PracticeAuditCutting the right red tape

Cutting the right red tape

VINCE CABLE’S PROPOSALS to raise audit thresholds and abolish statutory accounts filing for microbusinesses have certainly provoked plenty of reaction. Philip King, CEO of the Institute of Credit Management, went so far as saying they displayed “naivity verging on madness”!

I’ve got to say I support the government wholeheartedly in its attempt to reduce so called red tape from the lives of small business owners and directors, but as I’ve said before in my Risky Business blog, helping SMEs cut back on management time spent on financial disciplines and controls doesn’t seem sensible or desirable to me.

For the last twenty years or so, I have been a board director of Graydon, a “medium sized company” that would be impacted by Cable’s recent proposals. Personally, I very much appreciated the work done by my finance dept in producing comprehensive management accounts each month and credible audited accounts at year end.

Undoubtedly, this work helped the board run an efficient and profitable business.
Being honest, what began to really frustrate me as a director was the growing administrative burden in the areas of compliance and HR regulation. Sometimes, it almost felt you were trying run a business with one arm tied behind your back.

I therefore welcome the news that the upcoming budget may try to address SME concerns related to maternity leave, employees’ rights to take leave for training, and flexible working hours for employees with children up to the age of seventeen; legislation that has made the lives of business owners much more onerous. There’s got to be a better balance!

In other words, I’m all in favour of cutting red tape to help SMEs – but please, let’s cut the right kind of red tape !!!

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