalised importance and has become established as holding significantly increased value in so many aspects of business life.Reliable, trustworthy customers and clients you can turn to when the pressure is on matter now like never before. The implications will have an impact on your practice, and business in general, for a long time to come.An important lessonOne of the good news stories during the initial stages of the crisis was the way Irish people contributed to fundraising for the Choctaw Nation. As you may know, during the Great Famine in the 1840s, the Choctaw tribe of Native Americans sent much-needed funds to help with famine relief in Ireland.When the coronavirus crisis struck, the Choctaw nation set up a fundraising website. They were at first surprised, and then amazed when donation after donation came in from the Irish community around the world. In an interview about the donations, one of the contributors told this story about an old tribal chief who taught his grandson about the important lessons in life.“There is a fight going on inside me, a far-reaching fight between two wolves. One wolf is evil; he is anger, frustration, sorrow, regret, self-pity, and doubt. The other wolf is good; he is hope, generosity, sensitivity, understanding and confidence. The same fight is going on inside you and every other person too.” The grandson was transfixed. “Which wolf will win?” he asked. The old chief smiled and said: “The wolf you feed.”This is of crucial importance to your work in the months to come. Helping your client feed the good wolf inside themselves should be a central part of your work, as many of your existing clients will feel overwhelmed. They will have come through months of stress and worry, even the optimistic ones who bear it lightly. Many will need to look again at their finances and their financial planning, as many apparent certainties have been overturned. Much has changed, much of it forever.With so much change happening in their lives, it is vital that as their accountant, your relationship with your clients also changes. Clients often have a fixed view of what they should want from their accountant. They believe that they should look to their accountant to prepare accounts, undertake audits, and give tax and compliance advice. In this time of change, your task is to guide them from what they believe they should want to what they genuinely need most.Feed the right wolfMore than ever, clients need you to help them identify what constitutes success in the months and years ahead. Your value will come as much from helping them think clearly as from the technical tasks you carry out.To fully emerge from the coronavirus crisis will take many years. The phrase the ‘new normal’ is much overused, but it holds an important truth. Things may not be normal, but they are certainly going to be new and this is true for every aspect of your clients’ experience – including how they work with their accountant.For almost everyone, the first half of 2020 has been a time of frustration, stress and doubt. If you let your clients see you as the person who will confirm and verify a deeply damaging period for their business, their finances and their lives in a harsh financial record, you are going to be the focus of much of their stress and angst. Left to themselves, it is all too easy for your clients to focus on and feed the bad wolf.For the foreseeable future, every wise accountant will take an active hand in guiding their clients to think about the things they most need. The greatest problem with the COVID-19 crisis, however, has been fear of the unknown. So when it comes to your role, you must replace the fear of the unknown with clarity, understanding, well-thought-out confidence and a path that takes them to a better place. This is the good wolf.Moving from ‘want’ to ‘need’How often have you chatted with your clients about their life, family, hopes and ambitions before ‘getting down to business’? Instead of getting down to the business of counting the cost of the current crisis, however, they now need you to help them see the way ahead. They need you to shape a clear image of a future they can reach. This is not an invitation to become a counsellor or a cheerleader; it is much more important than that.Your role is to help your clients see the commercial realities and show them how to identify each individual stepping stone to get them to the other side of this whole challenging experience. In the short-term, that may well be about survival. You may need to place a sharper focus on identifying new ways to manage cash flow and to help them understand their options in this new reality so they can more effectively chart a course as the emergency financial instruments are removed.While accurate returns and timely compliance will remain part of your role, your real value lies in helping remove your clients’ fear of a future that is worryingly unclear and unfamiliar. Many clients will need to restructure long-standing business practices, to secure new sources of purchase finance, or to change the terms of access to credit.They will need you to help them understand that this will pass, and it will pass most easily and most quickly for those who know how to plan the practical steps to get to that future. The accountants who focus on the need to actively shape the future rather than count the cost of the past or worry about the unknown will stand apart as a source of uncommon, vital value. This will provide a real, tangible return for both you and your clients in the months and years ahead.By helping your clients in this way, you will significantly improve the likelihood of their long-term financial survival. You will open up new dimensions for your relationship with them, binding them to you for years to come. And these new relationships will survive the evolution of traditional accounting as your role as an adviser continues to grow.This is a time to take a firm hand and raise your clients from what they want, to what they need. It is time to help them feed the good wolf.  John Kennedy is a strategic advisor. He has worked with leaders and senior management teams in a range of organisations and sectors.

Dr Michael Hayden provides the accounting practitioner with some food for thought.The COVID-19 pandemic brings a realisation of the importance of certain sectors in our society. While many businesses cease operations, food producers and farm enterprises are acknowledged as essential services.The economic significance of the Irish agricultural industry is well documented. However, in these unprecedented times, the focus has turned to its social importance. This provides an opportunity for the accounting profession to reflect on how it can best assist and support farming businesses, not only in the current circumstances but in the future.A question worth considering is: does the agricultural community reap the full benefit of the extensive knowledge and skills the accountancy profession has to offer? While acknowledging that challenges exist for accountants in delivering their services to farm clients, there are significant opportunities for accountants and farmers to work more effectively together to develop sustainable farm enterprises.Industry contextThe agricultural industry is an integral part of our economy and society. After the economic crisis of 2008, the government primed the agricultural sector to stimulate economic growth and set out ambitious goals for it in the Food Harvest 2020 and subsequent Foodwise 2025 strategy documents. The Department of Agriculture, Food and the Marine’s 2019 Annual Review and Outlook report outlines the importance of the industry. It claims that food produced in Ireland was exported to over 180 markets worldwide and was valued at €13.7 billion in 2018, which represents 10% of merchandise exports. Additionally, the sector contributed 7.5% of gross national income (GNI) and employed 173,000 people (7.7% of total employment) in 2018.Despite the importance of the industry, when average farm size, farm incomes and dependency on farm subsidies are examined, as well as the average age and training levels of Irish farmers, a picture of economic vulnerability emerges. The National Farm Survey (NFS) is published annually by Teagasc and highlights this vulnerability. The 2019 NFS highlights that 34% of Irish farms were deemed viable, 33% sustainable, and 33% vulnerable. It also reports that the average family farm income (FFI) in Ireland was €23,933 in 2019, which varies significantly across farm types (for example, dairy generated €66,570, tillage generated €34,437 and beef generated €9,188). Furthermore, farming in Ireland remains reliant on subsidies which, on average, accounted for 77% of FFI in 2019.Experts warn of another economic crisis post-COVID-19, and there is no doubt that our agricultural industry will attract renewed focus. Furthermore, Brexit represents a significant external risk for Irish agriculture with potentially far-reaching economic, social and cultural consequences. In this context, it is perhaps more important than ever that the accounting profession supports the agricultural community in developing sustainable farm enterprises by assisting farmers in making informed financial decisions based on sound financial management information.Challenges in providing services to farm clientsBefore exploring the opportunities for accountants to provide support to the agricultural community, it is important to acknowledge some challenges that exist in assisting farmers in managing their enterprise.Despite the economic vulnerability of many farms, research shows that most farmers spend little time on financial management. A dislike of conducting financial management activities exists in the farming community. Indeed, they are often viewed as a necessary evil and do not always fit well with the identity of what farmers see as important farm management activities. There are other identity-related issues: many farmers are quite secretive about their financial affairs; some are naturally reluctant to seek farm management advice; many tend to rely on intuition and experience in managing their business as opposed to relying on financial information.As a result of the lack of engagement by farmers with financial management in the day-to-day management of their business, book-keeping systems can be relatively unsophisticated. There is a tendency to monitor bank balances (cash flow), and only a minority maintain management accounting records.The average age of a farmer in Ireland is 59 years. This high age profile is a well-documented concern for the industry. In terms of financial management, older farmers are less likely to invest in their farm and are less likely to strive for innovation and efficiencies.Historically, farmers view accountants as providing a statutory and compliance role, such as filing annual tax returns, with little focus on value-added services. Also, the cost of such value-added services is a barrier as quite often, farmers are unwilling to pay for such services.This profile of the farming community suggests that there are limited opportunities for accountants to provide value-added services to farmers. However, there are ‘green shoots’ that give cause for optimism.Green shoots to exploreIn recent years, there has been a considerable shift in the industry. This shift is transforming the Irish agricultural landscape and providing opportunities for accountants and farmers to work more effectively together to develop sustainable farm enterprises.Policy changes have resulted in some fundamental structural reforms, which have provided opportunities for growth. For example, milk quota abolition under the Common Agricultural Policy (CAP) has resulted in considerable investment and expansion in the dairy sector. While it is acknowledged that farmers tend not to engage extensively and/or dislike financial management, the mindset of many farmers in this respect is changing. In my research, I discovered that where farmers are making strategic farm expansion decisions, there is a considerable degree of engagement with their accountants.Many traditional farm enterprises are diversifying and exploring new markets for their produce. For example, there is an increase in the production of artisan food products directly by farmers, alternative supply chains where farmers sell their produce directly from farm-to-market, and an increased focus on organic food production. These trends and the movement from the traditional farm production system often bring a renewed focus on profit margins, cost management and overall financial management.Farm partnerships and the incorporation of farm enterprises are becoming more widespread in the industry. Such changes in legal structure provide additional opportunities for accountants who have expert knowledge in terms of tax, legal, and succession planning advice.As a result of the above developments, younger farmers are being enticed into the industry. Agricultural courses in colleges and universities have seen strong demand in the past decade, which is very positive. Numerous policy measures have also been enacted to encourage generational renewal, including changes to land leasing arrangements, while tax reliefs/incentives have been developed to facilitate younger farmers entering the industry.These transformations to the Irish agricultural landscape have encouraged farmers to be more open to engaging the value-added services of accountants. This provides opportunities for accountants to develop successful working relationships with farmers, whereby farmers could significantly benefit from the expert knowledge and skills that accountants have to offer.ConclusionThere is vast potential for accountants and farmers to work more effectively together to develop sustainable farm enterprises. Navigating the financial challenges of COVID-19 and Brexit are just two reasons why each farmer should look to his or her trusted accountant for support and expertise as the farming community strives to meet the critical societal demands for a sustainable food supply.Dr Michael Hayden FCA is Assistant Professor of Accounting at Maynooth University.

