The Tribune

By SIMON COOPER

Res Soicus

FEW business owners look forward to the monthly accounting task, even if it is just a question of handing over a shoebox stuffed with receipts to the accountant. We begrudge the time required, and that's a pity. Because it is accounting that tells us where we are heading, and where the money has gone.

When clients tell me: "Accounting's crazy. The accountant says I made a profit, but where's the money?", I'm inclined to shake my head. Because cash flow is what matters - and accounting records are what tell us where the money went.

Some businesses for sale on my books may never sell, at least at the price the owner wants. Inevitably, the difficulty is a lack of effective books. You see, buyers want a comparatively high return on their investment and, if I can't prove this, they won't budge.

ACCOUNTING

EVOLUTION

Ever since accounting records evolved on clay tablets in Ancient Egyptian times, they have been frustrating businesspeople. Just imagine lugging stone blocks around (don't begrudge your shoebox). Records like this are useless until converted to cash flow and profit statements. Generally speaking, many businesses are still somewhere on the ladder.

CHEQUE AND CASH ACCOUNTING - This one's a little ahead of the shoebox, because at least purchases and cash withdrawals should be on a monthly statement. The devil's in the not-so-petty cash tin, though, and you'll be surprised to see what's running through that when you check.

VINTAGE BILL GATES - Some businesspeople I know well still literally do accounting on a rickety old computer in the corner of their garage. This includes hand-typed invoices and what little they know of spreadsheets. Nothing joins up and everything's disconnected. They still don't know what's happening.

HOME ACCOUNTING PACKAGES - There are lots of excellent ones around that come on discs and virtually self-install. However, there are three inherent problems. Few people bother to learn to use them correctly;they bomb if they don't pay annual upgrade fees; and, if their computer crashes, everything's gone unless they made the back-up - and few do.

ACCOUNTING

REVOLUTION

Thankfully, that's all changed, although some have still to appreciate the fact. Cloud computing accounting packages rent for a low fixed fee every month. What's really neat is that everything's stored remotely on a secure server, and there are real people on the help desk that are paid to help you succeed.

What is even more amazing is that you can access your accounting data via smar tphone, no matter where you are. In fact, the only software you ever need is a cutting-edge web browser that keeps up with progress. I think that's "case closed". Do you?

MAKE ACCOUNTING WORK FOR YOU

I'm unsure if I mentioned this before, but I'm also an Authorized Financial Advisor for Xero Cloud accounting - check out www.xeroadvisors.com. While I may turn over a few dollars by training new clients for them, my deeper purpose is to get accounting in the Bahamas in better shape.

And there's a long-term ulterior motive in that, too. If your business has respectable books, this opens up the opportunity to sell it someday to an offshore buyer with real money. Someday I may even shift your business for sale at a really decent price. Let's make some money together.

NB: Simon Cooper is a founding partner of Res Socius, a business brokerage firm, businesses for sale directory and consultancy service. Res Socius is authorised by the Bahamas Investment Authority to facilitate the sale and purchase of businesses, and provide consultancy services. Contact 376-1256, visit www.ressocius.com or scan the QR code below.