Logo of Phnom Penh Post newspaper Phnom Penh Post - Accounting platform seeks funds

Accounting platform seeks funds

Accounting supplies at an office in Phnom Penh yesterday.
Accounting supplies at an office in Phnom Penh yesterday. Eliah Lillis

Accounting platform seeks funds

The developer of Banhji, a locally developed accounting platform aimed at small- and medium-size enterprises (SMEs), is in talks with investors to secure funding as part of a plan to expand the application beyond Cambodia.

Officially launched in October after a four-month beta testing period, Banhji helps SMEs in Cambodia maintain proper financial records. Some 300 companies with combined assets of over $100 million are currently using the platform, according to Sim Chankiriroth, the platform’s founder.

“The majority of companies using the app at the moment are small- or medium-sized companies and most of them are in the services, trading and manufacturing sectors,” he said. Banhji, which is free for basic use but requires payment to access certain modules, analyses business metrics and formats financial statements and tax filings.

Chankiriroth said government studies show that less than 5 percent of SMEs have proper financial reporting. He noted that as very few small businesses in Cambodia use accountants they cannot provide detailed financial records, which prevents them from accessing credit from financial institutions or getting more investors.

“The problem is the affordability of proper accountants as well as the willingness to pay for them, as many businesses would rather pay for a sales team and focus on improving sales instead of getting a financial report ready,” he explained.

Banjhi Pte Ltd was registered in Singapore while the software was developed in Cambodia by Chankiriroth and a team of seven local developers. The startup recently completed a three-month accelerator program in Singapore and has lined up two large investors for potential equity funding.

Chankiriroth said Banjhi’s premium modules will generate revenue, but most is expected to come from facilitating access to finance for the firms using the platform.

“We are not in the business of selling accounting software, we are helping SMEs gain access to finance, but through our transactional data,” he said, adding that he expects to turn a profit by mid-2018.

“We want to work with the banks so that instead of customers coming to them for loans, they can proactively tell [SMEs] how much money they can get,” he said. “We will use the transactional data we gather from our users that agree to share their information to evaluate credit scores and figure out how much money they are eligible to receive in loans from the bank.”

Banhji hopes to grow the platform in Cambodia and expand to at least three other countries in the region by the end of 2017, starting with Laos, Malaysia and Singapore.

Khoy Kimleng, director of assurance and advisory services at Deloitte Cambodia, said that many businesses are still failing to recognise the importance of accounting, which can lead to ineffective strategic planning decisions.

“It takes business owners a few years to realise the importance, and often that happens only when their businesses get out of their control,” he said.

Kimleng said that while accounting software has its benefits, it was still advisable to have a certified accountant review the prepared financial reports.

“Accounting software is a tool that can make the process faster, reduce errors and reduce the cost of reporting when compared to manual work, but it doesn’t guarantee correct reporting,” he said.

“The new focus when having a tool to report financial information is the ability to analyse the results and to use the information to guide their strategy in responding to challenges the company has encountered.”

Casey Barnett, president of CamEd Business School, said that while better accounting is needed for businesses to grow cumbersome regulations are discouraging advancement.

“Poor accounting is certainly holding back businesses in Cambodia as quality accounting improves management, investment and access to finance,” he said.

“Unfortunately, regulators such as the tax department are not helping facilitate quality accounting by requiring that Khmer language appear in accounts and invoices.”

Barnett noted that many high-quality accounting systems could not be used in Cambodia because they do not integrate Khmer in their software.

A recent survey Barnett conducted of 275 firms that use accounting software found 46 different platforms in use in Cambodia, but 42 percent of the firms used the international software package Quickbooks. The software’s widespread use could prove a challenge to Banhji’s efforts to carve out a market share.

“It takes a significant amount of time for a company to develop skill and experience in using any given software. Therefore it is unlikely that Quickbooks will be shaken from its market-leading status soon,” he said.

MOST VIEWED

  • Restrictions re-imposed in capital as Covid cases surge

    Amid the ongoing community outbreak of Covid-19, which has shown no sign of subsiding with 750 infections and 10 deaths reported on June 2 alone, the Phnom Penh Municipal Administration has decided to re-impose the suspension of all occupations and business activities deemed as posing high risk of

  • Phnom Penh-Sihanoukville expressway 51% complete

    The construction of the nearly $2 billion Phnom Penh-Sihanoukville Expressway is 51.35 per cent complete and is expected to be finished in 2023, according to Ministry of Public Works and Transport secretary of state Vasim Sorya. Invested in by Cambodian PPSHV Expressway Co Ltd, the first expressway in

  • First 7-Eleven store to open mid-June, ambassador says

    Thai retail conglomerate CP All Pcl will open Cambodia’s first 7-Eleven convenience store in mid-June, Cambodian ambassador to Thailand Ouk Sorphorn told The Post on June 1. The Bangkok-listed 7-Eleven franchise operator, the retail arm of Charoen Pokphand Group Co Ltd, granted CP All (Cambodia)

  • With herd immunity likely in 2022, is Cambodia ready to reopen for tourism?

    The government aims to inoculate 80 per cent of the target population by June next year, giving it a head start among regional peers to reboot the sector but first, it has to do a few things to up its game A sign on a glass

  • US embassy guard gets Covid despite two doses of Pfizer jab

    The Covid-19 tracking commission on June 4 said a security guard at the US embassy in Phnom Penh had contracted the novel coronavirus, despite having received a second dose of the Pfizer-BioNTech shot two weeks ago. Embassy spokesperson Chad Roedemeier confirmed the SARS-CoV-2 infection to The

  • US wants 'full access' to Ream Naval Base

    On June 11, the US embassy's Defense Attaché Colonel Marcus M Ferrara visited Ream Nava Base in coordination with Cambodian officials following the recent approval of Prime minister Hun Sen to allay the concerns on Chinese military presence at the base as raised by US Deputy