As some of you may or may not know, I was made redundant at the end of the year. I was very lucky and managed to get another job as finance manager for a small company (about £6m t/o). What this actually means is that I am the purchase ledger department, accounts department, soon-to-be wages department and anything else that isn't elsewhere.

My problem is that we are suffering due to a lack of sales, and therefore a lack of cash. I'm totally aware of the credit crunch and everything else that is going on in the big wide world, and I can handle that. What I can't handle is the fact that I've just found out the my bosses wife is on the payroll, as well as her two sons, and they don't actually do anything for us in the business. We are paying a lot of money into a 'retirement fund' when the oldest employee is around 45-50. I have to keep coming up with excuses why we can't pay the bills (which is my job), when I know the real under-lying reason.

1. How do I confront the boss?
2. Should I just keep my head down as it's my job that is liable to go?
3. Do I just let the company go under?
4. Do I tell the boss that if he doesn't get rid of un-necessary staff, then we will disppear?

Help please.

Firstly, I would get my cv out there.

1. How do I confront the boss?
Maybe regular Finance Meetings?

2. Should I just keep my head down as it's my job that is liable to go?
If you do this, then all the jobs will go?

3. Do I just let the company go under?
As above.

4. Do I tell the boss that if he doesn't get rid of un-necessary staff, then we will disppear?
Subtly introduce this aspect into Finance Meetings? Along with general cost management...

Is your Boss sensible? Intelligent? Or has he made it on the fat of the easy Economy of recent times, and likely to freak at the facts?

Difficult one, personally id go for option 4, be open and honest with him, at the end of the day its his business to run as he sees fit, you are there to give him all the info to make the right decisions.

oh and yeah get your cv out there, horrible situation but I wouldnt want to be the accountant of a business that goes under.

hope that makes sense and that it all works out one way or another!!

Yes, my boss/chairman/owner is sensible, but he's a salesman. Before I started, the idea of paying bills was to wait until people took you to court and then pay. I know this sounds quite reasonable, but he is on very good speaking terms with our main suppliers and manages to persuade them that we're having a bit of a cash-flow problem, and we'll catch up later.

This is my problem. All the suppliers that we're paying later now want paying. The general level of expenditure on advertising, marketing etc is more than we used to pay at my previous company which was about 6-7 times bigger. Some-one presents him with an opportunity that might increase our turnover, so he signs up for it, even though it's going to cost us £2k/month. Perhaps if they'd give us an annual bill of £24k, then he'd realise, but he just sees the opportunity, rather than the cost.

As I said, I'm not naive about the current climate, but if we don't start to cut costs quite drastically, it'll all be over. I fear, though, because he's been in the business all his working life, and only recently come into sole running of it, he knows best. He does know the business best, and I wouldn't try and tell him how to run the business from an operational point of view, but he's not the best at organising the company's finances.

So you have a chance of setting up Budgetary Controls, of you can convince him off their worth.

Show him the P/L, and the break down of flexible costs (wages, advertising etc). Maybe comment that advertising is usually a waste of money, or can at least be better focussed etc.

If he is reasonable, spelling out the costs in little words and short sentences may work.

This approach will help at your next interview!! IT is not a problem if you are leaving because the Boss is driving the business over a cliff, if you show that you have done something to save it, and even better if you can show that you have reduced costs.....

Going by your last post your boss doesn't seem very sensible at all... he seems quite stupid to be honest.

I'd say you need to bring it up at least once.... Then you can gauge his reaction for a start.

... sounds like a nightmare to me but good luck in sorting it out shaggy.

Agree with DD here. Your boss, as with any 'sensible' boss in todays currant climate, will re-evaluate and adapt accordingly.

I had to re-negotiate all the contracts with currant suppliers, and even changed to different ones for the winter just passed. Without that, my gross profit would have been severely hammered (all relative to business of course)

He needs to have it brought to his attention immediately. He will go one of two ways, but only a blunt and realistic approach will maximize your potential in helping him realise the dire needs of his companies situation.

If he doesnt appreciate your insight, his business will go under. If you don't bring it to his attention, his business may well go under. Can you stand by and watch it happen without offering support/advice?

I'd be surprised if the boss doesn't know the problems he has already - seems to be a very iffy character tbh - I really sympathise with you walking into this. Perhaps you should try to contact the previous finance manager [who you replaced] and compare notes. I think you know it would be better to get out - good luck.

There was no previous finance manager. He did everything himself.

I have my 3-month review on Monday, and I'm going to be blamed for the situation we are in. To me, it now looks like I've been brought in as a scapegoat. It'll be a nice excuse to tell the suppliers why they haven't been paid.

