Mandatory Competencies Flashcards
Can you name the three core financial statements that all company’s must provide?
Profit and loss statement;
Cashflow statement;
Balance sheet.
What is profit and loss account?
Often referred to as an income statement, it summarises the revenues, costs and expenses incurred by a company during a specified period.
What is a cashflow statement?
A cashflow statement is a summary of the actual and anticipated costs during an accounting period. Broken down into operating, investment and financing activities.
What is the difference between a balance sheet and a profit and loss account?
- Balance sheet is a financial snapshot / position at a given point in time;
- Profit and loss shows a company’s profit and loss over a given time period (for example the financial year).
What are management accounts?
- Internal reporting accounts, showing the full details of the business’ expenditure & income funds.
- A lender will request these if they are assessing your financial stature for the purpose of loaning.
What are Business accounts?
- External accounts required by law to be provided to HMRC annually. These provide an overview of a company’s finances.
What is the difference between Business Accounts and Management Accounts?
- Management Accounts are for internal use; Business Accounts are published for public viewing.
Does Turner & Townsend publish annual reports?
- Yes - every tax year, which is published and can be viewed by the wider public.
Could you tell me what accounting documents T&T would have to publish legally?
Could you tell me what accounting documents T&T would have to publish legally? - Statutory accounts must include: o Balance sheet; o Profit and loss account; o Notes about the accounts; o Director’s report; o Auditor’s report. - Note: copies must be sent to: shareholders, Companies House and HMRC.
What are financial statements?
- Forecasts of income and expenditure that can be used as an analytical tool to identify potential shortfalls and surpluses of working capital.
How do you vet a contractor to show if they are financially stable?
- Dunn & Bradstreet credit check, rates a company out of 100 in terms of their financial standing, looking at turnover and solvency. Experian provide a similar service;
- A company with a score between 80 and 100 would have low risk of late/default on payments;
- Achilles reports provide further insight, specific to construction company’s performance and supply chain;
- Constructionline, in effect, are a pre-qualification organisation set up to collect, verify and monitor standard company data.
Difference between Capital and Revenue in terms of profit and loss account?
- Capital expenditure: Assets such as owning office building – cannot be offset against tax liability
- Capital allowances: plant, machinery, thermal insulation, works to comply with Part B – can be offset against tax liability.
- Revenue expenditure: salaries, insurances, service costs.
What is a business plan?
A business plan describes your business by setting out:
o Nature of the business;
o Background information on the firm;
o Financial forecasts;
o Operations;
o Objectives;
o Growth plan or strategies to achieve the goals of the business;
o Time-frame for the achievement of the goals;
o Market analysis.
- And acts as a “roadmap” in achieving the company objectives in the short to medium term.
- This formal document may be required by lenders / investors to facilitate loans or other kind of financing.
What is a business strategy?
- A business strategy sets out the long-term guidelines for achieving business goals or objectives. This can also be used to secure loans from banks.
- For example – T&T’s Vision 2025.
What is the difference between business plan and strategy?
- A strategy is concerned with the business holistically. For example – expanding into new markets or industry sectors.
- Business plan deals with the specific implementation of aspects of the business plan.
What do you need to consider when setting up your own practice?
- Need to consider and make sure that you comply with the Rules of Conduct;
- Register the business and apply to HMRC;
- Set up company and client bank accounts;
- Set up a complaint’s handling procedure;
- Obtain appropriate PI and run off cover;
- Directors and officer liability;
- Insurance against buildings.
What is T&T’s current business strategy?
Vision 2025, which for Turner & Townsend means leading the market in major programmes, portfolio management, commercial management, the transition to net-zero, and digital solutions. This is achieved by:
o Accelerating activities in high-growth markets;
o Shifting focus and engagement to major programmes, portfolios and mega-projects;
o Building an advisory offer that transforms performance and sets a new standard for the industry;
o Creating significant partnerships with the world’s highest growth businesses;
o Re-focusing on high growth super sectors in Infrastructure, Natural Resources, and Real Estate; and
o Generating income from digital solutions.
Cluster or team:
o 10% growth year-on-year;
o One new £1 million client per annum, for the next five years;
o Increase team by 50% in the next 2 years.
How do you contribute to the T&T Business Plan?
By effectively delivering high standard service which should align with the Business goals of T&T. I am involved in a real-estate major project at Nine Elms and that is an area that T&T are looking to grow within.
What is Client Care?
- It is providing a standard of service which achieves the Clients Requirements and in line with the terms of engagement;
- This can include:
o Being polite, punctual, professional, and competent;
o Establishing clear lines of communication;
o Looking out for their best interests (Client feedback meetings / forms);
o Key performance indicators;
o Quality assurance procedures;
o Complaint handling procedures.
You are working for R&F – an international Client. Is there anything different that you must do in terms of client care in meeting their expectations?
- The main example would be respecting their cultural background – commercial information is treated as strictly confidential and must only be shared with our commercial counterparts within the Client’s organisation. This is respecting the information barrier that exists;
- I may summarise cost estimates or other reports in a way which helps the Client better understand the information.
How often do you do Client care with your client?
• Twice a year or quarterly.
What is a client brief?
- A document that captures the client’s requirements, sets out the objectives and requirements of a project;
- Provided in sufficient detail for the integrated project team to execute.
What information would you expect to see in a client’s brief?
- Services required;
- Insurances required;
- Terms of appointment;
- Fee, and payment mechanisms;
- Duration of appointment;
- Identify client procedures and policies that need to be followed.
When should you decline work for a client?
- Do not have the capacity;
- Conflict of interest exists;
- Do not have the required technical expertise;
- Client not prepared to pay the appropriate fee.
What makes up a bid?
- Executive summary including a scope or solution;
- The client’s needs and drivers;
- Project issues;
- Benefits for the clients and their experience;
- Conditions of engagement and terms and conditions;
- Methodology for delivering the work, information about the organisation, CV’s of project team and examples of case study projects previously delivered;
- Confirmation of proposed fees.
How do you calculate fees on a project?
- Percentage based;
- Time charged;
- Lump sum.
What do you if the client requests you to lower your fee?
- Reduce the scope of service;
- Agree to not attend certain meetings;
- Change the level of staff but make sure the client is aware
A client wants to pay in advance for your services, how would you deal with this?
- Set up a separate account which is properly named and clearly identifiable;
- Clients must always have access to the funds;
- Provide the client with a statement;
- Inform the client of when and how much the monies will be drawn down, providing a statement each time;
- Once services are complete send a complete statement detailing all the transactions;
- Make sure everything done is transparent and auditable and money has been checked for laundering.
Why is client care important to Turner & Townsend?
- Builds good reputation which leads to repeat work and recommendation to other clients;
- Reduces the likelihood of conflict protecting the company’s PI insurance.
Can you give me examples of good client care?
- Regularly request client feedback;
- Repeat business
How do you manage your clients’ expectations?
- Always make sure you and your client understand the brief and what is required of you;
- Tailor your service to expectations and KPI’s of the client;
- Regular informative communication.
What is the legislation surrounding personal data?
- General Data Protection Regulation (GDPR) 2018 – Data Protection Act 2018;
- It provides a framework about what and how personal data should be managed. It allows individuals the right to know what information is held about them, all of which are set out as Principles of GDPR (7 points):
1. Lawfulness, fairness and transparency;
2. Purpose limitation;
3. Data minimisation;
4. Accuracy;
5. Storage limitation;
6. Integrity and confidentiality (security);
7. Accountability.
