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Profit and Archaeology - RedEarth - 7th September 2008
Quote:quote:Originally posted by voice of reason
To try to answer your question
Also, I'm not sure about the VAT registered bit. Are the company arms of charities (archaeological or otherwise) excempt from being VAT registered?
Slightly off-topic but needs to be nipped in the bud.
No, charities are VAT-Registered (unless very small) - the VAT issue refers to the legal position that charities don't need to charge VAT to certain categories of body (other charities, certain designated public entities, but nowhere actually defined as adefinitive list). The problem alluded to is deciding whether they are exempt or not. If you get it wrong and don't charge VAT when you should, HMRC still want their cash, so that concentrates the mind. The other issue is that some of these entities actually [u]do</u> want you to charge them VAT due to certain technical issues of their own regarding VAT offset, and that adds another dimension of complication.
This whole thing is not a benefit to the charity issuing the invoice by the way. In terms of cashflow it is a pain in the backside - the way VAT works is you collect cash in on behalf of the Exchequer, while on VAT on your invoiced sales, you pay cash out. The ideal is balance each quarter, which is when VAT liability is assessed. However if you don't gather the same as you pay out, then you are responsible for the difference. The less VAT you charge, the greater your net outflow to Mr Darling's pockets.
The simple answer is that it is far easier (for simple brains and for accounting purposes) for charities to work for commercial clients rather than public sector!
Clear? I doubt it somehow, but that is how VAT operates.
I understand only too well how VAT operates, and following your answer I consider myself lucky not to have to run the VAT return for a charity as it is far easier for a limited company (I don't think I've come across any cases yet where we are excempt from charging VAT).
This perhaps feeds back into my earlier point about Charities (potentially) needing far more admin staff just to keep on top of this very type of thing, meaning that any additional money that might be made as a charity (and I stress 'might') being spent there rather than benefitting the poor old diggers.
The difficulty with all of this is that it is so complex and organisations operate in some many ways that it is impossible to be familiar with all of them (unless you are able spend a lot of time looking at it - I've got better things to do, like attempting to earn a living, and watching paint dry). Connecting to the IFA revue thread, perhaps they should carry out some sort of revue of the way these things operate, where there are balances, whether directors are taking too much, whether some organisations have advantages, etc.
Profit and Archaeology - RedEarth - 7th September 2008
Quote:quote:Originally posted by diggingthedirt
Primarily for 1Man1Desk. I'm intrigued by this concept of 'moral imperative' but still feel uneasy. I can see what you mean - not just playing by the rules but also being a good sportsman. You are making a business case for Corporate Social Responsibility. Investing in both people and infrastructure will lead to a better service to our clients. This will increase sales and profit resulting in a greater yield that can then be reinvested in the business.
My problem with the morality/immorality argument is that this masquerades the fundamental reality that business exists to maximise a return on shareholder investment. The imperative is commercial not moral, and this is particularly problematic in archaeology where the market is an artificial creation, with buyers purchasing a service that enables them to discharge a planning condition. It is true to say that any organisation must obtain at least as much as it spends, but lets be honest here. To obtain more in archaeology is most easily achieved by doing less archaeology. And in addition to methodological issues, the resulting product (archive, reports and final publication) is something buyers must share with the State. They do not have exclusive control of this, and there is no market logic to drive the quality of the product. This is the point I'm making about the difference between a wealth generating and a knowledge generating structure.
In answer to drpeterwardle's initial question, it is possible to make a profit in archaeology and not compromise standards, as long as the sector is explicit about it's own shortcomings and takes collective measures to address them. To all the moralists: I'm working in a country where the words 'archaeology' and 'millionaire' can be logically used in the same sentence, and, well, I'd quite like to be one. Does that make me a bad person?
Clearly in whatever form of business there are goodies and baddies -those that treat their staff well, invest well, and try to develop, and those that don't really care about any of the above. What is depressing that the majority of people in archaeology got into it because they enjoy it or find it interesting. To see them then crapping on each other is quite sad.
However, I don't agree with the implication that a 'commercial imperitive' = bad. It is entirely amoral and effectively mathematical since, as has already been stated, companies need to make some excess in order to continue and develop and so need a 'commercial imperative'. It's a bit like saying 2x2=4 is good, 20,000x20,000=40,000 is bad.
