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Morchard Bishop & Co. Chartered Accountants and business advisers specialising in supporting owners of dynamic, entrepreneurial and growing businesses.



Morchard Bishop & Co. blog posts

Accountancy blog in Farnham



Charles Barker-Benfield

First learn to swim

Bear with me on this – it may seem a bit of a stretch first to learn to swim but it worked for me: having learned to swim, I progressed to sailing – the idea being that if you fell into the water you’d swim back to the boat, get in and carry on. Or the boat would come back to pick you up, assuming always there was someone else still in the boat to do that and that meanwhile you had managed to stay afloat by swimming.

I should introduce some context here: swimming was learned at a reasonably early age with my mother’s encouragement in the outdoor pool at the Box Hill Hotel. And I have a photograph showing me swimming with my mother in the sea off Hong Kong at an even earlier age. So, swimming = tick thanks to my mother’s encouragement.

The progression to sailing involved first learning the basics in a heavy wooden craft then developing further skills in a wine glass dinghy (a fast two seater with fibreglass hull and a low transom through which water flows out as you speed on), all whilst in the Sea Scouts – the somewhat rarer nautical arm of the Scouts.

And whilst in the Sea Scouts and on discovering my eligibility to apply, I applied to participate in the Royal Navy’s Flying Scholarship scheme – an opportunity to learn to fly courtesy of the Fleet Air Arm. Can anyone remember the car sticker: “Fly Navy”? Thus swim, sail, fly.

So, having applied in the spring of 1970, I found myself accepted for assessment at Biggin Hill airfield where a batch of applicants on the RNFS scheme were put through a lot of aptitude tests: mathematical and other problem solving, hand-eye coordination skills, reasoning tests, medical and eyesight tests, measurement of height, weight, length of arms and legs… An intensive day spent being examined, measured, tested. My parents had disappeared, probably to a decent pub, and returned to collect me at closing time.

After which followed the summer of 1970: the Isle of Wight Festival with 5 friends (another story), and various other distractions of interest to a 16 year old until suddenly, in the autumn, a letter arrives to confirm the award of the Flying Scholarship, sponsored by the Royal Navy, no strings attached (nobody had slipped me the King’s shilling) and ready to be undertaken once I’d reached the qualifying age of 17. I was really pleased with that.

The first opportunity to progress to training came in the summer of 1971. Arrangements were made to join the private pilots’ training course run by the Fleet Air Arm at Kidlington airfield near Oxford. Military uniform to be worn. Which in my case was an extremely hairy set of battledress fatigues, rapidly swapped for a hairless cotton equivalent.

As the date of the course approached, my father commented that as I’d never actually been in an aeroplane before, ever, it might be a good idea to try it out, just to be sure I didn’t suffer from airsickness or a chronic fear of flying which no one knew about.

I had to report at Kidlington by 1400 hours on Sunday 11th July so on Saturday 10th he drove me to Fairoaks airfield and we took a half hour “test” flight in an Islander.

(Note: he drove me. I hadn’t started driving lessons at this point either, but we weren’t worried about driving at this stage).

And the flight in the Islander went fine – I was really impressed by the way the ground fell away on take-off but quickly got my bearings.

The next day we drove to Kidlington; I met the course director John Fensome, RN, who at 3.40 that afternoon took me for a twenty-minute familiarisation flight in a Piper Cherokee (Tango Mike). And I met the two other trainees who’d been there a week already. Two flights in two days seemed intense, but that wasn’t the half of it when my course began in earnest on the Monday.

Exercise 14

Mr Fensome was probably around 40 when he was running the training school in 1971 (it’s hard to judge ages when you’re only 17; anyone who is older than you is either old, or very old). And he knew a thing or two which explains why he was doing the training. I reckon he was the most relaxed instructor on the course, but that didn’t mean he was unfocussed.

