Entrepreneur, trainer and chartered accountant David Benaim explains the importance of following proper accounting practices, the meaning of visualised business intelligence, and gives us tips on how to become more efficient in the workplace.
B2B: Why is accounting important for small businesses in Cambodia?
Benaim: People often think of accounting as the tracking of finances to comply with regulations such as tax and audit. Many small organisations do not have strict requirements in this area, so this area of financial accounting is often prioritised less. The other side to the profession is known as management accounting, and it involves understanding historic financial performance and position in order to plan for the future.
Computerised business intelligence is the process of analysing internal business data in order to help businesses answer questions like: Is the pricing right for the market? Should we discontinue certain product lines? How can we shave off excess costs affecting performance minimally? How can we better manage our cash flow through the low season? Key indicators are summarised in a one page interactive visualised dashboard upon which management will base future decisions on.
B2B: What is required to build visualised business intelligence dashboards?
Benaim: A three-step process is required for visualised business intelligence (BI). The first step is data capture. This is normally done through internal software such as accounting, point-of-sale (POS) and customer relationship management (CRM) software or other computerised systems. A challenge with this step is that the data must be reliable. Often I encounter that paper records may be correct but the computerised system data is not.
Step two involves bringing the data into the business intelligence software program. Microsoft Excel (although used as such, Excel is not full BI software) is the commonly used one, but more specialised, advanced packages can produce live data. Microsoft Power BI and ClicData are affordable small business solutions. The third step is to summarise and aggregate information to then present it in a neat, clean and interactive way which fits in with the organisation’s key performance indicators.
B2B: How is accounting practice developing in Cambodia?
Benaim: Cambodia was one of the earlier countries to adopt the International Financial Reporting Standards (IFRS), effective from 2012. Most countries globally are converging towards the same goal, but it is good to see that Cambodia is one of 90 countries to have fully adopted it to date. The challenge in a country like Cambodia is that IFRS can get very complex and experienced accountants are needed to facilitate with adhering to these reporting standards. Smaller entities often have little knowhow with managing complex accounting rules such as depreciation, inventory or accruals, and can find conforming to these rules a challenge.
There are also more and more students getting through the certified accounting qualification which is lovely. However, the numbers of qualified accountants is still low compared to the upward trend from the ever-expanding economy.
B2B: What advice would you give to anyone wanting to open – or already operating – an accounting business or wishing to work independently as an accountant in Cambodia?
Benaim: I would advise accountants wanting to work here to become proficient at using accounting systems -QuickBooks and Peachtree (renamed Sage50 in 2012) are most commonly used. It is also important to understand the law, the requirements. Like starting any service based business, networking, creating strategic partnerships and going above and beyond for your clients is key to creating a strong reputation; this is paramount for the success of your business.
B2B: From your experience in Cambodia, how can organisations save time and reduce errors in their day to day accounting and analysis tasks?
Benaim: People often view an accounting system as an afterthought, when data is primarily recorded on paper and Excel, and is then manually typed a second time into the accounting system. Efficiencies gained from areas such as electronic invoicing, tracking unpaid bills, tracking stock, reconciling bank accounts and several others are often lost due to systems not being used to their full capabilities.
At Xlconsulting – we are big advocators of the paperless organisation. Sometimes policies require processes which improve security slightly but take much more time and paper to be implemented. This may include various forms being printed and signed (sometimes by multiple people). Using modern cloud systems could save not only time but office space and trees as well.
Data clean-up and analysis is also an area where learning a dozen or so tricks could shave hours off every month for each staff member. As someone with the highest academic rank of Excel and QuickBooks Online qualifications, I feel confident saying that these are areas where many businesses can drastically improve their efficiency.
Another fantastic piece of software is Receipt Bank. It allows users to take photos of receipts which are then uploaded automatically to your accounting system, keeping the receipts in a searchable place forever; no more data entry or files full of receipts!
B2B: What challenges has Xlconsulting faced since it first began and how has it overcome these?
Benaim: Challenges often come in trying to change an existing system or process. Resistance occurs because it has been historically done that way rather than because of reasons applicable today. It is sometimes difficult for businesses to understand the efficiencies that can be gained if they have never seen the product before.