Author: interhost

Checklists

1) Checklists work

Neil Armstrong’s lunar footprint is the ultimate evidence of the effectiveness of checklists. Right down to the final seconds, NASA launches run on checklists. 35 seconds and counting, second stage tanks now pressurised, T minus 15 seconds guidance is internal, T minus 10 ignition sequence starts, 6, 5, 4, 3… – you know the rest.

2) Checklists dramatically reduce error

But NASA isn’t the only organisation to recognise the benefits of checklists. In the time critical and intense environment of hospital intensive care units, life depends on separate teams carrying out multiple and separate processes in exactly the right sequence. Checklists have been shown to reduce deaths through complications by as much as one third.

3) Checklists clearly allocate responsibility

You’ll know the business epigram about everybody, somebody, nobody, anybody and the failed task. Anybody could have done it, but nobody did it because everybody thought somebody would do it. Often under pressure it’s the simplest task that, because of its very simplicity, is overlooked. A checklist with clearly allocated responsibilities stops this from happening.

4) Checklists identify problems early on

In cross-functional groups, it’s all too easy to carry on with “your” bit of the task even though something has gone wrong somewhere else. The multi-million dollar Hubble telescope initially failed because the wrong sized 20 cents washer was used. The error was ignored because people further down the chain knew they were doing their job properly and assumed previous readings were incorrect.

5 ways to make checklists work for you:

1) Don’t dismiss checklists because they seem simple

People object to checklists as mere recipes creating an additional admin burden, or too simplistic to be valuable. As experience in intensive care has shown, properly implemented, they’re neither.

2) Do fully understand the task.

Take the time to analyse the task and break it down into its essential steps. Not as easy as it sounds. You know how to tie shoelaces for example, but try writing a checklist that would explain how to do it to a complete novice.

3) Do understand your user

It’s no good expecting someone to do something that doesn’t fit with their worldview, or concentrate on two processes at once just because it suits your plan. Keep every task appropriate and sequential.

4) Do work out where you can create out-loops

Look to where you can create external sub loops that can feed back into the main process. For example you can create a sub-checklist for shoelace tying, because it is clear when the task is finished and ticked off. In relocation this is particularly useful for outsourcing skilled help outside your core businesses processes such as expense management.

5) Do look for transactional compression opportunities.

Finding processes that, whilst appearing different, can be implemented through essentially the same structure both reduces risk and saves time and money. Nature is brilliant at this; all mammals from the blue whale to field mice share the same amended skeletal structure.

Start today and start with the simple

Even though we firmly believe all relocation processes can be check-listed, issues like immigration can seem so complex that the whole process ends up in the box marked “too difficult”. So start with the more obviously transactional stuff involving costs, which, as it is more rules-based, is much more amenable to checklist processing. Perhaps you could start by making a checklist of how you’re going to do it.

Money laundering

If they handed gongs for money laundering, there would be knighthoods a plenty. The numbers are staggering. If you add the money involved in drug and people trafficking to gun running it comes to over 360 billion Dollars a year. That’s almost a billion Dollars being laundered every day.

(As an aside, a billion is a big number. To give you some idea a million seconds is about 11.5 days, a billion seconds is over 35 years. A billion is a big, big number).

But fortunately there’s an upside to money laundering. It’s often the trail left by the flow of illegal money that gives the forces of law and order the best chance of catching the criminals. Famously Al Capone’s notorious Chicago crime empire was brought down not by the FBI, but by the tax office.

That’s why there’s an extremely tight net of international legislation drawn to spot unusual money flow, and bring it to the attention of the long arm of the law.

The problem for us is the laws designed to catch the big fish can also bring the well-intentioned global mobility professional minnow to the attention of the boys and girls in blue.

Ignorance is no defence

Why? Well the law’s best hope of success often comes from bringing legitimate money movers such as banks and global corporates to their aid in spotting irregularity. That’s why the Proceeds of Crime Act 2002 makes it a criminal offence for you to fail to report knowledge or suspicions or even reasonable grounds for suspicion. So it comes under our responsibility of due diligence to be actively cautious and suspicious, and to report our suspicions.

Global mobility is particularly vulnerable because we often have to operate in a “pay now, worry later” way. This is not of our making. It’s just that we are often dealing with self-validated cross border cash payments in parochial emerging markets. Because the numbers we deal are often small and variable, they offer the perfect way to drip feed and legitimise money. It’s our job to spot the unusual.