The course progressed through a mix of classroom teaching – the theory of flight, the physics of lift and drag, how flight controls work in an aircraft, calculating projected drift from forecast wind speeds, to the more practical skills – how to read a map strapped to your knee and navigate a course across country whilst keeping the plane at a constant speed in level trim and flying in a specific direction for a predetermined time, whilst reading the instruments and keeping lookout for other aircraft, whilst operating the radio and communicating with the appropriate control tower, and avoiding no fly zones, and… etc. (The word ‘multitasking’ might have been in its infancy in 1971 but that didn’t mean that nobody could).

In the training manual the flying exercises were numbered 1 through 18, the key ones being: 1. Familiarisation with the aircraft; 2. Preparing for flight; 4. Effects of controls; 6. Straight and level flight; 7. Climbing; 8. Descending; 9. Medium turns; 10. Stalling; 11. Spinning; 12. Take off and climb; 13. Approach and landing.

Each had various sub sections (10.1 Basic stalls; 10.2 Advanced stalls; 11.1 Basic spins; 11.2 Advanced spins).

All except exercise 14 which was simply: First Solo.

Every exercise before and everything after was given appropriate detail. But exercise 14 stood out simply and starkly for what it was – your first solo flight in an aircraft under your sole control to test the key skills: preparing for flight, take off, climb, turn, climb, straight and level flight, turn, descend, turn, approach and landing. One circuit under your own steam. Preferably avoiding stalling, spinning, emergency descent and forced landing (with or without power). And I was very pleased to note that as the forced landing section was numbered 17 it was clearly not anticipated before exercise 14: First Solo.

I had a quiet word with the other trainees – roughly when in the overall scheme of things would it be likely for the first solo normally to occur, could they say…? About a third the way through the course, say 12 hours’ flying experience was their reply. So armed with this information I kept a close tally as my hours built up.

Monday 12th July was day one of the course and I clocked up 1 hour 35 minutes flying time under instruction with Mr Fensome. By the end of Thursday 15th this had risen to 8 hours 40 minutes and on the Friday all of us (three trainees plus Mr Fensome) were scheduled to spend the day at Sywell, a small grass airfield near Northampton. We left Oxford at 10.30 flying Cherokee Juliet Sierra. I was sitting in the back and – without duties – was able to enjoy the view.

But I knew it wouldn’t be that long before I was to make my first solo flight and was getting quite anxious about it. So after we landed I asked Mr Fensome when my first solo flight was likely to be. “Not today” was his answer. Relieved, I relaxed, and was able to concentrate on my next two training flights with the instructor, practicing exercises 12 and 13, becoming familiar with the Sywell circuit, flying first for 45 minutes at 11.30 then 30 minutes at 3.15, each of us rotating in turn.

In a Cherokee the trainee pilot sits on the left, the instructor on the right (the right being the same side as the door). After landing at 3.45 we taxied to the edge of the field and stopped. ‘Right’ said Fensome, ‘off you go: one circuit, solo’, and he got out.

I didn’t have time to be worried: I completed my checks, taxied to the runway, was cleared for take-off by the tower and was away: take-off, climb to 500 feet, turn 90 degrees left, continue climb to 1,000 feet, turn 90 degrees left and level off; fly downwind, complete downwind checks, turn 90 degrees left, deploy flap and begin descent, turn 90 degrees onto final approach and land back on the grass strip. Taxy back, park and shut down.

Fensome had watched it all from the tower. I was buzzing – the solo was a fantastic experience – and the best part of it was there was nobody else in the aircraft telling me what to do.

My instructor had judged it perfectly, knowing how to distract and when to launch me over the hurdle I’d managed to build up for Exercise 14 – on day 5, with 9 hours 55 minutes on the clock and a quiet word in my ear. He’d impressive judgement, that man.

Cross country running

I mentioned navigation earlier. For years my father and I had driven west to visit his parents who lived in the mid-Devon village of Morchard Bishop; this was before many of the dual carriageways were built so the journey was always long and it helped to have an alternative route as plan B if the roads were clogged up. Plan B could be invoked at any of many points on the journey (there were in fact many plans B), but essentially all we’d do was take off into the hills, stop and ponder the map if we got lost, and get there, eventually.

