Common Grounds originally processed their transactions using a combination of Excel and manual Point of Sale system. This method of bookkeeping and tax reporting was not very efficient and prone to human error. As the brand grew to multiple outlets, the volume of transactions overwhelmed the back office team. Financial reports were progressively inaccurate and often released months late.
AKRUA’s team was introduced to the operational team to implement various measures to improve data processing:
- Sales Reconciliation and Revenue Recognition: We introduced a daily reconciliation process to push sales and payment data from the POS system into the accounting software. By performing the reconciliation daily, the operational team became more disciplined in entering data accurately and mistakes were identified and corrected quickly.
- Implementation of Perpetual Inventory Method: We implemented a product tracking function for purchases within Xero so the operational team could identify the historical purchases of each product. Stocktake reports at the end of the period were processed into Xero to create the resulting Cost of Goods Sold/Inventory journal entry into the system. AKRUA’s team also collaborated with the operational team to identify potential wastage sources.
- Implementation of Proper Procure-to-Pay purchasing flow: We implemented a standard operating procedure where the operational team has to match the information between purchase order, the resulting goods receipt, and the vendor invoice to prevent potential fraud and/or data mistakes.
- Implementation of Timely Monthly Closing and Financial/Tax Compliance: We helped the operational team in preparing the month-end book closing on time (5-10 days after the end of the month), receiving approval from the management. Problems that prevent monthly closing were quickly identified and resolved. AKRUA helped to ensure that the operational team were able to close and prepare financial statements timely and accurately so management could make informed decisions.
This implementation and collaboration between the operational team and AKRUA’s consultant took about 3 months to complete. After the end of the implementation period, the client continues to engage with AKRUA to collaborate with the operational team in overseeing the financial reporting and tax compliance.