Regarding the whole aspect of doing less archaeology to make more money, obviously this goes on but there are supposed to be limits set by the Curators and guidelines from the IFA. If people are blatantly breaking these then eventually they will be stoppped. If the curators are letting shoddy work through then their morality should be considered suspect.
Are you working in the UK? I would assume that the words 'millionaire archaeologist' would have the words 'lottery winning' before them!
Profit and Archaeology - geodan - 8th September 2008
I'm assuming diggingthedirt, that you work in Eire. Personally I'd like to join the archaeological millionaire's club too, although realistically it's not going to happen.
I do get the impression from many that the ambition to make a comfortable living from the sector I have chosen to work in is somehow reprehensible, and that I should equip myself with a scourge as well as a trowel.
It seems to me that there is some disconnect in their reasoning, i.e. we want good terms and conditions and equivalent pay to other sectors although they are paid well/better because their company directors and staff are ambitious and require decent financial reward from truly privatised sectors (which "commercial" archaeology in the UK clearly is not). Simply - they charge themselves out at a sensible rate in the first place and make a decent profit, which may allow their directors to drive around in 7 series BM's, but also enables sensible training budgets and decent salaries for the companies employees.
As suggested above, I believe that we do not work in a fully privatised industry and my perception is that we suffer as a consequence. The pegging of archaeological salaries to council pay scales is a clear indication that the archaeological sector has failed to grasp the free market nettle. It is, however, necessary because of the remaining affiliation (to whatever extent) of some companies with local government, which lowers the rates that truly private companies can charge as they must compete with local government assisted companies which can often quote for work at a lower rate because they may not pay the true market price for support services, for example, and can also take a longer term view of profit and loss - as in the short term the taxpayer will pick up the bill.
Happiness depends on ourselves.
Profit and Archaeology - Digitaldigging - 8th September 2008
"My problem with the morality/immorality argument is that this masquerades the fundamental reality that business exists to maximise a return on shareholder investment"
Which is the advantage of forming a charity, or other form of NPO. Many software companies will also offer discounts or free merchandise to this type of organisation, resulting in reduced overheads which could be used to increase the standard of working conditions.
On a different note, it may not be constructive to wish for the same payscales as the council - if you are required to work in the private sector, surely wages and conditions should, at minimum, reflect those of the skilled workers who will build over whatever you are being hired to excavate?
Profit and Archaeology - 1man1desk - 8th September 2008
Posted by diggingthedirt:
Quote:quoteActually, although CSR is a good thing, that is not what I am making a case for. My case relates to good business management, not CSR. You make part of my point for me when you say:rimarily for 1Man1Desk. I'm intrigued by this concept of 'moral imperative' but still feel uneasy... You are making a business case for Corporate Social Responsibility...
Quote:quote:Investing in both people and infrastructure will lead to a better service to our clients. This will increase sales and profit resulting in a greater yield that can then be reinvested in the business.What you have to consider is the primary motivation of the managers of small-medium businesses, which would include all or most archaeological units in the UK. These are not publicly-quoted companies with shares on the stockmarket. They are either the commercial wing of a charity or council, or companies privately owned by an individual or a small partnership. I will focus on the private companies, as these are the areas where the profit motive is most applicable.
Just like anyone else, the owners of such companies do want to make money for themselves. However, in my experience, they usually have two other motivations that usually get a higher priority:
1. Make sure the business survives;
2. Make sure the business grows, up to a point.
The point concerned is usually either the point where the owners/partners no longer feel they can manage the company in that form, or the point where it gets too big for them to carry the financial liabilities themselves. Both of those points vary according to the abilities, resources and numbers of the owners/partners.
Most such owners/partners will pay themselves a salary, just like any employee. The salary concerned is not always necessarily much more than they pay other employees. Any surplus after that is usually ploughed back in to the company, contributing to its survival and growth.
