Making sense out of your business

Growing businesses can look at outsourcing their finance and accounting processes
to companies like Business Sense.
By Heinz Bulos
June 2004

here is a critical period wherein a
startup company starts to grow,
especially i rapidly. 1he
entrepreneur who used to do eerything
now has people to manage, systems to
control, and lots and lots o paperwork.

It`s typical or startup owners to do their
own bookkeeping, or a semblance thereo.
\hat usually happens is, well, a mess. 1he
books are not updated, records are
incomplete, bills are paid late. 1he most
diicult challenge, howeer, more than
keeping the books, is proper cash low
management.

linancial accounting is dierent rom
inancial management. 1he ormer is
recording data, the latter is about
managing cash low. And or small
businesses, cash low is king. At that point
o growth, small business owners ind it
hard to und their expansion, and usually
end up using their working capital. Oten,
they use money rom the business or
personal expenses. But the most common
problem is not handling collections well.

1hat`s why many are orced to hire an
accountant to do the job. But they don`t
hae to necessarily add an in-house
accountant to their regular payroll. 1here`s
another alternatie: outsourcing.

Outsourcing option
ne company that proides
outsourced accounting serices
is Business Sense, Inc., although
its President and COO, lenry Ong,
preers to describe it as a inancial
adisory and consulting serices company.

Business Sense proides inancial
support to small and medium sized
businesses,` says Ong. 1heir serices
include outsourced accounting, payroll,
and internal audit. \hat makes it dierent
is that it caters to small- and medium-
sized companies, particularly those
companies that hae annual sales o P10-
20 million.`

Started three years ago by two partners,
Business Sense has grown to more than
twenty people, mostly certiied public
accountants ,CPAs,, with around 100
clients rom dierent industries.

Ong, an Applied Lconomics and
Accounting graduate at the De La Salle
Uniersity, is himsel a CPA. le used to
work as a stockbroker, research analyst,
research director, and inancial consultant.
le and his partner then saw a need or
SMLs to outsource their inancial and
accounting requirements, without paying
too much or high-quality work or paying
too little or sub par work.


\hat we did was we realize a lot o
companies are just starting, most o them
cannot aord a high quality CPA. Mostly
they hire resh grads and they end up
ixing their books later on because the
resh grads couldn`t do the job well.
1hat`s how we came up with this
company because we think we can help
them. \e can gie them high-quality
serice.`

Business Sense`s alue proposition is that
the company can proide high-quality
work at ery reasonable terms. 1he irm
1
O
charges on a per project basis or on a
regular ee.

By outsourcing inance and accounting
tasks, SMLs can ocus on what they do
best. Most entrepreneurs are ery good
in selling but don`t hae knowledge in
inancial management,` points out Ong.

Ong says their clients oten aail o
incorporation serices, tax planning and
bookkeeping, and accounting work. 1hey
also do oshore outsourcing, with clients
rom long Kong and Malaysia.

It is less expensie to outsource that hire
an accountant,` Ong explains, pegging 30-
40 saings. Plus, instead o just one
accountant, outsourcing to Business Sense
is like getting our people to do your
accounting`. 1he company assigns around
three CPAs and a manager or each client.

Business Sense's advantages
he industry is dominated by the
Big 5 companies. \hat they oer
is external auditing. \e also do
that. \e cannot compete with them
because most companies go to them
because they hae the name.`

\hile the Big 5 can only oer external
auditing ,they can`t oer consulting and
accounting serices, ater the regulation
imposed as an atermath o Lnron and
other accounting scandals in the US,, they
also hae their own companies that do
outsourced accounting serices, making
them competitors o Business Sense.

But Ong stresses that they are competitie
to the Big 5, adding that its people came
rom these companies. \ith the
signiicant saings in terms o ees, Ong
asks, \hy go to the Big 5 when you can
go to us`

It is, o course, to their beneit that many
SMLs cannot aord the serices o the
Big 5. \hat is more common is or them
to hire reelance accountants. Ong says,
1here are a lot o people doing this
|work|. 1hese are mostly reelance people,
ormer chie accountants who retired.`

le says it`s better to go to a company
because we are more structured. \e hae
organized this irm to cater to this kind o
market.`

1here are also some ly-by-night
companies that oer accounting serices
then disappear ater a ew months. Ong
says that their business is one o trust and
conidentiality.

1o remoe any doubts about their
capabilities, Ong adds, \e can also
guarantee conidentiality because our
company is a member o INPAC1
International.` INPAC1 is a network o
independent accountancy irms which
oer clients a ull range o serices in
many countries. INPAC1 is well
established in Lurope and the Americas
and is growing ast in the Paciic basin
and other regions.

As a inal adice to growing companies,
Ong has this to say: \hen you hae
growing pains, hire proessional help
when there are problems.`

1