If you are a business owner, you have probably heard about the disaster that is Luckin Coffee. There are many ways that this financial disaster could have been avoided. After all, being to prevent such a business catastrophe can potentially save your company.
However, if you have never heard of the Luckin Coffee fiasco, you should know all about why it is important to avoid such failures and how you can do so. Should you be outsourcing your accounting and bookkeeping services to a firm like Ackenting Group, they can provide you with the key information you need and ensure that such disasters can be avoided in the future.
The Luckin Coffee Collapse
In the early months of 2020, investigations had found out about the existence of a preliminary $314 million accounting fraud at the Chinese coffee chain, Luckin Coffee. This triggered not just a lot of inquiries but also the following effects:
- an almost automatic 76% collapse in shares
- affected billions of dollars of shareholder wealth
- chairman Charles Zhengyao Lu was removed from the billionaire’s list
While the last point might not seem to be a global issue, it still amounts to billions of dollars lost during the collapse.
Ways To Prevent The Collapse
Many experts and accounting firms in Singapore have noted the difference in factors leading to the collapse.
Firstly, senior management should have been required to check the accuracy of their financial statements. There should have been an audit committee that provided oversight over the adequacy of the internal controls and oversight of external auditors.
The internal auditors could have done a better job at risk management, and employees could have been allowed a good reporting mechanism for bad company practices.
Investing In Your Future
When you outsource to an accounting firm in Singapore, such as Ackenting Group, this can be seen as an investment in the future of your company. Not only do we provide essential financial services to give you new ways of keeping track on your company’s finances, we also actively prevent disasters like Luckin Coffee from repeating. We keep your business’s interests at a high priority.
Some investing tips that you can take note of are the following:
- Stay Diversified – always keep in mind that you should never invest all of your assets into one pool. Concentrate on a diversified portfolio that gives you a little leeway in terms of risk.
- Be Careful with Stock Investment – research your investment company early and find out the risk that entails. As an audit firm in Singapore, we can aid you in calculating the risk in your finances.
- Trust Your Numbers – at the end of the day, you should trust the numbers you see above anything else.
Now that you have identified some quick tips on keeping your investments low key and protecting yourself, you can apply the knowledge above. Always watch out for where your money is going. By partnering with Ackenting Group, you can rely on our accounting and bookkeeping services to feel safe with your company’s finances and be updated daily on your financial records.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