One big difference between employees and owners is that it is common for owners to reduce their own salaries, defer payment, or even waive them altogether, if they have a cash-flow problem. That might be because the company is having a hard time, or because it is doing very well but really needs to invest in infrastructure or staff to maintain that success. I promise you that this really does happen; my own father, who was MD of his own company, didn't take a salary for 5 years at one time - he lived on expenses and benefits in kind, but didn't take any actual money. He wasn't unique.
Quote:quote:...The imperative is commercial not moral, and this is particularly problematic in archaeology where the market is an artificial creation, with buyers purchasing a service that enables them to discharge a planning condition.Archaeology is certainly not unique in the 'artifical' nature of the market. The same could be said for any other environmental field, although it does not stop there, and most of those other fields are fully commercialised.
Quote:quote:It is true to say that any organisation must obtain at least as much as it spends, but lets be honest here. To obtain more in archaeology is most easily achieved by doing less archaeology.Actually, that is not true. The fee paid is usually proportionate to the scale of work, so you get more for doing more.
It is true that, once a fee has been agreed for a defined piece of work, an unscrupulous and profit-oriented business may look for ways to cut corners. However, that isn't unique to archaeology either - just have a think about building contractors. So, you need to monitor anyone doing the work to make sure they do it properly.
One of the key roles played by consultants includes monitoring archaeological contractors to:
- make sure they do fulfil all their contractual obligations;
- make sure they only get paid for work actually done;
- make sure they don't do extra work (to get paid extra) unless there is a good reason for it.
That role is exactly equivalent to the role played by an architect during the construction phase of a building, or the civil engineering consultant during the construction of a bridge, and so on.
1man1desk
to let, fully furnished
Profit and Archaeology - drpeterwardle - 8th September 2008
I would add to 1man1desk posts that there are other reasons for not wanting to grow. Profit being one of them - small is beautiful. Another is that you simply cant be bothered. Another is changing what you, yourself, actually do.
Peter Wardle
Profit and Archaeology - diggingthedirt - 9th September 2008
There are some interesting points made in response here 1man1desk, in specific relation to the motivation of small to medium business owners. If I understand you right, you are saying that many delay gratification in the short term in order to grow a business, on the promise (misguided or otherwise!) of a successful pay off in the future (as long as this goes hand in hand with a well thought out exit strategy). This is the entrepreneurial drive, it creates jobs and stability, and if youâre lucky, a nice new jag in the driveway. Nothing to disagree with here.
The architect/consultant engineer analogy works for me in relation to the UK, but can't be applied to Ireland, unless the work is infrastructural. The licence system makes no provision for a monitoring framework; there are no guarantees that licence eligible directors will produce a quality archaeological product, only that they will provide a state accredited service. I maintain the point that the artificial nature of the market makes this arrangement problematic, and disagree with the premise that archaeology is equivalent to any other environmental field. Thinking of archaeology as a non-renewable resource (like minerals, habitats and rare forms of butterfly) imbues it with a value independent of our engagement with it. The danger of this is that the process ceases to be inquisitive â the past is preserved by record, and the people who eventually interpret this record are not likely to be the same people that created it.
Some would argue that this doesn't matter, and within the narrow terms that commercial archaeology sets for itself, it can be very successful at identifying and documenting unknown remains, and undertaking these tasks in a commercially profitable way. But the past is ultimately preserved (by record) in the public interest, and the question remains as to how well this is being served. Unlike architects or consultant engineers, archaeologists are asked to bare witness to past behaviours that may have no parallel in the modern world. It's precisely this difference that makes the past such a powerful force for change. Are we information managers? If not, then how can we organise a structure to realise the potential of commercially generated information, and disseminate this widely as new knowledge about the past?
And have a Jag in the driveway.
Profit and Archaeology - 1man1desk - 10th September 2008
Posted by diggingthedirt:
Quote:quote:The architect/consultant engineer analogy works for me in relation to the UK, but can't be applied to Ireland, unless the work is infrastructural.Well, I can't really comment about that - my post was based essentially on the UK situation.
Quote:quote:I maintain the point that the artificial nature of the market makes this arrangement problematic, and disagree with the premise that archaeology is equivalent to any other environmental field.The point is that the market is equally artificial in other environmental fields. As an example, developers only do surveys for protected species befor their planning application because they won't get permission otherwise (just like archaeological DBAs or evaluations), and they only take steps to prevent or mitigate for impacts on protected species because they have to comply with planning conditions (just like archaeological excavations).
