‘Clutter is nothing more than postponed decisions’
-Barbara Hemphill, an expert in increasing profits, productivity, and peace of mind.
Have you felt the need to clear your workstation or house before sitting down for an important task? Do you believe a clean room, or an organized desk helps you perform better? If so, join the club. Tiny Tots did just that, have achieved clarity in their accounts, and can drive more profits now that all their accounts are squeaky clean and perfectly organized. Let us look into their story of how they overcame their bottlenecks by tidying all their accounts and refining their data with the help of AlPrime Capital.
Tiny Tots (name changed for confidentiality purpose) is a bilingual Nursery for children between 1 to 4 years of age located in Kuwait City. It is a thriving small business with Stellar feedback from parents of children for their solid foundation in value-based education. The vibrant business has immense potential to grow, with a current following of over 4800 followers on Instagram and effervescent reviews on prominent websites like Edarabia. Tiny Tots approached AlPrime when they found that their accounts hit roadblocks and were unresponsive to the changes they were making. They all mangled into a blackhole where the cashflows, invoices, and inventories couldn’t determine if there were profits or losses. The inventories were inaccurate, petty cash was uncontrolled, and it was impossible to track invoices as they were sent to parents on WhatsApp.
After assuring that they could revive their accounts from chaos, the professional experts at AlPrime got to work immediately. They found that due to inaccurate tracking of Cash in hand, which includes Staff loan repayments, Cash payments, and daily expenses, the petty cash balance always showed negative values indicating a loss. Besides this, they discovered serious issues in Inventory valuation and Invoice Tracking, which needed great mending to function properly.
Thefirst thing AlPrime did was start at the beginning of all the transactions andextensively conducted historical accounting, tracking every sale, everypurchase of inventory, and every payment by breaking down every account.
A temporary account for sales was created to evaluate the inventory and eventually merged with the Inventory General account after sorting out everything.
Different accounts were created to keep accurate track of various expenses, and the admins had weekly follow-ups until all the balances were properly sorted.
The invoices were linked to the payment gateway and automated to reconcile with the system. This way, recurring invoices were generated in each student’s name and automatically sent to parents while being recorded in our database. Also, the receivables list was sent twice a week to make it easier for the admins to follow up with the parents for payments.
In this ordeal of clearing up these accounts and heaps of historical data, AlPrime also discovered some other hidden issues that required immediate attention. So they took the initiative to
link the Revenue and Cost of Sales accounts to track profits' settle the prepaid rent payments for both branches.
analyze their fixed assets and depreciation, as they were incorrectly calculated thus affecting the current value of assets.
recorded the accrued expenses for the IT company for the entire year and settled their bills.
Imagine entering a freshly painted house, neatly organized, with everything stacked in the right place to exude sophistication and richness. That was how Tiny Tots felt after their accounts were reorganized and data automated with ease of tracking. Now that their Profit or loss is not only visible but also has clear indicators, it has become easier for them to make informed business decisions. All their balance sheets are categorized in conformity with the IFRS, accrued and prepaid expenses are clearly calculated, and the tracking of Petty Cash is accurate.
Tiny Tots has an accurate gross profit margin per service delivered owing to their recent success in accounting. We can safely say that they have an accurate picture of the company’s position, which is much better than what they saw before meeting AlPrime. Now that they got their house in order, they have more time and energy to focus on the bright future of their students and cater to them by creating better-quality learning programs and initiatives. Tiny Tots is a shining example of what the magic of clear books and a premeditated investment in a reliable accountant can do to improve your business.