Time to sort out the CV.

Reading between the lines it sounds to me like the boss is milking the Company for all it's worth.

His family members are there to take extra cash out of the Company and avoid paying unnecesary tax.

If it all goes belly up, the Company will owe loads of money but his personal wealth will have been distributed amoungst family members and therefore harder to recover. He might get disqualified but he'll simply start up another Company in a family members name.

By paying all his suppliers late, he is ensuring that they will be the one's to lose out rather than him.

Goes on all the time in business and it's about time the Government stamped out these dodgy practices, rather than targetting the masses as they do.

A company we have dealings with has just ceased trading for the fourth time in ten years, and yet the Directors keep starting afresh having left a trail of debts behind them. Criminal and yet perfectly Legal. There are plenty of rules and regulations in place yet these sort of charactors always seem to manage to stay one step ahead.

Maybe you should tell him, that appointing a Finance Manager is not enough, the FM needs to be able to manage\control expenditure etc.....

Lots of good advice here chaps.

I guess tomorrow morning, I'll take a deep breath and say what has to be said. It'll probably be a bit uncomfortable for both of us, but I can't pretend that everything is OK with the company.

Thanks guys.

(And it will also give me time to sort out my teams for the end-of-season run in)

Try to be subtle, and lead him, rather than start a slanging match

Good Luck.

lead him yes.....

the only way to truley sell something to somebody is to make them want the answer. If you tell him the answer he wont believe you and the meeting will be unproductive.

before you sit down, write down what you want the outcome of the meeting to be. then work out steps to get him to say the outcome to you.

ie - outcome- to get rid of unnecessary staff

how - show and explain the figures factually (no bias or interpretation from yourself)
ask him- what his understanding of these figures is...
what he thinks will happen if the same was to happen over the next quarter....
what does he think could be done about it....


be prepared, anticipate objections, in fact you want him to object. The most likely one is that he answers the above questions with 'Well I hired a FM to answer those questions for me'

to this ping it back - 'what exactly did you hire a FM to do?' he will give you an answer to this like 'to sort out my f**in finances' this is important as it will show he recoignises his finances need sorting.

youve then got him, 'ok well my job is then to sort out your finances, I have some recommendations which, if we'd have changed last quarter would have made the books look like this (actually show hit the figures so prepare them - it will be a big smack in the face and make things real to him). If i show you the recs will you consider implementing them?'.

Dont move on till he says yes

With him saying yes your job is done, recommendations made, he is the boss so whether he takes them on board is his choice.

but you need to prepare for this meeting, figs for last qtr with your changes (hopefully show more profit to play on his greed!), projected figs for this nx qtr if things dont change (to play on his fear!). Now which one would you rather have Mr Boss?

So the Director/Owner (I assume 100% owner) is taking part of his overall salary/dividends in the form of remuneration to his non-working relatives. Not the first time this has happened and won't be the last, particularly under the current credit crunch. Would be a hit to cash flow if/when HMRC spot it during an Employer Compliance Review or Company Enquiry (they would either add relatives' salaries onto Director's salary or treat as dividends - usually whichever gives them most tax - and then compute extra corporation tax/income tax/PAYE/NIC for last 6 years plus interest and penalties). Surprised if the auditors have not mentioned this issue in the past (seems likely that the company has been audited) - such an obvious thing to look for whilst auditing the payroll - and dealing with the issue before HMRC find it should reduce penalties.

From a management report viewpoint, including the relatives' salaries within 'Directors remuneration' makes sense if the Boss is to get a true picture of what costs (e.g. staff, marketing) need to be cut in order to keep the company within its overdraft limit. How you deal with broaching this may not be easy - only you can judge how best to do it. Marketing is still important but are there ways to advertise smarter and more cost effectively that the Boss hasn't looked at (e.g. online advertising is cheaper than it was a year ago and generally you can target your audience better)? Redundancies themselves generally have an initial hit to cash flow before helping the bottom line so maybe temporary increase in overdraft needed - sooner the bank manager on board with the financial changes decided upon the better. Up to the Boss if he wants to, or is able to, sacrifice some of his remuneration (however he takes it) for a time in order to keep the business afloat. Perhaps business sale/merger which results in costs cut should be looked at sooner rather than later, assuming Boss agrees future is difficult even with your cost cutting exercise.

Hope the above thoughts help!

We don't have any audited accounts. The company went into voluntary administration last year, and then came back the next day. This was because there was an enormous expansion all signed up, but the banks pulled the rug just before it happened. Because the deals had already been signed up, this was the only way out. (or so I was told)

As to what our accounts will say this year, time will tell in the next few weeks when our accounts get prepared. I'm not aware that we have had a HMRC audit, but guess who will be taking over doing the payroll in the next week or so (if I'm still there), so it'll be another one that can be blamed on me.

