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I've seen such things happen, and I almost universally blame the founders and top level leadership when this kind of thing happens. Dedicated CFOs and accounti

I've seen such things happen, and I almost universally blame the founders and top level leadership when this kind of thing happens. Dedicated CFOs and accounting types are simply doing their job. Their singular focus is often the bottom line and the company's financial health. It's not their job to maintain, foster, or enhance company culture. That is the job of the CEO. In situations like this, it's the CEO's responsibility to make statements like "there are intangible benefits to free snacks and sodas. Small things like that help people that make money for the company stay focused longer and help them get through their day." Help the accountants understand where the cost cutting boundaries are early, so you don't have to micromanage every decision they make later on. Over time they'll start to "get it" with your culture and they'll focus their attention on real problems like getting financing, making sure invoices are paid, setting up M&A deals, etc that they were hired to do.

walshemj 13y ago
I remember being told that one of the CEO's of British Telecom is said to have said to his CFO "thank you for telling me what the cost of things are but I know the value of them" Ironically BT a huge company started to go towards free tea and coffee but this was stopped by HMRC (the taxman) who wanted to charge tax on this benefit in kind - and you think the IRS is bad.
- mattmanser 13y ago
  When? Food and drink are considered non-taxable benefits according to HMRC: http://www.hmrc.gov.uk/payerti/employee/changes/new-benefit.htm http://www.hmrc.gov.uk/payerti/employee/changes/new-benefit.... It's always been non-taxable as far as I can remember and a quick google is not bringing anything up.
  - pbhjpbhj 13y ago
    I think you might be confusing the fact that [non luxury] food and drink are [generally] zero-rated for VAT purposes with the assessment of a value for food and drink provided as a "benefit in kind" for income tax and NICs purposes. That said the online guidance on what counts as a trivial benefit, http://www.hmrc.gov.uk/manuals/eimanual/EIM21863.htm http://www.hmrc.gov.uk/manuals/eimanual/EIM21863.htm, says: >"Tea and coffee >An employer may provide its employees with access in the workplace to tea, coffee or water from a cooling dispenser. If this refreshment is available generally to all employees, the benefit is exempt from charge (EIM21670). If the exemption does not apply, you should accept that these refreshments represent a trivial benefit." // But it very much depends on how the benefit is provided, voucher schemes work differently and there is an assessment of the value of the benefit involved. Other references: http://www.hmrc.gov.uk/paye/exb/a-z/a/ http://www.hmrc.gov.uk/paye/exb/a-z/a/ http://www.hmrc.gov.uk/paye/exb/a-z/m/meals.htm http://www.hmrc.gov.uk/paye/exb/a-z/m/meals.htm
    - mattmanser 13y ago
      No, I'm not confusing anything, I'm not talking about VAT at all. I'm talking about the pretty explicit guidance on the page I linked. And rather ironically on the pages you linked. No income tax to pay on the benefit. Read the parent I replied to. He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee. I challenged it because I was interested if this was ever true and also it's never good to let rumours like this to exist, the UK is a great place to start a business and misinformation like this shouldn't go unchallenged.
      - pbhjpbhj 13y ago
        >He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee. // The page I linked says that it's not normally the case. But it's clear in the guidance that a not unusual construction of such a scheme, eg using vouchers and an external provider, would make it that tax/NICs were due on the hot-drinks a a benefit-in-kind. It's not provably misinformation but it is deficient and doesn't demonstrate the verity of the claim.
- arethuza 13y ago
  "started to go towards free tea and coffee but this was stopped by HMRC" That sounds like a cover story some accountant made up to justify penny pinching. I've never heard of stuff like that being taxed.
  - PanMan 13y ago
    In The Netherlands, you are not allowed to give your employees free food. You have to charge them (a little), otherwise the IRS doesn't agree.
    - onemorepassword 13y ago
