Accounting Problems Case Study - Very Small Furniture Sales and Manufacturing Company

He finally had to close his doors, not because of theexpensive and he had to sell more and more to pay
economy, but rather due to the accounting andfor the triple-net lease, and things were moving well,
management issues. Specifically, he had over a longbut that meant he was forced to produce more and
period of time built up his business from scratch. Hemore inventory, but this meant he could never be
made furniture as works of art, beautiful stuff andone with his customer as before. He hired a sales
had developed quite a reputation for himself. In fact,staff to work the stores mandatory hours; 10AM to
he did not even have a showroom, he simply set up7PM, as per his lease agreement.
on the main road outside of town and folks stoppedHe had trouble finding the right people and they
by to purchase his hand made furniture and told theiroften sold the furniture too cheap or failed to give
friends.customers cash receipts. He eventually had to close
Eventually, the city expanded and then disallowedthe store, even though it was making money, even
road-side sales, so he went and got a retail space inthough he had so much demand he could hardly keep
the old revitalized section of town. Unfortunately, heup. All due to cash flow, management and mostly
was selling so much furniture that he could not be indue to accounting problems, unable to see where he
the showroom all the time, rather, he had to be inwas; he had no snap-shot of his financial situation.
the workshop, something that only he could do, dueThus, he could not get a loan, move his business to
to the artistic talent needed.the next step or capitalize on all the goodwill, he had
The center in "old town" was very nice, butcreated over the years. Think on this.