In 2010, Neil Hughes set out the seven Cs framework to help businesses navigate the great recession. Fast forward a decade, and these principles remain more pertinent than ever.Are you familiar with the old story of the two hikers in the woods? They come across a bear who starts to chase them. One hiker stops and begins changing from hiking boots to running shoes. The other hiker says, “I can’t believe that you think you will outrun the bear just because you change your shoes!” The first hiker replies, “I don’t need to outrun the bear. I just need to outrun you!” The moral of the story? When trading through difficult times, those who are best prepared are most likely to survive.Considering that the current community mentality and enthusiasm is likely to fade when the effects of the recession start to bite and businesses are striving to outperform their peers, this sentiment is even more significant. Many business owners are currently trying to adopt the best strategies to save their businesses. A common characteristic in many business failures is mismanagement. Although not deliberate, many people do not take advice, make the wrong decisions, and incur avoidable losses.With so many external factors at play, how can you best position your business on the road to recovery? What course of action do you need to take to ensure that your firm not only survives, but emerges stronger than before? The seven Cs present a blueprint for business owners and managers who are working hard to beat the competition and overcome significant challenges.1. CounselMaking well-informed and rational decisions under increasing pressure and uncertain conditions borders on the impossible, which is why seeking counsel at an early stage is the first step to pivoting a business during a crisis. How has my business been affected by the fallout from the COVID-19 pandemic? What financial shape is it in? How can I tackle the ‘here and now’ while turning my focus to the future? Avoid falling into the trap of taking unqualified advice; seek guidance from a select group of professionals such as your Chartered Accountant, your solicitor, and your funder. Work with them to formulate a practical and comprehensive recovery plan.2. CommunicationDon’t underestimate the importance of honesty, especially when things are uncertain. Communicate your financial position with the people and groups to whom you are indebted – the taxman, lenders, landlords and suppliers. You will be amazed at the goodwill this generates. Not only are your creditors likely to appreciate your honesty, but it will also take some of the pressure off, which may facilitate better decision-making. Unbridled transparency builds trust, which will help you maintain your integrity. This, in turn, will buy you more time and with time, many things become possible. Start with the truth and go from there.3. CooperationThe current crisis has changed the way we work. With businesses now forced to rely on different forms of communication, relationships between business owners and employees may have changed. Now is not the time for ambiguity. Your staff play a crucial role in helping your business stay afloat during unstable times. Communicate with them clearly and frequently. Be forthright about the condition of your business; they will respect you for it and are likely to show loyalty in return. Failure to secure their cooperation will significantly dilute your business’s chance of survival.4. Clarity of purposeCreate a new business plan that will provide greater clarity on all functions from marketing, finance and accounting to operations, products and services, and distribution. Adopt an entrepreneurial attitude. While there is no doubt that this crisis has presented grave difficulties, it also provides plenty of scope for innovation. Business leaders are stepping out of their comfort zones and thinking outside the box. There are opportunities to be found if you look hard enough. Ask yourself: “how can I ensure my business not only survives, but thrives?” Rediscover the sense of excitement you felt when you first set up your business. This will drive you forward with clarity of purpose.5. CostCost reduction should be a crucial part of your business strategy. Many business leaders will find themselves implementing cost-cutting measures in response to declining revenue, profitability, and reduced access to credit. Instigate a company-wide series of targeted cost cuts. Don’t make arbitrary or general cuts that may adversely impact long-term goals. The main areas for potential savings in any business lie in eliminating waste, seeking out and demanding the best prices for supplies and services, and carrying out certain tasks in-house that were previously contracted out to third parties.6. CashA swift recovery often boils down to one thing: cash flow. Credit controllers work hard to bring in the money and are instrumental in keeping businesses ticking over. Cash control means releasing the ‘lock-up’ of your business (i.e. the latent profit that is locked up in your stock, work-in-progress and debtors). It is a lack of cash that causes many businesses to fail during times of hardship, not a lack of profit. And even profitable businesses will fail if they run out of cash.7. CustomersWith normal operations out of whack, it may be harder for organisations to focus on exceptional customer service. However, now more than ever, customers are exceedingly important. Engage with your customers, ensuring you are adapting to their changing needs. A business owner must strive to continually ensure that the customer’s experience of a product or service is as pleasant, straightforward, and satisfying as possible. During an economic slump, it is your customers who will carry you through.Neil Hughes FCA is Managing Partner at Baker Tilly Ireland and author of Beating the Recession: The Seven Cs of Business Recovery, which is published by Chartered Accountants Ireland.

Michael Clohosey considers the economic impacts of COVID-19 based on a series of interviews with business executives in the Zurich region.Switzerland shares some similarities with Ireland. Both are small countries with very open economies and punch above their weight on the global stage. Both economies also have a high reliance on the services sector, with the pharmaceutical/healthcare industry a large proportion of the industrial sector. Based in the Zurich area for almost ten years, I thought it would be interesting to share some perspective from this part of Europe, focusing on the impact of COVID-19 on businesses in Switzerland. I interviewed finance leaders from various industries, and this process provided some interesting perspectives on the current crisis and offered a view of its medium-term impact.The type of industry in which businesses are active is the main determinant of the impact of COVID-19 in Switzerland. For example, one domestic electrical supply company involved in electrical installations for both commercial and residential property felt only a marginal impact on demand. Another company involved in the production of control devices for heating and ventilation systems, and which has a much larger global presence, is forecasting a slight decrease in demand in the medium-term. On the other hand, an international education company suffered an immediate, almost complete drop in revenue. Once countries started to impose restrictions and prohibit essential travel, this required enormous effort and collaboration from their external partners to ensure that their students abroad were safe and could find a way to get home. While facing a severe decline in revenue and an uncertain future, the firm needed to focus solely on the welfare of its customers stranded in locations like South Africa, China and Australia.Business responseThe logistical response of the Swiss Government, including the travel restrictions, is well-covered in other sources. I will instead focus on the Government’s economic response to the crisis, which was quite strong – even if it was not immediate. One must remember that Switzerland is not part of the EU and does not, therefore, have ready access to the financial safeguards and protection the EU provides. In total, the Swiss Government set aside more than €61 billion to support the economy. This will create a massive deficit in the national budget, but the amount that must be borrowed is significantly lower due to the Government’s large cash reserves. Some economists estimate that the debt to GDP ratio will increase from 26.7% in 2019 to approximately 34% in 2020, easily meeting the eurozone’s Maastricht criteria. The Government’s measures, which focused on different target groups, aimed to safeguard jobs, guarantee wages and support the self-employed. Measures were also taken in the field of culture and sport to prevent bankruptcies and to cushion the financial consequences. Furthermore, there were provisions to delay payment and temporarily waive late payment interest on social security contributions and various taxes.Many businesses availed of this support, especially those in the travel and tourism trade. I know of many companies that eased their liquidity concerns by quickly accessing interest-free government loans of up to CHF 0.5 billion. Companies affected were also entitled to apply for what is termed “short-term working”. This was extremely helpful to the restaurant sector, from which employees were made temporarily redundant. Provided employees were still paid full salaries, employers received 80% of the cost from the Government. Rental payments remained privately managed. Some landlords were open to negotiation, especially where there were obvious financial difficulties on the tenant side. This flexibility to negotiate seemed to vary depending on whether the landlord was a private or commercial institution. Solutions found included deferral of rent payment. In an apparent contradiction, there appeared to be cases where landlords were more open to negotiating when they saw that the tenants were granted access to the Government’s interest-free business loans.There were short- and medium-term impacts on business, including the supply chain. One company that supplies leather to Asia for shoe manufacture suffered a drop in production due to the difficulty in exporting raw materials. Ship cargo returning from Asia was almost non-existent, and any possible exports were therefore changed to air cargo. An educational travel company I spoke to needed to review agreements with all educational partners abroad due to the number of re-bookings where students sought to change school. As we see with the airline sector, re-bookings are preferable to cash refunds. However, this is cumbersome in the educational travel industry due to the number of actors involved. Some firms changed their business models. Third-level institutions, for example, were in the main very quick to react. They established management task forces and brought their curricula online. Online education is one of the fastest-growing global industries, and the pandemic has only increased its expansion.Focus areas also changed in finance departments. The old maxim of “cash is king” was never as important as it is now. Companies that were not so well accustomed to short-term cash planning even hired external consultants to create 13-week cash forecasts. Fixed yearly budgets increasingly became rolling forecasts, with new scenario planning to account for the effects of the pandemic.Seven insights from the COVID-19 crisisA comprehensive review of organisations’ state of preparedness for such an unforeseen circumstance, their reactions to it, and the enforced planning for a new economic reality produced many new lessons. It also underlined the importance of established business principles.Business agility: we saw the importance of agility in how quickly some educational establishments brought their curricula online. Many advanced education establishments are already planning to generate a greater share of revenue through e-delivery.Securing the supply chain: it is very difficult to plan for an almost total transport shut-down. However, we saw in the example above of the shoe production company that alternative methods of transport can be put in place, albeit at a higher cost and risk. This same firm also discovered and used shoe manufacturers closer to the source of the raw material.Strong partnerships: strong business relations, especially with suppliers and customers, are more important than ever in times of crisis. One company I interviewed closed one of its largest partnership deals through online meetings. This was mainly due to the trust already created.Working from home: many firms, especially those in the financial services industry, have identified that productivity has not decreased while employees have worked from home. This has allowed them to offer it as an alternative for the future. In some cases, property leases can be reviewed due to the resultant decreased need for office space. It is therefore expected that the dynamics of cities like Zurich, which until now had large office space occupied by banks and financial institutions, will partially change in the future.Discretionary travel: discretionary costs, especially travel, were already in focus before the lockdown. The fact that many businesses functioned quite well without travel has led to a further appraisal of its value.Cash is king: the funds disclaimer says “past success does not guarantee future performance”. However, past success in the form of cash reserves can guarantee business survival in such times. Even more attention should be paid now to short- and medium-term cash planning.Scenario planning in forecasting: we have seen how macro events can have a drastic impact. Businesses can increase their ability to respond by replacing traditional budgeting with frequently updated forecasting models, which include scenario planning for changes in the economic environment. The conventional practice of involving all departments for budgets or forecasts can be reviewed to facilitate the agility required. Responsibility for financial planning and forecasting cannot be delegated from the finance function.A snapshot of the economic impact of the crisisAs Switzerland and Ireland are (at the time of writing) emerging from travel and business restrictions, I thought it helpful to review some key indicators of the financial impact of the recent upheaval. According to projections from the OECD’s latest economic outlook, similar to the world economy, Switzerland and Ireland are not expected to be at Q4 2019 levels of GDP until Q4 2021. This is projected for each of the two scenarios, which they estimate are equally probable. One scenario anticipates a second wave of infections with renewed lockdowns before the end of 2020. The other scenario anticipates the avoidance of another major outbreak. Refer to Table 1 for the historic percentage changes to real GDP and forecasted changes to real GDP based on economic projections for a single wave of infections.Switzerland and Ireland are expected to suffer similar declines in GDP. This perhaps is logical, given that both economies are driven mainly by the services and pharmaceutical/healthcare sectors. Interestingly tourism, one of the most severely affected industries, is not a very significant part of total GDP; it represents approximately 3% in both countries. Table 1 shows that Switzerland and Ireland have recorded quite different increases in real GDP in the last 20 years. Switzerland’s growth rate has been very stable at an average of 2% per annum, and almost exactly replicates the growth rate of ‘advanced economies’. Ireland’s growth rates, on the other hand, have been higher and much more variable.Putting recent lessons to workIt is not surprising that the global pandemic has impacted the economy in Switzerland as much as it has in Ireland and the rest of the world. People have changed their behaviours, both involuntarily and voluntarily. I have acquaintances who, up until the crisis, never purchased items online. I am sure that countless others in Ireland have just recently started shopping on their electronic devices.The online education industry is booming. Businesses have been quick to change their supply chains and include alternatives. They have also altered their business models, which we see most markedly in the education sector. Perhaps the increased effective use of video communications tools like Zoom and Skype has brought the possibility of education for the masses to greater prominence.The importance of classic principles, like strong partnerships based on trust and communication, has not diminished with decreased face-to-face contact. In fact, the opportunities for many more partnerships have actually increased in line with people’s confidence in, and use of, the internet. Global industry round-tables can be attended from one’s own home and without all the time and travel that was before deemed necessary. Amid the adverse effects of recent months, let us aspire in Switzerland, Ireland and elsewhere to consolidate and develop the positive aspects and put the lessons to work in our businesses.Michael Clohosey FCA is a senior finance executive based in Switzerland.

