Accounting & Bookkeeping

Accounting and bookkeeping are two different subjects.  Accountancy defined:

Accounting, or accountancy, is the measurement, processing and communication of financial information about economic entities.[1][2] Accounting, which has been called the “language of business”,[3] measures the results of an organization’s economic activities and conveys this information to a variety of users including investors, creditors, management, and regulators.[4]

Now, bookkeeping on the other hand is the:

Bookkeeping, in business, is the recording of financial transactions, and is part of the process of accounting.[1] Transactions include purchases, sales, receipts and payments by an individual or organization.

 

Accounting for all that it seems dry is vital for a business to be run well – bookkeeping is what you need to do to get the data in the first place.   Once you enter the data, it’s figuring out how to make it work for you that makes a business work.

Management Accounting

Talk to an accountant and they differentiate between financial accounting and management accounting.  Financial accounting reports on what has happened, management accounting is based on figuring out how to use the data that you have to tell you how to run your business.

Over a decade ago, when I was doing my dissertation I decided to focus on the connection between the accountants and the marketers.  The results were appalling – at least for someone who ‘knew’ what should be done.  These days, things have gotten a lot better – with bigger companies.  Smaller companies though still struggle to get the data in the right place at the right time.  Unfortunately, the information is still just not there.

In the Business

So let’s talk about the kind of reporting you want / need.  At the most basic level, you have sales and the cost of goods sold and the inventory you carry.  Then you have your various expenses that you’d want to track.  Assuming you are all tracking the same information (in the same way), the first step is to benchmark your data as best you can – if your expenses are significantly out of line with your peers, you know what to tackle.

Sometimes, that just means making a few phone calls.  Your internet bill seem a little high compared to everyone else? Well, perhaps a little Google-fu and a few phone calls can get you a better deal.  It’s amazing the amount of leeway a lot of account representatives have to provide you a better deal, if you push them hard on it.

The other benchmark to track is your expenses against previous years.  Has something gone up or down compared to previous years? Don’t just look as a straight numerical value but as a % of your total expenses – sometimes, a change is just inflation; while other times it’s because it’s of new charges thrown in that you were not aware of.

After that you can start looking at fixed and variable costs.  Realistically, in the long-term everything’s variable (rent changes too, just in bunches of years rather than monthly) but it’s worth tackling your variable cost immediately.  Those are by definition things that are easy to alter – while fixed costs often require significantly larger expenditures of time and sometimes capital.  Breaking up expenses so that you can watch for changes in either is extremely important.

Now, let’s talk reporting.  Sure, you could get reporting at its highest level (and that is useful for a bird’s eye-view); but really you want to break things down a bit more.  You want to break up your sales to what makes sense for your business – sales categories would be things like RPGs, Board Games, Miniatures, CCGs, etc.  Same with Inventory and Cost of Goods Sold.  Once you have reporting by that level, you can judge how you are doing based off the margins and how much of each type of inventory you have.  You can figure out turn rates and revenue per square footage.  Without that information? You’re guessing.

What other reports do you need? Well, for retail:

  • Shrinkage (aka theft / weird ass disappeared items)
  • Shipping charges
  • Interest charges (oooh, these are important if you have loans)
  • Cashflow statements
  • Accounts payable / receivable (who you owe / what is owed to you – great for figuring out cashflow and what’s due!)

I’m sure there’s more that’s skipping my mind but this post is getting long.  Take a course in accounting, take a few.  Understand what the books are meant for and what you can do with them – and then ask yourself the question – what do I want to know? You make the numbers dance, but only if you know the tune.

 

How to Pack a Game Box

So, we pack and ship a lot of games.  If you ever have to ship a box of games, here are a few tips and things to look out for to reduce dings.

Why boxes are damaged during shipping:

  • Box contents are too heavy
  • Cardboard box material is too light – often results in dinged corners when the packing box is dropped corner side up.
  • Items are packed flat and stacked on end (i.e. horizontal and vertical at same time)
    • this often leads to the horizontally packed boxes pushing into the vertically packed box causing crushing damage due to weight of the horizontally boxed games (possible even when resting)
  • Games slide around on the inside of the box due to no packing material
  • Forklift driven into box

General packing tips:

  • Use the right sized box.
    • Slightly larger is best as you can then use corner protectors (cardboard cut and inserted in corners)
  • Try to keep it to the same size items if possible (often not)
  • Use packing material to fill ‘gaps’ when items are of different sizes.
    • paper is great for volume but not in tightly packed corners
    • use cardboard protectors at edges of box to give extra stability or where horizontal / vertical boxes meet especially if there is sliding space
    • styrofoam peanuts are great for weird sizes which require more stability.  Shake the box a bit once you add peanuts, it’ll settle them and sometimes require you to add more peanuts for stability
  • If possible, keep boxes packed if there is a significant weight difference between boxes and/or a game box is significantly thinner than normal (e.g. RoboRally, Dust Tactics Core Set)
  • Pack so that weight is towards the centre of the box.  If it is weighted towards one end or the other, it makes the box easier to drop
  • Seal edges especially for heavier boxes (otherwise the box gets picked up by the edges and can cause tears and dropping)
  • When box is sealed, there should be no movement in the box if shaken.  If there is, repack!

What you don’t have to worry about:

  • If you are using heavy (industrial) cardboard; the games can be right up against the box.  The cardboard material in the box added to the gamebox material itself will protect it against most drops
  • Sleeves can be used as packing material if you are shipping them – they compress nicely and can’t be ‘damaged’ per se
  • Inserting cardboard between packed boxes.  If you pack the box right, there should be no sliding so this is unnecessary.