Hellor World

Welcome to my hidden difference. Navigation in life and in business requires maps. It also requires skill and experience. The less experience (practice), the more time has to be invested for the same result — and we all have to learn somehow.

Me? 47 years experience of all sorts, so not the same year’s experience 47 times over; watch out for that one. 

There’s nothing wrong with the same year’s experience many times over, such a person will be very very good at whatever it is they have had so much practice at, think “olympian”. However, outside their skillset they remain inexperienced which is also fine as long as this is recognised.

Executive summary: man falling passed the 25th story asked how things are going, replies “alright so far”.

In small businesses doing nothing about all the things one doesn’t know about generally makes no difference anyway.

Think so?

Actually, never having thought about it is more common. One might say it is perfectly normal.

Of course how one can become aware of what one does not know splits in to things one knows one does not know and things one does not know one does not know.

Ignoring the former is a choice, whether wise or not being a different discussion.

Ignoring the latter is otherwise known as blissful ignorance.

Executive summary: whether you have to think.

I like the idea that having a very high i.q. means you reach the right answer very quickly,

BUT

if you already know the right answer you already instantly know the right answer.

Already knowing something is otherwise known as “experience”. Done it before, go the teeshirt etc etc

So having a lower i.q. silly means “it takes longer to get there, but the destination is the same”.

CAVEATS

Sure, the above takes it as a given that the “right answer” really is the right answer and that stupidity or recklessness et al are not in play.

Executive summary: No, not possible.

I know of an excellent professional accounting business with many thousands of clients, all small businesses.

When I started there were no computers. A photocopier and fax were advanced tech. Adding machines were mechanical, so one could jam the machine by entering numbers faster than the mechanism could cope. We added everything twice and both had to match. This “dual input” method of control is still used in modern times, though it is less apparent. These days we type everything; back then it was all handwritten and in PENCIL. Why pencil? So we could rub it out and change it. Just the same as typing on a computer.

So I and my peers view modern tech through the lens of pencil and paper. Young people have no such lens and naturally see only the tech they are presented with, having to assume that said tech is its own judge of being correct, read on.

Granted, in theory, you can’t make a computer account system not balance. Mostly, because if you do, you broke it and that’s hard to do. This is because when it accepts an entry it makes both the debit and the credit entries simultaneously, whereas when by pencil, the second entry also has to then be added and may in fact be part of a total (think 14 column “ETB”) . I digress. Yes I remember “comp operators”, amazingly skilled ladies.

In the early years of computer software it used to infuriate me when I could feel the developer forcing me to do this and that when I roundly disagreed with him/her. They ALWAYS limit me in what I want to do and that’s true to this day. Perhaps I am too accustomed to the freedom of pencil and paper.

I even wrote a bookkeeping and accounting program in the late 1980’s which earned a whole page of glowing editorial in the business pages of the Mail on Sunday. I learned then what remains true to this day, that the popularity of an accounts system is based on the marketing of it, NOT the accounting purity and flexibility of it. Why? They are trying to be everything to everyone (exception being niche systems). So follow the money. In one case you will find a Microsoft marketing expert successfully using MS methods, the result is expensive software you buy piece by piece so you get sucked in to the initial cheap price and then find you need “extras” each of which cost. Customers are not experts, they are ordinary folk expecting the system to know and do everything for them - and the system does try to do this, but it can do only compliance, it cannot do original or critical thought, let alone planning of any sort.

Executive summary: monkey see, monkey do. 

In 1975 I would receive paper bank statements, vouch and then analyse each and every entry. (“Vouch” means check against the supporting document, usually an invoice).

In 2022 the client accesses a “portal” where bank transactions have been automatically imported, and “categorises” transactions. Similar transactions sometimes can be automatically categorised based on earlier entries. 

What’s the hidden difference? First there is zero vouching so no validation or vat check (“who needs it? I know what it was”). Second the categorisations by the user may be right or very wrong, no one checks. 

