Ok – for the programmers out there, the ! means NOT – so the title should be NOT easy week. Smile

So, one of purpose of this blog to share the good, the bad and the ugly in how make things go.

This week was a tough week.    One of my big issues that I have blogged about before has been the lack of an accounting system to give me firm bottom line.    I have been getting by on spreadsheets and estimates, but in the end, if the numbers are not coming out of bank accounts – it can be all a work of fiction.

So, two months ago, I had to make staff changes in Finance, because after 10 months I still wasn’t getting a HARD P&L.

I brought in a consultant to help out.    With his help, we made some good progress – started to have a strategy on how to deal with accounting for thousands of  monthly sales transactions coming into the system.   We actually took it beyond the strategy, and actually started doing it which is even better.   

And so, I was very hopeful, that when I asked to get an August P&L, I would be able to see HARD numbers and help me understand how my ‘spreadsheets’ work against the real world.   The review was on Friday – and the outcome: the consultant left the company, for good, 5 minutes after I saw the results.   Yep, for some reason, whatever we are doing, is chewing up and spitting out accountants.   

One of the fundamental issues that I see with this, is that I have had no experience with accounting systems and as such am able to offer zero guidance as to how things should be setup.   I know what I need – that is clear – but the path how to get there, not so clear.   And so, my guess is that, that I have brought on people that are very specialized in some areas, but struggle with the complexity of a multi-national setup.   They where actually all good people – but somewhere between what I needed, what guidance I could offer, and their experience and knowledge set,  things didn’t add up to 100%.

And so, the good news is that over time, I have learned an awful lot about the issues accountants have run into and I believe that I can now offer some insight into next steps.   Again, my view in tactical terms is not very long, since its all quite new to me, however, I can at least see 2 or 3 steps ahead.   

So, some of the results that this has on me.

My cash flow has been very tight last few months.    I have managed it, but I really wanted clarity and HARD facts as to why it has been so tight.  None of my forecasts predicted it (spreadsheet based) – and so it implies that there is something going on that my spreadsheet forecasts don’t model well.    This is where a HARD P&L for one month would have been terrific as it would have enabled me to look and see why am I hard on cash-flow, when for months I thought I would be sailing through this period.

Of course, I knew I was pushing my cash-flow hard – lot of the spare money has been used to fund RedStores.com.  (more on this later).     My legal costs fighting the divorce, travel associated with that, etc.  have also made a difference.   BUT, non-the-less not of those things explain everything.

So, a HARD P&L is the key for me to get smarter.    And now, in absence of that, I’m back to using my spreadsheets and validating them against reality.

The outcome of this, is that October is going to be a cash-flow challenge.    The yearly results are looking good, and we doing very well in terms of Sales and our forecast is very strong.   We did some smart things a couple of months ago, and its helping. 

But the short term is that we have to ask suppliers to accept slightly longer payment terms for next two months.  I  cut back for 1 month on any extra spending on future related projects such as MyJeweleryCove and SilverDevotion.    A real, real shame, since we have been getting VERY good traction – and stopping things is not a good thing.   But, as a friend once said “It is what it is”.

So, a very frustrating experience for me.    Where as I wanted to work in the “Planning/Designing” zone, I have been pushed into the “Immediate/Urgent” mode which is not a very good state – a stressful state (as per Steven Coveys).  So, I will have to do a bit of firefighting this month, and meanwhile try to keep as much of my energy as I can in the “Planning/Designing” part.

And, onto the good things, last night, I posted on theBeijinger.com a Quickbooks Expert add – this morning I have a 5 replies – and one gentlemen is looking good.   Will be spending few hours today on the phone going over the basics, and then continue on with the work.    I though they said its “3 times the luck”? or something like that.  Perhaps for me it will be “5 times”.    Non the less, with each engagement its going to closer and closer to what I need, so the key here is blind perseverance to get an accounting system in place.