That sort of navigation doesn’t work so well in an aircraft, not least as you can’t stop and ponder the map if you get lost (I have a lost procedure guide which states that "aviators are seldom lost but fairly frequently become uncertain of their position" which is reassuring now to know). Nevertheless, just pondering the map whilst flying at 100 knots with a cross wind moving you in a different direction can be quite tricky – particularly if the features you spot on the ground bear no relation to what is marked on the map (which happens every time your position over the ground is different to what you believe it to be on the map, i.e. when you are indeed well and truly lost).

So the solution, in aviation terms, is simply to radio for help – you ask for the direction to fly in order to arrive back at your airfield of origin (for example). And cover your surprise when you discover the direction given is markedly different to that in which you were flying.

My first solo cross-country flight involved plotting a route from Oxford to Moreton in Marsh to Edgehill to Barford to Enstone and back to Oxford. The route was planned in the classroom, marked on the map with a chinagraph pencil, with flying times calculated to allow for wind speed and direction, noting changes of radio frequency and then, when ready, flown.

I recall becoming very uncertain of my position within 5 minutes of starting, returning to the Oxford circuit and beginning again. The reason I was lost? Momentarily distracted by the joy of flying solo, missing a landmark on the ground and becoming disoriented. Easily done. It didn’t happen again, and the round trip took an hour to complete. Later, as part of the final examinations, I flew a triangular route between Oxford, Sywell, Staverton (Gloucester) and back to Oxford, landing first at Sywell then at Staverton to have my flight card countersigned by each of the tower controllers and completing the course in a couple of hours.

I finished my training on Wednesday 28th July, two and a half weeks after that very first flight in the Islander when on take-off the ground had fallen away as if by some magical illusion. I had qualified as a private pilot with a licence to fly the first (by weight) class of single-engined aircraft. And four weeks after that, on Wednesday 25th August, my father and I returned to Oxford to give that licence its first flight.

Vulcans at 11 o’clock

Looking back now from some considerable distance but with rather more clarity, my father must have had great faith and no fear. He never mentioned any anxiety, particularly of the sort I had suffered in the run up to my first solo flight. And mine had all gone by then. I’d learned how to fly an aircraft safely, to navigate across country, to bring it back to base. Many years later I found some photos he’d taken of me checking the aircraft over before our flight (it was the one I’d flown most whilst training – Kilo X-Ray).

So we took off and flew around for half an hour much as we’d done in the Islander. But this time we were over Blenheim, taking in the Oxfordshire countryside: I was flying and my dad was now my passenger. I was able to explain what was happening, show him something I’d learned to do and demonstrate the beginnings of some independence. (Only the beginnings mind, I still didn’t have a licence to drive a car and wouldn’t have time to learn that till the following year. But beginnings).

And whilst we were enjoying the view (and always with a keen lookout) we saw another aircraft, on the same level (bearing slightly left of straight ahead) and flying towards us: a Vulcan bomber, landing lights on for added visibility. I didn’t pause to think before engaging full throttle into a steep climb and turn; then, after quickly gaining height, we flew away. And never saw the Vulcan again.

Later, I wondered which aircraft its pilot had encountered the first time he'd flown with his new wings and his first passenger – and happily bet it wasn't a Vulcan.

Charles Barker-Benfield

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Charles Barker-Benfield

When were you last affected by a fraud? If you’re lucky, never. But you’d be surprised how many nasty little surprises catch people off guard. And I’m not talking about the tired old west African junk email clichés which frankly are so obvious that anyone careless enough to be taken in by them really is asking for trouble… No, this is your everyday little nasty surprise where someone, quite possibly the last person you’d suspect, has dipped their mind into your business’s money, seen that nobody has noticed them there, and gone back for proper rummage. Often simply because it’s lying there unguarded and they’ve discovered they can root around in it. As if a downstairs window was left open and they’d snatched a quick look inside whilst passing. Just curious, nothing difficult. But before you know it they have become the unreliable narrator, they have become the fraud.