What’s the catch? Only that these customers are quite frankly relying on chance that the tax authorities won’t enquire in to their accounts (lack of resources). If that enquiry happens I shudder to think of the initial findings, not least VAT (absence of “valid tax invoices”). Granted misclassifications only within the P&L rarely matter, but that leaves plenty to go wrong and opens the door to the four current years, maybe six or far less likely the last 21. In any event the stress levels are indescribable and never appreciated until experienced - something the tax people are well aware of and leverage to their advantage - including vast delays in correspondence despite demanding responses within 30 days

Is it worth the risk? To make an informed choice first requires awareness of all these matters.

Add to this that the accountancy service provider’s operative dealing with the process of these matters in to accounts is only 19 years old. That means by definition s/he is not capable of casting an experienced eye over anything and their supervisor is seeing only what they process. Sure, analytical review may show certain issues, but the data is at risk from the ground up.

So who carries the responsibility for any issues? The client of course. It says so in all the contractual docs as well as “certificates” in the accounts. Add to that by law responsibility cannot be transferred to anyone else. 

Does the client understand all of this? Sure they know some of it, but appreciate the potential impact? Of course not, they will simply blame “the accountants” thinking that gets them off the hook. No chance.

Executive summary: acting based on ignorance is stupidity.

How often do we hear this expression? Of course what it means is the person saying it cannot think of reasons to do or not do whatever is under discussion. Now if this is two lay people neither have the knowledge by definition so of course they won’t be able to see anything, while feeling hesitant, uncertain and with a feeling of fear (which isusually defined as a lack of knowledge of the unknown). What’s needed is an experienced and skilled guide. Like engaging a mountan guide in the Alps. Now that is sensible.

What never ceases to amaze me is that the expression itself is used as a form of supporting evidence. Because someone cannot see they use it as a reason to do or not do something. If one ever hear’s oneself saying or thinking “I can’t see…” this should sound very loud warning bells.

The expression we are wanting is “I can see why I should (not) do this thing”. Provided what can be seen is in fact sound thinking.

This begs the question how do we know when what we think (see) is correct? That depends on our sources, starting with the “mate down the pub”. Possibly the professional’s greatest and most infuriating adversary since everything they say is presented as solid gold and even backed up, usually by total rubbish irrelevant or dangerously incomplete for our client. There is usually some foundation in law or fact, but identifying it so as to debunk the “advice” can be time consuming. The opportunity to discuss with this source always results in reconciliation and agreement, but the person who accepted the initial “advice” remains as dumb as they were unless this reconciliation experience helps them appreciate that using someone else’s prescription to treat one’s own situation is lunacy. You can tell I speak from irritated experience. Sorry about that. It’s like thinking any type of “app” can replace an accountant. Not yet it can’t, regardless of the claimed “features”. Having the accountant use the app, now that makes sense. Get a professional driver, not an amateur. Of course then the app may well be superfluous and even get in the way. MTD is going to sucker a lot of small businesses.

Exec summary: self employed businesses tend to exist based on the personality of the founder.

Whether partnership, limited company or other legal form.

Without employees. In all that I write I am not really referring to businesses with employees, because these are not “individuals in business on their own account”.

Perhaps a more apparent example of this is an artist. The paintings of an artist have a style unique to the holder of the paint brush. The butcher, the baker, the candlestick maker and the accountant all each have their own style, founded in who they are, their personality and character mixed in with their years (not days or weeks!) of training and experience.

When looking at advertising these differences, indeed hidden differences, are rarely apparent. Each advert offers a list of let’s, say “features”. What they do not and cannot communicate is what it is like to deal with them. Not least where the author of the copy (the words) is not the owner, then matters are even more obscured (you can see that by comparing my old web site and this one). Maybe it really doesn’t matter when the decision to purchase is based solely on price, which assumes every detail of each self employed person’s business is identical.

Here is an example. A very old friend of mine is in the same business as me, also self employed. We chat about everything, using the “short hand” of our profession and in this regard we are indeed the same. However, we both know that to deal with either of us as a client is a very different experience. Nothing at all wrong with this, and yet an identical advertisement used by us both would give no idea how different we are.

So what are these hidden differences?

That’s like asking what someone is like. We are all different. However, I will have a shot at some influencing matters in my next post or over this entire web site. See what you think.