Beard finance director on company performance in the downturn

Beard finance director Clive Bassett speaks about weathering the turbulent economy.

A diary made up of  company annual reports, credit checking and job satisfaction.

Yesterday was Beard’s annual general meeting, at which the shareholders approved the financial statements for past year - so no wonder I started today with a sigh of relief.

The statements showed a 30% growth in turnover and a three-fold profit increase, despite these uncertain times. 

Gone are the days when financial statements were just legal compliance as their approval now creates a marketing tool and a business ‘asset’.

There is a rush of activity to file the statements at Companies House, to get them to our bondsman and various credit insurance companies. 

On top of that, I now produce an articulate summary of the key facts for our business development team for PQQ’s and presentations to demonstrate we’re a well structured business.

In my early days as finance director, the AGM was the culmination of an intense period of work, including the external audit and confirmation that my main duties were being delivered. Today my role has changed like those of most FD’s. 

After year-end, I revert to assisting with short term issues and longer term strategies.  These currently range from credit checking potential employers and ensuring we get paid, to working with the MD and new regional manager on a business plan for the opening of our next office. 

My other focus has been this year’s performance. The reporting has seen me reviewing and reconciling our actual performance to a budget set in the autumn of 2008, when the severity and gravity of the economic meltdown was still dawning. 

Variance from budget is easily calculated, but I’m now needed more and more to identify areas of expenditure and costs where we can exercise even more control or buying power, so our teams are focused on applying appropriate pressure on suppliers. 

Meanwhile, Beard’s directors (myself included) are trying to second-guess how much further supplier and sub-contractor prices might fall to ensure our tender submissions remain competitive. 

Despite these efforts we still find ourselves second on occasions, often to a bid which is ‘hanging out of the bottom’.  How the competition expects to make money at that level is beyond me!

All that said, I remain confident Beard’s 2009 budget is achievable and, if we get the right mix of work from our strong customer relationships, it could even be exceeded. 

The bigger question, and the one which will occupy my mind greatly, is where will the economy be in 2010 and beyond?  And how do we shape our business to take advantage of any recovery or minimise the downside of this extreme economic rollercoaster?

On a personal level, despite the issues, for once I don’t envy my fellow accountants in financial services or banking. Construction may not be headline grabbing sexy, and may have problems of over-capacity as the work dries up, but the knowledge that it is has a real, tangible and valuable output at the end of it, still brings me satisfaction and a smile. 

This might crystallise from seeing actual site progress during a visit or on web-cam or reading the customer feedback. 

My fellow accountants in financial services and banking probably wish their products were built on such solid foundations.