Why am I writing about this? Because I know someone who was badly affected by a fraud, and in discovering what happened to them I’ve understood more about the risks always present in any business which involves ordinary people (i.e. every business). Although this example was a sad indictment of one rotten apple and the mess they created, the point is to learn to be alert to the risk all the time and always avoid complacency. And if increased awareness helps another business avoid fraud and its consequences, great.

What are the warning signs?  Holidays are a classic indicator. Or rather, someone’s lack of proper holidays. A day here, a day there. Never as much as a week at a time when someone else must provide cover and possibly discover what the vacationer has been up to. So look out for lack of proper holidays for a start.

Next you can add regular evening and weekend working. Ask why: why is this necessary, exactly? Then check the answer with care – it may be plausible yet still a fiction.

Commitments made but never delivered: ‘Yes I’ll give you that report’ you are promised. It never materialises. You’re going to have to get it for yourself and check the detail ever so carefully. Avoid any hint of complacency in your thinking; avoid assuming that everything is fine unless and until you have checked all the evidence for yourself and confirmed it to be so. It may not be.

Actions reported but never completed: ‘Yes, I sorted out such and such’ you are assured. Or is that total nonsense because it never happened? If you don’t check it out for yourself, you’ll stay in the dark. It may be too late by then – so seek the evidence and review it yourself. Get corroboration from outside the business at every opportunity. You can decide how discreetly you do that (letting everyone in the business know you verify everything may be quite useful).

Be alert.  Where would you look for something you knew wasn’t meant to be found? In plain sight. Just as a secret meeting might be concealed in a series of meetings, transactions can be listed amongst other transactions with their true purpose otherwise concealed. Identifying something that has been obfuscated is always difficult, but you can get an analyst to apply forensic techniques to unearth what’s really going on in a business where you know or suspect that a fraud has been hidden away. And help you find any transactions which are not what they seem.

Don’t rely for discovery on the work of your auditors. (Assuming you have auditors for your business). Less than 5% of frauds are discovered as a result of an external audit*. Frauds which are discovered have frequently been going on for 18 months and can involve upwards of £100,000 (typically payroll and asset misappropriation frauds). Discovery is most likely to be as a result of staff tip offs and whistleblowing (more than 1 in 3 frauds are unearthed this way). So make sure your whistleblowing processes are fit for purpose.

The psychology of fraud is complex but there are some common features. The main one is exploitation of an opportunity. The opportunity is normally the window left open, unguarded. That isn't complex at all.

Take the man who broke Barings Bank (Nick Leeson) – he settled his own trades and was also responsible for his department’s accounting records and returns. Lack of supervision and internal controls permitted him to hide the losses which led ultimately to Barings’ insolvency. Although Leeson was the rogue trader, his bank’s failure was blamed on the lack of supervision and internal controls. To paraphrase a later parliamentary comment: if you’re that badly organised, you’ve only got yourself to blame.

Being under-supervised, getting away with increasingly risky positions which aren’t being checked by superiors, operating out of control are not risks exclusive to banks and financial services – they provide opportunities for the everyday fraud in all other businesses as well.

And if you find fraud in your business?  Seek advice and get help straight away.

It can be OK to encourage the perpetrator to help you unravel the mess they created if that involves their owning up to everything they have done (you hope they will reveal all). It’s quite possible that having hidden their fraud from the management of the business for some time they now find that they want to share. But it’s possible they’ve left other nasty surprises and you can’t rely on their remorse to help you find them all. Remember the unreliable narrator? No second chances – best remove the perpetrator from the business immediately, use their evidence, but get help too.

So if you’ve been defrauded, you’ll need help to sort out the mess plus help to overhaul your systems, improve controls and minimise the risk of recurrence. Risks can never completely be eliminated, but if you know what to look out for and where to look, you’ll be well ahead of where you were before.

In moving on after discovery, it’s important to be seen to check, to validate, to rely only on proper evidence, to avoid assumption and conjecture. There’s nothing wrong with trusting your instincts and being sceptical. Above all test that your controls work and ensure you avoid complacency, whether you’ve had the misfortune to be defrauded or not. And keep your eyes open, keep questioning. My friend learned a lot from their experience. But would much rather not have had to do so.

