There are over 9,000 licensed accounting firms in Nigeria, but such services remain inaccessible to SMEs.
This is due to a variety of reasons. Prices are hourly, and high. Most such firms do not use modern technology, but are rather manual or Excel-based.
“These firms were not designed to work for small businesses – they did not understand their needs, they had long proposals of several pages, they don’t help you improve processes, they don’t offer any tools to help business owners, they just walk in, take records and do the numbers,” says Chioma Ifeanyi-Eze.
This is the problem Ifeanyi-Eze has set out to solve with her startup Accountinghub, launched in January 2016. Accountinghub brings together a collection of accountants and consultants to offer quality accounting services to Nigerian SMEs.
It provides a marketplace for bookkeeping and allied accounting services, with its online shop allowing businesses to quickly arrange and pay for a variety of services.
“Essentially, we are building Nigeria’s accounting factory,” Ifeanyi-Eze says.
“Accountinghub is the accountant who is a friend. We listen and care. We go to the laundry shop and help the business owner ensure that all uncollected clothes are logged in a simple inventory-tracking tool. We teach the facility manager business-owner to manage complaints from residents using Helpdesk. We help you draw simple flowcharts to understand your customer journey map and how you can collect your monies most efficiently. We even buy notebooks and calculators for clients who cannot use technology.”
Totally self-funded thus far, but seeking an investor that can help with more than just cash, Accountinghub has already worked with more than 200 small businesses of all kinds.
“Uptake has been great. The market welcomed us with open arms. It was a much needed business,” Ifeanyi-Eze says. “We have gained huge, huge insight into the issues which face small businesses in Nigeria and have been a great part of helping our clients improve their businesses.”
She would welcome a certain kind of investor, however.
“We are searching for the investor who is willing to transform Accountinghub into a full-tech startup, helping us build the required tools and reach our market more,” she says. “Currently, Accountinghub is only able to serve one in every six clients who reach out. Clearly, we need technological help to do more.”
Yet Ifeanyi-Eze says the uniqueness of the business is seen very clearly from its already healthy profits, and with no money spent on marketing.
“It is a peculiar business which requires an investor who is willing to give more help than more money,” she says.
Some help has been it hand, from the Tony Elumelu Foundation in the form of a US$5,000 grant, and Ifeanyi-Eze is thinking of expansion. Accountinghub currently only has a physical location in Lagos, but plans to launch in Abuja soon.
“Sitting in Lagos, we have served over 20 businesses in Abuja. We have some foreign-based clients who have local Nigerian offices or who require cheaper accounting services than can be obtained in their resident countries,” Ifeanyi-Eze says.
The startup make revenues from retainer clients, which completely outsource their accounting to Accountinghub, as well as one-off clients and resale of non-proprietary accounting tools.
“Revenues have been great, increasing month on month as more retainer clients sign up. The one-offs have also continued to increase. Profit has continued to be healthy, marking almost 50 per cent of revenues,” says Ifeanyi-Eze.
She says the greatest difficulty has been finding talent.
“Nigeria lacks very good accountants, especially those who blend accounting with technology. We have had to train young graduates from scratch. They come out of school with very poor appreciation of the accounting principles which they should know,” Ifeanyi-Eze says.
“So besides teaching them to use tech tools, you now have to teach basic accounting principles, like deprecation and financial statements. Talents was and is still the biggest challenge.”