      I hate this fucking excuse, and I killed it in my current company because it leads to administrative overhead and all kinds of bullshit discussions about who contributes how much, just to save a few bucks. Yes, the company has to pay tax over the free food we give our employees because it's considered part of their pay. In the grand scheme of things: big fucking deal. It's cool in a larger company where you have a well-stocked cafeteria where you can buy good food at heavily subsidized prices. But in small companies this micro bean counter attitude in order to avoid taxes is actually more demotivating and divisive than not providing free food at all. Especially if you're in the middle of the city and people have dozens of options to go out for lunch.
    - guard-of-terra 13y ago
      Why can't IRS just tax employees as if they received whatever sum spent on free food as income? Still much less hassle-free if you ask me.
      - markokocic 13y ago
        Then you'll need to track exact value of food each employee spent, send them invoice and pay them the same amount each month to cover that amount. I can't see how that can be simpler than "free food".
  - walshemj 13y ago
- danielweber 13y ago
  They really should be taxed in the US, too. They are compensation. The IRS has a guideline that says (not exact words) "if it's too petty to keep track of, like someone using the Xerox machine for personal use, don't worry about it." Free cans of soda probably fall in that petty category.
  - marcosdumay 13y ago
    Here in Brazil such kinds of compensation are explicitly non-taxable. The employer can even give it in an specific moretary instrument (not money, but something traceable), and won't pay taxes over it.
- klipt 13y ago
  Oh, the IRS is considering it too: http://www.mercurynews.com/business/ci_22982220/irs-is-looking-into-whether-free-meals-at http://www.mercurynews.com/business/ci_22982220/irs-is-looki...
ignostic 13y ago
I'd strongly disagree that it's not the CFO's job to foster and enhance company culture. If your CFO is a cost-cutting machine, I hope he's not highly compensated. Any qualified first-year accountant can do that job. It's a good CFO's job to make sure that resources are invested strategically. Indeed, it's every executive's job to work together towards a shared vision and goal. If someone is working towards a different goal, you're inviting unnecessary conflict. No one should need to be micromanaged - at any point - if they share the goal and the culture along with the rest of the employees.
- hkarthik 13y ago
  When you bring in an outside CFO, chances are that you're getting a highly paid individual whose main incentive is to increase the valuation of your company to make it look good for an acquisition, increasing revenues substantially, or going public. Cost cutting is just one tool in their toolbelt to work towards it. But it's the sharpest and most easily understood tool they have so that's why they will reach for it so often. In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork. But such people will rarely carry the title of CFO.
  - ignostic 13y ago
    > "In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork." Again, I have to disagree. Ideally you get a proactive CFO who understands the value of the company culture, and works to encourage it. Yes, even if that costs more money. A paper pusher who stays out of your way does not approach the value of a good CFO who gets what the company is about and what they're trying to do. Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition.
    - ansgri 13y ago
      > Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition. This is the point. You are not to be surprised, but as CEO be ready that your CFO will require guidance while doing otherwise useful things.
300bps 13y ago
>Dedicated CFOs and accounting types are simply doing their job. Their singular focus is often the bottom line and the company's financial health. I disagree that anyone in a corporation should have a "singular focus". As an IT person at an investment bank I've seen numerous times IT people just "do what they're told to do" rather than offer a true consultative relationship to the business. A truly successful person realizes their limitations but offers reasonable suggestions on things that other people may have missed. I used to work at publicly traded insurance companies and there was often a marketing vs. underwriting struggle but nobody on either side ever had a "singular focus" because it's the lazy way to bankruptcy for the corporation.
Zimahl 13y ago
I'll disagree that a CFO shouldn't have insight into company culture. I think the problem with CFOs in general is they are just ledger monkeys - there's red ink and black ink. Development is always in the red even though it's the place where the real value is derived. So bonuses are an extraneous cost, food is an extraneous cost, healthcare is an extraneous cost. If you don't have a CFO who realizes that simple cuts to development, and all employees in general, will affect the black ink down the line, then you are in trouble.

