Thursday, 13 March 2008

The Balance Sheet

Accountants often get a bad rep. "boring", "dull" is often the tag they carry with them, due to their choice of profession. But at least accountants understand money. And so when you have to explain to chess players why a tournament of 60 players, paying $50 a head only paid out $2000 in prizes (with $1000 in expenses), they don't scratch their heads and look confused.
Accountants also understand the notion of budgets and balance sheets. Now it is no secret that last years Doeberl Cup lost money (in fact a large sum of money). This was lost in a way that most businesses lose money ie off-budget spending. In the case of the 2007 Doeberl, unplanned accommodation expenses for visiting GM's was the main cause (plus a drop in entries, despite an increase in prize money). So when the budget for this years event was drawn up these costs were added to the expenses column. Now like any well run business, the extra expenses needed to be met with extra income. As the projected increase in income due to extra entries still didn't cover the shortfall, entry fees had to go up. Of course it isn't all take and no give, as improvements to the event were also made (although this also came at an expense).
Of course the other option is to balance the books by bringing expenditure down to the level of income eg no GM conditions, finding a cheap, low quality venue, cutting the prize list etc. And while this "Razor Gang" approach is financially acceptable, it certainly isn't the way to provide top quality chess events in Australia. So a little short term pain, for long term gain is the way ahead.
So while any accountants reading this might nod their heads and say "duh", hopefully this now makes sense to the non accountants out there as well.

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