Look for the irregular

The way we deal with this serious fiscal responsibility at Hessel is to have processes in place to look for unusual behaviours and patterns. For example, one unusually high gas bill is probably ok, but two or three similarly disproportionately large bills in a row need investigation. That’s not to say there’s necessarily anything going on, it may just be a particularly cold snap; but because it doesn’t fit the expected pattern we have to take a preventative “what if” approach. What’s more, as tipping off potential miscreants also falls under the purview of money laundering legislation, we have an independent and confidential external legal body our staff can consult if they have any suspicions, no matter how slight.

However you choose to address the issue, it’s critical you recognise your responsibilities and put effective diagnostic processes in place. You’ll also have the benefit of knowing you’re making life harder for the criminal.

If you’d like to know more about how we can help you make sure your company is compliant with global legislation, e-mail Geoff.Davidson@hessel.co.uk .

Rapid response relocations

The oil division of a major shipping group needed the facility to manage the expenses of rapid response engineers sent at short notice into locations as diverse as the USA, UAE, India, Malaysia, UK and Australia. To do their job the relocated engineers needed to be sure that local costs such as car hire or urgent ad hoc equipment purchase could be met quickly and efficiently.

This often involved reimbursement in multiple currencies through a diverse banking network. And of course all expenditure had to be accurately reconciled and controlled against cost centres. We got involved right from the start and developed a tailor-made programme which included the following:

  • Development of a standardised invoice pro-forma to ensure information obtained from vendors was accurate and exchange rates were handled in a visible manner, particularly when dealing with non-convertible currencies
  • Development of a simplified expense claim that could involve claiming expenses in one currency for payment in a second currency against funds held in a third base currency, subject to banking regulations
  • Holding funds and tracking costs in multiple currencies and producing reconciliation and cost centre recharge reports
  • Making cross-border payments, setting up and controlling bank accounts in non-UK countries for in-country payment services.

Food group’s 500 annual assignments

In this case we worked from the ground floor to help a newly formed centralised HR and finance division to develop policies and then expense manage over 500 domestic relocations and international assignments per year.

The client was keen to ensure that all administration and compliance was transparent, efficiently managed and that payments and reimbursements took place in a controlled, accurate and timely manner. As if 500 relocations annually weren’t enough, the project was made more complex because we were working across 10 separate divisions of the company.

Throughout we were audited by HMRC and had all the workflow audited for Sarbanes-Oxley compliance. We passed both these audits with 100% compliance.

The development and execution required us to consider the following:

    • Development of 25 separate relocation and International assignment policies with bespoke downloadable expense claim forms for each policy
    • P11D/PSA year-end relocation tax reporting
    • Monthly payroll reporting for international assignments
    • Quarterly accrual report for relocation costs
    • Weekly recharging and VAT reclamation reporting
    • Monthly disturbance allowance and transfer grant reporting
    • BIK reporting for P11D for non-relocation benefits
    • Support for those on assignment – managing three-year budgets for education costs and spouse allowances and policing expense claims
    • Handling multiple payment of inter-company expenditure and property management in addition to all IA/Relocation reimbursement and vendor payments
    • Development of a FastTrack® same day payment service for urgent payments
    • Provision of payment services by BACS, CHAPS, cheque and automated cross-border payments
    • Full reconciliation of accounts on a weekly basis. Click here to read more how Hessel helped a major shipping group manage the expenses of rapid response engineers in locations as diverse as USA, UAE, India, Malaysia, UK and Australia.

International courier saves 69% tax

When Hessel were called in by the UK division of a global courier to help design a more tax efficient and accountable domestic relocation policy, a couple of things became clear pretty quickly.

Firstly, because the company had grown through M&A, there was no coherent relocation policy, and secondly there was little or no control over tax reporting. We worked closely with the client and their outsourced payment provider to design a relocation policy that was both equitable and accountable.

Of course we checked our proposals were aligned to ITEPA 2003 and ensured that there was no leakage of claimable items from qualifying to non-qualifying. Any ambiguous items were either clarified or removed from the policy. To further ensure compliance all relocation expense claims are now routed through Hessel where we check against policy, and if correct, record them for P11D/PSA reporting.

The client is delighted. Not only do they now have centralised, efficient and accountable policy management, but they’ve also saved an average 89% on the gross-up paid per employee. And all for a Hessel cost of less than 7% of the savings created.