John Kennedy explains why knowing too much can harm your practice, and where you should apply your focus instead. When I ask Chartered Accountants to make a list of the problems that hold them back from getting new clients, I am sometimes surprised at the issues they include. One point never makes the list, yet it is often a challenge – they just know too much. How can that be a problem? Surely every client wants a highly knowledgeable accountant, someone who is on top of all of the details and knows all of the angles?This is partly true, but it hides how you can inadvertently damage your practice. Unless you take time to step back, think clearly from the perspective of the client and shape your words to meet their needs, you can quickly lose their attention. This problem is compounded by the assumption that your clients pay you for your knowledge of accountancy, but that is not why clients pay you. Why do clients pay you? This is a deceptively simple question. Is it because of the things you know or because of the things you do for them? Or is it because your qualifications mean you are empowered to authorise documents? Each answer constitutes some part of the reason, but each also obscures a vitally important point. There are two crucial distinctions. First, clients do not pay you for the things you do; they pay you for the value you deliver. Second, the value you provide is only partially expressed in monetary terms. The fundamental truth is that, in many cases, clients most value the way you make them feel. Where your real value lies When you were studying as an undergraduate, the emphasis was on increasing your knowledge. You bought textbooks, you attended lectures, you completed assignments and the focus was always on what you knew – more facts, more information, more knowledge. Your exams tested and confirmed your knowledge; the more you could prove all you knew, the higher the grades. And the more you knew, the better you felt and the better you were regarded by the training firms for whom you hoped to work. With this relentless emphasis on knowing more and more, it is unsurprising that you came to assume that knowledge was where your value as an accountant lay. Then you became a trainee Chartered Accountant in a firm. In your application, your interview and all of the tasks you were given, it was assumed that you had the knowledge required. At this point, the emphasis began to shift to the things you did. You were given specific tasks; what you did and the time it took was captured in timesheets. The emphasis of virtually every aspect of your work, your day and your value revolved around recording your activity in your timesheets. And then you set up your own practice. By now, the emphasis had become so engrained – entrenched even – that you assumed that the key to building a successful practice revolved around turning what you knew into what you do, and recording that in timesheets to bill your client. This focus transferred to your client, but the truth is that this is not where your greatest value – nor your greatest opportunity – lies. Your client wants your value, not your time To build a successful practice, you need to move your thinking – and the focus for your client – beyond what you do and towards the value you provide. This involves two steps. The first step is to consciously move the emphasis from the things you do to the value you deliver. This first step is widely accepted but poorly implemented in practice. The second step is perhaps even more critical if much less understood. To build a practice with strong bonds with long-term clients, you need to move the emphasis from facts to feelings. Human beings like to believe that our species is more rational than it really is. We believe that we see or hear something, we analyse it rationally, and we decide. But do you suppress your feelings at work and give dispassionate advice? Are you always logical and provide clients with clearly thought-out analysis? This is what we like to believe, but it is often untrue. The reality looks much more like this: we see or hear something; we filter it through our emotions; we interpret it and tell ourselves a story; and on that basis, we decide if it is right or wrong. This filtering process happens all the time and while every client wants the facts dealt with, they assume that this is the minimum level of service they will receive from their accountant. The bonds that make clients work with you and generate referrals are forged beneath the level of conscious thoughts. Even in business, the way we feel is of enormous importance so you can create a genuine edge by understanding and applying this. The positive feelings generated by your work include peace of mind, increased confidence in decision-making, or the anticipation of a comfortable retirement. These are important sources of value, yet few realise just how vital these submerged feelings are – even in the most dispassionate business transaction. Every interaction has a submerged, and usually unstated, emotional aspect. As a practice owner, you must understand this and use it to your advantage. When making the shift in focus from the things you do to the value you deliver, you must take account of the genuine feelings at play. Value is about more than money Feelings are always there and are an important part of the value provided by a Chartered Accountant – no matter how much we try to convince ourselves that it is “just business”. Everyone has clients they like and clients they do not like; phone calls they look forward to making and phone calls they hate making; tasks they like doing and tasks they hate. We are very skilled at telling ourselves stories that turn these feelings into apparently rational explanations supported by facts to support our conclusions – but there is no avoiding the reality that feelings are very powerful, and this is the same for your client. Let us take an example that shows just how powerful this concept is. Complete this sentence: “More than anything, I want my children to be…” I have used this example for decades and the answer is almost always “happy”. Occasionally, the respondent will say “content” or “fulfilled”, but in each case the answer is an emotion. It is never a financial or factual answer. This is a simple example of just how important feelings are. How to gain an advantage Gaining a client does not begin and end with you making clear all of the things you will do for them. For an individual to act, they must first feel confident that you understand what they want. And more importantly, they must also be convinced and motivated to the point that they are committed to working with you. Being convinced and motivated depends on your ability to address the feelings that so often remain submerged, unexamined, and unaddressed. I have heard about all the effort accountants put into planning and preparing for meetings with potential clients, often spending hours crafting a well-designed and high-quality document and accompanying presentation. But they then go on to tell me that, even as they are discussing the document or giving the presentation, they know it is just not working. Almost everyone has experienced this in some way, but many simply continue as if the submerged feelings are not there or are insignificant. The habitual pattern is to press on with more information, more facts, more details. The result is that you completely overlook the reality that the submerged feelings are the decisive factor in the ultimate success of any relationship. It is much more useful to bring these feelings to the surface. You do this by using questions to draw out how the work you are discussing with your client will make them feel. The truth is that few clients care about exemplary management accounts or pristine submissions. Some do want to use their cash more effectively or to have a clear tax plan in place, but everyone wants to feel the peace of mind or sense of security that these actions bring. Yet, many accountants spend too much time talking about the surface facts, the facts that – even when they are dealt with well – are, at best, efficient and uninspiring. The often-unacknowledged truth is that the feelings you create in your clients are just as valuable in building long-term relationships as the work you do. When you deal with the surface facts well, but the submerged feelings are left unattended, there is the illusion of progress, but the relationship is merely routine with little enthusiasm. New clients in particular will sometimes engage you as part of their initial wave of enthusiasm, irrespective of the work you have done, but that will undoubtedly be a passing phase. The worst-case scenario is where the factual, practical aspects of the relationship are not adequately clarified and addressed, and the submerged feelings are also poorly dealt with. If this is the case, the client may accept you as a necessary evil, and you both bump along for a short time until your client moves to another practice. Even if they stay, these are the clients that are difficult to deal with, slow to pay, and frustrating to have. Only when you take control of, and actively deal with, both the surface level factual tasks and the submerged feelings do relationships take off. When this happens, it is of real value to both you and your client. These are the client relationships you want – you are both in step, you both work well together, and you both feel positive about the work. Too often, however, this kind of relationship is left to chance because the influential role of submerged feelings is seldom acknowledged, discussed, and actively addressed. But you can make these positive and rewarding client relationships a matter of choice. Just get into the habit of raising your clients’ understanding of the importance of the positive feelings generated by working constructively with you as their accountant. Ask about the areas they want to be confident in; probe how putting their affairs in order will reduce stress; and test and draw out the peace of mind they will get. As you become skilled at eliciting and addressing these submerged feelings, you will set yourself apart from your competitors. Move your emphasis from what you do to the value it brings, and then take the critical step of drawing out and addressing the submerged feelings that are most important to your client.   John Kennedy is a strategic advisor. He has worked with leaders and senior management teams in a range of organisations and sectors.

