In 2014, Tesco was rocked by a major accounting scandal.
The company had a state-of-the-art accounting system, a team of experienced finance professionals, and external auditors reviewing its books. Yet, it turned out Tesco had overstated its profits by £263 million.
That’s quite a mistake.
How did this happen? Tesco’s accounting system wasn’t faulty, and its accountants weren’t making basic calculation errors.
The problem was more subtle: on paper, the numbers looked right, but Tesco was counting revenue from deals before the money had actually come in. This made the company appear more profitable than it really was.
The consequences were swift — investors lost confidence, the stock price plummeted and senior executives were forced to resign.
It’s an extreme case, but the lesson applies to businesses of all sizes.
Just because you have a reputable accounting platform and a trusted accountant, it doesn’t mean your numbers are telling you the full truth.
Your accounting software is just a tool. It’s only as good as the data fed into it and the people managing it. And just like in any profession, there are outstanding accountants, average accountants and poor accountants.
I see business owners making this mistake all the time.
They assume that because they’ve invested in a well-known accounting system and have an in-house accountant, their financial management is sorted. But then the numbers come in, and something feels off.
The figures don’t match what they’re seeing on the ground… They’re not getting the financial insights they actually need… They don’t trust the numbers — and they can’t put their finger on why.
This is particularly dangerous in businesses where the finance function relies on just one or two people. Without checks and balances, errors go unnoticed, reports are delayed and key insights never make it to the business owner.
Of course, as Tesco’s case shows, even large finance teams can get it wrong. It’s not just about headcount — it’s about having the right structure, processes and expertise in place.
So how can you ensure you’re getting financial information you can actually trust?
Look for a finance function that has:
>> A highly systematised finance function — working to clearly defined processes, not making it up as they go along.
>> A team of experts — different levels of experience and skills, reviewing and signing off each other’s work to catch errors early.
>> Up-to-date, well-organised financials — no invoices sitting around for months, no missing paperwork.
>> Numbers you can actually use — helping you understand your business, spot trends early and make informed decisions. And ideally, your finance people should be able to explain the numbers to you and work with you to use them in your decision-making process.
At Insight Associates, this is exactly how we work.
In a recent client survey, our clients repeatedly told us how much they trust us to manage their finances — because we don’t just produce numbers, we ensure they’re reliable, timely and insightful.
If you’ve ever looked at your financials and thought, “This doesn’t seem right” — let’s talk. Simply email garry@insightassociates.co.uk or call us on 01279 647 447 to arrange a no-obligation consultation with myself or with one of our specialists.
We’d love to help you get the financial clarity you need to grow your business with confidence.
Warmly,
Garry
