On Site Music Retail Consulting

In response to the growing need by music instrument and product retailers for "hands-on" financial and operational guidance, Friedman, Kannenberg & Company, P.C. has developed on-site "Music Retailer Consulting Services" that deliver specific, timely, meaningful, valuable and affordable consulting services to management of music instrument/product retail stores. We will (1) assist you in identifying problems inherent in your retail music store operations, and (2) assist you in implementing appropriate changes to your business operations based upon our engagement findings.

We've structured our on-site engagement into two distinct "phases", which will enable us to systematically review your operations, identify problems and/or weaknesses, and make specific recommendations to correct those problems and/or weaknesses. This approach comes from having worked with several different music retailers in providing predominantly two types of engagements: (1) Retail Operations and Inventory Management engagements, and/or (2) Accounting and Computer Systems Review engagements. Given the importance of these two distinctly different areas of operations, our consulting engagement is now a hybrid of these two types of engagements, as most music retailers rely on their accounting and computer systems to assist in performing retailing and inventory management functions.

The following describes some of the specific tasks we typically perform during our engagement. By describing and discussing each of these tasks in advance of our arrival at your store, we are able to help you decide if there is a specific area of store operation you would like greater focus on during our engagement. In summary, we can "tailor-fit" our consulting engagement to address your specific needs, as well as help you identify the true source of the problems your store is experiencing.

RETAIL OPERATIONS AND INVENTORY MANAGEMENT REVIEW

The Retail Operations and Inventory Management Review phase of our engagement includes interviews of key personnel to document their job responsibilities and determine whether they're experiencing any difficulties in executing their job tasks. We will review various accounting reports, financial statements (both internal and external) and tax returns to determine the adequacy and timelines of financial information.

Although we will review many areas of store operations, we will focus on your inventory and its management. Our inventory review not only analyzes inventory levels, turns and trends, as well as inventory sales and profitability by grouping and/or department, but also includes our opinions on the mix of inventory, product lines and product. This expertise is not only invaluable, it's virtually unheard of in an accounting firm.

Our findings typically result in a range of specific recommendations, from correcting flaws in purchasing methodologies to presenting a seminar to your store's sales and administrative staff on inventory management and buying strategies (similar to the seminar we present at the NAMM Trade Shows). We will be prepared to present such seminars to you and your staff, as we travel with our portable computers and projection systems.

ACCOUNTING AND COMPUTER SYSTEMS REVIEW

Over the past few years we've confronted several accounting issues and problems specific to music instrument and product retailers. These accounting issues have included "rent-to-own" instruments, trade-ins and consignments, floor-planning, sales commission compensation plans, and debt financing, to name a few.

Additionally, we have worked with several different music retailers using very different computer systems, network operating systems and accounting software. Given our extensive knowledge and experience with several different computer system configurations, we have been able to test and work with a variety of accounting software packages under different operating platforms. Accordingly, our services in the Accounting and Computer Systems Review phase of our engagement will include an on-site review of your computer system, accounting software and other pertinent business software applications. We will assess the reporting capabilities of your accounting application to help identify whether store operations are functioning properly and adequately reporting their activities. CLICK HERE to view some of the music industry-specific accounting software packages we’ve worked with, as well as some of the more popular general accounting software packages we’ve worked with.

Our findings typically result in a range of specific recommendations, from making specific recommendations to modify the flow of data in, through and out of your computer system, to making recommendations of new accounting software packages, computer hardware and/or operating platforms, and subsequently, the training of store personnel on the use of any new accounting software.

SPECIFIC RECOMMENDATIONS

After our review and based upon meetings and discussions we will have with you and your staff, we will make specific written recommendations to implement into your store's operations, thereby correcting any visible flaws in your operations, accounting, data management and/or personnel.

As previously mentioned, we anticipate our comments and recommendations will also include an assessment of your internal accounting controls, your computer system hardware and your accounting software application(s). We will specifically identify whether we feel your current accounting system (whether manual or automated) provides your store's management with an ability to process, report and monitor inventory purchases and warehousing, customer sales and invoicing, accounts receivable, accounts payable, payroll and general ledger to provide timely financial reports and statements.

If need be, we will be prepared to help you identify a versatile, comprehensive and widely-supported accounting software solution specifically for a music retailer. We will address related software issues, such as the ability to integrate your accounting software with other applications, the ability to obtain on-going software updates and modifications, and your software's adaptability to new technologies (i.e. bar-coding, the internet, EDI, etc).

ENGAGEMENT STAFFING AND TIMING

Based upon our extensive experience in assisting music retailers, Alan M. Friedman (and select staff, where needed) would conduct the entire consulting engagement. As more fully described in our "Who We Are" section, Alan has extensive knowledge and experience in both the music instrument and product retail industry, as well as computer systems programming, evaluation, selection and implementation.

Most important, Alan and all of the individuals in our accounting firm are independent of any music supplier and hardware/software vendor. As independent CPA's and consultants, serving our client's interests are the only interests we serve under any engagement our firm performs.

Based upon our experience and given the comprehensive nature of our review, we generally recommend a 2-day consulting engagement to perform the aforementioned tasks. For example, upon acceptance of our engagement letter, we would ask you send us certain documents (i.e. financial statements, tax returns, management reports and/or any other pertinent information) so we may study and analyze them prior to our arrival at your store. This assures both you and ourselves of having a working knowledge of your store's operation and personnel upon our arrival. We would arrive in your city either Sunday evening or early Monday morning, and continue working into the early evening to make the most effective use of our time. We would then complete our engagement and leave by Tuesday evening.

ENGAGEMENT COSTS

Our fees for this engagement are based upon the time spent at our hourly billing rates, plus any travel, lodging and out-of-pocket costs. Rest assure, we will tailor our engagement tasks and time to make sure your most critical needs are met at an affordable cost.

As part of our consulting engagement, you will not be charged for any advance time we spend getting to know your business and reviewing any of the supporting documents we ask you furnish us. We view our time spent getting familiar with your business as our investment in what we hope will be a ongoing relationship with you and your staff.

Furthermore, during the course of our engagement, we typically gain an intimate knowledge of (a) your business, (b) the changes that need to be implemented to resolve any problems we uncover, and (c) the people whom both you and we rely on to execute our recommendations to insure greater success. As a result of our involvement, we welcome and are frequently asked to continue serving our music retailer consulting clients in a new capacity as their independent CPA firm and tax preparers.