Dr Annette Clancy explains why employees’ mental health should be the organising principle for businesses in the 21st century. 20-30% of us will experience mental health issues during our lifetime. Could the quantity and quality of work have something to do with this?  A recent study conducted in the UK shows that one-third of us are not happy about the amount of time we spend at work. More than 40% of employees are neglecting other aspects of their life because of work, which may increase their vulnerability to mental health problems. As a person’s weekly hours increase, so do their feelings of unhappiness, worry and anxiety. Employees’ mental health is affected by their roles. For example, we might expect to see mental health issues in workers who deal with trauma and violence every day, but studies also show that workplace culture, bullying, disciplinary processes, and toxic workplace relationships all contribute to deteriorating mental health. Many businesses have policies for mental health and workplace wellness, but for those who are trying to cope with challenging workloads and suffering at the same time, policies may not be enough. Very often, people hide what they are feeling for fear they will be stigmatised or punished. Policies need to be backed up with empathetic intervention by managers who have the right combination of ‘hard’ and ‘soft’ skills. Yet, managers are rarely trained to either recognise or manage conversations with team members who may be experiencing mental health difficulties. So, what can managers do to de-stigmatise mental health issues? 1. Create an organisational culture where there is respect for people. This sounds simple, but in practice, it rarely is. Most mental health issues arise from toxic relationships, bullying, harassment or power dynamics. Changing the culture around this would go a long way in helping to eliminate some mental health issues. 2. Train all managers and team leaders in ‘soft’ skills. Help people develop the ability to listen to what is not being said and read body language so that they can pay attention to those they manage. Stress and anxiety are felt, not spoken, so managers must be attuned to how it is expressed. 3. Encourage a culture of openness about time constraints and workload. Employees must feel able to speak up if the demands placed on them are too high. Also, ensure that employees’ jobs are manageable within the time for which they are contracted. Expanding job creep is one starting place for stress in organisations. Monitoring this aspect of an organisation’s behaviour alone could impact significantly on mental health. 4. Allow staff to attend counselling and support services during working hours, as they would for other medical appointments. This proactive initiative sends an important signal that mental health is a priority in your organisation. The World Health Organisation (WHO) defines mental health as “the state of wellbeing in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community”. The WHO definition provides a policy template for organisations wishing to create a culture in which the mental health of all workers is prioritised, not only those with mental health issues. It offers an interesting insight into how an organisation might be structured if mental wellbeing was the organising principle. As mental health issues continue to increase both within and beyond the workplace, perhaps the WHO definition isn’t so far-fetched. Putting people at the centre of organisations used to be the way we did things; putting the mental health of employees at the centre of organisations may be the way we need to do things in the 21st century. Dr Annette Clancy is Assistant Professor of Management at UCD School of Art, History and Cultural Policy.

Teresa Stapleton explains how senior leaders and managers can create a high-performance culture with loyal, engaged, and motivated employees. An estimated two-thirds of companies still conduct annual performance reviews, despite extensive research and employee feedback which suggests that they are outdated. What most companies hope to get from performance management is engaged, motivated, high-performing employees and business success. But the reality is that annual and bi-annual reviews fall well short in supporting these aspirations. They typically involve time-consuming and detailed write-ups of past performance, which have little impact on future results. More and more companies are questioning the value of analysing past performance based on goals set 12 months ago and rating individual performance on a scale to determine rewards. Most managers and staff dread the whole process. Research by Willis Towers Watson found that only 48% of employees report that performance reviews have helped improve their performance, and just 52% think their performance was accurately evaluated. There is widespread consensus that ongoing performance management and the provision of feedback and coaching is a better approach to creating an engaged, motivated workforce. However, the challenges involved in replacing the annual review process, which has been embedded in organisations for many years, can seem daunting. Over the last ten years, several companies have successfully done just that – transformed their performance management processes to re-energise their organisation and employees. While there’s no one-size-fits-all solution, the following themes are worth considering when re-thinking performance management. Performance management philosophy The starting point for changing any process is deciding what you want to achieve. Defining what specific behaviours, values and results you want to encourage, and whether individual accomplishments or team collaboration – or indeed, a mix of both – will be recognised and rewarded is a good first step. Many companies share their vision, values, culture, performance management philosophy, and employee development approach on their websites as it is where prospective candidates go to get a feel for the company and whether it would be a good fit for them.  The traditional levers for recruiting and motivating employees are attractive pay and benefits, competitive bonus schemes, job security and career development prospects. Also, employee engagement and employee experience are increasingly recognised as being of equal importance to attract talent and drive productivity. Some companies have adjusted their rewards model to empower managers to offer smaller incentives more regularly when goals are achieved. Others offer training, educational support, or development programmes to reward strong performance. Providing a positive working environment where employees feel that their work is meaningful and their contributions are valued is now seen as central to attracting and retaining talent. Senior leaders and managers have a critical role to play in building an environment and culture where their teams enjoy coming to work and are committed to delivering exceptional results. Performance appraisal model Companies often adjust their performance management approach over time to reflect changing economic conditions and the latest thinking on business leadership. The bell curve system of performance appraisal, which was widely used for decades by large companies, has been abandoned by most. This model forces managers to rank employees into a bell-shaped distribution curve, with 20% high performers, 70% middle performers, and 10% low performers. The advantages of the bell curve model are that it helps managers differentiate rewards based on contribution and forces them to tackle low performers. However, the drawbacks of the model are generally believed to outweigh the benefits as it can create unhealthy internal competition to be a top performer and get high rewards and undermine collaboration across teams. It was also viewed as unfair and demotivating to employees pushed into the ‘middle’ or ‘low’ categories to hit the numeric requirements of the curve if this does not reflect their actual performance. Many companies have replaced the bell curve model with less rigid approaches that focus on continuous performance management, providing real-time feedback and coaching to improve performance and support personal development. Some companies have even dropped performance ratings altogether as they focus performance discussions too much on past events, shifting instead to highlight learnings from past experiences and create personal development plans for each employee to increase future impact. Objectives and key results There is a real art in setting meaningful and achievable targets that motivate staff to deliver great results. The biggest challenge is often distilling the broad range of activities each employee is responsible for to highlight the objectives that will contribute most to the overall success of the business. All too often, individual commitments or goals are a long list of activities and deliverables, making it hard for employees to see what is truly important and creates the most impact. Including granular details of job responsibilities or adding broad commitments that apply to all employees, while well-intentioned, often dilute the focus on clear, meaningful, personalised priorities. A growing number of companies like Google, Intel and LinkedIn have adopted the ‘Objectives and Key Results’ (OKR) framework to align company, team and individual goals and set targets. The process involves defining three to five objectives for each individual, with key results that are usually stated as numeric targets or other clear measures to track progress. While setting clear expectations upfront is essential, it is just as important to update them regularly to reflect changing company priorities and business direction. Regular performance check-ins Managers play a crucial role in setting their teams up for success by getting to know the strengths and capabilities of each team member and matching each individual’s skills to meaningful goals. Open communication is essential to set performance expectations, stay aligned on progress, and provide real-time feedback to address issues before things go off course – or to capitalise on opportunities to do things quicker or better. Performance and development discussions should take place on an ongoing basis and not be reserved for a formal review meeting once or twice a year. If regular check-ins are happening, there should be no surprises when it comes to performance assessment and rewards discussions. Most companies have performance management tools to track and monitor performance processes. Automated systems can also help streamline the process of capturing peer-to-peer feedback, highlighting blind spots or behavioural issues that managers should address. Conclusion Modernising performance management requires re-thinking the whole employee/employer value exchange. Employees want to do meaningful work, aligned with their values, where they feel they can grow, flourish and be justly rewarded. Senior leaders and managers have a critical role to play in creating a high-performance culture with loyal, engaged, and motivated employees to sustain business growth and long-term success. Teresa Stapleton is an Executive Coach at Stapleton Coaching.

