A few weeks ago I asked the question “Do you know what goes into your accounts?” and rather sadly, today, I see the following news –
“Support services group Mouchel has gone into meltdown after an accounting error caused an £8.6m blow to its profits, resulting in its shares plummeting.
On the discovery of an error made by a client’s actuaries, and an over-optimistic expectation of contract settlements, chief executive Richard Cuthbert tendered his resignation on 6 October. The company share price then dropped by a third, leaving its equity value at just £19.4m by the end of last week.
The outside firm of actuaries told the group about the error the day before the profit warning – that a spreadsheet error meant a pension fund deficit had been wrongly valued. Around £4.3m of Mouchel’s profit write-down has been attributed to this error.”
I cannot stress it enough that good business management knows what is happening at grass-roots as well as at a strategic planning level.
A spreadsheet error caused the above; I appreciate that in a complex business such as Mouchel’s it is difficult to know every nuance of every operation, but I do see, time and time again the avoidance of responsibility being passed, either with a shrug of the shoulders or an air of confidence intending to belittle the questioner.
Don’t make the same mistake – ASK THE QUESTION!
If you would like peace of mind and the confidence in your own business, from an impartial, outside, perspective, then perhaps a business review could help you.
Call today me today on +44 (0)1440 785 358 ; we can start with a coffee.