1. Attendance and Apologies

Attendance (MC): Stephen Catt, Tom Bartels, Cameron Burgess, Bruce Diekman, Ashton Roskill (by phone), Caroline Brakewell

Attendance (Members): Yue Ajioka, Maurice Cabrera, Ran de Silva (7.27)

Apologies: Allie Cooke, Kirsten Lunoe

2. Chair of AH

Bruce indicated that he would prefer to stand down as interim chair if someone else better qualified could be persuaded to stand.

3. Finance Discussion

The following were distributed:

• Rolling cash flow
• P&L April 2019 Month to Date (MTD)
• AH Stock as at today taken from POSWISE
• Profit margin for April 2019 MTD
• Profit margin for March 2019 entire month
• Apr 2019 MTD Sales revenue forecast (based on POSWISE actual sales MTD)

Main discussion points (using the documents distributed):

• Interim cash flow model
• Issue of ‘off balance sheet’ liabilities. These are primarily to do with stock.

On the asset side, we only adjust our stock inventories at year end, instead of recognising stock assets when we receive them.
On the liabilities side, we are not recognising orders that we know about, and are only recognising these liabilities when we have received invoices.  

We need to transition to ‘accrual accounting’. Currently doing ‘cash accounting’. Explanation of the difference given is set out below. By doing cash accounting, we are not matching our order costs with the cash we’re receiving from sales, hence we have a distorted picture of our financials.

Cash/Accrual Accounting difference:

Accrual accounting – you recognise costs and revenues (and assets and liabilities) once you have a reliable estimate (from an invoice, order, reasonable estimate based on past experience). This is contingent on the high probability that you will have to pay these in the future/ receive these amounts in the future. Basically you have a complete financial record of all known costs, revenue, assets and liabilities.

Cash accounting – you recognise costs and revenues when they come out of your bank account or are received into your bank account. Works well for simple enterprises. For more nuanced retail ventures like AH, this is less appropriate.

• discussion with POSWISE to improve stock systems to allow proper accrual based stock accounting.
• POSWISE margin discussion
• POSWISE revenue actuals month-to-date vs forecast (decent!)
• Stock per POSWISE
• Further discussion with Allie and Ashton re: stock management measures, staff costs measures, etc.

Ashton reported that after meeting with Allie this morning key points were buying and stock loss. Good discussion with Justin from POSWise today. Good potential to get on top of issues which was quite encouraging.

By week after next, hope to have been able to make rationalisation with suppliers – supply base and supply management. Aim to report in 2 weeks.

Also new staff roster proposed, cutting opening hours still an option.

Further meeting with Allie next Tuesday. All hands staff meeting following Tuesday (although clashes with filmnight, major crowdfunding event).

4. Key issues to turn around performance

A priority is to simplify.

We need to get back to absolute necessities. Once we have that straight then and only then get onto extras such as vegie boxes, etc.

Recommendation to approach Justin (POSWise) to reset staff and volunteer discounts to 15%. Leave member discount at 10%.

Question whether 'aged', accrued volunteer discounts can and should be removed. Maurice said that this would lead to people affected being the loudest critics. If we proceed, we need to follow an open process, and move formally, giving people an invitation to attend and notice of relevant motions with an opportunity to speak.

Also consider ending permanent volunteer status.

Some information exchanged about what other co-ops do.

Steve mentioned the potential conundrum of cutting back volunteer benefits at the same time as we will be increasingly relying on volunteers to run the co-op.

Maurice referred us back to a useful email from John Caley that he had passed on – Bruce to recirculate it.

Maurice will send info about what percentage of sales are discounted by 25%. He will also explain to Allie where it comes from and how information can be manipulated. Maurice to discuss with Tom tomorrow at the shop.

Ashton -- how do we drive revenue? In his experience comes from 1 of 2 places:

• Promotional plan
• Marketing plan

Caroline agreed to meet with Allie and Ashton. Perhaps after hours next week in the shop. Caroline to set up meeting and let Ashton know.

Seasonality important. Price. Placement. Events. Promotional plan, then marketing plan.

Need to get info base – evidence of what works.

Call for help from Maurice re: Crowdfunding campaign – Thea Soutar (Marketing) is leaving for Scotland soon. Many tasks need taking over, doing, etc. Steve and Bruce volunteered – Steve emailed her during meeting.

Press releases – Caroline will do.

Tonika offer of kombucha bottles. Cam handling. Also potential deal re Orange Grove Market. Maurice to pass on contact details to Cam.

Letterboxing suggestion from member, Pia Larsen. Design and printing of leaflet. Tom to follow up.

Events, activities to consider when Crowdfunding finishes – Band/Red Rattler gig. Permaculture.