The accountancy profession needs to engage with  how emerging technologies like artificial intelligence will disrupt traditional career pathways. By Dr Patrick Buckley, Dr Elaine Doyle, and Ruth Gilligan Information technology has become inextricably embedded in virtually every aspect of our professional and personal lives. Data about what we do, what we are interested in, with whom we communicate and where we go can all be captured and stored at a scale unimaginable even five years ago. Technology giants such as Google, Amazon and Alibaba are engaged in a competitive race to capture the data generated by this new reality, lending credence to The Economist’s claim in 2017 that “the world’s most valuable resource is no longer oil, but data”. The data captured is valuable for several reasons. For one, traditional activities such as advertising can be personalised and optimised to a revolutionary degree – think of Facebook. Data also allows companies to build entirely new products. For example, the utility of Google Search results depends on analysing what information others have found useful in the past. A further value assigned to these data streams is linked to the development of artificial intelligence (AI). A host of mathematical and algorithmic tools – some novel, some more mature but turbocharged by the advent of big data – has propelled the development of AI. Leaving aside philosophical questions such as to what extent these systems are intelligent, every-day and now familiar examples of AI (Siri and Alexa, for example), are demonstrably practical and effective. These visible successes, combined with the breakneck pace of development, pose a multitude of questions about the impact of AI on our future – not least its impact on the future of work. The future of work Concerns about automation and jobless futures are not new. Two centuries ago, Ricardo proposed that technology caused unemployment. In the 1930s, Keynes predicted that new technologies would reduce the demand for human labour. In the 1980s, Leontief compared the role of a human in the modern economy to that of a horse in agricultural production – first diminished, and then eliminated by automation. Until the advent of AI, the consensus was that such predictions were overly simplistic. While new technologies can have a destructive effect on a particular industry or sector, their introduction often leads to increased opportunities in other areas. The overall effect is to change the structure of the jobs market, rather than result in a reduction in the work available. The jobs eliminated by new technology are replaced by jobs requiring higher-order cognitive skills (e.g. a robot replaces a welder but requires a software engineer to program it). Though this can be frightening and stressful for individuals, at a societal level, as long as education and training enable people to adapt to changing conditions by acquiring new skills, the long-term impact of technological change on the jobs market should be positive. The rise of AI has disrupted this consensus. In brief, the suggestion is that the human monopoly on tasks requiring significant cognitive processing is being broken. Education and training may become ladders to nowhere if AI systems that match or surpass human cognitive abilities are feasible. A glance at the world today demonstrates that many tasks humans once performed are being automated by AI systems, with virtually all studies showing that the process is accelerating as the capability of AI systems improves. For example, two Oxford economists, Frey and Osborne, predict that 47% of jobs in the US will be automated by 2030. The impact of AI Investigating how this disruption is likely to impact the accountancy profession, our research profiled the tasks that practitioners perform at different stages of their career and at three levels: trainee/junior, manager, and director/partner. We then calculated the probability of each task being automated by aggregating information from a range of sources, including academic studies and reports from professional, industry and government organisations. Our analysis makes it clear that, taken as a whole, accountants perform an enormous variety of tasks for their clients and employers. Some tasks, such as preparing accounts or tax returns, are considered extremely vulnerable to automation. Others, such as designing effective financial control strategies for clients, building relationships, or mentoring juniors and trainees are not. This feature of the profession has two implications: Given the enormous variety of tasks performed and roles fulfilled by accountants, assigning a single probability and suggesting that this represents an objective assessment of how vulnerable the profession as a whole is to automation is a simplification to the point of absurdity. The large number of tasks not vulnerable to automation means that for the foreseeable future, the profession as a whole does not face an existential threat. Tasks like designing effective tax strategies or the financial structures of businesses will require a mix of quantitative and soft skills as well as a deep, strategic understanding of the world beyond the capabilities of AI. Career pathways However, this does not mean that the profession can afford to be complacent. Analysing the potential effects of AI at different stages of a traditional career pathway reveals that the tasks vulnerable to automation belong predominately to early career stages. This is particularly the case for trainees/juniors, but also applies substantially to certain work at manager level. Therefore, while accountants may always be needed, the current economic case for most trainees and some managers may disappear. This presents challenges for the profession. Most obvious is the need to redesign career pathways in response to these trends. A traditional career pathway through the profession follows the well-worn path of trainee to manager to director to partner. A key question for firms and the profession is how to replenish senior ranks if the bottom rungs of the career progression ladder are removed. If there are no trainees or junior staff, where does the next generation of managers, directors and partners come from? A second, related issue is that of skills and knowledge development. Generally, the more experienced individuals in organisations perform the more cognitively demanding tasks. The tasks most vulnerable to AI automation are often seen as repetitive and undemanding. At first glance, the automation of such tasks may seem a positive development for employers and employees alike. However, this perspective takes no account of the knowledge and skills gained by performing these tasks in a real-world setting. For example, designing effective tax strategies requires experience that can only be acquired by spending time working on basic tax compliance. It may be possible to develop the skills and aptitudes required by more senior practitioners without a long, real-world apprenticeship. However, there is no evidence to support this position. At the very least, it seems likely that the entry pathway to the profession will need restructuring, with substantial changes required to curricula and entry requirements. In an extreme case, firms may face severe skills shortages a few years after engaging in significant automation. Higher-order skills may atrophy and disappear due to the lack of entry-level positions rupturing the supply pipeline of employees capable of performing higher-order tasks. Perception of the profession A third potential issue is the attractiveness of the profession to new entrants. If some of the tasks traditionally performed by managers are automated, then this will presumably have the effect of reducing the total number of individuals required at this level. The profession may evolve towards a position where a relatively small number of individuals (say 5%) do high-value, well-remunerated work while the other 95% are relegated to low-value, poorly paid tasks. A rational and risk-weighing decision-maker, the very type of intellect the profession seeks to attract, may select away from careers where the odds seem stacked against being able to access opportunity. In the long run, this selection bias may have a significant adverse effect on the profession’s ability to attract high-calibre candidates. The future of the profession Forecasting the future is a notoriously uncertain endeavour. Any predictions regarding the impact of AI on the accountancy profession (including those in this article) should be treated with scepticism. Reports of the imminent demise of the accountancy profession are, in all likelihood, greatly exaggerated. However, it would be equally short-sighted to discount the potential impact of AI on the profession entirely. It does seem likely that in the medium-term, the traditional career pathways associated with accountancy will be significantly dislocated. Responding to this will require meaningful, profession-wide dialogue and debate about how the next generation of accountants will be recruited, educated, and motivated.   Dr Patrick Buckley and Dr Elaine Doyle lecture at the Kemmy Business School, University of Limerick, and Ruth Gilligan is a Tax Associate at PwC Ireland.

Although the weeks and months ahead will undoubtedly be challenging, quality should not be compromised argues Fiona Kirwan. Full-year and interim year reporting deadlines are fast approaching for accountants both in industry and practice. Companies’ financial reporting functions and their auditors are getting used to working in ‘new normal’ circumstances. However, these changed circumstances must not compromise the quality of the work we all deliver day-to-day. Here are some issues Chartered Accountants should consider as they seek to maintain the highest level of quality in all aspects of their work. People COVID-19 has transformed the way we live and work. We have heard this phrase a lot in recent weeks, but it remains true. Almost instantly, employees who are used to the rhythm of the workplace became remote workers – many without the chance to prepare adequately. This creates challenges for managers of both finance and audit teams in leading teams remotely. It is more challenging to coach and supervise people who are not physically in the same location. It is therefore important to stay in touch and stay close to your people. Connecting as a community during this time takes imagination. It could mean developing new channels or social tools for employees to share stories; it could mean embracing video calls to create a sense of physical presence. Virtual social events are becoming the norm. Even small investments in building a genuine community can have a significant impact on your employees’ morale. This sense of community helps when coaching teams. People who are closely aligned on a personal level will find it easier to communicate complex information simply and team members will feel more comfortable asking questions and querying essential messages. Teams must be aware that some colleagues may not have optimal ‘work from home’ environments; some are juggling home-schooling with office hours; others are working from their bedrooms in shared living spaces. Organisations should implement flexible working structures to allow teams to deliver quality work while maintaining processes to ensure confidentiality and transparency. Such flexible working structures mean that everyone in the financial reporting process, both finance teams and auditors, must allow extra time to execute tasks remotely. Technology Almost all finance functions and accounting firms transitioned to remote working arrangements overnight, and the quality of an organisation’s technology is critical to day-to-day operations and ensuring business continuity in this scenario. Some organisations may have challenges arising from the fact that their teams are heavily reliant on desktop computers, second screens, or printing facilities that are not available in the home environment. The move to remote working could also leave team members isolated, but this is where the ability to host video conferences, share screens, and collaborate in files in real-time has become vital. Not only do these technical solutions allow teams to communicate internally, they have also become critical channels for communication between auditors and their clients. At PwC, we utilise our combined suite of audit tools – Connect, Aura and Halo – to communicate with our clients and colleagues across the globe. We also use Google’s G-Suite of collaboration tools, and Datashare to help us work with the data of clients with less complex IT systems. The recent uptake in the adoption of these technologies has seamlessly transitioned a lot of this work, which was historically done in person, into the digital realm.  Controls One area where the successful application of technology solutions has become essential is the implementation of internal controls over financial reporting. The appropriate tone from the top is vital; managers need to remind people that remote working might change how controls work, but it does not lower the bar. How companies operate their controls has been amended to allow for remote working. For example, a manual sign-off may now be replaced with a confirmation by email. In these uncertain times, companies will want to ensure that shortcuts are not being taken and rigour – both in procedures and the provision of appropriate evidence to support the implementation of controls – are maintained. Auditors will need to consider whether the controls, as they currently operate, remain fit for purpose and any increased risks that may have arisen from recent changes. Financial reporting The COVID-19 outbreak, and the measures taken to mitigate its impact, are having a significant effect on economic activity. This, in turn, has implications for financial reporting. Companies and auditors must work together to ensure that quality is not compromised – even in challenging circumstances. The following is a sample of the wide range of accounting issues that companies and auditors have considered in recent weeks: Going concern and viability statement: companies must assess going concern at each annual and interim reporting period, with a look-forward period of one year from the financial statement issuance date. Companies impacted by COVID-19 have had to update their forecasts and provide appropriate disclosures to alert investors about the underlying financial impact and management’s plans to address it, including if conditions give rise to uncertainties about the company’s ability to continue to operate; Subsequent events: the consensus is that COVID-19 was a non-adjusting post-balance sheet event for 31 December 2019 reporting. However, the appropriate disclosure of impact on the overall financial statements is a critical element of the financial statements; Measurements of assets: for year-end reporting and interim statements after December 2019, companies and auditors must assess the timing of COVID-19-related events to determine the impact on assets, including goodwill and indefinite life intangible assets, inventories, and deferred tax assets. Companies and their auditors must consider disruptions to the entity’s business or the broader market in determining recoverable amounts of assets. Careful consideration must be given to the net realisable value of inventory and, in the event of a price decline, whether prices will recover before the inventory is sold; Revenue recognition and receivables: identify the appropriate sales price given increases in expected returns, additional price concessions, or changes in volume discounts. Companies and auditors should be mindful that revenue can only be recognised for new sales if payment is probable under IFRS 15; Alternative performance measures: the European Securities and Markets Authority (ESMA) has provided guidance relating to the use of Alternative Performance Measures (APMs) in the context of COVID-19. Consistent with previous guidance relating to the maintenance of consistency of APMs from one reporting period to another, ESMA advises that rather than adjusting existing APMs or including new APMs, issuers should improve their disclosures and include narrative information in their communication documents to explain how COVID-19 impacted and/or is expected to impact on their operations and performance; the level of uncertainty; and the measures adopted – or expected to be adopted – to address the COVID-19 outbreak; and Internal consultations and reviews: audit teams face significant additional internal consultations and reviews in the current environment. Early agreement on timetables and collaborations between companies and auditors will ensure that quality is not compromised. As events continue to unfold, the challenges faced by accountants both in industry and practice are mounting. The weeks and months ahead will undoubtedly be challenging. However, quality should not be compromised. Supporting our colleagues and utilising our technology capabilities will ensure that control frameworks continue to operate, financial reporting will be clear and transparent for all users, and audit quality will not be compromised. Fiona Kirwan is a Director at PwC’s Assurance Practice.

