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RETAILERS: ARE YOU SKIMPING ON BOOKKEEPING PERSONNEL WHEN SALES ARE SLOW?

It happens everywhere.  It’s an epidemic that kills small business.

I had been a tax manager for a major US bank until they were acquired in the mid-90’s.  I recall that during my long tenure profits were largely linked to interest rates.  As a thrift, they depended largely on real estate lending.

It’s logical that when profits are down, management looks to cut back on general and administrative expenses.  Translation:  the people who don’t generate revenue.  The first place to reduce expense is by reducing accounting personnel.  After all, they are a drag on profit month after month, right?  You wonder why you’re spending so much money on personnel who open envelopes and record check payments, right?  Hmmmm.  If this is you, perhaps you should read on.

My introduction to the bicycle industry was through a consulting gig where I was filling in for a major bike manufacturer’s accountant.  She was on leave at the time.  Bookkeeping for the industry is typical and uncomplicated, especially when using a mainstream program such as Quickbooks.  I got through each day’s work in four hours.  Management may have noticed that they could save quite a bit by paying for four hours work rather than eight.

In my boredom, I decided to reconcile the bank account.  There I found something amiss.  It reconciled okay, meaning that check amounts on the books matched what the bank cleared.  However after looking at the check images I found checks recorded to shipping expense were in fact made payable to Petty Cash.  Plenty of them.  $85,000 of them over a two year period.  Yes, the accountant had written checks to Petty Cash and then cashed them over the counter at the bank.  While the GM was on medical leave earlier in the year, he had signed blank checks so that vendors could be paid.   Needless to say, the accountant was prosecuted and I was offered her job.  However, my skills were greater than that of a bookkeeper and, by hiring me, several tasks now being undertaken by the tax preparer, such as financial analysis and reporting, could be performed by me at a far lower rate.  Get it?  Pay a little more for personnel but get a discount far greater by eliminating work done by the CPA

Back to the bank.  Tax departments within Fortune 500 corporations hire some of the most resourceful and talented accountants.  They’re not cheap.  Back when a great salary was $85,000 these accountants commanded a salary of $150,000.  But, to a person, they saved greater than their salaries through clever structuring of transactions, and crafty management of tax audits, which resulted far less taxable income.  However, they seemed always to be the first to go when profits were down.

It’s far easier to protect sales personnel that are easily seen as revenue generators, than the back office accounting personnel that you think are just check payment recorders.

Maybe you ought to rethink this.  Maybe it’s time for a back office checkup.  Maybe it’s time for a different strategy that will bring greater sales when times are slow.  Maybe it’s time to bring Prime Velo in.

-Barry Riemer, Feb 21 2017

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Prime Velo Consulting

Headed by a former financial director for an industry leader, Prime Velo Consulting manages all areas of operations including: Starting up the Back Office Accounting for Inventory Collections Accounts Receivable Banking and Cash Management Asset Management Establishing Cost Financial Reporting Tax Planning Business Analysis Systems Training including Quickbooks
Prime Velo Consulting
Prime Velo ConsultingMonday, October 23rd, 2017 at 12:29pm
🚴 SHERIDAN, Wyo. (BRAIN) — Foldaway Solutions LLC, the distributor of Oyama Bicycles, Uniche and BTP Bar Tape, has has hired industry veterans Barry Riemer and Ken DeCesari. Riemer joins as CFP and DeCesari is the new vice president of sales.

Founded by Ken Fagut in 2015, Foldaway Solutions manages sales, marketing and distribution for these brands throughout North America. The company recently launched Oyama Bicycles in the North America at Interbike.

Through his consulting firm, Prime Velo, Riemer also serves as CFO for NYCeWheels (New York) and is an on-call financial consultant for Nikola Pedals and the Los Angeles Bicycle Coalition. He previously held the position of controller for Dahon North America.

FULL ARTICLE: www.bicycleretailer.com/north-america/2017/10/23/barry-riemer-and-ken-decesari-join-foldaway-solutions
Prime Velo Consulting
Prime Velo ConsultingSunday, June 25th, 2017 at 10:14pm
"The increase in e-bike popularity over the past five years has been nothing short of remarkable. In European markets like France and Sweden, sales in 2016 alone jumped between 30% and 40% respectively. That pales in comparison to motorcycle-averse China, which has some 200 million electric bicycles on the road."