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Commentary & Analysis

How to Account For This

By Pete Rivard June 25,

By WhatTheyThink Staff
Published: July 25, 2006

By Pete Rivard June 25, 2006 -- The fiscal year came to a close on the last day of June. My program’s Print Services Center finished up the year with its fourth consecutive record year in both revenue and profits. Except, as a not-for-profit, the school’s accountants diligently shifted those profits, month by month, into the program’s ravenous general expenses column, which devours them in an instant and bellows for more. Creative accounting is not just a slippery slope, it’s a wild theme park greased water slide to Hell by way of the federal prison system. I don’t get accountants. Behind a bland and boring façade, these folks are more like abstract sculptors, driven by creative impulses understood only by poets, painters and dancers. How else to explain how simple addition and subtraction can be heated, bent and reformed like metal and presented as something totally different than the raw material? And as with an abstract artist, you need the accountant there to explain what you’re looking at. One can’t help but view the front page newspaper photos of big time CFO’s and CEO’s being hauled away in cuffs or shielded by their lawyers as they exit court houses to feel that creative accounting is not just a slippery slope, it’s a wild theme park greased water slide to Hell by way of the federal prison system. My college’s bean counters move the Print Center’s equipment leases out of the Cost of Sales column, where I, in my woeful ignorance, would expect to find them. Instead, they are added to the Capital Expenses burden of the entire program. This helps the Print Services Center appear wildly profitable instead of respectably so. It also muffles the fact that we are making those machines pay for themselves, which, again in my inadequate world view, should smooth the path to the purchase of additional stuff. Everything that was possible to print on 12 x 18 or smaller soon was ours. The bookstore hated us. The profits from the Center, being plowed into general program expenses, serve to hide the reality that we need more students to cover total program costs, reducing the heat on Marketing, again, in my benighted opinion. Accountants blurring accountability. I started the Print Services Center five years ago with one student, one wide format inkjet printer, a laminator and a three-year ROI. At that point about 90 percent of the college’s print needs were shopped out; the other 10 percent were handled in the book store. No one would do business with the graphics program, with it’s row of AB Dick duplicators, an ancient DocuTech crawling toward the woodshed and its obligatory bullet, and a 4-color press on which our instructor never could get the ink and water balance right. With no sales force, no customer service other than that provided by ourselves and no marketing other than word of mouth, we paid for that wide format within the first year and redirected all of the college’s signage and banner needs back inside, while providing that student --and me, for that matter-- with a great small business start-up education. The student who succeeded the first had a great sense of ergonomics, and solid work ethic from her dad’s print shop, rearranging the equipment and furniture to great effect. She brought in foam core mounting and satin laminating ideas that increased our business, as well as some light design and typesetting work. We added a Xerox DocuColor and DigiPath station the next year along with more intensive design skills, adding non-profits and arts organizations spurned by local larger printers to our customer base. We began to add document digitizing, turning thick stacks of dog eared paper into organized, bookmarked PDF files and burning them onto CD’s. We began to capture more and more of the college’s business, and as our walls accumulated national awards won by our students. Anybody’s arguments about our ability to deliver to their quality expectations became laughable. Everything that was possible to print on 12 x 18 or smaller soon was ours. The bookstore hated us. A Rimage CD duplicating system followed. That type of work is spottier, with intense flurries of activity followed by weeks of next to no business. It does keep us plugged into the local music scene, and we get to hear a lot of the local indie music first as we design jewel case tray cards and inserts to go with the CD labels. I’m not convinced that black and white print is on the wane. We pound out monochrome pages here. An interesting thing about the DocuColor 6060 digital color press is that, in capturing the college’s color business, it drove our black and white printing through the roof, to the point where the old DocuTech just up and died on the spot. We replaced it with the Konica Bizhub1050, with its entire array of folding and finishing options, and the speed and image quality of that device moved almost all of the school’s academic packet business our way. It may be that the academic marketplace influences me, or I’m as blighted in my industry awareness as I am of accounting, but I’m not convinced that black and white print is on the wane. We pound out monochrome pages here. We still have no sales, and no marketing. We have no web browser virtual storefront, although we are looking at that option. We need a second wide format, because of the volume on the existing printer. We probably need to look at DVD duplicating as well as CD. We employ three student workers, one of whom, an inner city kid, is so fast on the Konica and the various finishing devices that I’m convinced he doesn’t adhere to the normal laws of space and time. And we are making a profit. An obscene profit, if you believe our accountants. Which I don’t.

 

 

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