VillageMall -Service Providers
The inefficiencies within the accounting services industry present an ideal
to change the way small businesses and accountants interact and utilise data and
information technologies. VillageMall®
objective is to reduce the total cost of accounting through efficiency, economies of
scale and productivity improvements in the ‘accounting process’ and thereby
generate higher profit margins than any other entities providing general
accounting, bookkeeping and related services to small businesses.
Research conducted in 1994 by Victoria University showed that over 60% of
"suburban" Accounting Practices’ time was consumed doing compliance work. The
Australian Society of CPA’s estimated that an increase in this workload of
20%-40% was imminent with the advent of GST.
believes small business proprietors rarely physically meet with their
accountants. Generally speaking, Accounting is the only profession of the three
major professions (i.e. law, medicine and accounting) that does regular ongoing
work for their clients. The other two are generally used when a particular need
Due to the current functionality of software systems and
traditional (entrenched) industry practices, accountants’ work is normally
carried out on a ‘one client at a time’ (professional) basis and charged out to
that client at an hourly rate.
believes that existing compliance and general accounting processes are
inefficient, cumbersome, labour intensive and expensive to manage. In the same
has successfully pioneered superior ways of developing and deploying Business
Solutions, we have applyed the same principles to the provision of services
Revenue is derived from customers who pay an agreed monthly fee for the service.
Revenue is recurring as long as the businesses subscribe to the service.
Business Services retail-clients are charged a fixed monthly fee based upon the number of
transactions recorded for the particular business each month according to
pre-determined plans (simular to mobile phone plans). A small fee is also charged each month for each
person employed by the small business if clients use the payroll component of
the service. A wholesale pricing structure is available to accountants on a
The Profit Model
Labour in the accounting
practice is the single biggest cost attributed to the delivery of accounting
services. The 1995/96 ABS survey conducted on the accounting industry reported
that the majority (87%) of accounting practices made a profit; however, the
industry average operating profit margin was only 19.4%.
The following survey findings are of particular interest:
for each qualified person (accountant) employed in the
practice only 0.8 unqualified persons were employed;
56% of all practice overheads were taken up by direct
employment costs with a further 2% on labour hire. That is, 58% of all
expenses were direct labour costs.
VillageMall® believes that by utilising the Business Service approach, approximately 15
unqualified persons will be employed for each qualified person employed. This
improvement in the qualified/unqualified employment ratio should reduce
employment costs within its operation by 20% relative to the average accounting
believes that "throughput" per employee will also be improved by in the vicinity
of 30% due to the overall efficiency gains achieved in part from operators being
skilled in performing repetitive tasks, through the superior capabilities
built into the VillageMall Business Solutions and the ability to balance the
workload across time and multiple companies.
These levels of cost savings would provide VillageMall Business
services with an operating profit margin of approximately 50% compared
with the average for accounting practices of nearly 20% in the 1995/96 ABS
Irrespective of the eventual operating profit margin figure,
believes its margin will be greater than that of most current accounting
practices due to the greater efficiency gains achieved in its
Business Services model, and use of its own superior
offers a single integrated business solution (more than simply
accounting) to a wide range of small to medium
business with 1 to 250 employees.
Services Client Advantage
The promotion and selling is largely based on the real value (i.e. benefits
less costs) that
can offer the small business, namely:
(a) Cost Savings
no need to purchase software, upgrades or attend training
no need to upgrade current computer hardware;
reduced (or nil) professional bookkeeping costs;
no software support contracts;
no requirement to keep abreast of changes to taxation law
more than simply accounting, a total business solution
(b) Time savings allowing the business to focus more on ‘taking
care of their business’:
eliminated or reduced data entry;
simpler use and administration;
more meaningful reporting.
(c) Greater convenience allowing data to be entered and the
financial information viewed from anywhere and in real-time by all parties.
(d) Increased cost control by fixing costs to a contracted
monthly fee payment.
(e) Better management and planning of cash flow through a "BAS"
function showing real-time GST and Income Tax payments required by the small
Single Business Solution for all clients
Extend professional services beyond simply accounting
Potential fee revenue increases through the ability to offer
an outsourced bookkeeping and payroll service to existing clientele. There
will be greater transparency as clients will actually "see" what the practice
is doing for them every single day;
Greater exposure to client’s business and more control through
access to real-time accounts information and all source documentation in
Potential increases in profit per client by value-charging
whilst achieving a significant reduction in compliance staff costs and other
Accelerated client growth by freeing up and redirecting
existing staff resources to:
broaden the delivery of other services;
acquire new clients (for both compliance and advice work);
Greater time availability for partners to spend ‘on’ the
Allow for more flexible and cost-effective management of
multiple site practices.
No expensive IT infrastructure, or Software required
VillageMall Business Services use the following skills:
If you have any of the above skills and wish to be part of the
VillageMall network of service providers please
Note: VillageMall is currently processing Wholesale service provider
partner requests; potential retail partners may register their interest and
will be advised of any future retail programs within their area.
* normally same day service activation.