Richard Day and Alannah Comerford look at how Chartered Accountants can explore the potential for robotic process automation using UiPath. In this series of articles, we are exploring the power of visualisation and data analytics and the benefits it can bring to Chartered Accountants. As you may know, the FAE syllabus was recently updated to include data analytics concepts and tools such as Tableau, Alteryx, and UiPath. Previous articles dealt with the concept of data visualisation and the value it can bring to an accountant, and most recently we covered the data processing tool, Alteryx, and the significant advantages it affords when performing data transformations and calculations. In this article, we will move to the more advanced area of automation. Robotic Process Automation (RPA) is an acronym you are probably familiar with, as more and more businesses seek to streamline their operations and exploit the advantages of automation. UiPath, which has been selected by the Institute, and similar tools enable RPA at a practical level. UiPath is a software solution that acts like a robot, programmed to perform the various activities in a process just as a human would. The tool can be used to run without human supervision or can work as an assistant. Automation without human supervision is extremely difficult and may not be the answer for complex processes that require significant judgement, reasoning or analysis from the person performing them. In such cases, automation may still support the person who is completing these tasks as an assistant, but human intervention is vital. However, if we consider those processes that are suitable for automation, they can usually be described as highly repetitive, manual processes where the employee does not exert judgement. All decisions are made based on business rules and pre-defined logic. Significant value can be derived from automation where there is interaction between multiple systems, but the inputs required are standard, making the process tedious and time heavy. Similarly, when the current manual procedure is inadequate for standardising a process and remains subject to error, automation – which has the power to perform the process accurately every time – can be invaluable. As an accountant, you might think that opportunities for automation should fall under the remit of those working in IT. Accountants, with their holistic knowledge of how a business operates and analytical nature, are ideally placed to identify potential automation opportunities and act as a key stakeholder throughout the process. Automation at work Consider a simple process whereby you are required to run reports or extracts from different systems and perform some data transformation and analytics on the information to produce an output, perhaps in the form of a reporting dashboard. Alteryx can be set-up to run workflows to deal with inputs from different systems and produce the desired output. However, you would still need to run the input files and refresh the dashboard manually. Incorporating UiPath can automate the process even further. UiPath can log-in to each system and can be used to run specific reports from different systems at set times, replacing the need to download data manually. It can then load this data into Alteryx, run a pre-defined workflow, and produce the desired dataset. This information can then be brought into Tableau to refresh a dashboard with the current information. In this way, UiPath can be configured as an interface between systems to offer a fully integrated solution. These processes can be as simple as taking a list of suppliers from one system, along with balances from another. UiPath can automate the production of these lists and balances for processing in Alteryx to produce a customer statement. This statement is then converted to a named PDF document and emailed to each customer. In an audit context, where proof of delivery can provide recognition of a sale, client records can be reconciled with those from a third-party delivery company, exceptions identified and presented for further investigation by the auditor. A business can reap many rewards from automation. While efficiency and time-saving with a shorter cycle time immediately spring to mind, increased quality and compliance as a result of a reduction in errors and an increase in accuracy are also often seen. Unlike mere mortals, robots never sleep and processes can operate autonomously 24/7, driving real-time transactions and analysis. While certainly more challenging to measure than the benefits outlined above, increased employee satisfaction through a focus on higher-value activities and a reduction in time spent on menial, repetitive tasks is a clear benefit. It helps shift the priorities of the employee to innovation, strategy and activities that add value to the business proposition, resulting in a happy and productive workforce and consequently, higher output. While the benefits that automation can bring when applied to appropriate processes are clear, we must bear in mind that, while automation can reduce hours in the long run, up-front investment is required to get it right. Also, control-aware accountants would know that any automated process requires ongoing review. A successful move towards automation requires the skills that accountants use all the time. For example, detailed process maps that are validated by walk-throughs are essential as well as thorough testing with scenario analysis. Consideration of the impact on controls, appropriate training, procedures, and user manuals are also required along with a measurement of actual versus expected results and periodic performance assessments. Accountants are likely to be key stakeholders in each of these activities. Admittedly, we have only just skimmed the surface of the potential of UiPath and what it can be used for. Still, given the myriad of considerations included above, this is hopefully understandable. We hope we have sparked a reflection on potential use cases in your own business and perhaps demonstrated areas where Alteryx alone may not go far enough. We encourage you to consider these use cases, investigate whether your organisation has the necessary experience and consider a proof of concept. In the world of RPA, do not be afraid to consult and draw on experience.   Richard Day FCA is Partner, Risk Assurance Leader, at PwC Ireland. Alannah Comerford ACA is Senior Manager, Data Analytics & Assurance, at PwC Ireland.

Raymond Donegan and Ted Webb outline the four steps to a successful sale. As a business owner, selling up is probably the most significant decision you will make in your working life. It is a difficult and often emotional process. However, with the right guidance, it can be navigated over a period of roughly six to eight months to everyone’s satisfaction. Four steps, if followed, will maximise the potential for a successful sale. Step 1: Preparation  The preparation stage sets the tone for the sale. At this point, your corporate finance adviser will draft an information memorandum with your assistance. This should be a compelling document, which will generally contain an executive summary and details of: business history; products or services offered; customers and market; future opportunities; overview of management, staff and facilities; and recent and forecast financial information. In addition to drafting the information memorandum, a comprehensive list of potential buyers should be drawn up by you and your corporate finance adviser. It is better to sell a business that is enjoying a period of growth with some suggestion of future growth remaining for the next owner. Also, if you want or need to retire by a specific date, it is best not to leave the sale too late. Specific areas of preparation to address include financial items such as fixed assets, working capital such as debtors and creditors, operating expenses, and shareholder costs. It is also crucial to assess the status of non-financial items, including management structure, intellectual property, tax status, and the business’ online presence. Step 2: Value the business and make initial contact with potential buyers The key drivers of value from a potential buyer’s perspective are the ability of your business to generate cash and its future risk and growth prospects. Several valuation methodologies can be used, including EBITDA (earnings before interest, tax, depreciation and amortisation) multiples, EBIT (earnings before interest and tax) multiples, and discounted cash flow. Once value has been established, it is time to contact potential buyers. The decision on which parties to approach will depend on the nature of your business and the type of sale process you are planning. Generally, the best result comes from a controlled auction process where several potential buyers are contacted. The benefit of this process is that, by the time the sale goes through, you will definitively know the market value of the business. Your corporate finance adviser will ensure that interested potential buyers receive an information memorandum after signing a confidentiality agreement. Prospective buyers then have approximately four weeks to respond with non-binding indicative offers, and once the offers are received, you and your adviser will decide whom to meet. Step 3: Management presentations and preferred buyer selection There is no substitute for face-to-face meetings; this is arguably the most critical stage of the entire sales process. Afterwards, your corporate finance adviser will request revised offers from interested parties. Now, you and your corporate finance adviser will decide on the preferred party. The price will play a large part in that decision, but other vital factors may include the structure of the deal and bidders’ plans for the future. You will naturally prefer to be paid in full immediately, whereas the buyer will prefer to pay over time. Ways to reach a compromise include: Deferred consideration: when an element of the consideration is paid after an agreed period; and Earnout: when the payment of deferred consideration is conditional on achieving specific financial targets such as an agreed level of sales or profits, or non-financial milestones such as renewing a contract. Once a preferred party is chosen, the heads of terms will be negotiated. This is a short document, which details the key financial and commercial terms of the deal. Step 4: Due diligence and negotiations The final stage of the process involves the preferred party undertaking due diligence on the target business, and all parties negotiating the necessary legal documents to conclude the transaction. Due diligence is akin to an invasive audit, but it is a necessary evil. It usually lasts six to eight weeks and covers several areas including financial and tax, commercial, products/services, legal/intellectual property, human resources and pensions, environmental, technical and property. Remember, the potential buyer’s view of your business can be positively reinforced if you can provide the information promptly. After three to four weeks of due diligence, the buyer’s lawyer will produce the first draft of the legal documents that will give effect to the sale. Assuming you are selling a company, these documents will include a share purchase agreement and a tax deed but may also feature other documents.  Conclusion  Selling a business is a complicated, lengthy exercise that most business owners will only do once in their lifetime. There can be a significant difference between a well-run, competitive sale process and a poorly executed transaction. An experienced team of advisers will know the best techniques to enhance value and mitigate risk for you and your business. Only by engaging with such a team can you expect to maximise your position.   Raymond Donegan is Director and Head of Family Businesses at IBI Corporate Finance. Ted Webb FCA is Managing Director at IBI Corporate Finance.

