Crisis-hit cakes and cafe chain, Patisserie Valerie, which yesterday announced it is in need of “an immediate injection of capital” to continue trading in its current form, has now revealed that its Finance Director, Chris Marsh, was arrested last night and then released on bail.
The news comes as the 200-strong cafe chain, with nearly 3,000 staff says that it is fighting for survival after uncovering “significant and potentially fraudulent” accounting irregularities.
The company, which was valued at £450 million on the stock exchange before its crisis emerged, has also admitted that it is facing a winding up petition from HM Revenue & Customs over an outstanding £1 million unpaid tax bill. Whilst the order was issued in mid-September, the directors were, until now, unaware of its existence.
In the latest financial year, businesses lost nearly £90 million from fraud carried out by their own employees. This is why effective management accounts and company audits for any business is essential.
When putting processes in place for effective business administration, sound management accounts will enable better control of your financial situation and awareness of the business in real time. This can be effective not only in detecting and countering fraud, but also in enhancing planning for the peaks and troughs. In turn, whilst many companies do not need an audit due to rising thresholds, an audit can give comfort to business owners and act as a fraud deterrent.
At Beavis Morgan, we work with SMEs to put processes in place which make it easier to run your business, reduce risk and maintain effective management of your company’s working capital.