Case Study: Gallery and Bar in Moscow
Our client, a new and innovative art space, combines a modern art exhibition, modern brands and slick and modern bar in one. The gallery opened in 2019 became a unique establishment in the downtown Moscow area. It presents an exclusive selection of modern art, limited clothing and footwear brands. Inspired by exhibitions in Tokyo, the project gave the city a rare space that couples unique aesthetics and great service. The owners took a creative approach not only to the interior of the establishment but also to how cocktails are served. The space opens your eyes on the philosophy of street-art and ignites interest in modern art in a new and exciting way.
What accounting issues did the gallery encounter?
The uncommon business model resulted in difficulties in accounting practices. The business encountered issues with improper structured internal accounting practices, resulting in mismatches and errors in financial and accounting information. The key issue was the lack of proper cost accounting practices. Food products were sold as a separate commodity unit without taking into account the costs of raw materials and production. As a result, for example, a cocktail with lavender, raspberry and mint was sold as a single unit (i.e. a cocktail), rather than a list of ingredients required to prepare the drink. In addition, Wagner & Experts found a lack of required barcodes on shoes displayed for sale in the gallery. These are required barcodes that track a product’s journey from production to its end consumer and without them the product is deemed illegal.
Errors in accounting may have resulted in fines and a required operations halt for a month and a half, while the lack of cost accounting was leading to ineffective use of assets. Issues with barcodes can result in fees and seizure of assets.
Once we have identified the key problems and risks of the gallery, we hit the ground running with work. In order to guarantee timely solutions, our accounting team was on call 24/7. We were able to find and fix all accounting issues and errors within one month and set up cost accounting in a way that when a cocktail was made out of water, raspberry, lavender, cane syrup and etc., so that when the sale of the cocktail is recorded the cost of the cocktail is properly written off.
Results of W&E Solution:
- We identified errors in previous accounting practices and promptly fixed the issues in the process;
- Automated the process of proper restaurant cost accounting;
- Fixed barcode issues with production.
As a result of our work, the client got rid of issues in accounting, prevented various fees and fines, and optimized spending on raw materials.
Why Wagner and Experts?
“Wagner & Experts is one of the best outsourcing companies in the market. They will effectively guide you through the difficulties russian of Russian bureaucracy and realities” – stated the Vice President of the Company. “We do not want to break the law, like some other companies operating in Russia, that is why we choose Wagner and Experts – for the transparency and honesty in doing business”.