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The Council of the Department of Economics of the Hochschule Mainz has decided on 28 November 2018 for the project


Accounting in Developing Countries -

Testing the Lessons Learned from the Bookkeeping Project for Small Businesses in Guantánamo Province, Cuba


to give a research semester for Prof. Dr. Werner Müller. The application was accompanied by the following description:


1. Question

Who can not see well should not drive a car! Who has no accounting should not lead a company! Both would drive the cart to the wall!

According to this claim, there would hardly be any small businesses in developing countries. However, a broader middle class is an important factor in the development of a local economy that could make these countries more independent of world markets. But this gap between demand and reality could be closed by technical means. The proposed project wants to clarify the following question:

Can small entrepreneurs in developing countries without accounting knowledge be provided with technical aids and personal support with information about their company that allows them to conduct business effectively?

With the support of a professor from the University of Guantánamo (Cuba), a practical test is to be conducted to determine whether the information provided by the project "Accounting without an accountant" from the winter semester 2014/15 can be used to organize the necessary information supply at a reasonable cost.

The necessary information is the monthly data of a balance sheet, profit and loss account and a cash flow statement, as well as a simple cost and activity accounting with cost element accounting (especially with the calculation of imputed costs), cost center accounting (for cost control) and cost unit accounting (for the price and product policy). From this it should be possible to develop a planning for the future.

It is estimated that small businesses need business support. For this purpose, a local or regional cooperative could use multi-client ERP software (Enterprise Resource Planning - see also, which reads in a simple data entry of members from a spreadsheet , processes them automatically and provides the members with professional evaluations. An economically trained employee of the cooperative would have to look at the evaluations and draw the members' attention to opportunities and risks.

It would also be necessary to consider whether this advisory task could be tackled with a justifiable remedy.


2. Procedure

Due to the good education system in Cuba, there is a good chance that in contact with the university there will be developed an application which meets the requirements there, and which could later be used successfully in other developing countries.

2.1. Formulate output

It has already been formulated as the goal that monthly data of a balance sheet, profit and loss account and a cash flow statement, as well as a simple cost and performance accounting with cost type accounting (especially with the entry of imputed costs), cost center accounting (for cost control) and cost unit accounting (for the Price and product policy) should be generated. Partial costing data is considered less relevant because small-scale enterprises with limited capacity can not or should not really respond to changes in volumes.

A specification should be made on the basis of the IFRS for small and medium-sized enterprises in coordination with the university there, but a large part of the contents of the standard should be deleted. Because the central question of small business owners, how much profit is achieved with which services, is not addressed by IFRS, this specific question should be answered with a simple cost accounting.

2.2. Formulate input

Based on the proposed output, it has to be determined which current data small businesses have to record for this purpose and how they have to be processed in the accounting software together with the cost accounting module as well as in sales, production and consumption statistics. These data and requirements must be modified for different industries.

After own suggestions for this complex a suggestion for the content coordination with the small entrepreneurs is to be worked out after a feedback of the university there.

2.3. Interviews with small business owners

The University of Guantánamo or the Department of Accounting and Finance of the Faculty of Economics establishes contact with 20 small private entrepreneurs from various industries. Interviews are conducted with them, asking for the business model, the procurement and sales market and the type of added value. The result is recorded in a log.

In a second part of the interviews, the small business owners would be presented with the designed evaluations and the data collection tools to ask for feedback. In particular, it must be clarified how complex data collection would be for the small business owner. After these responses, the data collection tools in particular would have to be revised.

2.4. testing

The data transfer will have to be offline for the research project, perhaps by visiting the small business owners once a week by a university assistant and copying their data. In the medium term, however, data transmission via the Internet will be possible by uploading a file. "By the year 2020, at least every second Cuban household should have Internet access. However, as part of its digitization strategy, Cuba does not want to limit itself to expanding Internet access, but also wants to build its own software services. For example, since last year, Chinese laptops have been manufactured on the island using the modular system, which are equipped with the local Linux distribution Nova." (

The transferred data is first imported into an outdated German financial accounting software and after the accounting, the data of the accounts and cost centers are exported in a format readable for a spreadsheet. These are inserted into a data part of a spreadsheet file, with which the designed evaluations are generated.

During the semester, a contact to the Department of Computer Science should be established so that a Cuban ERP software could be developed there, which would replace the obsolete German software. (Addendum: A computer science professor from Guantánamo has come to me, who would be interested in the creation of a Cuban ERP software, provided that the accounting colleague and I can present him the exact requirements.After a first written description on my part, he replied that he has contacts with the UCI in Havana and that he would like to get them on board, so the first address of the Cuban computer scientists would be involved.)

3. Effects

The most important result would be that you would create a copy template to strengthen the middle class in developing countries. This could strengthen sustainable economic development in potentially all developing countries and reduce their dependence on world markets.



My Motivation

One can compare the managment of enterprises with the control of a ship. Both are clumsy and slow to respond to course changes. Both have no brake. If a big ship goes to the port of New York, the captain can turn off the engine 15 to 20 km beforehand. Both are dependent on external influences, ships of weather and current, a company of the economy and the competition. Both have to navigate, ie determine the current position and the destination and then calculate the course. The ships have GPS today. Both need information. The ship has radar and gets weather data. For a company, the information comes from accounting. With general computer deployment, corporate governance is expected to be as good as the captain of a cargo ship today with radar and GPS.
The accounting of large companies has changed a lot in the last 30 years. Much of this has not been noted by the authors of the textbooks, nor by many of my colleagues. They spend too much time calculating numbers in class. Companies have been computing computers for more than 30 years. For the students it is of course convenient to get their good grades in the exams with simple arithmetic tasks. But that's a different topic.
Even the small businesses have been computer for over 20 years. Democratic business theory, which is geared towards the interests of the masses and not a small minority, must respond much more to their needs than to those of large corporations. 90% of companies in Germany have fewer than 10 employees. If the taxpayer finances science, then these 90% and not the 0.3% large companies with more than 250 employees need priority support. It is also possible to create technical structures for small businesses that will enable them to generate all the information necessary for good corporate governance without expensive professionals. This task should pay much more attention to business research.