Mrs. Chioma Ifeanyi-Eze is the founder and chief executive officer of Accounting hub, a Lagos-based accounting company that helps small businesses and others to manage their accounts using technology. She spoke with Ikechi Nzeako on how her firm helps business owners to manage their accounts. Excerpts
What services does your company render?
We do bookkeeping and accounting for small businesses in Nigeria but we are focused on using technology to provide accounting and bookkeeping services.
What motivated you to start up this company?
I saw a vacuum in the industry; there are over 9,000 accounting firms in the country and most of them are not really technology focused. Each of these firms, especially the small ones, works for one to 10 businesses and Nigeria has over 40 million small and medium enterprises (SMEs). About 9,000 accounting firms are providing service to these companies.
You can see that there is a huge gap between the number of SMEs and the number of accounting firms that are servicing them. Unless you use technology you cannot work for many SMEs; the old accounting practice was done in a way that they would come to your office and spend days and days looking through your books. But using technology I do not need to come to your every day to do accounting for you and I can work for up 100 SMEs and more businesses can have credible numbers to make their decisions. These businesses need credible numbers for their taxes; for their business decisions and for their businesses to be sustainable.
When did you start the company?
The company was officially registered in January 2016.
How has it fared?
It has been amazing. We have worked for more than 250 businesses and we have employed and trained more than 20 accountants. It has been great and the market has welcomed our services. We have termed what we are bringing to the market as “tech accounting”.
The market has been excited about the service. We also do free training for SMEs to show what we can do. We wanted to do free training for about 100 business owners and when we asked people to register, more than 300 business owners registered and we are working on how to accommodate all of them.
We want to teach them the power of technology and accounting so that every business owner can on his own can to keep his records without papers that could be torn or records that could be destroyed. We want to give them the power to use technology to manage their accounts.
If you teach them to do proper bookkeeping, then they must pay tax and other charges.
How have business owners received the service?
Business owners have received the service gladly and Nigeria is fast becoming a country where you cannot evade your taxes. There is programme called Voluntary Assets and Income Declaration Scheme (VAIDS) where you are expected to come clean regarding your taxes; as a business owner your Bank Verification Number (BVN) is connected to your bank account and every tax you have not paid will be discovered. So you cannot evade tax.
Business owners want their tax records to be clean. There is nowhere to hide for anybody as far as tax is concerned; there is no place to hide. So you should be glad that some people want to help you clean up your tax record before the March 2018 deadline. Business people are excited and are willing to come clean in matters concerning tax. I did not know that business owners are willing to pay taxes.
What do SMEs bring to the Nigerian economy?
SMEs bring a lot of employment to the economy; for example, take the number of accountants that my business has trained fresh out of school. Apart from that, I improve entrepreneurship as I am going to train 300 business owners for free to do their accounting.
This is just me, one SMEs doing this. And I can imagine the impact others are making; apart from creating employment, we increase the per capital income of the country and generate revenue and increase tax to government. The impact of SMEs on the economy is amazing and there are more SMEs than big companies in the country. If you focus on SMEs, you cannot get it wrong and that is what investors and venture capitalists have seen and are running one entrepreneurship programme or the other.
Many of the banks in the country are also promoting entrepreneurship because they have seen what can happen in that space if it is properly harnessed. The banks give them loans and train them because SMEs are the drivers of the economy.
The mortality rate of SMEs in the country is very high. What can be done to reduce that figure?
The fourth in the scale of 10 why they fail is poor accounting because many of them do not have records and decisions should be based on records. It is when you see that you collected 10 post-dated cheques and seven bounced, if you have records, you would say you would not collect post-dated cheques again. You need numbers to take decisions. When business owners take decisions without numbers, they will subjective decisions instead of objective decisions and the business will probably die.
A car-washing firm that we helped to set up an accounting system told me that he looked at his record and was surprised to find out that he had washed 60,000 cars in one year. If he did not have that record, how would he know? He also found out that more people were doing interior washing as opposed to washing their engines. He was looking at the different numbers his system was generating. He now knows what service to do and what to stop. He could take all manner of decisions – branding decisions, marking decisions and investment decisions. He told me how happy he was because he kept records. Numbers drive everything; if a business owner has the correct numbers, you will be amazed at what he can do with them.
What challenges do you face in this line of business?
The biggest challenge is getting the talents; the accountants go to school but they do not learn enough. If you want to recruit one accountant, you need to do 40 interviews. You do 40 interviews and only two look as if they know what they are doing. What they teach them in the school is different from what the workplace demands; there is a wide gap between what is taught in the school and what obtains at the workplace. What we have done is write to schools, asking them to allow us come in and teach the students tech accounting. People need to go and learn tech accounting after they have left school so that they can be accountants ready for the workplace.
What is motivating you to go on in spite of the challenges?
The greatest motivation is I see that there is a need in the market and I am meeting that need. Business people reach out to us asking for our service; not only business owners but also churches and estates want our service. Alumni associations and others are asking us to do accounting for them. We are amazed that people have realised the value of keeping records and numbers.
What should be done to make the environment friendlier?
Power is a major issue; we spend too much money powering our processes and others. Government can encourage businesses in other ways; for instance, we want to train 300 business owners and we want to use a government facility on the island and we are being asked to pay; that is not right. We are doing this for free and we are being asked to pay for facility. We are doing a noble thing and should not pay to use that government facility.
There are many youths who have ideas and dreams but have started anything, what do you say to them?
Business is supposed to be learnt; people assume that they know business but they do not know business. The young people who have ideas should go and learn business; pick interest in entrepreneurship; go online and study.