Charles Barker-Benfield

*[Source: US Association of Fraud Examiners’ 2016 report to the nations]


Charles Barker-Benfield

To be the world’s greatest living expert on something so highly specialised that nobody else has even heard of it must be close to the ultimate specialist niche.  And when that specialism becomes the trending topic of the day you can expect the world and his editor to beat a path to your door, tap into your knowledge and experience, and seek out your views.  For example? Your unique knowledge of the pairing rituals of the lesser blue-shaded Himalayan mountain butterflies whose eggs are laid only under the foliage of the extremely rare Little Yeti orchid and whose caterpillars, once successfully hatched, feed only under the light of the new moon…  so rarely seen, these insects exist solely that their wingbeats might trigger monsoon storms…

Alternatively, consider the tech start-up unicorn, that one in a billion enterprise, rare through its spectacular valuation but serving most of the planet and about which most people have now heard (Uber and Airbnb being well-known examples).

Happily most normal life exists somewhere between these two extremes. Although if you are in business for yourself, it’s more probable than not that your business is as unique as the lesser blue-shaded Himalayan mountain butterfly, and probably just as vulnerable to changes in its habitat and climate (your markets and customers’ enthusiasm for your products or services).

As an entrepreneur you’ll want your business to get ahead and make the best use of whatever resources are at your disposal, focussing on what you are good at and finding the best way of getting help with everything else; always looking for better ways of achieving your goals, exploring, testing, refining.  

And if yours is grouped with the majority of other owner managed businesses, you’re quite probably employing less than 5 people, which restricts what you can achieve without bringing in some useful outside resources to help.

Which is where we might come in. Our specialism is not so much that we know everything there is to know about the lesser blue-shaded Himalayan mountain butterfly (we do, and we've shared it all in this blog), or about every different business under the new moon (we don't).  It’s that we provide great support at a crucial time in the evolution of growing businesses.  And it’s the timing of the support that can often be even more important than the niche in which the business operates.  (If you’ve read Douglas Adams you’ll recall The Restaurant at the end of the Universe is not located in some uncharted backwater of the unfashionable end of the western spiral arm of another remote galaxy billions of light years from here, but moments from the very end of time).  It’s a when, not a where, and keeps coming back to getting your timing right.

Charles Barker-Benfield


Charles Barker-Benfield

Travelling from London to Minneapolis St Paul on a Sunday late afternoon flight I got into conversation with my neighbour, an American returning home. We talked about our respective jobs, families, interests in common, etc. and at some point I must have revealed that this was my first business trip to the US.

“Ah” he said, “let me give you some advice.  When the time comes for you to leave your hosts and return to the airport, make sure you leave plenty of time”.  I thought about this for a moment and asked him why that particular piece of advice. “Because” he explained, “your hosts won’t have a plane to catch and have no incentive in ending your meeting promptly so you can depart on time”.  I thought this was a bit strange but thanked him anyway and after discussing other things for a while settled into the flight. Reading, a movie, etc.

The leg of the journey after landing in New York was a little more intense: I had to change flights, make my way through queues in the low ceilinged immigration hall to the transit lounge, then connect with the flight to Minneapolis St Paul, hire a car on arrival, find the hotel, navigate myself the next morning to the factory of my employer’s US subsidiary to meet Tom the engineer, and later drive back to MSP airport to collect colleague Phil (the company MD) who’d flown out the day after me, return us both to the factory, do some more work, etc. etc.

We were there 4 days in all, during which we punctuated work with further exploration of Minneapolis, eating most meals out, hydrating during the day (and years before Starbucks) on the weak coffee kept warm in the Cona machines, and in the evenings on the not quite so weak beer. When not on the beer I managed to do the driving, navigating their grid system via the wrong side of the road, working out where best to U-turn when I was 180 degrees off target, which I was, often.  I remember experiencing helicopter flight for the first time in an IMAX cinema, and trying all sorts of new foods whilst enjoying the hospitality of our hosts who were only too pleased to show us round their twin cities. It was a productive trip.