Quote:quote:Thinking of archaeology as a non-renewable resource (like minerals, habitats and rare forms of butterfly) imbues it with a value independent of our engagement with it. The danger of this is that the process ceases to be inquisitive â the past is preserved by record, and the people who eventually interpret this record are not likely to be the same people that created it.But this is the premise on which the whole statutory/planning regime in relation to archaeology is based - that it does have an independent value. If it doesn't have "a value independent of our engagement with it", how can we justify asking any individual who does not feel himself to be engaged with it (a developer, for instance) to pay for archaeological work? We would get back to the old 1970's chestnut of "why should I fund your hobby?"
1man1desk
to let, fully furnished
Profit and Archaeology - diggingthedirt - 11th September 2008
Ok, we've established that the archaeological market is an artificial creation, and you make the point that other environmental fields practice perfectly adequately in an equally artificial market. I am assuming from this that you think the environmental sector also operates at an appropriately high standard (according to internationally agreed guidelines). In other words, there are no quality issues in the provision of these services in a commercially profitable way. You may be right. I'll look into it.
My concern in relation to profitability in the archaeological sector is with how the commercial framework affects the methodology employed and the quality of the results produced. You refer to the old 70's chestwig of "why should I fund your hobby?"
This attitude still remains latent amongst those who hold the purse strings, and jobs are won or lost primarily on cost, despite rhetoric to the contrary. I take on board everything said so far regarding good business practice, but this 'moral imperative' can only go so far. Quality management of archaeology (managing a programme of archaeological work on time and budget) is not the same thing as quality archaeology (generating new secure knowledge of the past). The two things are far from mutually exclusive, but as a sector we have become very good at the former (evaluation, mitigation, resolution â all fluent engineer) â but unfortunately quite poor at the latter.
As I mentioned before, some would say this doesn't matter: it's not our remit - leave that to the universities. This too stems from the very premise of the statutory/planning regime, which, as you rightly point out, is based on the idea that the material remains of the past have a value independent of our engagement with it. You see this as a positive, a broad social agreement that the past is good and the polluter must pay, whether they like it or not. Well yes of course, but that's an old battle and the debates moved on. It's not a question of whether or not we value the past, it's how we value it that counts. Many managers would find it easier to put a time-costed cash value on a site than explain to a range of different audiences what the feck it means. A wealth generating, as opposed to a knowledge generating framework. I just think we can do it better.
Profit and Archaeology - Paul Belford - 11th September 2008
diggingthedirt asks:
Quote:quote:how can we organise a structure to realise the potential of commercially generated information, and disseminate this widely as new knowledge about the past?
For me this is nub of the matter. In the UK the OASIS system is a good attempt to try and make available the results of commmercially-funded research.
And I use the word [u]research</u> deliberately.
For, regardless of how it is paid for, or under what circumstances it comes about, we must remember that all archaeological work is research. It is not just 'mitigation' or 'risk management' for someone else, it is potentially a contribution to the greater sum of human knowledge about past societies and where we are today. Holding onto this rather abstract and financially unquantifiable value is critical in our profession. Any new piece of archaeological work must be informed by previous and current work on sites of similar periods, types and locations. If we fail to do that for each and every project then we are not doing our jobs properly.
Having said that, in terms of the original topic, I agree that commercial archaeology must make a profit in order to maintain the ability to undertake such research. Such profit can be used to support training and staff development, new equipment and so-on.
However diggingthedirt is absolutely on the button to make the distinction he does:
Quote:quote:Quality management of archaeology (managing a programme of archaeological work on time and budget) is not the same thing as quality archaeology (generating new secure knowledge of the past).
I agree with him that the two are not mutually exclusive, but I do worry that many organisations invest in their staff's knowledge of the former at the expense of the latter. Training on 'how to do a desk-top' or 'health and safety' or 'financial control' is nowadays fairly common. Sending junior staff to period- or subject-specific conferences to learn something about the actual archaeology is still sadly not high on the list of priorities.
I am not sure why this is so, but for the profession to remain healthy it needs competence in both areas.