Financial Audit of a Computer Club Network

The Task

Is it possible to objectively assess the network's financial condition and determine the actual profitability of the business? The data lived in three sources: Senet (ERP), manual Excel reports, and bank statements. Each source held a piece of the truth, but none provided a complete and reliable picture of the network's financial condition.

What Was Wrong: Diagnostics

• Senet (ERP): no accounting standards

  ERP system for managing sessions, tariffs, shifts, and bar inventory. Implemented without data entry standards, the reliability of information is questionable.

• Excel reports: risk of manipulation and errors

  Daily shift reports are compiled manually. Data is entered and verified by the same people, there is no safeguard against distortion.

• Bank statements: incomplete expense coverage

  Some transactions go through the managing partner's personal account and are paid in cash. Actual expenses are difficult to track in full.

• Risk 1: Financial audit impossible

  Three data sources contradict each other. Reconciliation is impossible without unified accounting standards.

• Risk 2: Low investment attractiveness

  Without transparent reporting, the business cannot be objectively valued or attract additional funding.

• Risk 3: No lease agreement

  For a B2C business, location is a key asset. Without a lease, it's impossible to protect investments, insure equipment, or plan long-term.

• Risk 4: Staff turnover and accounting errors

  High staff rotation leads to knowledge loss, procedural violations, and accumulation of errors in daily reporting.

• Risk 5: Mixing personal and business expenses

  Business expenses are paid from personal accounts, distorting financial results and making accurate profitability assessment impossible.

What We Did

• Unified accounting system: full Senet integration across all clubs with separate payment terminals and analytics by clubs and revenue types
• Staff motivation: tying KPIs to accounting system data to reduce turnover and improve data entry quality
• Separation of finances: complete separation of personal and business accounts for transparency
• Purchases via sole proprietorship: transferring all business expenses to the sole proprietorship for transparency and tax optimization
• Annual budget: budget development accounting for seasonality for planning and control
• Documentation: formalizing lease agreements, internal policies, and standard operating procedures
• Periodic reporting: building management reporting with regular periodicity for data-driven decision making

Result

• The client began implementing the recommendations

  Following our work, the client independently started closing the identified risks.

• Digitalization of revenue accounting

  Revenue accounting moved to a unified system (Senet) across all clubs.

• Lease agreement

  Lease agreements formalized with clear terms.

• Separation of finances

  Business expenses transferred to a sole proprietorship account.

• Management reporting

  Periodic management reporting set up.