John Kennedy explains how to turn a casual chat into a steady flow of high-quality clients. A common problem that limits the success of many practices is also one of the most damaging, but happily, it is also one of the easiest to fix. In this article, I will show you how to turn an informal chat into a positive client relationship. When you master this structure, you will be able to manage any conversation so your potential clients will understand how they will benefit from working with you. The self-defeating spiral A typical self-defeating spiral causes significant damage, and it goes something like this: I don’t feel comfortable talking about myself. When I meet potential clients, I often don’t know what to say. I wish I had more clients and more high-quality clients with whom I like to work. I don’t feel successful, so I lack confidence when I talk to potential clients about my practice. For many years, I have focused on identifying what sets high achievers apart. There is overwhelming evidence that the ability to shape and structure a casual conversation is perhaps the single most crucial skill. This skill is not a result of natural talent, charisma or charm – it is a strength that is practised and learned. Successful client conversations It may seem obvious, but a fruitful conversation involves two people taking turns at listening and talking. Yet time and time again, when the pressure of wanting to make a good impression takes over, we make the same mistake. And, odds are, this has happened to you.  It is easy to fall into the trap of believing that your task is to list the many reasons why the other party should become your client. You say more and more about what you think you should tell them until you reach the point – and this can sometimes come frustratingly early – where you run out of things to say or, worse, you keep talking without feeling in control of the conversation as an unwelcome unease inside you begins to grow. Mastering this skill is easier than you think. A fruitful conversation is about listening and talking. You need to understand how to do both effectively and appreciate how each fits together. So, here is the structure of a successful client chat. 1. Prepare The first stage of the conversation takes place when you are on your own. There is no talking or listening, just thinking things through and creating an approach that works. To master the skill of turning casual chats into client contracts, you need to structure your thoughts. You need to understand how best to probe the value your potential client is seeking, the best way to present the value you can offer, and how to propose the next step in what will lead to a long-term, mutually rewarding relationship. 2. Probe The conversation begins here. This stage mostly involves listening and knowing how to guide the other party so that they talk about issues that move the discussion into ‘productive’ territory. Your main task is to keep the conversation casual, interesting to your client, and moving towards an understanding of the value they can achieve by working with you. You do this by asking high-quality questions. As you chat, gently guide the other party through a series of casual questions in a way that helps them clarify their thinking and reach a more valuable understanding of the outcome that is most important to them. The ability to do this effectively is a skill that takes time and practice. However, three fundamental questions form the bedrock of  every successful client conversation: What will success look like? How will you know if we have achieved the success you seek? What is most important to you about achieving that success? You probe your potential client’s thinking by asking these – and related – questions to help them think in a more structured way about their goals. Most clients are unclear as to what they want to achieve, so helping them identify their priorities will encourage them to talk with you more. You don’t do this by telling them how clever you are or by providing all the answers. The real skill and value lie in allowing potential clients to experience your proficiency by helping them structure and organise their thinking. When you master the skill of eliciting the most precise answers possible to these three fundamental questions, you will set yourself apart. By taking this approach, potential clients will experience the value of your expertise, and you will demonstrate that you are focused on helping them define, and then achieve, the success they seek.  These are the firmest possible foundations for a high-value client relationship. 3. Present Only now do you begin to talk more than you listen, and you keep asking questions to maintain focus on the critical issues. In this phase, your task is to help the client see how they will benefit from working with you. You may be inclined to talk about what you will do, but technical considerations are not very motivating for potential clients. Your critical task is to increase their motivation to the point where they decide to work with you. You do this by giving examples, by telling stories of how you helped others facing similar issues, and by focusing on how things will improve. This evidence is already captured in your value menu, where you prepared a store of material that will help your client feel they are in good hands. The stronger they feel about the specific value they will achieve by working with you, the more you will stand out as someone they can trust. 4. Propose In this step, you move the relationship from talk to action. By probing how the other person currently sees things, and how they would like things to be in the future, you are helping them untangle the issues and identify the outcomes about which they feel most strongly. These are the foundations of a strong, trusting relationship. At this point, you may suggest talking further – but before then, you will send a brief note indicating how you can help achieve the success they seek (this is very different to the standard ‘letter of engagement’). The purpose of the note is to confirm that you have fully understood the outcomes your client desires.  A succinct note about the value they will receive will move you from a casual, theoretical chat to a highly practical and highly focused discussion on the specific reasons you should both work together. Like a road journey at night This is likely to be very different to the path you have followed up to now. The traditional, and often ineffective, model tells you that you should outline your expertise at every opportunity; that you should see every conversation as a sales opportunity and sell from the outset. Sometimes this sales “advice” is even more aggressive with outdated jargon that speaks of “closing the deal” or trapping the potential client in the “killing zone”. This is hardly a basis on which to build a high-quality practice with the right clients and high-trust relationships. Instead, the Practice Builder approach outlines the specific steps you should take to help a potential client identify and access the value that is truly important to them. And through a well-structured conversation, you let them experience how you are an essential element in arriving at the outcome they want. It’s like taking a road journey at night. Through your questioning, you help your client identify the destination at which they wish to arrive. You then map out the route and together, you can set off on your conversational journey. You use your questions like headlights, to light up the landmarks and road signs for the next stage of the journey. The critical thing to remember is that you are in the driving seat, choosing the route, and setting the speed – but your client gets to adjust anything that makes the journey comfortable for them, such as opening the window or choosing the music. In this way, the conversation remains a comfortable and stress-free casual chat, but with a clear set of directions, milestones and a destination that you both reach by working together. This approach is fundamentally about helping your client arrive at the success they most value. When you stand out as a master at this, your client will want you on every journey. And they will want to tell all of their friends about you. This is a firm foundation on which to build a successful practice.   John Kennedy is an experienced strategic advisor who has worked with senior management teams in a range of organisations and sectors.

Olivia McEvoy outlines the diversity and inclusion issues at play in companies across the island of Ireland. As part of EY’s commitment to building a better working world, the firm conducts an annual survey to benchmark diversity and inclusion activity in organisations across the island of Ireland. The third survey reflects the experience of more than 150 C-suite leaders, human resource directors and diversity and inclusion leads. The respondents were drawn from both indigenous Irish and global organisations of varying sizes across a range of diverse sectors. This article outlines how organisations view and position diversity and inclusion. Smart working It is encouraging to note that appetite for diversity and inclusion remains constant. 100% of businesses say it is vital to business performance, and 82% recognise the impact of diversity of thought on decision and risk excellence. Indeed, there is no shortage of appreciation of the connection with diversity and inclusion and more significant customer and employee engagement, productivity, innovation and creativity, as well as talent acquisition and retention. With 95% of survey respondents aware of the pending Gender Pay Gap legislation, which is scheduled to take effect in 2020, significant numbers (71%) are also embracing a critical means of addressing the gender pay gap: a smart working culture. Smart working is a set of practices that add greater flexibility to work methods through innovative solutions and is measured by the achievement of results regardless of where and how employees perform their work. Flexible location, schedule, hours worked, and shared responsibility are some of the markers of smart working. Some organisations refer to smart working as agile, flexible, new ways of working or modern ways of working. The Gender Pay Gap legislation will also provide welcomed impetus and transparency, albeit 60% of organisations already publicly communicate information about their diversity and inclusion goals and targets. Absence of accountability However, there is still a ‘diversity and inclusion disconnection’ between what organisations are saying and what they are doing in this space. Leadership behaviour is the cornerstone of an inclusive environment and enables a culture of psychological safety, but just over half (53%) take responsibility to call out inappropriate behaviour and language. Leadership accountability is one of the most significant game-changers in achieving meaningful transformation, but a critically low 24% of leaders have diversity and inclusion goals or targets tied to their performance metrics and reward. Measuring the impact of diversity and inclusion on performance is instrumental but a rarity (16%) in organisations. Investment is also inextricably linked to enhanced organisational reputation, decision-making and talent attraction, but a third (31%) of organisations invest nothing and 43% spend less than €25,000. The majority of actual investment is a combination of events (63.8%), networks and network membership fees (52.2% and 40.6% respectively) and sponsorship (30.4%) rather than in the more strategic and systemic changes needed to develop the processes, capability and behaviours required to achieve lasting change. Delivering on diversity With ‘business as usual’ often enough to overwhelm, it is easy to get distracted and presume that if someone else in the organisation is talking about diversity and inclusion, that is enough. Indeed, lots of talk about it leads us to believe that the diversity and inclusion box is being ticked. But box-ticking is not enough. Talking is not enough. We need to adopt a transformational approach that embeds diversity and inclusion as part of our systems, structures and, ultimately, our culture if we want to realise meaningful change; and we must be bold personal agents of that change. As evidenced in the EY Ireland 2019 Diversity & Inclusion Survey report, there is some progress in some areas but regression in others – and certainly nothing like the ‘gear change’ called for in previous years. Rather than make exaggerated claims or aspire to progress, we need to be able to proclaim positive outcomes and actual results and deliver on diversity and inclusion. Everybody in? Olivia McEvoy is Director of Diversity & Inclusion in People Advisory Services at EY Ireland.   EY is launching its fourth annual Diversity and Inclusion (D&I) survey of organisations across the island of Ireland and we would be very grateful for your participation. The survey will remain open until 19 February 19th. Take the survey here: www.surveymonkey.com/r/EYDiversityInclusionSurveyIreland2020

