The other day I was watching Ed Sheeran on the TV performing in front of a stadium audience of thousands and found myself marvelling at the profit potential of one man and his guitar. Compared with a band (such as the 11-piece much missed Bellowhead) Ed entertains many thousands at the cost of him and his trusty Martin acoustic. It makes me smile!
The above is living proof that you can do whatever you like but the Accountant in me will always come out. This is because a lively interest in how business works and the mathematics of the Profit and Loss Account and Balance Sheet is kind of inbuilt in my very soul and is something like a good sense of rhythm or the ability to navigate which is simply a part of my makeup.
The majority of commercial mediations hinge on a financial issue. Usually not something straightforward or simple (as one would hope these type of problems might resolve themselves) but more often than not cash is at least one major factor. To do something (or to stop doing something) may generate some profit or to decide upon a course of action costs or saves an amount of money. Simple!
However, if there is one thing that mediation has taught me, it’s that the headline figures are simply the summary version of the much more complex issue under the surface. This needs exploring and picking apart a bit in order to arrive at the mutually agreed solution at the end of a successful mediation process. This is why so much time in a mediation is invested in listening and exploring to really try and understand what is going on.
Also one often finds that a simple number is not the final answer. Is there a VAT implication? Does the action have some tax implication? How will the proposed outcome be reflected in the business and its accounts? If someone sells their shares to another, how can this be achieved and are there tax implications that can put a stop to an otherwise excellent idea?
Of course, as a mediator, it is not my place to give advice or lead the conversation but having a proper understanding may allow me to ask an open question that leads the party concerned to take the advice on the tax implications, find out whether there is a VAT problem or if the proposed solution has thought of before with success? Also, there is a good chance that I will intrinsically understand the opening position in a business context thus saving unnecessary time explaining something that may not be so clear to someone without a financial background.
It is worth remembering that whilst mediation exists in a legal framework as part of the toolbox which can be used to solve a dispute, in itself, mediation is NOT about the law. The solution, whilst clearly needing to be legal, is not a result of legal precedent or the outcome of a legal direction by the judiciary. It is more likely to be around a business framework and aimed at achieving a workable solution to a practical problem. Exactly what I help my clients achieve practically every day.
That is why you need a mediator to count on an Accountant mediator such as me!