This I doubt very much. The only bills that are paid on time (in fact, in advance) are the retirement & pension payments, apart from the weekly wages.

The more I type about this, the more I realise that I fell for the sales pitch when I started at the company, and was to naive to see what the state of play was. I'm just getting myself more and more convinced that we are going to go under, and Mr Boss is getting as much cash out of the business as possible before the dreaded day.

I'd get yourself out of there before you get tarred for good by this guy's actions. He seems to be nothing more than a crook.

You could always resign tomorrow, call the taxman, and then set out about putting your skills towards good use rather than unknowingly [til now] covering up for an idiot like this.

Edit - just in case the 'ouch' is in response to this post , by the last part I mean you obviously have the ability to do Finance stuff that many people don't, but from what you have written there is a high risk you could be associated with a failed/dodgy company. I'd want out asap. I understand that, having been made redundant beforehand, gainful employment is to be desired. But it doesn't sound like you think this is going to be gainful employment for long.

Ouch

resigning out of principal after getting the job after losing the last one thru reundancy is a pwoper 'big balls' move.....dunno if i could do it......

Don't you have management accounts?

Difficult for an outsider to judge whether Mr Boss is overpaying himself via the various routes. A commercial salary would probably be £100k to £200k p.a. but much depends on the circumstances. Hopefully he has the will to turn the company around rather than leave creditors out of pocket on purpose and start afresh under a new phoenix company. If he offers you the position of Finance Director think twice.

Another approach would be to do a cost benefit analysis of the extra revenue raising projects he has paid for.
Show him they are not working.
Prepare monthly management accounts and budget reports if they have not been done already. At least then you can show you have done your job if you think you are being made the scapegoat

How much is he paying his wife and two sons per month?

What on earth made you decide to take a job with an MP.......

Well guys, it finally happened today. I was leaving to come home at the end of the day and the boss called me in for a chat. He told me that I wasn't big enough to tell the suppliers to get stuffed, and they needed some-one who wouldn't pay the bills, even though they were due. Our phones were cut off at the start of the week because we told them to get stuffed. Hmmm. I wonder who was right. Perhaps the boss shouldn't have been paying his household bills through the company. At least now that I've gone, there'll be no-one to tell him that we shouldn't be paying for his gardener or his cleaner or his electricity bill, or the architect's bill for re-designing his house.



To be quite honest, I'm glad I'm out. Mrs S is a little shocked and upset, but (as the song says) I'm free. I won't have people demanding payment almost every minute of the day. When the boss has been in the trade press saying we have lined up multi-million pound deals, it's a little hard to tell people we haven't got any cash to pay the bills.

When the PAYE-man gets the year-end numbers, he will notice that the company has under-paid the PAYE by around £100k. I can't imagine he will be understanding as to the current cash-flow problems and the place will go under. I'm glad I won't be there when they come to visit.

Before I turned my computer off tonight, I sent an email round saying that I wished every-one all the best for the future, but didn't include the boss on the circulation list. I had already deleted everything off my office mobile. Let's just say I guessed it was coming.

So now I'm free, to do what I want, any old time. I get to spend some time with jnr as it's the school holidays. I'll probably end up temping some-where, but as long as there's no bl**dy suppliers phoning up wanting money, I'll be happy.

I'll leave doing the CV till after the Easter break and just have some chill-time.

Peace, relaxation, and once I've got my "To whom it may concern" letter from the boss, I can send him the link to this thread.

In which case, for posterity, he's a fraudster, a conman, a complete bottom and I hope he ends up in prison.

you're better off well clear of that chap.

enjoy a holiday and good luck when it's time to start job hunting.

The ouch was to the unauditted accounts (I guess they were diy ones, to boot), the VA etc. Sometimes, it is better out, than in!

It's good that by the sounds of it you're not too affected by losing the job and it does seem like you've got out of there just in time. In some ways it sounds a bit like my company (wife and daughter on the payroll and no business sense due to being a salesman first and foremost) and I might end up the same soon.

Enjoy the break and good luck sorting out a more permanent solution soon.

give shaggy a job then!

Wrong way 'round. I'm the sucker doing the work while he enjoys semi-retirement! We came of off a 4-day week only a month ago yet this week he was saying how it was nice that he didn't have any meetings this week. I honestly don't think he can see the cause and effect of that situation

Maybe Shaggy and I could start a new consultancy firm to tell salespeople how to run companies!