Today was spent on mostly figuring out how to setup the accounting structure for the various companies under RedStores.com umbrella. In particular, the key aspect driving daily bookkeeping function is to know to which company certain transactions should be booked. That also implies that contractual relationships between the entities need to be established, and those then, need to be validated for tax and regulatory compliance in all the countries we operate in.
So, what we are moving to is beyond account (which that in itself is just basically data entry) but into the design of corporate entity relationships as they relate to each country.
Considering in there, we also have to look at how we would report against these various entities using cost centers (that may span a number of countries) – how to book various charge, where. We enter into the zone of transfer pricing, entity relationship.
At the bottom of this, we need P&L, Balance Sheets for each entity – and in addition, global consolidate reporting that brings this all together.
So, I’m tackling this with a number of ‘attacks’ – looking at hiring a consulting accounting management company to help with the architecture, onboard a controller (tomorrow).
From the overall strategy, SOP, Policies will fall out – which will then guide us into the future.
So, essentially, from the finance point of view, I am architecting the whole structure from ground up.
Beyond this, I’m working on a shareholder agreement with a lawyer out of Cali, to enable me to onboard investment. BUT for that, I need P&L, Balance Sheets, etc. So, time is of the essence to get things setup for this new structure. Sounds easy, I know, but when you factor in the various countries, gets a bit more challenging. Nevertheless, this is not rocket science, so its just going to take a bit of hard work and determination. Once this is in place, all my systems in RedStores will be 100% ready to launch. Then, with this in place, I will be free to concentrate on growth related activities.
Speaking of which, I have been considering purchasing some US based pearl competitors to expand our market reach. Having a shareholder agreement, in the footsteps of Rockefeller, would enable me to do cash/stock purchase deals – which could be quite interesting to smaller players.
On top of this, I’m thinking of the dividends structure and some rules how to govern that – that will (I think) will need to be setup pretty early as it would enable would be investors to be able to get not only count on a 20x flip, but also have a security that slow and steady they could actually get their investment back without a flip (and then still have ownership). So, its kind of nice to be in a place where dividends are considered – and they are.
So, basically, I’m enabling myself with a number of tools to play with in the future – these tools I will need to expand quickly – and all of that is grounded on having a solid, well designed financial system.
So, as you can guess from this, my ‘rock’ for this quarter and beyond is to get the financial system in place. Then I can play some serious chess!