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Hot on the heels of Tesco’s £250 m profit overstatement, construction kingpins Balfour Beatty, have issued a profit warning after discovering a massive £75 million profit shortfall in its Construction Services UK division.

In a trading update to the London Stock Exchange the company identified where and how the shortfall occurred and that KPMG have been called in to carry out a detailed investigation of the contract portfolio within Construction Services UK.

As we’ve outlined in our introduction to the “Book of Accounting Blunders,” no one and no one organisation can hope to be perfect but the scale of the profit shortfall is a worrying development for an already beleaguered division of this construction giant. What KMPG will uncover is unclear but one thing is for sure, proper accounting procedures appear to be lacking. How else could you explain £30m of write-downs in its troubled engineering services business, £20m in extra costs on London jobs, and £25m of write-downs across its regional building and major infrastructure arms?

For any small construction business or indeed any small business the lesson is clear – keep your books accurately so that you have clear line of sight in to how your business is performing. You can then take preventative measures to correct issues before they manifest themselves and cause cash flow problems or worse.

The manta here at Big Red Cloud is that is what good financial and accounting software is for: to keep the books accurately and consistently in compliance with the laws of the land and the Revenue.



Marc O'Dwyer

After completing a Graduate program in Marketing, Marc’s impressive sales career began at Allied Irish Banks, Pitney Bowes and Panasonic where he received numerous Irish and European sales performance awards and consistently exceeded targets and expectations. In 1992, Marc’s entrepreneurial spirit led him to set up his own business, Irish International Sales (IIS). Initially, this company was a reseller for Take 5 Accounts and Payroll software. Within four years, IIS became the largest reseller of Take 5 in Ireland, acquiring four other Take 5 resellers. He also found time to set up two mobile phone shops under the Cellular World brand and a web design company offering website design services for small businesses. In 2001, he bought the majority share in a small Irish software business, Big Red Book. At that time, the company was losing money. The company became profitable within two months, and Marc then acquired a payroll company to compliment Big Red Books Accounting products. In 2003, IIS were appointed as Channel Partners with SAP for their new SME product, SAP Business One. Marc sold his Take 5 business and concentrated on developing this new market for SAP As a result, by 2007, IIS was recognised as the largest Channel Partner for SAP in EMEA (Europe Middle East and Africa). In 2008, the IIS Sales Manager bought the Company from Marc in an MBO. He launched Big red cloud in June 2012, the online version of big red book, to date the company successfully converts 59% of trials into sales and the number of customers is growing rapidly. Marc continues to run both Big Red Book and Big Red Cloud which now support 75,000 businesses. He is a very keen sportsman, having played rugby for 20 years, represented Leinster at under 16 and under 20 levels, and league squash with Fitzwilliam Lawn Tennis Club for 10 years. Marc has competed in 11 Marathons, including the London and Boston Marathons, and has completed several Triathlons and Half Ironman races. He has also completed six Ironman Races in Austria(x2), Frankfurt (Germany), Nice (France) , Mallorca (Spain) and Copenhagen (Denmark)

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