5. FaceBook Travel Financial Software
Now I’m sure few would have had as much bad luck as I did, mine may be an extreme example, but I’d like to illustrate my experiences.
I did the accounts myself until 2004, easy enough, I just used a spreadsheet and cross referenced it with the bank, (who knows what people did before online banking) But as my business grew, I was needed else where, so I picked an accounting firm, and they appointed a book keeper. They advised using Pastel accounting Software, and who was I to say different.
6 months later, no one knew when the final deposit, (50% to 80%) was due to be paid, and I found my original spreadsheet had been discontinued. On investigation I found that some guests had come and gone without paying and from that point onwards I was on the back foot, having to roll money.
I then met with a more reputable firm Ernst and Young Accountants, and maybe if I’d have stuck with them all would have been fine, but instead, an excellent qualified accountant applied for the job, he advised me Ernst and Young were far to expensive and he could easily do the job, so I went with him. Turned out he was actually a builder that had a little book keeping experience and a bunch of false certificates. (Something extra for the CRM to do, check certificates) Next came Fatima a self proclaimed expert at Pastel,
Well after a year Pastel was still not working, and on investigation there was over $100,000 missing, either from negligence or fraud, we went to the police fraud division only to find we would have to pay the police $40,000 to open a case, as they needed to pay Price Waterhouse & Coopers.
Ian Buchannan, again a self claimed expert at Pastel, 20 years as Financial
Manager in his last company that had a turnover 10 times what ours was.
All looked good and at the beginning of 2009 I was told we were in the
black, I could buy a new Mercedes CLK AMG and make a significant charity
donation. Luckily I did not as 4 months later he came back, tail between
legs saying he was wrong and we were actually $150,000 in debt.
An example of which happened just days after I was told it was fully operational: A guest had moved villas as there was a flood. I just wanted to check that they had not paid the original owner, and OMG they had, and they had paid the second one, a loss of $5,000. And this was a system that was costing me $5,000 a month to staff.
I’d had enough, and was now significantly in the red, so I completely downscaled my operation from 38 staff to now 3. There was no point making money just for the financial staff to loose it all. And I was not going to build the business up again until there was an automated accounting system, so I decided I needed to make one, and that brings us full circle to February 2011 and the start of what is now this very proposal you are reading.
Well I’ve had my gripe, and for the most part I’m sure few have had such bad luck, but one thing is for sure, there is no automated financial software customised for the Travel Industry, and if there was, most would use it.
The main thing that needed to be done is eliminate all human interaction from the accounting process, not only does this avoid data capturing errors and fraud, it also save’s money on staff.
We have seen how the CRM works, between client and FaceBook Travel Agent or Reps. All the client information, is stored in the “client details/booking suite”. This is essential as it avoids the first layer of possible human error, being the Agent or Rep, having the wrong dates, or worse (it happens) as we have created the “client details/booking suite” we alleviate all data capturing errors by simply asking the client to “sign of” on there enquiry. No possibility for a mistake, unless made by the client. And even then, chances are the client will pick it up themselves at a later date.
Once the client signs of on there page, the information is automatically transferred to the financial model, how much is due, when its due and in how many parts, plus how much is owed to suppliers (accommodation venue’s) Here again we are alleviating human data capturing errors as the client information is automatically transferred and not manually done by a human.
the basic principal of the CRM link, accurate client information placed
into the financial model, ready for banking and payments.
Capturing data every day from a bank and inputting it into either a spread sheet or financial software is boring, monotonous and time consuming, there is a lot of room for human error. By linking the financial software directly to a bank, we eliminate these mistakes and save money on admin staff.
I’m sure it can be done, my South African Bank FNB were working on linking their bank to reservations software, a few years back.
Chances are we will start with one bank, and advise all would be FaceBook Travel Rep’s and Agents that they will need to open a new account with this Bank, but that’s not really an imposition for anyone.
In the long
term, considering whilst the financial software is initially being made
for the Travel Industry, we will also be adapting it to other FaceBook/S-World
industries, eventually it would be best if the system linked to all the
banks, but first things first.
I’m pretty certain, considering FaceBook members will be opening accounts with what ever bank we use, we will be able to get banks to bid for the contract, and by the time I’ve had a month or so with FaceBook’s team, we would be able to put a proposal together that really shows a great opportunity for any bank, and so I’d be disappointed if bids were over a US$ Billion. Banks are making that each month, so they can definitely afford it.
Another opportunity for our bank is to make a switch, which would automatically transfer money from other banks, making our software work with every bank. The bank that makes the switch however gets a small percentage of every sale, which adds up. (Or something along those lines)
Having the client payments going directly into the system, not only assures accuracy and saves time, it also picks up small discrepancies in payments which occur in EFT’ due to bank charges and currency conversions. These charges are really annoying from $1 to $100, often for small amounts, its just not worth the time to chase and re invoice the clients and so anything under $10 or so just got left, an expectable rounding error. Which doesn’t sound like much, but if you look at http://en.wikipedia.org/wiki/Chaos_theory you will see that there’s a lot of clever people saying it could be a big deal! And if you add it up over the years, it’s significant.
Of course a fully automated system would, handle all such discrepancies.
Now here is the part that makes this software utterly essential to FaceBook Travel, paying the venues and suppliers. The usual system is for the client to pay there agent, then the agent pays the venue.
There’s just too much that could go wrong, agents and reps spending the client’s money for one, and Tax & VAT implications for another.
As soon as the money hits the system it gets paid directly to the supplier, or a FaceBook trust account until the supplier account is due to be settled, an interest paying FaceBook account that is. Unlike real estate or long term lease deposits there is no rule or law saying one has to give interest back to the client.
As I mentioned previously, I spent 6 years and probably $250,000 on trying to get what I call total reporting. So I’ve had 6 years of thinking about what I’d like to know. In essence from a CEO or FaceBook Agent or Reps perspective, we would want to know the bottom line calculations in certain areas, Profit and loss, Expenses’, Turnover and Overall Debt/Profit balance if all debts were paid and all credits received. Having this information at hand in a very simple way will be invaluable. Especially as we tried our best to make intelligent software, that not only showed us what’s what, but also showed us, what will be, taking into consideration seasonal trends and global economics.
So not only does one get a standstill, one also gets a profit forecast, based on said trends, if one was thinking of moving to a bigger office, one could put the new expense into system and you will see your year end profit go down, or even see that such a move would put you in the danger zone.
It would also be nice if the system could react to dry spells, say one had a few bad months, it would pop up a profitability warning, with recommendations of how to cut costs, retrenchments, scaling back on luxuries, or even a lower salary for the boss. Whilst this would be incredibly useful for the FaceBook Travel Agent or Boss, it would also be useful for FaceBook Travel to monitor agents or reps that are irresponsibly ignoring the warnings.
Lastly on this, I’d like to mention that the system will also have to deal with all financial matters, not just bookings but staff salaries and associated taxes, Office Rent, Bills etc, etc...
Paying auditors is an annoying expense, and again there’s lots of room for Data Capturing errors. I wish the software to create and submit government ready audited accounts, and automatically pay taxes.