On the Thursday, our return flight to London (non-stop this time, over the pole) departed 6.30 pm local time. Around 4.30 pm we were still at the factory with our hosts. That’s when I remembered the American on the flight over and his strange advice. Except now it didn’t seem strange any more.  It took 20 minutes to wind up the meeting and get Phil into the car; we left at 4.50 and drove back to the hotel to collect the luggage. It was rush hour. I had to bang on Phil’s door to get him out of the shower so I could take his room keys and check us both out. We left the hotel for the airport at 5.20. It was still rush hour. I set him and the luggage down at the high-level terminal entrance at 5.50, drove to the low-level car hire return area, flung the keys at the man in the kiosk and ran back to the upper terminal. It was 6.05 pm and Phil had found a trolley for all the luggage. We pushed it at speed to the gate, arriving 6.15. All the other passengers were there, now on the point of boarding.

By this time our seats had been released to standby passengers and we had neither checked the luggage in nor collected our boarding cards. And obviously we’d both become somewhat anxious.

But we made a fuss, explained our situation and guess what? We were the first to board the plane. When we sat down we laughed for a long time and agreed we’d cut things quite fine.

Some hours later in the dimmed night lighting I wondered whether the American on Sunday’s flight over had only got to his seat by the skin of his teeth thanks to the enduring hospitality of his British hosts, and whether the advice he'd given me was raw from his own experience on that very day, not from years of transatlantic travel. That would explain quite a lot…

And ever since, I’ve found myself able to listen to the advice of strangers without thinking any of it strange (even if really, it is).

Charles Barker-Benfield


Charles Barker-Benfield

Some years ago (but recalled as if last month) I was discussing the details about starting a new job with John, one of the two owner / directors of the business I was joining.  We’d reached the point where the decision had been made and the offer confirmed when he asked me, quite casually, “When can you start?”  At the time I wasn’t tied to a notice period anywhere else, but had a week away with the family coming up very soon.  (It was late July, the weather was promising, and we were looking forward to getting away early August).  After I had explained the holiday plans we agreed on a start date for the Monday after I returned.  This was to be about three weeks after the meeting.

The holiday was great and the new job started.  It was the CFO role in a really interesting and dynamic business which happened to be on the brink of taking off – they had landed their biggest ever contract with a well known blue-chip customer just days before I started. Exciting times.

Unfortunately they were exciting times for what to start with were all the wrong reasons: it wouldn’t be exaggerating to say that the business was also on the brink of collapsing under the pressure of growth.  On my first day it was clear there were significant problems – they were running out of cash, fast, and urgently needed help sorting themselves out.

Over the next two critical months the directors and I steered the business away from bust and got the new contract under way; within the year we had rebuilt cash from its negative overdraft limit to a positive and healthy £1 million in the bank.  And even more importantly, we’d transformed the working capital engine of the business from next to useless to one which efficiently supported the expansion: customer payment terms were renegotiated, radically, with their biggest customer now helping to fund the growth that their contract had triggered. Inventory financing was introduced and managed properly and relationships with suppliers were greatly improved – these were constraints whose removal allowed the business to grow. We introduced new software systems to record the flow and reporting of the business’s transactions, and established a firm grip on managing the accounting and finances. And the business grew, profitably, from under £5 million to over £20 million turnover within just two years. The owners also saw the value of the business and their shareholdings grow appreciably. And I’m pleased to say that in due course I got a proper thank you.

Looking back to the interview the July before I joined the business and thinking about what had been going through the minds of the owners, it’s clear that they were in dire straits and needed to solve their cash problems, fast, despite not shouting for help there and then. Maybe the closest they came to “Help!” was John’s casual question “When can you start?” and I’ll assume that his failure to add “Actually it’s really important you start as soon as possible” might have been kept back so as not to put me off before I started. Maybe.

Getting the cash to flow in the right direction isn’t always easy. Financing rapid and sustained growth isn’t easy either. Doing both well is a challenge for any business. So I’d recommend that you don't leave it too late to have a conversation you'd been meaning to have… particularly if it starts with “Help!”

Charles Barker-Benfield