How can organisations keep the passion going for D&I? Dawn Leane explores how businesses can do more to successfully deliver their D&I programmes.   Diversity and inclusion (D&I) seems like a simple concept: while we are all different, we are all equal. So why has D&I become such a headache for some businesses? Organisations invest significant resources into D&I programmes, such as creating specialist roles, publishing results and setting up employee groups. However, these often fail to deliver the expected return on investment. Without results, organisations can begin to experience diversity fatigue. People become tired of ideas that don’t gain traction and employees can become sceptical that D&I is little more than a PR exercise.   Creating meaningful change To create meaningful change in an organisation, there are a few things you can do: Diagnose the specific D&I challenges the organisation is facing instead of just rolling out a standard set of programmes or initiatives. Find out what issues need to be addressed and how to measure them successfully. Are the organisation’s D&I programmes and initiatives authentic? Unconscious bias training and inclusion workshops can sometimes be implemented in order to mitigate complaints or, when poorly designed, can treat participants as if they are intolerant, which is ultimately counterproductive. Resist the temptation to tag everything as D&I. Most employees don’t want to be labelled as ‘diverse’ even in a positive way as it can create a sense of ‘otherness’. Make D&I relevant to everyone in the organisation. D&I initiatives often focus exclusively on diverse groups and fail to engage a wider audience of people. This can mean that functional and business unit leaders do not know how to support D&I within their individual areas. Embedding diversity, inclusion and belonging requires an organisational culture change – D&I values and associated behaviours must become part of the organisation’s DNA. This can only happen, however, when there is a sustained focus over a long period of time. Often, small changes have the biggest impact. Developing successful D&I programmes is not a one-size-fits-all approach, it is much more nuanced; organisations and the people who work for them are complex and dynamic. Individualised training An individualised D&I training, which involves a combination of coaching and mentoring, can be hugely beneficial to organisations. These sessions create the space for individuals to talk openly about their challenges and ask questions which they may not feel comfortable doing in a group setting.  A coaching conversation elicits, without judgement, the individual’s attitudes, beliefs and any of the issues or questions they may have. A mentoring conversation then takes this further to identify specific actions and behaviours that will make a difference. In my experience, forcing the D&I agenda in an inauthentic manner only serves to make people know which boxes to tick to be compliant. It doesn’t change attitudes or lead to sustainable change, which is essential for D&I to be successful in any organisation. Dawn Leane is Principal Consultant at Leane Leaders, Developing Inclusive Leadership. She will deliver a workshop on Leadership for Professional Women as part of Chartered Accountants Ireland's CPD programme on 25 March.

Diversity and inclusion have become part of business strategy, but how do you measure their success? Mark Fenton outlines the key areas organisations need to assess when determining the effectiveness of their D&I initiatives. Diversity and inclusion (D&I) have shifted from being two HR buzzwords to key components of business strategy for many of the world’s best and most innovative companies. Businesses recognise that all organisations share the same three strategic challenges that either inhibit or enable success over the longer term: How to hire, retain and develop top talent; How to understand and connect with clients; and How to outsmart the competition. There has been a myriad of initiatives developed for organisations seeking to embrace and integrate diversity and inclusion programmes into their office culture, with a view to create a more attractive brand that will appeal to future top talent, as well as encouraging and strengthening the existing team. It will also enable organisations to understand clients better, and generate an increasingly innovative workplace to get the jump on competitors. Measuring success However, despite all of these initiatives, less attention is being paid to providing organisations with specific success measures for their D&I programmes (including quantitative and qualitative key performance indicators [KPIs]), and identifiable changes that should follow. Here are nine areas that are worthy of consideration when looking to measuring the success of your D&I initiatives. These are best assessed over time, across several diversity areas, such as gender, ethnicity, disability, sexual orientation and age (with the consideration that some may be subject to restriction around data capture availability).  Representation Look at representation in areas across governance (boards, committees) and hierarchical levels. Look at the promotions that have been attained and by whom. Recruitment Assess your applicant pool, who is brought in for an interview and who receives a job offer. It’s important to also assess the diversity of your selection panel. Remuneration Conduct a gender pay gap analysis of all employees. Financial savings Analyse the budget savings attributable to your D&I initiatives such as the utilisation of remote working (which can reduce office footprint and associated costs), the promotion of internal talent (which can reduce hiring costs and talent turnover expenses) and the improved employer brand (which can be effectively generated through day-to-day engagement and word of mouth without expensive marketing campaigns). Employee turnover Assess employee turnover rates and career break returners following parental, care, illness, sabbatical or other leave. Employee resource groups Determine the level of engagement in employee resource groups. Training Check the completion of D&I training such as unconscious bias, inclusive leadership and cultural awareness. Also, investigate the level of access employees have to these programmes. Policies and procedures Assess the policies and procedures in the organisation to ascertain whether they are supportive of gender and minority groups, parental supports and workplace agility programmes including flexible and remote working, talent sponsorship and codes of conduct. Voice Collect feedback on your D&I programmes from employees (via staff surveys), customers (through net promoter scores), and suppliers (utilising supplier diversity policies). In parallel, KPIs can be applied that cover, for example, employee churn rates, performance ratings, employee engagement/job satisfaction, absenteeism, union feedback, grievances or industrial relations-related issues. This data can be further enhanced by overlaying the empirical research that correlates integrated D&I practices with improved financial performance and increased brand value. More than a buzz word An awareness of the power and influence of D&I on corporate culture in conjunction with a framework to tangibly measure and communicate its ability to overcome key business challenges around talent, clients and competitors make D&I much more than a ‘buzz’ issue within the corridors of HR. It is the business strategy for 2020. Mark Fenton is the CEO and Founder of MASF Consulting Ltd. 

A new report proposes measures for the sustainability of owners’ management companies and lays the foundation for a more structured approach to managing apartment complexes or managed estates. By David Rouse In a professional audit or reporting capacity, Chartered Accountants may encounter owners’ management companies (OMC). Readers living in an apartment complex or managed estate may even have been asked to serve as an OMC director. OMCs, while in form incorporated typically as companies limited by guarantee (CLG), are in substance hybrid entities. They sit at a corporate crossroads between not-for-profit companies, property management businesses and residents’ associations (see Figure 1). Many readers will be familiar with the legacy construction and financial issues facing these companies. High-profile cases such as Priory Hall and Longboat Quay, as well as other less prominent estates, have featured in the press in recent years while corporate governance failings in OMCs receive periodic attention in court reporting. The country’s largest OMCs have multi-million euro annual service charge budgets. And yet, the stewardship of these companies is entrusted to unpaid, untrained directors (the term “volunteer director” is deliberately avoided, as in law, there is no such thing – a director is a director). There is as yet no firm handle on the number of OMCs in the country. However, it is estimated that the upper limit is likely to be about 8,000 companies. New report A recent independent report titled Owners’ Management Companies – Sustainable Apartment Living for Ireland considers issues that will be familiar to those with even a passing knowledge of managed estates and OMCs. The report was jointly commissioned by the Housing Agency and Clúid Housing. The Housing Agency works with the Department of Housing, Planning and Local Government, local authorities, and approved housing bodies (AHB) in the delivery of housing and housing services. Clúid is the State’s largest AHB, managing  just over 7,000 homes across the country. The inadequacy of annual service charges, failure to provide for building maintenance (sinking) funds, and the persistent problem of mounting debtors are just some of the topics assessed. International best practice is examined, and Ontario and New South Wales are among the comparator jurisdictions featured. The future demand for high-density housing is signalled in the context of new Government policy, such as the National Planning Framework and the Climate Action Plan. To audit or not to audit? Recommendations for reform across a range of relevant regulatory systems are proposed. Of interest to the accountancy profession will be the recommendation for the removal of the audit exemption currently available to OMCs, most of which, as noted earlier, are incorporated as CLGs. Companies Act 2014 provides the audit exemption for CLGs. In this way, small not-for-profit companies without shareholders may benefit from a reduced financial and administrative burden. (It should be noted that under sections 334 and 1218 of the Companies Act, any one member of the CLG may in effect demand an audit.) However, while OMCs are not-for-profit, they are responsible for multi-million euro property assets in the form of estate common areas. Considering the centrality of OMCs to property values, good title, and quality of living spaces, the value of an audit to members in terms of assurance, transparency, and governance cannot be overstated. Finance and governance The creditworthiness of OMCs in the context of current under-funding is also considered. Regulation over and above corporate compliance enforced by the ODCE is recommended. Dispute resolution outside of the courts is advocated, as are more cost-effective avenues for service charge debt recovery. Personal insolvency practitioners will be aware that OMC service charge debt is an “excludable debt” under the Personal Insolvency Act 2012. Only with the consent of the creditor (i.e. the OMC) may management fee balances be reduced or written off in a Personal Insolvency Arrangement. The report’s other recommendations include mandatory training for OMC directors, the standardisation of accounts to a format prescribed for OMCs, and enhanced insurance obligations. Reform may be some way off. In the meantime, practitioners should be aware that the Institute’s practice toolkit, Owners’ Management Company PQAs, was updated in 2018. This replaces the 2011 version. As the Institute’s product catalogue notes, and as may be recognised from sectoral weaknesses highlighted in this commentary, although OMCs can be small in size, they may be higher-risk clients. Future regulation of the sector could mitigate a number of the risks identified.   David Rouse FCA is an advisor with the Housing Agency, a director of the Apartment Owners’ Network CLG, and a director of one of the country’s largest OMCs.