walshemj 13y ago

I remember being told that one of the CEO's of British Telecom is said to have said to his CFO "thank you for telling me what the cost of things are but I know the value of them" Ironically BT a huge company started to go towards free tea and coffee but this was stopped by HMRC (the taxman) who wanted to charge tax on this benefit in kind - and you think the IRS is bad.

mattmanser 13y ago
When? Food and drink are considered non-taxable benefits according to HMRC: http://www.hmrc.gov.uk/payerti/employee/changes/new-benefit.htm http://www.hmrc.gov.uk/payerti/employee/changes/new-benefit.... It's always been non-taxable as far as I can remember and a quick google is not bringing anything up.
- pbhjpbhj 13y ago
  I think you might be confusing the fact that [non luxury] food and drink are [generally] zero-rated for VAT purposes with the assessment of a value for food and drink provided as a "benefit in kind" for income tax and NICs purposes. That said the online guidance on what counts as a trivial benefit, http://www.hmrc.gov.uk/manuals/eimanual/EIM21863.htm http://www.hmrc.gov.uk/manuals/eimanual/EIM21863.htm, says: >"Tea and coffee >An employer may provide its employees with access in the workplace to tea, coffee or water from a cooling dispenser. If this refreshment is available generally to all employees, the benefit is exempt from charge (EIM21670). If the exemption does not apply, you should accept that these refreshments represent a trivial benefit." // But it very much depends on how the benefit is provided, voucher schemes work differently and there is an assessment of the value of the benefit involved. Other references: http://www.hmrc.gov.uk/paye/exb/a-z/a/ http://www.hmrc.gov.uk/paye/exb/a-z/a/ http://www.hmrc.gov.uk/paye/exb/a-z/m/meals.htm http://www.hmrc.gov.uk/paye/exb/a-z/m/meals.htm
  - mattmanser 13y ago
    No, I'm not confusing anything, I'm not talking about VAT at all. I'm talking about the pretty explicit guidance on the page I linked. And rather ironically on the pages you linked. No income tax to pay on the benefit. Read the parent I replied to. He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee. I challenged it because I was interested if this was ever true and also it's never good to let rumours like this to exist, the UK is a great place to start a business and misinformation like this shouldn't go unchallenged.
    - pbhjpbhj 13y ago
      >He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee. // The page I linked says that it's not normally the case. But it's clear in the guidance that a not unusual construction of such a scheme, eg using vouchers and an external provider, would make it that tax/NICs were due on the hot-drinks a a benefit-in-kind. It's not provably misinformation but it is deficient and doesn't demonstrate the verity of the claim.
arethuza 13y ago
"started to go towards free tea and coffee but this was stopped by HMRC" That sounds like a cover story some accountant made up to justify penny pinching. I've never heard of stuff like that being taxed.
- PanMan 13y ago
  In The Netherlands, you are not allowed to give your employees free food. You have to charge them (a little), otherwise the IRS doesn't agree.
  - onemorepassword 13y ago
    I hate this fucking excuse, and I killed it in my current company because it leads to administrative overhead and all kinds of bullshit discussions about who contributes how much, just to save a few bucks. Yes, the company has to pay tax over the free food we give our employees because it's considered part of their pay. In the grand scheme of things: big fucking deal. It's cool in a larger company where you have a well-stocked cafeteria where you can buy good food at heavily subsidized prices. But in small companies this micro bean counter attitude in order to avoid taxes is actually more demotivating and divisive than not providing free food at all. Especially if you're in the middle of the city and people have dozens of options to go out for lunch.
  - guard-of-terra 13y ago
    Why can't IRS just tax employees as if they received whatever sum spent on free food as income? Still much less hassle-free if you ask me.
    - markokocic 13y ago
      Then you'll need to track exact value of food each employee spent, send them invoice and pay them the same amount each month to cover that amount. I can't see how that can be simpler than "free food".
- walshemj 13y ago
danielweber 13y ago
They really should be taxed in the US, too. They are compensation. The IRS has a guideline that says (not exact words) "if it's too petty to keep track of, like someone using the Xerox machine for personal use, don't worry about it." Free cans of soda probably fall in that petty category.
- marcosdumay 13y ago
  Here in Brazil such kinds of compensation are explicitly non-taxable. The employer can even give it in an specific moretary instrument (not money, but something traceable), and won't pay taxes over it.
klipt 13y ago
Oh, the IRS is considering it too: http://www.mercurynews.com/business/ci_22982220/irs-is-looking-into-whether-free-meals-at http://www.mercurynews.com/business/ci_22982220/irs-is-looki...

ignostic 13y ago

I'd strongly disagree that it's not the CFO's job to foster and enhance company culture. If your CFO is a cost-cutting machine, I hope he's not highly compensated. Any qualified first-year accountant can do that job. It's a good CFO's job to make sure that resources are invested strategically. Indeed, it's every executive's job to work together towards a shared vision and goal. If someone is working towards a different goal, you're inviting unnecessary conflict. No one should need to be micromanaged - at any point - if they share the goal and the culture along with the rest of the employees.

hkarthik 13y ago
When you bring in an outside CFO, chances are that you're getting a highly paid individual whose main incentive is to increase the valuation of your company to make it look good for an acquisition, increasing revenues substantially, or going public. Cost cutting is just one tool in their toolbelt to work towards it. But it's the sharpest and most easily understood tool they have so that's why they will reach for it so often. In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork. But such people will rarely carry the title of CFO.
- ignostic 13y ago
  > "In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork." Again, I have to disagree. Ideally you get a proactive CFO who understands the value of the company culture, and works to encourage it. Yes, even if that costs more money. A paper pusher who stays out of your way does not approach the value of a good CFO who gets what the company is about and what they're trying to do. Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition.
  - ansgri 13y ago
    > Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition. This is the point. You are not to be surprised, but as CEO be ready that your CFO will require guidance while doing otherwise useful things.

300bps 13y ago

>Dedicated CFOs and accounting types are simply doing their job. Their singular focus is often the bottom line and the company's financial health. I disagree that anyone in a corporation should have a "singular focus". As an IT person at an investment bank I've seen numerous times IT people just "do what they're told to do" rather than offer a true consultative relationship to the business. A truly successful person realizes their limitations but offers reasonable suggestions on things that other people may have missed. I used to work at publicly traded insurance companies and there was often a marketing vs. underwriting struggle but nobody on either side ever had a "singular focus" because it's the lazy way to bankruptcy for the corporation.

Zimahl 13y ago

I'll disagree that a CFO shouldn't have insight into company culture. I think the problem with CFOs in general is they are just ledger monkeys - there's red ink and black ink. Development is always in the red even though it's the place where the real value is derived. So bonuses are an extraneous cost, food is an extraneous cost, healthcare is an extraneous cost. If you don't have a CFO who realizes that simple cuts to development, and all employees in general, will affect the black ink down the line, then you are in trouble.